EXHIBIT 10.13

                      AMENDED AND RESTATED CREDIT AGREEMENT

                           Dated as of October 4, 1999

                                     Between

                           LNR FLORIDA FUNDING, INC.,
                                  as Borrower,

                                       and

                      GERMAN AMERICAN CAPITAL CORPORATION,
                                    as Lender

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SECTION                                                                                                         PAGE

ARTICLE I DEFINITIONS AND ACCOUNTING TERMS........................................................................1

SECTION 1.01.            Certain Defined Terms....................................................................1
SECTION 1.02.            Computation of Time Periods.............................................................29
SECTION 1.03.            Accounting Terms........................................................................29

ARTICLE II AMOUNT AND TERMS OF THE ADVANCES......................................................................30

SECTION 2.01.            The Advances............................................................................30
SECTION 2.02.            Making the Advances.....................................................................30
SECTION 2.03.            Repayment of Advances...................................................................31
SECTION 2.04.            Prepayments.............................................................................32
SECTION 2.05.            Interest................................................................................34
SECTION 2.06.            Increased Costs, Etc....................................................................35
SECTION 2.07.            Payments and Computations...............................................................36
SECTION 2.08.            Taxes...................................................................................37
SECTION 2.09.            Use of Proceeds.........................................................................38
SECTION 2.10.            Late Charge.............................................................................38
SECTION 2.11.            Security for the Advances...............................................................38
SECTION 2.12.            The Note................................................................................39

ARTICLE III CONDITIONS OF LENDING................................................................................39

SECTION 3.01.            Conditions Precedent to Initial Advance.................................................39
SECTION 3.02.            Conditions Precedent to Each Advance....................................................41

ARTICLE IV REPRESENTATIONS AND WARRANTIES........................................................................42

SECTION 4.01.            Representations and Warranties of Borrower..............................................42

ARTICLE V COVENANTS OF THE BORROWER..............................................................................45

SECTION 5.01.            [Reserved]..............................................................................45
SECTION 5.02.            Affirmative Covenants...................................................................45
SECTION 5.03.            Negative Covenants......................................................................47
SECTION 5.04.            Reporting Requirements..................................................................48

ARTICLE VI EVENTS OF DEFAULT.....................................................................................50

SECTION 6.01.            Events of Default.......................................................................50

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ARTICLE VII SECONDARY MARKET; SERVICING..........................................................................52

SECTION 7.01.            Participations..........................................................................52
SECTION 7.02.            Servicing...............................................................................52

ARTICLE VIII PARTIAL RELEASE OF COLLATERAL.......................................................................53

SECTION 8.01.            Partial Release of Collateral...........................................................53

ARTICLE IX MISCELLANEOUS.........................................................................................53

SECTION 9.01.            Amendments, Etc.........................................................................53
SECTION 9.02.            Notices, Etc............................................................................53
SECTION 9.03.            No Waiver; Remedies.....................................................................54
SECTION 9.04.            Costs, Expenses.........................................................................54
SECTION 9.05.            Right of Set-off........................................................................55
SECTION 9.06.            Binding Effect..........................................................................56
SECTION 9.07.            Execution in Counterparts...............................................................56
SECTION 9.08.            Jurisdiction, Etc.......................................................................56
SECTION 9.09.            Governing Law...........................................................................56
SECTION 9.10.            Waiver of Jury Trial....................................................................56
SECTION 9.11.            Confidentiality.........................................................................57
SECTION 9.12.            Recourse Limitation.....................................................................57
SECTION 9.13.            Amendment of Existing Agreement.........................................................58

SCHEDULES

Schedule A        -      Domestic and Eurodollar Lending Offices
Schedule B        -      Disclosure Schedule
Schedule C        -      Reunderwritten Net Cash Flow Methodology
Schedule D        -      Mortgage File

Schedule E        -      Mortgage Loan Advances Maturity Dates for Current Mortgage Loan Advances

EXHIBITS

Exhibit A         -      Form of Amended and Restated Promissory Note
Exhibit B         -      List of Appraisers
Exhibit C         -      Form of Borrowing Base Certificate
Exhibit D         -      Form of Mortgage Loan Schedule
Exhibit E         -      Form of Monthly Asset Report
Exhibit F         -      Form of Amended and Restated Custodial Agreement
Exhibit G         -      Form of Notice of Borrowing
Exhibit H         -      Form of Collateral Assignment of Mortgage and Note
Exhibit I         -      Form of Collateral Assignment of Participation
Exhibit J         -      Intentionally Omitted
Exhibit K         -      Form of Request for Partial Release

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                      AMENDED AND RESTATED CREDIT AGREEMENT

         AMENDED AND RESTATED CREDIT AGREEMENT ("AGREEMENT"), dated as of
October 4, 1999, between LNR FLORIDA FUNDING, INC., a Florida corporation
("BORROWER") and GERMAN AMERICAN CAPITAL CORPORATION, a Maryland corporation
(together with its successors and assigns, "LENDER").

PRELIMINARY STATEMENTS:

         (1) Borrower is in the business of purchasing, originating and
servicing multi-family residential and commercial mortgage loans.

         (2) Borrower and Lender are parties to a Credit Agreement, dated as of
May 15, 1998, as amended by an Amendment to Credit Agreement, dated as of
January 13, 1999 (as amended, the "EXISTING CREDIT AGREEMENT"), pursuant to
which Borrower has requested that Lender make Advances to Borrower from time to
time in an aggregate amount outstanding at any time of not more than Two Hundred
Twenty Million and 00/100 Dollars ($220,000,000) in order to provide funds to
the Borrower to make or acquire mortgage loans. The Lender has indicated its
willingness to agree to lend such amount on the terms and conditions of this
Agreement.

         (3) The Borrower and the Lender desire to amend and restate the
Existing Credit Agreement (a) to provide for the continuing financing pursuant
to this Agreement of mortgage loans, (b) to incorporate the financing of junior
debt instruments secured by mortgage loans or junior participations in mortgage
loans and (c) to amend the provisions of the Loan Documents as otherwise
provided herein and therein. The Lender has indicated its willingness to amend
and restate the Existing Credit Agreement and to agree to continue to lend the
amount provided for herein on the terms and conditions of this Agreement.

         NOW, THEREFORE, in consideration of the premises and of the mutual
covenants and agreements contained herein, the parties hereto hereby agree as
follows:

                                   ARTICLE I

                        DEFINITIONS AND ACCOUNTING TERMS

         SECTION 1.01. CERTAIN DEFINED TERMS. As used in this Agreement, the
following terms shall have the following meanings (such meanings to be equally
applicable to both the singular and plural forms of the terms defined):

                  "A NOTE" means the senior promissory note or other evidence of
         senior indebtedness of a borrower under a mortgage loan secured by a
         Multi family Property or Commercial Property, including any amendments
         or modifications, or any renewal or substitution notes.

                  "ADVANCE" has the meaning specified in SECTION 2.01. Each
         Advance shall be either a Mortgage Loan Advance or a B Note Advance.

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                                       2

                  "ADVANCE AMOUNT" means the principal amount of any Advance.

                  "ADVANCE RATE" means as follows:

                  (a) with respect to a Mortgage Loan Advance, ninety percent
         (90%); and

                  (b) with respect to a B Note Advance, seventy five percent
         (75%); provided that, notwithstanding the foregoing, (1) the Advance
         Rate may be increased as determined by Lender in its sole discretion to
         equal the maximum percentage which would cause the sum of (a) the
         outstanding principal amount of the A Note and (b) the product of such
         percentage and the outstanding principal amount of the B Note to equal
         70% of the Property Value directly or indirectly securing such A Note
         and B Note (except if the maximum percentage determined pursuant to the
         foregoing would exceed 85.0%, then the Advance Rate increase determined
         pursuant to this clause (1) shall be capped at 85.0%) or (2) the
         Advance Rate may be decreased as determined by Lender in its sole
         discretion to equal the percentage which causes the sum of (A) the
         outstanding principal amount of the A Note and (B) the product of such
         percentage and the outstanding principal amount of the B Note to equal
         75% of the Property Value directly or indirectly securing such A Note
         and B Note.

         "AFFILIATE" means, as to any Person, any other Person that, directly or
indirectly, controls, is controlled by or is under common control with such
Person or is a director or officer of such Person. For purposes of this
definition, the term "control" (including the terms "controlling," "controlled
by" and "under common control with") of a Person means the possession, direct or
indirect, of the power to vote 10% or more of the Voting Stock of such Person or
to direct or cause the direction of the management and policies of such Person,
whether through the ownership of Voting Stock, by contract or otherwise.

         "AGREEMENT" has the meaning specified in the recital of parties to this
Agreement.

         "APPLICABLE LENDING OFFICE" means Lender's Eurodollar Lending Office
with respect to each Eurodollar Rate Advance and Lender's Domestic Lending
Office with respect to each Base Rate Advance.

         "APPLICABLE MARGIN" means, with respect to any Eurodollar Rate Advance,
75 basis points (0.75%) per annum.

         "APPRAISAL" means an appraisal of a Mortgaged Property prepared by an
Appraiser in accordance with the Uniform Standards of Appraisal Practice of the
Appraisal Foundation and complying with the requirements of Title 11 of the
Federal Financial Institutions Reform, Recovery and Enforcement Act of 1989 and
otherwise in form and substance acceptable to the Lender, as may be updated by
recertification from time to time.

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                                       3

         "APPRAISER" means any Independent appraiser set forth on Exhibit B or
otherwise approved by Lender in writing.

         "ASSIGNMENT OF MORTGAGE" means an assignment of Mortgage, in
substantially the form of EXHIBIT H attached hereto, and any separate Assignment
of Rents sufficient under the laws of the jurisdiction in which the applicable
Mortgaged Property is located to effect the transfer of all right, title and
interest of the Borrower in such Mortgage and Assignment of Rents.

         "ASSIGNMENT OF RENTS" means, with respect to any Mortgaged Property,
any assignment of leases, rents and profits or similar agreement executed by
Mortgagor, assigning to the mortgagee all of the income, rents and profits
derived from the ownership, operation, leasing or disposition of all or a
portion of such Mortgaged Property, in the form which was duly executed,
acknowledged and delivered, as amended, modified, renewed or extended through
the date hereof and from time to time hereafter.

         "AUTHORIZATION" means any authorization, approval, franchise, license,
variance, land use entitlement, sewer and waste water discharge permit, storm
water discharge permit, air pollution authorization to operate, certificate of
occupancy, municipal water and sewer connection permit, and any like or similar
permit now or hereafter required for the construction of any improvements
located on any Mortgaged Property or for the use, occupancy or operation of such
Mortgaged Property and all amendments, modifications, supplements and addenda
thereto.

                  "B NOTE" means a junior promissory note or other evidence of
         subordinate indebtedness of a borrower under a mortgage loan secured by
         a Multifamily Property or Commercial Property or a junior participation
         in a mortgage loan secured by a Multifamily Property or Commercial
         Property, including any amendments or modifications, or any renewal or
         substitution notes or participations.

                  "B NOTE ADVANCE" means an Advance made to the Borrower to
         provide funds to acquire one or more B Notes.

                  "B NOTE ADVANCES MATURITY DATE" means, with respect to any B
         Note Advance, the first Business Day in September, 2003.

                  "B NOTE ADVANCES TERMINATION DATE" means May 31, 2002.

                  "B NOTE BALLOON PAYMENT DEFAULT CONDITION" means the event
         which shall be deemed to have occurred, with respect to any B Note for
         which the Lender has determined that the mortgage loan securing such B
         Note (i) has become a Defaulted Loan due to the obligor failing to make
         a balloon payment and (ii) has Reunderwritten Net Cash Flow equal to or
         greater than the Initial Underwritten Net Cash Flow, if the Lender
         reasonably determines that the Borrower or an Affiliate of the Borrower
         in its capacity as "special servicer" of such mortgage loan, either:

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                                       4

         (x)      shall not be enforcing all of its material rights and remedies
                  with respect to such mortgage loan after the Lender shall have
                  provided written notice of such failure to enforce and a five
                  (5) Business Day opportunity to commence such enforcement; or

         (y)      shall not have (I) delivered to the Lender "an asset status
                  plan" with respect to the remedies it intends to pursue
                  regarding such mortgage loan within thirty (30) days of the
                  date the Lender first notified the Borrower in writing that
                  clauses (i) and (ii) above had occurred or (II) provided to
                  the Lender a reasonable opportunity to review and comment on
                  such plan (with Borrower or its Affiliate not having any
                  obligation to accept such comments).

