ARVIDA JMB PARTNERS L P, 10-Q, 1997-08-14

ARVIDA JMB PARTNERS L P
10-Q, 1997-08-14
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SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549

FORM 10-Q

Quarterly Report Under Section 13 or 15(d)
of the Securities Exchange Act of 1934

For the quarter ended June 30, 1997 Commission file #0-16976

ARVIDA/JMB PARTNERS, L.P.
(Exact name of registrant as specified in its charter)

Delaware 36-3507015
(State of organization) (IRS Employer Identification No.)

900 N. Michigan Avenue., Chicago, IL 60611
(Address of principal executive office) (Zip Code)

Registrant's telephone number, including area code 312/440-4800

Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for such a shorter period that
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. Yes X No

<PAGE>

TABLE OF CONTENTS

PART I FINANCIAL INFORMATION

Item 1. Financial Statements . . . . . . . . . . . . . . 3

Item 2. Management's Discussion and Analysis of
Financial Condition and Results of
Operations . . . . . . . . . . . . . . . . . . . 21

PART II OTHER INFORMATION

Item 1. Legal Proceedings. . . . . . . . . . . . . . . . 27

Item 6. Exhibits and Reports on Form 8-K . . . . . . . . 31

<PAGE>

<TABLE>
PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

ARVIDA/JMB PARTNERS, L.P.
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES

CONSOLIDATED BALANCE SHEETS

JUNE 30, 1997 AND DECEMBER 31, 1996

(UNAUDITED)

ASSETS
------

<CAPTION>
JUNE 30, DECEMBER 31,
1997 1996
------------- -----------
<S> <C> <C>
Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . $ 14,427,301 53,635,737
Restricted cash . . . . . . . . . . . . . . . . . . . . . . . . . . . 12,940,165 11,833,522
Trade and other accounts receivable (net of allowance for doubtful
accounts of $248,351 at June 30, 1997 and $261,326 at
December 31, 1996). . . . . . . . . . . . . . . . . . . . . . . . . 7,497,602 3,582,995
Mortgages receivable, net . . . . . . . . . . . . . . . . . . . . . . 757,180 1,269,460
Real estate inventories . . . . . . . . . . . . . . . . . . . . . . . 182,292,695 174,638,454
Property and equipment held for disposition or sale . . . . . . . . . 41,279,342 --
Property and equipment, net . . . . . . . . . . . . . . . . . . . . . 38,110,789 79,373,444
Investments in and advances to joint ventures, net. . . . . . . . . . 2,735,074 2,739,842
Equity memberships. . . . . . . . . . . . . . . . . . . . . . . . . . 4,984,918 5,457,880
Amounts due from affiliates . . . . . . . . . . . . . . . . . . . . . 1,182,128 1,003,732
Prepaid expenses and other assets . . . . . . . . . . . . . . . . . . 7,824,833 7,105,077
------------ ------------

Total assets. . . . . . . . . . . . . . . . . . . . . . . . $314,032,027 340,640,143
============ ============

<PAGE>

ARVIDA/JMB PARTNERS, L.P.
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES

CONSOLIDATED BALANCE SHEETS (CONTINUED)

(UNAUDITED)

LIABILITIES AND PARTNERS' CAPITAL ACCOUNTS
------------------------------------------

JUNE 30, DECEMBER 31,
1997 1996
------------- -----------
Liabilities:
Accounts payable. . . . . . . . . . . . . . . . . . . . . . . . . . $ 17,581,054 21,532,400
Deposits. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22,093,897 17,287,325
Accrued expenses and other liabilities. . . . . . . . . . . . . . . 15,119,741 15,324,815
Notes and mortgages payable, net. . . . . . . . . . . . . . . . . . 30,177,914 36,843,778
------------ ------------
Commitments and contingencies

Total liabilities . . . . . . . . . . . . . . . . . . . . . 84,972,606 90,988,318
------------ ------------

Partners' capital accounts:
General Partner and Associate Limited Partners:
Capital contributions . . . . . . . . . . . . . . . . . . . . . . 20,000 20,000
Cumulative net income . . . . . . . . . . . . . . . . . . . . . . 37,097,572 35,750,061
Cumulative cash distributions . . . . . . . . . . . . . . . . . . (35,839,796) (34,492,285)
------------ ------------
1,277,776 1,277,776
------------ ------------
Limited Partners:
Capital contributions, net of offering costs. . . . . . . . . . . 364,841,815 364,841,815
Cumulative net income . . . . . . . . . . . . . . . . . . . . . . 39,734,696 36,071,642
Cumulative cash distributions . . . . . . . . . . . . . . . . . . (176,794,866) (152,539,408)
------------ ------------
227,781,645 248,374,049
------------ ------------
Total partners' capital accounts. . . . . . . . . . . . . . 229,059,421 249,651,825
------------ ------------

Total liabilities and partners' capital . . . . . . . . . . $314,032,027 340,640,143
============ ============

<FN>
The accompanying notes are an integral part
of these consolidated financial statements.
</TABLE>

<PAGE>

<TABLE>
ARVIDA/JMB PARTNERS, L.P.
CONSOLIDATED STATEMENTS OF OPERATIONS

THREE AND SIX MONTHS ENDED JUNE 30, 1997 AND 1996

(UNAUDITED)

<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30 JUNE 30
-------------------------------------------------------
1997 1996 1997 1996
------------ ----------- ------------ -----------
<S> <C> <C> <C> <C>
Revenues:
Housing . . . . . . . . . . . . . . . . . . . $45,120,200 50,035,101 77,890,164 100,095,179
Homesites . . . . . . . . . . . . . . . . . . 6,556,525 5,309,248 8,731,704 8,421,248
Land and property . . . . . . . . . . . . . . 2,821,789 1,639,540 3,280,349 14,760,201
Operating properties. . . . . . . . . . . . . 7,579,225 7,257,263 16,780,263 15,574,281
Brokerage and other operations. . . . . . . . 6,228,479 7,797,157 11,689,258 13,789,872
----------- ---------- ----------- -----------
Total revenues. . . . . . . . . . . . . 68,306,218 72,038,309 118,371,738 152,640,781
----------- ---------- ----------- -----------
Cost of revenues:
Housing . . . . . . . . . . . . . . . . . . . 38,805,717 41,643,771 67,382,639 84,548,911
Homesites . . . . . . . . . . . . . . . . . . 3,937,468 3,703,417 5,214,387 5,944,055
Land and property . . . . . . . . . . . . . . 2,284,766 1,356,631 2,527,779 11,926,747
Operating properties. . . . . . . . . . . . . 6,539,114 7,140,931 13,939,744 14,348,278
Brokerage and other operations. . . . . . . . 5,844,534 7,014,093 11,176,450 12,835,606
----------- ---------- ----------- -----------
Total cost of revenues. . . . . . . . . 57,411,599 60,858,843 100,240,999 129,603,597
----------- ---------- ----------- -----------
Gross operating profit. . . . . . . . . . . . . 10,894,619 11,179,466 18,130,739 23,037,184
Selling, general and administrative expenses. . (5,098,646) (4,560,389) (12,199,315) (9,786,622)
----------- ---------- ----------- -----------
Net operating income. . . . . . . . . . 5,795,973 6,619,077 5,931,424 13,250,562

Interest income . . . . . . . . . . . . . . . . 203,469 369,365 1,031,386 781,893
Equity in earnings (losses) of
unconsolidated ventures . . . . . . . . . . . (27,336) (83,100) 19,805 (116,913)
Interest and real estate taxes, net . . . . . . (1,039,483) (933,651) (1,972,050) (1,882,825)
----------- ---------- ----------- -----------

<PAGE>

ARVIDA/JMB PARTNERS, L.P.

CONSOLIDATED STATEMENTS OF OPERATIONS - CONTINUED

THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30 JUNE 30
-------------------------------------------------------
1997 1996 1997 1996
------------ ----------- ------------ -----------

Net income. . . . . . . . . . . . . . . $ 4,932,623 5,971,691 5,010,565 12,032,717
=========== ========== ========== ==========

Net income per Limited
Partnership Interest. . . . . . . . . $ 12.21 14.63 9.07 28.31
=========== ========== ========== ==========

Cash distributions per
Limited Partnership
Interest. . . . . . . . . . . . . . . $ 60.04 -- 60.04 25.85
=========== ========== ========== ==========

<FN>
The accompanying notes are an integral part of these consolidated financial statements.
</TABLE>

<PAGE>

<TABLE>
ARVIDA/JMB PARTNERS, L.P.
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES

CONSOLIDATED STATEMENTS OF CASH FLOWS

SIX MONTHS ENDED JUNE 30, 1997 AND 1996

(UNAUDITED)

<CAPTION>
1997 1996
------------ -----------
<S> <C> <C>
Net income. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 5,010,565 12,032,717
Charges (credits) to net income not requiring (providing) cash:
Depreciation and amortization . . . . . . . . . . . . . . . . . . . . . . 1,991,957 2,845,245
Equity in (earnings) losses of unconsolidated ventures. . . . . . . . . . (19,804) 116,913
Provision for doubtful accounts . . . . . . . . . . . . . . . . . . . . . 40,983 (10,287)
Gain on disposition of property and equipment . . . . . . . . . . . . . . -- (4,491)
Changes in:
Restricted cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1,106,643) (1,210,692)
Trade and other accounts receivable . . . . . . . . . . . . . . . . . . . (3,955,590) 5,558,929
Real estate inventories:
Additions to real estate inventories. . . . . . . . . . . . . . . . . . (75,225,917) (96,341,150)
Cost of sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70,766,098 97,952,677
Capitalized interest. . . . . . . . . . . . . . . . . . . . . . . . . . (1,315,767) (2,835,956)
Capitalized real estate taxes . . . . . . . . . . . . . . . . . . . . . (1,878,655) (1,885,382)
Equity memberships. . . . . . . . . . . . . . . . . . . . . . . . . . . . 472,962 990,615
Amounts due from affiliates . . . . . . . . . . . . . . . . . . . . . . . (178,396) 871,647
Prepaid expenses and other assets . . . . . . . . . . . . . . . . . . . . (870,568) 194,800
Accounts payable, accrued expenses and other liabilities. . . . . . . . . (3,630,992) 117,718
Deposits and unearned income. . . . . . . . . . . . . . . . . . . . . . . 4,806,572 (1,434,349)
------------ -----------

Net cash provided by (used in) operating activities . . . . . . . (5,093,195) 16,958,954
------------ -----------

<PAGE>

ARVIDA/JMB PARTNERS, L.P.
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES

CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)

1997 1996
------------ -----------
Cash flows from investing activities:
Mortgages receivable. . . . . . . . . . . . . . . . . . . . . . . . . . . 512,280 694,934
Acquisitions of property and equipment. . . . . . . . . . . . . . . . . . (1,857,832) (8,747,952)
Proceeds from sales and disposals of property and equipment . . . . . . . -- 20,763
Joint venture distributions (contributions), net. . . . . . . . . . . . . (500,857) (7,276)
Payments from (advances to) joint ventures. . . . . . . . . . . . . . . . -- 4,168,156
Proceeds from sale of joint venture interest. . . . . . . . . . . . . . . -- 6,111,440
------------ -----------
Net cash provided by (used in) investing activities . . . . . . . (1,846,409) 2,240,065
------------ -----------
Cash flows from financing activities:
Proceeds from notes and mortgages payable . . . . . . . . . . . . . . . . 1,200,880 27,871,363
Payments of notes and mortgages payable . . . . . . . . . . . . . . . . . (7,866,744) (40,128,561)
Distributions to General Partner and Associate Limited Partners . . . . . (1,347,510) (579,239)
Distributions to Limited Partners . . . . . . . . . . . . . . . . . . . . (24,255,458) (10,444,416)
Bank overdrafts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -- (3,716,434)
------------ -----------
Net cash used in financing activities . . . . . . . . . . . . . . (32,268,832) (26,997,287)
------------ -----------
Decrease in Cash and cash equivalents . . . . . . . . . . . . . . . . . . . (39,208,436) (7,798,268)

Cash and cash equivalents, beginning of year. . . . . . . . . . . . . . . . 53,635,737 20,171,289
------------ -----------
Cash and cash equivalents, end of period. . . . . . . . . . . . . . . . . . $ 14,427,301 12,373,021
============ ===========
Supplemental disclosure of cash flow information:
Cash paid for mortgage and other interest, net of amounts capitalized . . $ -- 33,939
============ ===========
Non-cash investing and financing activities . . . . . . . . . . . . . . . $ -- --
============ ===========

<FN>
The accompanying notes are an integral part of these consolidated financial statements.
</TABLE>

<PAGE>

ARVIDA/JMB PARTNERS, L.P.
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 1997 AND 1996

(UNAUDITED)

Readers of this quarterly report should refer to the Partnership's
audited financial statements for the fiscal year ended December 31, 1996,
which are included in the Partnership's 1996 Annual Report on Form 10-K
(File No. 0-16976) filed on March 31, 1997, as certain footnote disclosures
which would substantially duplicate those contained in such audited
financial statements have been omitted from this report. Capitalized terms
used but not defined in this quarterly report have the same meanings as in
the Partnership's 1996 Annual Report.

GENERAL

Capitalized Interest and Real Estate Taxes

Interest, including the amortization of loan fees, of $1,315,767 and
$2,835,956 was incurred for the six months ended June 30, 1997 and 1996,
respectively, all of which was capitalized. Interest payments, including
amounts capitalized, of $1,275,291 and $2,869,895 were made during the six
months ended June 30, 1997 and 1996, respectively. Interest, including the
amortization of loan fees, of $681,238 and $1,357,841 was incurred for the
three months ended June 30, 1997 and 1996, respectively, all of which was
capitalized. Interest payments, including amounts capitalized of $714,665
and $1,278,892, were made during the three months ended June 30, 1997 and
1996, respectively.

Real estate taxes of $3,850,705 and $3,768,207 were incurred for the
six months ended June 30, 1997 and 1996, respectively, of which $1,878,655
and $1,885,382 were capitalized, respectively. Real estate tax payments of
$322,313 and $377,347 were made during the six months ended June 30, 1997
and 1996, respectively. Real estate taxes of $1,892,581 and $1,891,107
were incurred for the three months ended June 30, 1997 and 1996,
respectively, of which $853,098 and $957,456 were capitalized,
respectively. Real estate tax payments of $209,670 and $175,176 were made
during the three months ended June 30, 1997 and 1996, respectively. In
addition, real estate tax reimbursements totaling $244,706 and $165,682
were received from the Partnership's escrow agent during the six months
ended June 30, 1997 and 1996, respectively. The preceding analysis of real
estate taxes does not include real estate taxes incurred or paid with
respect to the Partnership's club facilities and other operating properties
as these taxes are included in cost of revenues for operating properties.

Property and Equipment and Other Assets

Depreciation expense of $1,841,345 and $2,668,474 was incurred for the
six months ended June 30, 1997 and 1996, respectively. Amortization of
other assets, excluding loan fees, of $42,754 and $49,297 was incurred for
the six months ended June 30, 1997 and 1996, respectively. Amortization of
loan fees, which is included in interest expense, of $108,058 and $127,414
was incurred for the six months ended June 30, 1997 and 1996, respectively.

Depreciation expense of $768,517 and $1,341,734 was incurred for the three
months ended June 30, 1997 and 1996, respectively. Amortization of other
assets, excluding loan fees, of $22,555 and $27,036 was incurred for the
three months ended June 30, 1997 and 1996, respectively. Amortization of
loan fees, which is included in interest expense, of $71,478 and $64,579
was incurred for the three months ended June 30, 1997 and 1996,
respectively.

<PAGE>

The decrease in depreciation expense for the three and six months
ended June 30, 1997 as compared to the three and six months ended June 30,
1996 is due to the elimination of depreciation expense for assets held for
disposal in accordance with FASB Statement 121. The Partnership's
application of this statement is discussed further in the "Impact of
Recently Issued Accounting Standards" section of the Notes.

Partnership Records

During February 1997, the Partnership made a distribution for 1996 of
$24,240,000 to its Holders of Interests ($60.00 per Interest) and
$1,346,651 to the General Partner and Associate Limited Partners,
collectively. In addition, during 1997 distributions totaling $15,458
(approximately $.04 per Interest) were deemed to be paid to each Holder of
Interests, $15,372 of which was remitted to North Carolina tax authorities
on their behalf for the 1996 non-resident withholding tax. Distributions
totaling $859 were also paid during 1997 on behalf of the General Partner
and Associate Limited Partners, collectively, a portion of which was also
remitted to the North Carolina tax authorities on their behalf. These
distributions are the primary cause for the decrease in Cash and cash
equivalents at June 30, 1997 as compared to December 31, 1996.

Reclassifications

Certain reclassifications have been made to the 1996 financial
statements to conform to the 1997 presentation.

NOTES AND MORTGAGES PAYABLE

At June 30, 1997, the Partnership's credit facility consisted of a
term loan in the original amount of $85,252,520, a revolving line of credit
facility up to $20 million, an income property term loan in the original
amount of $18,233,326 and a $15 million letter of credit facility, all of
which had a maturity of July 1997. For the six month period ended June 30,
1997, the effective interest rate for the combined term loan, income
property term loan and revolving line of credit facility was approximately
8.3% per annum.

Under the term loan agreement, the Partnership made scheduled
principal payments of $10 million in March 1994, February 1995 and February
1996 and $5 million principal payments in July 1995 and July 1996. The
term loan agreement also provided for additional principal repayments based
upon a specified percentage of available cash flow and upon the sale of
certain assets. During the year ended December 31, 1996, the Partnership
made such additional term loan payments totaling approximately $12.3
million. In January 1997, the Partnership paid off the remaining principal
balance of $5,234,008 outstanding under the term loan. Under the income
property term loan, principal payments of $0.1 million were required to be
paid monthly until maturity. The terms of the Partnership's credit
facility required that upon satisfaction of the principal due under the
term loan, the additional term loan principal repayments described above
would be applied to the principal outstanding under the income property
term loan. Accordingly, the Partnership made such additional income
property term loan repayments totaling approximately $1.3 million during
the six months ended June 30, 1997. At June 30, 1997, the balances
outstanding on the revolving line of credit facility, the income property
term loan and the letter of credit facility were $0, $9,712,126 and
$4,871,125, respectively.

<PAGE>

On July 31, 1997, the Partnership obtained a new credit facility from
Barnett Bank, N.A. ("Barnett") and certain other banks. The new credit
facility consists of a $75 million term loan, a $20 million revolving line
of credit and a $5 million letter of credit facility. The new facility has
a term of four years with annual scheduled principal repayments of $12.5
million, as well as additional annual principal repayments based upon a
specified percentage or amount of the Partnership's available cash. The
maximum required principal repayments, including the scheduled repayments,
generally will not exceed $18.75 million per annum. The remaining
outstanding balance on the new facility is due upon maturity. Interest on
the facility is based, at the Partnership's option, on the relevant LIBOR
plus 2.25% per annum or Barnett's prime rate. The Partnership expects to
obtain an interest rate swap for all or a portion of the outstanding
balance of the term loan. The Partnership paid loan fees totaling
approximately 1% of the total facility upon the closing of the loan. In
conjunction with the closing of the loan, the Partnership paid off the
remaining balances outstanding under its existing credit facility including
principal, interest and fees totaling approximately $9.6 million. In
addition, due to the replacement of the Partnership's existing letter of
credit facility by the new credit facility, the Partnership was required to
post approximately $4.2 million cash as collateral with its previous lender
for letters of credit which continue to be obligations of that lender. The
letters of credit are expected to be replaced with letters of credit issued
under the Barnett facility at which time the cash collateral will be
released to the Partnership. The term loan, revolving line of credit and
letter of credit facility are secured by recorded mortgages on real
property of the Partnership (including certain of its consolidated
ventures) and pledges of certain other assets. All of the loans under this
new facility are cross-collateralized and cross-defaulted. Proceeds from
the new financing were used to make a distribution in the amount of
approximately $73.4 million, including a distribution of $175 per Interest
to the Holders of Interests in August 1997, as discussed in the Subsequent
Events section of the Notes.

During April 1996, the Partnership refinanced the loan on one of its
retail properties located in its Weston Community with a different lender.
The outstanding principal balance on such loan of approximately $8.0
million is included in Notes and mortgages payable at June 30, 1997. In
addition, $3.0 million of subordinated debt attributable to the Cullasaja
Joint Venture is included in Notes and mortgages payable at June 30, 1997.

During January 1996, the Partnership executed a note for a $7.5
million construction loan for the construction and development of a second
retail shopping center located in its Weston Community. At June 30, 1997,
the entire $7.5 million was outstanding under this loan. The Partnership,
at its option, extended the loan upon its maturity, at which time it was
converted to a mini-permanent loan. The loan bears the same rate of
interest as the original construction loan (lender's prime rate (8.5% at
June 30, 1997) plus 1/2% per annum), and matures in July 2000. Principal
and interest on the loan are payable monthly, based on a 25-year
amortization schedule.

INVESTMENTS IN AND ADVANCES TO JOINT VENTURES

During March 1996, the Partnership closed on the sale of its 20% joint
venture interest in Coto de Caza, including the related promissory note for
advances previously made to the joint venture, to unaffiliated third
parties for a cash sales price of $12 million. This transaction is
reflected in Land and property revenues for the six months ended June 30,
1996 on the accompanying consolidated statements of operations and is the
primary cause for the decrease in Land and property revenues and cost of
revenues for the six months ended June 30, 1997 as compared to the same
period in 1996.

On December 31, 1996, the Partnership purchased its joint venture
partner's 50% interest in the Arvida Boose Joint Venture for a purchase
price of approximately $1.8 million and formed a new joint venture in the
name of Metrodrama Joint Venture. As a result of this transaction, the

<PAGE>

Partnership changed from the equity method of accounting to the
consolidated method of accounting for the joint venture effective December
31, 1996.

TRANSACTIONS WITH AFFILIATES

The Partnership, subject to certain limitations, may engage affiliates
of the General Partner for property management, insurance and certain other
administrative services to be performed in connection with the
administration of the Partnership and its assets. The total of such costs
for the six months ended June 30, 1997 was approximately $72,700, all of
which was paid as of June 30, 1997. The total of such costs for the six
months ended June 30, 1996 was approximately $94,100. In addition, the
General Partner and its affiliates are entitled to reimbursements for
salaries and salary-related costs relating to the administration of the
Partnership and the operation of the Partnership's properties. Such costs
were approximately $198,900 and $50,600 for the six months ended June 30,
1997 and 1996, respectively, all of which were paid as of June 30, 1997.

The Partnership receives reimbursements from or reimburses other
affiliates of the General Partner engaged in real estate activities for
certain general and administrative costs including, and without limitation,
salary and salary-related costs relating to work performed by employees of
the Partnership and certain out-of-pocket expenditures incurred on behalf
of such affiliates. For the six month period ended June 30, 1997, the
amount of such costs incurred by the Partnership on behalf of these
affiliates totaled approximately $251,800. At June 30, 1997, approximately
$153,700 was owed to the Partnership, of which approximately $150,400 was
received as of August 8, 1997. For the six month period ended June 30,
1996, the Partnership was entitled to reimbursements of approximately
$110,200.

Prior to June 1996, the Partnership and Arvida/JMB Partners, L.P.-II
(a publicly-held limited partnership affiliated with the General Partner)
each employed project related and administrative personnel who performed
services on behalf of both partnerships. In addition, certain out-of-
pocket expenditures related to such services and other general and
administrative costs were incurred and charged to each partnership as
appropriate. The Partnership receives reimbursements from Arvida/JMB
Partners, L.P.-II for these costs (including salary and salary-related
costs). Subsequent to June 1996, Arvida/JMB Partners, L.P.-II no longer
employed any project-related or administrative personnel and incurred no
costs on behalf of the Partnership. For the six month periods ended June
30, 1997 and 1996, the Partnership was entitled to receive approximately
$56,000 and $1,178,000, respectively, from Arvida/JMB Partners, L.P.-II.
At June 30, 1997, approximately $20,500 was owed to the Partnership, all of
which was received as of August 8, 1997. In addition, for the six month
periods ended June 30, 1997 and 1996, the Partnership was obligated to
reimburse Arvida/JMB Partners, L.P.-II approximately $0 and $113,700,
respectively. At June 30, 1997, approximately $1,800 was unpaid, including
amounts owed from the prior year, all of which was outstanding as of August
8, 1997.

Arvida Company ("Arvida"), pursuant to an agreement with the
Partnership, provides development, construction, management and other
personnel and services to the Partnership for all of its projects and
operations. Pursuant to such agreement, the Partnership reimburses Arvida
for all of its salary and salary-related costs incurred in connection with
work performed on behalf of the Partnership, subject to certain
limitations. The total of such costs for the six month periods ended June
30, 1997 and 1996 were approximately $4,297,200 and $4,384,700,
respectively. In addition, the Partnership was obligated to reimburse
Arvida approximately $22,000 at June 30, 1997, all of which was paid as of
August 8, 1997.

<PAGE>

The Partnership pays for certain general and administrative costs on
behalf of its equity clubs, homeowners associations and maintenance
associations (including salary and salary-related costs). The Partnership
receives reimbursements from these entities for such costs. For the six
month periods ended June 30, 1997 and 1996, the Partnership was entitled to
receive approximately $3,107,700 and $2,453,400, respectively, from these
entities. At June 30, 1997, approximately $41,200 was owed to the
Partnership, of which approximately $29,100 was received as of August 8,
1997. In addition, the Partnership owes its equity clubs for certain costs
incurred by the clubs which are obligations of the Partnership. For the
six month periods ended June 30, 1997 and 1996, the Partnership was
obligated to reimburse its equity clubs approximately $24,200 and $9,200,
respectively. At June 30, 1997, approximately $12,400 was unpaid, of which
approximately $4,300 was paid as of August 8, 1997.

The Partnership, pursuant to an agreement, provides management and
other personnel and services to one of its equity clubs. Pursuant to this
agreement, the Partnership is entitled to receive a management fee for the
services provided to the club. For the six months ended June 30, 1997 and
1996, the Partnership was entitled to receive approximately $258,500 and
$252,500. At June 30, 1997, approximately $358,600 was unpaid (including
amounts owed from the previous year), of which approximately $50,000 was
received as of August 8, 1997.

The Partnership funds certain capital expenditures, working capital
advances and operating deficits of its equity clubs, as well as operating
deficits of its homeowners associations as required or deemed necessary.
The working capital advances and certain capital expenditure fundings are
non-interest bearing, short term in nature, and are expected to be
reimbursed from future cash flows of the equity clubs. The funding of
operating deficits is expensed by the Partnership. At June 30, 1997, the
Partnership was owed approximately $647,800 from its equity clubs, none of
which was received as of August 8, 1997.

The Partnership periodically incurs salary and salary-related costs on
behalf of an affiliate of the General Partner of the Partnership. The
Partnership was entitled to receive approximately $239,700 and $0 for such
costs for the six months ended June 30, 1997 and 1996, respectively, of
which approximately $37,300 was owed to the Partnership at June 30, 1997,
none of which was received as of August 8, 1997.

In accordance with the Partnership Agreement, the General Partner and
Associate Limited Partners have deferred a portion of their distributions
of net cash flow from the Partnership totaling approximately $2,943,700 as
of June 30, 1997. This amount does not bear interest and is expected to be
paid in future periods subject to certain restrictions contained in the
partnership agreement of the Partnership.

All amounts receivable from or payable to the General Partner or its
affiliates do not bear interest and are expected to be paid in future
periods.

COMMITMENTS AND CONTINGENCIES

As security for performance of certain development obligations, the
Partnership is contingently liable under standby letters of credit and
performance bonds for approximately $4,871,000 and $7,993,000, respec-
tively, at June 30, 1997. In addition, certain joint ventures in which the
Partnership holds an interest are also contingently liable under
performance bonds for approximately $1,020,000 at June 30, 1997.

<PAGE>

The Partnership was a defendant in a lawsuit filed in the County
Department, Chancery Division of the Circuit Court of Cook County, Illinois
on July 1, 1996, and entitled Jack H. Carlstrom, Lynn M. Carlstrom, Woneta
Bellevue, Roger Lathbury and Begona Lathbury v. Arvida/JMB Managers, Inc.,
Neil G. Bluhm, Ira J. Schulman, Burton E. Glazov, Stuart C. Nathan, A. Lee
Sacks, John G. Schreiber, Judd D. Malkin, Lehman Brothers Inc., Starwood
Capital Group I, L.P., Starwood/Florida Funding, L.L.C., Starwood
Opportunity Fund IV, L.P., BSS Capital II, L.L.C., Barry Sternlicht, Walton
Street Capital Acquisition Co. III and Whitehall Street Real Estate Limited
Partnership VII, and Arvida/JMB Partners, L.P., nominal defendant
("Carlstrom action"). The Carlstrom action challenged, among other things,
the Partnership's proposed $160 million term loan from Starwood/Florida
Funding L.L.C. ("Starwood financing"). The complaint, as amended, alleged,
among other things, that the General Partner breached its fiduciary duties
owed plaintiffs and members of the purported class plaintiffs sought to
represent by failing to negotiate for the financing with other entities and
entering into the Starwood financing in order to entrench itself and
maintain its control over the Partnership. The complaint, as amended, also
alleged that the terms of the Starwood Financing were burdensome to the
Partnership and allegedly would cause a waste of the Partnership's assets.
The Carlstrom action was consolidated with an earlier filed action and was
brought as a four-count complaint for breach of fiduciary duty on behalf of
the class, breach of fiduciary duty on behalf of the Partnership,
conspiracy and collusion to breach fiduciary duties on behalf of the class
and the Partnership, and for an injunction on behalf of the class and the
Partnership. In addition to the relief described above, plaintiffs in the
complaint, as amended, on behalf of themselves and members of the purported
class, sought damages in a sum to be determined at trial, attorneys' fees
and costs, and such other relief as the Court might deem just and proper.
On December 13, 1996, the Court granted the plaintiffs' motion for a
preliminary injunction to stop the Starwood financing until a hearing on a
permanent injunction. The Partnership, its General Partner, and members of
the Special Committee appealed. After the Partnership appealed, the
parties entered into a settlement. After notice to the class, and a
hearing on May 13, 1997, the trial court, among other things, approved the
settlement as fair, reasonable and adequate, and in the best interests of
the plaintiffs, Holders of Interests, and the Partnership; ordered that the
settlement be consummated by the parties in accordance with its terms and
conditions and the terms and conditions of the stipulation of settlement on
file with the court; dismissed the action on the merits and with prejudice;
reserved jurisdiction over all matters relating to the consummation and
enforcement of the stipulation of settlement and the settlement, and
without limiting the generality of the foregoing, to the enforcement on any
replacement general partner of the commitment of the General Partner in
October 1997 to choose the option set forth in Section 5.5(j)(i)(c) of the
Partnership Agreement; and permanently enjoined and barred the Partnership,
plaintiffs, and Holders of Interests from instituting, commencing,
asserting, prosecuting, or continuing any of the released claims against
any of the defendants in any jurisdiction. The Partnership paid
approximately $1.8 million for the plaintiffs attorneys' fees and expenses
during June 1997 as a result of the approved settlement. No appeal from
the settlement has been taken.

<PAGE>

of Interests, and put their personal interests ahead of the interests of
the Partnership and the Holders of Interests. In the first claim for
relief, plaintiffs sought a declaratory judgment that the terms of the
financing be declared null, void and unenforceable. In the second claim
for relief, plaintiffs asserted a claim derivatively on behalf of the
Partnership alleging, among other things, that the financing commitment
letter was not the product of a valid exercise of business judgment. In
addition to relief described above, plaintiffs sought to preliminarily and
permanently enjoin any actions in furtherance of the financing commitment
letter, an award of compensatory damages, interest, costs and
disbursements, including reasonable attorneys' and experts' fees and such
other relief as the Court might deem just and proper. The General Partner
and the Partnership filed a motion to dismiss the Raleigh action which was
granted on November 7, 1996. In granting the motion, the Court held that
Raleigh was not a Limited Partner and did not have standing to file the
derivative claims. The Court further determined that Raleigh did not have
the right to vote. Plaintiffs asked the Court to reconsider its ruling,
but the Court denied the request to change its ruling.

Plaintiffs appealed the November 7, 1996 dismissal order. On December
12, 1996, the Delaware Supreme Court reversed the trial court order on a
procedural ground. The Delaware Supreme Court concluded that the trial
court should not have considered matters outside of the pleadings in
dismissing the Raleigh action without providing the plaintiffs some limited
discovery. Accordingly, the Delaware Supreme Court remanded the case back
to the trial court for further proceedings.

On December 16, 1996, the Partnership filed a counterclaim against
Vanderbilt Income and Growth Associates, L.L.C. and Raleigh Capital
Associates L.P. ("Raleigh"), seeking a declaratory judgment that Raleigh
had no right to vote on Partnership matters. On January 28, 1997, the
trial court granted plaintiffs leave to dismiss their own complaint
concerning the Starwood financing, leaving the Partnership's counterclaim
pending.

By letter dated January 10, 1997, Raleigh requested admission as a
Substituted Limited Partner of the Partnership. The Partnership referred
the request to the Special Committee. On February 11, 1997, the Special
Committee denied the request. Thereafter, the Partnership supplemented its
counterclaim, as amended, and sought a court declaration that Raleigh is
not entitled to be admitted as a Substituted Limited Partner. On February
20, 1997, Raleigh filed a reply and counterclaim against the Partnership,
the General Partner, and the Special Committee. The reply counterclaim
sought, among other things, a declaration that Raleigh has voting rights in
the Partnership and that defendants' breached their fiduciary duties by
failing to admit Raleigh as a Substituted Limited Partner. The reply
counterclaim also sought to enjoin the Partnership, the General Partner,
and the Special Committee from refusing to admit Raleigh as a Substituted
Limited Partner, an award of damages, interest, fees, and costs.

On or about February 28, 1997, Gladys Beasley, individually and as a
representative of a class of persons similarly situated, filed an
intervenor complaint for declaratory relief against the Partnership. In
the intervenor complaint, plaintiff sought a declaration that purchasers
who obtained Interests in the Partnership in the public offering and
subsequent Holders of Interests in the Partnership by assignment from
original Holders have the same voting rights in the Partnership, among
other things, to remove and replace the General Partner. In addition,
plaintiff Gladys Beasley, sought an order adjudging and decreeing that the
intervenor action was properly maintained as a class, an award of her costs
and expenses of the litigation, and such other relief as the Court deemed
appropriate.

The trial of all claims in the Raleigh action was held on April 7
through April 9, 1997. In a memorandum opinion dated May 23, 1997, the
Court concluded that, while neither the partnership agreement nor the
assignment agreement of the Partnership expressly states whether subsequent

<PAGE>

Holders of Interests have voting rights, a reasonable investor could have
read the operative agreements as providing that subsequent Holders of
Interests, such as Raleigh, have voting rights. The Partnership believes,
among other things, that the Court erred in its application of the law to
the facts on this issue and is in the process of appealing the Court's
decision on this aspect of the case. On the issue of whether Arvida/JMB
Managers, Inc. properly denied Raleigh's request for admission as a
Substituted Limited Partner, the Court upheld the denial of Raleigh's
request.

The Partnership was named a defendant in a number of homeowner
lawsuits, certain of which purported to be class actions, that allegedly in
part arose out of or related to Hurricane Andrew, which on August 24, 1992
resulted in damage to a former community development known as Country Walk.

The homeowner lawsuits alleged, among other things, that the damage
suffered by the plaintiffs' homes and/or condominiums within Country Walk
was beyond what could have been reasonably expected from the hurricane
and/or was a result of the defendants' alleged defective design,
construction, inspection and/or other improper conduct in connection with
the development, construction and sales of such homes and condominiums,
including alleged building code violations. The various plaintiffs sought
varying and, in some cases, unspecified amounts of compensatory damages and
other relief. In certain of the lawsuits injunctive relief and/or punitive
damages were sought.

Several of these lawsuits alleged that the Partnership was liable,
among other reasons, as a result of its own alleged acts of misconduct or
as a result of the Partnership's alleged assumption of Arvida Corporation's
liabilities in connection with the Partnership's purchase of Arvida
Corporation's assets from Disney in 1987, which included certain assets
related to the Country Walk development. Pursuant to the agreement to
purchase such assets, the Partnership obtained indemnification by Disney
for certain liabilities relating to facts or circumstances arising or
occurring prior to the closing of the Partnership's purchase of the assets.

Over 80% of the Arvida-built homes in Country Walk were built prior to the
Partnership's ownership of the Community. Where appropriate, the
Partnership has tendered or will tender each of the above-described
lawsuits to Disney for defense and indemnification in whole or in part
pursuant to the Partnership's indemnification rights. Where appropriate,
the Partnership has also tendered these lawsuits to its various insurance
carriers for defense and coverage. The Partnership is unable to determine
at this time to what extent damages in these lawsuits, if any, against the
Partnership, as well as the Partnership's cost of investigating and
defending the lawsuits, will ultimately be recoverable by the Partnership
either pursuant to its rights of indemnification by Disney or under
contracts of insurance.

One of the Partnership's insurance carriers has been funding
settlements of various litigation related to Hurricane Andrew. In some,
but not all, instances, the insurance carrier has provided the Partnership
with written reservation of rights letters. The aggregate amount of the
settlements funded to date by this carrier is approximately $8.0 million.
The insurance carrier that funded these settlements pursuant to certain
reservations of rights has stated its position that it has done so pursuant
to various non-waiver agreements. The carrier's position was that these
non-waiver agreements permitted the carrier to fund settlements without
barring the carrier from raising insurance coverage issues or waiving such
coverage issues. On May 23, 1995, the insurance carrier rescinded the
various non-waiver agreements currently in effect regarding the remainder
of the Hurricane Andrew litigation, allegedly without waiving any future
coverage defenses, conditions, limitations, or rights. For this and other
reasons, the extent to which the insurance carrier may recover any of these
proceeds from the Partnership is uncertain. Therefore, the accompanying
consolidated financial statements do not reflect any accruals related to
this matter.

<PAGE>

Currently, the Partnership is involved in two subrogation lawsuits.
On April 19, 1993, a subrogation claim entitled Village Homes at Country
Walk Master Maintenance Association, Inc. v. Arvida Corporation et al., was
filed in the 11th Judicial Circuit for Dade County. Plaintiffs filed this
suit for the use and benefit of American Reliance Insurance Company
("American Reliance"). In this suit, as amended, plaintiffs seek to
recover damages and pre- and post-judgment interest in connection with
$10,873,000 American Reliance has allegedly paid, plus amounts it may have
to pay in the future, to the condominium association at Country Walk in the
wake of Hurricane Andrew. Disney is also a defendant in this suit. The
Partnership believes that the amount of this claim that allegedly relates
to units it built and sold is approximately $3,600,000. Plaintiffs also
seek a declaratory judgment seeking to hold the Partnership and other
defendants responsible for amounts American Reliance must pay in the future
to its insured as additional damages beyond the $10,873,000 previously
paid. The Partnership has filed motions directed to the complaint, as
amended, and the litigation is in the discovery stage. The Partnership
intends to vigorously defend itself. On or about May 10, 1996, a
subrogation claim entitled Juarez et al. v. Arvida Corporation et al. was
filed in the Circuit Court of the Eleventh Judicial Circuit in and for Dade
County. Plaintiffs filed this suit for the use and benefit of American
Reliance. In this suit, plaintiffs seek to recover damages, pre-and post-
judgment interest, costs and any other relief the Court may deem just and
proper in connection with $3,200,000 American Reliance allegedly paid on
specified claims at Country Walk in the wake of Hurricane Andrew. Disney
is also a defendant in this suit. The Partnership is advised that the
amount of this claim that allegedly relates to units it sold is
approximately $350,000. The Partnership intends to defend itself
vigorously in this matter. The Partnership was also involved in a
subrogation action brought by the Insurance Company of North America
("INA") arising out of a claim that INA allegedly paid on a single home in
Country Walk. The Partnership has settled this claim for approximately
$5,600 with the settlement being funded by the Partnership's insurance
carrier. On April 24, 1997, the Metropolitan Property and Casualty Company
("Metropolitan") filed a lawsuit entitled Metropolitan Property and
Casualty Company v. Arvida/JMB Partners in the Circuit Court of the 11th
Judicial Circuit in and for Dade County for subrogation in which it seeks
compensatory damages, costs, interest and any other relief the court may
claim just in connection with money Metropolitan allegedly paid to its
homeowner insureds in the wake of Hurricane Andrew. Metropolitan has
advised the Partnership that in connection with this suit there are three
claims, totaling approximately $505,000. The Partnership could be named in
other subrogation actions, and in such event, the Partnership intends to
vigorously defend itself in such actions. Due to the uncertainty of the
outcome of these subrogation actions, the accompanying consolidated
financial statements do not reflect any accruals related to these matters.

The Partnership has been advised by Merrill Lynch, Pierce, Fenner &
Smith Incorporated ("Merrill Lynch") that various investors have sought to
compel Merrill Lynch to arbitrate claims brought by certain investors of
the Partnership representing approximately 5% of the total of approximately
404,000 Interests outstanding. Merrill Lynch has asked the Partnership and
its General Partner to confirm an obligation of the Partnership and its
General Partner to indemnify Merrill Lynch in these claims against all
loss, liability, claim, damage and expense, including without limitation
attorneys' fees and expenses, under the terms of a certain Agency Agreement
dated September 15, 1987 ("Agency Agreement") with the Partnership relating
to the sale of Interests through Merrill Lynch on behalf of the
Partnership. These claimants have sought and are seeking to arbitrate
claims involving unspecified damages against Merrill Lynch based on Merrill
Lynch's alleged violation of applicable state and/or federal securities
laws and alleged violations of the rules of the National Association of
Securities Dealers, Inc., together with pendent state law claims. The
Partnership believes that Merrill Lynch has resolved some of these claims
through litigation and otherwise, and that Merrill Lynch is defending other
claims. The Agency Agreement generally provides that the Partnership and
its General Partner shall indemnify Merrill Lynch against losses occasioned
by any actual or alleged misstatements or omissions of material facts in
the Partnership's offering materials used in connection with the sale of

<PAGE>

Interests and suffered by Merrill Lynch in performing its duties under the
Agency Agreement, under certain specified conditions. The Agency Agreement
also generally provides, under certain conditions, that Merrill Lynch shall
indemnify the Partnership and its General Partner for losses suffered by
the Partnership and occasioned by certain specified conduct by Merrill
Lynch in the course of Merrill Lynch's solicitation of subscriptions for,
and sale of, Interests. The Partnership is unable to determine the
ultimate investment of investors who have filed arbitration claims as to
which Merrill Lynch might seek indemnification in the future. At this
time, and based upon the information presently available about the
arbitration statements of claims filed by some of these investors, the
Partnership and its General Partner believe that they have meritorious
defenses to demands for indemnification made by Merrill Lynch and intend to
vigorously pursue such defenses. Although there can be no assurance
regarding the outcome of the claims for indemnification, at this time,
based on information presently available about such arbitration statements
of claims, the Partnership and its General Partner do not believe that the
demands for indemnification by Merrill Lynch will have a material adverse
effect on the financial condition of the Partnership.

On or about October 16, 1995, a lawsuit was filed against the
Partnership and others in the Circuit Court of the 15th Judicial Circuit,
in and for Palm Beach County, Florida, and amended on or about February 20,
1996, entitled Council of Villages, Inc. et al v. Arvida/JMB Partners,
Arvida/JMB Managers, Inc., Arvida/JMB Partners, Ltd., Broken Sound Club,
Inc., and Country Club Maintenance Association, Inc. The multi-count
complaint, as amended, is brought as a class action, and individually, on
behalf of various residents of the Broken Sound Community, and alleges that
defendants engaged in various acts of misconduct in, among other things,
the establishment, operation, management and marketing of the Broken Sound
golf course and recreational facilities, as well as the alleged improper
failure to turn over such facilities to the Broken Sound homeowners on a
timely basis. Plaintiffs seek, through various theories, including but not
limited to breach of ordinance, breach of fiduciary duty, fraud, unjust
enrichment and civil theft, damages in excess of $45 million, the
appointment of a receiver for the Broken Sound Club, other unspecified
compensatory damages, the right to seek punitive damages, treble damages,
prejudgment interest, attorneys' fees and costs. The Partnership believes
that the lawsuit is without merit and intends to vigorously defend itself
in this matter.

On or about July 30, 1996, Savoy v. Arvida/JMB Partners, Arvida/JMB
Managers, Inc., Arvida/JMB Partners, Ltd., and Broken Sound Club, Inc. was
filed against the Partnership and others in the Circuit Court of the 15th
Judicial Circuit, in and for Palm Beach County, Florida. The lawsuit is
filed as a three-count complaint for dissolution of the Broken Sound Club,
Inc. ("Club"), and seeks, among other things, the appointment of a
custodian or receiver for the Club, a determination that certain acts be
deemed wrongful, the return to the Club of in excess of $2.5 million in
alleged "operating profits", an injunction against the charging of certain
dues, an injunction requiring the Club to produce certain financial
statements, and such other relief as the Court deems just, fair and proper.

The Partnership believes the lawsuit is without merit and intends to
vigorously defend itself.

The Partnership owns a 50% joint venture interest in 31 commercial/
industrial acres in Pompano Beach, Florida, which is encumbered by a
mortgage loan in the principal amount of approximately $4 million at March
31, 1997. During April 1992, as a result of the Partnership's previous
determination that the development of the land was no longer economically
profitable, the Partnership and its joint venture partner each tendered
payment in the amount of approximately $3.1 million to the lender for their
respective shares of the guarantee payment required under the loan
agreement and certain other holding costs, the majority of which reduced
the outstanding mortgage loan to its current balance. The venture also
intended at that time to convey title to the property to the lender;
however, such conveyance is pending until resolution of certain
environmental issues. The Partnership had been negotiating with the lender

<PAGE>

regarding the scope of the development work required to be done.
Negotiations with the lender were unsuccessful, and the lender filed a
lawsuit entitled Bankers' Trust Company v. Arvida/JMB Partners, L.P., et
al., Case No. 95-2780 in the Broward County Circuit Court in which the
lender asserted, among other things, that the mortgage loan is with
recourse to the joint venture partners as a result of the partners' failure
to perform in accordance with the terms of the loan agreement. The lender
demanded payment of the outstanding loan balance plus interest thereon.
The lawsuit has been resolved. On or about July 18, 1997, the parties
entered into a settlement agreement which provides for, among other things,
the payment of $300,000 by the Partnership, $300,000 on behalf of the Joint
Venture Partner, the payment of back taxes on the property by the Joint
Venture in the amount of $302,398, a commitment by the Joint Venture to
remediate the property on or before June 30, 2000 in accordance with the
settlement agreement, issuance of a new non-recourse note, a mortgage
modification and dismissal of the lawsuit with prejudice and without costs.

With respect to the environmental issues, the previous owner remains
obligated to undertake the clean-up. The clean-up began in July 1994, and
the first phase of the remedial action plan was completed in October 1994.
Further action plans are now being discussed with state environmental
officials. If the previous owner is unable to fulfill all its obligations
as they relate to this environmental issue, the venture and ultimately the
Partnership may be obligated for such costs. Should this occur, the
Partnership does not anticipate the cost of this clean-up to be material to
its operations.

The Partnership is also a defendant in several actions brought against
it arising in the normal course of business. It is the belief of the
General Partner, based on knowledge of facts and advice of counsel, that
the claims made against the Partnership in such actions will not result in
any material adverse effect on the Partnership's consolidated financial
position or results of operations.

The Partnership may be responsible for funding certain other ancillary
activities for related entities in the ordinary course of business which
the Partnership does not currently believe will have any material adverse
effect on its consolidated financial position or results of operations.

IMPACT OF RECENTLY ISSUED ACCOUNTING STANDARDS

The Partnership adopted the Financial Accounting Standard's Board's
Statement No. 121, "Accounting for the Impairment of Long-Lived Assets and
for Long-Lived Assets to Be Disposed Of", effective January 1, 1995. In
accordance with Statement No. 121, the Partnership has discontinued
recording depreciation on assets held for disposal. The combined results
of operations for the Partnership's assets held for disposal totaled
approximately $2.8 million and $1.5 million for the six months ended June
30, 1997 and 1996, respectively, and are included in operating properties
revenues and cost of revenues on the accompanying consolidated statements
of operations. The Partnership requires no impairment losses or other
adjustments to be recorded as of June 30, 1997 as a result of the
application of this statement.

During the second quarter of 1997, Statements of Financial Accounting
Standards No. 128 ("Earnings per Share") and No. 129 ("Disclosure of
Information about Capital Structure") were issued. As the Partnership's
capital structure consists of only general and limited partnership
interests, the Partnership does not expect any significant impact on its
consolidated financial statements upon adoption of these standards when
required at the end of 1997.

ADJUSTMENTS

In the opinion of the General Partner, all adjustments (consisting
solely of normal recurring adjustments) necessary for a fair presentation
have been made to the accompanying consolidated financial statements as of
June 30, 1997 and December 31, 1996 and for the three and six months ended
June 30, 1997 and 1996.

<PAGE>

SUBSEQUENT EVENTS

During August 1997, the Partnership made a distribution of $70,700,000
to its Holders of Interests ($175 per Interest) and $2,668,455 to its
General Partner and Associate Limited Partners, collectively.

<PAGE>

PART I. FINANCIAL INFORMATION

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Reference is made to the notes to the accompanying consolidated
financial statements ("Notes") contained in this report for additional
information concerning certain of the Partnership's investments.

At June 30, 1997 and December 31, 1996, the Partnership had cash and
cash equivalents of approximately $14,427,000 and $53,636,000,
respectively. The decrease in Cash and cash equivalents at June 30, 1997
as compared to December 31, 1996 is due primarily to distributions to
partners and Holders of Interests of approximately $25.6 million made in
February 1997, and the payoff of the outstanding balance of $5,234,008
outstanding under the Partnership's term loan in January 1997.

The Partnership's revolving line of credit, income property term loan
and letter of credit agreement matured in July 1997. On July 31, 1997, the
Partnership obtained a new credit facility from Barnett Bank, N.A.
("Barnett") and certain other banks. The new credit facility consists of a
$75 million term loan, a $20 million revolving line of credit and a $5
million letter of credit facility. The new facility has a term of four
years with annual scheduled principal repayments of $12.5 million, as well
as additional annual principal repayments based upon a specified percentage
or amount of the Partnership's available cash. The maximum principal
repayments, including the scheduled repayments, generally will not exceed
$18.75 million per annum. The remaining outstanding balance on the new
facility is due upon maturity. Interest on the facility is based, at the
Partnership's option, on the relevant LIBOR plus 2.25% per annum or
Barnett's prime rate. The Partnership expects to obtain an interest rate
swap for all or a portion of the outstanding balance of the term loan. The
Partnership paid loan fees totaling approximately 1% of the total facility
upon the closing of the loan. In conjunction with the closing of the loan,
the Partnership paid off the remaining balances outstanding under its
existing credit facility including principal, interest and fees totaling
approximately $9.6 million. In addition, due to the replacement of the
Partnership's existing letter of credit facility by the new credit
facility, the Partnership was required to post approximately $4.2 million
cash as collateral with its previous lender for letters of credit which
continue to be obligations of that lender. The letters of credit are
expected to be replaced with letters of credit issued under the Barnett
facility at which time the cash collateral will be released to the
Partnership. The term loan, revolving line of credit and letter of credit
facility are secured by recorded mortgages on real property of the
Partnership (including certain of its consolidated ventures) and pledges of
certain other assets. All of the loans under this new facility are cross-
collateralized and cross-defaulted. Proceeds from the new financing were
used to make a distribution in the amount of approximately $73.4 million,
including a distribution of $175 per Interest to the Holders of Interests
in August 1997.

As further discussed in Item 1. of Part II - Legal Proceedings, on May
13, 1997, a final hearing on the terms of the settlement of the Carlstrom
action was held. At the conclusion of the hearing, the trial court, among
other things, approved the settlement as fair, reasonable and adequate, and
in the best interests of the plaintiffs, Holders of Interests and the
Partnership. In accordance with the terms of this settlement, the General

<PAGE>

Partner will choose the option set forth in Section 5.5(J)(i)(c) of the
Partnership Agreement (i.e. to commence a liquidation phase on October 31,
1997, in which all of the Partnership's remaining assets will be sold or
disposed of by October 31, 2002).

During June and July of 1996, the Holders of Interests received
several unsolicited offers to purchase their Interests in the Partnership.
The General Partner of the Partnership established a special committee (the
"Special Committee") to review such offers and make a recommendation to the
Holders of Interests with respect to the offers. In addition, the
Partnership engaged Lehman Brothers Inc. ("Lehman") as a financial advisor
to assist the Special Committee in evaluating and responding to the offers.