         "B NOTE CURRENT TOTAL EXPOSURE PERCENTAGE" means, with respect to any B
Note as of any date of determination after the date the related B Note Advance
is made, the percentage equal to the quotient of (x) the sum of the outstanding
principal amounts of the A Note and such B Note Advance divided by (y) the
Property Value directly or indirectly securing such A Note and B Note. For
purposes of the proviso to the definition of "Capital Limit", if the amount of
the B Note Advance necessary to cause such percentage to equal 80% would be a
negative number, then the "B Note Advance" shall be deemed to equal zero.

         "B NOTE EXTENDED MONTHLY PAYMENT DEFAULT LOAN" means any mortgage loan
securing a B Note for which all of the following are true: (i) such mortgage
loan has become a Defaulted Loan due to the obligor failing to make a monthly
payment (other than a balloon payment), (ii) such failure has continued for
ninety (90) days or more and remains uncured and (iii) such mortgage loan has
Reunderwritten Net Cash Flow equal to or greater than the Initial Underwritten
Net Cash Flow as determined by the Lender.

         "B NOTE NON-PAYMENT DEFAULT EVENT" means the event which shall be
deemed to have occurred with respect to any B Note if the Lender determines that
the mortgage loan securing such B Note has become a Defaulted Loan (other than
as a result of the events described in clause (a) of the definition thereof) and
the related B Note Current Total Exposure Percentage exceeds 85%. If a B Note
Non-Payment Default Event occurs, then the Lender shall notify the Borrower in
writing of the event that caused such mortgage loan to become a Defaulted Loan.

         "B NOTE PAYMENT DEFAULT EVENT" means the event which shall be deemed to
have occurred with respect to any B Note if the Lender determines that (i) the
mortgage loan securing such B Note has become a Defaulted Loan as a result of
the events described in clause (a) of the definition thereof and (ii) the
related B Note Current Total Exposure Percentage exceeds 85%, and in connection
with the occurrence of any such event, any of the following has also occurred:

(1)      the Reunderwritten Net Cash Flow of such mortgage loan is less than the
         Initial Underwritten Net Cash Flow of such mortgage loan; or

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                                       5

(2)      a B Note Balloon Payment Default Condition has occurred and is
         continuing; or

(3)      such mortgage loan is a B Note Extended Monthly Payment Default Loan.

Lender agrees to consider in good-faith any written objection from the Borrower
with respect to the Reunderwritten Net Cash Flow being less than the Initial
Underwritten Net Cash Flow.

         "B NOTE PERFORMANCE EVENT" means the event which shall be deemed to
have occurred with respect to any B Note if the Lender determines that (i) the
Reunderwritten Net Cash Flow of the mortgage loan securing such B Note is less
than the Initial Underwritten Net Cash Flow and (ii) the related B Note Current
Total Exposure Percentage exceeds 85%. If a B Note Performance Event occurs,
then the Lender shall notify the Borrower in writing of (x) the then current
Property Value and the reasons for and methodology of such Property Value
determination and (y) the Reunderwritten Net Cash Flow and a detailed
calculation thereof. Lender agrees to consider in good-faith any written
objection from the Borrower with respect to a decrease in Reunderwritten Net
Cash Flow delivered within thirty (30) days following the Lender's notice.

         "BASE RATE" means a fluctuating interest rate per annum in effect from
time to time, which rate per annum shall be equal to the lesser of (i) the
maximum non-usurious rate permitted by Law or (ii) the greater of (A) the rate
of interest announced publicly by Deutsche Bank AG, New York Branch, in New
York, from time to time, as its "Prime Rate" and (B) one percent (1%) above the
Federal Funds Rate.

         "BASE RATE ADVANCE" means an Advance which bears interest in accordance
with SECTION 2.05(A)(I).

         "BORROWER" has the meaning specified in the recital of parties to this
Agreement.

         "BORROWER'S ACCOUNT" means an account of Borrower maintained by
Borrower and designated by notice to Lender not less than two (2) days prior to
the Closing Date.

         "BORROWING BASE CERTIFICATE" means a certificate in substantially the
form of EXHIBIT C hereto, duly certified by the chief financial officer of
Borrower.

         "BORROWING BASE DEFICIENCY" means, at any time, (a) with respect to the
Mortgage Loans, the excess of (i) the aggregate principal amount of Advances
with respect to the Mortgage Loans outstanding at such time over (ii) the
aggregate Capital Limit determined with respect to the Mortgage Loans or (b)
with respect to each B Note, the excess of (I) the principal amount of the B
Note Advance for such B Note outstanding at such time over (II) the Capital
Limit for such B Note.

         "BORROWING LIMIT" means, as of any date of determination, the lesser of
(a) Two Hundred Seventy Million and 00/100 Dollars ($270,000,000) minus the
Repurchase Price under the Repurchase Facility (exclusive of the portion of the
Repurchase Price equal to

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                                       6

the sum of the Price Differential as of such date of determination, the Pricing
Rate Breakage and costs incurred pursuant to paragraphs 7(d) and 7(e) of Annex I
thereto) and (b) the Capital Limit.

         "BUSINESS DAY" means a day of the year on which banks are not required
or authorized by law to close in New York City, and, if the applicable Business
Day relates to any Eurodollar Rate Advances, a Business Day on which commercial
banks are open for international business (including dealings in dollar deposits
in the London interbank market).

         "CAPITAL LIMIT" means the following:

                  (a) with respect to the Mortgage Loans, (a) sum of (i) the
         product of (x) the aggregate Loan Value of the Eligible Mortgage Loans
         constituting Collateral and (y) the related Advance Rate, plus (ii) all
         cash and cash equivalents of Borrower plus (iii) the fair market value
         of any nonliquid assets, as determined by Lender in its sole
         discretion, as part of Facility Equity, less (b) the Minimum Collateral
         Value, or

                  (b) with respect to each B Note, the principal amount of the B
         Note Advance for such B Note as of such date of determination;
         PROVIDED, that notwithstanding the foregoing, with respect to any B
         Note for which a B Note Performance Event or a B Note Non-Payment
         Default Event or a B Note Payment Default Event shall have occurred and
         is continuing, then "CAPITAL LIMIT" for such B Note means the amount
         (not less than zero) which when inserted into the definition of "B Note
         Current Total Exposure Percentage" as the applicable outstanding B Note
         Advance causes the B Note Current Total Exposure Percentage to equal
         80%.

         "CAPITALIZED LEASES" means, with respect to any Person, any leases of
any property by such Person, as lessee, which, in accordance with GAAP, is
required to be accounted for as a capital lease on the balance sheet of such
Person.

         "CASH COLLATERAL ACCOUNT" has the meaning specified in SECTION 2.04.

         "CHANGE OF CONTROL" means with respect to any Person (i) the sale or
transfer by Persons who are the direct beneficial owners of such Person as of
the Closing Date of more than forty-nine and nine-tenths percent (49.9%) of the
direct or indirect right to distributions from such Person in the aggregate to
Persons who were not direct beneficial owners as of such date or (ii) the sale
or transfer by such direct beneficial owners of such Person as of the Closing
Date of more than forty-nine and nine-tenths percent (49.9%) of the direct or
indirect voting rights in such Person to Persons who were not direct beneficial
owners as of such date.

         "CLOSING DATE" means the date on which Borrower shall execute and
deliver this Agreement.

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                                       7

         "CMBS" means commercial mortgage backed securities evidencing an
interest in or secured by a pool of Mortgage Loans.

         "COLLATERAL" means, collectively, (x) with respect to the B Notes, all
Eligible B Notes, (y) with respect to the Mortgage Loans, all Eligible Mortgage
Loans, any Hedge Agreements entered into by Borrower in connection with any
Mortgage Loans, all Borrower's right, title and interest in and to the related
Mortgage Loan Documents and (z) all other property, whether real, personal or
mixed, tangible or intangible, owned or to be owned or leased or to be leased or
otherwise held or to be held by Borrower or in which Borrower shall have or
shall acquire an interest, to the extent that Borrower's interest therein is now
or hereafter granted, assigned, transferred, mortgaged or pledged to Lender or
in which a security interest is granted to Lender to secure all or any part of
the Obligations.

         "COLLATERAL DOCUMENTS" means the Security Agreement, the Assignments of
Mortgage, and any other agreement that creates or purports to create a Lien in
favor of Lender.

         "COMMERCIAL PROPERTY" means a fee simple estate in or a ground lease on
a parcel of real property, together with all improvements thereon, which
property is used for commercial purposes other than multifamily residential,
including without limitation congregate care and assisted living facilities,
nursing homes, retail shopping centers, hotels, office buildings, industrial
properties and warehouse facilities, together with any personal property,
fixtures, leases, and other property or rights of the owner pertaining thereto.

         "CONSOLIDATED" refers to the consolidation of accounts in accordance
with GAAP.

         "CUSTODIAL AGREEMENT" means the Custodial Agreement of even date
herewith, by and among Borrower, Lender and the Custodian, substantially in the
form of EXHIBIT F annexed hereto, as it may be amended, restated, replaced,
supplemented or otherwise modified from time to time.

         "CUSTODIAN" means LaSalle National Bank, the financial institution
selected to act as Custodian pursuant to the Custodial Agreement, and any other
financial institution subsequently selected by Lender to so act, and reasonably
acceptable to Borrower.

         "DEBT" of any Person means, without duplication, (a) all indebtedness
of such Person for borrowed money, (b) all Obligations of such Person for the
deferred purchase price of property or services (other than trade payables not
overdue by more than ninety (90) days incurred in the ordinary course of such
Person's business), (c) all Obligations of such Person evidenced by notes,
bonds, debentures or other similar instruments, (d) all Obligations of such
Person created or arising under any conditional sale or other title retention
agreement with respect to property acquired by such Person (even though the
rights and remedies of the seller or lender under such agreement in the event of
default are limited to repossession or sale of such property), (e) all
Obligations of such Person for

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                                       8

lease payments payable by such Person as lessee under Capitalized Leases, (f)
all Obligations, contingent or otherwise, of such Person under acceptance,
letter of credit or similar facilities, (g) all Obligations of such Person to
purchase, redeem, retire, defease or otherwise make any payment in respect of
any capital stock of or other ownership or profit interest in such Person or any
other Person, valued, in the case of redeemable preferred stock, at the greater
of its voluntary or involuntary liquidation preference plus accrued and unpaid
dividends, (h) all Debt of others referred to in clauses (a) through (g) above
or clause (i) below guaranteed directly or indirectly in any manner by such
Person, or in effect guaranteed directly or indirectly by such Person through an
agreement (i) to pay or purchase such Debt or to advance or supply funds for the
payment or purchase of such Debt, (ii) to purchase, sell or lease (as lessee or
lessor) property, or to purchase or sell services, primarily for the purpose of
enabling the debtor to make payment of such Debt or to assure the holder of such
Debt against loss, (iii) to supply funds to or in any other manner invest in the
debtor (including any agreement to pay for property or services irrespective of
whether such property is received or such services are rendered) or (iv)
otherwise to assure a creditor against loss; and (i) all Debt referred to in
clauses (a) through (h) above of another Person secured by (or for which the
holder of such Debt has an existing right, contingent or otherwise, to be
secured by) any Lien on property (including, without limitation, accounts and
contract rights) owned by such Person, even though such Person has not assumed
or become liable for the payment of such Debt.

         "DEFAULT" means any Event of Default or any event that would constitute
an Event of Default but for the requirement that notice be given or time elapse
or both.