Lehman was asked to render its estimate of the present discounted value
("Estimated Liquidation Value") of an Interest based on the assumption that
the Partnership commences an orderly liquidation in October 1997 and
completes that liquidation by October 2002. Lehman arrived at an Estimated
Liquidation Value as of July 2, 1996 ranging from $565 to $610 per
Interest. This Estimated Liquidation Value relied upon the Partnership's
estimate of the gross cash distributions that a Holder of Interests would
receive through the assumed liquidation period, discounted to reflect the
present value of such distributions. Certain assumptions and other
factors, including risk factors, that should be considered when analyzing
the projected budgets which were the basis of such estimate of gross
distributions can be found in the Partnership's Schedule 14D-9 dated July
3, 1996, as amended, which was filed with the Securities and Exchange
Commission. Reference to such Schedule 14D-9 is hereby made for a
discussion of such assumptions and other factors.

Lehman updated its Estimated Liquidation Value as of October 1, 1996
(the "October Estimated Liquidation Value"). In arriving at the Revised
Estimated Liquidation Value, Lehman relied upon the Partnership's estimate
of the gross cash distributions that the Holders would receive through the
assumed liquidation period. These estimated gross distributions were then
discounted to reflect the present value of such distributions as of October
1, 1996, which ranged from $595 to $640 per Interest, depending on the
different discount rates used.

During October 1996, Raleigh Capital Associates, L.P. and certain of
its affiliates (collectively, "Raleigh") commenced another unsolicited
offer to acquire up to 100,000 Interests, which represents approximately
24.8% of the outstanding Interests in the Partnership, at a purchase price
of $500 per Interest, which amount, under the terms of the offer, was to be
reduced by distributions made by the Partnership during the period of the
offer. Such offer was amended on April 16, 1997 to modify the purchase
price for the Interests to provide for $400 per Interest (which reflects an
adjustment in the purchase price for the $60 per Interest distribution made
by the Partnership in February 1997) to be paid upon closing of the offer,
and an additional $40 per Interest to be paid should a certain lawsuit
pending in the Court of Chancery of the State of Delaware result in a
determination that Raleigh has voting rights with respect to Interests it
had previously acquired, which was subsequently determined by such court.
Raleigh's amended offer expired on April 29, 1997. Raleigh has reported
that it acquired a total of 26,405 Interests pursuant to such amended
offer, which represents approximately 6.5% of the total outstanding
Interests. As a result of the Interests acquired pursuant to both its
original offer and its amended offer, Raleigh has reported ownership of a
total of 106,747 Interests, representing approximately 26.4% of the total
outstanding Interests.

Based on its analysis and its consultation with its advisors, the
Special Committee determined that with respect to Holders of Interests who
have the expectation of retaining their Interests through an anticipated
orderly liquidation of the Partnership's assets by October 2002 and who
have no current or anticipated need for liquidity, the second Raleigh offer
was inadequate and not in the best interest of such Holders. The Special
Committee recommended that such Holders reject the second Raleigh offer and

<PAGE>

not tender their Interests pursuant to such offer. However, the Special
Committee recommended to those Holders of Interests who have a current need
or desire for liquidity that such Holders tender their Interests in the
offer.

During April 1997, Smithtown Bay, L.L.C. ("Smithtown") commenced an
offer to acquire up to 17,000 Interests, which represents approximately
4.2% of the outstanding Interests in the Partnership. Smithtown's offer had
a purchase price of $475 per Interest and expired on May 30, 1997. In
connection with the Smithtown offer, Lehman updated its Estimated
Liquidation Value as of March 31, 1997 (the "March Estimated Liquidation
Value"). In arriving at the March Estimated Liquidation Value, Lehman
relied upon the Partnership's estimate of the gross cash distributions that
the Holders of Interests would receive through the assumed liquidation
period. These estimated gross distributions were then discounted to
reflect the present value of such distributions as of March 31, 1997, which
ranged from $540 to $585 per Interest, depending on the different discount
rates used.

Based on its analysis and its consultation with its advisors, the
Special Committee has determined that with respect to Holders of Interests
who have the expectation of retaining their Interests through an
anticipated orderly liquidation of the Partnership's assets by October 2002
and who have no current or anticipated need or desire for liquidity, the
Smithtown offer was inadequate and not in the best interests of such
Holders of Interests. Accordingly, the Special Committee recommended that
such Holders of Interests reject the Smithtown offer and not tender their
Interests pursuant to such offer. However, the Special Committee
recommends that Holders of Interests who have a current need or desire for
liquidity tender their Interests to Smithtown.

During July 1997, Lafayette Bay, LLC ("Lafayette") commenced an offer
to acquire up to 10,400 Interests, which represents approximately 2.6% of
the outstanding Interests in the Partnership. Lafayette's offer has a
purchase price of $540 per Interest and is scheduled to expire on August
29, 1997. Under the terms of Lafayette's offer, Lafayette will reduce its
offer price of $540 per Interest by the $175 per Interest distributed to
the Holders of Interests during August 1997 (for a new purchase price under
the Lafayette offer of $365 per Interest).

The Partnership estimate of the present discounted value (the
"Partnership's Estimated Liquidation Value") of an Interest on a
liquidation basis, as of June 30, 1997, was a range of approximately $590
to $640 per Interest. The Partnership's Estimated Liquidation Value is
based on the Partnership's projected budgets and the underlying assumptions
thereto, and the assumption that the Partnership completes an orderly
liquidation of its assets by October 2002. The Partnership's Estimated
Liquidation Value represents the Partnership's estimate of the gross cash
distributions that an Interestholder would receive per Interest from June
30, 1997, through the assumed liquidation, discounted to reflect the
present value of such distributions. Based upon its estimate of the gross
cash distributions to be received, the Partnership believes that an
Interestholder would receive total distributions from June 30, 1997,
through October 2002 in excess of $1,000, including the distribution of
$175 per Interest being made from the proceeds of the new credit facility
discussed above.

The Special Committee has expressed no opinion and has remained
neutral in regard to the Lafayette offer for those Holders of Interests who
have no current or anticipated need or desire for liquidity and who expect
to obtain the Interests through an anticipated orderly liquidation of the
Partnership by October 2002. However, the Special Committee recommends
that Holders of Interests who have a current need or desire for liquidity
tender their Interests to Lafayette. Lehman was not requested to render,
and has not rendered, any opinion as to the adequacy or fairness of the
Lafayette offer.

<PAGE>

The Partnership began incurring significant expenditures in connection
with the various unsolicited tender offers for Interests during the third
quarter of 1996, and may incur significant additional costs in the future
in connection therewith.

RESULTS OF OPERATIONS

The results of operations for the three and six months ended June 30,
1997 are primarily attributable to the development and sale or operation of
the Partnership's assets.

For the three months ended June 30, 1997, the Partnership (including
its consolidated ventures and its unconsolidated ventures accounted for
under the equity method) closed on the sale of 261 housing units, 76
homesite lots and approximately six acres of developed land. This compares
to closings in the second quarter of 1996 of 271 housing units, 70 homesite
lots and approximately three acres of developed land. Outstanding
contracts ("backlog") as of June 30, 1997 were for 670 housing units, 32
homesites and approximately 37 acres of undeveloped land. This compares to
a backlog as of June 30, 1996 of 823 housing units, 52 homesites and
approximately 33 acres of developed and undeveloped land tracts.

The Partnership's Communities are in various stages of development,
with estimated remaining build-outs ranging from one to nine years. The
Weston Community, located in Broward County, Florida, is the Partnership's
largest Community and is in its mid-stage of development. Also in their
mid stages of development are the River Hills Country Club in Tampa,
Florida; the Water's Edge Community in Atlanta, Georgia; The Cullasaja
Club, near Highlands, North Carolina and the Partnership's condominium
project on Longboat Key, Florida known as Arvida's Grand Bay. The
Partnership's Jacksonville Golf & Country Club Community in Florida is in
its late stage of development. All of the remaining units in the
Partnership's Sawgrass Country Club and Dockside Communities in
Jacksonville, Florida and Atlanta, Georgia, respectively, closed during
1996. In addition, the Broken Sound Community, located in Boca Raton,
Florida, had its final closings in 1995; however, the Partnership still has
equity memberships in the Broken Sound Club to sell. Future revenues will
be impacted to the extent that there are lower levels of inventories
available for sale as the Partnership's remaining Communities approach or
undertake their final phases.

The decrease in housing revenues for the three and six months ended
June 30, 1997 as compared to the same periods in 1996 is due primarily to
decreased revenue recognition on the condominiums at Arvida's Grand Bay.
Substantial revenues were recognized from three of the buildings at
Arvida's Grand Bay in 1996. The Partnership expects to recognize the
remaining revenues from these buildings in 1997. The Partnership commenced
construction on one of the two buildings still to be completed at Arvida's
Grand Bay during the second quarter of 1997. However, no revenues are
expected to be recognized for this building until 1998. The decrease in
revenues for the six months ended June 30, 1997 as compared to the same
period in 1996 is also due to a lower volume of units closed in Weston
during the first quarter of 1997 as compared to the same quarter in 1996.
This unfavorable variance was a result of a decrease in unit backlog at
December 31, 1996 as compared to December 31, 1995. However, a portion of
this unfavorable variance reversed during the 1997 second quarter due to
increased unit closings in Weston as compared to the second quarter in
1996. The close out of the remaining units in Sawgrass Country Club in
Jacksonville and Dockside in Atlanta in 1996 also contributed to the
decrease in revenues for 1997 as compared to 1996.

<PAGE>

The increase in homesite revenues for the three months ended June 30,
1997 as compared to the same period in 1996 is due primarily to a higher
volume of lot closings in Weston, as well as an increase in the average
price of the lots closed. Fewer lots closed year to date for the six
months ended June 30, 1997 as compared to the same period in 1996 due
primarily to slower lot sales in the Partnership's Waters Edge community in
Atlanta. However, homesite revenues increased for the six months as a
result of the recognition of deferred income in 1997 for lot sales at
Weston recorded in previous years which did not yet meet the requirements
for income recognition.

The increase in the gross operating profit margin from homesite
activities resulted from the favorable pricing of lots in Weston, as well
as the recognition of the deferred income in 1997 for lots closed in
previous years.

Land and property revenues increased for the three months ended June
30, 1997 as compared to the same period in 1996 due primarily to the
closing of an approximate six acre developed commercial parcel in Weston in
June 1997. The decrease in land and property revenues for the six months
ended June 30, 1997 as compared to the same period in 1996 is due primarily
to the sale of the Partnership's 20% joint venture interest in the Coto de
Caza Joint Venture and related promissory note in March 1996 for a cash
sales price of $12 million.

The increase in operating properties revenues for the three and six
months ended June 30, 1997 as compared to the same periods in 1996 is due
primarily to rental income generated at the Partnership's new retail
shopping plaza in Weston, which opened in the fourth quarter of 1996. In
addition, revenues from the Partnership's club operations increased in 1997
as compared to 1996 due primarily to an overall increase in membership dues
and golf revenues at the Partnership's country clubs in Weston and River
Hills, and increased revenues from the restaurant operations at one of the
Partnership's clubs in Jacksonville, Florida.

The increase in the gross operating profit margin from operating
properties activities is due primarily to the elimination of depreciation
expense recorded on assets held for disposal. Due to the intended sale of
these assets, and in accordance with FASB Statement 121, the Partnership
discontinued recording depreciation on its two retail shopping plazas and
cable operation in Weston, as well as its hotel operation and mixed use
office/retail plaza in Boca Raton, Florida.

The decrease in revenues from brokerage and other operations for the
three and six months ended June 30, 1997 as compared to the same periods in
1996 is due primarily to a decrease in the volume of resale brokerage
activity in Palm Beach County, Florida, as well as the Partnership's sale
of its resale operation located in Longboat Key near Sarasota, Florida in
October 1996. Also contributing to the unfavorable variance are decreased
commissions earned from the sales of builders' homes within the
Partnership's Weston Community due to a decrease in the number of builder
units closed in 1997 as compared to 1996.

The increase in selling, general and administrative expenses for the
three and six months ended June 30, 1997 as compared to the same periods in
1996 is due primarily to the approximate $1.8 million payment of certain
attorneys' fees and expenses as a result of the approved settlement in the
Carlstrom action as discussed in detail in Item 1. of Part II - Legal
Proceedings. In addition, the Partnership began incurring significant
expenditures in the third quarter of 1996 in connection with the various
unsolicited tender offers made for Interests. Such expenditures incurred
during the period ended June 30, 1997 also contributed to the increase in
selling, general and administrative expenses as compared to the same period
in 1996.

<PAGE>

While the average balances invested in interest bearing accounts
increased for the six months ended June 30, 1997 as compared to the same
period in 1996 resulting in increased interest income for the period, such
balances decreased in the second quarter of 1997 as compared to the same
quarter in 1996. The decrease in the average balances invested in the
second quarter is the cause for the decrease in interest income for the
three months ended June 30, 1997 as compared to the same period in 1996.

<PAGE>

PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

Reference is made to the Commitments and Contingencies Section of
Notes for a detailed discussion regarding certain lawsuits which allegedly
in part arose out of or related to Hurricane Andrew, which on August 24,
1992 resulted in damage to a former community development known as Country
Walk, which discussion is hereby incorporated herein by reference.

The Partnership was a defendant in a lawsuit filed in the County
Department, Chancery Division of the Circuit Court of Cook County, Illinois
on July 1, 1996, and entitled Jack H. Carlstrom, Lynn M. Carlstrom, Woneta
Bellevue, Roger Lathbury and Begona Lathbury v. Arvida/JMB Managers, Inc.,
Neil G. Bluhm, Ira J. Schulman, Burton E. Glazov, Stuart C. Nathan, A. Lee
Sacks, John G. Schreiber, Judd D. Malkin, Lehman Brothers Inc., Starwood
Capital Group I, L.P., Starwood/Florida Funding, L.L.C., Starwood
Opportunity Fund IV, L.P., BSS Capital II, L.L.C., Barry Sternlicht, Walton
Street Capital Acquisition Co. III and Whitehall Street Real Estate Limited
Partnership VII, and Arvida/JMB Partners, L.P., nominal defendant
("Carlstrom action"). The Carlstrom action challenged, among other things,
the Partnership's proposed $160 million term loan from Starwood/Florida
Funding L.L.C. ("Starwood financing"). The complaint, as amended, alleged,
among other things, that the General Partner breached its fiduciary duties
owed plaintiffs and members of the purported class plaintiffs sought to
represent by failing to negotiate for the financing with other entities and
entering into the Starwood financing in order to entrench itself and
maintain its control over the Partnership. The complaint, as amended, also
alleged that the terms of the Starwood Financing were burdensome to the
Partnership and allegedly would cause a waste of the Partnership's assets.
The Carlstrom action was consolidated with an earlier filed action and was
brought as a four-count complaint for breach of fiduciary duty on behalf of
the class, breach of fiduciary duty on behalf of the Partnership,
conspiracy and collusion to breach fiduciary duties on behalf of the class
and the Partnership, and for an injunction on behalf of the class and the
Partnership. In addition to the relief described above, plaintiffs in the
complaint, as amended, on behalf of themselves and members of the purported
class, sought damages in a sum to be determined at trial, attorneys' fees
and costs, and such other relief as the Court might deem just and proper.
On December 13, 1996, the Court granted the plaintiffs' motion for a
preliminary injunction to stop the Starwood financing until a hearing on a
permanent injunction. The Partnership, its General Partner, and members of
the Special Committee appealed. After the Partnership appealed, the
parties entered into a settlement. After notice to the class, and a
hearing on May 13, 1997, the trial court, among other things, approved the
settlement as fair, reasonable and adequate, and in the best interests of
the plaintiffs, Holders of Interests, and the Partnership; ordered that the
settlement be consummated by the parties in accordance with its terms and
conditions and the terms and conditions of the stipulation of settlement on
file with the court; dismissed the action on the merits and with prejudice;
reserved jurisdiction over all matters relating to the consummation and
enforcement of the stipulation of settlement and the settlement, and
without limiting the generality of the foregoing, to the enforcement on any
replacement general partner of the commitment of the General Partner in
October 1997 to choose the option set forth in Section 5.5(J)(i)(c) of the
Partnership Agreement; and permanently enjoined and barred the Partnership,
plaintiffs, and Holders of Interests from instituting, commencing,
asserting, prosecuting, or continuing any of the released claims against
any of the defendants in any jurisdiction. The Partnership paid
approximately $1.8 million for the plaintiffs attorneys' fees and expenses
during June 1997 as a result of the approved settlement. No appeal from
the settlement has been taken.

<PAGE>

On or about September 27, 1996, a lawsuit entitled Vanderbilt Income
and Growth Associates, L.L.C. and Raleigh Capital Associates L.P.,
individually and derivatively on behalf of Arvida/JMB Partners, L.P. v.
Arvida/JMB Managers, Inc., Judd D. Malkin, Neil G. Bluhm, Burton E. Glazov,
Stuart C. Nathan, A. Lee Sacks, John G. Schreiber, BSS Capital II, L.L.C.,
Starwood Capital Group I, L.P., Starwood/Florida Funding, L.L.C., Starwood
Opportunity Fund, IV, L.P. and Barry Sternlicht, defendants, and Arvida/JMB
Partners, L.P., nominal defendant, was filed in the Court of Chancery of
the State of Delaware in and for New Castle County, Civil Action No. 15238
("Raleigh action"). The Raleigh action was filed as a verified complaint
for declaratory and injunctive relief. Plaintiffs claimed that the
defendants in entering into the financing commitment letter for the
Starwood term financing violated, or aided and abetted, or participated in
the violation of, fiduciary duties owed to the Partnership and the Holders
of Interests, and put their personal interests ahead of the interests of
the Partnership and the Holders of Interests. In the first claim for
relief, plaintiffs sought a declaratory judgment that the terms of the
financing be declared null, void and unenforceable. In the second claim
for relief, plaintiffs asserted a claim derivatively on behalf of the
Partnership alleging, among other things, that the financing commitment
letter was not the product of a valid exercise of business judgment. In
addition to relief described above, plaintiffs sought to preliminarily and
permanently enjoin any actions in furtherance of the financing commitment
letter, an award of compensatory damages, interest, costs and
disbursements, including reasonable attorneys' and experts' fees and such
other relief as the Court might deem just and proper. The General Partner
and the Partnership filed a motion to dismiss the Raleigh action which was
granted on November 7, 1996. In granting the motion, the Court held that
Raleigh was not a Limited Partner and did not have standing to file the
derivative claims. The Court further determined that Raleigh did not have
the right to vote. Plaintiffs asked the Court to reconsider its ruling,
but the Court denied the request to change its ruling.

<PAGE>

The trial of all claims in the Raleigh action was held on April 7
through April 9, 1997. In a memorandum opinion dated may 23, 1997, the
Court concluded that, while neither the partnership agreement nor the
assignment agreement of the Partnership expressly states whether subsequent
Holders of Interests have voting rights, a reasonable investor could have
read the operative agreements as providing that subsequent Holders of
Interests, such as Raleigh, have voting rights. The Partnership believes,
among other things, that the Court erred in its application of the law to
the facts on this issue and is in the process of appealing the Court's
decision on this aspect of the case. On the issue of whether Arvida/JMB
Managers, Inc. properly denied Raleigh's request for admission as a
Substituted Limited Partner, the Court upheld the denial of Raleigh's
request.

On or about October 16, 1995, a lawsuit was filed against the
Partnership and others in the Circuit Court of the 15th Judicial Circuit,
in and for Palm Beach County, Florida, entitled Council of Villages, Inc.
et al v. Arvida/JMB Partners, Arvida/JMB Managers, Inc., Arvida/JMB
Partners, Ltd., Broken Sound Club, Inc., and Country Club Maintenance
Association, Inc. The multi-count lawsuit, as amended, is brought as a
class action, and individually, on behalf of various residents of the
Broken Sound Community, and alleges that defendants engaged in various acts
of misconduct in, among other things, the establishment, operation,
management and marketing of the Broken Sound golf course and recreational
facilities, as well as the alleged improper failure to turn over said
facilities to the Broken Sound homeowners on a timely basis. Plaintiffs
seek, through various theories, including but not limited to breach of
ordinance, fiduciary duty, fraud, and civil theft, damages in excess of $45
million, the appointment of a receiver for the Broken Sound Club, other
unspecified compensatory damages, the right to seek punitive damages,
treble damages, prejudgment interest, attorneys' fees and costs. The
Partnership believes that the lawsuit is without merit and intends to
vigorously defend itself in this matter.

The Partnership believes the lawsuit is without merit and intends to
vigorously defend itself.

Bankers' Trust Company v. Arvida/JMB Partners, L.P., et. al., Case No.
95-2780 was filed in the Broward County Circuit Court in which the
plaintiff asserted, among other things, that the mortgage loan on a joint
venture in which the Partnership owns a 50% joint venture interest is with
recourse to the joint venture partners as a result of the partners' failure

<PAGE>

to perform in accordance with the terms of the loan agreement. The lender
demanded payment of the outstanding loan balance plus interest thereon.
The lawsuit has been resolved. On or about July 18, 1997, the parties
entered into a settlement agreement which provides for, among other things,
the payment of $300,000 by the Partnership, $300,000 on behalf of the Joint
Venture Partner, the payment of back taxes on the property by the Joint
Venture in the amount of $302,398, a commitment by the Joint Venture to
remediate the property on or before June 30, 2000 in accordance with the
settlement agreement, issuance of a new non-recourse note, a mortgage
modification and dismissal of the lawsuit with prejudice and without costs.

Other than as described above, the Partnership is not subject to any
material pending legal proceedings, other than ordinary routine litigation
incidental to the business of the Partnership. However, reference is made
to the Commitments and Contingencies Section of the Notes for a discussion
of certain claims asserted by Merrill Lynch for indemnification by the
Partnership and the General Partner in connection with claims for
arbitration filed by certain investors in the Partnership.

<PAGE>

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

(a) Exhibits

3.1. Amended and Restated Agreement of Limited Partnership.*

3.2. Assignment Agreement by and among the General Partner, the
Initial Limited Partner and the Partnership.*

4.1. Various mortgages and other security interests dated October
7, 1992 related to the assets of Arvida/JMB Partners, Center Office
Partners, Center Retail Partners, Center Hotel Limited Partnership, Weston
Hills Country Club Limited Partnership which secure loans under the Amended
and Restated Credit Agreement referred to in Exhibit 4.1 are herein
incorporated by reference to Exhibit No. 4.7 of the Partnership's Report on
Form 10-Q (File number 0-16976) dated November 11, 1992.

4.2. Second Amended and Restated Credit Agreement dated November
29, 1994, among Arvida/JMB Partners, L.P., Arvida/JMB Partners, Southeast
Florida Holdings, Inc., Center Office Partners, Center Retail Partners,
Center Hotel Limited Partnership, Weston Hills Country Club Limited
Partnership and Chemical Bank and Nationsbank of Florida, N.A. ***

4.3. Affirmation and Amendment of Security Documents dated November
29, 1994, among Arvida/JMB Partners, Arvida/JMB Partners, L.P., Southeast
Florida Holdings, Inc., Center Office Partners, Center Retail Partners,
Center Hotel Limited Partnership, Weston Hills Country Club Limited
Partnership and Chemical Bank. ***

4.4. Modification of Mortgage and Security Agreement and Other loan
Documents dated November 29, 1994, among Arvida/JMB Partners, Weston Hills
Country Club Limited Partnership and Chemical Bank. ***

4.5. Modification of First Mortgage and Security Agreement and
Other Loan Documents dated November 29, 1994, among Arvida/JMB Partners,
Center Office Partners, Center Retail Partners, Center Hotel Limited
Partnership and Chemical Bank. ***

4.6. Credit Agreement extension dated July 28, 1995 made by
Arvida/JMB Partners, L.P., Arvida/JMB Partners, Southeast Florida Holdings,
Inc., Center Office Partners, Center Retail Partners, Center Hotel Limited
Partnership, Weston Hills Country Club Limited Partnership and Chemical
Bank is incorporated by reference to the Partnership's Report for June 30,
1995 on Form 10-Q (File No. 0-16976) dated August 9, 1995.

4.7. Letter Agreement dated January 17, 1996, among Arvida/JMB
Partners, L.P., Arvida/JMB Partners, Southeast Florida Holdings, Inc.,
Center Office Partners, Center Retail Partners, Center Hotel Limited
Partnership, Weston Hills Country Club Limited Partnership and Chemical
Bank and Nationsbank of Florida, N.A. regarding the release of a certain
parcel from the lender's lien is herein incorporated by reference to
Exhibit 4.15 to the Partnership's report for December 31, 1995 on Form 10-K
(File No. 0-16976) dated March 25, 1996.

4.8. Letter Agreement dated March 1, 1996 regarding the sale of the
Partnership's interest in the Coto de Caza Joint Venture and the extension
of the maturity date of the revolving line of credit facility and the
income property term loan is incorporated herein by reference to Exhibit
4.16 to the Partnership's report for December 31, 1995 on Form 10-K (File
No. 0-16976) dated March 25, 1996.

<PAGE>

4.9. Commitment for a term loan by and between Starwood/Florida
Funding, L.L.C. and Arvida/JMB Partners, L.P. dated September 12, 1996 is
incorporated herein by reference to Exhibit 4.1 to the Partnership's Report
on Form 8-K (File No. 0-16976) dated September 12, 1996.

4.10. Letter dated March 12, 1997, from Barnett Bank of Broward
County, N.A. containing a term sheet for a $100 million financing is
incorporated herein by reference to Exhibit 4.10 of the Partnership's
Report for December 31, 1996, as amended, on Form 10-K (File No. 0-16976)
dated May 1, 1997.

4.11. Credit Agreement dated July 31, 1997 between Barnett Bank,
N.A. and The Other Lenders and Arvida/JMB Partners, L.P. is filed herewith.

10.1. Agreement between the Partnership and The Walt Disney Company
dated January 29, 1987 is hereby incorporated by reference to Exhibit 10.2
to the Partnership's Registration Statement on Form S-1 (File No. 33-14091)
under the Securities Act of 1933 filed on May 7, 1987.

10.2. Management, Advisory and Supervisory Agreement is hereby
incorporated by reference to Exhibit 10.2 to the Partnership's report for
December 31, 1990 on Form 10-K (File No. 0-16976) dated March 27, 1991.

10.3. Letter Agreement, dated as of September 10, 1987, between the
Partnership and The Walt Disney Company, together with exhibits and related
documents.**

10.4. Joint Venture Agreement dated as of September 10, 1987, of
Arvida/JMB Partners, a Florida general partnership. **

10.5. Stipulation of settlement dated April 1, 1997, filed in the
Circuit Court of Cook County, Illinois, Chancery Department is incorporated
herein by reference to Exhibit 16.5 of the Partnership's Report for
December 31, 1996, as amended, on Form 10-K (File No. 0-16976) dated May 1,
1997.

27. Financial Data Schedule

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

* Previously filed with the Securities and Exchange
Commission as Exhibits 3. and 4.0, respectively, to the Partnership's Form
10-K Report (File No. 0-16976) filed on March 27, 1990 and incorporated
herein by reference.

** Previously filed with the Securities and Exchange
Commission as Exhibits 10.4 and 10.5, respectively, to the Partnership's
Registration Statement (as amended) on Form S-1 (File No. 33-14091) under
the Securities Act of 1933 filed on September 11, 1987 and incorporated
herein by reference.

*** Previously filed with the Securities and Exchange
Commission as Exhibits 4.10, 4.11, 4.12 and 4.13, respectively, to the
Partnership's Form 10-K Report (File No. 0-16976) filed on March 27, 1995
and hereby incorporated herein by reference.

(b) No reports on Form 8-K were filed during the quarter ended
June 30, 1997.

<PAGE>

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934,
the Company has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.

ARVIDA/JMB PARTNERS, L.P.

BY: Arvida/JMB Managers, Inc.
(The General Partner)

By: GAILEN J. HULL
Gailen J. Hull, Vice President
Date: August 8, 1997

Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following person in the capacity
and on the date indicated.

GAILEN J. HULL
Gailen J. Hull, Principal Accounting Officer
Date: August 8, 1997

CREDIT AGREEMENT

Between

BARNETT BANK, N.A.

as Agent

and

The Other Lenders Parties Hereto (collectively "The Lenders")

and

ARVIDA/JMB PARTNERS, L.P. and

its Borrower Affiliates and Borrower Subsidiaries

(collectively, the "Borrowers")

Dated as of __________, 1997

<PAGE>

TABLE OF CONTENTS

ARTICLE 1. DEFINITIONS. . . . . . . . . . . . . . . . . . 1
1.1 Defined Terms . . . . . . . . . . . . . . . . . 1
1.1.1 "Accounts". . . . . . . . . . . . . . 1
1.1.2 "Actual Share". . . . . . . . . . . . 2
1.1.3 "Additional Properties" . . . . . . . 2
1.1.4 "Adjusted Value". . . . . . . . . . . 2
1.1.5 "Advance" . . . . . . . . . . . . . . 2
1.1.6 "Affiliate" . . . . . . . . . . . . . 2
1.1.7 "Agreement" . . . . . . . . . . . . . 2
1.1.8 "Appraisals". . . . . . . . . . . . . 2
1.1.9 "Assignments of Entity Interests" . . 2
1.1.10 "Assignments of Intellectual Property" 3
1.1.11 "Assignments of Licenses, Permits, and
Development Rights". . . . . . . . . . . . . . . . . . . . 3
1.1.12 "Assignments of Rents and Leases" . . 3
1.1.13 "Bank Accounts" . . . . . . . . . . . 3
1.1.14 "Borrower Affiliate". . . . . . . . . 3
1.1.15 "Borrower Subsidiary" . . . . . . . . 3
1.1.16 "Borrowers" . . . . . . . . . . . . . 3
1.1.17 "Business Day". . . . . . . . . . . . 4
1.1.18 "Cable Franchise" . . . . . . . . . . 4
1.1.19 "Carlstrom Stipulation. . . . . . . . 4
1.1.20 "Cash Collateral" . . . . . . . . . . 4
1.1.21 "Cash Flow After Project Financing" . 4
1.1.22 "Closing Date". . . . . . . . . . . . 4
1.1.23 "Code". . . . . . . . . . . . . . . . 4
1.1.24 "Collateral". . . . . . . . . . . . . 5
1.1.25 "Committed Share" . . . . . . . . . . 5
1.1.26 "Commitment Termination Date" . . . . 5
1.1.27 "Consistent Basis". . . . . . . . . . 5
1.1.28 "Consolidated Entities" . . . . . . . 5
1.1.29 "Contingent Payment Agreement". . . . 5
1.1.30 "Controlled Affiliate . . . . . . . . 5
1.1.31 "Default Rate". . . . . . . . . . . . 6
1.1.32 "Distributions" . . . . . . . . . . . 6
1.1.33 "Effective Rate". . . . . . . . . . . 6
1.1.34 "Entity Interests". . . . . . . . . . 6
1.1.35 "Equipment" . . . . . . . . . . . . . 6
1.1.36 "ERISA" . . . . . . . . . . . . . . . 6
1.1.37 "Event of Default". . . . . . . . . . 6
1.1.38 "Financial Statements". . . . . . . . 6
1.1.39 "General Intangibles" . . . . . . . . 6
1.1.40 "Generally Accepted Accounting Principles" 6
1.1.41 "Improvements". . . . . . . . . . . . 6
1.1.42 "Intellectual Property" . . . . . . . 7
1.1.43 "Inventory" . . . . . . . . . . . . . 7
1.1.44 "Lenders" . . . . . . . . . . . . . . 7
1.1.45 "Letter of Credit Line" . . . . . . . 7
1.1.46 "Letters of Credit" . . . . . . . . . 7
1.1.47 "Liens" . . . . . . . . . . . . . . . 7
1.1.48 "Line of Credit". . . . . . . . . . . 7
1.1.49 "Loan Documents". . . . . . . . . . . 7
1.1.50 "Loan Year" . . . . . . . . . . . . . 7
1.1.51 "Loans" . . . . . . . . . . . . . . . 7
1.1.52 "Material Adverse Change" . . . . . . 7
1.1.53 "Mortgaged Properties". . . . . . . . 8
1.1.54 "Mortgages" . . . . . . . . . . . . . 8
1.1.55 "Net Worth" . . . . . . . . . . . . . 8
1.1.56 "Non-Controlled Affiliate . . . . . . 8
1.1.57 "Notes" . . . . . . . . . . . . . . . 9
1.1.58 "Obligations" . . . . . . . . . . . . 9
1.1.59 "Operating Accounts". . . . . . . . . 9
1.1.60 "Other Affiliates and Other Subsidiaries" 9
1.1.61 "Other Indebtedness". . . . . . . . . 9
1.1.62 "Other Properties". . . . . . . . . . 9
1.1.63 "Permitted Encumbrances". . . . . . . 9
1.1.64 "Person". . . . . . . . . . . . . . . 9
1.1.65 "Project Indebtedness". . . . . . . . 10
1.1.66 "Required Lenders". . . . . . . . . . 10
1.1.67 "Security Agreement". . . . . . . . . 10
1.1.68 "Security Documents". . . . . . . . . 10
1.1.69 "Solvent" . . . . . . . . . . . . . . 10
1.1.70 "Spreading Agreement" . . . . . . . . 11
1.1.71 "Subsidiary". . . . . . . . . . . . . 11
1.1.72 "Super-Required Lenders". . . . . . . 11
1.1.73 "SWAP Agreement". . . . . . . . . . . 11
1.1.74 Intentionally Omitted . . . . . . . . 11
1.1.75 "Term Loan" . . . . . . . . . . . . . 11
1.1.76 "Total Liabilities" . . . . . . . . . 11
1.1.77 "Tranche" . . . . . . . . . . . . . . 12
1.1.78 "UCC-1 Financing Statements". . . . . 12
1.1.79 "Weston". . . . . . . . . . . . . . . 12
1.2 Other Definitional Provisions . . . . . . . . . 12
1.2.1 Material and Materially . . . . . . . 12
1.2.2 Capitalized Terms Used in Other Documents 12
1.2.3 Pronouns, Sections and Articles . . . 12
1.2.4 Accounting Terms. . . . . . . . . . . 12
1.2.5 Terms Defined in Uniform Commercial Code 12
1.2.6 Hereby, Hereto, Herein, Etc.. . . . . 13
1.2.7 Reference to Parties. . . . . . . . . 13

ARTICLE 2. AMOUNT AND TERMS OF THE LOANS. . . . . . . . . 13
2.1 The Term Loan Commitment. . . . . . . . . . . . 13
2.1.1 Purpose of Loan and Loan Amount . . . 13
2.1.2 The Term Loan Notes . . . . . . . . . 13
2.1.3 Required Curtailments . . . . . . . . 14
2.2 The Line of Credit Commitment . . . . . . . . . 15
2.2.1 Purpose of Loan and Loan Amount . . . 15
2.2.2 Request for Advances under Line of Credit
Commitment . . . . . . . . . . . . . . . . . . . . . . . . 15
2.2.3 Revolver. . . . . . . . . . . . . . . 16
2.2.4 Exceeding Amount. . . . . . . . . . . 16
2.2.5 The Line of Credit Notes. . . . . . . 17
2.2.6 Clean-Up of Line of Credit. . . . . . 17
2.3 The Letter of Credit Commitment . . . . . . . . 17
2.3.1 Purpose of Loan and Loan Amount . . . 17
2.3.2 Term and Limits on Requests for Letters of
Credit . . . . . . . . . . . . . . . . . . . . . . . . . . 18
2.3.3 Draws Under Letters of Credit . . . . 18
2.3.4 The Letter of Credit Notes. . . . . . 18
2.3.5 Limitation on Letters of Credit . . . 19
2.3.6 Draws Subsequent to Maturity Date or Event
of Default . . . . . . . . . . . . . . . . . . . . . . . . 19
2.3.7 Non-Funding Lender. . . . . . . . . . 20
2.3.8 Draws on Letters of Credit. . . . . . 20
2.4 Terms Applicable to All Commitments . . . . . . 21
2.4.1 Place of Payment. . . . . . . . . . . 21
2.4.2 Payments Made Other Than On a Business Day 21
2.4.3 Advances Do Not Constitute Waivers. . 21
2.4.4 Reduction of Commitments. . . . . . . 21
2.5 Late Fee. . . . . . . . . . . . . . . . . . . . 22
2.6 Facility Fees . . . . . . . . . . . . . . . . . 22
2.6.1 Term Loan . . . . . . . . . . . . . . 22
2.6.2 Line of Credit. . . . . . . . . . . . 22
2.6.3 Letter of Credit Line . . . . . . . . 22
2.6.4 Administrative Fees . . . . . . . . . 23
2.7 Prorata Treatment; Several Commitments. . . . . 23
2.8 Application and Allocation of Payments. . . . . 24
2.9 Sharing of Payments . . . . . . . . . . . . . . 24
2.10 Settlement Procedures . . . . . . . . . . . . . 25
2.11 Accounting. . . . . . . . . . . . . . . . . . . 27
2.12 Additional Payments in Respect of Changed Circumstances 28

ARTICLE 3. SECURITY . . . . . . . . . . . . . . . . . . . 29
3.1 Security Documents. . . . . . . . . . . . . . . 29
3.2 Partial Releases of Mortgaged Properties. . . . 30
3.2.1 Defined Terms . . . . . . . . . . . . 30
3.2.2 Houses and Homesites. . . . . . . . . 31
3.2.3 Scheduled Property. . . . . . . . . . 32
3.2.4 Discretionary Property. . . . . . . . 33
3.2.5 Refinanced Property . . . . . . . . . 34
3.2.6 Limit on Purchase Money Financing . . 35
3.3 Additional Mortgaged Properties and Additional Other
Collateral . . . . . . . . . . . . . . . . . . . . . . . . 35

ARTICLE 4. REPRESENTATIONS AND WARRANTIES . . . . . . . . 37
4.1 Corporate Existence; Compliance with Law; Name History 37
4.2 Corporate Power and Authorization to Execute Loan
Documents; No Conflict; No Consent . . . . . . . . . . . . 38
4.3 Financial Condition . . . . . . . . . . . . . . 39
4.4 No Litigation . . . . . . . . . . . . . . . . . 39
4.5 Investment Company Act; Regulation. . . . . . . 40
4.6 Assets; Title to Assets . . . . . . . . . . . . 41
4.7 Payment of Taxes. . . . . . . . . . . . . . . . 41
4.8 Agreement or Contract Restrictions; No Default. 42
4.9 Intentionally Deleted . . . . . . . . . . . . . 42
4.10 Government Contract . . . . . . . . . . . . . . 42
4.11 ERISA Requirement . . . . . . . . . . . . . . . 42
4.12 Solvency. . . . . . . . . . . . . . . . . . . . 42
4.13 Racketeer Influenced and Corrupt Organization(s) Act 44
4.14 Validity of Loan Documents. . . . . . . . . . . 44
4.15 Priority of Liens, Taxes and Charges. . . . . . 44
4.16 Event of Default. . . . . . . . . . . . . . . . 45
4.17 Specific Representations as to Mortgaged Properties and
Additional Properties. . . . . . . . . . . . . . . . . . . 45
4.17.1 Violations of Governmental Law, Ordinances
or Regulations . . . . . . . . . . . . . . . . . . . . . . 45
4.17.2 Zoning and Concurrency. . . . . . . . 45
4.17.3 Compliance with Zoning Ordinances and
Similar Laws . . . . . . . . . . . . . . . . . . . . . . . 46
4.17.4 Availability of Utilities . . . . . . 46
4.17.5 Building Permits. . . . . . . . . . . 47
4.17.6 Certificate of Occupancy. . . . . . . 47
4.17.7 Condition of Property . . . . . . . . 47
4.17.8 Hazardous Substances. . . . . . . . . 47
4.17.9 Leases. . . . . . . . . . . . . . . . 55
4.17.10 Management Agreements . . . . . . . . 55
4.17.11 Access. . . . . . . . . . . . . . . . 55
4.17.12 Mortgagee Title Insurance . . . . . . 56
4.18 Brokerage Commissions . . . . . . . . . . . . . 56
4.19 Specific Representations as to Other Collateral and
Other Assets . . . . . . . . . . . . . . . . . . . . . . . 56
4.19.1 Intellectual Property . . . . . . . . 56
4.19.2 Bank Accounts . . . . . . . . . . . . 57
4.19.3 Promissory Obligations. . . . . . . . 57
4.19.4 Project Indebtedness. . . . . . . . . 57
4.20 Usury . . . . . . . . . . . . . . . . . . . . . 57
4.21 Setoffs . . . . . . . . . . . . . . . . . . . . 57
4.22 Subsidiaries and Affiliates . . . . . . . . . . 57
4.23 Chief Executive Office/Location of Collateral . 58
4.24 Intentionally Deleted . . . . . . . . . . . . . 58
4.25 Due Diligence . . . . . . . . . . . . . . . . . 58
4.26 Accuracy of Information . . . . . . . . . . . . 58
4.27 Continuation and Investigation. . . . . . . . . 58

ARTICLE 5. CONDITIONS OF LENDING. . . . . . . . . . . . . 59
5.1 Conditions to Initial Advance . . . . . . . . . 59
5.2 Conditions to Each Advance and Issuance of Letters of
Credit . . . . . . . . . . . . . . . . . . . . . . . . . . 63

ARTICLE 6. AFFIRMATIVE COVENANTS. . . . . . . . . . . . . 65
6.1 Financial Reports and Other Information . . . . 65
6.2 Payment and Performance of Liabilities. . . . . 67
6.3 Conduct of Business; Maintenance of Existence and
Rights . . . . . . . . . . . . . . . . . . . . . . . . . . 68
6.4 Maintenance of Property . . . . . . . . . . . . 68
6.5 Right of Inspection; Discussions. . . . . . . . 68
6.6 Notices . . . . . . . . . . . . . . . . . . . . 69
6.7 Payment of Taxes; Liens . . . . . . . . . . . . 70
6.8 True Books. . . . . . . . . . . . . . . . . . . 70
6.9 Observance of Laws. . . . . . . . . . . . . . . 71
6.10 Further Assurances. . . . . . . . . . . . . . . 71
6.11 ERISA Benefit Plans . . . . . . . . . . . . . . 71
6.12 Change of Name, Principal Place of Business, Office, or
Agent. . . . . . . . . . . . . . . . . . . . . . . . . . . 71
6.13 Financial Covenants . . . . . . . . . . . . . . 71
6.13.1 Minimum Net Worth . . . . . . . . . . 71
6.13.2 Maximum Debt/Worth Ratio. . . . . . . 72
6.13.3 Minimum Debt Service Coverage Ratio . 72
6.13.4 Maximum Loan to Value Ratio . . . . . 74
6.14 Annual Appraisals . . . . . . . . . . . . . . . 76
6.15 Insurance . . . . . . . . . . . . . . . . . . . 77
6.16 Operating Accounts. . . . . . . . . . . . . . . 80
6.17 Application of Loan Proceeds. . . . . . . . . . 80
6.18 Indemnification/Expenses, Including Attorneys' Fees and
Taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . 80
6.19 Updated Opinion of Counsel. . . . . . . . . . . 82
6.20 Additional Documents/Preservation of Security . 83
6.21 Intentionally Deleted . . . . . . . . . . . . . 83
6.22 Environmental Remedial Work/Further Environmental
Audits . . . . . . . . . . . . . . . . . . . . . . . . . . 83
6.23 Warranties and Representations True . . . . . . 84

ARTICLE 7. NEGATIVE COVENANTS . . . . . . . . . . . . . . 84
7.1 No Mergers. . . . . . . . . . . . . . . . . . . 85
7.2 Releases/Loan to Value Ratio. . . . . . . . . . 86
7.3 No Additional Properties. . . . . . . . . . . . 86
7.4 Loans and Advances. . . . . . . . . . . . . . . 86
7.5 Regulation U. . . . . . . . . . . . . . . . . . 87
7.6 Distributions . . . . . . . . . . . . . . . . . 88
7.7 Indebtedness. . . . . . . . . . . . . . . . . . 89
7.8 Alteration of Partnership or Corporate Structure 90
7.9 Change of Business or Management. . . . . . . . 92
7.10 Intentionally Deleted . . . . . . . . . . . . . 92
7.11 Insider Transactions. . . . . . . . . . . . . . 92
7.12 Sale or Lease of Assets . . . . . . . . . . . . 93
7.13 Changes in Accounting Methods, Fiscal Year. . . 93

ARTICLE 8. EVENTS OF DEFAULT. . . . . . . . . . . . . . . 94
8.1 Breach of Monetary Obligations. . . . . . . . . 94
8.2 Breach of Covenants . . . . . . . . . . . . . . 94
8.3 Default of Other Obligations. . . . . . . . . . 94
8.4 Filing of Liens Against the Property. . . . . . 95
8.5 Bankruptcy or Insolvency of Borrower. . . . . . 95
8.6 Breach of Other Conditions Under Loan Documents 96
8.7 Breach of Warranty. . . . . . . . . . . . . . . 96
8.8 Transfer of Property. . . . . . . . . . . . . . 96
8.9 Encroachments and Permits . . . . . . . . . . . 96
8.10 Breach. . . . . . . . . . . . . . . . . . . . . 96
8.11 Filing of Notice. . . . . . . . . . . . . . . . 96
8.12 Non-Monetary Default Period . . . . . . . . . . 97

ARTICLE 9. REMEDIES OF LENDERS. . . . . . . . . . . . . . 97
9.1 Termination of Commitments; Acceleration. . . . 97
9.2 Charge Default Rate of Interest . . . . . . . . 98
9.3 Right of Setoff . . . . . . . . . . . . . . . . 98
9.4 Agent's Right to Enter and Take Possession, Operate and
Apply Income . . . . . . . . . . . . . . . . . . . . . . . 99
9.5 Receiver. . . . . . . . . . . . . . . . . . . . 101
9.6 The Agent's Power of Enforcement. . . . . . . . 102
9.7 Waiver of Appraisement, Valuation, Stay and Extension105
9.8 Suits to Protect the Collateral . . . . . . . . 105
9.9 Delay or Omission - No Waiver . . . . . . . . . 106
9.10 No Waiver of One Default to Affect Another, Etc.106
9.11 Discontinuance of Proceedings - Position of Parties
Restored . . . . . . . . . . . . . . . . . . . . . . . . . 107
9.12 Remedies Cumulative . . . . . . . . . . . . . . 107

ARTICLE 10. RELATIONSHIP OF AGENT AND OTHER LENDERS . . . 107
10.1 Appointment, Powers and Immunities. . . . . . . 107
10.2 Reliance by Agent . . . . . . . . . . . . . . . 109
10.3 Events of Defaults. . . . . . . . . . . . . . . 110
10.4 Rights as a Lender. . . . . . . . . . . . . . . 113
10.5 Indemnification . . . . . . . . . . . . . . . . 113
10.6 Non-Reliance on Agent and Other Lenders . . . . 114
10.7 Resignation of the Agent. . . . . . . . . . . . 114
10.8 Removal of the Agent. . . . . . . . . . . . . . 114
10.9 Consents under Loan Documents . . . . . . . . . 115
10.10 Collateral Matters. . . . . . . . . . . . . . . 115
10.11 Representations and Warranties. . . . . . . . . 116
10.12 Other transactions with the Borrower. . . . . . 117

ARTICLE 11. MISCELLANEOUS . . . . . . . . . . . . . . . . 117
11.1 Course of Dealing; Amendment; Supplemental Agreements117
11.2 Waiver By Agent or Lenders of Requirements. . . 117
11.3 Intentionally Deleted.. . . . . . . . . . . . . 118
11.4 Notices . . . . . . . . . . . . . . . . . . . . 118
11.5 No Waiver; Cumulative Remedies. . . . . . . . . 119
11.6 Reliance Upon, Survival of and Materiality of
Representations and Warranties, Agreements, and Covenants. 119
11.7 Limitation on Liability of Lenders. . . . . . . 120
11.8 Liens; Setoff . . . . . . . . . . . . . . . . . 122
11.9 Severability and Enforceability of Provisions . 122
11.10 Obligations Absolute. . . . . . . . . . . . . . 122
11.11 Waiver of Notice, Etc.. . . . . . . . . . . . . 123
11.12 Governing Law, Venue, and Service of Process. . 124
11.13 Trial by Jury . . . . . . . . . . . . . . . . . 124
11.14 Usury . . . . . . . . . . . . . . . . . . . . . 124
11.15 Recapture and Duration of Interest in Collateral125
11.16 Reproduction of Documents . . . . . . . . . . . 125
11.17 Incorporation By Reference of Certain Laws and
Regulations. . . . . . . . . . . . . . . . . . . . . . . . 125
11.18 Accrual of Interest Under the Notes . . . . . . 126
11.19 Monies. . . . . . . . . . . . . . . . . . . . . 126
11.20 Intentionally Deleted.. . . . . . . . . . . . . 126
11.21 Successors and Assigns. . . . . . . . . . . . . 126
11.22 Counterparts; Effective Date. . . . . . . . . . 128
11.23 Joint and Several Loans . . . . . . . . . . . . 129
11.24 Title and Headings; Table of Contents . . . . . 131
11.25 Entire Agreement, Etc.. . . . . . . . . . . . . 131
11.26 Legal or Governmental Limitations . . . . . . . 131
11.27 Non-Recourse. . . . . . . . . . . . . . . . . . 131
11.28 Confidentiality . . . . . . . . . . . . . . . . 132
11.29 Conflict of Terms . . . . . . . . . . . . . . . 133

<PAGE>

CREDIT AGREEMENT

THIS CREDIT AGREEMENT is made and entered into as of __________, 1997,
by and between the Lenders, as hereinafter defined, BARNETT BANK, N.A., having
an office at One East Broward Boulevard, Fort Lauderdale, Florida 33301, in
its capacity as agent for the Lenders (in such capacity, together with its
successors and assigns (the "Agent") and as Lender, and ARVIDA/JMB PARTNERS,
L.P., a Delaware limited partnership ("Arvida"), ARVIDA/JMB PARTNERS, a
Florida general partnership, ARVIDA GRAND BAY LIMITED PARTNERSHIP-IV, a
Delaware limited partnership, The AOK GROUP, a Florida general partnership,
METRODRAMA JOINT VENTURE, a Florida general partnership, SOUTHEAST FLORIDA
HOLDINGS, INC., an Illinois corporation, GULF AND PACIFIC COMMUNICATIONS
LIMITED PARTNERSHIP, a Delaware limited partnership, and WESTON HILLS COUNTRY
CLUB LIMITED PARTNERSHIP, a Delaware limited partnership (sometimes
collectively referred to herein as the "Borrowers"), having their chief
executive office at 900 North Michigan Avenue, Chicago, Illinois 60611-1575.

R E C I T A L S

The Borrowers have applied to the Lenders for the following facilities
(collectively, the "Commitments"): (i) a term loan in the amount of Seventy-
Five Million and No/100 Dollars ($75,000,000.00) (the "Term Loan Commitment"),
(ii) a revolving line of credit in the amount of Twenty Million and No/100
Dollars ($20,000,000.00) (the "Line of Credit Commitment"), and (iii) a
revolving line of credit for the issuance of standby letters of credit, in the
amount of Five Million and No/100 Dollars ($5,000,000.00) (the "Letter of
Credit Commitment"), which Commitments are more particularly described in
Section 2 herein. The Lenders are willing to extend the foregoing Commitments
to the Borrowers, upon the terms and conditions set forth herein.

NOW, THEREFORE, in consideration of the premises, as well as in
consideration of the sum of TEN DOLLARS ($10.00) and other good and valuable
consideration, each to the other in hand paid, the receipt and sufficiency of
which are hereby acknowledged each to the other, the parties hereto do
mutually covenant and agree as follows:

ARTICLE 1. DEFINITIONS

1.1 Defined Terms. Except as otherwise defined or expressly provided
in this Agreement, the following capitalized terms shall have the respective
meanings ascribed to them for all purposes of this Agreement:

1.1.1 "Accounts" has the meaning ascribed to such term in the
Security Agreement.

1.1.2 "Actual Share" means the percentage interest of each
Lender in each of the Advances made pursuant to the Commitments.

1.1.3 "Additional Properties" means those parcels of real
property and all Improvements thereon and all such other rights and interests
relative thereto as are described in Recitals A through H in each of the
Mortgages which may be spread to any such Additional Property, which are
contemplated to be hereafter acquired by certain of the Borrowers, and which,
subject to the terms of Section 3.3.1, upon such acquisition by any Borrower
shall be encumbered by the Mortgages as security for the Obligations, and
shall thereafter, for all purposes hereof, be deemed to be Mortgaged
Properties, as said Additional Properties are described on Schedule 1.1.3.

1.1Property or any other Collateral determined by the Required Lenders,
at their sole discretion, on the basis of their review and acceptance of any
Appraisal therefor.

1.1.5 "Advance" means any advance of proceeds to or on behalf
of the Borrowers pursuant to the Term Loan Commitment, Line of Credit
Commitment or Letter of Credit Commitment (inclusive of draws or amounts paid
on Letters of Credit) described in Section 2 of this Agreement.