         "DEFAULTED LOAN" means, as of any date of determination, a Mortgage
Loan or mortgage loan securing a B Note for which any one of the following
applies:

                  (a) as to which the Mortgagor or obligor has failed to make a
         monthly payment and such failure has continued for sixty (60) days or
         more or has failed to make a balloon payment, if any;

                  (b) as to which the Mortgagor or obligor has entered into or
         consented to a bankruptcy, appointment of a receiver or conservator or
         a similar insolvency or similar proceeding, or the Mortgagor or obligor
         has become the subject of a decree or order for such a proceeding which
         shall have remained in force undischarged or unstayed for a period of
         forty-five (45) days;

                  (c) as to which Borrower shall have received notice of the
         foreclosure or proposed foreclosure of any other lien by a third party
         on the related Mortgaged Property or mortgaged property;

                  (d) as to which, in the judgment of Borrower, a payment
         default has occurred or is imminent and is not likely to be cured by
         the Mortgagor or obligor within 30 days;

                  (e) as to which the Mortgagor or obligor has failed to make
         any payment of ground rents, taxes, assessments, water rates, sewer
         rents, municipal

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                                       9

         charges or insurance premiums, in either case, in accordance with the
         related Mortgage Loan Documents or mortgage loan documents;

                  (f) as to which the Mortgagor or obligor has defaulted or
         failed to perform or observe a term, covenant or condition in the
         Mortgage Loan Documents or mortgage loan documents and such default or
         failure, is likely to have a material and adverse affect on the value
         of the Mortgage Loan or Property Value underlying the B Note, the
         related Mortgaged Property or mortgaged property or the priority of the
         security interest on such Mortgaged Property or mortgaged property; or

                  (g) as to which the Mortgagor or obligor admits in writing its
         inability to pay its debts generally as they become due, files a
         petition to take advantage of any applicable insolvency or
         reorganization statute, makes an assignment for the benefit of its
         creditors, or voluntarily suspends payment of its obligations.

         "DETERMINATION DATE" with respect to each Interest Period, the second
Business Day prior to the Interest Reset Date.

         "DISCLOSED LITIGATION" has the meaning specified in SECTION 3.01(B).

         "DISCLOSURE SCHEDULE" means the schedule of litigation attached to this
Agreement as SCHEDULE B.

         "DOLLARS" and the sign "$" means the lawful money of the United States
of America.

         "DOMESTIC LENDING OFFICE" means the office of Lender specified as its
"Domestic Lending Office" on SCHEDULE A hereto or such other office of Lender as
Lender may from time to time specify to Borrower.

         "ELIGIBLE B NOTES" means a B Note meeting the following criteria,
except with respect to matters disclosed in writing to, and approved in writing
by, Lender prior to the making of an Advance with respect to the affected B
Note:

                  (a) FLOATING RATE. The B Note provides for (or in the case of
         a B Note in the form of a participation entitles the holder thereof to
         receive) interest payments based on a floating rate equal to not less
         than the Eurodollar Rate plus 4.50%.

                  (b) ORIGINATOR. The mortgage loan pursuant to which (or in the
         case of a B Note in the form of a participation regarding which) such B
         Note was issued, was originated by the Lender or an Affiliate of the
         Lender prior to May 31, 2002.

                  (c) ACQUISITION. The B Note was acquired by the Borrower from
         (or in the case of a B Note in the form of a participation issued to
         the Borrower by) the Lender or an Affiliate of the Lender.

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                                       10

                  (d) STRUCTURE. The B Note is subordinate to an A Note, both of
         which are secured by a mortgage on the same real property (or in the
         case of a B Note in the form of a participation entitles the holder to
         receive cash flow in connection with a mortgage secured by the same
         real property). The relative rights of the A Note and the B Note with
         respect to the real property are governed by a Servicing and
         Intercreditor Agreement.

                  (e) ADDITIONAL CRITERIA. With respect to any B Note approved
         by the Lender related to a mortgage loan originated by a Person other
         than the Lender or an Affiliate of the Lender, the mortgage loan and
         the mortgaged property to which such A Note and B Note relate meet as
         of the date of funding of the applicable B Note Advance the criteria in
         this Agreement for an "Eligible Mortgage Loan" (other than the criteria
         in clauses (h) and (ss) of the definition thereof).

         "ELIGIBLE MORTGAGE LOAN" means a Mortgage Loan meeting the following
criteria, except with respect to matters disclosed in writing to, and approved
in writing by, Lender prior to the making of an Advance with respect to the
affected Mortgage Loan:

                  (a) MORTGAGE LOAN SCHEDULE. The information set forth in the
         Mortgage Loan Schedule is true, complete and correct in all material
         respects.

                  (b) ORIGINATION/ACQUISITION OF MORTGAGE LOANS. The
         underwriting, origination or acquisition and closing policies and
         procedures utilized by Borrower with respect to the Mortgage Loan
         conformed, in all material respects, to its customary underwriting and
         closing policies and procedures for comparable mortgage loans
         originated or acquired (as the case may be) in effect at the time of
         the underwriting and origination or acquisition of such Mortgage Loan,
         with such exceptions thereto as are believed to be customarily
         acceptable to reasonable and prudent commercial mortgage lenders or
         acquirors; PROVIDED, HOWEVER, such Mortgage Loans may not qualify for
         inclusion in a "real estate mortgage investment conduit."

                  (c) PAYMENT CURRENT. All payments required to be made with
         respect to the Mortgage Loan under the terms of the Mortgage Note or
         Mortgage (inclusive of any grace or cure period) up to the Closing Date
         have been made.

                  (d) NO CROSS-COLLATERALIZATION, EQUITY PARTICIPATION, NEGATIVE
         AMORTIZATION OR PARTICIPATION INTEREST. The Mortgaged Property is not
         security for any obligation other than the Mortgage Loan. Except as set
         forth in the Mortgage Loan Schedule, the Mortgage Loan contains no
         equity participation by Borrower and is a whole loan and not a
         participation certificate; neither the related Mortgage Note nor the
         related Mortgage provides for any contingent or additional interest in
         the form of participation in the cash flow of the related Mortgaged
         Property; the Mortgage Note does not provide for negative amortization.
         The indebtedness evidenced by such Mortgage Note is not convertible to
         an ownership interest in the Mortgaged Property (other than through
         foreclosure of the

<PAGE>

                                       11

         Mortgage) or the related Mortgagor. Borrower has no ownership interest
         in the related Mortgaged Property or the Mortgagor other than in the
         Mortgage Loan which is being collaterally assigned by Borrower
         hereunder.

                  (e) COMPLIANCE WITH APPLICABLE LAWS. As of the date of its
         origination, the Mortgage Loan either complied with, or was exempt
         from, applicable state or federal laws, regulations and other
         requirements pertaining to usury. With respect to Mortgage Loans
         originated by Borrower, Borrower has complied in all material respects
         with the requirements of any and all other federal, state or local laws
         applicable to the origination of the Mortgage Loan, including, without
         limitation, truth-in-lending, real estate settlement procedures, equal
         credit opportunity and disclosure laws.

                  (f) PROCEEDS FULLY DISBURSED. The proceeds of the Mortgage
         Loan have been fully disbursed, and there is no requirement for future
         advances thereunder.

                  (g) DOCUMENTS VALID. To Borrower's knowledge and based upon an
         opinion of counsel to Mortgagor obtained at the closing of its
         origination, each of the Mortgage Note, the Mortgage and each other
         written agreement in connection therewith is genuine and is the legal,
         valid and binding obligation of the Mortgagor, the related indemnitor
         or other party executing such document, enforceable in accordance with
         its terms. To Borrower's knowledge, there is no valid offset, defense,
         abatement, counterclaim or right of rescission in favor of the
         Mortgagor or any other obligated Person with respect to the Mortgage
         Note, Mortgage or other written agreement relating to the Mortgage
         Loan, nor will the operation of any of the terms of the Mortgage Note
         or the Mortgage, or the exercise of any right thereunder, render either
         the Mortgage or the Mortgage Note unenforceable or subject to any valid
         right of rescission, offset, counterclaim or defense, including,
         without limitation, the defense of usury, and Borrower has no actual
         knowledge that any such right of rescission, offset, counterclaim or
         defense has been asserted or is available with respect thereto.

                  (h) ASSIGNMENT OF MORTGAGE; NOTE ENDORSEMENT. The Assignment
         of Mortgage (but for the insertion of the name of the assignee and any
         related recording information which is not yet available to the
         Borrower) is in recordable form and constitutes the Borrower's legal,
         valid and binding assignment to Lender of the Mortgage and the related
         Assignment of Leases and Rents. The Borrower's endorsement and delivery
         of the Mortgage Note to Lender in accordance with the terms of this
         Agreement constitutes the Borrower's legal, valid and binding
         assignment to Lender of such Mortgage Note, and together with the
         Borrower's execution and delivery of such Assignment of Mortgage to
         Lender, legally and validly conveys all right, title and interest of
         Borrower in the Mortgage Loan to Lender other than rights to servicing
         of the Mortgage Loan.

                  (i) FIRST LIEN. To Borrower's knowledge based upon the title
         insurance policy (or binding commitment therefor) secured with respect
         to each

<PAGE>

                                       12

         Mortgage Loan, the Mortgage is a valid and enforceable first lien on
         the Mortgaged Property (including all buildings and improvements on
         such Mortgaged Property and all installations and mechanical,
         electrical, plumbing, heating and air conditioning systems located in
         or annexed to such buildings, and all additions, alterations and
         replacements made at any time prior to the Closing Date of the Mortgage
         Loan with respect to the foregoing, but excluding any related personal
         property), which Mortgaged Property is free and clear of all
         encumbrances and liens having priority over the first lien of such
         Mortgage, except for Permitted Encumbrances.

                  (j) NO MODIFICATION, RELEASE OR SATISFACTION. Neither the
         Mortgage nor the Mortgage Note has been impaired, waived, modified,
         altered, satisfied, canceled, subordinated or rescinded, and the
         Mortgaged Property has not been released from the lien of the Mortgage
         and the Mortgagor has not been released from its obligations under the
         Mortgage, in whole or in any part, in each such event in a manner which
         would materially interfere with the benefits of the security intended
         to be provided by the Mortgage. Except for instruments included in the
         Mortgage File and which are disclosed to Lender, no instrument has been
         executed that would effect any such waiver, modification, alteration,
         satisfaction, cancellation, subordination, rescission or release.

                  (k) NO TAXES OR ASSESSMENTS. Based upon the title insurance
         policy (or binding commitment therefor) secured with respect to each
         Mortgage Loan, all taxes and governmental assessments, or if payable in
         installments, the installment thereof, which became due and owing prior
         to the date of origination of the Mortgage Loan in respect of the
         Mortgaged Property (excluding any related personal property) and which,
         if left unpaid, would be, or might become, a lien on the Mortgaged
         Property having priority over the Mortgage, have been paid, or an
         escrow of funds in an amount sufficient to cover such taxes and
         assessments has been established.

                  (l) ESCROW DEPOSITS. All escrow deposits and other escrow
         payments required under the Mortgage Note, the Mortgage and any other
         Mortgage Loan Documents executed in connection with the origination of
         the Mortgage Loan to be paid prior to the Closing Date have been paid
         to, and are in the possession, or under the control of Borrower or its
         agent, or have been applied in accordance with their intended purposes.

                  (m) NO BUYDOWNS OR THIRD PARTY ADVANCES. Borrower has not,
         directly or indirectly, advanced funds to, induced or solicited any
         payment from, a Person other than the Mortgagor, or, to Borrower's
         knowledge, received any payment from a Person other than the Mortgagor,
         for the payment of any amount required under the Mortgage Note or the
         Mortgage, except for interest accruing from the date of such Mortgage
         Note or the date of disbursement of the proceeds of such Mortgage Loan,
         whichever is later, to the date which precedes by 30 days the first due
         date under such Mortgage Note. The Mortgage Loan Documents

<PAGE>

                                       13

         contain no provision which may constitute a "buydown" provision. The
         Mortgage Loan is not a graduated payment mortgage loan.

                  (n) NO CONDEMNATION. No proceedings for the total or partial
         condemnation of the Mortgaged Property were pending or threatened as of
         the date of origination.

                  (o) NO MECHANICS' LIENS. To Borrower's knowledge based upon
         the title insurance policy (or a binding commitment therefor), the
         Mortgaged Property (excluding any related personal property) as of the
         date of origination was free and clear of any mechanics' and
         materialmen's liens or liens in the nature thereof and no rights are
         outstanding that, under law, could give rise to any such liens, any of
         which liens are or may be prior to, or equal with, the lien of the
         Mortgage, except those which are insured against by the lender's title
         insurance policy referred to in subparagraph (t) below.

                  (p) TITLE SURVEY; IMPROVEMENTS. The Mortgage File includes an
         as-built survey with respect to the Mortgaged Property which satisfied
         the requirements of the title insurance company for its deletion of the
         standard general exceptions for encroachments, boundary and other
         survey matters and for easements not shown by the public records from
         the title insurance policy as required by Borrower's customary
         practices in originating commercial loans similar to the Mortgage Loans
         included herein. To Borrower's knowledge based upon the survey, except
         for encroachments, encumbrances and other matters which do not
         materially and adversely affect the value of the Mortgaged Property as
         security for the Mortgage Loan, (i) none of the improvements which were
         included for the purpose of determining the value of the Mortgaged
         Property at the time of the Appraisal lies outside the boundaries and
         building restriction lines of the Mortgaged Property, (ii) no
         improvements on adjoining properties materially encroach upon the
         Mortgaged Property so as to materially and adversely affect the value
         of the Mortgaged Property as security for the Mortgage Loan, and (iii)
         to Borrower's knowledge (based upon an opinion of counsel obtained from
         the Mortgagor, a zoning endorsement to the title insurance policy, an
         architect or engineer's certificate, or a letter from the applicable
         zoning authority), no improvements located on or forming a part of the
         Mortgaged Property are in material violation of any applicable zoning
         and building laws or ordinances (except to the extent they may
         constitute legal non-conforming uses).

                  (q) MORTGAGE FILES. The Mortgage File contains the agreements,
         instruments and documents listed in SCHEDULE D.

                  (r) TITLE. Borrower is the sole legal owner and beneficial
         holder of the Mortgage Loan or is a participant or a member of a
         syndication of such Mortgage Loan, has full right and authority to sell
         and assign the Mortgage Loan or its participant or syndicate interest,
         and is transferring the Mortgage Loan or its participant or syndicate
         interest to Lender free and clear of any and all liens,

<PAGE>

                                       14

         encumbrances, pledges, charges or security interests of any nature
         encumbering the Mortgage Loan, except Permitted Liens.

                  (s) COMPLIANCE WITH LAWS. To Borrower's knowledge (based upon
         a representation or opinion of counsel obtained from the Mortgagor),
         the Mortgagor has obtained all inspections, licenses, permits,
         Authorizations, and certificates necessary for compliance in all
         material respects with applicable laws and governmental regulations,
         including, but not limited to, certificates of occupancy and fire
         underwriter certificates. Borrower has no knowledge that the Mortgaged
         Property is in material noncompliance with such laws or regulations, is
         being used, operated or occupied unlawfully in any material respects or
         has failed to have or obtain such inspections, licenses or
         certificates, as the case may be.

                  (t) TITLE INSURANCE. The Mortgaged Property (excluding any
         related personal property) is covered by an ALTA lender's title
         insurance policy ("Title Policy") or, if an ALTA lender's title
         insurance policy is unavailable, another state-approved form of
         lender's title insurance policy, issued by a nationally recognized
         title insurance company, in an amount not less than the stated original
         principal amount of the Mortgage Loan insuring Borrower, and its
         successors and assigns, that the related Mortgage is a valid first lien
         on the Mortgaged Property, subject only to Permitted Encumbrances (or
         if the Title Policy has not been issued, then a binding commitment
         therefor has been delivered at closing). Such title insurance policy
         (or if not yet issued, the coverage to be provided thereby) is in full
         force and effect. Borrower has not taken, or omitted to take, any
         action, and, to Borrower's knowledge no other Person has taken, or
         omitted to take, any action, that would materially impair the coverage
         benefits of the title insurance policy. If available in Borrower's
         judgment at a reasonable cost, such title policy includes an
         endorsement with respect to zoning and permitted uses as well as the
         following endorsements or their equivalents: (1) ALTA 8.1 (commercial
         environmental protection), (2) CLTA 100 (comprehensive), (3) CLTA 104
         (assignment of beneficial interest) and (4) CLTA 116 (designation of
         improvements). As of the date of the Assignment of Mortgage, Borrower
         has not made any claim under the title insurance policy.

                  (u) HAZARD INSURANCE. The related Mortgaged Property is
         insured by the types and amounts of coverage required by the Mortgage
         (subject to a customary deductible). All premiums due and payable on
         such insurance policies prior to the Closing Date have been paid and
         nothing has occurred that would materially impair the benefits of
         coverage thereunder. The Mortgage obligates the Mortgagor to maintain
         all such insurance and, at the Mortgagor's failure to do so, authorizes
         the mortgagee to maintain such insurance at the Mortgagor's cost and
         expense and to seek reimbursement therefor from the Mortgagor. Any
         insurance proceeds in respect of a casualty loss or taking, will be
         applied either to the repair or restoration of all or part of the
         related Mortgaged Property, or to the payment of the outstanding
         principal balance of such Mortgage Loan together with any accrued
         interest thereon in accordance with the requirements of the Mortgage.

<PAGE>

                                       15

                  (v) UCC FINANCING STATEMENTS. One or more Uniform Commercial
         Code financing statements covering all furniture, fixtures, equipment
         and other personal property (1) which are collateral under the Mortgage
         or under a security or similar agreement executed and delivered in
         connection with the Mortgage Loan and (2) in which a security interest
         can be perfected by the filing of Uniform Commercial Code financing
         statement(s) under applicable law have been filed or recorded (or have
         been sent for filing or recording) in all Uniform Commercial Code
         filing offices in the jurisdiction where the Mortgage Property is
         located necessary to the perfection of a security interest in such
         furniture, fixtures, equipment and other personal property under
         applicable law (unless such security interest is otherwise perfected
         under applicable law).

                  (w) DEFAULT, BREACH AND ACCELERATION. To Borrower's knowledge,
         there is no material default, breach, violation or event of
         acceleration existing under the Mortgage or the Mortgage Note and no
         event which, with the passage of time or with notice and the expiration
         of any grace or cure period, would constitute a non-monetary default,
         breach, violation or event of acceleration.

                  (x) CUSTOMARY PROVISIONS. The Mortgage Loan Documents are on
         standard forms customarily acceptable to reasonable and prudent
         mortgage lenders and with no material deviations therefrom except as
         disclosed to Lender. The Mortgage Note or the Mortgage contain
         customary and enforceable provisions such as to render the rights and
         remedies of the holder thereof adequate for the practical realization
         against the Mortgaged Property of the material benefits of the
         security, including, but not limited to, judicial or, if applicable,
         nonjudicial foreclosure.

                  (y) INSPECTION. Borrower inspected the Mortgaged Property or
         caused the Mortgaged Property to be inspected in connection with the
         origination or acquisition of such Mortgage Loan, and no earlier than
         six months prior to the applicable Closing Date.

                  (z) NO NOTICE OF BANKRUPTCY. Borrower has no actual knowledge
         nor has it received any notice that the Mortgagor is a debtor in any
         state or federal bankruptcy, reorganization or insolvency proceeding.

                  (aa) NO GROUND LEASE. Except as disclosed to Lender, the
         Mortgage Loan is secured by a fee interest in the Mortgaged Property
         and not by any ground lease.

                  (bb) DEED OF TRUST. With respect to the Mortgage that is a
         deed of trust or trust deed, a trustee, duly qualified under applicable
         law to serve as such, has either been properly designated and currently
         so serves or may be substituted in accordance with applicable law.
         Except in connection with a trustee's sale after default by the
         Mortgagor or in connection with the release of the Mortgaged Property
         following the payment of the Mortgage Loan in full, no fees or expenses
         are payable by Borrower or Lender to such trustee.

<PAGE>

                                       16

                  (cc) TYPE OF MORTGAGED PROPERTY. The Mortgaged Property
         consists of a fee simple interest (or if disclosed to Lender, a
         leasehold interest) in real property and improvements thereon as set
         forth in the schedule attached hereto as EXHIBIT D. The Mortgaged
         Property is improved as a commercial Mortgaged Property or a
         multifamily Mortgaged Property as set forth on the schedule attached
         hereto as EXHIBIT D.

                  (dd) MORTGAGE ACCELERATION PROVISIONS. The Mortgage contains a
         provision for the acceleration of the payment of the unpaid principal
         balance of the Mortgage Loan in the event that (1) subject to a
         one-time transfer right pursuant to the Mortgage, the Mortgaged
         Property is sold or transferred without the prior written consent of
         the mortgagee thereunder or (2) the Mortgagor encumbers the Mortgaged
         Property without the prior written consent of the mortgagee thereunder.

                  (ee) NO ADDITIONAL COLLATERAL. The Mortgage Note is not, and
         has not been, secured by any collateral except the liens and security
         interests evidenced by the Mortgage Loan Documents assigned pursuant to
         the Assignment of Mortgage. The Mortgage was not given as collateral or
         security for the performance of obligations of any Person other than
         Borrower under the Mortgage Note.

                  (ff) ASSIGNMENT OF LEASES AND RENTS. The Mortgage Loan
         Documents contain the provisions of an Assignment of Rents or a
         separate Assignment of Rents is part of the Mortgage Loan Documents.
         Any Assignment of Leases and Rents creates a valid first priority
         perfected present assignment of, or security interest in, the right to
         receive all payments due under the related leases, if any, subject only
         to the Permitted Encumbrances, to the effect of bankruptcy, insolvency,
         reorganization, receivership, moratorium or other laws relating to or
         affecting the rights of creditors generally and general principles of
         equity (regardless of whether considered in a proceeding in equity or
         at law); and no Person other than the Mortgagor owns any interest in
         the right to receive any payments due under any such leases that is
         superior to or of equal priority with the mortgagee's interest therein
         except for a Person holding a Permitted Encumbrance.

                  (gg) ENVIRONMENTAL ASSESSMENT. The related Mortgaged Property
         was subject to one or more environmental site assessments (or an update
         of a previously conducted assessment) ("ASSESSMENT REPORT"), which was
         (were) performed on behalf of Borrower by an environmental professional
         independent of Borrower, or as to which the related report was
         delivered to Borrower in connection with its origination or acquisition
         of such Mortgage Loan; and Borrower, having made no independent inquiry
         other than reviewing the resulting Assessment Report(s) and/or
         employing an environmental consultant to perform the assessment(s)
         referenced herein, has no knowledge of any material and adverse
         environmental conditions or circumstance affecting such Mortgaged
         Property that was not disclosed in the related Assessment Report(s).
         Borrower

<PAGE>

                                       17

         has not taken any action with respect to such Mortgage Loan or the
         related Mortgaged Property that could subject Lender, or its successors
         and assigns in respect of the Mortgage Loan, to any liability under the
         Comprehensive Environmental Response, Compensation and Liability Act of
         1980, as amended ("CERCLA") or any other applicable federal, state or
         local environmental law, and the Borrower has not received any actual
         notice of a material violation of CERCLA or any applicable federal,
         state or local environmental law with respect to the related Mortgaged
         Property that was not disclosed in the related Assessment Report. To
         the extent any such condition or circumstance was disclosed, there has
         been escrowed an amount of money considered sufficient by Borrower,
         based upon the related Assessment Reports, to cure and remedy such
         condition or circumstance as recommended in the related Assessment
         Report or such condition has been cured and remedied. The related
         Mortgage requires the Mortgagor to comply with all applicable federal,
         state and local environmental laws and regulations.

                  (hh) FLOOD ZONE. To Borrower's knowledge based upon the survey
         obtained with respect to each Mortgage Loan, if any portion of a
         Mortgaged Property was, at the time of the origination of the related
         Mortgaged Loan, in an area identified in the Federal Register by the
         Federal Emergency Management Agency as having special flood hazards,
         and flood insurance was available, a flood insurance policy meeting any
         requirements of the then current guidelines of the Federal Insurance
         Administration is in effect with an insurance carrier acceptable to
         Borrower, in an amount representing coverage not less than the least of
         (1) the outstanding principal balance of such Mortgage Loan, (2) the
         full insurable value of such Mortgaged Property, and (3) the maximum
         amount of insurance available under the National Flood Insurance Act of
         1968, as amended.

                  (ii) ADVERSE PROCEEDINGS. To Borrower's knowledge, there are
         no actions, suits or proceedings before any court, administrative
         agency or arbitrator concerning the Mortgage Loan or the Mortgaged
         Property that might materially and adversely affect title to the
         Mortgage Loan or the validity or enforceability of the related Mortgage
         or that might materially and adversely affect the value of the
         Mortgaged Property as security for the Mortgage Loan, the use for which
         such premises were intended or the marketability of such Mortgaged
         Property.