1.1.6 "Affiliate" means, as to Arvida, any corporation,
partnership or other entity of which more than ten percent (10%), but less
than one hundred percent (100%) of the securities, partnership interests or
other ownership interests having ordinary voting power to elect the board of
directors or having direct power to perform functions similar to that of a
board of directors, is at the time directly or indirectly owned or controlled
by Arvida, all of which Affiliates presently in existence are described on
Schedule 1.1.6.

1.1.7 "Agreement" means this Agreement, as the same may be
amended, supplemented, restated, replaced, or otherwise modified from time to
time in accordance with the provisions hereof.

1.1.8 "Appraisals" mean M.A.I. narrative appraisals of the
Mortgaged Properties, obtained by Agent at the expense of the Borrowers, from
time to time, pursuant to the terms hereof.

1.1.9 "Assignments of Entity Interests" means, collectively,
the Stock Pledge Agreements, the Limited Partnership Pledge Agreements and the
General Partnership Pledge Agreements, of even date herewith, from certain of
the Borrowers to the Agent, on behalf of the Lenders, collaterally assigning
all of the Borrowers' Entity Interests in certain of the Subsidiaries and
Affiliates, as same are identified on Schedule 1.1.9, satisfactory to the
Agent and the Lenders in form and content, in each instance to the extent not
prohibited by the terms of any existing Project Indebtedness or any applicable
partnership or joint venture agreement, and in the case of Affiliates other
than Controlled Affiliates to the extent that consents required therefor from
third Persons have been given, as same may be amended, supplemented, restated
or replaced or otherwise modified from time to time, together with all
required consents thereto from all Persons whose consent may be required.

1.1.10 "Assignments of Intellectual Property" means,
collectively, the Copyright Security Agreement and the Trademark Security
Agreement, of even date herewith, from certain of the Borrowers to the Agent,
on behalf of the Lenders, collaterally assigning all of the Borrowers'
interests in all Intellectual Property, satisfactory to the Agent and the
Lenders in form and content, as same may be amended, supplemented, restated or
replaced or otherwise modified from time to time.

1.1.11 "Assignments of Licenses, Permits, and Development
Rights" means assignments of even date herewith, from the Borrowers to the
Agent, on behalf of the Lenders, of all licenses, permits, approvals,
certifications and development rights relating to the use and construction of
any Improvements on any of the Mortgaged Properties, to the extent permitted
by law same are assignable, in form and content satisfactory to the Agent and
the Lenders, as same may be amended, supplemented, restated or replaced, or
otherwise modified from time to time, together with all required consents
thereto from all Persons whose consent may be required.

1.1.12 "Assignments of Rents and Leases" means assignments of
rents and leases of even date herewith, from the Borrowers to the Agent, on
behalf of the Lenders, assigning any and all of their interests in leases and
rents, now existing or which may come into existence during the term of the
Loans with respect to any of the Mortgaged Properties, in form and content
satisfactory to the Agent and Lenders, as same may be amended, supplemented,
restated or replaced or otherwise modified from time to time.

1.1.13 "Bank Accounts" means all cash accounts that any of the
Borrowers maintain with the Agent or any other Lender or any other financial
institutions including, without limitation, Operating Accounts.

1.1.14 "Borrower Affiliate" means those certain Affiliates
described on Schedule 1.1.14.

1.1.15 "Borrower Subsidiary" means those certain Subsidiaries
described on Schedule 1.1.15.

1.1.16 "Borrowers" means collectively, Arvida and the Borrower
Affiliates and Borrower Subsidiaries.

1.1.17 "Business Day" means a day that is not a Saturday, a
Sunday, or a day on which the Agent or any other Lender is closed pursuant to
authorization or requirement of law.

1.1.18 "Cable Franchise" means all of the right, title and
interest of Gulf and Pacific Communications Limited Partnership, a Delaware
limited partnership ("Gulf and Pacific"), in and to that certain cable
television franchise granted to Gulf and Pacific (the "Cable Franchise"), and
which, subject to the terms of Section 3.3.2, shall be collaterally assigned
to the Agent, on behalf of the Lenders, as security for the Obligations and
shall thereafter, for all purposes hereof, be deemed to be Collateral.

1.1.19 "Carlstrom Stipulation" has the meaning ascribed to
such term in Section 4.4.2.

1.1.20 "Cash Collateral" means all cash deposited, from time
to time pursuant to the terms hereof, into an account maintained by the Agent
as cash collateral for the Obligations (the "Cash Collateral Account").

1.1.21 "Cash Flow After Project Financing" means, with respect
to any fiscal period, all cash receipts of Arvida and its Consolidated
Entities (excluding capital contributions and draws under the Line of Credit),
including all cash proceeds from sales or operation of assets of Arvida and
its Consolidated Entities, distributions received from unconsolidated
Affiliates of Arvida plus the proceeds from any Project Indebtedness, but
after deducting Operating Expenses, Project Indebtedness Debt Service and
capital expenditures with respect to assets of Arvida and its Consolidated
Entities. "Project Indebtedness Debt Service" means all payments of principal
and interest required to be made in connection with any Project Indebtedness.
"Operating Expenses" means, with respect to any fiscal period, all cash
disbursements of Arvida and its Consolidated Entities in order to obtain all
cash receipts, including, without limitation, all cash expenses (such as,
without limitation, advertising and promotion, management, interest (other
than interest under the Term Loan), principal payments made toward the Letter
of Credit Notes following any draw on any Letter of Credit, advances by Arvida
to Non-Controlled Affiliates of Arvida, salary, rent, insurance, utility,
construction, development, repair and maintenance, accounting, statistical or
bookkeeping services and computing or accounting equipment use, travel and
telephone expenses).

1.1.22 "Closing Date" means the effective date of this
Agreement, which is ________________, 1997.

1.1.23 "Code" means the Uniform Commercial Code, as the same
may, from time to time, be in effect in the State of Florida; provided,
however, in the event that by reason of mandatory provisions of law, any or
all of the attachment, perfection, or priority of the security interest in any
Collateral is pursuant to the Uniform Commercial Code as in effect in a
jurisdiction other then the State of Florida, the term "Code" shall mean the
Uniform Commercial Code as in effect in such other jurisdiction.

1.1.24 "Collateral" means all property, real or personal,
tangible or intangible, now existing or hereafter acquired by any of the
Borrowers, which is or hereafter shall be subject to a security interest or
lien in favor of the Agent, on behalf of the Lenders, pursuant to the Security
Documents, in order to secure the Obligations, including, without limitation,
all Mortgaged Properties, Entity Interests, Cash Collateral, Accounts,
Equipment, General Intangibles, Intellectual Property and Inventory.

1.1.25 "Committed Share" means the percentage interest of each
Lender in each of the Commitments, as described on Schedule 1.1.25.

1.1.26 "Commitment Termination Date" means the earlier of:
(i) July , 2001 and (ii) the date of termination of the Commitments
pursuant to Article 9.

1.1.27 "Consistent Basis" means, in reference to the
application of Generally Accepted Accounting Principles, that the accounting
principles observed in the current period are comparable in all material
respects to those applied in the preceding period.

1.1.28 "Consolidated Entities" means Arvida and all of the
Subsidiaries and Controlled Affiliates, excluding, however, those Subsidiaries
and Controlled Affiliates which are homeowners associations ("HOAs") or equity
clubs ("Equity Clubs"), interests in which are by their terms contemplated to
pass to purchasers of Houses or Home Sites or the purchasers of memberships in
country clubs developed by the Borrowers.

1.1.29 "Contingent Payment Agreement" means the agreement of
even date herewith by and among the Borrowers, whereby each of the Borrowers
agrees that each Borrower shall have the right to seek contribution from each
of the other Borrowers with respect to each such Borrower's respective
liabilities for the Obligations, which expressly identifies the Lenders as
third-party beneficiaries thereof, a copy of which is attached hereto as
Exhibit "A".

1.1.30 "Controlled Affiliate" means, as to Arvida, any
Affiliate of which more than fifty percent (50%) but less than one hundred
percent (100%) of the securities, partnership interests or other ownership
interests having ordinary voting power to elect the board of directors or
having direct power to perform functions similar to that of a board of
directors, is at the time directly or indirectly owned or controlled by
Arvida, provided however, that for purposes hereof Country Isles Associates,
an Illinois general partnership, shall be deemed to be a Non-Controlled
Affiliate, rather than a Controlled Affiliate.

1.1.31 "Default Rate" means the rate of interest identified as
the Default Rate in the Notes.

1.1.32 "Distributions" means distributions of cash or cash
equivalents to Arvida's partners or other holders of partnership interests in
Arvida.

1.1.33 "Effective Rate" means, with respect to any Tranche
representing a portion of the outstanding principal balance under any of the
Loans, either the Note LIBO Rate (as defined in the Term Loan Notes and Line
of Credit Notes) or the Prime Rate (as defined in the Term Loan Notes and Line
of Credit Notes) or the Default Rate, applicable to such Tranche.

1.1.34 "Entity Interests" means all of the Borrowers'
interests in each of the Subsidiaries and Affiliates and all of the interests
of all such Subsidiaries and Affiliates in other Subsidiaries and Affiliates.

1.1.35 "Equipment" has the meaning ascribed to such term in
the Security Agreement.

1.1.36 "ERISA" means the Employee Retirement Income Security
Act of 1974, as the same may be supplemented or amended from time to time.

1.1.37 "Event of Default" means any of the events specified in
Section 8 hereof.

1.1.38 "Financial Statements" means the annual and quarterly
financial statements described in Section 4.3.1 and Sections 6.1.1 and 6.1.2.

1.1.39 "General Intangibles" has the meaning ascribed to such
term in the Security Agreement.

1.1.40 "Generally Accepted Accounting Principles" means those
principles of accounting set forth in Opinions of the Financial Accounting
Standards Board or the American Institute of Certified Public Accountants or
which have other substantial authoritative support and are applicable in the
circumstances as of the date of any report required herein or as of the date
of an application of such principles as required herein.

1.1.41 "Improvements" means any improvements, including,
without limitation, subdivision improvements and infrastructure, now or
hereafter existing or developed upon any of the Mortgaged Properties.

1.1.42 "Intellectual Property" means collectively, all
Computer Hardware and Software Collateral, Copyright Collateral, Patent
Collateral, Trademark Collateral and Trade Secrets Collateral, as each of such
terms is defined in the Security Agreement.

1.1.43 "Inventory" has the meaning ascribed to such term in
the Security Agreement.

1.1.44 "Lenders" means collectively, BankBoston, N.A., a
national banking association, Bank United, a federal savings bank, Barnett
Bank, N.A., a national banking association and First Union National Bank, a
national banking association, each a "Lender".

1.1.45 "Letter of Credit Line" has the meaning ascribed to
such term in Section 2.3 hereof.

1.1.46 "Letters of Credit" means Standby Letters of Credit
issued pursuant to the provisions of Section 2.3 hereof.

1.1.47 "Liens" means all mortgages, pledges, hypothecations,
assignments, security interests, liens, charges, encumbrances or preferences,
priorities, or other security agreements or arrangements of any kind or nature
whatsoever, including, without limitation, any conditional sale or other title
retention agreement or agreement providing for the filing or delivery of any
financing statement under the Code or comparable law of any jurisdiction.

1.1.48 "Line of Credit" has the meaning ascribed to such term
in Section 2.2 hereof.

1.1.49 "Loan Documents" means all documents executed and
delivered in connection with the Loans including, without limitation, this
Agreement, the Notes, the Mortgages, UCC-1 Financing Statements, Assignments
of Rents and Leases, Security Agreement, Security Documents, Assignments of
Licenses and Permits, Assignments of Entity Interests, Assignments of
Intellectual Property and Tax Indemnification Agreement.

1.1.50 "Loan Year" means each successive twelve (12) month
period commencing with the date of this Agreement and each subsequent
anniversary hereof throughout the term of the Loans.

1.1.51 "Loans" means any or all of the Advances made under the
Term Loan Commitment, Line of Credit Commitment or Letter of Credit
Commitment.

1.1.52 "Material Adverse Change" means, with respect to the
period of time from and after March 31, 1997, as to the most recent quarterly
Financial Statements of Arvida and its Consolidated Entities, and the periods
of time from and after the applicable effective date of any other information
relevant thereto, in each case up to, through and including (but in no case
subsequent to) the Closing Date of this Agreement: (a) a material adverse
change in the business, operations, properties, assets, prospects or condition
(financial or otherwise) of any Borrower, or (b) the impairment of the Agent's
first priority security interest, on behalf of the Lenders, which is to be
effected in any of the Mortgaged Properties or other Collateral pursuant to
the Security Documents or (c) the material impairment of (i) any of the
Mortgaged Properties or other Collateral, (ii) any Borrower's ability to carry
on its operations substantially as now conducted or (iii) the ability of any
Borrower to perform its Obligations under this Agreement or the other Loan
Documents.

1.1.53 "Mortgaged Properties" means all parcels of real
property and all Improvements thereon, and all such other rights and interests
relative thereto as are described in Recitals A through H in each Mortgage
encumbering same, now owned by the Borrowers, as such Mortgaged Properties are
described on Schedule 1.1.53, which shall be encumbered by the Mortgages, as
security for the Obligations, together with all Additional Properties, at such
time that such Additional Properties shall be acquired by the Borrowers and
encumbered by a Mortgage, in accordance with Section 3.3.1 hereof.

1.1.54 "Mortgages" means, collectively, the Mortgage and
Security Agreements (with respect to Mortgaged Properties in Florida) and the
Deed to Secure Debt and Security Agreement (with respect to Mortgaged
Properties in Georgia), of even date herewith, from the Borrowers to the
Agent, on behalf of the Lenders, encumbering all of the Mortgaged Properties
presently owned by the Borrowers, in Florida and Georgia, respectively, and
all Spreading Agreements which may hereafter be given by the Borrowers to the
Agent, in order to spread the lien of the Mortgages to those Additional
Properties not presently owned by the Borrowers, but which the Borrowers may
acquire hereafter, in accordance with Section 3.3.1, all in form and content
satisfactory to the Agent and Lenders, as same may be amended, supplemented,
restated or replaced or otherwise modified from time to time. Such Mortgages
shall, upon recordation, constitute first liens against all of said Mortgaged
Properties and shall be in form and content satisfactory to the Agent and the
Lenders and shall be subject only to such Permitted Exceptions and matters as
shall be satisfactory to the Agent.

1.1.55 "Net Worth" means, as of the date of the determination
thereof, the assets of Arvida and its Consolidated Entities, excluding
goodwill, as determined in accordance with Generally Accepted Accounting
Principles, less the Total Liabilities.

1.1.56 "Non-Controlled Affiliate" means, as to Arvida, any
Affiliate in which Arvida does not have a Controlling Interest.

1.1.57 "Notes" means, collectively, the Term Loan Notes
described in Section 2.1 hereof, the Line of Credit Notes described in
Section 2.2 hereof and the Letter of Credit Notes described in Section 2.3
hereof, of even date herewith, from the Borrowers to each of the Lenders, each
in the amount of each such Lender's respective Committed Shares of each
Commitment, all in form and content satisfactory to the Agent and the Lenders,
as same may be amended, supplemented, restated or replaced or otherwise
modified from time to time.

1.1.58 "Obligations" means all liabilities and obligations of
the Borrowers for the payment of all Loans and all other monetary amounts
(whether such amounts are liquidated or determinable) and for the performance
of the terms and covenants of this Agreement and all other Loan Documents
(whether or not such performance is then required or contingent), and all
covenants and duties regarding the foregoing, arising under or with respect to
this Agreement, the Notes, the Security Documents, or any other Loan Documents
(including all renewals, extensions, modifications and refinancings thereof,
now or hereafter existing).

1.1.59 "Operating Accounts" means all those certain Bank
Accounts that any of the Borrowers maintain solely in connection with the
development, management and/or operation of any of the Mortgaged Properties or
other Collateral.

1.1.60 "Other Affiliates and Other Subsidiaries" means, as to
Arvida, all Affiliates and Subsidiaries except only the Borrower Affiliates
and the Borrower Subsidiaries.

1.1.61 "Other Indebtedness" means all indebtedness incurred by
Arvida and/or any of its Consolidated Entities, and all indebtedness for which
Arvida and/or any of its Consolidated Entities are otherwise liable,
including, without limitation, contingent indebtedness under guaranties,
without redundancy, including, without limitation the Project Indebtedness,
but excluding the Obligations created pursuant to the terms of this Agreement.

1.1.62 "Other Properties" means all of those parcels of real
property and Improvements thereon, owned by Other Affiliates and Other
Subsidiaries, which are presently subject to Project Indebtedness and which
are not included among the Mortgaged Properties, as such Other Properties are
described on Schedule 1.1.62.

1.1.63 "Permitted Encumbrances" has the meaning ascribed to
such terms in Section 7.7.2.

1.1.64 "Person" means any corporation, business entity,
natural person, firm, joint venture, limited or general partnership, limited
liability company, limited liability partnership, trust, unincorporated
organization, association, government, or any department or agency of any
government.

1.1.65 "Project Indebtedness" means all indebtedness incurred
by Arvida and/or any of its Consolidated Entities, or for which Arvida and/or
any of its Consolidated Entities are otherwise liable, other than the
Obligations, for the acquisition, financing or refinancing of, or the
development and/or construction of improvements on, any parcels of real
property, including, without limitation, contingent indebtedness under
guaranties, without redundancy, provided, however, that no Project
Indebtedness shall be permitted with respect to any Mortgaged Property, unless
and until same has been released from the Lien of the Mortgages, pursuant to
Section 3.2.

1.1.66 "Required Lenders" means, at any time, Lenders holding
at least sixty-two and one-half percent (62.5%) of the total Committed Shares
of all of the Lenders at such time.

1.1.67 "Security Agreement" means that certain Security
Agreement of even date herewith, from the Borrowers to the Agent, on behalf of
the Lenders, in form and content satisfactory to the Agent and the Lenders, as
same may be amended, supplemented, restated or replaced or otherwise modified
from time to time.

1.1.68 "Security Documents" means those certain documents
described on Schedule 1.1.68 attached hereto, of even date herewith, from the
Borrowers to the Agent, on behalf of the Lenders, including, without
limitation, the Mortgages, Assignments of Rents and Leases, Assignments of
Licenses, Permits and Development Rights, Security Agreement, Assignments of
Entity Interests, Assignments of Intellectual Property and such other security
agreements as the Lenders shall require in order to encumber the Collateral as
security for the Loans, all in form and content satisfactory to the Agent and
the Lenders, as same may be amended, supplemented, restated or replaced or
otherwise modified from time to time, and all consents to any of the foregoing
required to be obtained from third parties.

1.1.69 "Solvent" means, with respect to any Person, that as of
the date of determination, both (a)(i) the then fair saleable value of the
property of such Person is (y) greater than the total amount of liabilities
(including contingent obligations) of such Person and (z) greater than the
amount that will be required to pay the probable liabilities of such Person's
then existing debts as they become absolute and matured considering all
financing alternatives and potential asset sales reasonably available to such
Person; (ii) such Person's capital is not unreasonably small in relation to
its business or any contemplated or undertaken transaction; and (iii) such
Person does not intend to incur, or believe or reasonably should believe that
it will incur, debts beyond its ability to pay such debts as they become due
and (b) such Person is solvent within the meaning given that term and similar
terms under applicable laws relating to fraudulent transfers.

1.1.70 "Spreading Agreement" means any spreading agreement
which shall hereafter be given by the Borrowers to the Agent, on behalf of the
Lenders, in order to spread the lien of any of the Mortgages to any Additional
Properties which the Borrowers may acquire hereafter in accordance with
Section 3.3.1, all in form and content satisfactory to the Agent and Lenders,
as same may be amended, supplemented, restated or replaced or otherwise
modified from time to time.

1.1.71 "Subsidiary" means any corporation, partnership, or
other entity, of which one hundred percent (100%) of the securities,
partnership interests or other ownership interests having ordinary voting
power to elect the board of directors or having direct power to perform
functions similar to that of a board of directors, is at the time directly or
indirectly owned or controlled by Arvida, all of which Subsidiaries presently
in existence are described on Schedule 1.1.71.

1.1.72 "Super-Required Lenders" means, at any time, Lenders
holding at least sixty-six percent (66%) of the aggregate amount of the
Commitments of the Lenders at such time, provided, however, that, if the
Committed Share of First Union National Bank shall be reduced to less than
thirty-five percent (35%), then in each provision in this Agreement where the
consent or approval of the Super-Required Lenders is otherwise stipulated,
such provision shall be automatically deemed amended to require the consent or
approval of the Required Lenders.

1.1.73 "SWAP Agreement" means that certain International SWAP
Dealers Association, Inc. Master Agreement, to be entered into by and between
the Borrowers and First Union National Bank, together with all exhibits,
schedules and addenda thereto, which accomplishes an interest rate swap, hedge
or other type of derivative for the interest payments due with respect to a
portion of the principal balance outstanding under the Term Loan.

1.1.74 Intentionally Omitted

1.1.75 "Term Loan" has the meaning ascribed to such term in
Section 2.1 hereof.

1.1.76 "Total Liabilities" means as of the date of the
determination thereof, the liabilities of Arvida and its Consolidated Entities
determined in accordance with Generally Accepted Accounting Principles, plus
any unfunded availability under the Commitments established by this Agreement
and, to the extent not included in the foregoing, all Other Indebtedness.

1.1.77 "Tranche" means any portion of the outstanding
principal balance under any of the Loans bearing interest at the applicable
Note LIBO Rate, Prime Rate, or Default Rate.

1.1.78 "UCC-1 Financing Statements" means those certain UCC-1
Financing Statements (local and state) covering all Collateral subject to
perfection by filing thereof, including, without limitation, personal
property, fixtures and equipment owned by the Borrowers, placed or to be
placed on or under the Mortgaged Properties and used by the Borrowers
exclusively in connection with said Mortgaged Properties, and such other
documents that will ensure the Agent a perfected security interest, on behalf
of the Lenders, in and to said Collateral.

1.1.79 "Weston" means the Mortgaged Property legally described
on Schedule 1.1.79.

1.2 Other Definitional Provisions.

1.2.1 Material and Materially. "Material" and "materially"
shall have the meanings ascribed to such terms under Generally Accepted
Accounting Principles as such would be applied to the business of the
Borrowers or others, except as the context shall clearly otherwise require.

1.2.2 Capitalized Terms Used in Other Documents. Capitalized
terms used in the other Loan Documents or any other documents, instruments, or
certificates executed or delivered pursuant to this Agreement or any other
Loan Document, shall have the meaning as ascribed to such terms in this
Agreement, unless otherwise defined in such other Loan Document, instrument or
certificate or as the context otherwise requires.

1.2.3 Pronouns, Sections and Articles. As used in this
Agreement a neuter pronoun shall be deemed to include references to the
masculine and feminine variations thereof, and vice versa, and a singular
pronoun shall be deemed to include a reference to the plural variation
thereof, and vice versa, in each case as the context may permit or require.
Any reference to an "Article", "Section", "Schedule" or "Exhibit" shall mean,
respectively, the appropriate Article, Section, Schedule or Exhibit of this
Agreement unless there is a specific reference to an article, section, or
exhibit of another document or instrument.

1.2.4 Accounting Terms. Accounting terms to the extent not
otherwise defined shall have the respective meanings given them under, and
shall be construed in accordance with, Generally Accepted Accounting
Principles.

1.2.5 Terms Defined in Uniform Commercial Code. Terms defined
in, or by reference to Article 9 of the Code to the extent not otherwise
defined herein shall have the respective meanings given to them in Article 9.

1.2.6 Hereby, Hereto, Herein, Etc. The words "hereby,"
"hereto," "hereof," "herein," "hereunder" and words of similar import when
used in this Agreement shall refer to this Agreement as a whole and not to any
particular provision of this Agreement.

1.2.7 Reference to Parties. Whenever in this Agreement any
of the parties hereto is referred to, such reference shall be deemed to
include the successors and assigns of such parties unless the context shall
expressly provide otherwise.

ARTICLE 2. AMOUNT AND TERMS OF THE LOANS

2.1 The Term Loan Commitment.

2.1.1 Purpose of Loan and Loan Amount. It is intended that,
subject to the satisfaction of the conditions of Article 5, the entire amount
of the Term Loan Commitment shall be disbursed on the Closing Date. No later
than 11:00 a.m. (Ft. Lauderdale, Florida time) on the Closing Date, each
Lender shall deliver to the Agent, in immediately available funds, the amount
of its respective Committed Share of the Term Loan Commitment, to such account
of the Agent as the Agent may designate. The Agent shall, subject to the
satisfaction of the conditions of Article 5, thereupon disburse to the
Borrowers the entire amount of the Term Loan Commitment. The proceeds of the
Advance under the Term Loan Commitment shall be used by the Borrowers
principally to make Distributions. The Borrowers shall furnish to the Agent
within thirty (30) days following the date hereof evidence satisfactory to the
Agent that the Borrowers have in fact expended the amount of the proceeds of
the Term Loan in such manner.

2.1.2 The Term Loan Notes. The proceeds of the Term Loan
Commitment so advanced (such Advance being herein referred to as the "Term
Loan"), shall be evidenced by promissory notes of even date herewith, from the
Borrowers to each Lender, each such promissory note to be in the amount of
such Lender's respective Committed Share of the Term Loan Commitment
(collectively, the "Term Loan Notes"). The calculation of accrued interest
shall be based on the outstanding principal balance of each of the Term Loan
Notes as of the end of any day. Each Tranche from time to time outstanding
under the Term Loan shall bear interest at an Effective Rate determined in
accordance with the terms of the Term Loan Notes, provided, that commencing
upon an Event of Default, the entire outstanding principal balance of the Term
Loan shall bear interest at the Default Rate specified therein. The Borrowers
shall make payments of interest and principal to the Agent, for the account of
the Lenders, in accordance with and pursuant to the terms of this Agreement
and the Term Loan Notes. All outstanding principal and unpaid accrued
interest under the Term Loan shall be due and payable on the Commitment
Termination Date. Notwithstanding any repayment by the Borrowers of any
principal amount outstanding under the Term Loan, the Borrowers shall not be
entitled to reborrow any sums whatsoever under the Term Loan Commitment.

2.1.3 Required Curtailments. Without limiting the foregoing,
the Term Loan Notes shall provide that the Borrowers shall, during each Loan
Year, make payments to the Agent, for the account of the Lenders, toward the
reduction of the principal balances outstanding under the Term Loan Notes, in
the following amounts and at the following times:

2.1.3.1 The Borrowers shall pay to the Agent, for
the account of the Lenders, on or before the last Business Day of each Loan
Year, the sum of $12,500,000.00 (the "Minimum Required Curtailment"), and

2.1.3.2 The Borrowers shall pay to the Agent, for
the account of the Lenders, on each ARC Payment Date an amount (the
"Additional Required Curtailment") calculated as follows:

(A) (i) On the 1998 February ARC Payment
Date, an amount equal to twenty-five percent (25%) of the amount of any
Distribution then made.

(ii) On each subsequent February ARC
Payment Date, an amount equal to the sum of: (x) the ARC Deficit, if any, to
the extent the ARC Deficit does not exceed the Adjusted CFAPF for the fiscal
year ended on the immediately preceding December 31, plus (y) twenty-five
percent (25%) of the remainder of the Adjusted CFAPF for the fiscal year ended
on the immediately preceding December 31, after payment of the ARC Deficit
pursuant to the foregoing subparagraph (x).

(B) On each August ARC Payment Date, an
amount equal to the sum of: (x) the ARC Deficit, if any, plus (y) twenty-five
percent (25%) of the remainder of the Distribution then made, after payment of
the ARC Deficit pursuant to the foregoing subparagraph (x).

The term "Adjusted CFAPF" means Cash Flow After
Project Financing less all Term Loan Principal Payments and all interest paid
on the Term Loan during the preceding fiscal year.

(C) Notwithstanding anything herein to the
contrary, those portions of the Additional Required Curtailment calculated
pursuant to subsection (A)(i); subpart (y) of subsection (A)(ii); and subpart
(y) of subsection (B) shall in the aggregate, in any one (1) Loan Year, not
exceed $6,250,000.00.

The term "ARC Deficit" means: (i) as of any ARC
Payment Date in the second Loan Year, the difference of $18,750,000.00 less
the sum of all Term Loan Payments theretofore paid, (ii) as of any ARC Payment
Date in the third Loan Year, the difference of $37,500,000.00 less the sum of
all Term Loan Payments theretofore paid and (iii) as of any ARC Payment Date
in the fourth Loan Year, the difference of $56,250,000.00 less the sum of all
Term Loan Payments theretofore paid.

The term "ARC Payment Date" means: (i) any Business
Day in any August of any Loan Year, on which a Distribution is made, if any
(an "August ARC Payment Date"), and (ii) the first Business Day of each
February of each Loan Year, or such later date in February on which the
Borrowers intend to make a Distribution, provided the Borrowers shall have
notified the Lenders of such later date, in writing, not later than January 15
of such year (a "February ARC Payment Date").

The term "Term Loan Principal Payments" means, as of
any ARC Payment Date, all payments which have theretofore been made toward the
reduction of the outstanding principal balance under the Term Loan, including,
without limitation, all payments of Minimum Required Curtailments made in the
same Loan Year and all prior Loan Years, all payments of Additional Required
Curtailments made in the same Loan Year and all prior Loan Years and all prior
voluntary prepayments made in the same Loan Year and all prior Loan Years.

2.2 The Line of Credit Commitment.

2.2.1 Purpose of Loan and Loan Amount. Upon and subject to
the terms and conditions of this Agreement, including, without limitation,
satisfaction of the conditions of Section 5.2 and compliance with the
covenants set forth in Articles 6 and 7 the Lenders agree to make Advances to
the Borrowers, through the Agent from time to time until the Commitment
Termination Date, and the Agent agrees to make Advances to the Borrowers from
time to time until the Commitment Termination Date, subject to the funding by
each Lender of its respective Committed Share thereof, provided that the
outstanding Advances shall not in the aggregate exceed the Line of Credit
Commitment. The proceeds of all Advances under the Line of Credit Commitment
shall be used for working capital for the ongoing operation of the Borrowers'
business, and, subject to compliance with the covenants set forth in
Articles 6 and 7, for the making of Distributions.

2.2.2 Request for Advances under Line of Credit Commitment.
The Borrowers shall make a request for any Advance under the Line of Credit
Commitment by submitting to the Agent a request (a "Request for Advance") in
accordance with the procedures hereinafter set forth, and, subject to the
terms hereof, no later than 11:00 a.m. (Ft. Lauderdale, Florida time) on the
date stipulated in such Request for Advance as the date of the funding
thereof, each Lender shall deliver to the Agent, in immediately available
funds, the amount of its respective Committed Share of such Advance, to such
account of the Agent as the Agent may designate. Each Advance under the Line
of Credit Commitment shall be made by wire transfer or internal transfer if
with the Agent, to the account designated from time to time by the Borrowers
for Advances, in the amount thereof, to the extent of the funding by such
Lender of its Committed Share thereof. Each Request for Advance under the
Line of Credit Commitment shall be given in writing (by telecopy, hand
delivery, or overnight delivery service), not less than three (3) Business
Days prior to the requested date of such Advance, by Borrowers to the Agent at
the following address:

Nora Lankford, V.P.
Barnett Bank, N.A., Credit Services
101 Hialeah Drive, 2nd Floor
Hialeah, FL 33010
(305) 883-2535
Fax: (305) 883-2515 or 2493

or to such other address as Agent may specify from time to time by written
notice to the Borrowers given in accordance with the provisions of
Section 11.4 below. Each such Request for Advance shall be substantially in
the form of Exhibit "B-1" attached hereto and hereby made a part hereof,
specifying therein the requested date of the Advance, the amount of such
Advance and such other information as shall be required by the Agent,
including, without limitation, the use thereof. The Agent and the Lenders
shall be entitled to rely upon and shall be fully protected under this
Agreement in relying upon any Requests for Advance believed by the Agent to be
genuine and to assume that the Person or Persons executing and delivering the
same were duly authorized.

2.2.3 Revolver. Prior to the Commitment Termination Date,
the Borrowers may borrow, repay, and reborrow under the Line of Credit
Commitment in accordance with the terms hereof.

2.2.4 Exceeding Amount. If at any time the aggregate
principal amount of Advances outstanding under the Line of Credit Commitment
shall exceed the Line of Credit Commitment, the Borrowers will pay to the
Agent, for the account of the Lenders, upon demand such amount as shall be
required to cause the aggregate principal amount of Advances outstanding to be
equal to or less than the Line of Credit Commitment. The amount of all
Advances which will cause the outstanding balance under the Line of Credit to
exceed the Line of Credit Commitment shall bear interest at an Effective Rate,
provided that if same are not paid within three (3) Business Days following
demand therefor, then the amount of Advances in excess of the Line of Credit
Commitment shall thereupon bear interest at the Default Rate. Notwithstanding
anything seemingly to the contrary herein, under no circumstances shall the
Borrower request nor shall the Lenders knowingly make any Advances which shall
cause the outstanding balance under the Line of Credit to exceed the Line of
Credit Commitment.

2.2.5 The Line of Credit Notes. Advances under the Line of
Credit Commitment (such Advances being herein referred to as the "Line of
Credit") shall be evidenced by the promissory notes of even date hereof from
the Borrowers to each Lender, each such promissory note to be in the amount of
such Lender's respective Committed Share of the Line of Credit Commitment
(collectively, the "Line of Credit Notes"). The calculation of accrued
interest shall be based on the outstanding principal balance of each of the
Line of Credit Notes as of the end of any day, and such amount shall equal:
(i) the sum of all Advances theretofore made to or on behalf of the Borrowers
under the Line of Credit Commitment, reduced by (ii) all payments applied to
the principal balance thereof. Each Tranche from time to time outstanding
under the Line of Credit shall bear interest at an Effective Rate determined
in accordance with the terms of the Line of Credit Notes, provided, that
commencing upon an Event of Default, the entire outstanding principal balance
of the Line of Credit shall bear interest at the Default Rate specified
therein. The Borrowers shall make payments of interest and principal to the
Agent for the account of the Lenders, in accordance with and pursuant to the
terms of the Line of Credit Notes. All outstanding principal and unpaid
accrued interest under the Line of Credit shall be due and payable on the
Commitment Termination Date.

2.2.6 Clean-Up of Line of Credit. The Borrowers shall repay
the outstanding balances under the Line of Credit Notes at least once each
Loan Year, provided, however, that the Borrowers shall, at no point, repay the
outstanding balance under any of the Line of Credit Notes to the extent that
there shall be less than $1,000.00 outstanding thereunder at any time, and
shall not reborrow under the Line of Credit Commitment for a period of at
least thirty (30) days after such repayment (a "Clean-up Repayment").
Notwithstanding the foregoing, however, the Borrowers shall be entitled to
forego such Clean-up Repayment for one Loan Year, provided, however, that the
Borrowers shall not be entitled to make any Distributions during the Loan Year
following the Loan Year as to which the Borrowers failed to make a Clean-up
Repayment, until the Borrowers shall make a Clean-up Repayment.

2.3 The Letter of Credit Commitment.

2.3.1 Purpose of Loan and Loan Amount. Upon and subject to
the terms and conditions of this Agreement, the Lenders severally agree to
establish on their books a line of credit availability in favor of the
Borrowers in an amount equal to each such Lender's respective Committed Share
of the Letter of Credit Commitment. The Letter of Credit Commitment shall be
used for the issuance of Letters of Credit by the Agent, as required by any of
the Borrowers in order to secure bonds for site improvement work on Mortgaged
Properties.

2.3.2 Term and Limits on Requests for Letters of Credit. The
Agent shall upon the request of the Borrowers, in accordance with the
procedures hereinafter set forth, and subject to the terms hereof, including,
without limitation, satisfaction of the conditions of Section 5.2 and
compliance with the covenants set forth in Articles 6 and 7, issue Letters of
Credit, in accordance with the provisions hereof. No Letter of Credit shall
be issued which, when aggregated with the amount of outstanding Letters of
Credit, would exceed the Letter of Credit Commitment. In order to request the
issuance of a Letter of Credit (or to amend, renew or extend an existing
Letter of Credit), the Borrowers shall give written notice to the Agent at the
following address:

Nora Lankford, V.P.
Barnett Bank, N.A., Credit Services
101 Hialeah Drive, 2nd Floor
Hialeah, FL 33010
(305) 883-2535
Fax: (305) 883-2515 or 2493

(or to such other address as the Agent may specify from time to time by
written notice to the Borrowers given in accordance with the provisions of
Section 11.4 below), not less than five (5) Business Days prior to the
requested date of issuance, amendment, renewal or extension of any such Letter
of Credit. Each such notice (a "Request for Letter of Credit") shall be
substantially in the form of Exhibit "B-2" attached hereto, specifying therein
the date of issuance, amendment, renewal or extension, the date on which the
Letter of Credit is to expire, the amount of such Letter of Credit, the name
and address of the beneficiary thereof, and such other information as shall be
necessary to prepare such Letter of Credit, and in all other material respects
conform to the Agent's policies and procedures in effect from time to time for
the issuance of Letters of Credit. The Agent and the Lenders shall be
entitled to rely upon and shall be fully protected under this Agreement in
relying upon any Request for Letter of Credit believed by the Agent to be
genuine and to assume that the Person or Persons executing and delivering the
same were duly authorized.

2.3.3 Draws Under Letters of Credit. Draws made upon any
Letter of Credit issued pursuant hereto shall be deemed Advances under the
Letter of Credit Notes, as of the date of the payment thereof, and shall be
subject to the requirements of the Letter of Credit Notes and this Agreement.

2.3.4 The Letter of Credit Notes. Advances under the Letter
of Credit Commitment (such Advances being herein referred to as the "Letter of
Credit Line") shall be evidenced by the promissory notes of even date
herewith, from Borrowers to each of the Lenders, each in the amount of such
Lender's respective Committed Share of the Letter of Credit Commitment
(collectively, the "Letter of Credit Notes"). Any draw made upon any Letter
of Credit, which shall constitute an Advance under the Letter of Credit
Commitment, shall upon demand by the Agent be repaid by the Borrowers to the
Agent, for its own account as the issuer thereof (or for the account of the
Lenders to the extent of their payments to the Agent of their respective
Committed Shares of any such Advance), not later than 11:00 a.m.
(Ft. Lauderdale, Florida time) on the third Business Day following receipt of
demand therefor, from the Agent, together with interest thereon at the
Effective Rate provided in the Letter of Credit Notes; if the Borrower shall
fail to make payment by such time on the third Business Day following receipt
of such demand, same shall constitute an Event of Default hereunder and the
amount of such Advance under the Letter of Credit Commitment shall thereupon
commence to accrue interest at the Default Rate provided in the Letter of
Credit Notes.

2.3.5 Limitation on Letters of Credit. The Agent shall have
no obligation to issue any Letter of Credit if there shall then exist any
Event of Default, if there shall then exist any outstanding drafts under any
outstanding Letters of Credit or any outstanding unpaid Advances made by the
Agent under any such outstanding Letters of Credit, or if the face amount of
any such Letter of Credit to be issued, plus the sum of the principal amounts
under all outstanding Letters of Credit would exceed the Letter of Credit
Commitment, or if the expiration date of any such requested Letter of Credit
falls on a date later than the earlier of (i) 365 days following the date of
issuance or (ii) thirty (30) Business Days prior to the Commitment Termination
Date; provided, however, that in the event the Borrowers shall request any
Letter of Credit, the expiration of which falls on a date later than thirty
(30) Business Days prior to the Commitment Termination Date, the Agent shall
issue such Letter of Credit if the Borrowers shall deposit Cash Collateral
with the Agent simultaneously with the Borrowers' Request for Letter of
Credit, in an amount equal to the amount of such requested Letter of Credit.
Each Request for Letter of Credit shall be accompanied by such other
applications, agreements, information or documents as the Agent shall require
and shall be in accordance with the Agent's policies and procedures then in
effect.

2.3.6 Draws Subsequent to Maturity Date or Event of Default.
In the event that the expiration date of any Letter of Credit shall fall upon
a date subsequent to the Commitment Termination Date, then, no later than such
Commitment Termination Date, the Borrowers shall either (i) cause all
underlying Letters of Credit to be returned and cancelled or (ii) if not
previously paid to the Agent, pursuant to Section 2.3.5, pay to the Agent Cash
Collateral in an amount equal to the maximum amount of all such outstanding
Letters of Credit. Such Cash Collateral shall be held in the Cash Collateral
Account. All obligations of the Borrowers to the Agent in connection with
such Letters of Credit shall be secured by the Cash Collateral, to the same
degree as if the Letter of Credit Notes were still outstanding. This Section
shall survive the Commitment Termination Date. From time to time after funds
are deposited in the Cash Collateral Account, the Agent may apply such funds
then held in the Cash Collateral Account to the payment of any Obligations, in
such order as the Agent may elect, as shall be or shall become due and payable
by the Borrowers to the Agent with respect to any Letters of Credit. Neither
the Borrowers nor any Person claiming on behalf of or through the Borrowers
shall have any right to withdraw any of the funds held in the Cash Collateral
Account, except that upon the termination of all Letters of Credit, in
accordance with their terms and the payment of all amounts payable by the
Borrowers to the Agent in respect thereof and in respect of any draws
thereunder, any funds remaining in the Cash Collateral Account shall be
returned to the Borrowers. Notwithstanding the occurrence of the Commitment
Termination Date, the Borrowers will be and will continue to remain obligated
to reimburse the Agent (whether from the Cash Collateral Account or otherwise)
for the full amount of all payments made by the Agent, pursuant to any Letter
of Credit, and the foregoing Obligation shall be secured by all of the
Collateral. In the event any Letter of Credit is drawn upon at any time
subsequent to the Commitment Termination Date, and there shall then be
insufficient funds in the Cash Collateral Account to cover such draw, the
amount of such draw shall be immediately repaid by the Borrowers following
receipt of demand therefor in writing from the Agent, and shall bear interest
at the Default Rate from the date of such draw until the date paid.

2.3.7 Non-Funding Lender. The Agent shall not be obligated
to issue any Letter of Credit at a time when a Lender has become a Non-Funding
Lender pursuant to Section 2.7.2 below, unless the Agent has entered into
arrangements satisfactory to it and the Borrowers to eliminate the Agent's
risk with respect to the participation of the Non-Funding Lender with respect
to Advances under any such Letter of Credit, which may include the Borrowers'
depositing with the Agent Cash Collateral in the amount of the Committed Share
of such Non-Funding Lender in such Letter of Credit.

2.3.8 Draws on Letters of Credit. A Letter of Credit may be
drawn upon by presentment to the Agent, at its office where the original
Letter of Credit was issued (or such other offices as may be specified
therein), duly endorsed by the beneficiary, together with such supporting
documents and certificates as may be required by the Letter of Credit. The
Agent may afford the beneficiary notice of and an opportunity to correct
nonconforming items capable of cure, each in the sole and absolute discretion
of the Agent and without any notice to or consent from the Borrowers. The
Letter of Credit may not be transferred or assigned without (a) the prior
written consent of the Agent, (b) submission to the Agent of a notice of
transfer in the form annexed to the Letter of Credit, and (c) the payment of
the Agent's normal transfer fees.

2.4 Terms Applicable to All Commitments.

2.4.1 Place of Payment. All payments of principal, interest,
Facility Fees, late fees, expenses and other amounts made by or on behalf of
the Borrowers pursuant to this Agreement, the Notes and the other Loan
Documents shall be made in immediately available funds by 11:00 a.m. (Fort
Lauderdale, Florida time) on a Business Day, to the Agent, for the account of
each Lender, at its office at One East Broward Boulevard, Fort Lauderdale,
Florida 33301, or at such other place as the Agent may instruct. Any payments
of principal, interest, Facility Fees, late fees, expenses or other amounts
pursuant to this Agreement, the Notes or the other Loan Documents, made after
11:00 a.m. (Ft. Lauderdale, Florida time) shall be deemed to be payments made
on the next following Business Day, for all purposes hereof, including,
without limitation, the accrual of interest. The date, amount and interest
rate of each Advance under the Term Loan, Line of Credit and Letter of Credit
Line, and each payment of principal and interest with respect thereto shall be
recorded on the books and records of the Agent, and such books and records
shall constitute conclusive evidence, absent manifest error or bad faith, of
the accuracy of the information therein recorded.

2.4.2 Payments Made Other Than On a Business Day. Should any
payment under any Notes become due and payable on a day other than a Business
Day, the maturity thereof shall be extended to the next succeeding Business
Day, and, in the case of any payment of principal, interest shall be payable
thereon at the Effective Rate or the Default Rate, as applicable, specified in
such Notes for each Business Day such principal is outstanding. Payments of
principal shall not be deemed paid on any Business Day unless received by not
later than 11:00 a.m. on such Business Day.

2.4.3 Advances Do Not Constitute Waivers. No Advance of the
proceeds of any of the Commitments hereunder shall constitute a waiver of any
of the conditions for the making of further Advances, and in the event that
any Advance shall be made notwithstanding that any Event of Default shall then
exist, the making of such Advance shall not have the effect of precluding the
Agent, upon the consent of the Required Lenders, from thereafter declaring
there to exist an Event of Default.

2.4.4 Reduction of Commitments. The Borrower shall have the
right, upon thirty (30) days' prior written notice to the Agent, to
voluntarily reduce the amount of the Line of Credit Commitment and/or the
Letter of Credit Commitment, without premium or penalty, provided, however,
that upon the effective date of such reduction therein, the Borrowers shall
pay to the Agent, for the ratable benefit of the Lenders, all such sums as
shall be required to reduce the outstanding principal balance under the Line
of Credit to the Line of Credit Commitment as so reduced and/or shall return
to the Agent all outstanding Letters of Credit (or deposit with the Agent
sufficient Cash Collateral) as shall be required to reduce the amount of the
outstanding Letters of Credit to the Letter of Credit Commitment as so
reduced. The Borrowers shall not have the right to at any time thereafter
increase the amount of Line of Credit Commitment.

2.5 Late Fee. A late charge of five percent (5%) of any payment
required to be made pursuant to the terms of this Agreement, any of the Notes
or any other Loan Document, shall be imposed on any payment which is not
received within five (5) days of the date such payment is due. This late
charge is not a penalty, but liquidated damages to defray administrative and
related expenses caused the Lenders due to such late payment. The late charge
shall be immediately due and payable, and shall be paid by the Borrowers to
the Agent, for the account of the Lenders, without notice or demand. In the
event that any such late payment for which a late charge shall be assessed
hereunder shall constitute an Event of Default hereunder, then such late
charge shall be applied toward the payment of interest accrued at the Default
Rate charged upon the total outstanding principal balance of the Loans,
commencing upon the occurrence of such Event of Default. This provision for a
late charge is not, and shall not be deemed, to effect a grace period and the
Lenders shall be entitled to the rights and remedies otherwise provided herein
upon an Event of Default.

2.6 Facility Fees. In consideration of the Commitments, the
Borrowers shall pay the following fees (the "Facility Fees"):

2.6.1 Term Loan. With respect to the Term Loan Commitment,
the Borrowers shall pay to the Agent, for the account of the Lenders, at
closing a non-refundable commitment fee in the amount of $750,000.00.

2.6.2 Line of Credit. With respect to the Line of Credit
Commitment, the Borrowers shall pay to the Agent, for the account of the
Lenders, (a) at closing, a non-refundable commitment fee in the amount of
$200,000.00 and (b) at the end of each quarter of each Loan Year, a fee for
unused availability on the Line of Credit, in an amount equal to one-sixteenth
of 1% (0.0625%) of the unused portion of the Line of Credit Commitment for
such quarter of such Loan Year. Such fee for unused availability shall be
calculated as of the last Business Day of each quarter of each Loan Year
during the term of the Line of Credit Commitment or as of any earlier
Commitment Termination Date, if any, on the basis of the average daily unused
portion of the Line of Credit Commitment for each quarter of each Loan Year
during which the Line of Credit Commitment is outstanding (or portion thereof,
if the Commitment Termination Date occurs earlier).

2.6.3 Letter of Credit Line. With respect to the Letter of
Credit Commitment, the Borrowers shall pay to the Agent, for its own account,
as the issuer of the Letters of Credit, a non-refundable commitment fee in the
amount of $6,250.00, and to the Agent, for the account of the Lenders, a non-
refundable commitment fee in the amount of $43,750.00, all at closing.

2.6.4 Administrative Fees. The Borrowers shall pay to Agent,
for its own account, such administrative fees as have been agreed upon by and
between Agent and the Borrowers as set forth in a separate agreement.

2.7 Prorata Treatment; Several Commitments.

2.7.1 Except to the extent otherwise provided herein:
(i) each Advance shall be funded to the Agent by each Lender to the extent of
its respective Committed Share; (ii) each payment of the principal balance
outstanding under any of the Loans by the Borrowers shall be made to the Agent
for the account of the Lenders in accordance with their respective Actual
Shares of the unpaid principal amounts under such Loans; and (iii) each
payment of the interest outstanding under any of the Loans by the Borrowers
shall be made to the Agent for the account of the Lenders in accordance with
their respective Actual Shares of the outstanding interest under such Loans.

2.7.2 The failure of any Lender (such Lender, a "Non-Funding
Lender") to make its Committed Share of any Advance to be made by it on the
date specified therefor shall not relieve any other Lender (each such Lender,
an "Other Lender") of its obligation to make its respective Committed Share of
such Advance on such date, but neither any Other Lender nor the Agent shall be
responsible or liable to the Borrowers, the other Lenders or any other Person
for the failure of any Non-Funding Lender to make its Committed Share of an
Advance. Notwithstanding anything set forth herein to the contrary, (i) a
Non-Funding Lender shall not have any voting or consent rights under or with
respect to any Loan Document nor shall such Non-Funding Lender constitute a
"Lender" for any voting or consent rights under or with respect to any Loan
Document, (ii) such Non-Funding Lender shall have no Actual Share whatsoever
in any Advance as to which such Non-Funding Lender failed to pay its Committed
Share, and (iii) payments made by the Borrowers against the Obligations shall
be applied in the order of application set forth in Section 2.8 and shall be
allocated first to amounts due to those Lenders who are not Non-Funding
Lenders, until each Lender's Actual Share (including that of all Non-Funding
Lenders) of the aggregate principal balance outstanding under the Term Loan,
Line of Credit and Letter of Credit Line, taken together, shall equal each
Lender's Committed Share thereof. A Non-Funding Lender shall not be entitled
to any share of any payments made by the Borrowers unless and until each of
the Other Lenders have received sufficient payments to reduce its respective
Actual Share of the outstanding principal balance of all of the Loans taken
together, to an amount equal to its Committed Share thereof.

2.7.3 Anything in this Agreement to the contrary
notwithstanding, each Lender hereby agrees with each Other Lender that no
Lender shall take any action to protect or enforce its rights arising out of
this Agreement, the Notes or any of the other Loan Documents (including,
without limitation, exercising any rights of setoff) without first obtaining
the prior written consent of the Required Lenders, it being the intent of the
Lenders that any such action to protect or enforce rights under this
Agreement, the Notes and each of the other Loan Documents shall be taken in
concert and at the direction or with the consent of the Agent and the Required
Lenders, not individually by a single Lender.

2.7.4 Nothing in this Agreement shall be construed or deemed
to imply or require any extension of credit by any Lender to another Lender,
and no Lender shall have any obligation to purchase the Committed Share of any
other Lender upon any Event of Default by the Borrowers or in any other event
or circumstance whatsoever.

2.7.5 Notwithstanding that certain Lenders may have greater
or lesser Committed Shares and/or Actual Shares, no Lender shall have any
priority of ownership or interest in any of the Loans, Loan Documents or
Collateral superior to the priority of ownership or interest of any other
Lender.

2.8 Application and Allocation of Payments. The Borrowers
irrevocably waive the right to direct the application of any and all payments
at any time or times hereafter received from or on behalf of the Borrowers,
and the Borrowers irrevocably agree that the Agent and the Lenders shall have
the continuing exclusive right to apply any and all payments against the then
due and payable Obligations of the Borrowers and/or payment of the outstanding
amounts under the Loans, as the Agent and Lenders may deem advisable. In the
absence of the specific determination by all of the Lenders with respect
thereto, the same shall be applied in the following order: (i) then due and
payable Facility Fees, late fees, and expenses owing to the Agent, for its own
account, (ii) then due and payable Facility Fees, late fees and expenses owing
to the Lenders, (iii) then due and payable Obligations to the Lenders other
than Facility Fees, late fees, expenses and interest and principal payments;
(iv) then due and payable interest accrued on the Loans, (v) then due and
payable principal amounts with respect to draws on any Letter of Credit;
(vi) then due and payable principal amounts under the Line of Credit;
(vii) then due and payable principal amounts under the Term Loan; and
(viii) prepayments of principal, to be applied against the outstanding
principal balance of the Term Loan or the Line of Credit, as directed by the
Borrowers.