                  (jj) PROPERTY CONDITION. Based solely on the engineering
         report received at the origination of the Mortgage Loan or such other
         engineering report reviewed by Borrower, and otherwise to the
         Borrower's knowledge (A) the Mortgaged Property is in good repair and
         free of structural defects, damage and waste that would materially and
         adversely affect the value of such Mortgaged Property other than
         matters described in such report for which an escrow of funds or
         reserves has been provided or as of the Closing Date has been repaired
         or corrected in all material respects, and there is no proceeding
         pending for the total or partial condemnation thereof and (B) all
         building systems are in good working order subject to ordinary wear and
         tear. With respect to Mortgage Loans

<PAGE>

                                       18

         originated by Borrower, Borrower inspected the related Mortgaged
         Property in connection with the origination of the related Mortgaged
         Loan.

                  (kk) ADDITIONAL FINANCING. Except for Permitted Encumbrances,
         the Mortgage Loan does not permit the Mortgagor to obtain additional
         financing secured by the Mortgaged Property, the lien of which is
         senior to, on a parity with, or subordinate to the Mortgage Loan,
         without the consent of the mortgagee.

                  (ll) ACCESS ROUTES. At the time of origination of the Mortgage
         Loan (based upon a representation from Mortgagor and a review of the
         survey), the Mortgagor had sufficient rights with respect to ingress
         and egress and similar matters identified in the appraisal of the
         Mortgaged Property as being critical to the appraised value thereof.

                  (mm) RECORDATION. The Mortgage is properly recorded (or, if
         not recorded, has been submitted for recording), is in form and
         substance acceptable for recording and, when properly recorded, will be
         sufficient under the laws of the jurisdiction wherein the Mortgaged
         Property is located to reflect of record the lien of such Mortgage.

                  (nn) NO FRAUD. Neither Borrower nor any of its officers or
         employees has participated in or condoned any fraud in connection with
         the origination, underwriting or servicing of the Mortgage Loan.
         Borrower has no knowledge of any fraud committed against it as a lender
         with respect to the Mortgage Loan.

                  (oo) MANAGEMENT AGREEMENT. Borrower has reviewed the
         Management Agreement for the related Mortgaged Property (if any) (the
         "MANAGEMENT AGREEMENT") and any acknowledgment agreement from the
         Manager thereunder, and based on such review and to the knowledge of
         Borrower (based solely on a representation of Mortgagor, if any), the
         Management Agreement is in full force and effect, and no default, or
         event which, with the passage of time or the giving of notice or both,
         would constitute a default, has occurred under such Management
         Agreement.

                  (pp) APPRAISAL. The Mortgage File contains an Appraisal of the
         Mortgaged Property by an appraiser, who, to the knowledge of Borrower,
         had no interest, direct or indirect, in the Mortgaged Property or in
         any loan made on the security thereof, whose compensation, under the
         terms of the appraiser's engagement, to the knowledge of Borrower, was
         not (directly or indirectly) based upon the approval or disapproval of
         the Mortgage Loan (other than a reduction of such compensation due to
         an early termination of the engagement); and who (1) was MAI certified,
         or (2) if Lender expressly approved in writing, after written
         disclosure to it, was state-licensed or state-certified if required by
         applicable law and was a member of, and had a professional designation
         from, a nationally recognized appraisal organization other than MAI. To
         the knowledge of Borrower, such Appraisal satisfied Borrower's
         customary underwriting and closing requirements and procedures. The
         market value used by Borrower in

<PAGE>

                                       19

         calculating the loan-to-value ratio of the Mortgage Loan was not
         greater than the appraised value as set forth in such Appraisal.

                  (qq) RECOURSE. The Mortgage Loan Documents contain Borrower's
         standard provisions providing for recourse against the Mortgagor for
         damages sustained in connection with the Mortgagor's fraud, material
         misrepresentation, or misappropriation. The Mortgage Loan Documents
         contain provisions pursuant to which the Mortgagor has agreed to
         indemnify the mortgagee for damages resulting from violations of
         Environmental Laws.

                  (rr) LEGAL OPINIONS. The Mortgage File for the Mortgage Loan
         contains an opinion from counsel in such form as is customarily
         acceptable to reasonable and prudent mortgage lenders and with no
         material deviations therefrom except as disclosed to Lender.

                  (ss) MORTGAGE NOTE. When a Mortgage Note is delivered to
         Lender or its designee, it will be the only promissory note evidencing
         the related Mortgaged Loan that has been manually signed by the
         Mortgagor, except for any earlier promissory notes consolidated with
         such Mortgage Note, an original of which is included in the related
         Mortgage File.

Without limitation of Lender's rights to declare that any Mortgage Loan no
longer constitutes an Eligible Mortgage Loan by reason of any deviation from the
foregoing criteria, to the extent that the Lender has approved in writing a
Mortgage Loan containing any deviation from the foregoing criteria for an
Eligible Mortgage Loan, which has been disclosed to Lender, in connection with
its review of a Mortgage Loan, such Mortgage Loan shall constitute an Eligible
Mortgage Loan hereunder notwithstanding the continued existence of such
deviation.

         "ENVIRONMENTAL ACTION" means any action, suit, demand, demand letter,
claim, notice of non-compliance or violation, notice of liability or potential
liability, investigation, proceeding, consent order or consent agreement
relating in any way to any Environmental Law, any Environmental Permit or
Hazardous Material or arising from alleged injury or threat to health, safety or
the environment, including, without limitation, (a) by any governmental or
regulatory authority for enforcement, cleanup, removal, response, remedial or
other actions or damages and (b) by any governmental or regulatory authority or
third party for damages, contribution, indemnification, cost recovery,
compensation or injunctive relief.

         "ENVIRONMENTAL LAW" means any federal, state, local or foreign statute,
law, ordinance, rule, regulation, code, order, writ, judgment, injunction,
decree or judicial or agency interpretation, policy or guidance relating to
pollution or protection of the environment, health, safety or natural resources,
including, without limitation, those relating to the use, handling,
transportation, treatment, storage, disposal, release or discharge of Hazardous
Materials.

<PAGE>

                                       20

         "ENVIRONMENTAL PERMIT" means any permit, approval, identification
number, license or other authorization required under any Environmental Law.

         "ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and the regulations promulgated and rulings issued
thereunder.

         "EUROCURRENCY LIABILITIES" has the meaning specified in Regulation D of
the Board of Governors of the Federal Reserve System, as in effect from time to
time.

         "EURODOLLAR LENDING OFFICE" means the office of Lender specified as its
"Eurodollar Lending Office" opposite its name on SCHEDULE A hereto or such other
office of Lender as Lender may from time to time specify to Borrower.

         "EURODOLLAR RATE" means, for any Interest Period, (a) either (i) the
quotation (expressed as percentage per annum) appearing on Telerate Page 3750 as
of 11:00 a.m., New York time, on the relevant Determination Date for such
Interest Period for U.S. Dollar deposits for the relevant Interest Period in the
London interbank market (rounded upward, if necessary, to the nearest one
hundred-thousandth of a percentage point) or, if no such rate appears on
Telerate Page 3750, or (ii) the arithmetic mean (rounded upward, if necessary,
to the nearest one hundred-thousandth of a percentage point) of the rates quoted
at approximately 11:00 a.m., London time, on such Determination Date, by four
(4) major banks in the London interbank market, selected by Lender, to prime
banks in the London interbank market for U.S. Dollar deposits for the relevant
Interest Period commencing on the first day of such Interest Period and in a
principal amount equal to an amount of not less than $1,000,000 that is
representative for a single transaction in such market at such time, PROVIDED
that, if fewer than four such quotations are provided as requested, the rate of
interest that is in effect on such Determination Date will be the Eurodollar
Rate for the immediately preceding Interest Period divided by (b) one (1) minus
the Eurodollar Rate Reserve Percentage. The foregoing notwithstanding, the
Eurodollar Rate for any Stub Interest Period shall be determined on the basis of
a one-month Interest Period commencing on the date of the applicable Advance.

         "EURODOLLAR RATE ADVANCE" means any Advance which bears interest in
accordance with SECTION 2.05(A)(II).

         "EURODOLLAR RATE RESERVE PERCENTAGE" for any Interest Period means the
reserve percentage applicable two (2) Business Days before the first day of such
Interest Period under regulations issued from time to time by the Board of
Governors of the Federal Reserve System (or any successor) for determining the
maximum reserve requirement (including, without limitation, any emergency,
supplemental or other marginal reserve requirement) for a member bank of the
Federal Reserve System in New York City with respect to liabilities or assets
consisting of or including Eurocurrency Liabilities (or with respect to any
other category of liabilities that includes deposits by reference to which the
interest rate on Eurodollar Rate Advances is determined) having a term equal to
such Interest Period.

<PAGE>

                                       21

         "EVENT OF DEFAULT" has the meaning specified in SECTION 6.01.

         "EXCLUDED TAXES" has the meaning specified in SECTION 2.08(A).

         "EXCULPATED PARTIES" has the meaning specified in SECTION 9.12.

         "FACILITY EQUITY" means (a) the sum of (i) the aggregate Loan Value of
all Mortgage Loans pledged as Collateral, plus (ii) all cash and cash
equivalents of Borrower plus (iii) the fair market value of any nonliquid assets
accepted by Lender in its sole discretion as part of Facility Equity (such fair
market value determination to be made by Lender in its sole discretion) less (b)
the aggregate unpaid principal balance of the Advances.

         "FEDERAL FUNDS RATE" means, for any period, a fluctuating interest rate
per annum equal for each day during such period to the weighted average of the
rates on overnight Federal funds transactions with members of the Federal
Reserve System arranged by Federal funds brokers, as published for such day (or,
if such day is not a Business Day, for the next preceding Business Day) by the
Federal Reserve Bank of New York, or, if such rate is not so published for any
day that is a Business Day, the average of the quotations for such day for such
transactions received by the Lender from three Federal funds brokers of
recognized standing selected by it.

         "FISCAL YEAR" means a fiscal year of the Borrower and its Consolidated
Subsidiaries ending on November 30 in any calendar year or such other fiscal
year as the Borrower may select from time to time in accordance with the terms
of this Agreement.

         "FLOATING RATE LOAN" means an Eligible Mortgage Loan that bears
interest at a fluctuating rate.

         "GAAP" means generally accepted accounting principles consistently
applied and consistent with those applied in the preparation of the financial
statements referred to in SECTION 5.04.

         "GOVERNMENTAL AUTHORITY" means any nation or government, any state,
county, municipality or other political subdivision or branch thereof, and any
entity exercising executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government, including any agency, board,
commission, court, department or officer thereof.

         "GUARANTEE" of or by any Person (the "GUARANTOR") means any obligation,
contingent or otherwise, of the guarantor guaranteeing or having the economic
effect of guaranteeing any Debt or other obligation of any other Person (the
"PRIMARY OBLIGOR") in any manner, whether directly or indirectly, and including
any obligation of the guarantor, direct or indirect, (a) to purchase or pay (or
advance or supply funds for the purchase or payment of) such Debt or other
obligation or to purchase (or to advance or supply funds for the purchase of)
any security for the payment thereof, (b) to purchase or lease property,
securities or services for the purpose of assuring the owner of such Debt or
other obligation of the payment thereof, (c) to maintain working capital, equity
capital or

<PAGE>

                                       22

any other financial statement condition or liquidity of the primary obligor so
as to enable the primary obligor to pay such Indebtedness or other obligation or
(d) as an account party in respect of any letter of credit or letter of guaranty
issued to support such Debt or obligation; PROVIDED, HOWEVER, that the term
Guarantee shall not include endorsements for collection or deposit in the
ordinary course of business.

         "GUARANTY" means the Guaranty made by LNR in favor of the Lender with
respect to the B Note Advances, dated as of the date hereof.

         "HAZARDOUS MATERIALS" means (a) refined petroleum products, by-products
or breakdown products, radioactive materials, asbestos-containing materials,
polychlorinated biphenyls and radon gas and (b) any other chemicals, materials
or substances designated, classified or regulated as hazardous or toxic or as a
pollutant or contaminant under any Environmental Law.

         "HEDGE AGREEMENTS" means interest rate swap, cap or collar agreements,
interest rate future or option contracts, currency swap agreements, currency
future or option contracts and other similar agreements to which a Mortgagor is
a party.