2.9 Sharing of Payments.

2.9.1 If any Lender shall obtain from any Borrower payment of
any principal or interest on any Advance owing to it or any payment of any
other amount under this Agreement or any Note held by it or any other Loan
Document through the exercise of any right of setoff, banker's lien or
counterclaim or similar right or otherwise (other than from the Agent as
provided herein) and, as a result of such payment, such Lender shall have
received a greater percentage of the principal of or interest on the Loans or
such other amounts then outstanding, due to such Lender, in accordance with
its Actual Share, than the share received by any other Lender, in accordance
with its Actual Share, it shall promptly pay to the Agent for the benefit of
the Lenders, the amount of such excess together with interest thereon at the
Prime Rate, from the date of receipt of such payment until the date such
payment is made to the Agent, and make such other adjustments from time to
time as shall be equitable, to the end that all Lenders shall share the
benefit of such excess payment (net of any expenses that may be incurred by
such Lender in obtaining or preserving such excess amount) in accordance with
the unpaid principal of and/or interest on the Loans or such other amounts
respectively, owing to each of the Lenders, on the basis of their respective
Actual Shares. Amounts received by the Agent under this Section shall be
treated as a payment received from the Borrowers under Section 2.8 above. To
such end, all Lenders shall make appropriate adjustments among themselves if
such payment is rescinded or must otherwise be restored.

2.9.2 If, under applicable bankruptcy, insolvency or other
similar law, any Lender receives a secured claim in lieu of a setoff or right
as against any Borrower to which this Section 2.9 applies, with respect to any
of the Loans, such Lender shall assign such rights to the Agent for the
ratable benefit of the Lenders and in any event, exercise its rights in
respect of such secured claim in a manner consistent with the rights of the
Lenders entitled under this Section to share in the benefits of any recovery
on such secured claim.

2.10 Settlement Procedures.

2.10.1 The Loan balances may fluctuate from day to day from
the Agent's disbursement of funds to, and receipt of funds from, the
Borrowers. In order to minimize the frequency of transfers of funds between
the Agent and the Lenders, Advances may be made by the Agent and payments in
respect thereof will be settled according to the procedures set forth in this
Section. Notwithstanding these procedures, each Lender's obligation to fund
its Committed Share of any Advance will commence on the date such Advance is
made. Such payments will be made by each Lender without setoff, counterclaim
or reduction of any kind.

2.10.2 By not later than one Business Day following its
receipt of a Request for Advance or a draw on a Letter of Credit, the Agent
shall notify each Lender thereof. By not later than 11:00 a.m. (Ft.
Lauderdale, Florida time): (i) on the same Business Day as any proposed
Advance under the Line of Credit Commitment is to be made, in accordance with
a Request for Advance, and (ii) on the same Business Day on which a Lender
shall receive notice from the Agent of any draw on a Letter of Credit, each
Lender shall pay to Agent, in immediately available same day funds, to such
account of the Agent as the Agent may designate, such Lender's Committed Share
of such Advance, provided, however, if any Lender shall receive notice of any
such draw upon a Letter of Credit later than 4:00 p.m. (Ft. Lauderdale,
Florida time), such Lender shall promptly initiate payment of its Committed
Share of such Advance and shall make such payment no later than 9:00 a.m.
(Ft. Lauderdale, Florida time) on the next following Business Day.
Notwithstanding anything to the contrary contained in this Agreement for
purposes of calculating any Lender's Actual Share of any interest payment made
by the Borrowers to the Agent: (i) the Agent shall be entitled to all
interest, at the Effective Rate or Rates applicable thereto, and, if
applicable, the Default Rate, with respect to any Lender's Committed Share of
any Advance, from the date of the making of such Advance by the Agent (in the
case of a draw on a Letter of Credit) until the date such Lender shall pay
such Lender's Committed Share thereof to the Agent and (ii) a Lender shall be
entitled to all interest, at the Effective Rate or Rates applicable thereto,
and, if applicable, the Default Rate, with respect to any such Lender's Actual
Share of any repayment made by the Borrowers to the Agent to the extent such
repayments may be applied toward such Lender's Actual Share of outstanding
Advances, in accordance with Section 2.8, from the date of such repayment by
the Borrowers to the Agent (subject to the terms of Section 2.4.2) until the
date the Agent shall pay to such Lender its Actual Share thereof. In the
event that either (a) the Agent shall not make any Advance for which a Lender
shall have timely funded its Committed Share thereof or (b) any Lender shall
fund its Committed Share of an Advance (e.g., a draw upon any Letter of
Credit) on or later than the Business Day on which the Agent shall have
received repayment thereof from the Borrowers, the Agent shall, within one (1)
Business Day following an event described in (a) or (b), above, refund to such
Lender the entire amount of such Committed Share of such Advance which is not
made or of such Committed Share of such repaid draw on a Letter of Credit, as
the case may be.

2.10.3 All notices by the Agent to the Lenders or by the
Lenders to the Agent shall be by telephone, telex, telecopier or other form of
teletransmission, in accordance with the notice instructions set forth in
Schedule 2.10.3, or such other notice instructions as the Agent or any Lender
shall advise the Agent or such Lender of, from time to time (but not later
than three (3) Business Days prior to the date such new notice instructions
shall become effective). Any such notice shall be deemed to have been
effectively made upon the sender's receipt of confirmation of successful
transmission, in form appropriate to the form of transmission.

2.10.4 The notification by the Agent to each Lender of a
Request for Advance by the Borrowers shall, unless otherwise specified by the
Agent, constitute a certification by the Agent to each Lender that, to the
Agent's actual knowledge: (i) the Borrowers have fulfilled the conditions of
such Advance and are entitled to such Advance under the Loan Documents and
(ii) all prior Advances to the Borrowers have been made by the Agent in
accordance with the terms of this Agreement and the Loan Documents. In
conjunction with the foregoing, the Agent shall be entitled to rely in good
faith upon the advice of outside experts, as contemplated by Section 10.2, and
upon certifications by the Borrowers and other parties, accepted by the Agent
in the ordinary course of the Agent's business.

2.10.5 Subject to Section 2.7, each payment received by the
Agent under this Agreement or any Notes for the account of the Lenders shall
be paid by the Agent to the Lenders, in proportion to their Actual Shares for
application to Facility Fees, late fees, expenses, interest and principal, in
accordance with Section 2.8. Each such payment shall be made by the Agent to
the Lenders either (i) if such payment shall have been received by the Agent
by 11:00 a.m. (Ft. Lauderdale, Florida time) on any Business Day, by the end
of such Business Day or (ii) if such payment shall have been received by the
Agent later than 11:00 a.m. (Ft. Lauderdale, Florida time) on any Business
Day, by no later than the next following Business Day. Without limiting any
Lender's obligation to pay to the Agent each such Lender's Committed Share of
Agent's Expenses, as provided by Section 10.3.3, the Agent shall be entitled
to deduct from any such Lender's Actual Share in such payments (before
remitting the balance to such Lender) such Lender's Committed Share of such
Agent's Expenses, if any, which have not been paid by such Lender to the Agent
within ten (10) Business Days following written request therefor by the Agent
to such Lender, regardless of whether such Lender disputes its obligation to
pay such Agent's Expenses, but without prejudice to such Lender's rights to
recover the amount so deducted if not in fact owed by such Lender.

2.11 Accounting.

2.11.1 Within five (5) Business Days following the making of
any Advance, the Agent will deliver to each of the Lenders a certificate with
respect to its Actual Share of such Advance, which certificate will be
substantially in the form of Exhibit "C" attached hereto.

2.11.2 The Agent will provide a monthly accounting of
transactions under the Loans to the Borrowers and each of the Lenders. Each
and every such accounting (absent manifest error) shall be deemed final,
binding and conclusive upon each Lender and the Borrowers in all respects as
to all matters reflected therein, unless the Borrowers or any Lender, within
thirty (30) days after the date any such accounting is rendered, shall notify
the Agent in writing of any objection which the Borrowers or such Lender may
have to any such accounting, describing the basis for such objection with
specificity. In such event, only those items (the "Disputed Items") expressly
objected to on such notice shall be deemed to be disputed by the Borrowers or
such Lender. The Agent's determination in good faith based upon the facts
available of any Disputed Item shall (absent manifest error) be final, binding
and conclusive on the Borrowers and each Lender.

2.12 Additional Payments in Respect of Changed Circumstances.

2.12.1 If any change subsequent to the date of this Agreement,
in any law or regulation or in the interpretation thereof by any court or
administrative or governmental authority charged with the administration
thereof, or any change in Generally Accepted Accounting Principles, shall
either (i) impose, modify, or deem applicable any reserve, special deposit,
capitalization, or similar requirement in connection with the Loans or other
transactions contemplated hereby or any collateral therefor, on the Agent or
any other Lender, (ii) impose on the Agent or any other Lender any other
condition relating, directly or indirectly, to this Agreement, the Loans or
other transactions contemplated hereby or any Collateral therefor, or
(iii) subject the Agent or any other Lenders to any tax (other than taxes
based upon gross revenues or net income), charge, fee, deduction, or
withholding of any kind whatsoever, and the result of any event referred to in
clause (i), (ii), or (iii) above shall be to increase the costs to, or impose
additional expenses upon, the Agent or any other Lender in connection with the
Loans or other transactions contemplated hereby (which increase in cost shall
be the result of the Agent's reasonable allocation of the aggregate of such
cost increases resulting from such events), then, upon demand by the Agent
accompanied by a certificate from the Agent describing the subject event(s)
giving rise to such cost increases, the Borrowers shall immediately pay to the
Agent, from time to time as specified by the Agent, additional amounts which
shall be sufficient to compensate the Agent and other Lenders for such
increased cost from the date of such change, together with interest on each
such amount from the date demanded until payment in full thereof at a rate
equal to the Effective Rate, provided, that if same has not been paid within
three (3) Business Days following demand, thereafter, at a rate equal to the
Default Rate, which rate shall not exceed the maximum non-usurious rate of
interest allowed by applicable law as amended from time to time. If any
payment of interest or in the nature of interest would cause the foregoing
interest rate to be exceeded, then such excess payment shall be credited as a
payment of principal, unless the Borrowers notify the Agent in writing to
return the excess payment to the Borrowers. A certificate setting forth in
reasonable detail any increased cost incurred by the Agent and other Lenders
as a result of any event mentioned in clause (i), (ii), or (iii) above
submitted by the Agent to the Borrowers as soon as practicable after such
costs are determined by the Agent, shall be presumptive evidence as to the
amount thereof.

2.12.2 Each Borrower shall pay directly to the Agent from time
to time, on behalf of each Lender, upon request, such amounts as any such
Lender may reasonably determine to be necessary to compensate such Lender for
any costs that it reasonably determines are attributable to any capital
required or expected to be maintained by such Lender or any person controlling
such Lender, pursuant to any applicable law or regulation or any reasonable
interpretation thereof, or any directive or request of any court or
governmental or monetary authority (i) following any change in applicable laws
or regulations or (ii) implementing after the date hereof any risk-based
capital guideline or other capital requirement heretofore or hereafter issued
by any such governmental authority in respect of any such Lender's Commitments
hereunder (such compensation to include, without limitation, an amount equal
to any reduction of the rate of return on assets or equity of such Lender or
its parent holding company to a level below that which such Lender or its
parent holding company could have achieved but for such law, regulation,
interpretation, directive or request.) Upon demand therefor by the Agent,
accompanied by a certificate from the Agent describing the subject event(s)
giving rise to such additional costs, the Borrower shall immediately pay to
the Agent such amounts as shall be sufficient to compensate such Lender for
such additional costs, together with interest on each such amount from the
date demanded until payment in full thereof at a rate equal to the Effective
Rate, provided that if same has not been paid within three (3) Business Days
following demand, thereafter at a rate equal to the Default Rate, which rate
shall not exceed the maximum non-usurious rate of interest allowed by
applicable laws, amended from time to time. If any payment of interest or in
the nature of interest would cause the foregoing interest rate to be exceeded,
then such excess payments will be credited to the payment of principal, unless
the Borrowers notify the Agent in writing to return the excess payment to the
Borrowers. A certificate setting forth, in reasonable detail, any increased
cost incurred by any such Lender as a result of any event described in this
Section 2.12.2 submitted by such Lender to the Borrowers as soon as
practicable after such additional costs are determined by such Lender shall be
presumptive evidence as to the amount thereof.

ARTICLE 3. SECURITY

3.1 Security Documents. Payment of the Loans shall be secured as
provided in this Article 3. Payment of the Notes including any amounts
actually drawn under a Letter of Credit as well as the contingent obligations
of the Borrowers to reimburse the Agent (and to the extent of their Advances
therefor, the Lenders) for any amounts which may in the future be drawn under
Letters of Credit, and all other Obligations of the Borrowers under the Notes,
Letters of Credit, this Agreement and all of the Loan Documents, and all other
Obligations of the Borrowers to the Lenders, presently existing or hereafter
arising, shall be secured by a perfected first priority security interest in
the Collateral, in accordance with the Security Documents. The Borrowers have
executed and delivered to the Agent the Security Documents of even date
herewith covering the Collateral, in form and substance satisfactory to the
Lenders. The Security Documents shall be sufficient to grant to the Lenders a
perfected first priority security interest in the Mortgaged Properties and
other Collateral, subject to no Liens except for Permitted Encumbrances and
the Liens created by the Security Documents in favor of the Agent and the
Lenders. The Borrowers agree to execute or otherwise provide to the Agent and
the Lenders any and all modifications, financing statements and other
agreements or consents required by the Agent now or in the future in
connection therewith.

3.2 Partial Releases of Mortgaged Properties. Provided that (i)
there shall exist no Event of Default or event which with the giving of notice
or passage of time or both would constitute an Event of Default hereunder,
(ii) that the granting of a Partial Release shall not cause a breach of any of
the financial covenants set forth in Section 6.13, and (iii) the granting of a
Partial Release shall not render any portion of a Mortgaged Property remaining
encumbered without reasonably adequate ingress and egress, the Agent shall
grant to the Borrowers releases of Mortgaged Properties or portions thereof
from the Lien of the Mortgages ("Partial Releases"), on the following bases:

3.2.1 Defined Terms. For purposes of this section, the
following terms have the following meanings:

The term "Bulk Home Site Parcel" means a parcel of more
than twenty-five (25) Home Sites which is proposed to be sold to a single
buyer in a single sale.

The term "Commercial Property" means any property
described in the then current Economic Model as an Operating Property or as
Land and Property.

The term "Discretionary Property" means any Commercial
Property or Residential Property as to which a Borrower seeks a Partial
Release in accordance with the terms of Section 3.2.4.

The terms "Houses" and "Home Sites" mean, respectively,
single family residences constructed on lots within any residential
subdivision identified as a "Community Development" in the then current
Economic Model, and single family vacant building sites within any residential
subdivision identified as a "Community Development" in the then current
Economic Model.

The term "Maximum Discretionary Commercial Acreage"
means six (6) net buildable acres.

The term "Maximum Discretionary Residential Acreage"
means twenty-five (25) net buildable acres.

The term "Maximum Permitted Refinancing" shall mean
seventy-five percent (75%) of the Adjusted Value of the Proposed Refinanced
Property determined by the Required Lenders on the basis of the Appraisal
thereof.

The term "Minimum Permitted Price" means: (a) with
respect to any proposed sale of a Scheduled Property for a gross sales price
which is less than or equal to $20,000,000.00, a gross sales price therefor
which is equal to seventy-five percent (75%) of the gross sales price
projected for such Scheduled Property in the then current Economic Model, and
(b) with respect to any proposed sale of a Scheduled Property for a gross
sales price which is greater than $20,000,000.00, a gross sales price therefor
which is $5,000,000.00 less than the gross sales price projected for such
Scheduled Property in the then current Economic Model.

The term "Minimum Permitted Refinancing" shall mean
fifty percent (50%) of the Adjusted Value of the Proposed Refinanced Property
determined by the Required Lenders on the basis of the Appraisal thereof.

The term "Residential Property" means any property
within any residential subdivision identified as a "Community Development" in
the then current Economic Model and designated for Houses or Homes Sites.

The term "Scheduled Property" means (i) any improved
property described in the then current Economic Model as an "Operating
Property", which is scheduled to be sold, in such current Economic Model,
regardless of whether such sale is projected for the current or a later fiscal
year, (ii) any unimproved lot, tract or parcel described in the then current
Economic Model as "Land and Property", which is scheduled to be sold in such
current Economic Model, regardless of whether such sale is projected for the
current or a later fiscal year, and (iii) any Bulk Home Site Parcel.

3.2.2 Houses and Homesites. With respect to proposed sales
of Houses and Home Sites, but excluding proposed sales of Bulk Home Site
Parcels, any applicable Borrower shall deliver to the Agent, by or before the
first day of each quarter of a calendar year, a request for releases of Houses
and Home Sites which shall: (i) set forth the number of Houses and Home Sites
in each applicable residential subdivision which represents such Borrower's
good faith estimate of the number of Houses and Home Sites which shall be sold
within the next following quarter and (ii) the current schedule of gross sales
prices for each House and Home Site, by subdivision and model, as the case may
be.

Provided there shall then exist no Event of Default or
event which with the giving of notice or passage of time or both would
constitute an Event of Default hereunder, within five (5) Business Days
following receipt of any such request for releases, the Agent shall deliver to
each closing agent designated by an applicable Borrower, each of which shall
be reasonably satisfactory to the Agent (each, an "Escrow Agent") executed
forms of Partial Release from the Lien of the applicable Mortgage, for the
number of Houses and Home Sites in each subdivision projected for such quarter
in such request for releases (less such Partial Releases as the Agent shall
previously have delivered to such Escrow Agent with respect to such
subdivision in excess of actual closings to date within such subdivision). In
the event that the Agent shall refuse to deliver such Partial Releases because
of its determination that an Event of Default or a condition which with the
giving of notice or passage of time would constitute an Event of Default, the
Agent shall notify the Borrowers of such Event of Default or condition, in
writing, within such five (5) day period. In the event that a Borrower shall
determine during any quarter that it has underestimated the number of closings
of Houses and/or Home Sites in such quarter, then such Borrower may submit one
or more additional requests for releases of Houses and Home Sites, which shall
satisfy the conditions set forth in the foregoing paragraph, and, provided
there shall then exist no Event of Default or event which with the giving of
notice or passage of time or both would constitute an Event of Default
hereunder, within ten (10) Business Day following a receipt of any such
request for releases, the Agent shall deliver to the designated Escrow Agent
executed forms of Partial Releases for such additional number of Houses and
Home Sites.

Subject to the terms of each Escrow Agreement to be
entered into between the Borrowers, the Agent and each applicable Escrow
Agent, which shall be materially in the form attached hereto as Exhibit "D"
(which Escrow Agreements shall include, without limitation, the condition that
any sale of a House or Home Site shall be at a gross sales price of not less
than seventy-five percent (75%) of the scheduled gross sales price for the
applicable House model in the applicable subdivision, or for the applicable
Home Site, as the case may be), the Escrow Agent shall, at the closing of any
such House or Home Site attach the specific legal description to an
appropriate Partial Release, and deliver such Partial Release for recording
together with the deed therefor. No later than the third (3rd) Business Day
of each month, the Escrow Agent shall deliver to the Agent a report, in the
form attached to the Escrow Agreement, describing all sales of Houses and Home
Sites, by subdivision, lot, buyer, gross sales price, and net cash proceeds
therefor.

3.2.3 Scheduled Property. With respect to any proposed sale
of a Scheduled Property, a Borrower shall deliver to the Agent a request for
the release of such Scheduled Property which shall: (i) set forth the legal
description for the Scheduled Property, (ii) include, if platted, the plat
showing the location thereof, or if not platted, a survey thereof indicating
the relation of such Scheduled Property to the Mortgaged Property of which it
is a part, (iii) include a copy of the proposed draft contract for the sale
thereof and (iv) the proposed gross sales price therefor. Provided there
shall then exist no Event of Default or event which with the passage of time
or giving of notice or both would constitute an Event of Default hereunder,
and further provided that the gross sales price, subject to such adjustments
as provided in the proposed contract, shall equal or exceed the Minimum
Permitted Price for such Scheduled Property, then, within five (5) Business
Days following receipt of any such request for release, the Agent shall
deliver to such Borrower's designated closing agent (which shall be reasonably
satisfactory to the Agent) a Partial Release from the Lien of the applicable
Mortgage for such Scheduled Property, in escrow. In the event that the Agent
shall refuse to deliver such Partial Releases because of its determination
that an Event of Default or a condition which with the giving of notice or
passage of time would constitute an Event of Default, the Agent shall notify
the Borrowers of such Event of Default or condition, in writing, within such
five (5) day period. If the proposed gross sales price for such Scheduled
Property shall be less than the Minimum Permitted Price therefor, the Agent
shall, within five (5) Business Days after receipt of such Borrower's request
for release, deliver such request for release to the Lenders for their review.

If the Required Lenders shall approve the sale of such Scheduled Property for
the proposed gross sales price, then within five (5) Business Days following
receipt of the written approval of the Required Lenders to such sale for such
proposed gross sales price, the Agent shall deliver to the closing agent a
Partial Release from the Lien of the applicable Mortgage for such Scheduled
Property, in escrow. It shall be a condition to any escrow thereof that a
Partial Release for a Scheduled Property shall be released from escrow only if
the actual gross sales price shall be equal to or exceed the lesser of the
proposed gross sales price or the Minimum Permitted Price, and all adjustments
thereto are materially as provided in the proposed contract therefor. Within
three (3) Business Days following the closing of the sale of any such
Scheduled Property, the closing agent shall deliver to the Agent a copy of the
fully executed closing statement therefor.

3.2.4 Discretionary Property. The Borrowers shall have the
right to obtain, in any single Loan Year, releases of Residential Property not
in excess of the Maximum Discretionary Residential Acreage, and releases of
Commercial Property not in excess of the Maximum Discretionary Commercial
Acreage, without consideration as to the gross sales price therefor (any such
property for which a Borrower seeks a Partial Release pursuant to this
Section 3.2.4, a "Discretionary Property"). An applicable Borrower which
seeks the release of any Discretionary Property under the terms of this
Section 3.2.4 shall deliver to the Agent a request for the release of a
Discretionary Property which shall: (i) set forth the legal description
therefor, (ii) include, if platted, the plat showing the location thereof, or
if not platted, a survey thereof indicating the relation of such Discretionary
Property to the Mortgaged Property of which it is a part, (iii) include a copy
of the proposed draft contract for the sale thereof, and (iv) the proposed
gross sales price therefor. Provided there shall then exist no Event of
Default or event with the passage of time or giving of notice or both would
constitute an Event of Default hereunder, and further provided that the
release of such Discretionary Property shall not cause the Discretionary
Property released in such Loan Year to exceed the Maximum Discretionary
Residential Acreage or the Maximum Discretionary Commercial Acreage, then,
within five (5) Business Days following receipt of any such request for
release, the Agent shall deliver to such Borrower's designated closing agent
(which shall be reasonably satisfactory to the Agent), a Partial Release from
the Lien of the applicable Mortgage for such Discretionary Property, in
escrow. In the event that the applicable Borrower shall request the release
of any Discretionary Property in excess of the Maximum Discretionary
Residential Acreage or the Maximum Discretionary Commercial Acreage in any
single Loan Year (for purposes hereof, "Excess Discretionary Property"), the
Agent shall, within five (5) Business Days after receipt thereof, deliver the
request for release to the Lenders for their review. In the event that the
Agent shall refuse to deliver such Partial Releases because of its
determination that an Event of Default or a condition which with the giving of
notice or passage of time would constitute an Event of Default, the Agent
shall notify the Borrowers of such Event of Default or condition, in writing,
within such five (5) day period. If the Required Lenders shall approve the
sale of such Excess Discretionary Property, then within five (5) Business Days
following receipt of written approval of the Required Lenders to such sale,
the Agent shall deliver to the closing agent a Partial Release from the Lien
of the applicable Mortgage for such Excess Discretionary Property. Within
three (3) Business Days following the closing of the sale of any such
Discretionary Property, the closing agent shall deliver to the Agent a copy of
the fully executed closing statement therefor.

3.2.5 Refinanced Property. With respect to any proposed
refinancing of any Mortgaged Property or any portion thereof (a "Proposed
Refinanced Property"), an applicable Borrower shall deliver to the Agent a
request for the release thereof, which shall: (i) set forth the legal
description thereof, (ii) include, if platted, a plat indicating the location
thereof, or, if not platted, a survey thereof, indicating the relationship of
such Proposed Refinanced Property to the rest of the Mortgaged Property of
which it is a part, (iii) include a copy of the commitment for the proposed
refinancing, indicating, inter alia, the amount of such refinancing and
(iv) if not then subject to an Appraisal which has been obtained and accepted
by the Lenders within the immediately preceding twelve (12) months, a current
Appraisal therefor. Provided there shall exist no Event of Default or event
which with the passage of time or giving of notice or both would constitute an
Event of Default hereunder, and further provided that: (a) if the Agent does
not have a current (within the preceding twelve (12) months) Appraisal
therefor, the Appraisal submitted in connection with such request for release
shall be reviewed and accepted by the Required Lenders and the Required
Lenders shall have determined an Adjusted Value on the basis thereof, and
(b) the amount of the proposed refinancing shall not be in excess of the
Maximum Permitted Refinancing nor less than the Minimum Permitted Refinancing,
the Agent shall deliver to such Borrower's designated closing agent (which
shall be reasonably satisfactory to the Agent) a Partial Release from the Lien
of the applicable Mortgage for such Proposed Refinanced Property, in escrow.
In the event that the proposed refinancing for such Proposed Refinanced
Property shall be greater than the Maximum Permitted Refinancing or less than
the Minimum Permitted Refinancing, the Agent shall within five (5) Business
Days after receipt thereof, deliver the request for release to the Lenders for
their review. If the Required Lenders shall approve the refinancing of such
Proposed Refinanced Property for the amount of such refinancing, then within
five (5) Business Days following written approval of the Required Lenders to
such refinancing, the Agent shall deliver to the closing agent a Partial
Release of the Lien from the applicable Mortgage for such Proposed Refinanced
Property, in escrow. It shall be a condition to any escrow thereof, that a
Partial Release for a Proposed Refinanced Property shall be released from
escrow only if the amount of the actual refinancing is not greater than the
Maximum Permitted Refinancing nor less than the Minimum Permitted Refinancing.

Within three (3) Business Days following the closing of such refinancing, the
escrow agent shall deliver to the Agent a copy of the fully executed closing
statement therefor.

3.2.6 Limit on Purchase Money Financing. In connection with
the sale of Mortgaged Properties or portions thereof, the Borrowers shall not
at any one time hold, in the aggregate, more than $1,000,000.00 in purchase
money financing for such sales.

3.3 Additional Mortgaged Properties and Additional Other Collateral.

3.3.1 Not later than thirty (30) days prior to the
acquisition of any of the Additional Properties, the Borrowers shall deliver
to the Agent all such materials that shall be required, in the Agent's sole
reasonable discretion (the "Additional Property Due Diligence"), to satisfy
the conditions of lending described in Article 5, below, to the extent same
apply to Mortgaged Properties, including, without limitation, confirmation
that all of the representations and warranties set forth in Article 4, below,
shall be valid, in all material respects, with respect to any such Additional
Property. In the event that the Agent shall determine in its sole discretion
upon review of the Additional Property Due Diligence, to accept such
Additional Property as Collateral for the Obligations, the Borrowers shall
simultaneously with the acquisition of such Additional Property, execute and
deliver to the Agent, on behalf of the Lenders, a Spreading Agreement, in the
form set forth on Exhibit "E" attached hereto, which shall have the effect of
spreading the lien of the Mortgage then in place in such jurisdiction, to such
Additional Property (following which, such Additional Property shall be deemed
a Mortgaged Property for all purposes hereof), together with such other
amendments to the Loan Documents as the Agent shall reasonably require.

3.3.2 Within thirty (30) days following the Closing Date, the
Borrowers shall deliver to the Agent all such materials that shall be
required, in the Agent's sole reasonable discretion (the "Cable Franchise Due
Diligence"), to evaluate the Cable Franchise, including, without limitation,
the Cable Franchise. In the event that the Agent shall determine in its sole
discretion upon review of the Cable Franchise Due Diligence, to accept the
Cable Franchise as Collateral for the Obligations, Gulf and Pacific shall, as
soon as reasonably possible, but in any event within thirty (30) days
following receipt of notice from the Agent of its acceptance of the Cable
Franchise as Collateral, execute and deliver to the Agent, on behalf of the
Lenders, all such Security Documents as the Agent shall reasonably require in
order to create and perfect a first priority security interest in the Cable
Franchise, together with all consents that shall be required thereto,
including, without limitation, from any local and state public service
authorities and governmental bodies or agencies having jurisdiction thereover
(the "Consents"). The Consents shall, inter alia: (i) acknowledge the right
of the Agent upon an Event of Default, to foreclose upon its security interest
in the Cable Franchise and to assume the right, title and interest of Gulf and
Pacific therein, without liability for any defaults on the part of Gulf and
Pacific preceding such foreclosure, unless and to the extent that the Agent
and other Lenders shall have been afforded notice of such default prior to
such foreclosure and a reasonably adequate opportunity to cure same, and
(ii) confirm the right of the Agent, on behalf of the Lenders, to sell or
assign such Cable Franchise to a reasonably qualified buyer or assignee.

In the event that Gulf and Pacific shall, at any time
during the term of the Loans, propose to sell the Cable Franchise, Gulf and
Pacific shall deliver to the Agent a request for the release of such Cable
Franchise, which shall: (i) include the proposed contract for the sale of the
Cable Franchise and (ii) the proposed sales price therefor. Provided there
shall then exist no Event of Default or event which with the passage of time
or giving of notice or both would constitute an Event of Default hereunder,
and further provided that, subject to such adjustments as provided in the
proposed contract, the sales price shall equal or exceed an amount equal to
seventy-five percent (75%) of the sales price projected for the Cable
Franchise in the then current Economic Model (the "Minimum Permitted Cable
Franchise Price"), then, within fifteen (15) Business Days following receipt
of any such request for release, the Agent shall deliver to Gulf and Pacific's
designated closing agent (which shall be reasonably satisfactory to the Agent)
releases from the Lien of the applicable Security Documents encumbering such
Cable Franchise, in escrow. If the proposed sales price for such Cable
Franchise shall be less than the Minimum Permitted Cable Franchise Price, the
Agent shall, within five (5) Business Days after receipt of such request for
release, deliver such request to the Lenders for their review. If the
Required Lenders shall approve the sale of such Cable Franchise for the
proposed sales price, then, within five (5) Business Days following receipt of
the written approval of the Required Lenders of such sale for such proposed
sales price, the Agent shall deliver to the closing agent a release from the
Lien of such Security Documents, in escrow. It shall be a condition to any
escrow thereof that such release shall be released from escrow, only if the
actual sales price is not less than the proposed sales price for such Cable
Franchise, and that all adjustments thereto are materially as provided in the
proposed contract therefor. Within three (3) Business Days following the
closing of the sale of the Cable Franchise, the closing agent shall deliver to
the Agent a copy of the fully executed closing statement therefor same has
been subject only to usual and customary adjustments.

3.3.3 The Agent may, and upon the direction of the Required
Lenders shall, from time to time, require the Borrowers, within ten (10)
Business Days following notice to the Borrowers thereof, to execute and
deliver to the Agent all such documents and instruments and to take all such
other reasonable actions, (including, where possession by the Agent shall be
required in order to achieve perfection therein, delivery to the Agent
thereof) all as the Agent, on behalf of the Lenders, shall determine to be
necessary or otherwise reasonably required, in order to extend the first
priority Lien under the Security Documents to any of the Accounts, Inventory,
Equipment and/or General Intangibles and/or to perfect such first priority
security interest therein, including, without limitation, any additions to any
of the Collateral, as same shall be disclosed to the Agent, from time to time,
pursuant to the requirements of Sections 6.1.2 and 6.1.2.

ARTICLE 4. REPRESENTATIONS AND WARRANTIES

To induce the Lenders to enter into this Agreement and to make the Loans
hereunder, the Borrowers represent and warrant to the Lenders (which
representations and warranties shall survive the delivery of the Loan
Documents mentioned herein) as follows:

4.1 Corporate Existence; Compliance with Law; Name History. Each of
the Borrowers and each general partner of a partnership Borrower is duly
organized and validly existing. Each corporate and limited partnership
Borrower and each corporate and limited partnership general partner of any
partnership Borrower is in good standing under the laws of its state of
formation. Each of the Borrowers has all requisite power (corporate and
partnership) to own and operate its properties and to carry on its business as
now being conducted. Each of the Borrowers is duly qualified as a foreign
corporation or partnership, as the case may be, to do business in every
jurisdiction in which the nature of its business or the ownership of its
properties makes such qualification necessary and is qualified to do business
in such jurisdictions, has all licenses and permits necessary to carry on and
conduct its business in all states and localities wherein it now operates, and
is in material compliance with all other requirements of law, rule, or
regulation applicable to it and to its business. None of the Borrowers has
merged, changed its name, or done business under a fictitious name during the
past five years, except as set forth on Schedule 4.1.

4.2 Corporate Power and Authorization to Execute Loan Documents; No
Conflict; No Consent. Each of the Borrowers and each general partner of a
partnership Borrower has the power and authority and the legal right to
execute and deliver the respective Loan Documents to be executed by them and
to perform their respective obligations thereunder and have taken all
partnership and/or corporate action necessary to authorize the execution,
delivery, and performance of such Loan Documents and to authorize the
transactions contemplated thereby. The execution, delivery, and performance
by each of the Borrowers and each general partner of a partnership Borrower of
the respective Loan Documents to be executed by them will not:
(a) contravene, conflict with, result in the breach of, or constitute a
violation of or default under (i) the partnership agreement, joint venture
agreement or articles of incorporation or bylaws of any of them, (ii) any
applicable law, rule, regulation, judgment, order, writ, injunction, or decree
of any court or governmental authority, or (iii) any agreement or instrument
to which any Borrower or any general partner of any partnership Borrower is a
party or by which any Borrower or any general partner of any partnership
Borrower or its properties may be bound or affected; or (b) result in the
creation of any Lien, charge, or encumbrance upon any of the properties or
assets of any Borrower or any general partner of any partnership Borrower
pursuant to any of the foregoing, except the Liens created by the Loan
Documents. No consent, license, or authorization of, or filing with, or
notice to, any Person or entity (including, without limitation, any
governmental authority), is necessary or required in connection with the
execution, delivery, performance, validity, or enforceability of the Loan
Documents and the transactions contemplated thereunder, except for consents,
licenses, authorizations, filings, and notices already obtained or performed
and of which the Lenders have been provided written notice, or referred to or
disclosed in the Loan Documents. Any such consents, licenses, authorizations,
filings, or notices remain in full force and effect.

4.3 Financial Condition.

4.3.1 The audited consolidated Financial Statements of Arvida
and its Consolidated Entities, as included in Arvida's 1996 fiscal year 10K
Report, and the unaudited consolidating financial statements of Arvida and its
Consolidated Entities, as of March 31, 1997 copies of which have been
furnished to the Agent, are correct, complete, and fairly present in all
material respects the financial condition of Arvida and its Consolidated
Entities and the results of the operations of Arvida and its Consolidated
Entities for the periods covered thereby, as of the date of the Financial
Statements. The Financial Statements have been prepared in accordance with
Generally Accepted Accounting Principles applied on a Consistent Basis
maintained throughout the period involved.

4.3.2 As at the Closing Date, there has occurred no Material
Adverse Change.

4.3.3 With respect to the Arvida/JMB Partners, L.P. 1997
Business Plan (the "1997 Annual Business Plan") and the Arvida/JMB Partners,
L.P. 1997 Economic Model, dated March 20, 1997, (the "1997 Economic Model")
furnished by Arvida to the Agent and the Lenders, relating to the financial
condition, operations, business, properties and prospects of Arvida and the
Subsidiaries and Affiliates: (i) all facts upon which the 1997 Annual Business
Plan and the 1997 Economic Model are based, are true and complete in all
material respects and no fact was omitted therefrom which would make the 1997
Annual Business Plan or the 1997 Economic Model misleading in any material
respect and (ii) all prospective budgets and forecasts contained therein have
been made in good faith on the basis of such facts. With respect to any
revised or updated Annual Business Plan (an "Annual Business Plan") or
Economic Model (an "Economic Model") furnished to the Agent and the Lenders at
any time after the date hereof, the foregoing clauses (i) and (ii) shall be
true and correct in all material respects as of the date of such Annual
Business Plans or Economic Models. The 1997 Annual Business Plan and the 1997
Economic Model are set forth on Schedule 4.3.3.

4.4 No Litigation.

4.4.1 Except as disclosed on Schedule 4.4.1 (the "Pending and
Threatened Litigation"), as of the Closing Date there is no suit or proceeding
at law or in equity or other proceeding or investigation (including
proceedings by or before any court, arbitrator, governmental or administrative
commission, board, bureau, or other administrative agency) pending, or to the
best knowledge of the Borrowers threatened, by or against or involving Arvida
or any of its Subsidiaries or Affiliates or any general partner of Arvida or
of a partnership Subsidiary or Affiliate or against any of their respective
properties, existence, or revenues. The matters comprising the Pending and
Threatened Litigation, individually and in the aggregate: (a) would not, if
the reasonably likely outcome thereof were in fact realized as of the date
hereof, constitute a Material Adverse Change, (b) would not, regardless of
outcome, be required to be disclosed in notes to the balance sheet of Arvida
or of any of the Subsidiaries or Affiliates, prepared in reasonable detail in
accordance with Generally Accepted Accounting Principles applied on a
Consistent Basis, except to the extent so disclosed in notes to the Financial
Statements delivered to the Agent pursuant to Section 4.3.1 or so indicated on
Schedule 4.4.1, and (c) do not bring into question and do not subject to
attack either the authority of any of the Persons executing this Agreement and
the other Loan Documents, on behalf of Arvida or the other Borrowers, or the
validity of the transactions contemplated thereby.

4.4.2 On April 1, 1997, a Stipulation of Settlement (the
"Carlstrom Stipulation") was filed in Case No. 96-CH-6627 and Case No.
96-CH-6892, Judge Michael B. Getty, in the Circuit Court of Cook County,
Illinois, County Department, Chancery Division, captioned Jack H. Carlstrom et
al., Plaintiffs v. Arvida/JMB Managers, Inc. et al., Defendants and Arvida/JMB
Partners, L.P., Nominal Defendant (the "Carlstrom Litigation"). The Order
entered on May 13, 1997 adopting the Carlstrom Stipulation is now final and
unappealable. The time period for filing an appeal has not been extended as
referenced in Section I. Definitions, V., p. 7 of the Carlstrom Stipulation.
Additionally, the Order entered on May 13, 1997 denying the Homeowners'
Petition to Intervene in the Carlstrom Litigation is now final and
unappealable. This Agreement and the other Loan Documents and the
transactions contemplated thereby conform, in all material respects to the
terms of the Barnett Bank Financing, as such term is defined in the Carlstrom
Stipulation.

4.4.3 The plaintiffs in the litigation filed under Case No.
CL95-2894AG and CL95-8107AJ, in the Fifteenth Judicial Circuit Court, Palm
Beach, County, Florida, captioned Counsel of Villages, Inc. v. Arvida/JMB
Partners (the "Broken Sound Litigation"), have threatened to sue any lender
making a loan to Arvida and or certain of its Subsidiaries or Affiliates for,
inter alia, the purpose of making distributions to investors. Arvida and each
of the other Borrowers hereby warrants and represents that it does not intend,
by executing and delivering this Agreement or any other Loan Document
contemplated herein, or by entering into any of the other transactions
contemplated thereby, to hinder, delay, defraud or impede any plaintiff in the
Broken Sound Litigation from collecting or enforcing any judgment that may be
rendered in that suit against Arvida or any of the other Borrowers.

4.5 Investment Company Act; Regulation.

4.5.1 No Borrower is an "investment company," an "affiliated
person" of, or "promoter" or "principal underwriter" for, any "investment
company," or a company "controlled" by an "investment company," and no
Borrower is an "investment advisor" or an "affiliated person" of an
"investment advisor" (as each of the quoted terms is defined or used in the
Investment Company Act of 1940, as amended). Neither the making of the Loans,
nor the establishment of the Commitments hereunder, nor the application of the
proceeds or repayment thereof by the Borrowers, nor the consummation of the
other transactions contemplated hereby, will violate the provisions of the
foregoing Act or any rule, regulation, or order promulgated thereunder.

4.5.2 No Borrower is subject to regulation under any state or
local public utilities code or federal, state, or local statute or regulation
limiting the ability of any Borrower to incur indebtedness for money borrowed
or to pledge assets of the type contemplated hereunder.

4.6 Assets; Title to Assets. Each of the Borrowers has good and
marketable title in fee to its Mortgaged Properties, as set forth on
Schedule 1.1.53, and good and marketable title to its other properties and
assets, reflected in the Financial Statements and notes thereto, including,
without limitation, the Collateral, except for such assets as have been
disposed of in the ordinary course of business, and all such properties and
assets are free and clear of all Liens, mortgages, pledges, security
interests, charges, title retention agreements, or other encumbrances of any
kind except those in favor of the Agent and Permitted Encumbrances.

4.7 Payment of Taxes. Each of the Borrowers has filed or caused to
be filed all federal, state, and local tax returns which are required to be
filed by it and has paid or caused to be paid (i) all charges and other
impositions shown thereon to be due and payable and (ii) all other taxes and
charges with respect to any of its properties and assets, including without
limitation, real property taxes as to the Mortgaged Properties and personal
property taxes as to the other Collateral, prior to the date on which any
fine, penalty, interest or late charge may be added thereto for nonpayment
thereof, except where such charges are being properly and diligently contested
by any such Borrower in good faith by proper legal actions or proceedings and
with respect to which (i) adequate reserves shall have been established and/or
maintained, (ii) such contest operates to suspend collection of the contested
charges or claims and has been maintained and prosecuted continuously with
diligence, (iii) none of the Collateral is or will be subject to forfeiture or
loss or any Lien by reason of the institution or prosecution of such contest,
(iv) such Borrower is not subject to criminal penalties as a result of such
contest, and (v) no Lien exists, has been imposed or has been attempted to be
imposed for such charges or claims during such action or proceeding unless the
full amount of such charge or claim is covered by insurance satisfactory in
all respects to the Agent. Proper and accurate amounts have been withheld by
each of the Borrowers from their respective employees for all periods in full
and complete compliance with the tax, social security and unemployment
withholding provisions of applicable federal, state, local and foreign law and
such withholdings have been timely paid to the respective governmental
authorities. Neither the Internal Revenue Service nor any other applicable
governmental authority is currently auditing any of the tax returns of any of
the Borrowers. No Borrower has executed or filed with the IRS or any other
governmental authority any agreement or other document extending, or having
the effect of extending, the period for assessment or collection of any
charges, except with respect to the allocation of estimated common area
improvement costs for certain of the Borrowers' communities for which the
period of assessment has been extended until the year following the completion
of the applicable community, in accordance with the Internal Revenue Code of
1986, as amended from time to time.

4.8 Agreement or Contract Restrictions; No Default. None of the
Borrowers is a party to, nor is bound by, any agreement, contract, or
instrument or subject to any charter or other corporate restriction which has
resulted, or if the reasonable effect thereof were in fact realized as of the
date hereof would result, in a Material Adverse Change in the business,
properties, assets, operations, or condition, financial or otherwise, of any
of the Borrowers as of the Closing Date. Each of the Borrowers is in full
compliance in all material respects with and is not in default in the
performance, observance, or fulfillment in any material respect of any
obligations, covenants, or conditions contained in any material agreement or
instrument to which it is a party.

4.9 Intentionally Deleted.

4.10 Government Contract. No Borrower is subject to the renegotiation
of any government contract in any material amount.

4.11 ERISA Requirement. No Borrower nor any predecessor is now or was
formerly during the five-year period immediately preceding the effective date
of this Agreement a participating employer in any multi-employer or "multiple
employer" plans within the meaning of Sections 4001(1)(a)(3), 4063, and 4064
of ERISA. Each employee benefit plan subject to the requirements of ERISA
complies with all of the requirements of ERISA and those plans which are
subject to being "qualified" under Sections 401(a) and 501(a) of the Internal
Revenue Code of 1986, as amended from time to time, have since their adoption
been "qualified" and have received favorable determination letters from the
Internal Revenue Service confirming the "qualified" status. There is no
matter which would adversely affect the qualified tax exempt status of any
such trust or plan, and there are no deficiencies or liabilities for any such
plan or trust. No employee benefit plan sponsored by any Borrower has engaged
in a non-exempt "prohibited transaction" as defined in ERISA.

4.12 Solvency.

4.12.1 After taking into account the Contingent Payment
Agreement by and among the Borrowers, each Borrower is, and on and after the
consummation of the transactions contemplated herein will be, Solvent. After
taking into account the Contingent Payment Agreement by and among the
Borrowers, each Borrower has sufficient capital to conduct its businesses, is
Solvent and able to pay all of its debts, including its Obligations to the
Lenders created by virtue of the Loan Documents, as they mature.

4.12.2 Each Borrower hereby warrants and represents that it
does not intend, by executing and delivering this Agreement or any other
document contemplated herein, or by entering into any of the other
transactions referred to in this Agreement, to hinder, delay or defraud any
Person to whom the Borrowers are indebted or shall become indebted.

4.12.3 In the event any Borrower files a voluntary petition
seeking relief under Title 11 of the United States Code ("Bankruptcy Code"),
as amended, or any Borrower becomes the subject of an involuntary bankruptcy
proceeding in which an order for relief is entered and not dismissed within
sixty (60) days, or otherwise becomes the subject of any petition seeking any
reorganization, arrangement, composition, readjustment, liquidation,
dissolution, assignment for the benefit of creditors, or similar relief under
any present or future federal or state laws or statutes relating to
bankruptcy, insolvency, or other relief for debtors, or any Borrower seeks,
consents to or acquiesces in the appointment of a trustee, receiver,
conservator or liquidator, each Borrower agrees that the Lenders will not be
adequately protected and therefore will be entitled to immediate relief from
any automatic stay prescribed by applicable state or federal law including,
but not limited to, 11 U.S.C. Section 362, to enforce its rights under this
Agreement. This entitlement shall be irrespective of any of the requirements
of state or federal law including, but not limited to, 11 U.S.C. Section 362,
and the Lenders shall not be obligated to satisfy those requirements in order
to obtain stay relief.

4.12.4 Each Borrower further agrees that to the extent any
Lender has received, or will receive, by virtue of this Agreement, "transfers"
or "preferences" as such terms are defined by the Bankruptcy Code, such Lender
has given new value and reasonably equivalent value contemporaneously in
exchange for such transfers and such transfers have not rendered any Borrower
insolvent. To the extent that any Lender has received or will receive by
virtue of this Agreement, "transfers" or "preferences", it is hereby agreed
that such Lender will not have received more than it would if any such
Borrower commenced proceedings under Chapter 7 of the Bankruptcy Code.

4.12.5 Any and all payments made by any Borrower to the
Lenders pursuant to this Agreement shall be construed as payments of a debt
incurred by such Borrower in the ordinary course of business or financial
affairs of such Borrower and the Lenders, in fact made in the ordinary course
of business or financial affairs of the Borrower and the Lenders, and made
according to ordinary business terms consistent with this Agreement.

4.12.6 Notwithstanding the provisions of the preceding
paragraphs, in the event any payments made by any Borrower to the Lenders,
directly or indirectly, or any part thereof are subsequently invalidated,
declared to be fraudulent or preferential, set aside, voided, and/or required
to be repaid to a trustee, receiver or any other party appointed under the
Bankruptcy Code, state or federal law, common law or equitable cause, the
Obligation or part thereof intended to be satisfied on the part of any
Borrower under this Agreement shall be reinstated or shall continue to be
effective, as the case may be, and shall remain fully enforceable pursuant to
the Agreement and applicable law to the extent that such payments or transfers
are voided, set aside or required to be disgorged.

4.12.7 The foregoing representations and warranties set forth
in this Section 4.12 collectively constitute a material inducement for the
Lenders entering into this Agreement.

4.13 Racketeer Influenced and Corrupt Organization(s) Act. No
Borrower has ever been or is now engaged, nor will engage, directly or
indirectly, in any pattern of "racketeering activity" or in any "collection of
any unlawful debt," as each of the quoted terms or phrases is defined or used
by the Racketeer Influenced and Corrupt Organization(s) Act of either the
United States (Title 18, United States Code, Section 1961 et seq.), or any
comparable law of the states of Florida, Georgia, North Carolina, Delaware,
Illinois or any of the jurisdictions where any of the Borrowers does business,
(as each act now exists or is hereafter amended, the "RICO Lien Acts"). None
of the interests of any of the Borrowers in the Mortgaged Properties or any
other Collateral has ever been: nor do the Borrowers reasonably anticipate
that any such interests shall become, subject to any final judgment, order or
adjudication, Lien pursuant to any proceedings under any RICO Lien Act.

4.14 Validity of Loan Documents. The Loan Documents are in all
respects legal, valid and binding according to their terms.

4.15 Priority of Liens, Taxes and Charges.

4.15.1 There do not now exist any mortgages, assignments,
bills of sale, security agreements, financing statements or other title
retention agreements or other Liens (except for the Mortgages and other
Security Documents executed in favor of the Agent and the Permitted
Encumbrances) with respect to any Mortgaged Property or with respect to any
other Collateral.

4.15.2 The Mortgages and the other Security Documents are
sufficient to create in favor of the Agent, on behalf of the Lenders, security
interests in the Mortgaged Properties and the other Collateral. Upon the
recordation of the Mortgages and Assignments of Rents and Leases in the
recording offices described on Schedule 4.15.2, in the jurisdictions where the
Mortgaged Properties lie; and upon the filing of the Financing Statements
described on Schedule 4.15.2, in the state and local filing offices described
thereon, and upon the registration of the Trademark Security Agreement and
Copyright Security Agreement with the United States Patent and Trademark
Office and the United States Copyright Office, respectively, as described in
Schedule 4.15.2, and the taking of possession of certain other Collateral as
described on Schedule 4.15.2, then all security interests in the Mortgaged
Properties and all other Collateral shall have been perfected and shall
constitute first priority perfected security interests in all of such
Mortgaged Properties and other Collateral.

4.15.3 All state and local recording, documentary stamp,
intangible personal property tax, and other governmental charges and
assessments required to be paid in connection with the execution, delivery,
filing and/or recordation of, or as a condition to, the enforcement of this
Agreement, the Notes, the Mortgages, the Security Documents and any other Loan
Documents, shall have been duly paid in full, on or before the Closing Date.

4.16 Event of Default. As of the date hereof, there exists no breach
of any of the representations, warranties, covenants or obligations of the
Borrowers under the Loan Documents, and there exists no Event of Default.

4.17 Specific Representations as to Mortgaged Properties and
Additional Properties.

4.17.1 Violations of Governmental Law, Ordinances or
Regulations. No Borrower has any knowledge of any violations or written
notice of any violations of any federal or state law or municipal ordinance or
order or requirement of the county or city in which any of the Mortgaged
Properties is located or any municipal department or other governmental
authority having jurisdiction affecting any of the Mortgaged Properties, which
violations in any way relate to or affect in any material respect any of the
Mortgaged Properties.

R.DOC
4.17.2.1 Each of the Mortgaged Properties is
presently zoned to permit the type of Improvements contemplated to be
developed thereon as set forth in the 1997 Annual Business Plan and/or the
1997 Economic Model, and at the applicable density contemplated therein. When
same shall be acquired by any Borrower, the Additional Properties shall then
be zoned to permit the type of Improvements contemplated to be developed
thereon as set forth in the then current Annual Business Plan and/or Economic
Model, and at the applicable density contemplated therein; or, alternatively,
to the best of the Borrowers' knowledge, after diligent inquiry, there shall
not then exist, nor be any reasonable basis to anticipate that there shall
exist any unusual or extraordinary circumstances or reasons for undue delay or
unusual expense in obtaining the rezoning necessary to permit such
Improvements.

4.17.2.2 All infrastructure (the "Infrastructure")
required in order to satisfy the "concurrency" requirements of the Growth
Management Act of 1985, as amended (Fla. Stat. Chapter 163, Part 2) with
respect to the Mortgaged Properties located in Florida, and the requirements
of any comparable Georgia law, rule or regulation, with respect to the
Mortgaged Properties located in Georgia, and the requirements of all local
governmental authorities having jurisdiction thereover, with respect to all
Mortgaged Properties, as a precondition to obtaining development permits
(including, without limitation, potable water, sanitary sewer, solid waste and
drainage) are available to and adequate to serve all of the Improvements
contemplated to be developed on each of the Mortgaged Properties, pursuant to
the 1997 Annual Business Plan and/or the 1997 Economic Model, and at the
densities contemplated therein; or, alternatively, to the best of the
Borrowers' knowledge, after diligent inquiry, there do not now exist, nor is
there any reasonable basis to anticipate that there shall exist any unusual or
extraordinary circumstances or reasons for undue delay or unusual expense in
the issuance of permits necessary to develop the Infrastructure, including,
without limitation, governmental moratoria.

4.17.3 Compliance with Zoning Ordinances and Similar Laws.
All plans and specifications and construction pursuant thereto for
Improvements now or hereafter constructed, and the uses of all of the
Mortgaged Properties contemplated thereby, have been or shall, prior to the
commencement thereof, be approved by all appropriate governmental and quasi-
governmental authorities. The Mortgaged Properties and all Improvements
thereon do now and shall continue to comply, in all material respects, with
all applicable governmental and quasi-governmental laws, regulations, and
standard requirements, including but not limited to the Fair Housing Act of
1968, as amended, and the Americans with Disabilities Act of 1990, as amended.

4.17.4 Availability of Utilities. All utility services
necessary for the operation of existing Improvements, and for the construction
and operation of contemplated Improvements on the Mortgaged Properties and
sufficient for the operation thereof for their present or intended purposes
(as such intended Improvements are contemplated by the 1997 Annual Business
Plan and the 1997 Economic Model), are in place as to existing Improvements
and are available at the boundaries of the subject Mortgaged Properties, as to
intended Improvements, including water supply, storm and sanitary sewer
facilities, electric and telephone facilities; or, to the best of the
Borrowers' knowledge, after diligent inquiry, there do not now exist nor is
there any reasonable basis to anticipate that there shall exist any unusual or
extraordinary circumstances or reasons for undue delay or unusual expense in
the extension of such utility facilities as shall be necessary for the
construction of any such Improvements.

4.17.5 Building Permits. All building permits required for
the construction of the Improvements on all of the Mortgaged Properties as
such Improvements are contemplated by the Economic Model, have been obtained,
or to the best of the Borrowers' knowledge, after diligent inquiry, there do
not now exist nor is there any reasonable basis to anticipate that there shall
exist any unusual or extraordinary circumstances or reasons for undue delay or
unusual expenses in obtaining such permits.

4.17.6 Certificate of Occupancy. All certificates of
occupancy required for the occupancy of any existing Improvements on any of
the Mortgaged Properties have been obtained, or to the best of the Borrowers'
knowledge, after diligent inquiry, may be obtained without undue delay or
unusual expense.

4.17.7 Condition of Property. None of the existing
Improvements on any of the Mortgaged Properties is now damaged or injured, in
any material respect, as a result of any fire, explosion, accident, flood or
other casualty or is now subject to any pending or threatened action for
condemnation.

4.17.8 Hazardous Substances.

4.17.8.1 The Borrowers warrant and represent to the
Lenders to the best of their knowledge, with respect to the Mortgaged
Properties, except as disclosed in those certain environmental audits
described on Schedule 4.17.8 attached hereto and hereby made a part hereof
(the "Environmental Audits"):

(a) No Borrower nor any other person to the
best of the Borrowers' knowledge, after due and diligent inquiry, has ever
used any of the Mortgaged Properties as a facility for the treatment or
disposal of any "Hazardous Substances," as that term is hereinafter defined,
or for the storage of any Hazardous Substances, except for the use and storage
of Hazardous Substances in the Ordinary Course of Business, as defined below,
and all past uses of the Mortgaged Properties were in compliance in all
material respects with any and all applicable federal, state and local
Environmental Laws, as defined below;

(b) The Mortgaged Properties are now in
compliance in all material respects with any and all applicable Federal, state
and local Environmental Laws, which Environmental Laws include but are not
limited to, the Comprehensive Environmental Response, Compensation and
Liability Act of 1980 ("CERCLA"), 42 U.S.C. Section 9601, et seq., the
Superfund Amendments and Reauthorization Act of 1986 ("SARA"), Public Law 99-
499, 100 Stat. 1613, the Resource Conservation and Recovery Act ("RCRA"), 42
U.S.C. Section 6901, et seq., the Florida Resource Recovery and Management
Act, Section 403.701, et seq., Florida Statutes, the Pollutant Spill
Prevention and Control Act, Section 376.011-376.17 and 376.19-376.21 Florida
Statutes, all applicable Georgia Environmental Laws, and all Federal, state or
local environmental statutes, ordinances, rules and regulations applicable to
the Mortgaged Properties, whether now existing or in the future enacted,
promulgated, adopted, entered or issued, both within and outside present
contemplation.

(c) As of the date hereof the Borrowers have no
knowledge of any soil or groundwater contamination and no knowledge that there
are Hazardous Substances, (including solids or gaseous products and any
materials containing asbestos), the presence of which is limited, regulated or
prohibited by any state, federal or local governmental authority or agency
having jurisdiction over any of the Mortgaged Properties, or which are
otherwise known to pose a hazard to health or safety of occupants of any of
the Mortgaged Properties, located on, in or under any of the Mortgaged
Properties or used in connection therewith, except as permitted by law and as
may occur in the ordinary course of the Borrowers' development, operation and
sale of residential and non-industrial commercial Improvements (the "Ordinary
Course of Business").

(d) With respect to any of the Mortgaged
Properties, no Borrower is aware of, nor has any Borrower received written
notice of, any past or present events, conditions, circumstances, activities,
practices, incidents, actions or plans which may interfere with or prevent
compliance or continued compliance in any material respect with Environmental
Laws or any ordinance, regulation, code, plan, order, decree, judgment,
injunction, notice or demand letter issued, entered, promulgated or approved
thereunder, or which may give rise to any common law or legal liability, or
otherwise form the basis of any claim, action, demand, suit, proceeding,
hearing, study or investigation, based on or related to the manufacture,
processing, distribution, use, treatment, storage, disposal, transport or
handling, or the emission, discharge, release or threatened release into the
environment, of any Hazardous Substance onto any of the Mortgaged Properties.

4.17.8.2 The Borrowers covenant and agree that at
all times during the term of the Loans the Mortgaged Properties will be in
compliance in all material respects with any and all applicable Federal, state
and local Environmental Laws, which Environmental Laws include but are not
limited to CERCLA, SARA, RCRA, and (with respect to the Mortgaged Properties
in Florida), the Florida Resource Recovery and Management Act, and the
Pollutant Spill Prevention and Control Act and (with respect to the Mortgaged
Properties in Georgia), the applicable provisions of the laws of Georgia, and
all Federal, state or local environmental statutes, ordinances, rules and
regulations applicable to the Mortgaged Properties whether now existing or in
the future enacted, promulgated, adopted, entered or issued, both within and
outside present contemplation of the Borrowers and Lenders.

4.17.8.3 The Borrowers shall notify the Agent of
(i) any material change in the nature or extent of any Hazardous Substance
maintained on, in or under any of the Mortgaged Properties or used in
connection therewith of which any Borrower is aware, except any changes in the
Ordinary Course of Business as defined above which comply with any and all
applicable, federal, state and local Environmental Laws; (ii) any material
change in the nature, extent or use of any Mortgaged Property or the
activities or operations of any Borrower thereon, (iii) the commencement of
any civil, criminal or administrative action, suit, demand, claim or hearing
with respect to any of the Mortgaged Properties, relating in any way to any
Environmental Law or any plan, order, decree, judgment, injunction, notice or
demand issued, promulgated or approved thereunder (an "Environmental
Complaint"), (iv) the receipt of any notices, summons, citations, orders,
directives, letters or other communications of any sort, from any governmental
agency or authority (an "Environmental Notice"), with respect to any hazardous
materials, substances, wastes, or other environmentally regulated substances
affecting any of the Mortgaged Properties and (v) any information with respect
to any other environmental matters which could materially impair any of the
Mortgaged Properties, materially increase any Borrower's expenses in
connection therewith, materially disrupt the activities or operations of any
Borrower thereon, or materially adversely affect the financial condition of
any such Borrower. The Borrower shall immediately transmit to the Agent
copies of any such Environmental Complaint or Environmental Notice.

4.17.8.4 Except as disclosed in the Environmental
Audits, there is no civil, criminal or administrative action, suit, demand,
claim, hearing, notice or demand letter, notice of violation, investigation,
or proceeding pending or threatened with respect to any Mortgaged Property or
any Borrower relating in any way to any Environmental Laws or any regulation,
code, plan, order, decree, judgment, injunction, notice or demand letter
issued, entered, promulgated or approved thereunder.

4.17.8.5 Except as limited below, the Borrowers
hereby agree to indemnify, reimburse, defend and hold harmless the Lenders and
their respective officers, directors, employees, successors and assigns (the
"Indemnified Persons"), from and against all demands, claims, civil or
criminal actions or causes of action, liens, assessments, civil or criminal
penalties or fines, losses, damages, liabilities, obligations, costs,
disbursements, expenses or fees of any kind or of any nature (including,
without limitation, cleanup costs, attorneys', consultants' or experts' fees
and disbursements and costs of litigation at trial and appellate levels) which
may at any time be imposed upon, incurred by or asserted or awarded against,
any Indemnified Person, directly or indirectly, related to or resulting from:
(a) any acts or omissions of any Borrower at, on or about any of the Mortgaged
Properties which contaminate air, soils, surface waters or groundwaters over,
on or under any of the Mortgaged Properties; (b) the breach by any Borrower of
any representation or warranty under this Agreement; (c) pursuant to or in
connection with the application of any Environmental Law, to the acts or
omissions of any Borrower or any other Person at any of the Mortgaged
Properties and any environmental damage alleged to have been caused there, in
whole or in part, by the manufacture, processing, distribution, use, handling,
transportation, treatment, storage, or disposal on any of the Mortgaged
Properties of any Hazardous Substance; or (d) the presence, whether past,
present or future, of any Hazardous Substances on, in or about any of the
Mortgaged Properties except in the Ordinary Course of Business.

Without limiting the foregoing, this indemnification
provision specifically protects the Indemnified Persons against any claim or
action from activities described in (a), (b), (c) or (d) above, based in whole
or in part upon any Environmental Law, based in whole or in part upon any
environmental statute, rule, regulation or policy, including but not limited
(with respect to the Mortgaged Properties in Florida) to Chapters 403 and 376,
Florida Statutes, the Florida Administrative Code, and (with respect to the
Mortgaged Properties in Georgia) the applicable laws of Georgia, the
Comprehensive Environmental Response, Compensation and Liability Act of 1980,
("CERCLA") 42 U.S.C. Section 9601, et seq., as amended, the Resource
Conservation and Recovery Act, 42 U.S.C. Section 6901, et seq., and all
federal, state or local environmental statutes, ordinances, rules and
regulations applicable to the Mortgaged Properties, whether now existing or in
the future enacted, promulgated, adopted, entered into or issued, both within
and outside present contemplation.

Except as limited below, the Borrowers' indemnification
obligation under this Section shall not be limited to any extent by the term
of the Loans and shall continue, survive and remain in full force and effect
notwithstanding payment in full and satisfaction of the Obligations or
foreclosure under the Mortgage, or delivery of a deed in lieu of foreclosure
as to any of the Mortgaged Properties. The provisions of this Section shall
be deemed to survive satisfaction of the Obligations or issuance of a
certificate of title and shall continue in full force and effect after any
foreclosure or other proceeding by which the Lenders, their successors and
assigns, succeed to ownership of any of the Mortgaged Properties.

Notwithstanding anything herein to the contrary, the
indemnification obligations of the Borrowers hereunder may be released upon
the consent of all of the Lenders, at their sole discretion, upon the payment
and performance in full of all Obligations pursuant to this Agreement and the
other Loan Documents, provided: (a) there has occurred no Event of Default
during the term of the Loans; (b) there have occurred no violations of
Environmental Laws, no Environmental Complaints and no adverse developments in
Environmental Laws or case law pursuant to which the Agent or any of the
Lenders may be held liable for environmental matters related to the Loans or
any of the Mortgaged Properties; (c) if deemed necessary by the Agent or the
Lenders, updated Environmental Audits acceptable to the Lenders have been
prepared and provided to the Lenders at the Borrowers' expense, ensuring that
there are no environmental problems related to any of the Mortgaged
Properties; and an opinion relating to environmental matters has been obtained
from counsel acceptable to the Lenders, at the Borrowers' expense, in form and
content acceptable to the Lenders; and (d) none of the Lenders has held title
to any of the Mortgaged Properties as a result of foreclosure or deed in lieu
thereof.

Those liabilities, losses, claims, expenses and damages
for which the Indemnified Persons are indemnified under this Section shall be
paid to the Indemnified Persons, without any requirement of waiting for the
ultimate outcome of any litigation, claim or other proceeding, and the
Borrowers shall pay such liability, losses or claims or expenses to the
Indemnified Persons as so incurred within thirty (30) days after notice from
the Indemnified Persons itemizing said amounts together with reasonably
detailed supporting documentation, as of the date of such notice. In addition
to any remedy available for failure to pay such amounts when due, such amounts
shall thereafter bear interest at the "Default Rate" as defined in the Notes
or other Loan Documents.

The Borrowers waive any acceptance of this indemnity by
the Indemnified Persons. The failure of the Indemnified Persons to enforce
any right or remedy hereunder, or to promptly enforce any such right or
remedy, shall not constitute a waiver thereof nor give rise to any estoppel
against the Indemnified Persons, nor excuse the Borrowers from their
Obligations hereunder. Any waiver of such right or remedy must be in writing
and signed by all of the Lenders. This indemnity is subject to enforcement at
law and/or equity, including actions for damages and/or specific performance.

Notwithstanding anything to the contrary contained in
this Agreement, the Borrowers' indemnity, agreements and undertakings
hereunder shall not apply to the extent that the Borrowers can affirmatively
demonstrate that the claims, civil or criminal actions or causes of action,
liens, assessments, civil or criminal penalties or fines, losses, damages,
liabilities, or obligations that apply to any presence, release or discharge
of toxic or Hazardous Substances, petroleum or petroleum products, chemicals
or other pollutants on any of the Mortgaged Properties arise from conduct of
any Indemnified Person, or some other third party and such conduct has first
occurred on any of the Mortgaged Properties after the earliest of the
following dates: (a) transfer of title to such Mortgaged Property to an
Indemnified Person or any third party pursuant to a foreclosure sale or
(b) acceptance by an Indemnified Person or any third party of a deed or other
assignment of title to such Mortgaged Property or (c) exclusive possession or
control of such Mortgaged Property by an Indemnified Person or such third
party. In consideration of this indemnity the Lenders covenant that they will
avail themselves of the protection afforded secured banks under CERCLA and any
implementing regulations, if applicable. Further, the Lenders agree and
acknowledge that the Borrowers' maximum liability under this indemnity shall
not exceed the sum of (i) the cost of remediation in compliance with all
federal, state or local environmental statutes, regulations, rules or
ordinances, including any penalties, fines or assessments in connection
therewith and (ii) any other actual out-of-pocket damages incurred by the
Indemnified Persons relating to the presence, release or discharge of toxic or
Hazardous Substances, petroleum or petroleum products, chemicals, pollutants,
or other contaminants on any such Mortgaged Property, and within the scope of
this indemnity and agreement in an amount not to exceed the outstanding loan
balance, including, without limitation, principal, interest, the Agent's
reasonable third-party out-of-pocket expenses, including reasonable attorney's
fees and costs and any penalties, provided that the Agent shall utilize a law
firm from among its usual and customary law firms, and that such counsel shall
be reasonably satisfactory to the Borrowers. Notwithstanding anything to the
contrary herein or the other Loan Documents (or any instruments or
certificates executed or delivered in connection with the Loans), or any
amendments or modifications made to the foregoing at any time or times, no
present or future constituent partner in or agent of any Borrower, nor any
shareholder, member, officer, manager, director, employee, trustee,
beneficiary or agent of any corporation or other entity that is or becomes a
constituent partner in any Borrower, shall be personally liable, directly or
indirectly, and neither the Agent, the Lenders nor any of their successors or
assignees shall have any recourse against any property or assets of any such
constituent partner or other Person or entity for the matters set forth in
this Section 4.17.8, (any such Persons being herein referred to as "Non-
Recourse Persons"), provided such Non-Recourse Persons shall not include any
Borrower or any Subsidiary of a Borrower which would otherwise be liable as a
general partner of a Borrower, and the Lenders and each of their successors
and assignees waives and does hereby waive any such personal liability against
any such Non-Recourse Person. For purposes of this Agreement, each of the
other Loan Documents and any such instruments and certificates, and any such
amendments or modifications, neither the negative capital account of any
constituent partner in any Borrower, nor any obligation of any constituent
partner in any Borrower to restore a negative capital account or to contribute
or advance capital to any Borrower or to any other constituent partner in any
Borrower, shall at any time be deemed to be the property or an asset of any
Borrower or any such other constituent partner (and neither the Lenders nor
any of their successors or assignees shall have any right to collect, enforce
or proceed against or with respect to any such negative capital account or
partner's obligation to restore, advance or contribute). As used in this
paragraph, a "constituent partner" in any Borrower shall mean any direct
partner in any Borrower and any Person that is a partner in any partnership
that, directly or indirectly through one or more other partnerships, is a
partner in any Borrower. Finally, notwithstanding anything to the contrary
contained herein, this indemnity shall not be assignable to any future buyer
of any of the Mortgaged Properties, it being the intent of the Borrowers and
the Lenders that the indemnity is given for the benefit of the Indemnified
Persons.

4.17.8.6 As used herein, "Environmental Law" means
any federal, state, or local statutory or common law relating to pollution or
protection of the environment or of human health, including without
limitation, any common law of nuisance or trespass, and any law or regulation
relating to emissions, discharges, releases or threatened releases of
Hazardous Substances into the environment (including without limitation,
ambient air, surface water, groundwater, land surface or subsurface strata) or
otherwise relating to the manufacture, processing, distribution, use,
treatment, storage, disposal, transport or handling of Hazardous Substances.

4.17.8.7 As used herein, "Hazardous Substance" means
any substance or material (i) identified in Section 101(14) of CERCLA, 42
U.S.C. Section 9601(14) and as set forth in Title 40, Code of Federal
Regulations, Part 302, as the same may be amended from time to time, or
(ii) determined to be toxic, a pollutant or a contaminant under or pursuant to
any applicable federal, state or local statute, law, ordinance, rule or
regulation or judicial or administrative order or decision, as the same may be
amended from time to time, including, but not limited to (with respect to the
Mortgaged Properties in Florida), petroleum, petroleum products and petroleum
products chemicals of concern defined in Sections 376.301(26), (27) and (28),
Florida Statutes, as the same may be amended from time to time, and (with
respect to the Mortgaged Properties in Georgia) the applicable provisions of
the laws of Georgia, (iii) asbestos, (iv) radon, (v) polychlorinated
biphenyls, and (vi) such other materials, substances or wastes which are
otherwise dangerous, hazardous, harmful or deleterious to human health or the
environment.

4.17.8.8 The Agent may, and upon the direction of
the Required Lenders, in their sole discretion, which shall not be arbitrarily
withheld, shall require the Borrowers to periodically (but not more frequently
than annually unless an environmental complaint from a governmental entity is
then outstanding) perform (at the Borrowers' expense) an environmental audit,
or update, which must be satisfactory to the Agent with the consent of the
Required Lenders, in their sole discretion, which shall not be arbitrary, of
any of the Mortgaged Properties, hazardous waste management practices and/or
hazardous waste disposal sites used by any Borrower. Such audit must be by an
environmental consultant satisfactory to the Agent. Should the Borrowers fail
to commence such environmental audit within thirty (30) days of the Agent's
written request, the Agent shall have the right but not the obligation to
retain an environmental consultant to perform such environmental audit. All
reasonable third party costs and expenses incurred by the Agent in the
exercise of such rights shall bear interest at the Default Rate set forth in
the Notes and shall be secured by the Mortgage and other Security Documents
and shall be payable by Borrowers upon demand or charged to the Borrowers'
Line of Credit balance at the discretion of the Required Lenders.

4.17.8.9 Any intentional breach of any warranty,
representation or agreement contained in this Section 4.17.8 shall be an Event
of Default and entitle the Agent with the consent of the Required Lenders to
exercise any and all remedies provided in the Loan Documents, or otherwise
permitted by law.

4.17.8.10 Any unintentional breach of any warranty,
representation or agreement contained in this Section 4.17.8 hereof, unless
the Borrowers shall provide the Agent, within ninety (90) days of Borrowers'
determining that there has been an unintentional breach of any warranty,
representation or agreement, a formal written plan of assessment or
remediation (the "Plan") relating to the cure of any environmental problems on
a Mortgaged Property which resulted from said breach of warranty,
representation or agreement contained in Section 4.17.8 hereof, shall
constitute an Event of Default and entitle the Agent or Required Lenders to
exercise any and all remedies provided in the Loan Documents, or otherwise
permitted by law. The Plan shall include a detailed analysis of any
environmental problems on the Mortgaged Property, a plan of action of
remediation and a time frame for each phase of remediation. If the Agent with
the consent of the Required Lenders shall determine that the Plan is
satisfactory, in their discretion, which shall not be arbitrary, and Borrowers
shall implement the Plan, provided Borrowers implement the Plan and follow the
time frame for remediation as set forth in the Plan, there shall not be an
Event of Default. If the Agent with the consent of the Required Lenders
determine at any time that Borrowers are not complying or implementing the
Plan, or both, said non-implementation or non-compliance or both shall
constitute an Event of Default hereunder and shall entitle the Agent with the
consent of the Required Lenders to exercise any and all remedies provided in
the Loan Documents or otherwise permitted by law.

4.17.8.11 The Borrowers shall, in accordance with all
applicable Environmental Laws, at their own cost and expense, take all actions
that shall be necessary or reasonably advisable for the assessment and cleanup
of any contamination on any of the Mortgaged Properties, including, without
limitation, all removal, containment and remedial actions, and shall further
pay or cause to be paid, at no expense to the Agent or the Lenders, all
testing, investigation, cleanup, administrative enforcement and other costs of
applicable governmental agencies or which otherwise may be asserted or
assessed against any Borrower or any Mortgaged Property in connection
therewith.

4.17.9 Leases. As of the Closing Date there are no leases
affecting any of the Mortgaged Properties, except as described on
Schedule 4.17.9.

4.17.10 Management Agreements. As of the Closing Date there
are no Property management agreements, contracts or agreements whatsoever with
respect to the management of any of the Mortgaged Properties, except as
described on Schedule 4.17.10.

4.17.11 Access. Except for driveways and roads to be
constructed on or adjacent to the Mortgaged Properties, the rights of way for
all roads necessary for the full utilization of each of the Mortgaged
Properties for its intended purposes, have either been acquired by the
appropriate governmental authority or have been dedicated to public use and
accepted by such governmental authority, and all such roads shall have been
completed, or all necessary steps shall have been taken by the Borrowers and
such governmental authority to assure the complete construction and
installation thereof prior to the date upon which access to the Mortgaged
Property via such roads will be necessary. With respect to certain Additional
Properties which may hereafter be acquired by any Borrower and subjected to
the Lien of the Mortgage in accordance with Section 3.3.1, to the extent that
any rights-of-way for any roads necessary for the full utilization of any such
Additional Property for its intended purpose shall not have been acquired by
the appropriate governmental authority or have been dedicated to public use
and accepted by such governmental authority or such rights-of-way for such
roads shall not have been completed, then to the best of the Borrowers'
knowledge, after diligent inquiry, there shall not then exist, nor shall there
be any reasonable basis to anticipate that there shall exist, any unusual or
extraordinary circumstances or reasons for undue delay or unusual expense in
acquiring or dedicating such rights-of-way for such roads, completing such
roads, and in connection with any other necessary steps required to assure the
complete construction and installation thereof prior to the date upon which
access thereto via such roads will be necessary. All curb cuts and traffic
signals shown on any plans and specifications for horizontal or site
improvements are existing or have been fully approved by all necessary
governmental authorities or such approvals are anticipated to be obtained in
the ordinary course.

4.17.12 Mortgagee Title Insurance. The Borrowers warrant that
there are no matters pending against the Borrowers or any Mortgaged Property
which could result in a change in the status of the title to any Mortgaged
Property in the period of time between the effective date of the Title
Commitment (as defined in Section 5.1.5) and the recording of the Mortgage
(the "gap"). Each Borrower covenants that it shall not commit any act or
permit any act to be committed which might result in a change in the status of
the title to any Mortgaged Property during the gap, and each Borrower shall
indemnify the Agent and the title insurance agent and the Title Insurer (as
defined in Section 5.1.5) from any and all losses, costs and expenses
(including reasonable attorneys' fees and costs) suffered as a result of a
change in the status of the title to any Mortgaged Property during the gap.

4.18 Brokerage Commissions. Any brokerage commission asserted by any
Person claiming by, through or under the Borrowers which is due in connection
with the transaction contemplated hereby has been paid in full and any such
commission coming due in the future will be paid promptly by the Borrowers.
The Borrowers agree to and shall indemnify the Lenders from any liability,
claim or loss arising by reason of any such brokerage commission, with the
exception of any brokerage commission which may be due and owing by any Lender
relating to the Loans due to any such Lender's relationship with any broker.
This provision shall survive the repayment of the Loans and shall continue in
full force and effect so long as the possibility of such liability, claim or
loss exists. The Lenders have no knowledge of any third party entitled to
claim a mortgage brokerage fee or commission in connection with the
Commitments or the Loans made pursuant thereto.

4.19 Specific Representations as to Other Collateral and Other Assets.

4.19.1 Intellectual Property. Schedule 4.19.1 correctly and
completely describes, as of the Closing Date, all of the Intellectual
Property, excluding only any right, title or interest in the names "Arvida" or
"JMB" or any derivatives thereof. Such Intellectual Property interests as are
described in Schedule 4.19.1 are free from all liens and restrictions and
constitute all such trademarks, patents, copyrights and similar interests as
are necessary in order for the Borrowers to conduct their business as now
conducted. The Borrowers are in compliance, in all material respects, with
the terms and conditions, if any, imposed in connection with the use of such
patents, trademarks, copyrights and licenses therein and with the terms and
conditions of any agreements relating thereto.

4.19.2 Bank Accounts. Schedule 4.19.2 correctly and
completely describes, as of the Closing Date, all Bank Accounts and other
accounts maintained with any Lender or other financial institution by any
Borrower which Schedule correctly identifies the name, address and telephone
number of each institution, the name in which the Bank Account is held, a
description of the purpose of the Bank Account and the complete account
number.

4.19.3 Promissory Obligations. Schedule 4.19.3 correctly and
completely describes, as of the Closing Date, all Accounts which are
promissory obligations evidenced by promissory notes, whether or not secured
by chattel mortgages or real property mortgages, by amount and the names of
all obligors thereunder.

4.19.4 Project Indebtedness. Schedule 4.19.4 correctly and
completely describes, as of the Closing Date, all Project Indebtedness
outstanding, by obligor, obligee and current amount outstanding.

4.20 Usury. The amounts to be received by the Lenders which are or
which may be deemed to be interest hereunder or under any of the Loan
Documents or otherwise in connection with the transactions herein contemplated
constitute lawful interest and are not usurious or illegal under the laws of
the State of Florida, and no aspect of the transactions contemplated by this
Agreement is or will be usurious under current Florida law.

4.21 Setoffs. As of the Closing Date hereof, to the best of the
Borrowers' knowledge, no Borrower has any defense, right of setoff or claim
against the Agent or any of the other Lenders, with respect to the performance
or payment of the Obligations or any portion thereof.

4.22 Subsidiaries and Affiliates.

4.22.1 Schedules 1.1.6 and 1.1.71 correctly and completely set
forth, as of the date hereof, the names of all Subsidiaries and Affiliates and
the names and respective ownership interests of all Persons, directly or
indirectly, having ownership interests in each of the Subsidiaries and
Affiliates. In addition: (a) Arvida's sole general partner is Arvida/JMB
Managers, Inc., a Delaware corporation (the "Arvida General Partner"),
(b) Northbrook Corporation, a Delaware corporation ("Northbrook") owns and
controls not less than fifty-one percent (51%) of the outstanding capital
stock of the Arvida General Partner, (c) the Malkin Group (as defined in
Section 7.8), the Bluhm Group (as defined in Section 7.8), JMB Realty (as
defined in Section 7.8) and the Director Group (as defined in Section 7.8),
together own and control not less than fifty-one percent (51%) of the
outstanding capital stock of Northbrook, and (d) the Malkin Group, the Bluhm
Group and the Director Group together own and control not less than fifty-one
percent (51%) of the outstanding capital stock of JMB Realty.

4.22.2 All of the stock of each corporate Subsidiary has been
validly issued and is fully paid and non-assessable. All of the issued and
outstanding securities of all of the Borrowers were offered, issued and sold
in compliance with all applicable federal and state securities laws, rules and
regulations. There do not exist any outstanding rights to purchase options,
warrants or similar rights or agreements pursuant to which any Borrower may be
required to issue, sell or purchase any stock, partnership interest or other
equity security, except as described on Schedule 4.22.2.

4.23 Chief Executive Office/Location of Collateral. The chief
executive office of each of the Borrowers is described on Schedule 4.23.
Certain of the Borrowers maintain offices and Collateral and records in
connection therewith at certain other locations, as described on
Schedule 4.23. No Collateral belonging to any Borrower and no records in
connection therewith are located other than at the chief executive offices of
such Borrower or at such other locations as are described on Schedule 4.23.

4.24 Intentionally Deleted.

4.25 Due Diligence. To the extent that any of the representations and
warranties in this Agreement are stated as being to the best of the Borrowers'
knowledge, those representations and warranties are being made after diligent
and reasonable investigation by the Borrowers regarding the subject matter of
such representations.

CHAR Accuracy of Information. The Lenders' Commitments to make the
Loans, as expressed herein and accepted by the Borrowers is based on the
accuracy of the Borrowers' representations and statements. Neither this
Agreement nor any document, financial statement, credit information,
certificate or statement required herein to be furnished or furnished by the
Borrowers to the Lenders contains any untrue statement of a fact material to
this Agreement or which the Borrowers would reasonably expect to be material
to the Lenders' decision to enter into this Agreement or the transactions
contemplated hereunder or omits to state a fact necessary to make any such
statement not misleading in any material respect. The Required Lenders shall
have the option to declare there to be an Event of Default under this
Agreement if there shall have been any material misrepresentation or
misstatement or any material error in any written statement, document or other
submission delivered to the Lenders, or, if prior to the Closing Date: (a)
there shall have occurred a Material Adverse Change or (b) any Borrower has
become insolvent, bankrupt or has otherwise been subject to any Material
Adverse Change in financial condition.

4.27 Continuation and Investigation. The warranties and
representations contained herein shall be and remain true and correct as of
the date made, so long as any of the Obligations of any of the Borrowers
hereunder have not been satisfied, or so long as any of the Loans shall remain
outstanding. All representations, warranties, covenants and agreements made
herein or in any certificate or other document delivered to Agent by or on
behalf of the Borrowers pursuant to or in connection with this Agreement shall
be deemed to have been relied upon by the Lenders notwithstanding any
investigation heretofore or hereafter made by the Lenders or on their behalf,
and shall survive the making of any or all of the Advances contemplated
hereby.

ARTICLE 5. CONDITIONS OF LENDING

The obligation of the Lenders to make Advances or to permit any
borrowings hereunder, or to issue Letters of Credit (or renewals thereof) is
conditioned upon the performance of all agreements by Borrowers contained
herein, as well as satisfaction of the following conditions precedent:

5.1 Conditions to Initial Advance. Notwithstanding any other
provision of this Agreement and without affecting in any manner the rights of
the Agent or any Lender hereunder, the Agent and the Lenders shall not be
obligated to make the initial Advance or issue the initial Letter of Credit or
to take or perform any other action hereunder, until the following conditions
have been fulfilled to the satisfaction of the Agent (and to the extent
hereinbelow specified, of the Lenders):

5.1.1 All legal matters in connection with the Loan Documents
and the transactions herein and therein contemplated and all documents and
proceedings shall be satisfactory in form and substance to the Agent.

5.1.2 The Agent shall be satisfied, in its sole discretion,
as of the Closing Date, that (i) there shall have occurred no material
increase in liabilities, liquidated, or contingent, of any Borrower, or
material decrease in the assets of any Borrower since the date of the
Borrowers' Financial Statements, as described in Section 4.3, (ii) there shall
have occurred no Material Adverse Change; (iii) the results of each of the
Borrowers' operations for the period commencing as of the date of such
Financial Statements and ending on the Closing Date are not materially
different from the projected results of each such Borrower's operations for
such period as set forth in the 1997 Annual Business Plan and/or the 1997
Economic Model, and (iv) there has been no material deterioration in the
accounts payable or accrued expenses of any Borrower from that reflected in
the Borrowers' Financial Statements.

5.1.3 On or prior to the Closing Date, the Agent and the
Lenders shall have received, duly executed, this Agreement and the other Loan
Documents described on Schedule 5.1.3, all in form and substance satisfactory
to the Agent and the Lenders, together with all other documents required
hereunder or otherwise reasonably required by the Agent to be executed and
delivered or otherwise provided to the Agent.

5.1.4 The Borrowers shall have delivered to the Agent the
Mortgages and UCC-1 Financing Statements (local and state) and such other
instruments as necessary to insure Agent a perfected first security interest
in the Mortgaged Properties and other Collateral encumbered by the Mortgages
and Security Documents, as security for the Loans, as described on
Schedule 4.15.2. Without limiting the foregoing, the Borrowers shall have
delivered to the Agent possession of all Collateral with respect to which
perfection requires possession, including, without limitation stock
certificates evidencing Entity Interests in corporate Subsidiaries.

5.1.5 The Borrowers shall have delivered to the Agent a
mortgagee title insurance commitment or commitments (collectively, the "Title
Commitment") and policy (or policies) in the aggregate face amount of ONE
HUNDRED MILLION AND NO/100 DOLLARS ($100,000,000.00), insuring the Mortgages
as valid first Liens on all of the Mortgaged Properties, subject only to such
Permitted Encumbrances as shall be approved in writing by the Agent, issued by
a title company satisfactory to the Agent (the "Title Insurer"), and in a form
satisfactory to and approved by the Agent and including a Florida Form 9 (and
comparable comprehensive endorsements for the Mortgaged Properties in
Georgia), a revolver endorsement and other appropriate endorsements and such
reinsurance and/or co-insurance agreements, if any, and any legally permitted
affirmative insurance required by the Agent. Without limiting the foregoing,
such Title Commitment shall have no creditors' rights exception. The
Borrowers shall have delivered to the Agent affidavits from each Borrower and
from such other third parties as shall be required, in form and content
sufficient to permit the Title Insurer to delete from the Title Commitment any
exception for parties in possession, matters of survey, construction or
mechanics' or materialmen's liens, the "Gap" exception and taxes and
assessments which are due and payable. The Borrowers, at the Borrowers'
expense, shall deliver to the Agent copies of all matters affecting title to
all of the Mortgaged Properties (as determined by the Agent's counsel).

5.1.6 The Borrowers shall have delivered to the Agent:
5.1.6.1 Certificates of good standing and authority
to do business for each corporate and limited partnership Subsidiary and
Affiliate which is a Borrower or whose ownership interests are to be assigned
to the Agent hereunder and, where applicable, for each of their respective
general partners, from the states of their respective formation and
qualification, certified by the Secretaries of State of each such state.

5.1.6.2 Certified Articles of Incorporation for
each corporate Subsidiary and Affiliate which is a Borrower or whose ownership
interests are to be assigned to the Agent hereunder, and, where applicable for
each of their corporate general partners, and Certificates of Limited
Partnership for each limited partnership Subsidiary and Affiliate, which is a
Borrower or whose ownership interests are to be assigned to the Agent
hereunder, and, where applicable, for each of their limited partnership
general partners, in effect on the date hereof, certified by the Secretaries
of State of the states of formation of each such Borrower.

5.1.6.3 Copies of the by-laws for each corporate
Subsidiary and Affiliate and partnership agreements for each partnership
Subsidiary and Affiliate, which is a Borrower or whose ownership interests are
to be assigned to the Agent hereunder, and, where applicable, for each of
their partnership general partners, in effect on the date hereof, accompanied
by a certificate from appropriate officers of each such entity certifying that
such copies are true and complete and that such by-laws or partnership
agreements, as the case may be, have not been amended, annulled, rescinded or
revoked.

5.1.6.4 Copies of the resolutions of each Borrower
and, where applicable, each general partner of such Borrower, authorizing the
execution, delivery and performance of the Loan Documents and the borrowings
contemplated thereunder, together with appropriate incumbency certificates
containing the names, titles and genuine signatures of all duly elected
officers of any corporate Borrower Subsidiary or Borrower Affiliate, as of the
date of this Agreement, who are signatories to the Loan Documents and
accompanied by certificates from appropriate officers and/or partners that
such resolutions are true and complete and have not been amended, rescinded,
or revoked.

5.1.7 The Borrowers shall have delivered to the Agent:

5.1.7.1 Opinions of counsel licensed in the State
of Florida and all other states in which any of the Mortgaged Properties or
other Collateral may be located, in form and content satisfactory to the Agent
and its counsel and covering such matters as reasonably may be required by the
Agent and its counsel; and, as to organization and existence of Persons formed
under the laws of states other than Florida, opinion letters as to those
issues from local counsel for such jurisdictions.

5.1.7.2 An opinion of counsel licensed in the State
of Illinois, in form and content satisfactory to the Agent and its counsel,
confirming that the Carlstrom Stipulation is final and unappealable and that
the Borrowers execution and delivery of this Agreement and the other Loan
Documents and their performance and observance of their Obligations hereunder
and thereunder and the transactions contemplated hereby and thereby, do not
conflict with or constitute a breach or default under the terms of the
Carlstrom Stipulation.

5.1.8 The Borrowers shall have furnished to the Agent proof
of payment of real property and personal property taxes for 1996 or the most
current taxing period, and all prior years or taxing periods, and information
as to tax identification numbers, tax rates, estimated tax values and the
identities of the taxing authorities and evidence of payment of any
outstanding tax Liens or other outstanding tax obligations or encumbrances
(other than the Permitted Encumbrances) against each of the Mortgaged
Properties and other Collateral.

5.1.9 The Borrowers shall have furnished UCC-11 searches and
other evidence satisfactory to the Agent that there exist no Liens with
respect to any of the Mortgaged Properties or other Collateral, other than
Permitted Encumbrances or as otherwise contemplated by the Security Documents
and hereunder.

5.1.10 The Borrower shall have delivered to the Agent evidence
satisfactory to the Agent that the Borrowers have obtained all consents and
acknowledgements of all Persons whose consents and acknowledgements may be
required in connection herewith, including, but not limited to all applicable
governmental authorities having appropriate jurisdiction, to the execution and
delivery of this Agreement, the other Loan Documents and the consummation of
the transactions contemplated thereby.

5.1.11 The Borrowers shall have made payment in immediately
available funds to the Agent for its account and the account of the Lenders,
as the case may be, of all Facility Fees, other fees, costs and expenses of
closing, including, without limitation, the fees and expenses of appraisers,
consultants, legal counsel to each of the Lenders other than the Agent (in
each instance not to exceed $5,000.00) and legal counsel to the Agent,
presented as of the Closing Date.

5.1.12 The Borrowers shall have furnished to the Agent
evidence of insurance in form and content satisfactory to the Agent, as
described in Section 6.15 hereof.

5.1.13 The Agent shall have obtained Appraisals ordered by
Agent, at the expense of Borrowers, with respect to those certain Mortgaged
Properties, for which the Agent shall have required Appraisals as of the
Closing Date, and which shall support the required Loan to Value Ratios
described in Section 6.13 hereof.

5.1.14 The Borrowers shall have furnished to the Agent either
(a) three (3) original boundary and as-built surveys of each of the Mortgaged
Properties encumbered by the lien of the Mortgage, current within ninety (90)
days of closing, satisfactory to the Agent, in Agent's sole discretion or such
certificates and affidavits of surveyors or (b) such other materials and
information as shall be satisfactory to Agent and shall enable the Title
Insurer to delete all exceptions for matters of survey from the Title
Commitment.

5.1.15 The Borrowers shall have furnished to the Agent
Environmental Audits of each of the Mortgaged Properties, as described on
Schedule 4.17.8, at the Borrowers' expense, performed to the Agent's
satisfaction by an acceptable and qualified environmental consultant or
independent engineer verifying that no material unremediated environmental
contamination has occurred or is imminent, and containing adequately supported
and documented conclusions (which conclusions must be satisfactory to the
Agent, in its sole discretion), which evaluate (i) whether any hazardous or
toxic substances, hazardous wastes, pollutants, contaminants or any other
environmental hazards are present in the soil, surface water or groundwater,
at or adjacent to any of the Mortgaged Properties; (ii) whether operations at
any of the Mortgaged Properties are not in compliance with all federal, state
and local air quality and water quality regulations and other applicable
environmental laws; and (iii) whether there are any other potential or actual
environmental concerns from current or prior ownership and uses of any of the
Mortgaged Properties. The contract between the Borrowers and consultant for
the conduct of an Environmental Audit or assessment shall contain a provision
which expressly states that the Lenders are intended beneficiaries of the
contract and are entitled to rely on any report of findings or conclusions or
the results of the Environmental Audits.

5.1.16 The Borrowers shall have furnished to the Agent the
Financial Statements, the 1997 Annual Business Plan and the 1997 Economic
Model described in Section 4.3.

5.1.17 The Borrowers shall have furnished to the Agent such
documents and materials, including, without limitation, letters from
appropriate governmental authorities, confirming the substance of the
representations set forth in Section 4.17.

5.2 Conditions to Each Advance and Issuance of Letters of Credit. It
shall be a further condition to the making of the initial Advance and a
condition to the making of each subsequent Advance to the Borrowers and the
issuance of any Letter of Credit, that the following statements shall be true
on the date of each such funding or issuance of the Letter of Credit and each
request by the Borrowers for an Advance or the issuance of a Letter of Credit
shall constitute an affirmation thereof:

5.2.1 The representations and warranties set forth in
Section 4 hereof, as supplemented and updated by written disclosures by the
Borrowers to the Agent of changes affecting such representations and
warranties, as required to be furnished to the Agent pursuant to
Section 6.6.4, or as supplemented by subsequent Financial Statements, as
required to be furnished to the Agent pursuant to Section 6.1: (a) shall be
true, correct, and complete on and as of the date of such Advance (or with
respect to those matters set forth in Sections 4.4.1, 4.17.9, 4.17.10, 4.19.1,
4.19.2, 4.19.3 and 4.22.1, as of the date most recently supplemented and/or
updated in accordance with Section 6.6.4), with the same effect as though the
representations and warranties had been made on and as of that date (except
that any representation or warranty set forth in Article 4 with respect to the
existence or non-existence of a Material Adverse Change or set forth in
Section 4.17.12 with respect to the "gap", shall relate only to the Closing
Date, shall continue to have been true as of such Closing Date but shall not
be subject to any requirement that same be supplemented or updated), and
(b) there shall then exist no Event of Default or any condition which upon
notice or lapse of time of both, would constitute an Event of Default under
this Agreement.

5.2.2 The Borrowers shall be in material compliance with all
terms and conditions set forth herein, including, without limitation, the
covenants set forth in Articles 6 and 7, and no Event of Default, nor any
event which upon notice or lapse of time or both would constitute an Event of
Default, shall have occurred and be continuing or shall come to exist after
giving effect to the making of such Advance.

5.2.3 After giving effect to any Advance or the issuance of a
Letter of Credit, the aggregate principal amount of the applicable Loan shall
not exceed the maximum amount of the Commitment therefor.

5.2.4 To the extent any of the conditions set forth in
Sections 5.1.2 through 5.1.17 shall not have been previously satisfied, same
shall be satisfied.

5.2.5 It shall not be unlawful for the Agent or any Lender or
any Borrower to perform its respective agreements or obligations hereunder or
under any other Loan Document.

5.2.6 There shall be pending no action, proceeding,
investigation, audit, regulation or legislation, threatened or proposed,
before any court, governmental agency or legislative body (i) which would be
reasonably likely to result in the occurrence of an Event of Default
hereunder, or (ii) to enjoin, restrain or prohibit, or to obtain damages in
respect of, or which is related to or arises out of this Agreement, any of the
other Loan Documents, or the consummation of the transactions contemplated
hereby and thereby and which, in the Agent's judgment would make it
inadvisable to consummate the transactions contemplated by this Agreement or
any of the other Loan Documents or to make Advances.

5.2.7 No Borrower shall have any defense, right of set off or
claim against the Lender or any of the other Lenders with respect to the
performance or payments of the Obligations or any portion thereof, provided,
however, that any such defense, right of set off or claim of the Borrowers
against a Non-Funding Lender on the basis of such Lender's failure to fund any
Advance, or any such defense, right of setoff or claim of the Borrowers
against a Lender which is a party to an interest rate hedge agreement related
to the Loans shall, standing alone, not be deemed to constitute a failure of
the foregoing condition precedent to the making of Advances.

5.2.8 No order, judgment or decree shall have been entered
and no proceeding seeking to obtain the entry of any order, judgment or
decree, which enjoins or restrains or purports to enjoin or restrain any
Lender from making an Advance or issuing any Letter of Credit hereunder shall
be pending.

ARTICLE 6. AFFIRMATIVE COVENANTS

The Borrowers covenant and agree that from the date of this Agreement
until payment and performance in full of all present and future Obligations
hereunder and termination of all Commitments established hereunder, including,
without limitation, the expiration of the Letters of Credit issued hereunder
and the termination of the Agent's obligation to issue Letters of Credit
hereunder, the Borrowers will fully comply with the following provisions:

6.1 Financial Reports and Other Information. The Borrowers will
deliver or cause to be delivered to the Agent (and, in the case of the
Financial Statements described in Sections 6.1.1 and 6.1.2, directly to each
of the other Lenders), the following:

6.1.1 As soon as practicable and in any event within fifty
(50) days after the end of each fiscal quarter of Arvida: (a) consolidated and
consolidating Financial Statements for Arvida and its Consolidated Entities
(including balance sheets, income statements and cash flow statements and any
reasonably requested supporting schedules to the aforementioned Financial
Statements), all in reasonable detail and satisfactory in scope to the Agent
and certified by the controller of Arvida or any of the natural Persons
described on Schedule 6.1.1-A, as to the correctness, completeness and
fairness in all material respects of such Financial Statements and that the
same have been prepared in accordance with Generally Accepted Accounting
Principles applied on a Consistent Basis, (b) a description of all Bank
Accounts, and to the extent expressly requested by the Agent, in writing, all
Intellectual Property, Accounts, Equipment, Inventory and General Intangibles,
not otherwise included in the foregoing, (c) a summary report of the year-to-
date operations of Arvida and its Consolidated Entities in comparison to the
Annual Business Plan with respect to such year and the latest Economic Model
furnished to the Lenders pursuant to Section 5.1.16 and Section 6.1.3 together
with reasonably detailed reports with respect to the operations of its
Consolidated Entities for such quarter, containing the information described
on Schedule 6.1.1-B, certified by the controller of Arvida or any of the
natural Persons described in Schedule 6.1.1-A, as to the correctness,
completeness and fairness thereof in all material respects, and (d) a detailed
report as to any changes with respect to any matter which is the subject of
any representation or warranty set forth in Sections 4.4.1, 4.17.9, 4.17.10,
4.19.1, 4.19.2, 4.19.3 and 4.22.1, occurring from and after the later of the
Closing Date and the last such quarterly report as to any such change therein.

6.1.2 As soon as practicable and in any event within ninety-
five (95) days after the end of each fiscal year of Arvida: (a) audited
consolidated Financial Statements for Arvida and its Consolidated Entities as
included in such year's 10K Report, and unaudited consolidating Financial
Statements for Arvida and its Consolidated Entities (including balance sheets,
income statements and cash flow statements and any reasonably requested
supporting schedules to the aforementioned Financial Statements), all in
reasonable detail and satisfactory in scope to the Agent and certified by the
controller, treasurer or chief financial officer of Arvida as to the
correctness, completeness and fairness, in all material respects, of such
Financial Statements and that the same have been prepared in accordance with
Generally Accepted Accounting Principles applied on a Consistent Basis,
(b) operating statements, note receivables summaries, and summaries of cash
and cash equivalents, (c) a description of all Accounts, Bank Accounts and
Intellectual Property, and to the extent expressly requested by the Agent, in
writing, all Equipment, Inventory and General Intangibles not otherwise
included in the foregoing, and (d) a summary report of the operations of
Arvida and its Consolidated Entities for such fiscal year in comparison to the
Annual Business Plan for such year and the Economic Model furnished to the
Lenders pursuant to Section 5.1.16 and Section 6.1.3, together with detailed
reports with respect to the operations of Arvida and its Consolidated Entities
for such year containing the information described on Schedule 6.1.1-B and
certified by the controller, treasurer, or chief financial officer of Arvida
as to the correctness, completeness and fairness thereof, in all material
respects.

6.1.3 As soon as practicable and in any event no later than
thirty (30) days prior to the end of each fiscal year, a revised Annual
Business Plan, substantially in the form and covering in all material respects
the same information contained in, the 1997 Annual Business Plan; and as soon
as practicable and in any event no later than ninety (90) days following the
end of each fiscal year, a revised Economic Model, substantially in the form
and covering in all material respects the same information contained in, the
1997 Economic Model.

6.1.4 Together with each delivery of those items required by
Sections 6.1.1 and 6.1.2, a certificate in the form attached hereto as Exhibit
"F" executed by the controller of Arvida or any of the natural persons
described on Schedule 6.1.1-A, containing computations in reasonable detail
and reasonably sufficient in order that the Agent may evaluate and confirm
compliance with the financial covenants contained in Section 6.13.

6.1.5 Within two (2) Business Days following the end of each
calendar month a certificate in the form attached hereto as Exhibit "G" (a
"Monthly Compliance Certificate"), stating that to the best knowledge of
Arvida's controller or any of the natural Persons described on Schedule 6.1.1-
A: (i) the Borrowers have in all material respects kept, observed, performed,
and fulfilled each and every agreement binding on them, contained in the Loan
Documents, and none of them are at the time in material breach of the keeping,
observance, performance, or fulfillment of any of the terms, provisions, and
conditions thereof, (ii) no Events of Default or events which upon notice or
the lapse of time or both would constitute Events of Default have occurred (or
specifying all such defaults and events of which he may have knowledge and
what actions the Borrowers are taking or propose to take with respect
thereto), and (iii) none of the Borrowers has any defense, right of setoff or
claim against the Agent, the Lenders or any of them, with respect to the
performance or payment of the Obligations, or any portion thereof, or, if any
Borrower shall then claim any such defense, right of setoff or claim, stating
same with specificity and including all materials in support thereof.

6.1.6 With reasonable promptness, such additional financial
or other data, information or materials as the Agent may from time to time
reasonably request, including, without limitation, such additional information
as the Agent may require in connection with any computations furnished in
accordance with Section 6.1.4, in order that the Agent may evaluate and
confirm compliance with the financial covenants contained in Section 6.13.
Subject to the provisions of Section 11.28, the Agent is hereby authorized to
deliver a copy of any Financial Statements or any other information relating
to the business, operations or financial condition of any Borrower which may
be furnished to it or come to its attention pursuant to the Loan Documents or
otherwise, to any regulatory body or agency having jurisdiction over the
Lenders or to any Person which shall, or shall have the right or obligation
to, succeed to all or any part of any Lender's interest in the Loan Documents.

6.2 Payment and Performance of Liabilities.

6.2.1 Each Borrower will make full and timely payment of the
principal of and interest on the Loans owed hereunder and duly comply with all
the terms and covenants contained in and perform all other Obligations under
the Loan Documents.

6.2.2 Each Borrower will (and will cause each of its
respective Subsidiaries, Controlled Affiliates, and, to the extent there shall
be recourse liability to such Borrower therefor, its Non-Controlled
Affiliates, to) make full and timely payment of the principal of and interest
on all Other Indebtedness for which it is liable, whether such liability is
direct or contingent, and duly comply with and perform all the terms and
covenants contained in the documents evidencing and/or securing such Other
Indebtedness, provided, however, that an event of default thereunder shall
constitute an Event of Default under this Agreement only to the extent so
provided in Section 8.3.1.

6.2.3 Each Borrower will (and will cause each of its
respective Subsidiaries, Controlled Affiliates, and, to the extent there shall
be recourse liability to such Borrower, therefor, its Non-Controlled
Affiliates, to) perform and observe in all material respects all of its
respective obligations under all contracts, agreements, instruments,
documents, licenses, permits, franchises and/or leases to which it is a party
or is otherwise subject (other than Other Indebtedness) provided an event of
default thereunder will constitute an Event of Default hereunder only to the
extent so provided in Section 8.3.2.

6.3 Conduct of Business; Maintenance of Existence and Rights. Arvida
and, so long as it shall own any assets, including, without limitation, any
Mortgaged Property or other Collateral, and otherwise conduct business, each
of the other Borrowers will (and will cause its respective Subsidiaries and
Controlled Affiliates to) do or cause to be done all things necessary to
preserve and to keep in full force and effect its existence and rights and
privileges and its franchises, licenses, trade names, patents, trademarks, and
permits with respect to assets which are necessary for the continuance of its
business, and continue to engage principally in the business currently
operated by each of them.