         "INDEMNIFIED PARTY" has the meaning specified in SECTION 9.04(B).

         "INDEPENDENT" means, with respect to any specified Person, such a
Person who (a) does not have any direct financial interest or any material
indirect financial interest in the Borrower or in any of its Affiliates, (b) is
not connected with the Borrower as an officer, employee, promoter, underwriter,
trustee, partner or director and (c) is not controlled by or under common
control with the Borrower.

         "INITIAL ADVANCE" has the meaning specified in Section 3.01.

         "INITIAL UNDERWRITTEN NET CASH FLOW" means, with respect to any B Note,
the threshold level of underwritten net cash flow of the related Multifamily
Property or Commercial Property mutually agreed to by Borrower and Lender prior
to the making of a B Note Advance hereunder which shall be set forth in the
related Notice of Borrowing.

         "INTEREST PAYMENT DATE" means the first (1st) day of each calendar
month while any portion of the Loan remains unpaid; PROVIDED, HOWEVER, that if
such Interest Payment Date is not a Business Day, such Interest Payment Date
shall be the immediately succeeding Business Day.

         "INTEREST PERIOD" means, a period commencing on the date of the Initial
Advance hereunder and ending the next succeeding Interest Payment Date and each
successive one month period from and including each Interest Payment Date to but
excluding the next succeeding Interest Payment Date; PROVIDED, however, that
with respect to any Advance that is funded by Lender on a day other than an
Interest Payment Date, the initial Interest Period for such Advance (a "STUB
INTEREST PERIOD") shall be the period commencing on the date of such Advance and
ending on the next succeeding Interest Payment Date; and PROVIDED FURTHER that
no Interest Period shall extend beyond the Maturity Date.

<PAGE>

                                       23

         "INTEREST RESET DATE" means the first day of the applicable Interest
Period.

         "INTERNAL REVENUE CODE" means the Internal Revenue Code of 1986, as
amended from time to time, and the regulations promulgated and rulings issued
thereunder.

         "KEEPWELL AGREEMENT" means that certain keepwell agreement dated as of
May 15, 1999 by and between Borrower and Lender.

         "LAWS" means all present and future laws, statutes, codes, ordinances,
orders, judgments, decrees, injunctions, rules, regulations, determinations,
awards and court orders of any federal, state, municipal or local government,
governmental authority, regulatory agency or authority.

         "LENDER" has the meaning specified in the Preliminary Statement.

         "LENDER'S ACCOUNT" means an account of the Lender designated in writing
by the Lender to the Borrower.

         "LIBOR BREAKAGE" means the amount of losses, costs, charges and damages
which are actually incurred or which would be incurred by Lender (as reasonably
determined by Lender) as a result of any early termination of any arrangement,
or the entry into a new arrangement, with any other member of the London
interbank market for the funding of any portion of any Advance (determined as
though such Lender had funded 100% of such portion in the London interbank
market and calculated as of the date of the applicable repayment or
acceleration).

         "LIEN" means any lien, security interest or other charge or encumbrance
of any kind, or any other type of preferential arrangement, including, without
limitation, the lien or retained security title of a conditional vendor and any
easement, right of way or other encumbrance on title to real property.

         "LNR" has the meaning specified in SECTION 4.01(E).

         "LOAN DOCUMENTS" means (i) this Agreement, (ii) the Note, (iii) the
Collateral Documents, (iv) the Guaranty and (v) any other written agreement,
document or instrument evidencing, securing or otherwise related to the
Advances, in each case as amended or otherwise modified from time to time.

         "LOAN SERVICER" has the meaning specified in SECTION 7.02.

         "LOAN VALUE" means, (a) with respect to any Mortgage Loan, an amount
equal to the least of (i) the outstanding principal amount of the applicable
Mortgage Loan, (ii) the purchase price paid by Borrower to acquire the Loan or
(iii) the fair market value of such Mortgage Loan, as determined by Lender in
its sole discretion, and (b) with respect to any other Collateral (other than
any B Note), the fair market value of such Collateral, as determined by Lender
in its sole discretion.

<PAGE>

                                       24

         "MARGIN CALL NOTICE" has the meaning specified in SECTION 2.04(B).

         "MARGIN STOCK" has the meaning specified in Regulation U.

         "MATERIAL ADVERSE CHANGE" means any material adverse change in the
business, condition (financial or otherwise), operations, performance or
properties of Borrower and its Subsidiaries, taken as a whole.

         "MATERIAL ADVERSE EFFECT" means a material adverse effect on (a) the
business, condition (financial or otherwise), operations, performance,
properties of Borrower and its Subsidiaries, taken as a whole, (b) the rights
and remedies of the Lender under any Loan Document or (c) the ability of
Borrower to perform its Obligations under any Loan Document to which it is or is
to be a party.

         "MINIMUM COLLATERAL VALUE" means an amount equal to Fifteen Million and
00/100 Dollars ($15,000,000.00) (i) PROVIDED, that notwithstanding the
foregoing, commencing on the date the aggregate amount of Mortgage Loan Advances
made by the Lender first exceeds $150,000,000, the "Minimum Collateral Value"
shall thereafter be increased to the greater of (1) Twenty-Two Million and
00/100 Dollars ($22,000,000) and (2) 10% of the aggregate outstanding amount of
Mortgage Loan Advances (but not more than Twenty-Seven Million and 00/100
Dollars ($27,000,000)).

         "MORTGAGE" means the mortgage, deed of trust or other instrument
creating a first lien on, or first priority security interest in, one or more
Mortgaged Properties securing a Mortgage Note, together with any rider, addendum
or amendment thereto, as amended from time to time.

         "MORTGAGE CONSTANT" means ten percent (10%) per annum with respect to
any Mortgage Loan.

         "MORTGAGE FILE" means, with respect to any Eligible Mortgage Loan, the
documents listed on SCHEDULE D attached hereto.

         "MORTGAGE LOAN" means a mortgage loan originated or acquired by the
Borrower, or participation or similar interests in such Mortgage Loans, and
secured by a Mortgaged Property, including the related Mortgage Note, Mortgage,
the Borrower's interest in any Hedge Agreements and other Mortgage Loan
Documents, as well as any reserves, escrows or other deposits maintained in
connection with such mortgage loan.

         "MORTGAGE LOAN ADVANCE" means an Advance made to the Borrower to
provide funds to make or acquire one or more Mortgage Loans.

         "MORTGAGE LOAN ADVANCES MATURITY DATE" means, with respect to any
Mortgage Loan Advance, the date which is the earlier to occur of (i) the
Mortgage Loan Advances Termination Date and (ii) the date which is the first
anniversary of the funding of such Advance; PROVIDED, that notwithstanding the
foregoing, the "Mortgage Loan Advances Maturity Date" with respect to any
Mortgage Loan Advance made prior to the date of this Agreement means the date
set forth on Schedule E attached hereto.

<PAGE>

                                       25

         "MORTGAGE LOAN ADVANCES TERMINATION DATE" means June 1, 2000.

         "MORTGAGE LOAN DOCUMENTS" means, with respect to any Mortgage Loan, the
related Mortgage Note, Mortgage, Assignment of Rents, Hedge Agreement and any
other agreement, instrument or document evidencing or securing such Mortgage
Loan.

         "MORTGAGE NOTE" means, with respect to any Mortgage Loan, the
promissory note or other evidence of indebtedness of the Mortgagor under such
Mortgage Loan, including any amendments or modifications, or any renewal or
substitution notes, as of such date.

         "MORTGAGED PROPERTY" means the real property securing a Mortgage Loan,
consisting of either a Multifamily Property or a Commercial Property.

         "MORTGAGOR" means the borrower under any Mortgage Loan.

         "MULTIFAMILY PROPERTY" means a fee simple estate in or a ground lease
on a parcel of real property, together with all improvements thereon, which
property consists of five (5) or more residential dwelling units, together with
any personal property, fixtures, leases, and other property or rights of the
owner pertaining thereto.

         "NET CASH PROCEEDS" means, with respect to any sale, transfer or other
disposition of any Mortgage Loan or B Note, the aggregate amount of cash
received from time to time (whether as initial consideration or through payment
or disposition of deferred consideration) by or on behalf of such Person in
connection with such transaction after deducting therefrom only (without
duplication) (a) reasonable and customary out-of-pocket brokerage commissions,
underwriting fees and discounts, legal fees, finder's fees and other similar
fees and commissions, (b) reasonable and customary out-of-pocket closing costs
and (c) the amount of taxes payable in connection with or as a result of such
transaction, in each case to the extent, but only to the extent, that the
amounts so deducted are, at the time of receipt of such cash, actually paid to a
Person that is not an Affiliate of such Person and are properly attributable to
such transaction or to the asset that is the subject thereof.

         "NON-RENEWAL NOTICE" has the meaning specified in SECTION 2.02(C).

         "NOTE" means the amended and restated promissory note of Borrower
payable to the order of the Lender, in substantially the form attached hereto as
EXHIBIT A, evidencing the indebtedness of Borrower to the Lender resulting from
the Advances made by the Lender.

         "NOTICE OF BORROWING" has the meaning specified in SECTION 2.02.

         "OBLIGATION" means, with respect to any Person, any payment or
performance obligation of such Person of any kind, including, without
limitation, any liability of such Person on any claim, whether or not the right
of any creditor to payment in respect of such claim is reduced to judgment,
liquidated, unliquidated, fixed, contingent, matured, disputed, undisputed,
legal, equitable, secured or unsecured, and whether or not such

<PAGE>

                                       26

claim is discharged, stayed or otherwise affected by any proceeding referred to
in SECTION 6.01(F). Without limiting the generality of the foregoing, the
Obligations of Borrower under the Loan Documents include (a) the obligation to
pay principal, interest, charges, expenses, fees, attorneys' fees and
disbursements, indemnities and other amounts payable by Borrower under any Loan
Document and (b) the obligation of Borrower to reimburse any amount in respect
of any of the foregoing that the Lender, in its sole discretion, may elect to
pay or advance on behalf of Borrower.

         "ORGANIZATIONAL DOCUMENTS" means, (i) with respect to any Person that
is a corporation, the certificate of incorporation or charter and by-laws of
such Person, (ii) with respect to any Person that is a partnership, the
partnership agreement and, if a limited partnership, certificate of limited
partnership of such Person, and (iii) with respect to any Person that is a
limited liability company, the articles of organization and the operating
agreement of such Person.

         "OTHER TAXES" has the meaning specified in SECTION 2.08(B).

         "PERMITTED ENCUMBRANCES" means, collectively and with respect to a
Mortgaged Property encumbered by an Eligible Mortgage Loan or a mortgaged
property to which an A Note and a B Note relate,

                  (a) Liens for real estate taxes and special assessments not
         yet due and payable,

                  (b) covenants, conditions and restrictions, rights of way,
         easements and other matters of public record as of the date of
         recording of the related mortgage, such exceptions appearing of record
         being acceptable to mortgage lending institutions generally or
         specifically reflected in the appraisal made in connection with the
         origination of the related Eligible Mortgage Loan, none of which
         materially interferes with the benefits of the security intended to be
         provided by such Mortgage,

                  (c) exceptions and exclusions specifically referred to in
         Borrower's mortgagee title insurance policy, none of which materially
         interferes with the benefits of the security intended to be provided by
         the related Mortgage or the use, enjoyment, value or marketability of
         the related Mortgaged Property in relation to the appraised value of
         such Mortgaged Property utilized in connection with the origination of
         the related Eligible Mortgage Loan,

                  (d) other matters to which like properties are commonly
         subject which do not, individually or in the aggregate, materially
         interfere with the benefits of the security intended to be provided by
         the Mortgage thereon, or

                  (e) other encumbrances and liens specifically approved by
         Lender after its due diligence of such Mortgage Loan in connection with
         confirming that a Mortgage Loan constitutes an Eligible Mortgage Loan.

<PAGE>

                                       27

         "PERMITTED LIENS" means such of the following as to which no
enforcement, collection, execution, levy or foreclosure proceeding shall have
been commenced: (a) Liens for taxes, assessments and governmental charges or
levies not yet due and payable; (b) Liens imposed by law, such as landlord's,
materialmen's, mechanics', carriers', workmen's and repairmen's Liens and other
similar Liens arising in the ordinary course of business securing obligations
that are not overdue for a period of more than 90 days; and (c) pledges or
deposits to secure obligations under workers' compensation laws or similar
legislation or to secure public or statutory obligations.