6.4 Maintenance of Property. Each Borrower will (and will cause its
respective Subsidiaries and Controlled Affiliates to) maintain their
properties and assets including, without limitation, the Mortgaged Properties
and the Collateral, in good condition and repair and, from time to time, make
all necessary and proper repairs, renewals, replacements, additions, and
improvements thereto, so that the business carried on may be properly and
advantageously conducted at all times in accordance with prudent business
management.

6.5 Right of Inspection; Discussions. Each Borrower will (and will
cause its respective Subsidiaries and Controlled Affiliates to) permit any
Person designated by the Agent, at the Agent's expense, to visit and inspect
any of the Mortgaged Properties and all Other Properties belonging to it, and
examine all of its corporate books, records, papers, and financial reports,
including the making of any copies thereof and abstracts therefrom, and to
discuss its affairs, finances, and accounts with its principal officers, all
at such reasonable times and as often as the Agent may reasonably request
pursuant to reasonable prior notice. Each Borrower will (and will cause its
respective Subsidiaries and Controlled Affiliates to) permit the Agent, or its
designated representative, to audit, at the expense of the Lenders, any of its
assets or financial and business records at such reasonable times as the Agent
may request by prior notice, provided, however, that all Appraisals of
Mortgaged Properties, obtained pursuant to the terms of Section 5.1.13 and
Section 6.14, shall be at the expense of the Borrowers.

6.6 Notices. The Borrowers will promptly, and in no event later than
six (6) Business Days after obtaining knowledge of any such occurrence, give
written notice to the Agent of:

6.6.1 The occurrence of: (a) any breach or Event of Default
(or event which after notice or lapse of time, or both would constitute a
breach or Event of Default) under this Agreement or under any other Obligation
of the Borrowers to the Lenders, or (b) any event of default or default by a
Borrower under the terms and conditions of any Other Indebtedness, including
without limitation, Project Indebtedness, or any other obligations whatsoever,
including, without limitation, in connection with any contract, agreement,
instrument, document, license, permit, franchise or lease to which any of the
Borrowers or their respective Subsidiaries or Affiliates are parties or are
subject whether now existing or hereafter arising, as "event of default" or
"default" is defined in such documents, to the extent the amount at stake as a
consequence of such default or event of default shall equal or exceed
$500,000.00. Any such notice given pursuant to this Section shall specify the
nature of such event, the period of existence thereof, and the action that the
Borrowers propose to take with respect thereto;

6.6.2 The occurrence of any material casualty to any
Mortgaged Property, or any of the other properties or assets of any Borrower
or any of its respective Subsidiaries or Affiliates, including, without
limitation, any of the Collateral, or any force majeure (including, without
limitation, any strike or other labor disturbance) materially affecting the
operation or value of any such properties. Any such notice given pursuant to
this Section shall specify whether or not such casualty or force majeure is
covered by insurance;

6.6.3 The commencement or any material adverse change in the
nature or status of any litigation, dispute, or proceeding that may involve a
claim for damages, injunctive relief, enforcement, or other relief pending,
being instituted, or threatened by, against or involving any Borrower or any
of its respective Subsidiaries or Affiliates, or, where applicable, any of
their respective general partners, or any attachment, levy, execution, or
other process being instituted by or against any assets of any Borrower or any
of its respective Subsidiaries or Affiliates, or any of their respective
general partners, to the extent the amount at stake thereunder shall equal or
exceed $500,000.00; and

6.6.4 The occurrence of any change with respect to any matter
which is the subject of any representation or warranty set forth in Article 4,
occurring from and after the Closing Date, which change would cause such
representation or warranty, if given following such change, not to be true and
correct in all material respects at the time given, provided, however, with
respect to the matters which are the subject of the representations and
warranties set forth in Sections 4.4.1, 4.17.9, 4.17.10, 4.19.1, 4.19.2,
4.19.3 and 4.22.1 the Borrowers shall be required only to make the quarterly
report as to changes therein as required by Section 6.6.4. Notwithstanding
the foregoing, any representation or warranty set forth in Article 4 with
respect to the existence or nonexistence of a Material Adverse Change or set
forth in Section 4.17.12 with respect to the "gap", expressly relates only to
the Closing Date, and shall not be subject to the requirement, otherwise
imposed hereby, that same be supplemented or updated.

6.7 Payment of Taxes; Liens. Each Borrower will (and will cause its
respective Subsidiaries, Controlled Affiliates and, to the extent there shall
be recourse liability to such Borrower therefor, its Non-Controlled
Affiliates, to) promptly pay, or cause to be paid: (a) all taxes, assessments,
and other governmental charges which may lawfully be levied or assessed:
(i) upon such Person's income or profits, (ii) upon all of the Mortgaged
Properties and other Collateral belonging to such Person and upon materially
all of the other property, real, personal or mixed, belonging to such Person,
or (iii) by reason of employee benefit plans sponsored by such Person, and
(b) all lawful claims for labor, material or supplies which, if unpaid, might
become a Lien or charge against any such property; provided, however, no such
Person shall be required to pay any such tax, assessment, charge, levy, or
claim so long as the validity thereof shall be actively contested in good
faith by appropriate proceedings and such Person shall have set aside on its
books adequate reserves (determined in accordance with Generally Accepted
Accounting Principles) with respect to any such tax, assessment, charge, levy,
or claim so contested, in accordance with Section 4.7; but provided further
that any such tax, assessment, charge, levy, or claim shall be paid forthwith
upon the commencement of proceedings to foreclose any Lien securing the same.

6.8 True Books. Each Borrower will (and will cause its respective
Subsidiaries and Controlled Affiliates to) keep proper and true books of
record and account, reasonably satisfactory to the Agent, in which full, true,
and correct entries will be made of all of its dealings and transactions, and
establish on its books such reserves as may be required by Generally Accepted
Accounting Principles with respect to all taxes, assessments, charges, levies,
and claims, and with respect to its business in general, and will include such
reserves in any interim as well as year-end Financial Statements.

6.9 Observance of Laws. Each Borrower will (and will cause its
respective Subsidiaries and Controlled Affiliates and, to the extent such
Borrower shall be liable therefor, its Non-Controlled Affiliates, to) conform
to and duly observe all laws, regulations, and other valid requirements of any
governmental authority with respect to the conduct of its business in all
material respects.

6.10 Further Assurances. At the Borrowers' cost and expense, upon
request of the Agent, the Borrowers will duly execute and deliver or cause to
be duly executed and delivered to the Agent such further instruments or
documents and do and cause to be done such further acts as may be reasonably
necessary or proper in the reasonable opinion of the Agent to carry out more
effectively the provisions and purposes of this Agreement.

6.11 ERISA Benefit Plans. Each Borrower will (and will cause its
respective Subsidiaries and Controlled Affiliates, and, to the extent such
Borrower shall be liable therefor, its Non-Controlled Affiliates, to) comply
with all requirements of ERISA applicable to it and will not materially
increase its liabilities under or violate the terms of any present or future
benefit plans maintained by it without the prior approval of the Agent. The
Borrowers will furnish to the Agent as soon as possible and in any event
within ten (10) days after such Borrower or a duly appointed administrator of
a plan (as defined in ERISA) knows or has reason to know that any reportable
event, funding deficiency, or prohibited transaction (as defined in ERISA)
with respect to any plan has occurred, a statement describing in reasonable
detail such reportable event, funding deficiency, or prohibited transaction
and any action which such Borrower proposes to take with respect thereto,
together with a copy of the notice of such event given to the Pension Benefit
Guaranty Corporation or the Internal Revenue Service or a statement that said
notice will be filed with the annual report of the United States Department of
Labor with respect to such plan if such filing has been authorized.

6.12 Change of Name, Principal Place of Business, Office, or Agent.
Each Borrower will (and will cause its respective Subsidiaries and Controlled
Affiliates to) notify the Agent of any change in its name, its principal place
of business, the office where its books and records are kept, or any change in
its registered agent for the purposes of service of process.

6.13 Financial Covenants. The Borrowers, taken as a whole, shall
maintain the following financial covenants, compliance of which shall be
determined on the basis of the Financial Statements and other information to
be provided to the Agent by the Borrowers, as described in Section 6.1 above.

6.13.1 Minimum Net Worth:

6.13.1.1 As of the end of each fiscal quarter,
Arvida's Net Worth shall be equal to or in excess of the Minimum Net Worth.

6.13.1.2 The term "Minimum Net Worth" means as of
the end of each fiscal quarter, $120,000,000.00, less the total principal
payments then or theretofore made by the Borrowers to the Lenders toward the
reduction of the principal balance outstanding under the Term Loan.

6.13.2 Maximum Debt/Worth Ratio:

6.13.2.1 As of the end of each fiscal quarter,
Arvida's Debt/Worth Ratio shall not exceed the Maximum Debt/Worth Ratio.

6.13.2.2 The term "Debt/Worth Ratio" means, as of
the date of any quarterly determination thereof, the ratio of Arvida's Total
Liabilities to Arvida's Net Worth. The term "Maximum Debt/Worth Ratio", means:
(a) as of the end of each fiscal quarter during the first two (2) Loan Years:
1.65 to 1, and (b) as of the end of each fiscal quarter during the last two
(2) Loan Years: 1.5 to 1.

6.13.2.3 Notwithstanding the foregoing, if the
Debt/Worth Ratio as of the end of any fiscal quarter shall exceed the
applicable Maximum Debt/Worth Ratio, but is less than the applicable Maximum
Debt/Worth Ratio when committed but available unfunded obligations under the
Commitments established hereunder (the "Unfunded Committed Obligations") are
excluded from Total Liabilities, same shall not constitute an Event of Default
hereunder, provided, however, the Borrowers shall not be permitted to make any
Distributions unless and until the Maximum Debt/Worth Ratio, determined on the
basis of the inclusion of Unfunded Committed Obligations, shall not exceed the
applicable Maximum Debt/Worth Ratio.

6.13.3 Minimum Debt Service Coverage Ratio:

6.13.3.1 As of the end of each fiscal quarter, the
Debt Service Coverage Ratio shall be equal to or in excess of the Minimum Debt
Service Coverage Ratio.

6.13.3.2 The term "Debt Service Coverage Ratio", as
used herein, means, as of the date of any quarterly determination thereof, the
ratio of: (a) Cash Flow After Project Financing for the immediately preceding
four (4) fiscal quarters to (b) the total Minimum Required Curtailment paid
pursuant to the terms of Section 2.1.3.1 and interest incurred (whether paid
or accrued), with respect to the Term Loan, for the immediately preceding four
(4) fiscal quarters ("Debt Service"), provided, however, that capitalized
interest shall be excluded from Debt Service to the extent same is being
funded from an interest reserve therefor. The Debt Service Coverage Ratio
shall be determined quarterly on a rolling four quarter basis (i.e. tested
quarterly based upon the immediately four preceding quarters), provided,
however, that with respect to the determination of Debt Service as of the end
of each of the first three fiscal quarters during the term of the Loans, it
shall be assumed as of the end of each of such first three fiscal quarters
that Debt Service equals the sum of (i) actual Debt Service for such quarter
and, in the case of the second and third quarters, all prior quarters, plus
(ii) Assumed Debt Service for the next three, two or one quarters (the
"Assumed Quarters"), determined as of the end of the first, second and third
quarters, respectively. The term "Assumed Debt Service" means Debt Service on
the Term Loan for the Assumed Quarters, determined on the basis of the
following assumptions: (x) the outstanding principal balance under the Term
Loan for the Assumed Quarters shall be assumed to equal the difference of
$75,000,000.00 less the greater of $12,500.000.00 or all such sums as shall
have been applied to the reduction of the outstanding principal balance under
the Term Loan as of the end of any fiscal quarter as of which such Assumed
Debt Service is determined and (y) the assumed outstanding principal balance
under the Term Loan for the Assumed Quarters, as determined pursuant to (x),
above, shall be assumed to bear interest at the weighted average of the actual
Effective Rates applicable to all Tranches in effect as of any such date of
determination. The term "Minimum Debt Service Coverage Ratio" means 1.3 to 1.

6.13.3.3 Notwithstanding the foregoing, provided
there shall then exist no other Event of Default hereunder or under any of the
other Loan Documents, in the event that as of any quarterly determination, the
Debt Service Coverage Ratio is less than the Minimum Debt Service Coverage
Ratio, the Borrowers shall have a period of one fiscal quarter within which to
restore the Debt Service Coverage Ratio to at least the Minimum Debt Service
Coverage Ratio; the Borrowers' failure to do so shall constitute an Event of
Default hereunder.

6.13.3.4 If as of any quarterly determination
thereof, the Debt Service Coverage Ratio shall be less than 1.6 to 1, then,
the Borrowers shall not be entitled thereafter so long as the Debt Service
Coverage Ratio shall be less than 1.6 to 1, to make any Distributions,
provided, however, that in August of 1998 and February of 1999, only, the
Borrowers may make Distributions notwithstanding that the Debt Service
Coverage Ratio shall, as of the last quarterly determination thereof, be less
than 1.6 to 1, if the Debt Service Coverage Ratio shall be equal to or in
excess of the Minimum Debt Service Coverage Ratio.

6.13.4 Maximum Loan to Value Ratio.

6.13.4.1 As of any determination thereof, the Loan
to Value Ratio shall not exceed the Maximum Loan to Value Ratio.

6.13.4.2 The term "Loan to Value Ratio," as used
herein, means as of the date of any determination thereof, the ratio of:
(a) the sum of the outstanding principal balance under the Term Loan, plus
$25,000,000.00 (or, if the Line of Credit Commitment or the Letter of Credit
Commitment shall have been reduced, in accordance with Section 2.4.4, such
lesser amount equal to the sum of the Line of Credit Commitment and Letter of
Credit Commitment), to (b) the sum, at the time of such determination, of
(x) all amounts then on deposit in the Cash Collateral Account pursuant to the
terms hereof plus (y) the Adjusted Values of the Mortgaged Properties and
other Collateral then remaining encumbered by the lien of the Security
Documents for which the Agent shall have obtained Appraisals, as such Adjusted
Values shall be established from time to time by the Required Lenders on the
basis of such Appraisals, at their sole discretion.

6.13.4.3 The term "Maximum Loan to Value Ratio"
means: (a) as of any determination in the first two (2) Loan years, sixty
percent (60%), and (b) as of any determination thereof in the last two (2)
Loan years, fifty percent (50%).

6.13.4.4 If as of any determination thereof, the
Loan to Value Ratio shall exceed the Maximum Loan to Value Ratio, then, within
five (5) Business Days following written notice thereof from the Agent to
Borrowers, the Borrowers shall either: (i) pay to the Agent, for the account
of the Lenders, in reduction of the outstanding principal amount under the
Term Loan, an amount sufficient to reduce the Loan to Value Ratio (for all of
the Loans, taken together) to the applicable Maximum Loan to Value Ratio, as
above described, or (ii) deposit into the Cash Collateral Account, sufficient
Cash Collateral to reduce the Loan to Value Ratio to the applicable Maximum
Loan to Value Ratio; the Borrowers' failure to do so shall constitute an Event
of Default hereunder. Any payment made under (i), above, toward the reduction
of the outstanding principal balance under the Term Loan shall be credited
toward the next due payments of principal required to be made under
Sections 2.1.3.1 and 2.1.3.2.

6.13.4.5 Within five (5) Business Days following the
Required Lenders' determination of Adjusted Value for any Mortgaged Property,
on the basis of their review and acceptance of any Appraisal obtained upon the
initiative of the Required Lenders in accordance with Section 6.14 (a
"Lenders' Appraisal") or, as to Weston only, on the basis of their review and
acceptance of any Requested Appraisal obtained in accordance with the
procedures set forth below, the Agent shall deliver to the Borrowers notice in
writing of such determination of the Adjusted Value of such Mortgaged Property
(the "Lenders' Base Determination").

Notwithstanding anything herein to the contrary, in the
event that the Borrowers shall dispute any such Lenders' Base Determination of
the Adjusted Value for Weston, rendered on the basis of any Lenders' Appraisal
or Requested Appraisal, the Borrowers shall notify the Agent of such dispute
in writing within five (5) Business Days following receipt of any such
Lenders' Base Determination of Adjusted Value for Weston (a "Borrowers' Notice
of Dispute"), which Borrowers' Notice of Dispute shall set forth with
specificity the basis for the Borrowers' dispute of such Lenders' Base
Determination. Within fifteen (15) Business Days following receipt of any
such Borrowers' Notice of Dispute, the Required Lenders shall evaluate the
basis for such Borrowers' dispute and deliver to the Borrowers in writing the
Required Lenders' reviewed determination of the Adjusted Value of Weston (the
"Lenders' Reviewed Determination").

In the event the Borrowers shall dispute any Lenders'
Reviewed Determination of the Adjusted Value of Weston rendered on the basis
of a Lenders' Appraisal, the Borrowers shall have the right to request a new
Appraisal for Weston (a "Requested Appraisal"), by written notice to the Agent
given within five (5) Business Days following the Borrowers' receipt of the
Lenders' Reviewed Determination (provided, however, that the Borrowers shall
in no event have the right to request an additional Requested Appraisal
following the acceptance by the Required Lenders of a Requested Appraisal and
the rendering of a Lenders' Base Determination or Lenders' Reviewed
Determination on the basis thereof). If, upon their review thereof, the
Required Lenders shall accept any such Requested Appraisal, the Lenders' Base
Determination of the Adjusted Value of Weston rendered on the basis thereof
(or, if same shall be reviewed following any Borrowers' Notice of Dispute with
respect thereto, the Lenders' Reviewed Determination) shall be final and
controlling for all purposes of Section 6.13.4 until a new Lenders' Appraisal
of Weston is obtained in accordance with the terms hereof. If the Required
Lenders shall, upon their review of any Requested Appraisal not accept such
Requested Appraisal, the Lenders' Reviewed Determination of the Adjusted Value
established for Weston on the basis of the most current Lenders' Appraisal
shall be final and controlling for all purposes of Section 6.13.4, provided
however that within five (5) Business Days following receipt of notice of the
Required Lenders' rejection of such Requested Appraisal, the Borrowers shall
have the right to request not more than one (1) additional Requested
Appraisal, until such time as the Required Lenders shall review and accept any
such additional Requested Appraisal, following which, under no circumstances
shall the Borrowers have any further right to request an additional Requested
Appraisal, notwithstanding the rejection by the Required Lenders of any prior
Requested Appraisals.

During any Dispute Pendency Period: (a) if the Lenders'
Base Determination (or if previously rendered, the Lenders' Reviewed
Determination) of the Adjusted Value of Weston shall result in a determination
that the Loan to Value Ratio then exceeds the Maximum Loan to Value Ratio, as
set forth in Section 6.13.4.3, then, during any Dispute Pendency Period:
(i) the Borrowers shall not be required to make the payments otherwise
required to be made by the terms of Section 6.13.4.4 and (ii) the Borrowers
shall not make any Distributions; and (b) the Borrowers shall not request nor
shall the Agent issue any Letter of Credit or make any Advance which would
cause the Loan to Value Ratio to exceed the Maximum Loan to Value Ratio,
determined on the basis of the Lenders' Base Determination (or if previously
rendered, the Lenders' Reviewed Determination) of the Adjusted Value of
Weston.

The term "Dispute Pendency Period" means any period of
time commencing upon the date of the timely delivery of a Borrowers' Notice of
Dispute as to a Lender's Base Determination of the Adjusted Value of Weston
rendered on the basis of a Lender's Appraisal, and ending on the date which is
the latest of: (i) the date five (5) Business Days following the Borrowers'
receipt of a Lenders' Reviewed Determination of the Adjusted Value of Weston,
or (ii) if within such five (5) Business Day period described in (i) above,
the Borrowers shall have delivered to the Agent a timely request in writing
for a Requested Appraisal (provided, however, that the Borrowers shall in no
event have the right to request an additional Requested Appraisal following
the acceptance by the Required Lenders of a Requested Appraisal and the
rendering of a Lenders' Base Determination or a Lenders' Reviewed
Determination of Adjusted Value on the basis thereof, and shall in no event
have the right to request more than one (1) additional Requested Appraisal,
notwithstanding the rejection by the Required Lenders of a prior Requested
Appraisals), then the date five (5) Business Days following the Borrowers'
receipt of a Lenders' Base Determination of the Adjusted Value of Weston
rendered on the basis of a Requested Appraisal, or (iii) if within such five
(5) Business Day period described in (ii), above, the Borrowers shall have
timely delivered to the Agent a Borrowers' Notice of Dispute with respect to
such Lenders' Base Determination, then the date five (5) Business Days
following the Borrowers' receipt of a Lenders' Reviewed Determination of the
Adjusted Value of Weston, rendered on the basis of a Requested Appraisal and
review thereof, following the request for such review in a Borrower's Notice
of Dispute.

6.14 Annual Appraisals. The Agent may, and on the direction of the
Required Lenders shall as often as the Agent or the Required Lenders shall
deem necessary, obtain Appraisals of any or all of the Mortgaged Properties
(less only those Mortgaged Properties which have theretofore been released
from the Collateral, pursuant to Section 3.2 herein), prepared by an appraisal
firm or firms chosen by the Agent and ordered by the Agent, provided, however,
the Agent shall, prior to obtaining any Appraisal, deliver to the Borrowers
the Agent's current list of approved appraisers from which the Agent shall
select an appraiser, and the Borrowers shall have the right, to be exercised
within five (5) Business Days from receipt thereof, to reject in writing not
more than two (2) such appraisers. Such Appraisals shall be at the expense of
the Borrowers, provided, however, if the Agent shall obtain more than one (1)
Appraisal of any single Mortgaged Property in any one Loan Year, the Lenders
shall bear the costs of such additional Appraisals for such Mortgaged
Property, unless at the time the Agent orders any such additional Appraisal
there shall exist any Event of Default or condition which with the giving of
notice or passage of time or both would constitute an Event of Default.
Notwithstanding the foregoing, the Borrowers shall bear the costs of any
Requested Appraisal made pursuant to Section 6.13.4.5.

6.15 Insurance.

6.15.1 The Borrowers will procure for, deliver copies of and
original certificates of and maintain for the benefit of the Lender during the
term of the Loans:

6.15.1.1 Liability insurance policies in such
amounts as the Agent shall require, including such minimum liability
insurance, with respect to each of the Mortgaged Properties as the Agent shall
reasonably require, with an umbrella policy of $50,000,000.00.

6.15.1.2 Insurance insuring the Mortgaged Properties
and other Collateral against fire, builder's risk (relating to the
construction of any Improvements), hazard, extended coverage and such other
insurable hazards, casualties and contingencies as the Agent may require with
respect to any such Collateral. The form of such policies and the companies
issuing them shall be acceptable to the Agent. The said property insurance so
obtained shall include "all risks", builder's risk, on a non-reporting 100%
completed value form, on the Improvements, buildings, machinery, equipment,
materials, supplies and temporary structures and all other property of any
nature used for the construction of any Improvements, and without limiting the
same by this description, shall extend to any loss occasioned by fire,
windstorm, other perils of extended coverage, vandalism, malicious mischief,
theft, mysterious disappearance and such other coverage as is a normal
incidence of such insurance. The foregoing insurance shall specifically cover
necessary architect and engineering fees necessary to repair or replace any
insured Mortgaged Property and shall also cover debris removal. Further, the
insurance shall permit waiver of subrogation so any release of liability
entered into prior to any loss will not affect the validity of the coverage
otherwise provided. Such insurance shall include an endorsement which
includes as a loss payable any additional interest expense caused by a peril
insured against under the policy, which coverage for interest expense is
limited to the period of time from the date of physical damage until such time
as will reasonably elapse, in the exercise of due diligence, to the repair of
the damage to its prior state. The amount of coverage of the policy of
insurance shall be full replacement cost. At such time as any portion of any
Improvements which are intended to be utilized for rental purposes, at any
time under construction are completed, the Borrowers shall submit to the Agent
a business interruption or rent loss insurance policy in an amount acceptable
to the Agent which shall be the gross rental income from the Mortgaged
Property for one year, on an annual basis, issued by an insurance company
acceptable to the Agent.

6.15.1.3 The Borrowers shall submit to the Agent
evidence satisfactory to the Agent as to whether or not any Mortgaged Property
or any part thereof is located within an area identified pursuant to the Flood
Disaster Protection Act of 1973 as being in a flood hazard area. If any
Mortgaged Property is located in a flood hazard area, flood insurance shall be
obtained for the maximum amount of coverage available through the federal
flood insurance program for the improvements located on the Mortgaged Property
from time to time or 100% of the highest insurance value of the improvements
on a replacement cost basis, whichever is less. The National Flood Insurance
Program flood policy shall cover the same parties covered under the builder's
risk policy and other insurance policies, with coverage for flood, collapse,
rain damage and such other usual coverage as may be obtained thereunder, and
such policy will be written with an insurance company and with cancellation
provisions as hereinabove provided.

1\CHARAC All policies shall (i) contain a standard,
non-contributory mortgagee endorsement making losses payable to the Agent, its
successors and/or assigns, as mortgagee and loss payee, (ii) shall have
deductibles acceptable to Agent, (iii) shall provide that Agent will be
notified by written notice at least thirty (30) days prior to any cancellation
or material change in coverage, (iv) be in form and with insurers recognized
as adequate by the Agent and (v) provide coverage of such risks and for such
amounts as are customarily maintained for businesses of the scope and size of
the Borrowers and otherwise acceptable to Agent. At least thirty (30) days
prior to the expiration date of all such policies, the Borrowers shall deliver
to the Agent proof of renewals of all required policies in a form satisfactory
to the Agent. The Borrowers shall deliver to the Agent receipts evidencing
the payment of all such insurance policies and renewals on an annual basis.
As further security for the indebtedness secured hereby, the delivery of the
insurance policies to the Agent shall constitute an assignment of all unearned
premiums. In the event of the foreclosure of the Mortgage or any other
Security Document or any other transfer of title to Collateral in
extinguishment of the Obligations secured hereby, all right, title and
interest of the Borrowers in and to all insurance policies then in force shall
pass to the purchaser or grantee.

6.15.2 Provided, there is no Event of Default which has
occurred and is continuing, the Borrowers shall be entitled to negotiate for
the adjustment or compromise of any loss under any insurance policy of the
type described in Section 6.15.1.2, provided however, the Borrowers shall not
conclude said negotiations in a final settlement without the Agent's prior
written consent, which consent shall be not be arbitrarily withheld by the
Agent. Further, the Agent shall permit the Borrowers to utilize the insurance
proceeds to rebuild and/or repair any Improvements, provided, that: (i) there
is no Event of Default which has occurred and is continuing; (ii) the
insurance proceeds are sufficient in the Agent's opinion, which shall not be
arbitrarily withheld, to rebuild and/or repair any Improvements, or both and
if not sufficient Borrowers have deposited with the Agent additional funds to
build and/or repair the Improvements, or both; and (iii) if the costs to
rebuild or repair the Improvements on the Mortgaged Properties (the
"Improvements Repair Costs") shall exceed, in the aggregate, at any point in
time during the term of the Loans, $1,000,000.00, the Agent shall hold and
disburse all insurance proceeds and additional funds in excess of
$1,000,000.00, and disburse same on its usual and customary terms, as the
Improvements are rebuilt and/or repaired. Prior to the occurrence of any
Event of Default, all insurance proceeds so held by the Agent shall be
maintained in an interest-bearing money-market account for the benefit of the
Borrowers.

Upon the occurrence and during the continuance of an
Event of Default, the Agent with the consent of the Required Lenders is hereby
authorized and empowered to adjust or compromise any loss under any insurance
policy. Each insurance company is hereby authorized and directed to make
payment for all such losses directly to the Agent instead of to the Borrowers
and the Agent jointly. Subject to the provisions of the foregoing paragraph,
after deducting from the insurance proceeds any reasonable third-party out-of-
pocket expense incurred by it in the collection or handling of said funds, the
Agent shall apply the net proceeds and all interest accrued thereon, to the
payment of the Obligations, or toward the repair and restoration of the
Improvements, without affecting the lien of the Mortgage or other Security
Documents for the full amount secured hereby before such payment took place.
The Agent shall not be held responsible for any failure to collect any
insurance proceeds due under the terms of any policy, regardless of the cause
of such failure.

6.15.3 If required by the Agent and Required Lenders upon an
Event of Default, the Borrowers will pay to the Agent on the first (1st) day
of each month, together with and in addition to the regular installment of
interest and principal and until the Obligations are fully paid and
discharged, an amount equal to one-twelfth (1/12) of the yearly premiums for
insurance, to enable the Agent to pay such insurance premiums when due. The
Borrowers shall promptly furnish the Agent with the insurance premium
statements. Such added payments shall not be nor be deemed to be trust funds,
but may be commingled with the general funds of the Agent and the Agent shall
not pay interest on them. At the option of the Agent, such added payments may
be carried as a debit item on the Agent's books and accounts. Upon demand of
the Agent, the Borrowers agree to deliver to the Agent such additional sums as
are necessary to make up any deficiencies in the amounts necessary to enable
the Agent to pay such insurance premiums. The Agent shall have no
responsibility for payment of any premium for insurance hereunder, except to
the extent that funds are deposited by Borrowers with the Agent hereunder.
Upon an Event of Default by any Borrower in the performance of any of the
terms, covenants and conditions in the Mortgage, the Security Documents, this
Agreement or the Notes, the Agent may, at Agent's option, apply any amount
then held by the Agent under this paragraph to the reduction of the
Obligations.

6.15.4 The Borrowers shall cooperate with the Agent in
obtaining for the Agent the benefits of any insurance or other proceeds
lawfully or equitably payable to any Borrower or the Agent in connection with
the transactions contemplated hereby and in paying any indebtedness or
obligation of any Borrower to the Lenders incurred hereunder (including the
payment by Borrowers of the expense of an independent Appraisal on behalf of
the Agent in case of a fire or other casualty affecting any Mortgaged
Property).

6.16 Operating Accounts. Each of the Borrowers shall maintain its
Operating Accounts, and the cash management accounts associated with such
Operating Accounts, with Barnett Bank, N.A. or one or more of the other
Lenders.

6.17 Application of Loan Proceeds. The Borrowers shall use the
proceeds of the Loans solely for the purposes set forth herein and shall in no
event use any of the Loan proceeds for any other purpose whatsoever.

6.18 Indemnification/Expenses, Including Attorneys' Fees and Taxes.

6.18.1 The Borrowers are strictly liable for and hereby agree
to pay or reimburse the Agent (and the other Lenders as to the matters in (a)
and (c), below) for, and hold the Agent (and the other Lenders as to the
matters in (a) and (c), below) and their respective shareholders, officers,
employees, agents and attorneys (the "Indemnified Persons") harmless from and
against: (a) all their reasonable and customary out-of-pocket costs and
expenses incurred in connection with the preparation, negotiation, execution,
and delivery of, and any amendment, supplement, or modification to, or waiver
or consent under, the Loan Documents, and the consummation of the transactions
contemplated thereby, including, without limitation, the reasonable and
customary fees and disbursements of counsel for the Agent and Lenders
(provided that the fees for each Lender's counsel, except that of the Agent,
shall not exceed $5,000.00), taxes, and all recording or filing fees, (b) all
of the Agent's (but not the other Lenders') reasonable third-party costs and
expenses incurred in connection with the collection, or enforcement of, or the
preservation of any rights under, the Loan Documents, including, without
limitation, the reasonable fees and disbursements of counsel for the Agent
(but not the other Lenders), including attorneys' fees out of court, in trial,
on appeal, in bankruptcy proceedings, or otherwise, (c) without limiting the
generality of subpart (a) all liability for, any and all documentary stamp
taxes, non-recurring intangible taxes, or other taxes (excluding the Lenders'
income taxes), together with any interest, penalties, or other liabilities in
connection with such failure to pay documentary stamp taxes or any other
taxes, that the Agent or the other Lenders now or hereafter incur with respect
to the Loan Documents, the Obligations evidenced by the Loan Documents, any
Advances under the Loan Documents, and (d) all other liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses, and
disbursements of any kind or nature whatsoever which the Agent (but not any
other Lender) shall suffer or incur with respect to, based upon, arising out
of or in any manner related to the execution, delivery, enforcement or
performance of this Agreement or the Loan Documents or any of the transactions
contemplated hereby and thereby, including without limitation, the issuance of
Letters of Credit, including, without limitation, the reasonable fees and
disbursements of counsel for the Agent, including attorneys' fees out of
court, in trial, on appeal, in bankruptcy proceeding, or otherwise, except to
the extent same arise out of the gross negligence or willful misconduct of the
Agent or any other Lender. The Borrowers shall pay all such amounts under
subparagraphs (a) through (d), above, upon demand accompanied by reasonably
itemized supporting statements detailing such amounts, and until repaid such
sums shall bear interest at the Default Rate, and shall be secured by the Lien
of the Security Documents. Without limiting the foregoing, the Borrowers
hereby acknowledge and agree that with respect to each Advance under the Line
of Credit and all Advances under the Letter of Credit Line, the Borrowers
shall be liable for non-recurring intangible tax thereon and the Agent shall
withhold from each such Advance the amount of intangible tax due in connection
therewith.

6.18.2 Without limiting the generality of Section 6.18.1, the
Borrowers hereby agree to indemnify and hold the Agent and the Lenders
harmless from and against all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses and disbursements of any
kind or nature whatsoever which the Agent, or any other Lender, subject to the
limitations set forth below, shall suffer or incur, including, without
limitation, the reasonable fees and disbursements of counsel for the Agent
(but not the other Lenders except to the extent set forth below), including
attorneys' fees out of court, in trial, on appeal, in bankruptcy proceedings,
or otherwise, based upon, arising out of or in any manner related to the
assertion by any third party of any claim or action against the Agent, or any
Lender to the extent set forth below, which is in any manner whatsoever
related to or based upon this Agreement, the Loan Documents or any of the
transactions contemplated hereby and thereby (except only to the extent same
shall arise out of the gross negligence or willful misconduct of the Agent or
any other Lender), including, without limitation, any claims which may be
brought or asserted by any of the plaintiffs in the Carlstrom Litigation or
the Broken Sound Litigation (any such claim or action being herein referred to
as an "Indemnified Claim"). In the event that any such Indemnified Claim is
brought or asserted against the Agent or any Lender, the Agent or, to the
extent the Agent is not named as a defendant in any such Indemnified Claim,
such of the other Lenders as are so named, shall have the right to employ a
single law firm from among the Agent's (or, as applicable, such other
Lenders') usual and customary law firms, which counsel shall be reasonably
satisfactory to the Borrowers, in the defense of any such action or claim;
provided, however, that to the extent an Indemnified Claim shall state
separate or distinct causes of action against or with respect to a Lender so
named therein, such that it might reasonably constitute a conflict of interest
for a single law firm to represent all of the Lenders so named therein, such
Lender shall have the right to employ an additional law firm from among its
usual and customary law firms, as necessary to avoid any such conflict of
interest, which law firm shall be reasonably satisfactory to the Borrowers, in
the defense of any such action or claim. The Borrowers hereby acknowledge and
agree that they shall pay all amounts so incurred by the Agent and/or the
other Lenders in connection with any such Indemnified Claim, within fifteen
(15) days following demand therefor from the Agent or any such Lender, in
writing, together with invoices and other materials reasonably supporting such
demand, and until repaid such sums shall bear interest at the Default Rate and
shall be secured by the Lien of the Security Documents.

6.18.3 In the event that the Agent or any Lender shall incur
any of the costs described in Sections 6.18.1 and 6.18.2, above and the
Borrower shall not repay such sums within fifteen (15) days following demand,
the Agent and the Lender shall have the right, in their sole discretion upon
one (1) Business Day's notice to the Borrowers to make Advances from the Line
of Credit Commitment, in order to pay such costs.

6.19 Updated Opinion of Counsel. The Borrowers shall submit to the
Agent an opinion of counsel licensed in the State of Florida and the state or
states where any Mortgaged Property or other Collateral is located and with
respect to matters under the laws of the state or states of incorporation or
formation of any Borrower entity organized in a state other than Florida,
satisfactory to the Agent covering such further matters regarding the
Mortgaged Properties or other Collateral as the Agent may reasonably require
from time to time, in connection with the spreading of the lien of the
Mortgages or any other Security Documents, to any Additional Properties or
other additional Collateral, or in connection with any other modifications or
amendments to this Agreement, the Notes, the Security Documents or any other
Loan Documents whatsoever.

6.20 Additional Documents/Preservation of Security.

6.20.1 The Borrowers shall sign and deliver to the Agent such
documents, instruments, assignments and other writings, and to do such other
lawful and reasonable acts to preserve and protect the Mortgaged Property or
other Collateral at any time securing or intended to secure the Obligations,
and to more effectively carry out the intents and purposes of this Agreement,
including, without limitation, as contemplated by Section 3.3, all as the
Agent may reasonably require from time to time.

6.20.2 The Borrowers shall furnish to the Agent copies of all
proposed plats, applications for orders approving any Developments of Regional
Impact (or the equivalent in Georgia), restrictive covenants, condominium
declarations, easements, licenses and other matters which the Borrowers or any
of them intend to impose upon any of the Mortgaged Properties or any portion
thereof (collectively, the "Proposed Encumbrances"). Provided that a Proposed
Encumbrance as to any Mortgaged Property or any portion thereof shall be
consistent with the anticipated utilization and scheduled disposition of such
Mortgaged Property or portion thereof, as set forth in the Annual Business
Plan and/or the Economic Model, as most currently revised and submitted to the
Agent, and shall not otherwise materially adversely affect the value of any
such Mortgaged Property, in the reasonable discretion of the Agent, the Agent
shall approve, and where appropriate, execute a consent to such Proposed
Encumbrance.

6.21 Intentionally Deleted.

6.22 Environmental Remedial Work/Further Environmental Audits.

6.22.1 In accordance with the report by Dames & Moore entitled
"Arvida/JMB Partners Revised Phase II Environmental Site Assessment Report,"
Project #12525-037-024, dated June 23, 1997, and listed on Schedule 4.17.8,
Arvida will implement closure activities for underground storage tanks at the
River Hills Country Club in Valrico, Florida, and will conduct appropriate
assessment and remedial work pursuant to the pre-approved petroleum cleanup
program administered by the State of Florida Department of Environmental
Protection under Chapter 376, Florida Statutes.

6.22.2 The Borrowers shall provide an annual update of the
environmental status of the River Hills petroleum cleanup work. This update
shall be provided at least annually by a consultant acceptable to Agent, and
in a form acceptable to Agent.

6.22.3 In order to evaluate the environmental risks associated
with this transaction, the Borrowers will also, upon request, give permission
to the Agent and its agents and contractors to enter each Mortgaged Property
for the purpose of conducting its own environmental assessment or
hydrogeologic study of each such Mortgaged Property, including, but not
limited to, soil borings, installation of piezometers, the collection of soil
and surface water samples, geophysical or geotechnical testing, soil vapor
surveys and the installation and sampling of ground water monitoring wells,
provided, however, the Agent shall not undertake to obtain any environmental
assessment of any Mortgaged Property more frequently than once during any
twelve-month period, unless there shall exist a reasonable basis therefor.
All such assessments, studies, inspections and investigations deemed necessary
by the Agent shall be conducted at the Borrowers' expense.

6.23 Warranties and Representations True. The representations and
warranties of the Borrowers set forth in this Agreement and the other Loan
Documents, as supplemented by written disclosures by the Borrowers to the
Agent of changes affecting such representations and warranties, as required to
be furnished to the Agent pursuant to Section 6.6.4 or as supplemented by
subsequent Financial Statements required to be furnished to the Agent pursuant
to Section 6.1: (a) shall continue to be true, correct and complete on and as
of the later of the date of the last monthly Compliance Report or the date of
any Advance (or with respect to those matters set forth in Sections 4.4.1,
4.17.9, 4.17.10, 4.19.1, 4.19.2, 4.19.3 and 4.22.1, as of the date most
recently supplemented or updated in accordance with Section 6.6.4), with the
same effect as though the representations and warranties had been made on and
as of that date (except that any representation or warranty set forth in
Article 4 with respect to the existence or non-existence of a Material Adverse
Change or set forth in Section 4.17.12 with respect to the "gap", shall relate
only to the Closing Date, shall continue to be true and correct as of the
Closing Date, but shall not be subject to any requirement that same bs
supplemented or updated) and (b) neither any written disclosures by the
Borrowers to the Agent of changes affecting such representations and
warranties nor subsequent Financial Statements as provided by the Borrowers to
the Agent shall disclose any changes in conditions which would constitute an
Event of Default under this Agreement or any of the other Loan Documents,
except to the extent that any such change in conditions thereby disclosed has
been waived, cured, or, where permitted herein, written consent has been given
by the Agent, the Required Lenders, the Super-Required Lenders or all of the
Lenders, as the case may be in their sole discretion.

ARTICLE 7. NEGATIVE COVENANTS

The Borrowers covenant and agree that from the date of this Agreement
until payment and performance in full of all present or future Obligations
hereunder and termination of all Commitments established hereunder, including,
without limitation, the expiration of the Letters of Credit issued hereunder
and the termination of the Agent's obligations to issue Letters of Credit
hereunder, the Borrowers will fully comply with the following provisions:

7.1 No Mergers. No Borrower shall (nor shall any Borrower permit any
of its respective Subsidiaries or Controlled Affiliates to): (a) directly or
indirectly, by operation of law or otherwise, merge with, consolidate with,
(except as expressly contemplated by Schedule 4.22.2) acquire all or
substantially all of the assets or capital stock of, or otherwise combine
with, any Person (any such event, a "Merger"), or (b) create, form or acquire
any new subsidiary or enter into any new partnership or joint venture with any
other Person (a "New Partnership") except wholly controlled HOAs or Equity
Clubs (as defined in Section 1.1.28). Notwithstanding the foregoing, any
Subsidiary or Controlled Affiliate may, subject to the written consent of the
Required Lenders, which shall not be unreasonably withheld, enter into a
Merger with one or more other Subsidiaries or Controlled Affiliates, or
create, form or acquire, or enter into, a New Partnership with one or more
Subsidiaries or Controlled Affiliates, provided, however, that such consent of
the Required Lenders shall be conditioned on satisfaction of the following
conditions (and such other conditions as the Required Lenders shall reasonably
impose in connection therewith): (i) such Merger or New Partnership shall not
cause any Event of Default hereunder or any event which with the passage of
time or giving of notice, or both, would constitute an Event of Default
hereunder, (ii) no Subsidiary or Controlled Affiliate (nor any of their
respective Subsidiaries or Affiliates, Entity Interests in which have been
assigned to the Agent) shall merge or enter into a New Partnership with any
Other Affiliate or Other Subsidiary which shall be subject to any Other
Indebtedness, including, without limitation, Project Indebtedness, other than
Liabilities incurred in the ordinary course, (iii) the Borrowers shall notify
the Agent of any such proposed Merger or New Partnership, not later than five
(5) Business Days prior to the effectuation of such Merger or New Partnership,
(iv) the Borrowers shall pay all documentary stamp tax, if any, in connection
with any such merger, (v) the Borrowers shall deliver to the Agent, within
five (5) Business Days following the effectuation of such Merger or New
Partnership permitted under this Section, copies of all documents in
connection therewith, including, without limitation, all applicable merger
documentation, in connection with any Merger, and any partnership agreement,
in connection with any New Partnership; and (vi) upon the request of the
Agent, in accordance with Section 3.3.3, the Borrowers shall assign or pledge
to the Agent, on behalf of the Lenders, all new Entity Interests which may
come into existence as a consequence of any such Merger, and all partnership
interests, which may come into existence as a consequence of any such New
Partnership, to the extent same are owned by any Borrower. Not later than
thirty (30) Business Days prior to the proposed effectuation of any such
Merger or New Partnership, the Borrowers shall submit to the Agent all
information reasonably required by the Agent and the Lenders to evaluate such
proposed Merger or New Partnership, and within such thirty (30) Business Day
period, the Agent shall notify the Borrowers, in writing, of the approval or
disapproval of the Required Lenders to such proposed Merger or New
Partnership.

7.2 Releases/Loan to Value Ratio. No Borrower shall request a
Partial Release of any Mortgaged Property or other Collateral or any portion
thereof from the Lien of the Mortgage or any other Security Document, or an
Advance of any Loan proceeds, if the effect of such Partial Release or
Advance: (i) (a) at any time during the first two (2) Loan Years, shall be to
increase the Loan to Value Ratio to greater than sixty percent (60%) or (b) at
any time during the second two (2) Loan Years, shall be to increase the Loan
to Value Ratio to greater than fifty percent (50%) or (ii) shall be to cause a
breach of any of the other financial covenants set forth in Section 6.13.

7.3 No Additional Properties. No Borrower shall (nor shall any
Borrower permit any of its respective Subsidiaries or Controlled Affiliates,
or, to the extent same shall entail the contribution of any additional capital
therefor or the incurring of any indebtedness or liability in excess of the
permitted aggregate maximum amount of Project Indebtedness by any Borrower,
Subsidiary or Controlled Affiliate, any of its Non-Controlled Affiliates, to)
acquire any additional real property assets other than Additional Properties
described on Schedule 1.1.3, without the consent of the Required Lenders, at
their sole discretion, which consent may be conditioned upon, inter alia, the
spreading of the Lien of the Mortgages to encumber such Additional Property.

7.4 Loans and Advances. No Borrower shall, directly or indirectly
(or permit any of its Subsidiaries or Controlled Affiliates, or, to the extent
same shall entail the contribution of any additional capital therefor by any
Borrower, Subsidiary or Controlled Affiliate, any of its Non-Controlled
Affiliates, to) acquire, make or have outstanding a loan or advance to or an
investment in, or acquire all or a substantial part of the assets or
properties of, or own or acquire stock or other securities of, any other
Person (other than another Borrower, a Subsidiary or Affiliate), except
(a) stock or other securities received in settlement of a debt that was
created in the ordinary course of business, (b) readily marketable securities
issued by the United States of America, and (c) certificates of deposit or
repurchase agreements of any Lender or of any other financial institution of
comparable standing, and (d) normal and customary cash management accounts;
provided, in any event the value of the stock or other securities described in
(a) through (c) shall at no time exceed in the aggregate $1,000,000.00.

Notwithstanding the foregoing, the Lenders acknowledge and agree that
the following does not constitute a violation of this Section 7.4: Arvida,
its Subsidiaries and its Affiliates provide management services for various
entities, many of which have different ownership interests. All of the costs
of providing said services, both direct and indirect, are paid by Arvida, its
Subsidiaries or Affiliates and subsequently reimbursed to Arvida, its
Subsidiaries or its Affiliates. These costs incurred in providing said
managment services include, but are not limited to:

(1) All compensation and compensation-related costs of
personnel who are employed in connection with non-affiliated entities,
including salaries, wages, bonuses, incentive compensation,fringe benefits
such as health, life, workmen's compensation and disability insurance,
retirement plans, social security taxes and sick, holiday and vacation pay;

(2) Direct overhead costs incurred by employees or officers
of Arvida, its Subsidiaries or Affiliates, incurred in providing services to
non-affiliated entities, including transportation, meals and lodging expenses;

(3) Indirect overhead costs incurred by Arvida, its
Subsidiaries or its Affiliates, in support of its employees or officers
providing services to non-affiliated entities, including rent and equipment
maintenance, telephone and other utilities, human resource services,
accounting services, information systems services, secretarial and other
administrative support services.

7.5 Regulation U. The Borrowers will not permit any part of the
proceeds of the Loans made pursuant to this Agreement to be used to purchase
or carry or to reduce or retire any loan incurred to purchase or carry any
margin stock (within the meaning of Regulation U of the Board of Governors of
the Federal Reserve System) or to extend credit to others for the purpose of
purchasing or carrying any such margin stock, or to be used for any other
purpose which violates, or which would be inconsistent with, the provisions of
Regulation U or other applicable regulation. Each Borrower covenants that it
is not engaged and will not become engaged as one of its principal or
important activities in extending credit for the purpose of purchasing or
carrying such margin stock. If requested by the Agent, any Borrower will
furnish to the Agent in connection with any Loans hereunder, a statement in
conformity with the requirements of Federal Reserve Form U-1 referred to in
said regulation. In addition, the Borrowers covenant that no part of the
proceeds of the Loans hereunder will be used for the purchase of commodity
future contracts.

7.6 Distributions.

7.6.1 Except for the Distributions made with the proceeds of
the Term Loan, Arvida shall make no Distributions except during the months of
February and/or August of any year, and shall make any such Distributions only
upon satisfaction of the following conditions: (a) there shall exist no Event
of Default nor any event which with the passage of time or giving of notice
would constitute an Event of Default, (b) the making of such Distributions
shall not otherwise be prohibited by any of the terms or conditions hereof,
including without limitation, as set forth in Sections 6.13.2, 6.13.3 and
6.13.4, and (c) no later than ten (10) Business Days prior to the making of
any such Distribution, Arvida shall furnish to the Agent (i) an accounting of
the determination of the funds to be utilized for the making of such
Distribution, satisfactory to the Agent, demonstrating, inter alia, that the
Cash Flow after Project Financing for the period since the date of the last
Distributions is sufficient for the making of such Distributions, and
(ii) evidence satisfactory to the Agent that, as of the date of the making of
such Distribution, and giving effect to the making of such Distribution, there
shall exist no violation of any of the terms or conditions hereof, including,
without limitation, as set forth in Articles 6 and 7.

7.6.2 Without limiting the foregoing, if and to the extent
that Cash Flow after Project Financing in any single fiscal year shall exceed
the projections therefor set forth in such year's Annual Business Plan
(excluding sales of Home Sites except for sales of Bulk Home Site Parcels, as
defined in Section 3.2) by more than $25,000,000.00 (the "Excess CFAPF"),
Arvida shall not make any Distributions to its partners in excess of an amount
(the "Permitted Distributions") equal to the sum of $24,000,000.00 plus the
Projected Distributions for such fiscal year as set forth in the current
Annual Business Plan or Economic Model (Distributions in excess of Permitted
Distributions being herein referred to as "Excess Distributions"), unless and
until the Agent and Required Lenders shall have reasonably determined to their
satisfaction, that (i) such Excess Distributions would not give rise to an
Event of Default hereunder and (ii) would not give rise to a present breach
nor cause any future breach, of any of the covenants set forth in Articles 6
or 7, which with the passage of time or giving of notice would constitute an
Event of Default. If the Agent and Required Lenders reasonably determine that
any such Excess Distribution would give rise to an Event of Default or a
present breach or cause a future breach of the terms and covenants hereof,
then: (a) Arvida shall not be permitted to make any such Excess Distribution,
until such time as the making of any such Excess Distribution would not give
rise to an Event of Default or a present breach or be reasonably likely to
cause a future breach of any of the covenants hereof or (b) the Borrowers
shall pay to the Agent, for the account of the Lenders, toward the reduction
of the principal balance under the Term Loan, an amount sufficient to assure
that no such breach of any of the terms or covenants hereof would occur as a
result of any such Excess Distribution. The Borrowers shall no later than
thirty (30) Business Days prior to the making of any such proposed Excess
Distribution notify the Agent thereof in writing and furnish to the Agent all
such information as the Agent and the Lenders shall reasonably require in
order to determine whether such Excess Distribution would give rise to an
Event of Default hereunder or would give rise to a present breach or cause any
future breach of any of the covenants set forth in Articles 6 or 7, which with
the passage of time or giving of notice would constitute an Event of Default.
The Agent shall notify the Borrowers, in writing, within such thirty (30)
Business Day period, of the determination by the Required Lenders to consent
or withhold their consent to the making of such Excess Distribution, provided,
however, if the Required Lenders shall determine in their sole discretion,
that a new Appraisal or Appraisals of all of or certain of the Mortgaged
Properties shall be required in order to evaluate the Borrowers' request for
the making of such Excess Distribution, such time period shall be extended to
the date ten (10) Business Days following the determination by the Required
Lenders of Adjusted Values for those Mortgaged Properties for which they shall
have obtained new Appraisals.

7.6.3 No Subsidiary or Controlled Affiliate shall make any
distributions or pay any dividends of cash or cash equivalents to any Person,
except to another Borrower, Subsidiary or Controlled Affiliate and to
Arvida/JMB Managers, Inc. (but only on a prorata basis, in accordance with its
one-tenth percent (0.1%) partnership interest in Arvida/JMB Partners and
certain other Controlled Affiliates, as disclosed on Schedule 1.1.30).

7.7 Indebtedness.

7.7.1 No Borrower shall, directly or indirectly, create,
incur, assume or suffer or permit to exist for its own account or that of any
of its Subsidiaries or Controlled Affiliates any Other Indebtedness or
liabilities, except for (i) the Loans; (ii) Project Indebtedness of any
Borrower, Subsidiary and/or Controlled Affiliate (and any guaranties thereof
by any other Borrower, Subsidiary or Controlled Affiliate), not to exceed
$70,000,000.00 in the aggregate, provided that such Project Indebtedness shall
not be secured by any Mortgaged Property or any other Collateral (unless same
shall have previously been released from the lien of the Security Documents,
pursuant to Section 3.2), and the making thereof shall not cause the breach of
any of the covenants set forth in Articles 6 or 7 or any Event of Default;
(iii) liabilities incurred in the ordinary course of business of any Borrower,
Subsidiary or Controlled Affiliate; and (iv) other indebtedness approved in
writing by the Agent and the Required Lenders. Notwithstanding the foregoing,
it is acknowledged and agreed that there are presently outstanding, for the
account of the Borrowers, standby letters of credit issued by The Chase
Manhattan Bank ("Chase") in an amount not exceeding $5,000,000.00 in the
aggregate (the "Chase Letters of Credit") which are secured by cash collateral
pledged to Chase in the amount of such Chase Letters of Credit. The Borrowers
agree that: (i) as such Chase Letters of Credit expire and to the extent the
same are to be renewed, or (ii) upon the applicable roll-over date of any
self-renewing Chase Letter of Credit, such Chase Letters of Credit shall be
replaced with Letters of Credit under the Letter of Credit Commitment
established hereunder.

7.7.2 No Borrower shall, directly or indirectly, create,
incur, assume, or suffer or permit to exist for its own account or that of any
of its Subsidiaries or Controlled Affiliates any Lien, (including the Lien or
retained security title of a conditional vendor or lessor) or assign or
otherwise convey any right to receive income, in either event, with respect to
the Mortgaged Properties and other Collateral except the following
(collectively, the "Permitted Encumbrances"): (i) Liens in favor of the
Lenders created pursuant to the Security Documents, (ii) title exceptions
appearing in the Title Commitment described in Section 5.1.5 or otherwise
consented to by the Required Lenders, pursuant to Section 6.20.2
(collectively, the "Permitted Title Encumbrances"), (iii) purchase money Liens
incurred for the acquisition and/or lease of Equipment or Inventory in the
ordinary course of business, (iv) any Lien imposed by operation of law,
provided that any such Lien shall be removed within thirty (30) days after the
attachment thereof, (v) the pledge by Arvida and Arvida/JMB Partners to one
another of their respective interests in The AOK Group, which have been
subordinated to the Lien of the Agent therein, and (vi) real property and
personal property taxes not yet due.

7.8 Alteration of Partnership or Corporate Structure. There shall
not occur, without the consent of the Super-Required Lenders:

7.8.1 With respect to Arvida:

7.8.1.1 Any material change, amendment or
modification to the Partnership Agreement of Arvida;

7.8.1.2 Any addition of a new general partner or
any substitution or removal of the Arvida General Partner or any other event,
the effect of which shall be that the Arvida General Partner shall cease to be
the sole general partner of Arvida; or

7.8.1.3 Any sale or transfer of, or the creation of
a Lien upon any of the ownership interests in, the Arvida General Partner, or
any sale or transfer of any of the ownership interests in any Person or
Persons directly or indirectly holding the ownership interests in the Arvida
General Partner, which results in either (a) the "Malkin Group", the "Bluhm
Group", "JMB Realty," or the "Director Group" (as said terms are hereinafter
defined), or any or all of them, ceasing directly or indirectly to own and
control in the aggregate, and unencumbered by any Lien, at least fifty-one
percent (51%) of the ownership interests in the Arvida General Partner, (b)
the Malkin Group, the Bluhm Group, JMB Realty or the Director Group, or any or
all of them, ceasing directly or indirectly to own and control in the
aggregate at least fifty-one percent (51%) of the ownership interests in the
Person or Persons directly or indirectly holding the ownership interests in
the Arvida General Partner, or (c) the Malkin Group, the Bluhm Group, and the
Director Group or any of them, ceasing directly or indirectly to own and
control in the aggregate at least fifty-one percent (51%) of the ownership
interests in JMB Realty.

As used in this Agreement, the "Bluhm Group" means
Neil G. Bluhm, his Family Members (as hereinafter defined), and any trust, the
sole beneficiaries of which (other than contingent beneficiaries) are Neil G.
Bluhm and/or his Family Members; the "Malkin Group" means Judd D. Malkin, his
Family Members, and any trust, the sole beneficiaries of which (other than
contingent beneficiaries) are Judd D. Malkin and/or his Family Members; an
individual's "Family Members" means such individual's current or prior spouse,
his or her parents, his or her children, grandchildren or great-grandchildren
and their respective spouses, and any trust, the sole beneficiaries of which
(other than contingent beneficiaries) are such parents, children,
grandchildren or great grandchildren or their respective spouses; "Director
Group" means M. Lee Sachs, John Schreiber, Burton Glazov and/or Stuart Nathan;
and "JMB Realty" means JMB Realty Corporation, a Delaware corporation.

7.8.2 With respect to any Borrower, other than Arvida:

7.8.2.1 Any material change, amendment or
modification to the partnership agreement or the articles or bylaws, as the
case may be, of any Borrower Subsidiary or Borrower Affiliate or any of its
respective Subsidiaries or Controlled Affiliates or of any general partners of
any of the foregoing Persons which are partnerships; or

7.8.2.2 Except as permitted pursuant to
Section 7.1, any addition of a new general partner or any substitution or
removal of any general partner of any Borrower Subsidiary or Borrower
Affiliate or any of its respective Subsidiaries or Controlled Affiliates which
is a partnership; or

7.8.2.3 Except as permitted pursuant to
Section 7.1, any sale, transfer or other change of ownership interests of a
Borrower Subsidiary or Borrower Affiliate, or of any of its respective
Subsidiaries or Controlled Affiliates or, where applicable, any general
partners of any of the foregoing Persons, except, only, a sale or transfer of
ownership interests to a Borrower, Subsidiary or Controlled Affiliate (a
"Transferee"), which Transferee shall not be subject to any Other
Indebtedness, including, without limitation, Project Indebtedness, other than
liabilities incurred in the ordinary course, and, in any such event, provided
that such transfer shall be subject to any Assignment of Entity Interests in
such transferred ownership interests and the acknowledgement, confirmation and
ratification of same by such Transferee.

The Lenders shall consider any request for consent to any of the foregoing in
accordance with their normal and customary standards, and shall not
unreasonably withhold or delay consent to any such request. If the Super-
Required Lenders shall consent to any changes described in Sections 7.8.1.2 or
7.8.1.3, above, then, the Borrowers shall, within fifteen (15) Business Days
following receipt of such consent, and, in any event, prior to the
effectuation of any event described in either Sections 7.8.1.2 or 7.8.1.3, pay
to the Agent, for the account of the Lenders, the following additional fees:
(i) with respect to the Term Loan, a fee in the amount of one-half percent
(.5%) of the then outstanding principal balance under the Term Loan; (ii) with
respect to the Line of Credit Commitment, a fee in the amount of one-half
percent (.5%) of the Line of Credit Commitment at such time, and (iii) with
respect to the Letter of Credit Commitment, a fee in the amount of one-half
percent (.5%) of the Letter of Credit Commitment at such time.

7.9 Change of Business or Management. Except as may be contemplated
by the then current Annual Business Plan or Economic Model, no Borrower shall
(nor permit any of its respective Subsidiaries or Controlled Affiliates to)
materially change the nature of its business as it currently exists.

7.10 Intentionally Deleted.

7.11 Insider Transactions.

7.11.1 No Borrower will (nor will it permit any of its
respective Subsidiaries or Controlled Affiliates to), directly or indirectly,
purchase, acquire, or lease any property or services from, or sell, provide,
or lease any property or services to, or otherwise deal with (i) any other
Borrower or any of its respective Subsidiaries or Affiliates or any of their
respective partners, or any of their respective officers, stockholders,
employees, agents or consultants or (ii) any business entity, corporation,
partnership, or association in which any other Borrower or any of its
respective Subsidiaries or Affiliates or any of their respective partners, or
any of their respective officers, stockholders, employees, agents or
consultants, owns a controlling interest, except upon terms and conditions not
less favorable than would obtain with an unrelated third party or if no such
relationship existed.

7.11.2 Other than as permitted by Section 7.4, no Borrower
will (nor will it permit any of its respective Subsidiaries or Controlled
Affiliates, or, to the extent same shall entail the contribution of any
additional capital therefor by any Borrower, Subsidiary or Controlled
Affiliate, any of its Non-Controlled Affiliates, to), directly or indirectly,
lend or advance or permit to be outstanding any loans or advances of money,
credit or property to officers, stockholders, employees, agents, or
consultants of any other Borrower or any of its respective Subsidiaries or
Affiliates or any of their respective partners other than (a) salaries and
wages paid in the ordinary course of business, (b) business expense advances
in the ordinary course of business to officers and employees of any Borrower
or its Consolidated Entities or Arvida Company, and (c) credit for services or
goods rendered or sold, at rates and on terms not less favorable than would
obtain with an unrelated third party or if no such relationship existed.

7.12 Sale or Lease of Assets. No Borrower shall (nor shall any
Borrower permit any of its respective Subsidiaries or Controlled Affiliates
to) sell, lease, assign, convey or otherwise dispose of any of its assets or
properties, including, without limitation, any Mortgaged Properties or any
other Collateral except for (a) sales of Mortgaged Properties, to the extent
such sales do not violate the conditions of Article 6 or Article 7 and
otherwise comply with the terms of Section 3.2; (b) the rental or lease of
Mortgaged Properties or Improvements thereon, pursuant to lease agreements
providing for rental or lease on market terms, which shall be entered into in
the ordinary course of such Borrower's or Subsidiary's or Controlled
Affiliate's business and shall be substantially consistent with the Annual
Business Plan for the fiscal year in which such rental or lease takes place;
(c) the sale or lease of other Collateral on market terms, which shall be
entered into in the ordinary course of such Borrower's or Subsidiary's or
Affiliate's business, and shall be substantially consistent with the Annual
Business Plan for the fiscal year in which such sale or lease takes place, and
(d) the sale, lease, assignment, conveyance or other disposition of any of its
assets or properties other than Mortgaged Properties or other Collateral, in
the ordinary course of such Borrower's or Subsidiary's or Controlled
Affiliate's business, substantially consistent with the then current Annual
Business Plan and/or Economic Model.

7.13 Changes in Accounting Methods, Fiscal Year. The Borrowers will
not change, in any material respect, their accounting methods or practices,
their depreciation or amortization policy or rates, or their fiscal year end
from that in existence as of the date of the Financial Statements provided to
the Agent pursuant to Section 6.1 hereof, except as required to comply with
law or with Generally Accepted Accounting Principles ("Permitted Accounting
Changes"). Notwithstanding anything herein to the contrary, if any Permitted
Accounting Changes shall have any impact whatsoever upon, or otherwise alter
the calculation or determination of, any of the financial covenants set forth
in Section 6.13, then the calculation or determination of such financial
covenants shall be made as if such Permitted Accounting Changes had not been
effected.

ARTICLE 8. EVENTS OF DEFAULT

The occurrence of any one or more of the following circumstances, to the
extent applicable, after the passing of time as set forth herein, shall
constitute events of default ("Event(s) of Default").

8.1 Breach of Monetary Obligations.

8.1.1 Failure by the Borrowers to pay, as and when due and
payable, any scheduled installment of principal required to be paid by this
Agreement or the Notes.

8.1.2 Failure by the Borrowers to pay, as and when due and
payable, any scheduled installment of interest, subject however, to such grace
periods as may be provided herein or in the Notes with respect thereto.

8.1.3 Failure by the Borrower to make any other payment
required to be paid by this Agreement, the Mortgage, the Notes or any other
Loan Documents, with the exception of interest and principal, by the later of:
(a) fifteen (15) days from receipt by the Borrowers from the Agent of written
notice of the required payment and (b) the fifteenth day of each month during
the term of the Loans.

8.2 Breach of Covenants. Failure by Arvida or any other Borrower to
perform, observe or maintain any of the covenants set forth in Articles 6 or
7, subject to such grace periods for cure as may be therein expressed.

8.3 Default of Other Obligations/Judgments.

8.3.1 Failure by any Borrower or any Subsidiary or Controlled
Affiliate to make full and timely payment of the principal of and interest on
any Other Indebtedness, including, without limitation, the Project
Indebtedness, or to duly observe all of the covenants, conditions and
agreements now or hereafter existing, pursuant to the terms and conditions of
any such Other Indebtedness, which failure shall result in the acceleration of
any principal amount of such Other Indebtedness, in excess of $5,000,000.00,
provided, however, that if such Other Indebtedness shall not be recourse to
such Borrower or such Subsidiary or Affiliate, such default and acceleration
thereunder shall not constitute an Event of Default hereunder; or

8.3.2 Except with respect to any judgment in connection with
any Other Indebtedness, as described in Section 8.3.1, the rendering of any
final judgment or judgments (at the expiration of all times to appeal
therefrom) for the payment of money in excess of $500,000.00, in the
aggregate, against any Borrower, unless the same shall be (a) fully covered by
insurance or (b) vacated, stayed, bonded, paid or discharged within thirty
(30) days from the date of such judgment.

8.4 Filing of Liens Against the Property. Any Lien for labor,
material, taxes or otherwise shall be filed against any Mortgaged Property or
other Collateral or otherwise incurred and not be removed within thirty (30)
days from the date of filing any such Lien, or any Mortgaged Property or other
Collateral shall be further encumbered by the Lien of any other mortgage or
encumbrance, without the prior consent thereto of the Required Lenders.

8.5 Bankruptcy or Insolvency of Borrower.

8.5.1 The filing by any Borrower or any general partners of
any Borrower of a voluntary petition in bankruptcy for adjudication as a
bankrupt or insolvent, or the filing by any Borrower or any general partner of
any Borrower of any petition or answer seeking or acquiescing in any
reorganization, arrangement, composition, readjustment, liquidation,
dissolution or similar relief for itself under any present or future federal,
state or other statute, law or regulation relating to bankruptcy, insolvency
or other relief for debtors, or any Borrower or any general partner of any
Borrower seeking or consenting to or acquiescing in the appointment of any
trustee, receiver or liquidator of any Borrower or any general partner of any
Borrower or of all or any substantial part of its properties or of any or all
of the rents, revenues, issues, earnings, profits or income thereof, or the
making of any general assignment for the benefit of creditors, or specific
written admission by any Borrower or any general partner of any Borrower of
its inability to pay its debts generally as they become due; or

8.5.2 The filing of an involuntary petition against any
Borrower or any general partner of any Borrower seeking any reorganization,
arrangement, composition, readjustment, liquidation, dissolution or similar
relief under any present or future federal, state or other statute, law or
regulation relating to bankruptcy, insolvency or other relief for debtors, or
the appointment of any trustee, receiver or liquidator of any Borrower or any
general partner of any Borrower or of all or any substantial part of its
property or of any or all of the rents, revenues, issues, earnings, profits or
income thereof without its consent or acquiescence, which shall not be
discharged by the appropriate court of law within sixty (60) days of the
above-described filing or appointment; or

8.5.3 Any of the assets of any Borrower or, where applicable,
any general partner of a Borrower shall be attached, levied upon or subjected
to a writ or distress warrant, or come within the possession of any receiver,
trustee, custodian or assignee for the benefit of creditors, which shall not
be discharged by the appropriate court of law within sixty (60) days.

8.6 Breach of Other Conditions Under Loan Documents. Failure by any
Borrower to duly observe any other covenant, condition or agreement of this
Agreement, the Mortgages, the Notes, or any other Loan Document, except for
any Event of Default described in Sections 8.1 through 8.5, above, after the
expiration of any applicable grace period, if any.

8.7 Breach of Warranty. Any representation or warranty made or
agreed to be made herein or in any related Loan Document heretofore,
concurrently or hereafter executed shall be breached by any Borrower or shall
prove to be false or misleading when made.

8.8 Transfer of Property. Any Borrower shall sell, transfer, assign,
convey or lease all or any part of its interest in any Mortgaged Property or
other Collateral constituting security for this Loan without the express
written consent of the Agent and the Required Lenders, except as permitted by
Section 7.12.

8.9 Encroachments and Permits. All or any material portion of the
Improvements on any Mortgaged Property shall encroach upon any street or road
setback or easement or upon any adjoining property, or violate in any material
respect any ordinance, regulation, rule or direction of any federal or state
agency, or of any governmental or quasi-governmental authority, or any zoning
setback line, or the building permit(s) for any material portion of the
Improvements or any DRI orders, development approvals or permits concerning
approvals or utility commitments shall be revoked or suspended or shall lapse,
or any building or other permit or license with respect to any material
portion of the Improvements on any Mortgaged Property shall be conditional in
nature and Borrowers shall fail to punctually satisfy the conditions so as to
prevent its invalidity.

8.10 Breach. A material violation or breach by Borrower shall occur
in any agreement, covenant or restriction affecting title to any Mortgaged
Property or other Collateral, including but not limited to matters appearing
as Permitted Title Encumbrances in the Title Policy.

8.11 Filing of Notice. The filing for record by any Borrower or any
general partner of any Borrower of a notice limiting the maximum amount which
may be secured by the Mortgage pursuant to Section 697.04(1)(b) of the Florida
Statutes, as amended.

8.12 Non-Monetary Default Period. Notwithstanding any provision to
the contrary contained herein, with respect to any breach of any term,
covenant or condition described in Sections 8.6 through 8.11, no Event of
Default shall be deemed to have occurred until the Agent has given the
Borrowers notice of such breach, and the Borrowers have not cured said breach
within thirty (30) days thereafter. Notwithstanding the matters set forth
above if during the above-described grace period, the Borrowers shall be
diligently pursuing the cure of any such breach, including but not limited to
taking all actions necessary to cure said breach in a timely manner and
notifying the Agent of said actions, then the Agent shall extend the grace
period for an additional thirty (30) days, provided if the Agent and Required
Lenders shall determine at any time during the extended grace period that the
Borrowers are no longer acting diligently to cure the breach, the extended
grace period shall be terminated upon the Agent's providing the Borrowers with
notice of same. Further, if the Agent and Required Lenders shall determine
that the Borrowers shall be diligently pursuing the cure of the breach, the
Agent may allow the Borrowers additional time to cure the breach, which
additional time shall be determined at the sole discretion of the Agent and
Required Lenders and which additional time shall be terminated upon the
Agent's providing the Borrowers notice of same.

ARTICLE 9. REMEDIES OF LENDERS

If any one or more Events of Default shall occur, the Agent and the
Lenders shall be entitled from time to time to exercise any one or more of the
following remedies:

9.1 Termination of Commitments; Acceleration. The Agent may, and
upon the direction of the Required Lenders, shall declare the entire
indebtedness evidenced by the Notes owed to the Lenders by the Borrowers
hereunder and all other Obligations owed by the Borrowers to the Lenders,
whether direct or indirect, contingent or certain, to be forthwith due and
payable, whereupon:

9.1.1 the indebtedness owed to the Lenders by Borrowers
hereunder and all other Obligations owed by Borrowers to the Lenders with
accrued interest thereon, shall forthwith become due and payable, all without
presentment, demand, protest, or other notice of any kind from the Agent or
Lenders, all of which are hereby expressly waived, anything contained in the
Loan Documents to the contrary notwithstanding, and

9.1.2 automatically all Commitments to extend credit or to
make Advances subsequent to the occurrence of the Event of Default, including,
without limitation, the Commitment to make Advances or to issue Letters of
Credit, shall immediately terminate and the Borrowers shall thereupon pay to
the Agent a sum equal to the maximum amount available under all outstanding
Letters of Credit, as of the date of any such Event of Default, which sum the
Agent will hold in the Cash Collateral Account for reimbursement of any
amounts drawn under any such Letters of Credit. Alternatively, the Borrowers
may post an irrevocable letter of credit in the amount of all outstanding
Letters of Credit in favor of the Agent, which letter of credit shall be in
form and substance and drawn on a financial institution acceptable to the
Agent in its sole discretion. The Agent may withdraw funds from such Cash
Collateral Account or letter of credit in its discretion to satisfy Borrowers'
reimbursement obligation for any draws under any such Letters of Credit.
Should the Borrowers fail to pay the Agent the amounts required to be paid
pursuant to this Section 9.1.2, the Agent may, but shall not be obligated to,
make Advances under the Line of Credit Commitment and to deposit such Advances
into such Cash Collateral Account; and each Lender shall be responsible to
fund to the Agent its Committed Share of any such Advances. The Borrowers
shall immediately repay such Advances to the Agent, for the account of the
Lenders, and upon failure to do so, the Agent, on behalf of the Lenders shall
be entitled to pursue any and all remedies the Lenders may have under the Loan
Documents. In the event any such funds remain in the Cash Collateral Account
after the expiration of all of the outstanding Letters of Credit, the funds
therein shall be applied to any unpaid Obligations of the Borrowers to the
Lenders, and any remaining amount shall be remitted to the Borrowers.

9.2 Charge Default Rate of Interest. The Agent may, and upon the
direction of the Required Lenders, shall, charge interest on any or all of the
outstanding principal balances under the Notes at the Default Rate provided in
the Notes.

9.3 Right of Setoff. Upon the occurrence and during the continuance
of any Event of Default, any Lender is hereby authorized at any time and from
time to time, without notice to the Borrowers (any such notice being hereby
expressly waived by the Borrowers), to setoff and apply, directly or through
any of such Lender's affiliates, any and all deposits (whether general or
special, time or demand, provisional or final, or otherwise) and other assets
and properties at any time held in the possession, custody or control of such
Lender and its affiliates, and any indebtedness at any time owing by such
Lender or any of its affiliates, to or for the credit, account or benefit of
any of the Borrowers, against any and all of the Obligations now or hereafter
existing under this Agreement or the other Loan Documents, subject to each
Lender's responsibility to account to all other Lenders therefor pursuant to
the provisions of Section 2.9.1. The Borrowers acknowledge that they have
granted to Lenders a senior security interest in and to, among other things,
all such deposits, assets, properties and indebtedness in the possession of
the Lenders and Lenders' affiliates, and the Borrowers hereby authorize the
Lenders and any such affiliate to so setoff any such amounts at such times and
in such manner as Lenders may direct pursuant to this Section, subject to each
Lender's responsibility to account to all other Lenders therefor pursuant to
the provisions of Section 2.9.1. Each such Lender shall notify the Agent and
the Borrowers promptly after any such setoff and application; provided,
however, that the failure to give such notice shall not affect the validity of
such setoff and application. In debiting any such Bank Account, the
indebtedness shall be deemed to have been paid or repaid only to the extent of
the funds actually in that Bank Account, notwithstanding any internal
procedure of the Lenders or their affiliates to the contrary. The rights of
Lenders under this Section are in addition to and without limitation of any
other rights, powers, privileges, remedies and other interests (including,
without limitation, other rights of setoff and security interests) that the
Lenders may have under this Agreement, the other Loan Documents and applicable
law.

9.4 Agent's Right to Enter and Take Possession, Operate and Apply
Income. The Agent may, and upon the direction of, the Required Lenders shall,
take the following actions:

9.4.1 If an Event of Default shall have occurred and be
continuing, the Borrowers agree that upon the Agent's demand, the Borrowers
shall forthwith surrender to the Agent the actual possession and, to the
extent permitted by law, the Agent itself or by such officers or agents as it
may appoint, may enter and take possession of any or all of the Mortgaged
Properties or other Collateral and may exclude the Borrowers and their agents
and employees wholly therefrom and may have joint access with the Borrowers to
the books, papers and accounts of the Borrowers.

9.4.2 If any Borrower shall for any reason fail to surrender
or deliver all or any portion of the Mortgaged Properties to the Agent upon
demand, the Agent may obtain a judgment or decree conferring on the Agent the
right to immediate possession or requiring such Borrower to deliver immediate
possession of all or part of the Mortgaged Properties and other Collateral to
the Agent, and the Borrowers hereby specifically consent to the entry of such
a judgment or decree.

9.4.3 The Borrowers will pay to the Agent and Lenders upon
demand, all reasonable third-party out-of-pocket expenses of obtaining such
judgment or decree (including all reasonable third-party out-of-pocket
expenses and attorneys' fees and costs incurred by the Agent and Lenders,
through all stages of litigation and appeal); and all such expenses shall be
secured by the lien of the Mortgage.

9.4.4 Upon every such entering upon or taking of possession,
the Agent may hold, store, use, operate, manage and control the Mortgaged
Properties and other Collateral and conduct any Borrower's business thereon
and, from time to time:

9.4.4.1 Require the Borrowers to immediately
assemble the Collateral including the Borrowers' books, records, files, papers
and other data pertaining thereto and deliver the Collateral, at Borrowers'
expense, to a place designated by the Agent;

9.4.4.2 make all maintenance, repairs, renewals,
replacements, additions, betterments and improvements necessary and proper to
the Mortgaged Properties and other Collateral and purchase or otherwise
acquire additional fixtures, personalty and other property;

9.4.4.3 insure the Mortgaged Properties and other
Collateral;

9.4.4.4 manage and operate the Mortgaged Properties
and other Collateral and exercise all of the rights and powers of any Borrower
(in the Agent's name or otherwise) with respect to the management and
operation thereof;

9.4.4.5 enter into any and all agreements with
respect to the exercise by others of any of the powers herein granted to the
Agent; and

9.4.4.6 perform or cause to be performed any and
all work and labor necessary to complete any pending Improvements in
accordance with the plans and specifications therefor;

all as the Agent may, or upon the direction of the Required Lenders shall,
determine to be to the best advantage of the Lenders; and the Agent may
collect and receive all the income, revenues, rents, issues and profits of the
same, including those past due as well as those accruing thereafter, for the
account of the Lenders, and after deducting:

(aa) All expenses of taking, holding, managing
and operating the Mortgaged Properties and other Collateral;

(bb) The cost of all such maintenance, repairs,
renewals, replacements, additions, betterments, improvements, purchases and
acquisitions;

(cc) The cost of such insurance;

(dd) Such taxes, assessments and other charges
prior to the lien of the Mortgage or other Security Documents as the Agent may
determine to pay;

(ee) Other proper charges upon the Mortgaged
Properties or other Collateral or any part thereof; and

(ff) The reasonable compensation, expenses and
disbursements of the attorneys and agents of the Agent and the Lenders,
including reasonable attorneys' fees and costs for any appeal,

the Agent shall apply the remainder of the sums received by the Agent, for the
account of the Lenders in the manner set forth in Section 2.8.

9.4.5 Whenever all interest, principal installments and other
amounts due under the terms of the Notes and Mortgage shall have been paid and
all other Obligations satisfied, the Agent shall surrender possession of the
remaining Collateral to the Borrowers, their successors or assigns. The
Agent's right to take possession, however, shall exist if any subsequent Event
of Default shall occur and be continuing.

9.5 Receiver. If any Event of Default shall have occurred and be
continuing, the Agent shall be entitled, as a matter of strict right and
without regard to the value or occupancy of the Mortgaged Properties or other
Collateral, to the appointment of a receiver who will enter upon and take
possession of the Mortgaged Properties and other Collateral, collect the rents
and profits therefrom and apply the same as the court may direct. The
receiver shall have all the rights and powers permitted under the laws of the
jurisdiction in which any such Mortgaged Property or other Collateral lies.
All reasonable third-party out-of-pocket costs and expenses (including
receiver's fees, reasonable attorneys' fees and costs, including reasonable
attorneys' fees and costs incurred as a result of any appeal, and agents'
compensation) incurred in connection with the appointment of a receiver shall
be secured by the Mortgages and Security Documents. The right to enter and
take possession of the Mortgaged Properties and other Collateral, to manage
and operate the same and to collect the rents, issues and profits thereof
(whether by a receiver or otherwise) shall be cumulative to any other right or
remedy hereunder or afforded by law and may be exercised by the Agent,
concurrently therewith or independently thereof. The Agent shall be liable to
account only for such rents, issues and profits actually received by the Agent
whether received pursuant to this Section 9.5 or the preceding Section 9.4,
above. Notwithstanding the appointment of any receiver, trustee or other
custodian, the Agent shall be entitled, as pledgee, on behalf of the Lenders,
to the possession and control of any cash or other instruments, at the time
held by or payable or deliverable under the terms of this Agreement, the
Mortgage or any other Security Document to the Agent.

9.6 The Agent's Power of Enforcement. If any Event of Default shall
have occurred and be continuing, whether the Agent takes possession or not,
the Agent may, and upon the direction of the Required Lenders shall, proceed
by suit at law or in equity (or by any other appropriate proceeding or
remedy):

9.6.1 To sue and recover judgment, either before, after or
during the pendency of any proceeding for the enforcement of the Mortgages or
other Security Documents, for the entire amount of the Obligations so due and
unpaid together with all costs and expenses, including third-party reasonable
out-of-pocket costs, expenses and disbursements of the Agent's (but not the
other Lenders') agents and attorneys, whether or not suit is filed, and if
filed, for all appeals, and the right of the Agent to recover such judgment
shall not be affected by any taking, possession or foreclosure sale hereunder
or by the exercise of any other right, power or remedy for the enforcement of
the terms of the Mortgages or other Security Documents or other Loan Document
or the foreclosure of the Lien thereof.

9.6.2 With respect to the Mortgaged Properties in Florida, to
foreclose the Mortgages and to sell the Mortgaged Properties in their entirety
or in separate parcels, under the judgment or decree of a court or courts of
competent jurisdiction and to pursue any other remedy available to it, all as
the Agent shall deem most effectual. The Agent may, and upon the direction of
the Required Lenders shall, take action either by judicial proceedings or by
the exercise of its powers to take possession.

9.6.3 With respect to the Mortgaged Properties in Georgia, to
commence foreclosure proceedings against the Mortgaged Properties through
judicial proceedings or by advertisement, at the option of the Agent, pursuant
to the statutes in such case made and provided, and to sell the Mortgaged
Properties or to cause the same to be sold at public sale, and to convey the
same to the purchaser, in accordance with such statutes in single or multiple
parcels, at the Agent's election. The purchaser at any such sale or other
disposition shall hold the Mortgaged Properties free from any claim or right
of the Borrowers of whatever kind, including any equity of redemption of any
Borrower. The Borrowers specifically waive (to the extent permitted by law)
all rights of redemption, stay or appraisal which they had or may have under
any Rule of Law of statute now existing or hereafter adopted. Provided,
however, the foregoing is not intended and shall not have the effect of
clogging any Borrower's equitable right of redemption or foreclosing any
Borrower's statutory right of redemption prior to any such sale. In addition
to the right of suit, and to whatever remedies for the collection of said
indebtedness that are now, or may be hereafter, provided by law and not in
lieu thereof, all of which may be pursued concurrently at the option of the
Agent, the Borrowers hereby grant this power of attorney and irrevocably
authorize and empower the Agent, its successors and assigns in the event of
the failure of Borrowers to pay the obligations hereby secured when due or
when declared to be due under the powers contained in the Notes, the Credit
Agreement and the Mortgages, to sell the Mortgaged Properties, with or without
taking possession thereof, at public sale in the county where the Mortgaged
Properties or any portion thereof are located, without any order of any court
or judge and without any notice to any Borrower, after advertising such sale
once a week for four (4) weeks in the newspaper in which the sheriff's
advertisements for any county in which any of the Mortgaged Properties or any
portion thereof is located may at that time be published (that is, one
insertion each week for each of the four (4) weeks immediately preceding the
day on which the sale is to take place, regardless of the number of days or
calendar weeks between the date of the first publication and the date of the
sale) and to execute and deliver to the purchaser or purchasers thereof a deed
or deeds or other instruments in conveyance of the Mortgaged Properties, with
warranty in the name of the Agent, and to do any and all other things that may
be necessary or proper to complete and consummate said sale or sales. If the
Mortgaged Properties are sold at public outcry, the Agent may purchase the
same. All recitals of facts as to default, advertisement and sale in any deed
executed by the Agent pursuant to the powers herein contained, absent manifest
error, shall be conclusive evidence of the truth thereof against the
Borrowers. The rights and powers hereby conferred upon the Agent, its
successors and assigns, are coupled with an interest and shall be irrevocable
by the Borrowers. In the event of a sale under the power of sale herein
given, the Borrowers, or any persons in possession under them, shall then
become and be tenants holding over and shall forthwith deliver possession to
the Purchaser at such sale, or be forthwith dispossessed in accordance with
the provisions of law applicable to a tenant's holding over.

9.6.4 To exercise all of the remedies of a "secured party"
under the Code or of any other applicable laws. In addition to, and without
limitation on, any rights of a secured party under the Code or any other
applicable laws, the Agent, may, and at the direction of the Required Lenders,
shall, without being required to give any notice, except as hereinafter
provided or as may be required by mandatory provisions of applicable law, sell
all or any part of the Collateral, at public or private sale or at any
broker's board or on any securities exchange, for cash, on credit or for
future delivery, and at such price or prices as the Agent may deem
satisfactory. The Agent, on behalf of the Lenders, may be the purchaser of
any or all of the Collateral so sold at any public sale (or, if the Collateral
is of a type customarily sold in a recognized market or is of a type which is
the subject of widely distributed standard price quotations, at any private
sale) and thereafter hold the same, absolutely, free from any right or claim
of whatsoever kind. Upon any such sale the Agent shall have the right to
deliver, assign and transfer to the purchaser thereof, the Collateral so sold.

Each purchaser at any such sale shall hold the Collateral so sold absolutely,
free from any claim or right, including any equity or right of redemption of
the Borrowers and, to the extent permitted by law, the Borrowers waive all
rights of redemption, stay or appraisal which any of them has or may have
under any rule of law or statute now existing or hereafter adopted, provided,
however, the foregoing is not intended and shall not have the effect of
clogging any Borrower's equitable right of redemption or foreclosing any
Borrower's statutory right of redemption prior to any such sale. The Agent
shall give the Borrowers ten (10) days' written notice of its intention to
make any such public or private sale or sale at a broker's board or on a
securities exchange. Such notice, in case of a public sale, shall state the
time and place fixed for such sale, and, in case of sale at a broker's board
or on a securities exchange, shall state the board or exchange at which such
sale is to be made and the day on which the Collateral, or the portion thereof
so being sold, will first be offered for sale at such board or exchange. Any
such public sale shall be held at such time or times within ordinary business
hours and at such place or places as the Agent may fix in the notice of such
sale. At any such sale, any portion of the Collateral may be sold in one lot
as an entirety or in separate parts, as the Agent may determine. The Agent
shall not be obligated to make any such sale pursuant to any such notice. The
Agent may, without notice or publication, adjourn any public or private sale
or cause the same to be adjourned from time to time by announcement at the
time and place fixed for the sale, and such sale may be made at any time or
place to which the same may be announced at the sale so adjourned. In case of
any sale of all or any part of the Collateral on credit or for future
delivery, the Collateral so sold may be retained by the Agent until the
selling price is paid by the purchaser thereof, but the Agent shall not incur
any liability in case of the failure of such purchaser to take up and pay for
the Collateral so sold and, in case of any such failure, such Collateral may
again be sold upon like notice. The Agent, instead of exercising the power of
sale herein conferred upon it, may proceed by a suit or suits at law or in
equity to foreclose the security interests assigned or granted to the Agent
and sell the Collateral, or any portion thereof, under a judgment or decree of
a court or courts of competent jurisdiction.

9.6.5 In case of a foreclosure sale of all or any part of the
Mortgaged Properties or other Collateral and of the application of the
proceeds of sale to the payment of the Obligations secured by the Mortgage and
other Security Documents, the Agent shall be entitled to enforce payment of
and to receive all amounts then remaining due and unpaid upon the Notes, and
shall be entitled to recover judgment for any portion of the Obligations
remaining unpaid, with interest at the Default Rate.

9.6.6 The Borrowers agree, to the full extent that they may
lawfully so agree, that no recovery of any such judgment by the Agent or
Lenders and no attachment or levy of any execution upon any such judgment upon
any of the Mortgaged Properties or other Collateral or upon any other property
shall in any manner or to any extent affect the lien of the Mortgages or other
Security Documents upon the Mortgaged Properties or other Collateral or any
part thereof or any Lien, rights, powers or remedies of the Agent or Lenders
hereunder, but such Lien, rights, powers and remedies shall continue
unimpaired.

9.Agent under this Section 9.6 shall be applied in the manner set
forth in Section 2.8.

9.6.8 Upon any foreclosure sale pursuant to judicial
proceedings, the Agent, on behalf of the Lenders, may bid for and purchase all
or any portion of the Mortgaged Properties or other Collateral and, upon
compliance with the terms of sale, may hold, retain and possess and dispose of
Collateral without further accountability to the Borrowers.

9.7 Waiver of Appraisement, Valuation, Stay and Extension. The
Borrowers agree (to the full extent permitted by law) that in case of an Event
of Default on its part hereunder, no Borrower nor anyone claiming by, through
or under any Borrower, shall or will set up, claim or seek to take advantage
of any appraisement, valuation, stay or extension laws now or hereafter in
force, in order to prevent or hinder the enforcement or foreclosure of the
Mortgage or the final and absolute sale of any portion of the Collateral or
the final and absolute possession of Mortgaged Properties or other Collateral
by the purchasers in foreclosure and the Borrowers, for themselves and for all
who may at any time claim by, through, or under it, hereby waive (to the full
extent that it may lawfully do so) the benefit of all such laws and any and
all right to have the assets comprising the Mortgaged Properties and other
Collateral marshalled upon any foreclosure and the Borrowers agree that the
Mortgaged Properties and other Collateral may be sold in its entirety.

9.8 Suits to Protect the Collateral. The Agent may, and upon the
direction of the Required Lenders shall, take all measures (a) to institute
and maintain such suits and proceedings as it may deem expedient to prevent
any impairment of the Mortgaged Properties or other Collateral by any acts
which may be unlawful or which violate the Mortgage, any Security Document, or
this Agreement, or any other Loan Document; (b) to preserve or protect the
Lenders' interest in the Collateral and in the income, revenues, rents and
profits arising therefrom; and (c) to restrain the enforcement of or
compliance with any legislation or other government enactment, rule or order
that may be unconstitutional or otherwise invalid, if the enforcement of or
compliance with such enactment, rule or order would impair the Lenders'
security. All payments made or third-party costs or expenses incurred by the
Agent in connection with this paragraph, including reasonable attorneys' fees
and costs, whether or not suit is filed and, if filed, for all appeals, shall
be secured by the Mortgage and other Security Documents and shall be
immediately repaid by the Borrowers to the Agent on demand, with interest
thereon from the date incurred until the date repaid by the Borrowers at the
Default Rate as provided by the Notes.

9.9 Delay or Omission - No Waiver. No delay or omission of the Agent
or the Lenders to exercise any right, power or remedy accruing upon any
uncured Event of Default shall impair any such right, power or remedy or shall
be a waiver of any such Event of Default or acquiescence therein; and every
right, power and remedy given by this Agreement, any Loan Document or by law
to the Agent or the Lenders may be exercised from time to time and as often as
may be deemed expedient by the Agent and the Required Lenders.

9.10 No Waiver of One Default to Affect Another, Etc. No waiver of
any Event of Default hereunder shall extend to or shall affect any subsequent
or any other then existing Event of Default or shall impair the Lenders'
rights, powers or remedies for the Events of Default not so waived. No waiver
of any Event of Default shall be effective hereunder unless consented to by
the Required Lenders, the Super-Required Lenders or all of the Lenders, as
shall be required in the specific instance.

If the Agent, with the consent of the Required Lenders or the unanimous
consent of all Lenders, as the case may be, (a) grants forbearance or an
extension of time for the payment or performance of any Obligations; (b) takes
other or additional security for the payment of the Notes; (c) waives or does
not exercise any right granted in this Agreement, the Mortgages, the Security
Documents, the Notes or any other Loan Documents; (d) releases any part of the
Collateral from the Lien of the Mortgages or any other Security Document or
otherwise changes any of the terms of this Agreement, the Notes, Mortgages or
the Security Documents or any other Loan Documents; (e) consents to the filing
of any map, plat or replat of any of the Mortgaged Properties; (f) consents to
the granting of any easement or other non-Permitted Exception on any Mortgaged
Property; or (g) makes or consents to any agreement subordinating the Lien of
the Mortgages, any such act or omission shall not release, discharge, modify,
change or affect the Borrowers' original liability under the Notes, the
Mortgages, the other Security Documents, this Agreement, the other Loan
Documents or otherwise, or the original liability of any maker, co-signer,
endorser, surety or guarantor of the Notes, nor shall any such act or omission
preclude the Agent, with the consent of the Required Lenders, from exercising
any right, power or privilege granted in this Agreement or the Mortgages or
Security Documents or any other Loan Documents in the event of any other
concurrent or subsequent Event of Default, nor (except as otherwise expressly
provided in an instrument or instruments executed by the Agent with the
consent of the Required Lenders) shall the lien of the Mortgages or Security
Documents be altered thereby. In the event of the sale or transfer by
operation of law or otherwise of all or any part of the Collateral, the Agent,
with the consent of the Required Lenders, without further notice, is
authorized and empowered to deal with any such transferee as fully and to the
same extent as it might deal with the Borrowers, without in any way releasing
or discharging any of the Borrowers' liabilities or obligations hereunder,
provided, however, the foregoing shall not be construed or deemed to
constitute the approval of the Agent or the Lenders to any such sale or
transfer otherwise prohibited hereby.

9.11 Discontinuance of Proceedings - Position of Parties Restored. In
case the Agent shall have proceeded to enforce any right or remedy under the
Mortgages or Security Documents or other Loan Documents by foreclosure, entry
or otherwise and such proceedings shall have been discontinued or abandoned
for any reason or shall have been determined adversely to the Agent, then and
in every such case, the Borrowers, the Agent and the Lenders shall be restored
to their former positions and rights hereunder and all rights, powers and
remedies of the Agent the Lenders shall continue as if no such proceeding
occurred.

9.12 Remedies Cumulative. No right, power or remedy conferred upon or
reserved to the Agent or Lenders by this Agreement is intended to be exclusive
of any other right, power or remedy, but each and every such right, power and
remedy shall be cumulative and concurrent and shall be in addition to any
other right, power and remedy given hereunder or under any other Loan Document
or now or hereafter existing at law or in equity or by statute.

ARTICLE 10. RELATIONSHIP OF AGENT AND OTHER LENDERS

10.1 Appointment, Powers and Immunities.

10.1.1 Each Lender hereby irrevocably appoints and authorizes
the Agent to act as its agent hereunder and under the other Loan Documents
with such powers as are specifically delegated to the Agent by the terms of
this Agreement and of the other Loan Documents, together with such other
powers as are reasonably incidental thereto. The Agent (which term as used in
this Agreement shall include reference to its affiliates, successors and
assigns, by merger, acquisition, consolidation or reorganization and its own
and its affiliates' officers, directors, employees and agents): (a) shall
have no duties or responsibilities except those expressly set forth in this
Agreement and in the other Loan Documents, and shall not by reason of this
Agreement or any other Loan Document be a trustee or fiduciary for any Lender,
(b) shall not be responsible to the Lenders for any recitals, statements,
representations or warranties contained in this Agreement or in any other Loan
Document, or in any certificate or other document referred to or provided for
in, or received by any of them under, this Agreement or any other Loan
Document, or for the value, validity, effectiveness, genuineness,
enforceability or sufficiency of this Agreement or any other Loan Document or
any other document referred to or provided for herein or therein or for any
failure by any Borrower or other Lender or any other Person to perform any of
its obligations hereunder or thereunder, (c) shall not be required to initiate
or conduct any litigation or collection proceedings hereunder or under any
other Loan Document except upon the consent of the Required Lenders thereto
and (d) shall not be responsible to the Lenders for any action taken or
omitted to be taken by it hereunder or under any other Loan Document or under
any other document or instrument referred to or provided for herein or therein
or in connection herewith or therewith, except for its own gross negligence or
willful misconduct as determined by a final judgment of a court of competent
jurisdiction. The Agent may employ agents and attorneys-in-fact and shall not
be responsible for the negligence or misconduct of any such agents or
attorneys-in-fact selected by it in good faith. The Agent may deem and treat
the payee of any Note as the holder thereof for all purposes hereof unless and
until a notice of the assignment or transfer thereof shall have been filed
with the Agent.

10.1.2 Subject to the limitations contained herein, the
Agent's power shall include, but not be limited to the powers: (i) to
administer, control, manage and service the Loans; (ii) at the direction of
the Required Lenders, to enforce or refrain from enforcing the terms and
conditions of this Agreement and the other Loan Documents; (iii) to make all
decisions hereunder and under the Loan Documents, in connection with the day
to day administration of the Loans, including, without limitation, the conduct
of inspections and other routine administration and servicing matters; (iv) to
collect and receive from the Borrowers or any other Persons all payments of
amounts due under the terms of the Loan Documents and to distribute such
amounts to the Lenders in accordance with their rights hereunder; and (v) to
exercise all such powers as are incidental to any of the foregoing matters.

10.1.3 The Agent shall, within ten (10) Business Days
following its receipt of same, promptly furnish to each of the other Lenders,
accurate copies of all Financial Statements, Annual Business Plans, Economic
Models, Monthly Compliance Certificates and other financial reports submitted
by the Borrowers or any of them in satisfaction of the requirements of
Section 6.1 hereof, copies of all notices received by the Agent pursuant to
Sections 6.6 and 6.12, copies of all Appraisals obtained by the Agent pursuant
to Section 6.14, copies of all insurance certificates and policies received by
the Agent pursuant to Section 6.15, copies of all updated opinions of counsel,
if any, received by the Agent pursuant to Section 6.19, copies of all
Environmental Audits received by the Agent pursuant to Section 6.22, and
copies of all additional documents, if any, received by the Agent pursuant to
Section 6.20 and the Agent shall, within three (3) Business Days following its
receipt of same, promptly furnish to each of the other Lenders, copies of any
Notice of Default received by the Agent pursuant to Section 10.3.1.
Notwithstanding the foregoing, however, the Agent shall not be obligated to
provide to any Lender: (a) any other credit or information concerning the
affairs, financial condition or business of any of the Borrowers that may come
into the possession of the Agent or any of its affiliates, nor to update or
correct any information previously given which becomes incorrect or which the
Agent learns is incorrect (provided, however, that: (i) if any such
information or update or correction of any information materially affects any
of the information set forth in the materials delivered by the Agent to the
other Lenders pursuant to the first sentence of this Section or the Agent's
obtaining of such information otherwise means the Agent has "actual
knowledge", as defined in Section 10.3.1, of the occurrence of an Event of
Default, the Agent shall promptly furnish to the other Lenders such
information and (ii) in any event, upon the written request of any Lender
requesting specific information regarding the Borrowers obtained by the Agent
in connection with the Loans, the Agent shall copy and furnish such
information to such Lender, at such Lender's expense) or (b) any confidential
information about the Borrowers set forth in reports of bank examiners from
regulatory authorities having jurisdiction over the Agent. The Agent shall
not be required to provide any such information more than one time and
subsequent requests by any other Lender therefor shall only be deemed to refer
to information obtained by the Agent from and after the date of its last
submission. All expenses incurred by the Agent incident to the submission of
any such information, to the extent not paid or reimbursed by the Borrowers
shall be deemed an Agent's Expense as defined in Section 10.3.3.

10.1.4 The Agent shall endeavor to exercise its powers
hereunder with the same standard of care as the Agent customarily exercises
with respect to similar transactions entered into for its own account.
Notwithstanding the foregoing, the Agent shall have no liability or
responsibility to the Lenders for any action taken or committed to be taken
hereunder or under any other Loan Document or under any other document or
instrument referred to or provided for herein or therein or in connection
herewith or therewith, except for its own gross negligence or willful
misconduct as determined by a final judgment of a court of competent
jurisdiction.

10.2 Reliance by Agent. The Agent shall be entitled to rely upon any
certification, notice or other communication (including, without limitation,
any thereof by telephone, telecopy, telex, telegram or cable) believed by it
to be genuine and correct and to have been signed or sent by or on behalf of
the proper Person or Persons, and upon advice and statements of legal counsel,
independent accountants and other experts selected by the Agent. As to any
matters not expressly provided for by this Agreement or any other Loan
Document, the Agent shall in all cases be fully protected in acting, or in
refraining from acting, hereunder or thereunder in accordance with
instructions given by the Required Lenders or all of the Lenders as is
required in such circumstance, and such instructions of such Lenders and any
action taken or failure to act pursuant thereto shall be binding on all the
Lenders.

10.3 Events of Defaults.

10.3.1 In the event the Agent or any other Lender acquires
"actual knowledge" (which term means actual knowledge of any of its officers
having primary day-to-day responsibility for administration of the Loans)
thereof, it will promptly notify each of the other Lenders of the occurrence
of any Event of Default hereunder or under any of the other Loan Documents.
The Agent shall not be deemed to have actual knowledge of the occurrence of an
Event of Default (other than the nonpayment of principal and interest on
Advances or of Facility Fees, late fees or expenses) unless the Agent has
received notice from a Lender or a Borrower specifying such Event of Default
and stating that such notice is a "Notice of Default". In the event that the
Agent or any other Lender shall receive such a Notice of Default, or upon an
Event of Default with respect to the payment of principal or interest on
Advances, Facility Fees, late fees or expenses, the Agent or such other
Lender, as the case may be, shall give prompt notice thereof to all of the
Lenders.

10.3.2 Promptly following receipt by each of the Lenders of a
Notice of Default, the Agent and the Lenders shall consult with each other to
attempt to reach a mutually acceptable decision regarding the course of action
to be taken by the Agent with respect to such Event of Default. The Agent
shall take such action or actions, assert such rights, exercise such remedies
and/or waive such Events of Default or refrain from taking any such actions
with respect thereto, as agreed to in writing by the Required Lenders or the
Super-Required Lenders or all of the Lenders, in accordance with the
provisions of Section 10.9. However, in the event that the Required Lenders,
the Super-Required Lenders or all of the Lenders, as the case may be, do not
so agree on a course of action within ten (10) Business Days following the
receipt by the Lenders of any such Notice of Default, then the Agent shall
have the right (but not the obligation), at any time prior to the agreement by
the Required Lenders, the Super-Required Lenders or all of the Lenders, as the
case may be, to pursue a course of action: (i) to proceed to exercise all or
some of the remedies provided in Article 9 and such other remedies as the
Agent shall reasonably determine to be necessary and/or (ii) for a period not
to exceed thirty (30) days after the end of the ten (10) Business Days
following the Lenders' receipt of any such Notice of Default, to forbear from
exercising all or some of the remedies provided in Article 9. In the event
that the Required Lenders, the Super-Required Lenders or all of the Lenders,
as the case may be, have not agreed upon a course of action within the thirty
(30) day period described in subpart (ii) of the foregoing sentence, then the
Agent shall have the right (but not the obligation), to commence to take such
action or actions, assert such rights, exercise such remedies or refrain from
taking such actions with respect thereto, including, without limitation
accelerating the Loans, as the Agent shall reasonably determine to be
necessary to protect and enforce the interests and rights of the Lenders and
all of the Lenders shall cooperate fully in connection with the course of
action so determined by the Agent; provided, however, that in the case of an
Event of Default pursuant to Section 8.1 or Section 8.2 hereof, if the
Required Lenders or the Super-Required Lenders, as the case may be, have not
otherwise agreed, the Agent shall not waive any such Event of Default
described therein.

10.3.3 Each of the Lenders shall, within five (5) Business
Days following request therefor in writing, accompanied by reasonably
sufficient supporting materials, pay to the Agent its Committed Share of all
costs and expenses incurred by the Agent in the exercise of its rights and
obligations hereunder, including, without limitation, those costs and expenses
described in Section 11.20 not previously paid or reimbursed to the Agent by
the Borrowers (the "Agent's Expenses").

Mortgaged Properties or other Collateral after the occurrence of
any Event of Default (upon the institution of foreclosure proceedings or
otherwise) the Agent shall collect all sales proceeds, rents and other
operating revenues and pay all expenses incurred by it in connection with the
management of the Mortgaged Properties or other Collateral. All management
and other fees and expenses paid by the Agent shall be deducted from the
rents and/or sales proceeds collected, or if such rents and sales proceeds
are insufficient, such fees and expenses shall be paid by the Agent and
such fees and expenses shall be deemed Agent's Expenses as defined in
Section 10.3.3; and each Lender shall, within five (5) Business Days
following request therefor, accompanied by reasonably sufficient supporting
materials, pay to the Agent upon demand such Lender's Committed Share thereof.