         "PERSON" means an individual, partnership, corporation (including a
business trust), limited liability company, joint stock company, trust,
unincorporated association, joint venture or other entity, or a government or
any political subdivision or agency thereof.

         "PRICE DIFFERENTIAL" and "PRICING RATE BREAKAGE" have the meanings
specified in the Repurchase Facility.

         "PROPERTY VALUE" means, with respect to any Multifamily Property or
Commercial Property securing a B Note (or in the case of a B Note in the form of
a participation, entitling the holder thereof to receive cash flow in connection
with a mortgage secured by a Multifamily Property or Commercial Property), an
amount equal to the market value of such Multifamily Property or Commercial
Property as determined by the Lender in its sole discretion.

         "REGULATION U" means Regulation U of the Board of Governors of the
Federal Reserve System, as in effect from time to time.

         "RELEASE PRICE" means, with respect to an Eligible Mortgage Loan or
Eligible B Note, the payment to be made by Borrower in order to effect the
release of such Eligible Mortgage Loan or Eligible B Note from the Liens of the
Loan Documents thereon, which Release Price shall be equal to the sum of (a) the
principal amount of the Advance made with respect to the applicable Mortgage
Loan or B Note minus, as of the dates of release, the amount of principal
prepayments previously made by the Borrower attributable to such Mortgage Loan
or B Note equal to the sum of (x) prepayments from principal collections
pursuant to Sections 2.04(b)(i) and 2.04(b)(ii) and (y) such Advances pro rata
share of all voluntary prepayments pursuant to Section 2.04(a) or prepayments in
connection with a Margin Call Notice pursuant to Section 2.04(b)(iii) and (y)
the applicable Advance Rate, PLUS (b) LIBOR Breakage, if any, and shall be
adjusted by Lender to account for any principal payments made from time to time
by the Borrower in respect of such Mortgage Loan or B Note.

         "REPURCHASE FACILITY" means the Master Repurchase Agreement (including
Annex I--Supplemental Terms and Conditions attached thereto), dated as of June
25, 1999, between Deutsche Bank AG, New York Branch and Delaware Securities
Holdings, Inc.

         "REPURCHASE PRICE" has the meaning specified in the Repurchase
Facility.

<PAGE>

                                       28

         "RESPONSIBLE OFFICER" means the following officers of Borrower or any
officer of Borrower subsequently designated in writing by Borrower as a
"Responsible Officer": (i) President; (ii) Vice-President; (iii) Chief Operating
Officer; (iv) Chief Executive Officer; and (v) Chief Financial Officer.

         "REUNDERWRITTEN NET CASH FLOW" means, with respect to any B Note, the
underwritten net cash flow of the related Multifamily Property or Commercial
Property determined by the Lender from time to time pursuant to the methodology
set forth in Schedule C.

         "SECURITIZATION" means the creation and issuance of CMBS in a
registered or unregistered offering or offerings.

         "SECURITY AGREEMENT" has the meaning specified in SECTION 3.01(D)(VII).

         "SERVICING AND INTERCREDITOR AGREEMENT" means (i) prior to a
securitization of an A Note, the related interim servicing and intercreditor
agreement and (ii) after a securitization of an A Note, the related servicing
and intercreditor agreement in each case, by and among German American Capital
Corporation, the Borrower and an Affiliate of Borrower as special servicer.

         "SIDE LETTER" means a letter agreement dated May 15, 1998 between
Borrower and Deutsche Morgan Grenfell, Inc., pursuant to which Borrower agreed
to retain Deutsche Morgan Grenfell, Inc. as lead manager in connection with any
Securitization of Mortgage Loans pledged as Collateral hereunder.

         "SOLVENT" and "SOLVENCY" mean, with respect to any Person on a
particular date, that on such date (a) the fair value of the property of such
Person is greater than the total amount of liabilities, including, without
limitation, contingent liabilities, of such Person, (b) the present fair salable
value of the assets of such Person is not less than the amount that will be
required to pay the probable liability of such Person on its debts as they
become absolute and matured, (c) such Person does not intend to, and does not
believe that it will, incur debts or liabilities beyond such Person's ability to
pay such debts and liabilities as they mature and (d) such Person is not engaged
in business or a transaction, and is not about to engage in business or a
transaction, for which such Person's property would constitute an unreasonably
small capital. The amount of contingent liabilities at any time shall be
computed as the amount that, in the light of all the facts and circumstances
existing at such time, represents the amount that can reasonably be expected to
become an actual or matured liability.

         "STUB INTEREST PERIOD" has the meaning specified in the definition of
"INTEREST PERIOD."

         "SUBSIDIARY" of any Person means any corporation, partnership, joint
venture, limited liability company, trust or estate of which (or in which) more
than 50% of (a) the issued and outstanding capital stock having ordinary voting
power to elect a majority of the Board of Directors of such corporation
(irrespective of whether at the time capital stock of any other class or classes
of such corporation shall or might have voting power

<PAGE>

                                       29

upon the occurrence of any contingency), (b) the interest in the capital or
profits of such partnership, joint venture or limited liability company or (c)
the beneficial interest in such trust or estate is at the time directly or
indirectly owned or controlled by such Person, by such Person and one or more of
its other Subsidiaries or by one or more of such Person's other Subsidiaries.

         "TAXES" has the meaning specified in SECTION 2.08(A).

         "TANGIBLE NET WORTH" means, as to any Person and as of determination,
the net worth of such Person at such time, determined in accordance with GAAP,
less the amount of all intangible items, including, without limitation,
goodwill, franchises, licenses, patents, trade marks, trade names, copyrights,
service marks, brand names, write-ups of assets and any unallocated excess costs
of investments in subsidiaries over equity in underlying net assets at dates of
acquisition.

         "TERMINATION DATE" means with respect to Mortgage Loan Advances, the
Mortgage Loan Advances Termination Date, and with respect to B Note Advances,
the B Note Advances Termination Date.

         "TRANSFER" means, with respect to any item of property, any conveyance,
assignment, sale, mortgaging, encumbrance, pledging, hypothecation, granting of
a security interest in, granting of options with respect to, or other
disposition of (directly or indirectly, voluntarily or involuntarily, by
operation of law or otherwise, and whether or not for consideration or of
record) all or any portion of any legal or beneficial interest in such property.

         "TRUST RECEIPT" means, with respect to any Eligible Mortgage Loan or
Eligible B Note, the Trust Receipt issued by the Custodian with respect thereto,
pursuant to the Custodial Agreement and in the form attached thereto, certifying
that the Custodian is holding, on behalf of the Lender as collateral assignee,
the documents described in the Custodial Agreement with respect to such Eligible
Mortgage Loan or Eligible B Note.

         "VOTING STOCK" means capital stock issued by a corporation, or
equivalent interests in any other Person, the holders of which are ordinarily,
in the absence of contingencies, entitled to vote for the election of directors
(or persons performing similar functions) of such Person, even if the right so
to vote has been suspended by the happening of such a contingency.

         SECTION 1.02. COMPUTATION OF TIME PERIODS. In this Agreement in the
computation of periods of time from a specified date to a later specified date,
the word "from" means "from and including" and the words "to" and "until" each
mean "to but excluding."

         SECTION 1.03. ACCOUNTING TERMS. All accounting terms not specifically
defined herein shall be construed in accordance with GAAP.

<PAGE>

                                       30

                                   ARTICLE II

                        AMOUNT AND TERMS OF THE ADVANCES

         SECTION 2.01. THE ADVANCES. The Lender agrees, on the terms and
conditions hereinafter set forth, to make advances (each, an "ADVANCE") to the
Borrower from time to time on any Business Day during the period from the date
hereof until the applicable Termination Date in an aggregate principal amount
not to exceed the Borrowing Limit. Each Advance shall, unless approved in
advance by Lender, be in a minimum principal amount of $1,000,000 or an integral
multiple of $10,000 in excess thereof. Within the Borrowing Limit in effect from
time to time, the Borrower may borrow under this SECTION 2.01, prepay pursuant
to SECTION 2.04 and reborrow under this SECTION 2.01.

         SECTION 2.02. MAKING THE ADVANCES.

         (a) Upon satisfaction of the conditions precedent to Lender's
obligations pursuant to this Agreement, the Advances shall be made on notice,
given not later than 11:00 A.M. (New York City time) on the second Business Day
prior to the date of the proposed disbursement of the Advance, by the Borrower
to Lender. Such notice (a "NOTICE OF BORROWING") shall be by telephone,
confirmed immediately in writing, or telex or telecopier, in substantially the
form of EXHIBIT G hereto, specifying therein, among other things, (i) the
requested date of such Advance, (ii) the amount of such Advance and (iii) with
respect to each B Note Advance only, the outstanding principal amounts of the
related A Note and B Note, the Initial Underwritten Net Cash Flow (including a
description of the methodology used to determine such amount) and the Property
Value agreed to by Borrower and Lender. Subject to the satisfaction of the
conditions precedent to Lender's obligations under this Agreement, the Lender
shall, on the date of the proposed Advance, make funds in an amount equal to the
amount of such Advance available to Borrower by crediting Borrower's Account.

         (b) Lender and Borrower shall consult one another and cooperate with
respect to the identification of potential Eligible Mortgage Loans for inclusion
as Collateral under this Agreement. In order to obtain formal approval from
Lender of a particular Mortgage Loan as an Eligible Mortgage Loan, Borrower
shall submit to Lender a review package with respect to such Mortgage Loan
containing the following:

                  (i) an underwriting narrative for the applicable Mortgage Loan
         including the indicative debt service coverage ratio and loan-to-value
         ratio of the applicable Mortgaged Property;

                  (ii) the most recent rent roll, to the extent available, for
         the applicable Mortgaged Property;

                  (iii) current and, to the extent available, historical
         financial statements for the applicable Mortgaged Property for the
         three (3) most recent fiscal years;

                  (iv) all available financial information with respect to the
         applicable Mortgagor;

<PAGE>

                                       31

                  (v) copies of any Appraisal, engineering report, environmental
         assessment or other report prepared by any third party consultants;

                  (vi) an analysis of any unusual features of the applicable
         Mortgage Loan (e.g., that the Mortgagor's interest is a condominium or
         a ground lease); and

                  (vii) such other information as Lender may reasonably request.

In addition, Borrower shall, at the request of Lender provide Lender the
opportunity to conduct a site inspection of the applicable Mortgaged Property.
Lender shall endeavor in good faith to respond in writing within five (5)
Business Days after submission of the information set forth above as to whether
the proposed Mortgage Loan constitutes an Eligible Mortgage Loan under this
Agreement. Borrower shall not submit any Notice of Borrowing requesting an
Advance with respect to any Mortgage Loans until such time as Borrower has
received written confirmation from Lender that such Mortgage Loans constitute
Eligible Mortgage Loans and as to the Loan Value of such Eligible Mortgage
Loans.

         (c) EXTENSION OF B NOTE ADVANCES TERMINATION DATE. Upon request of the
Borrower in writing, Lender agrees to consider in good faith a one-time,
one-year extension of the B Note Advances Termination Date and corresponding
dates on which B Note Advances are required to be repaid as provided in SECTION
2.03(A).

SECTION 2.03.     REPAYMENT OF ADVANCES.

         (a) MATURITY. Subject to the provisions of SECTION 2.04, Borrower shall
repay to Lender the aggregate outstanding principal amount of each Mortgage Loan
Advance outstanding on the Mortgage Loan Advances Maturity Date. Subject to the
provisions of SECTION 2.04, Borrower shall repay to Lender the aggregate
principal amount of all B Note Advances outstanding as of August 31, 2002 in
four equal quarterly installments on the December, 2002, March, 2003, June, 2003
and September, 2003 Interest Payment Dates; PROVIDED that (1) in the event the
Borrower makes a voluntary prepayment or mandatory prepayment of the B Note
Advances pursuant to SECTION 2.04 after August 31, 2002, then the amount of each
remaining quarterly installment shall be reduced by an amount equal to the
quotient of (A) the amount of such voluntary prepayment or mandatory prepayment
divided by (B) the number of remaining quarterly Interest Payment Dates on which
installments are due (including, if such prepayment is made on a date on which
such quarterly installment is due, such date in the number determined pursuant
to this clause (B)) and (2) Borrower shall repay to Lender the aggregate
outstanding principal amount of each B Note Advance outstanding on the B Note
Advances Maturity Date.