10.3.5 In the event of a foreclosure sale of all or a portion
of the Mortgaged Properties or other Collateral, the Agent shall bid at the
foreclosure sale to raise any bid made by others at said sale, up to the
highest price agreed upon by the Required Lenders, or if the Required Lenders
shall not agree thereon within ten (10) Business Days following request
therefor by the Agent, the highest price determined by the Agent in the
exercise of its reasonable discretion, not to exceed the amount of the
judgment. Upon completion of a foreclosure sale and the conveyance of such
Mortgaged Properties or other Collateral to the highest bidder, the Agent
shall render an accounting for all monies received and monies expended between
the date of taking possession of such Mortgaged Properties or other Collateral
and the date of conveyance to the highest bidder, including, without
limitation the Agent's Expenses in connection with such foreclosure and sale.
If the highest bidder shall be someone other than the Agent, then, upon
receipt from the highest bidder of the amount of the bid, the Agent will remit
to each Lender its Actual Share of the net amount received from the sale to
such Lender, which amount shall be net of all Agent's Expenses incurred by
Agent not previously reimbursed by such Lender to the Agent. If the highest
bidder shall be the Agent, then the Agent will cause to be executed, delivered
and recorded deeds as to such Mortgaged Properties or other Collateral to the
Lenders, or their nominees, as tenants in common, as soon as is practicable.
In the event that any of the Mortgaged Properties or other Collateral are so
deeded to the Lenders or their nominees, as tenants in common, the Lenders or
their nominees waive all statutory or common law rights of partition, or other
similar rights and remedies with respect to such Mortgaged Properties and
other Collateral. If the highest bidder shall be the Agent, then this
Agreement shall continue in force and effect during such ownership of the
Mortgaged Properties and other Collateral and this Agreement shall govern the
rights and obligations of the parties in connection with such ownership,
provided, however, that as soon as reasonably possible following delivery of
title to the Mortgaged Properties and/or other Collateral to the Lenders, as
tenants in common, the Agent shall prepare a comprehensive business plan with
respect to the management, development and/or disposition of the Mortgaged
Properties and other Collateral (the "Disposition Plan"); upon the approval of
the Required Lenders to the Disposition Plan, the Agent shall proceed to put
into effect the course of action required by such Disposition Plan.

10.3.6 Upon the consent of the Super-Required Lenders, the Agent
may, in connection with the sale of all or a portion of the Mortgaged
Properties or other Collateral, take back from the purchaser thereof a
purchase money obligation and mortgage instrument and/or security interest
therein. If a purchase money obligation and mortgage instrument or security
interest shall be taken in part payment for the sale of any of the Mortgaged
Properties or other Collateral acquired by the Lenders or their nominees, as
the case may be, such Lenders or nominees hereby agree to enter into an
agreement with respect to such obligation and mortgage instrument or security
interest, defining their rights in the same, in accordance with their
respective Actual Shares, which agreement shall be in all material respects
similar to this Agreement, to the extent this Agreement is appropriate or
applicable. In the absence of any such agreement, the obligation and mortgage
instrument or security interest shall be held by the Agent for the ratable
benefit of the Lenders or their nominees, in accordance with their Actual
Shares, and shall be subject to the terms of this Agreement to the extent
applicable.

10.3.7 The Agent, upon the consent of the Required Lenders, or
upon the failure of the required Lenders to grant consent within ten (10)
Business Days following written request therefor, shall have the right to
employ such Persons (including, without limitation, attorneys) in connection
with the enforcement of any rights under this Agreement or the other Loan
Documents or in connection with the administration of the Loans, other than
the routine safekeeping of documents, the receipt of monies, the disbursement
of monies, the bookkeeping thereof and the rendering of statements thereof;
and the Lenders shall promptly pay to the Agent their Committed Shares of the
fees and expenses of such other Persons, to the extent that the same shall not
be promptly reimbursed to the Agent by the Borrowers or out of the Collateral,
and such fees and expenses shall be deemed Agent's Expenses as defined in
Section 10.3.3. The Lenders shall have the right to an accounting for any and
all Agent's Expenses incurred by the Agent in connection with any such
employment of attorneys or other Persons.

10.4 Rights as a Lender. With respect to its Committed Share of the
Commitments and Actual Share of the Loans, the Agent (and any successor acting
as Agent) shall have the same rights and powers hereunder as any other Lender
and may exercise the same as though it were not acting as Agent and the term
"Lender" or "Lenders" shall, unless the context otherwise indicates, include
the Agent in its capacity as a Lender. In the event of the termination of the
Agent's status as Agent hereunder, it shall retain all of its rights and
obligations in its capacity as a Lender and same shall survive and continue in
full force and effect, including, without limitation, the right to receive its
Actual Share of any amounts of principal, interest, Facility Fees, late fees
and expenses due under or in connection with the Loans to the extent recovered
in immediately available funds, by any successor Agent, and also including its
right to an accounting for any and all expenses incurred by such successor
Agent in connection with any enforcement actions with respect to the Loans.

10.5 Indemnification.

10.5.1 The Lenders agree to indemnify the Agent and its
officers, directors and shareholders (to the extent not reimbursed by the
Borrowers hereunder and without limiting the Obligations of the Borrowers
hereunder) ratably in accordance with their respective Committed Shares, for
any and all claims of any kind and nature whatsoever that may be imposed on,
incurred by or asserted against the Agent (including by any Lender) arising
out of or by reason of any investigation in or in any way relating to or
arising out of this Agreement or any other Loan Document or any other
documents contemplated by or referred to herein or therein or the transactions
contemplated hereby or thereby (including, without limitation, the costs and
expenses that the Borrowers are obligated to pay hereunder) or the
administration or enforcement of any of the terms hereof or thereof or of any
such other documents, including, without limitation, in connection with the
exercise of any rights or the taking of any action at the direction of the
Required Lenders or all of the Lenders, as the case may be; provided that no
Lender shall be liable for any of the foregoing to the extent they arise from
the gross negligence or willful misconduct of the Agent as determined by a
final judgment of a court of competent jurisdiction.

10.5.2 Except for action expressly required of the Agent
hereunder and under the other Loan Documents, the Agent shall in all cases be
fully justified in failing or refusing to act hereunder and thereunder unless
it shall receive further assurances to its satisfaction from the Lenders of
their indemnification obligations under Section 10.5 hereof against any and
all liability and expense that may be incurred by it by reason of taking or
continuing to take any such action.

10.6 Non-Reliance on Agent and Other Lenders. Each Lender agrees that
it has, independently and without reliance on the Agent or any other Lender,
and based on such documents and information as it has deemed appropriate, made
its own credit analysis of the Borrowers and decision to enter into this
Agreement and that it will, independently and without reliance upon the Agent
or any other Lender, and based on such documents and information as it shall
deem appropriate at the time, continue to make its own analysis and decisions
in taking or not taking action under this Agreement or any of the other Loan
Documents. The Agent shall not be required to keep itself informed as to the
performance or observance by any Borrower of this Agreement or any of the
other Loan Documents or any other document referred to or provided for herein
or therein or to inspect the properties or books of any of the Borrowers.

10.7 Resignation of the Agent. Subject to the appointment and
acceptance of a successor Agent as provided below, the Agent may resign at any
time by giving notice thereof to the Lenders and the Borrowers. Upon any such
resignation the Required Lenders shall appoint a successor Agent, which shall
have an S&P rating of not less than BBB+ (Long and Short Term Debt). Upon the
acceptance of any appointment as the Agent hereunder by a successor Agent,
such successor Agent shall thereupon succeed to and become vested with all the
rights, powers, privileges and duties of the retiring Agent, and the retiring
Agent shall be discharged from its duties and obligations hereunder. After any
retiring Agent's resignation hereunder as Agent, the provisions of this
Section 10 shall continue in effect for its benefit in respect of any actions
taken or omitted to be taken by it while it was acting as Agent.

10.8 Removal of the Agent.

10.8.1 Subject to a showing of gross negligence or willful
misconduct, all of the other Lenders, acting unanimously, may require the
Agent to resign at any time by providing such Agent and the Borrowers with a
written request from all such other Lenders for such Agent's resignation.

10.8.2 In the event that the Agent's Committed Share of all of
the Commitments shall in the aggregate at any time be less than the lesser of
(x) five percent (5%) of the total amount of all of the Commitments and (y)
$5,000,000.00, the Agent shall resign.

10.8.3 Upon any required resignation of the Agent under this
Section, the Required Lenders shall appoint another Lender as successor Agent;
provided that such Lender satisfies the qualifications for a successor Agent
upon the voluntary resignation of an Agent pursuant to Section 10.7 or, if
none, another entity meeting those qualifications.

10.9 Consents under Loan Documents. Notwithstanding the provisions of
this Agreement which provide that certain matters require the consent or
approval of the Required Lenders, the Agent and the Lenders hereby agree that:
(a) the following matters shall require the consent of the Super-Required
Lenders: (i) any event described in Section 7.8, (ii) the waiver of any Event
of Default described in Section 8.1, or arising out of a breach of any of the
financial covenants set forth in Section 6.13; and (b) the following matters
shall require the consent of all of the Lenders: (i) any increase or extension
of the Commitment of any Lender (except pursuant to any assignment made under
the terms of Section 11.21.2); (ii) the postponement or delay of any date
fixed by this Agreement or any other Loan Document for any payment of
principal, interest, fees or other amounts due to the Agent, the Lenders, or
any of them, hereunder or under any other Loan Documents; (iii) any reduction
or forgiveness of any outstanding principal or interest; (iv) any change in
any Effective Rate specified herein or in the Notes, with respect to the
Loans; (v) any reduction or forgiveness of any Facility Fees, late fees or
other fees or other amounts payable hereunder or under any other Loan
Document; (vi) any change in the percentage of the Committed Shares required
for the Lenders or any of them to take any action hereunder; (vii) any
amendment of this Section or any provision herein providing for consent or any
other action by the Required Lenders, the Super-Required Lenders, or all of
the Lenders; (viii) any release of any Collateral or other termination of any
Lien under the Mortgage or any other Security Document, except that the Agent
may grant a Partial Release therefrom pursuant to the terms of Section 3.2; or
(ix) any release of any of the Borrowers from their Obligations.
Notwithstanding the foregoing, no amendment, waiver or consent shall, unless
in writing and signed by the Agent, in addition to the Required Lenders, the
Super-Required Lenders, or all of the Lenders, as the case may be, affect the
rights or duties of the Agent under this Agreement or under any other Loan
Document.

10.10 Collateral Matters.

10.10.1 Except as otherwise expressly provided for in this
Agreement, and subject to the provisions of Section 10.1, the Agent shall have
no obligation whatsoever to any Lender or any other Person to investigate,
confirm or assure that the Collateral exists or is owned by any Borrower or is
cared for, protected or insured or has been encumbered, or that the Liens
granted to the Agent herein or pursuant hereto have been properly or
sufficiently or lawfully created, perfected, protected or enforced or are
entitled to any particular priority, or to exercise at all or in any
particular manner or under any duty of care, disclosure or fidelity, or to
continue exercising, any of the rights, authorities and powers granted or
available to the Agent in this Agreement or in any of the other Loan
Documents, it being understood and agreed that in respect of the Collateral,
or any act, omission or event related thereto, the Agent may act in any manner
it may deem appropriate, in its sole discretion, given the Agent's own
interest in the Collateral as a Lender and that the Agent shall have no duty
or liability whatsoever to any other Lender, other than liability for its own
gross negligence or willful misconduct as determined by a final judgment of a
court of competent jurisdiction.

10.10.2 Each Lender hereby appoints each other Lender as agent
for the purpose of perfecting the Lenders' security interest in assets which,
in accordance with Article 9 of the Code can be perfected only by possession.
Should any Lender (other than the Agent) have or obtain possession of any such
Collateral, such Lender shall notify the Agent thereof and shall hold such
Collateral for the benefit of the Lenders or, promptly upon the Agent's
request therefor, shall deliver such Collateral to the Agent or in accordance
with the Agent's instructions.

10.11 Representations and Warranties. Each Lender hereby represents
and warrants to the other Lenders that:

10.11.1 Its execution and delivery of this Agreement has been
duly authorized; it has full power and authority to execute this Agreement;
and

10.11.2 It has reviewed all of the Loan Documents and is
familiar with the terms thereof and hereby approve same.

10.11.3 Neither the Agent nor any other Lender shall be deemed
to have made any other representations or warranties, express or implied,
including, without limitation, any representation or warranty as to the
collectibility of the Loans, the enforceability of the Loan Documents, the
continued Solvency of the Borrowers or the continued existence, sufficiency or
value of the Mortgaged Properties or any other Collateral. Neither the Agent
nor any other Lender shall be responsible in any manner to any other Lender
for: (a) the effectiveness, enforceability, genuineness, validity or the
execution of, this Agreement or any of the other Loan Documents, or any other
documents, agreements or instruments; (b) any representation, warranty,
document, certificate, report or statement therein made or furnished under or
in connection with any of the Loan Documents; (c) the adequacy of Collateral
for the Obligations of the Borrowers under any of the Loan Documents; (d) the
existence, priority or perfection of any lien or security interest granted or
purported to be granted in connection with any of the Loan Documents; or
(e) the observance of or compliance with any of the terms, covenants or
conditions of the Loan Documents on the part of the Borrowers.

10.12 Other transactions with the Borrower. The Agent and any other
Lender and its respective affiliates may, subject to the provisions of
Section 2.9.1: (i) accept deposits from, lend money to, act as trustee under
indentures for, and generally engage in any kind of business with any of the
other Borrowers or their respective Subsidiaries and Affiliates and any Person
who may do business with any of them; (ii) exercise rights of offset against
any such Borrower or Subsidiary or Affiliate with respect to any other Loans
to same; (iii) take, as collateral for any such other Loans, any property of
such Borrowers or Subsidiaries or Affiliates (excepting any Mortgaged
Properties or other Collateral, unless previously released from the Lien of
the Security Documents), all without any duty to account therefor to any other
Lender.

ARTICLE 11. MISCELLANEOUS

11.1 Course of Dealing; Amendment; Supplemental Agreements. No course
of dealing between the parties hereto shall be effective to amend, modify, or
change any provision of this Agreement. This Agreement may not be amended,
modified, or changed in any respect except by an agreement in writing signed
by the party against whom such change is to be enforced, and, in any event,
subject to the terms of Section 10.9. The parties hereto may, subject to the
provisions of this Section, from time to time, enter into written agreements
supplemental hereto for the purpose of adding any provisions to this Agreement
or changing in any manner the rights and obligations of the parties hereunder.

Any such supplemental agreement in writing and executed by the parties shall
be binding upon the parties thereto.

11.2 Waiver By Agent or Lenders of Requirements. No failure on the
part of the Agent or Lenders to exercise, and no delay in exercising, any
right, power or remedy under this Agreement or any other Loan Document shall
operate as a waiver thereof or waiver of any Event of Default, nor shall any
single or partial exercise by the Agent or Lenders of any right, power or
remedy exercised under this Agreement or any other Loan Document preclude any
other or further exercise thereof or the exercise of any other right, power or
remedy of the Agent or Lenders. No modification or waiver of any provision of
this Agreement or of any provision of any other Loan Document, nor consent to
any departure therefrom, shall be effective unless the same shall be in
writing and signed by Agent, with the consent of the Required Lenders, or to
the extent required by any other provision of this Agreement, including,
without limitation, Section 10.9, the Super-Required Lenders or all of the
Lenders, and then such waiver or consent shall be effective only in the
specific instance and for the purpose for which it is given.

11.3 Intentionally Deleted.

11.4 Notices.

11.4.1 Notwithstanding any provisions to the contrary
contained in the other Loan Documents, all notices, requests and demands to or
upon the Agent and any Borrower party to this Agreement, pursuant to any Loan
Document, shall be deemed to have been given or made when delivered by hand,
delivered by nationally recognized overnight courier service next Business Day
delivery, delivered by telecopy (upon confirmation of receipt received on a
Business Day), or three (3) Business Days after deposit in the U.S. mail,
postage prepaid by registered or certified mail, return receipt requested,
addressed as follows or to such other address as may be hereafter designated
in writing by one party to the other:

Borrowers: c/o Arvida/JMB Partners, L.P.
900 North Michigan Avenue
Chicago, Illinois 60611-1575
Attn: Mr. Stephen A. Lovelette
Telecopy No. (312) 915-2310

With a Copy to: White & Case
200 South Biscayne Boulevard
Suite 4900
Miami, Florida 33131
Attn: H. William Walker, Jr., Esq.
Telecopy No. (305) 358-5744

and With a Copy to: Arvida Company
7900 Glades Road, 2nd Floor
Boca Raton, Florida 33434
Attn: John Baric, Esq.
Telecopy No. (561) 479-1227

Agent and Barnett Bank, N.A.
Lenders: One East Broward Boulevard
Fort Lauderdale, Florida 33301
Attn: Brian K. Davis,
Vice President
Telecopy No. (954) 765-1506

With a Copy to: Holland & Knight
701 Brickell Avenue, Suite 3000
Miami, Florida 33131
Attn: Robert H. Smith, Esq.
Telecopy No. (305) 789-7799

11.4.2 At the discretion of the Agent, the Agent may require
that all communications, directions and requests, including, without
limitations, Requests for Advances, Requests for Letters of Credit and
Requests for Releases, be executed by a person or persons expressly designated
by the Borrowers as having the authority to make any such communication,
direction, or request to the Agent hereunder.

11.4.3 All communications among the Lenders shall be deemed to
have been given or made when delivered by hand, by nationally recognized
overnight courier service, next day Business Day delivery or when deposited in
the U.S. Mail, postage prepaid by registered or certified mail, return receipt
requested, addressed as set forth on Schedule 2.10.3 hereof, or such other
address as may hereafter be designated in writing by any such Lender, or when
delivered by telex, telecopy, telephone or other teletransmission, to the
extent permitted or required hereunder, pursuant to the instructions set forth
on Schedule 2.10.3, or as same may hereafter be designated in writing by any
such Lender, (but in no event later than three (3) Business Days prior to the
effective date thereof).

11.5 No Waiver; Cumulative Remedies. No omission or failure of the
Agent or Lenders to exercise and no delay in exercising by the Agent or
Lenders of any right, power, or privilege hereunder, shall impair such right,
power, or privilege, shall operate as a waiver thereof or be construed to be a
waiver thereof; nor shall any single or partial exercise of any right, power,
or privilege hereunder preclude any other or further exercise thereof or the
exercise of any other right, power, or privilege. The rights and remedies
provided in the Loan Documents are cumulative and not exclusive of any rights
or remedies provided by law, and the warranties, representations, covenants,
and agreements made therein shall be cumulative, except in the case of
irreconcilable inconsistency, in which case the provisions of this Agreement
shall control.

11.6 Reliance Upon, Survival of and Materiality of Representations and
Warranties, Agreements, and Covenants. All representations and warranties,
agreements, and covenants made by the Borrowers in the Loan Documents are
material and shall be deemed to have been relied upon by the Lenders,
notwithstanding any investigation heretofore or hereafter made by the Lenders,
and shall survive the execution and delivery of the Loan Documents and the
making of the Loan or Loans herein contemplated, and shall continue in full
force and effect so long as any Obligations owed to the Lenders by the
Borrowers pursuant hereto or so long as there shall be any Commitment by the
Lenders to make Loans to the Borrowers hereunder. All statements contained in
any certificate or other paper delivered to the Lenders at any time by or on
behalf of the Borrowers pursuant hereto shall constitute representations and
warranties by the Borrowers hereunder.

11.7 Limitation on Liability of Lenders.

11.7.1 The Agent, the Lenders and their designees, and their
respective directors, officers, employees, attorneys and agents (the
"Indemnified Persons") shall not incur any liability (other than for a
Person's own acts or omissions amounting to gross negligence or willful
misconduct as finally determined pursuant to applicable law by a governmental
authority having jurisdiction) for any acts and omissions arising out of or
related directly or indirectly to this Agreement, or any other Loan Document;
and the Borrowers hereby expressly waive any and all claims and actions (other
than those attributable to a Person's own acts or omissions amounting to gross
negligence or willful misconduct as finally determined pursuant to applicable
law by a governmental authority having jurisdiction) against the Indemnified
Persons, arising out of or related directly or indirectly to any and all of
the foregoing acts, omissions and circumstances.

11.7.2 Neither Agent nor the Lenders nor any of the Indemnified
Persons shall be liable or responsible for: (a) the use which may be made of
any Letter of Credit or for any acts or omissions of the beneficiaries
thereunder in connection therewith; (b) the form, validity, sufficiency,
accuracy, genuineness, or legal effect of documents, or of any endorsements
thereon, even if such documents should in fact prove to be in any or all
respects invalid, insufficient, fraudulent, or forged; (c) payment by the
Agent against presentation of documents which do not comply with the terms of
any Letter of Credit, including failure of any documents to bear any reference
or adequate reference to such Letter of Credit; or (d) any other circumstances
whatsoever in making or failing to make payment under the Letter of Credit.
In furtherance and not in limitation of the foregoing, the Agent may accept
documents that appear on their face to be in order, without responsibility for
further investigation, regardless of any notice or information to the
contrary.

11.7.2.1 The Borrowers hereby agree at all times to
protect, indemnify and save harmless the Agent (but not the other Lenders) and
the Agent's Indemnified Persons from and against any and all claims, actions,
suits, proceedings, damages, losses, liabilities, costs, counsel fees, and
other expenses of any kind whatsoever which the Agent (but not the other
Lenders) or the Agent's Indemnified Persons may sustain or incur (or which may
be claimed against the Agent (but not the other Lenders) or any of the Agent's
Indemnified Persons by any Person or entity whatsoever), by reason of or in
connection with the issuance of or payment under any Letter of Credit; it
being the intention of the parties that this Agreement shall be construed and
applied to protect and indemnify the Agent (but not and the other Lenders) and
the Agent's Indemnified Persons against any and all risks involved in the
issuance of any Letter of Credit, all of which risks are hereby assumed by the
Borrowers, including, without limitation, any and all risks of the acts or
omissions, whether rightful or wrongful, of any present or future de jure or
de facto government or governmental authority. The Agent and Lenders and
Indemnified Persons shall not, in any way, be liable for any failure by the
Agent to pay any draw under any Letter of Credit as a result of any such
governmental act or omission or any other cause beyond the control of the
Agent or Lenders.

11.7.2.2 Notwithstanding anything herein to the
contrary contained in this Section 11.7, the Borrowers shall not be required
to indemnify the Agent or Lenders or Indemnified Persons for any claims,
actions, suits, proceedings, damages, losses, liabilities, costs, counsel
fees, or other expenses to the extent, but only to the extent, caused by
(a) the willful misconduct or gross negligence of the Agent or Lenders under
or in connection with this Agreement or any other Loan Documents or the
transactions contemplated hereby, including, without limitation, in
determining whether a sight draft or certificate presented under the Letter of
Credit complies with the terms of the Letter of Credit or (b) the Agent's
willful or grossly negligent failure to pay under the Letter of Credit after
the presentation to it by the beneficiary thereof of a sight draft and
certificate strictly complying with the terms and conditions of the Letter of
Credit. The agreements in this Section shall survive repayment of all other
amounts payable hereunder or pursuant thereto, now or in the future.

11.7.2.3 Notwithstanding anything herein to the
contrary, under no circumstance shall an Indemnified Person be responsible or
liable to any other party hereto, any successor, assignee or third-party
beneficiary of such Person or any other Person asserting claims derivatively
through such party, for indirect, punitive, exemplary or consequential damages
which may be alleged as a result of credit having been extended under the Loan
Documents or otherwise in connection with any transaction contemplated herein
or under any other Loan Documents.

11.7.2.4 Without limiting the generality of the
foregoing, in any suit, proceeding or action brought by the Agent or the
Lenders relating to any Account, General Intangible, Instrument or Equipment,
or any sum owing thereunder, or to enforce any provision of any Account or
General Intangible, Borrowers shall save, indemnify and keep the Agent and the
Lenders and Indemnified Persons harmless from and against all expenses, loss
or damage suffered by reason of any defense, setoff, counterclaim, recoupment
or reduction of liability whatsoever of the obligor thereunder arising out of
a breach by any Borrower of any obligation thereunder or arising out of any
other agreement, indebtedness, or liability at any time owing to, or in favor
of, such obligor or successors from any Borrower and all such obligations of
the Borrowers shall be and remain enforceable against and only against the
Borrowers and shall not be enforceable against the Agent or the Lenders or the
Indemnified Persons or any of them.

11.7.2.5 The Borrowers hereby acknowledge and agree
that neither the Agent nor any Lender nor any Indemnified Person (i) is now or
ever has been in control of any of the Collateral or the affairs of the
Borrowers or (ii) has the capacity through the provisions of the Loan
Documents to influence the conduct of the Borrowers with respect to the
ownership, operation or management of the Collateral.

11.8 Liens; Setoff. The Borrowers hereby grant to the Agent and the
Lenders a continuing Lien to secure all Obligations of the Borrowers to the
Agent and the Lenders whether created hereunder, pursuant hereto, or otherwise
upon any and all monies, securities and other property of the Borrowers and
the proceeds thereof, now or hereafter held or received by or in transit to,
the Agent or the Lenders from or for the Borrowers, and also upon any and all
deposits (general or special) and credits of the Borrowers, if any, at the
Agent or any Lender, at any time existing, including, without limitation, the
Bank Accounts. Upon the occurrence of any uncured Event of Default, the Agent
and the Lenders are hereby authorized at any time and from time to time,
without notice to the Borrowers, to set off, appropriate, and apply any or all
items hereinabove referred to against all Obligations of the Borrowers owed to
the Agent and the Lenders, whether under the Loan Documents or otherwise,
whether now existing or hereafter arising. The Agent and the Lenders shall be
deemed to have exercised such right of setoff and to have made a charge
against such items immediately upon the occurrence of such Event of Default
although made or entered on their respective books subsequent thereof.

11.9 Severability and Enforceability of Provisions. In the event that
any one or more of the provisions of the Loan Documents is determined to be
invalid, illegal, or unenforceable in any respect as to one or more of the
parties, all remaining provisions nevertheless shall remain effective and
binding on the parties thereto and the validity, legality, and enforceability
thereof shall not be affected or impaired thereby. If any such provision is
held to be illegal, invalid, or unenforceable, there will be deemed added in
lieu thereof a provision as similar in terms to such provision as is possible,
that is legal, valid, and enforceable. To the extent permitted by applicable
law, the parties hereby waive any law that renders any such provision invalid,
illegal, or unenforceable in any respect.

11.10 Obligations Absolute. The Obligations of the Borrowers under this
Agreement are primary, absolute, independent, unconditional, and irrevocable,
and shall be paid and performed strictly in accordance with the terms of this
Agreement, under all circumstances whatsoever, including without limitation,
the following circumstances:

11.10.1 Any lack of validity or enforceability of any portion
of any Letter of Credit, this Agreement, or any agreement or instrument
relating thereto;

11.10.2 Any amendment or waiver of or any consent to or actual
departure from any Letter of Credit, this Agreement, or any agreement or
instrument relating thereto;

11.10.3 Any exchange, release, or non-perfection of any
Collateral;

11.10.4 The existence of any claim, setoff, defense or other
right which any Borrower may have at any time against any beneficiary of any
Letter of Credit (or any persons or entities for whom such beneficiary may be
acting), or any other Person or entity, whether in connection with this
Agreement, any Letter of Credit, the transactions contemplated herein or
therein, or any unrelated transaction;

11.10.5 Any demand, certificate, statement, sight draft, or
other document presented under any Letter of Credit proving to be forged,
fraudulent, invalid, or insufficient in any respect or any statement therein
being untrue or inaccurate in any respect whatsoever;

11.10.6 Payment by the Agent under any Letter of Credit against
presentation of a demand, draft, or certificate which does not comply with the
terms of the Letter of Credit, provided that such payment shall not have
constituted gross negligence or willful misconduct of the Agent;

11.10.7 Any delay, extension of time, renewal, compromise, or
other indulgence or modification granted to or agreed by the Agent or Lenders,
with or without notice to or approval by the Borrowers in respect of any of
the Borrowers' Obligations to the Lenders under this Agreement; or

11.10.8 The failure of the Agent to give any notice to the
Borrowers hereunder.

11.11 Waiver of Notice, Etc. Except as otherwise provided for in this
Agreement, the Borrowers waive, to the fullest extent permitted by applicable
law, (a) presentment, demand and protest and notice of presentment, dishonor,
notice of intent to accelerate, notice of acceleration, default, nonpayment,
maturity, release, compromise, settlement, extension or renewal of any or all
of the Loan Documents and hereby ratify and confirm whatever the Agent or the
Required Lenders may do in this regard, (b) all rights to notice of, and a
hearing prior to, the Agent's taking possession or control of, or to the
Agent's replevy, attachment or levy upon, the Collateral or any bond or
security which might be required by any court prior to allowing Agent to
exercise any of Agent's remedies, and (c) the benefit of all stay, moratorium,
redemption, valuation, appraisal and exemption laws and laws requiring the
marshalling of assets, provided, however, the foregoing is not intended and
shall not have the effect of clogging any Borrowers' equitable or statutory
right of redemption prior to any foreclosure sale.

11.12 Governing Law, Venue, and Service of Process. This Agreement
shall be governed by and construed in accordance with the laws of the State of
Florida, without application of conflict of law principles, except as
expressly provided in any Loan Document, including, without limitation, any
Security Document which shall specify the law of such jurisdiction where the
Collateral encumbered thereby shall be located. The Borrowers and the Lenders
waive any plea of jurisdiction as not being a resident of, or being located or
conducting business in, Broward County, Florida and agree that any litigation
or action directly or indirectly connected with this Agreement or any other
Loan Document, shall, at the Agent's election, take place and be litigated in
either the Circuit Court of Broward County, Florida, or in the United States
District Court for the Southern District of Florida. The Agent shall not,
however, be required to bring any action in either or both of such courts and
may bring such action in any other court where jurisdiction and venue may
exist. The Borrowers and the Lenders waive any right which they may have,
with respect to any litigation or action directly or indirectly connected with
this Agreement or any other Loan Document, to: (a) remove such litigation or
action from any state court to a federal court, or (b) to require that any
such litigation or matter take place in any federal court, instead of a state
court.

11.13 Trial by Jury. THE BORROWERS AND THE LENDERS HEREBY KNOWINGLY,
VOLUNTARILY AND INTENTIONALLY WAIVE THE RIGHT THAT IT OR THEY MAY HAVE TO A
TRIAL BY JURY WITH RESPECT TO ANY LITIGATION, DIRECTLY OR INDIRECTLY, BASED ON
OR ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT OR ANY OTHER
LOAN DOCUMENTS OR THE LOANS AND FACILITIES CONTEMPLATED HEREBY, OR IN ANY
COURSE OF CONDUCT, COURSE OF DEALING, STATEMENT (WHETHER WRITTEN OR ORAL) OR
ACTIONS OR OMISSIONS OF ANY PARTY HERETO. THIS PROVISION IS A MATERIAL
INDUCEMENT FOR THE LENDERS ENTERING INTO THIS AGREEMENT AND THE TRANSACTIONS
CONTEMPLATED HEREBY.

11.14 Usury. Anything in the Loan Documents to the contrary
notwithstanding, at no time shall the Borrowers be obligated or required to
pay interest on the principal balance of the Loans or any draw made under a
Letter of Credit or under the Loan Documents, at a rate which could subject
the Lenders to either civil or criminal liability as a result of interest
being in excess of the maximum rate the Borrowers are permitted by law to
contract or agree to pay. If, by the terms of this Agreement, the Loans, the
Letters of Credit or any other Loan Document, the Borrowers are at any time
required or obligated to pay interest on the principal balance of the Loans,
or any draw under a Letter of Credit, or under any of the other the Loan
Documents, at a rate in excess of such maximum rate, the rate of interest
thereunder shall be deemed to be immediately reduced to such maximum rate, and
such interest and the portion of all prior interest payments in excess of such
maximum rate shall be applied and shall be deemed to have been payments in
reduction of the principal balance of the Loans and any draws under a Letter
of Credit, as of the date such payment was made.

11.15 Recapture and Duration of Interest in Collateral.
Notwithstanding any provision of the Loan Documents now or hereafter to the
contrary or any future act, statement or writing by any Lender to the
contrary, to the extent that the Agent or any Lender receives any payment or
payments by or on behalf of the Borrowers, which payment or payments, or any
part thereof, are subsequently invalidated, declared to be fraudulent or
preferential, set aside or required to be repaid to such Borrower, its
respective estates, trustees, receivers, custodians or any other party under
any bankruptcy law, state or federal law, common law or equitable cause, then,
to the extent of such payment or repayment, the obligation or part thereof
which has been paid, reduced or satisfied by the amount so repaid shall be
reinstated and included within the Obligations of the Borrowers as of the date
such initial payment, reduction, or satisfaction occurred and shall remain
secured by all of the Collateral.

11.16 Reproduction of Documents. The Loan Documents including, without
limitation: (a) consents, waivers and modifications which may hereafter be
executed, (b) documents, instruments and agreements received by the Lenders at
the signing of this Agreement, and (c) financial statements, certificates and
other information previously or hereafter furnished to the Lenders, may be
reproduced at any time by the Lenders by any photographic or microfilm,
micro-card, miniature, or other similar process and the Lenders may destroy
any original document reproduced. The Borrowers agree and stipulate that any
such reproduction shall be admissible in evidence as the original itself in
any judicial or administrative proceeding (whether or not the original is in
existence and whether or not such reproduction was made by the Lenders in the
regular course of business) and that any enlargement, facsimile or further
reproduction of such reproduction shall likewise be admissible in evidence.

11.17 Incorporation By Reference of Certain Laws and Regulations. The
Lenders are subject to various state and federal laws, and to the rules and
regulations of the Comptroller of the Currency, the Federal Deposit Insurance
Corporation and the Board of Governors of the Federal Reserve Board. As they
may apply (a) such laws, rules, and regulations are incorporated by reference
as part of this Agreement, and shall prevail over the terms of this Agreement
if any conflict may exist between the requirements of such laws, rules, and
regulations, and the terms of this Agreement and (b) to the extent that the
Lenders' power and authority to perform the obligations on the part of the
Lenders to be performed under this Agreement or any other Loan Document, now
or in the future, may be limited or regulated thereby, the Lenders are hereby
excused from such performance.

11.18 Accrual of Interest Under the Notes. Interest under any Advances
shall commence to accrue as of the date any Advance is credited to the
Borrowers' disbursement accounts at the Agent, or a draw occurs under any
Letter of Credit, notwithstanding whether the Borrowers shall receive the
benefit of such monies as of such date.

11.19 Monies. All references to monies in this Agreement or any other
Loan Document shall be deemed to mean lawful monies of the United States of
America.

11.20 Intentionally Deleted.

11.21 Successors and Assigns.

11.21.1 This Agreement and the other Loan Documents shall be
binding upon the parties hereto and thereto and their respective successors
and assigns, and shall inure to the benefit of the parties hereto and thereto,
and, to the extent permitted herein, their respective successors and assigns.
The terms and provisions of this Agreement shall inure to the benefit of any
assignee or transferee of the Notes hereunder, and in the event of any such
assignment or transfer by any Lender permitted hereunder, the rights and
privileges therein conferred upon such Lender shall automatically extend to
and be vested in such assignee or transferee, and such Lender shall be
relieved of all liability thereunder. The Borrowers may not assign any of
their rights or obligations under the Loan Documents without the prior written
consent of the Agent.

11.21.2 No Lender shall have any right at any time to assign,
or to transfer a participation interest in, any or all of its Committed Shares
or other rights or obligations hereunder, except to a successor by way of
merger, acquisition, consolidation or similar restructuring, without the prior
consent in writing of all of the other Lenders, which may be withheld at such
Lenders' sole discretion, and the prior consent in writing of Arvida, which
shall not be unreasonably withheld or delayed (and shall be deemed given if
Arvida shall not respond to a request for consent thereto within five (5)
Business Days), provided, however:

11.21.2.1 A Lender may assign any or all of its
Committed Shares (and Actual Shares) and other rights and obligations
hereunder to all or any of the Lenders. In the event that any Lender (an
"Assignor Lender") shall desire to assign any of its interest in its Committed
Shares (and Actual Shares) or other rights and obligations hereunder, such
Assignor Lender shall notify the Agent and all other Lenders, in writing (a
"Notice of Proposed Assignment"), no later than sixty (60) days prior to the
proposed date of such assignment, which Notice of Assignment shall specify the
percentage of the Committed Shares (and Actual Shares) intended to be so
assigned (a "Tendered Committed Share") which in any event shall not represent
less than $10,000,000.00 of the total of all of the Commitments established
hereunder, prorated as to such Commitments and Advances thereunder. Within
such sixty (60) days, each Lender wishing to take the assignment of all of or
a portion of such Tendered Committed Share (each an "Assignee Lender") shall
notify the Agent and the Assignor Lender of its interest and the maximum
percentage amount of such Tendered Committed Share which such Assignee Lender
wishes to take assignment of, which maximum percentage of such Tendered
Committed Shares shall not represent less than $5,000,000.00 of the total of
all of the Commitments established hereunder (a "Notice of Interest"). If only
one such Lender shall deliver a Notice of Interest, it shall be entitled to
acquire either the entirety of such Tendered Committed Share or such Assignee
Lender's expressed maximum percentage share thereof. In the event that more
than one Lender shall deliver a Notice of Interest, each such Lender shall be
entitled to acquire the lesser of (i) its expressed maximum percentage share
of such Tendered Committed Share and (ii) the product of the Tendered
Committed Share times a fraction, the numerator of which is such Assignee
Lender's Committed Share of the Commitments and the denominator of which is
the sum of the Committed Shares of all of the Lenders who shall have delivered
a Notice of Interest.

11.21.2.2 In the event that an Assignor Lender shall
not have succeeded in assigning the entire amount of its Tendered Committed
Share to one or more of the other Lenders, pursuant to Section 11.22.2.1,
above, such Assignor Lender shall have the right, subject to the prior consent
in writing of Arvida, which shall not be unreasonably withheld or delayed (and
shall be deemed given if Arvida shall not respond to a request for consent
thereto within five (5) Business Days), to either (i) assign increments (each
not less than $5,000,000.00) of the balance of its remaining Committed Shares
(and Actual Shares) to a financial institution or institutions which shall
have an S&P rating of BBB+ (Long and Short Term Debt) or greater, provided,
however, that such Assignor Lender shall retain Committed Shares which shall
not be less than $5,000,0000, and if the balance of such Assignor Lender's
Committed Shares after assignments to the other Lenders as set forth in
Section 11.21.2.1, above, shall be less than $5,000,000, such Assignor or
Lender shall not be entitled to further assign its Committed Share, or
(ii) grant participations in all or a portion of the remainder of such
Tendered Committed Share, to any other Person, provided that (i) all amounts
payable by the Borrowers hereunder shall be determined as if such Lender had
not sold such participation and the participating Lender shall remain a Lender
for all purposes under this Agreement, (ii) any such participation will be
made in compliance with all applicable local, state and federal laws, rules
and regulations, (iii) any such participation shall be divided prorata among
the participating Lender's Committed Shares of the Loans and (iv) such Lender
shall not grant any participation under which the participant shall have
rights to approve any amendment to or waiver of this Agreement or the Loan
Documents. In the case of any participation, the participant shall not have
any rights under this Agreement or any of the other Loan Documents entered
into in connection herewith (the participant's rights against such Lender in
respect of such participation to be those set forth in the participation or
other agreement executed by such Lender and the participant relating thereto)
and all amounts payable to any Lender hereunder shall be determined as if such
Lender had not sold such participation. Except as otherwise provided herein,
no Lender shall, as between the Borrowers and that Lender, be relieved of any
of its obligations hereunder as a result of any sale, assignment, transfer or
negotiation of, or garnering a participation in, all or any part of the
Advances or other obligations owed to such Lender. Subject to the provisions
of Section 11.28, any Lender permitted to sell participations under this
Section may furnish any information concerning the Borrowers from time to time
to assignees and participants (including prospective assignees and
participants). At the request of any Lender, each Borrower shall certify the
correctness, completeness and accuracy and all descriptions of the Borrowers
and their affairs and the Collateral for the Loans.

11.21.2.3 Upon the effective date of any such
assignment pursuant to this Section 11.21.2, the Committed Shares of the
Assignor Lender and each of the Assignee Lenders shall be deemed to be
adjusted in accordance with such assignment. In connection with any such
assignment, the Borrowers agree to execute and deliver to the Assignee Lender
appropriate renewal Notes, in the aggregate amount of the assigned Committed
Shares. With respect to the fees and expenses in connection with the
consummation of any such assignments, including, without limitation,
attorneys' fees and expenses, the Assignor Lender shall pay to the Agent fifty
percent (50%) of such expenses and the Assignee Lenders shall pay the
remaining fifty percent (50%) of such expenses, each in proportion to their
respective shares in such assignment.

11.22 Counterparts; Effective Date. This Agreement and any amendments,
waivers, consents, or supplements hereto may be executed in any number of
separate counterparts, no one of which need contain all of the signatures of
the parties, and as many of such counterparts as shall together contain all of
the signatures of the parties shall be deemed to constitute one and the same
instrument. A set of the counterparts of this Agreement signed by all parties
hereto shall be delivered to and held by the Agent. This Agreement shall
become effective upon the receipt by the Agent of signed counterparts of this
Agreement from each of the parties hereto or telecopy confirmation of the
signing of counterparts of this Agreement by each of the parties hereto.

11.23 Joint and Several Loans.

11.23.1 Each of the Borrowers agrees that it is jointly and
severally, directly and primarily liable to the Agent and each of the Lenders
for payment and performance in full of all of the Obligations owing to each
such Lender and/or the Agent, and that such liabilities are independent of the
duties, obligations and liabilities of each of the Borrowers as joint and
several Borrowers.

11.23.2 Each of the Borrowers agrees that any release which may
be given by the Agent or any Lender (subject to the provisions of this
Agreement) to any or all of the Borrowers shall not release any of the
Borrowers from its respective Obligations hereunder which is not specifically
so released.

11.23.3 Each of the Borrowers hereby waives any right to assert
against the Agent and the Lenders and each of them any defense (legal or
equitable), setoff, counterclaim (other than a compulsory counterclaim) or
claim which any of the Borrowers individually (and not in common with any
other Borrower) may now or any time hereafter have against any Borrower or any
party liable to the Agent or any Lender in any manner whatsoever, provided the
foregoing shall not constitute a waiver of any such Borrower's right to assert
any such defense, set-off, counterclaim, or claim against such other Person.

11.23.4 Any and all present and future indebtedness of the
Borrowers to any one or more of them, as the case may be, is hereby
subordinated to the full payment and performance of the Loans and other
Obligations of the Borrowers hereunder and/or under the other Loan Documents.

11.23.5 Each of the Borrowers is presently informed as to the
financial condition of each of the other Borrowers and of all other
circumstances which a diligent inquiry would reveal and which bear upon the
risk of nonpayment of the Loans and the other Obligations and indebtedness of
each of the Borrowers hereunder and/or under the other Loan Documents. Each
of the Borrowers hereby covenants that it will continue to keep itself
informed as to the status of each of the Borrowers and all circumstances which
bear upon the risk of nonpayment. Each of the Borrowers hereby waives any and
all rights that it may have to require the Agent or any Lender to disclose to
any of the Borrowers any information which the Agent or any such Lender may
now or hereafter acquire concerning the condition or circumstances of the
Borrowers or any of them, except that the Agent and the Lenders agree, upon
written request of the Borrowers, to provide to the Borrowers a statement of
the balance outstanding under the Loans.

51\CHAR Except as expressly provided herein, each of the
Borrowers waives all rights to notices of Events of Default, the existence,
creation or recurring of new or additional indebtedness or Obligations and all
other notices or formalities to which the Borrowers, as joint and several
Borrowers hereunder, may be entitled.

11.23.7 At the request of the Borrowers, to facilitate and
expedite the administration and accounting processes and procedures of their
borrowings, the Lenders have agreed, in lieu of maintaining separate loan
accounts on the Agent's books in the name of each of the Borrowers, the Agent
may maintain a single loan account with respect to each of the Term Loan, Line
of Credit and Letter of Credit Commitment, under the names of the Borrowers
(individually, a "Loan Account" and collectively, the "Loan Accounts"). Loans
shall be made and Letters of Credit shall be issued jointly and severally to
or for the account, as the case may be, of each and all of the Borrowers,
together with all interests and other charges as permitted under and pursuant
to this Agreement. The applicable Loan Accounts shall be credited with all
repayments of the Loans and reimbursements with respect to Letters of Credit
received by the Agent from the Borrowers and each of them, pursuant to the
terms of this Agreement.

11.23.8 Each of the Borrowers expressly agrees and acknowledges
that the Agent and the Lenders shall have no responsibility to inquire into
the correctness of the proportionment or allocation of any disposition by any
Borrower of any Advances, any of the Letters of Credit or any of the expenses
or other items charged to the Loan Accounts pursuant to this Agreement. All
Loans, Letters of Credit and such expenses and other items shall be made for
the collective, joint and several account of the Borrowers and shall be
charged to their respective Loan Accounts.

1\CHARA Each of the Borrowers agrees and acknowledges that the
administration of the Loans in a combined basis as set forth in this Section
is being done as an accommodation for the Borrowers and at their request, and
that the Agent and the Lender shall incur no liability to any of the Borrowers
as a result thereof. To induce the Agent and the Lenders to do so, and in
consideration thereof, each of the Borrowers hereby jointly and severally
agrees to indemnify and hold the Agent and the Lenders harmless from and
against any and all liabilities, expense, loss, damage, claim of damage or
injury, made against the Agent or any of the Lenders by any of the Borrowers
or any other Person, arising from or incurred by reason of such administration
of the Loans.

11.23.10Each of the Borrowers represents and warrants to the
Agent and the Lenders that the collective administration of the Loans is being
undertaken by the Agent and the Lenders pursuant to this Section because the
Borrowers are integrated in their operations and administration and require
financing on a basis permitting the availability of credit from time to time
to each of the Borrowers. Each of the Borrowers hereby acknowledges and
agrees that each of them will derive substantial benefit, directly and
indirectly, from such collective administration and credit availability
because the successful operations of each of the Borrowers is enhanced by the
continued successful performance of the integrated group.

11.23.11Notwithstanding anything to the contrary in this
Agreement, the Notes, the Mortgages, the Security Documents or other Loan
Documents, the maximum liability of any Borrower, other than Arvida, for the
Obligations created, evidenced and secured hereby and thereby shall not exceed
the maximum amount, as such maximum amount shall be determined by a court of
competent jurisdiction, of any such Borrower Subsidiary's or Borrower
Affiliate's liability therefor which may be incurred without rendering the
Obligations, as they relate to such Borrower Subsidiary or Borrower Affiliate,
voidable as a fraudulent conveyance or fraudulent transfer under the
Bankruptcy Code or under any other present or future federal or state laws or
statutes relating to bankruptcy, insolvency, assignment for the benefit of
creditors or other relief for debtors, including, without limitation, the
Uniform Fraudulent Transfer Act or the Uniform Fraudulent Conveyance Act, as
in effect in any jurisdiction wherein any such Borrower Subsidiary's or
Borrower Affiliate's Solvency is subject to determination. For purposes of
determining such liability of any Borrower Subsidiary or Borrower Affiliate,
due consideration shall be given to the benefits received, directly or
indirectly, by such Borrower Subsidiary or Borrower Affiliate from the Loans
made pursuant to the Commitments created hereby.

11.24 Title and Headings; Table of Contents. The titles and headings
preceding the text of this Agreement and the Table of Contents have been
included solely for convenience of reference and shall neither constitute a
part of this Agreement nor affect its meaning, interpretation, or effect.

11.25 Entire Agreement, Etc. The Loan Documents express the entire
understanding of the parties with respect to the transactions contemplated
thereby and supersede any prior written or oral understanding of the parties
thereto.

11.26 Legal or Governmental Limitations. Anything contained in this
Agreement to the contrary notwithstanding, the Lenders shall not be obligated
to extend credit or make Loans to the Borrowers in an amount in violation of
any limitations or prohibitions provided by any applicable statute or
regulation.

11.27 Non-Recourse. Notwithstanding anything to the contrary herein or
in the Notes, the Mortgage, the Security Documents or other Loan Documents (or
any instruments or certificates executed in connection therewith at any time
or times), neither any present nor future constituent partner (as hereinafter
defined) in or agent of any of the Borrowers, nor any shareholder, member,
officer, manager, director, employee, trustee, beneficiary or agent of any
corporation or other entity that is or becomes a constituent partner in any of
the Borrowers shall be personally liable, directly or indirectly, (and neither
the Agent, the Lenders nor any of their successors or assignees shall have any
recourse against any property or assets of any such constituent partner or
other Person) under or in connection with this Agreement, the Notes, the
Mortgage, the other Security Documents or other Loan Documents, the Loans or
any instruments securing or otherwise executed in connection therewith, or any
certificate delivered in connection therewith, or any amendments or
modifications to any of the foregoing made at any time or times, heretofore or
hereafter (such Persons being herein referred to as a "Non-Recourse Person";
provided, however, such Non-Recourse Persons shall not include any Borrower or
any Subsidiary of a Borrower that would otherwise be liable as a general
partner of a Borrower). The recourse of the Agent, the Lenders and each of
their successors and assignees under or in connection with this Agreement, the
Other Loan Documents, the Loans and such instruments and certificates, and any
such amendments or modifications, shall be limited to the assets of the
Borrowers, and the Agent, the Lenders and each of their successors and
assignees waive and do hereby waive any such personal liability against any
such Non-Recourse Persons. For the purposes hereof and each other Loan
Document and any such instruments and certificates and any such amendments or
modifications, neither the negative capital account of a constituent partner
in any Borrower, nor any obligation of any constituent partner in any Borrower
to restore a negative capital account or to advance or contribute capital to
any Borrower or to any other constituent partner in any Borrower shall at any
time be deemed to be the property or an asset of any Borrower or such other
constituent partner (and neither the Agent nor the Lenders nor any of their
successors or assignees shall have any right to collect, enforce or proceed
against or with respect to any such negative capital account or partner's
obligation to restore, advance or contribute). As used in this Section, a
"constituent partner" in any Borrower shall mean any direct partner in such
Borrower and any Person that is a partner in any partnership that, directly or
indirectly through one or more other partnerships, is a partner in such
Borrower.

11.28 Confidentiality. The Lenders shall not disclose any Financial
Statements, Annual Projections, Economic Models, Monthly Compliance
certificates or other financial reports, Appraisals or insurance certificates
or policies or any other material non-public information concerning any of the
Borrowers or the Subsidiaries or Affiliates obtained by or furnished to the
Agent or any other Lenders in connection with the transactions contemplated
hereby, to any Person other than the Lenders' respective directors, officers,
employees, agents, contractors, representatives and advisors (collectively,
the "Representatives"), who shall only use such information in connection with
the consummation or administration of the transactions contemplated hereby, or
any prospective assignees of any Lender's Committed Shares or any prospective
purchasers of participation interests in any Lender's Committed Shares,
provided that the Lenders shall inform any such prospective assignees or
prospective participants of the confidential nature of such information with
respect to the transactions contemplated by this Agreement and direct them to
treat all such information in the same manner that is required of the Lenders
herein. Notwithstanding the foregoing, however, the Lenders shall be
permitted to disclose any information obtained by them: (a) which is
incorporated in any Loan Documents subject to recordation and/or filing in
applicable public records or is otherwise a matter of public record, (b) as
shall be required by law, for instance, in the context of interrogatories,
requests for information or documents, subpoenas, civil investigative demands
or similar process, (c) as shall be required by any regulatory or governmental
authorities, or (d) as shall be otherwise reasonably required in connection
with the transactions contemplated hereby.

11.29 Conflict of Terms. Except as otherwise expressly provided in
this Agreement or any of the other Loan Documents, if any provision contained
in this Agreement is in conflict with, or inconsistent with, any provision in
any of the other Loan Documents, the provisions contained in this Agreement
shall govern and control.

SIGNATURE PAGES FOLLOW

<PAGE>

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

Signed, sealed and deliveredAGENT:
in the presence of:
BARNETT BANK, N.A., a national
banking association

____________________________By:
Name: Brian K. Davis
____________________________ Title: Vice President

[CORPORATE SEAL]

LENDERS:

BARNETT BANK, N.A., a national
banking association

____________________________By:
Name: Brian K. Davis
____________________________ Title: Vice President

[CORPORATE SEAL]

BANKBOSTON, N.A., a national
banking association

____________________________By:
Name:
____________________________ Title:

[CORPORATE SEAL]

BANK UNITED, a federal savings bank

____________________________By:
Name:
____________________________ Title:

[CORPORATE SEAL]

FIRST UNION NATIONAL BANK,
a national banking association

____________________________By:
Name:
____________________________ Title:

[CORPORATE SEAL]

BORROWERS:

ARVIDA/JMB PARTNERS, L.P.,
a Delaware limited partnership

By: ARVIDA/JMB MANAGERS, INC.,
a Delaware corporation,
its sole general partner

____________________________ By:
Stephen A. Lovelette,
____________________________ Vice President

[CORPORATE SEAL]

<PAGE>

THE AOK GROUP,
a Florida general partnership

By: ARVIDA/JMB PARTNERS, L.P.,
a Delaware limited partnership,
a general partner

By: ARVIDA/JMB MANAGERS, INC.,
a Delaware corporation, its
sole general partner