         (b) ADVANCES REPAID BY ADVANCES. A Mortgage Loan Advance which has a
Mortgage Loan Advances Maturity Date prior to the Mortgage Loan Advances
Termination Date may be repaid by another Mortgage Loan Advance against the same
Mortgage Loans covered by the Mortgage Loan Advance being repaid; PROVIDED that
(i) no Material Adverse Change has occurred with respect to the prior Mortgage
Loan Advance and (ii) all of the conditions precedent to Lender's obligations
pursuant to this Agreement have been satisfied with respect to such subsequent
Advance.

<PAGE>

                                       32

SECTION 2.04.     PREPAYMENTS.

         (a) VOLUNTARY. The principal amount of the Advances made by Lender
pursuant to this Agreement may be prepaid in whole or in part at the option of
Borrower, upon not less than five (5) Business Days' notice to Lender.

         (b) MANDATORY.

                  (i) COLLECTIONS OF PRINCIPAL. Borrower shall, on each Interest
         Payment Date, prepay an aggregate principal amount of the Advances
         outstanding equal to the product of (A) the amount of principal paid by
         Mortgagors (in the case of the Mortgage Loans) or by mortgagors on the
         underlying mortgage loans in payment of the B Notes (in the case of the
         B Notes) during the period commencing on the immediately preceding
         Interest Payment Date and ending on the day before such Interest
         Payment Date with respect to the Mortgage Loans or B Notes comprising
         Collateral for the Obligations of the Borrower under the Loan Documents
         and (B) the applicable Advance Rate.

                  (ii) NET CASH PROCEEDS. Borrower shall, on the date of receipt
         of the Net Cash Proceeds by Borrower or any of its Subsidiaries from
         the sale, transfer or other disposition of any Collateral, prepay an
         aggregate principal amount of the Advances equal to the lesser of (A)
         the amount of such Net Cash Proceeds and (B) the outstanding principal
         amount of the Advance made with respect to the applicable Mortgage Loan
         or B Note sold, transferred or otherwise disposed.

                  (iii) MARGIN CALL. In the event that on any Business Day prior
         to the Termination Date (in the case of the Mortgage Loans) or the B
         Note Advances Maturity Date (in the case of the B Notes), Lender,
         acting in good faith, shall determine in its sole discretion that:

                           (A) any Mortgage Loan constituting Collateral
                  hereunder no longer qualifies as an Eligible Mortgage Loan; or

                           (B) there has been a reduction in the Loan Values of
                  any Eligible Mortgage Loans constituting Collateral; or

                           (C) there has been a B Note Performance Event or a B
                  Note Non-Payment Default Event or a B Note Payment Default
                  Event with respect to a B Note constituting Collateral

and, as a result, a Borrowing Base Deficiency then exists, Lender shall deliver
a notice (a "MARGIN CALL Notice") to the Borrower requesting that Borrower cure
such Borrowing Base Deficiency. Each Margin Call Notice shall set forth in
reasonable detail the basis for such Borrowing Base Deficiency, including
identification of those Mortgage Loans no longer constituting Eligible Mortgage
Loans (and the reasons for such determination) and with respect to which the
Lender has reduced the related Loan Value or those B Notes as to which a B Note
Performance Event or a B Note Non-Payment Default Event or a B Note Payment
Default Event has occurred (and the reasons for such determination). Within two
(2) Business Days following receipt of a Margin Call Notice, Borrower shall cure
such Borrowing Base Deficiency by either:

<PAGE>

                                       33

                  (x) prepaying an aggregate principal amount of the Advances
         equal to the amount of any Borrowing Base Deficiency,

                  (y) pledging additional Eligible Mortgage Loans to Lender
         having an aggregate Loan Value equal to the amount of the applicable
         Borrowing Base Deficiency or additional Eligible B Notes to Lender
         sufficient to cure the applicable Borrowing Base Deficiency; or

                  (z) obtaining a release of the applicable Mortgage Loans or B
         Notes in accordance with the terms and conditions of ARTICLE VIII by
         prepaying the Release Price with respect to such Mortgage Loans or B
         Notes.

For purposes of this subsection, if at any time such Mortgage Loan shall
otherwise become a Defaulted Loan, then such Mortgage Loan shall no longer
constitute an Eligible Mortgage Loan.

                           (iv) CHANGE OF CONTROL. In the event that there is a
                  Change of Control of Borrower, Lender may (i) by notice to
                  Borrower declare the Note, all interest thereon, and other
                  amounts payable under this Agreement and the other Loan
                  Documents to be due and payable as of the date set forth in
                  such notice, which date shall be not less than sixty (60) days
                  after the date of such notice, whereupon Borrower shall prepay
                  on such date all such amounts without presentment, demand,
                  protest or further notice of any kind, all of which are hereby
                  expressly waived by Borrower, and (ii) declare its obligation
                  to make further Advances to be terminated, whereupon the same
                  shall forthwith terminate.

                           (v) BORROWER'S RIGHT TO DISPUTE. Notwithstanding
                  anything herein to the contrary, the Borrower may dispute any
                  Margin Call Notice delivered by the Lender stating that a
                  Borrowing Base Deficiency exists due to either (x) a B Note
                  Performance Event or (y) a B Note Payment Default Event
                  relating to a mortgage loan which is a B Note Extended Monthly
                  Payment Default Loan. Such appeal may be made only if the
                  Borrower has elected to cure by making a prepayment equal to
                  the Borrowing Base Deficiency and must be delivered in writing
                  within thirty (30) days after such prepayment is made. In the
                  dispute notice, the Borrower shall select an Appraiser who
                  will be commissioned to deliver an Appraisal with respect to
                  the related Multifamily Property or Commercial Property
                  indirectly securing, the applicable B Note(s). The Borrower
                  and the Lender shall jointly commission the Appraiser and
                  shall cause the Appraisal to be addressed and delivered by the
                  Appraiser to both parties. The value set forth in the
                  Appraisal shall control the determination of whether a
                  Borrowing Base Deficiency due to a B Note Performance Event
                  existed. 90% of the value set forth in the Appraisal shall
                  control the determination of whether a Borrowing Base
                  Deficiency due to a B Note Payment Default Event relating to a
                  mortgage loan which is a B Note Extended Monthly Payment
                  Default Loan existed.

                           (vi) PAYMENT FOR THE APPRAISAL AFTER A DISPUTE. In
                  the event based on the entire (or 90% of the, as applicable)
                  appraised value set forth in the Appraisal, a Borrowing Base
                  Deficiency did exist and the "B Note Current Total Exposure
                  Percentage" is equal to or greater than 90%, then the Borrower
                  shall pay for the cost of obtaining the Appraisal. In the
                  event based on the entire (or 90% of the, as applicable)

<PAGE>

                                       34

                  appraised value, a Borrowing Base Deficiency did exist and the
                  "B Note Current Total Exposure Percentage" is greater than 85%
                  and less than 90%, then the Borrower and the Lender shall each
                  pay one-half of the cost of obtaining the Appraisal. In the
                  event based on the entire (or 90% of the, as applicable)
                  appraised value, a Borrowing Base Deficiency did not exist and
                  the "B Note Current Total Exposure Percentage" is equal to or
                  less than 85%, then the Lender shall (1) pay for the cost of
                  obtaining the Appraisal and (2) promptly (and in any event
                  within three (3) Business Days) reimburse the Borrower for the
                  amount of Advances prepaid by the Borrower to cure such
                  proposed Borrowing Base Deficiency together with any interest
                  thereon earned by the Lender and any related LIBOR Breakage.
                  In the event based on the entire (or 90% of the, as
                  applicable) appraised value, a Borrowing Base Deficiency did
                  exist and the "B Note Current Total Exposure Percentage" is
                  greater than 85% but lower than such percentage as determined
                  by the Lender's Property Value, then the Lender shall promptly
                  (and in any event within three (3) Business Days) reimburse
                  the Borrower for a portion of the amount of Advances prepaid
                  by the Borrower to cure such proposed Borrowing Base
                  Deficiency, together with any interest thereon earned by the
                  Lender and any related LIBOR breakage, reflecting the positive
                  difference between "B Note Current Total Exposure Percentage"
                  using the Lender's Property Value and such appraised value (or
                  90% portion thereof, as applicable).

All prepayments under this SUBSECTION (B) shall be made together with accrued
interest to the date of such prepayment on the principal amount prepaid. If any
payment required to be made under this SECTION 2.04(B) (or any prepayment as a
result of an acceleration following the occurrence of an Event of Default) on
account of Eurodollar Rate Advances would be made other than on the last day of
the applicable Interest Period therefor, the Borrower shall concurrently with
such prepayment, reimburse the Lender for any LIBOR Breakage; PROVIDED, HOWEVER,
that in lieu of paying such LIBOR Breakage, the Borrower shall have the option
to make such prepayment into an account of the Lender (the "CASH COLLATERAL
ACCOUNT") in which event such funds shall be held by the Lender in the Cash
Collateral Account as additional security for the Advances and shall not be
applied to the repayment of the applicable Advance until the last day of the
applicable Interest Period. In such event the Borrower shall execute and deliver
such documents as the Lender shall reasonably request in order to establish,
perfect and evidence the Lender's interests in the Cash Collateral Account.

         SECTION 2.05. INTEREST.

         (a) SCHEDULED INTEREST. Borrower shall pay interest on the unpaid
principal amount of each Advance owing to the Lender from the date of such
Advance until such principal amount shall be paid in full, at the following
rates per annum:

                  (i) BASE RATE ADVANCES. For periods, if any, during which this
         Agreement provides that such Advance shall accrue interest based upon
         the Base Rate, a rate per annum equal at all times to the Base Rate in
         effect from time to time; payable in arrears monthly on each Interest
         Payment Date during such periods and on the date such Base Rate Advance
         shall be converted or paid in full.

<PAGE>

                                       35

                  (ii) EURODOLLAR RATE ADVANCES. During such periods as such
         Advance is a Eurodollar Rate Advance, a rate per annum equal at all
         times during each Interest Period for such Advance to the sum of (A)
         the Eurodollar Rate for such Interest Period for such Advance PLUS (B)
         the Applicable Margin, payable in arrears monthly on each Interest
         Payment Date.

Except as expressly provided in SECTION 2.06, interest on all outstanding
Advances shall accrue and be payable in accordance with CLAUSE (II) of this
SECTION 2.05(A).

         (b) DEFAULT INTEREST. Upon the occurrence and during the continuance of
an Event of Default, Borrower shall pay interest on (i) the unpaid principal
amount of each Advance owing to the Lender, payable in arrears on each Interest
Payment Date and on demand, at a rate per annum equal at all times to the lesser
of (x) the maximum non-usurious rate permitted by law or (y) five percent (5%)
per annum above the rate per annum required to be paid on such Advance pursuant
to CLAUSE (A)(I) OR (A)(II) above and (ii) to the fullest extent permitted by
law, the amount of any interest, fee or other amount payable hereunder that is
not paid when due, from the date such amount shall be due until such amount
shall be paid in full, payable in arrears on the date such amount shall be paid
in full and on demand, at a rate per annum equal at all times to the lesser of
(x) the maximum non-usurious rate permitted by law or (y) five percent (5%) per
annum above the rate per annum required to be paid on the applicable Advances.

         (c) NOTICE OF INTEREST RATE. Lender (or a Loan Servicer on behalf of
Lender) shall, prior to the commencement of each Interest Period, determine and
provide Borrower with a statement of the Eurodollar Rate applicable for the
related Interest Period and the applicable interest rate for the related
Interest Period. After determining the applicable interest rate, Lender (or a
Loan Servicer on behalf of Lender) shall calculate the aggregate interest
payment payable on the outstanding Advances on the relevant Interest Payment
Date and shall, as soon as practicable, notify Borrower of such rates and the
amount of the applicable interest installments. The determination of the
interest rate payable on the outstanding Advances and the calculation of each
interest installment by Lender (or a Loan Servicer on behalf of Lender) shall,
in the absence of manifest error, be presumptive evidence of the amount due;
PROVIDED, HOWEVER, that any error in the determination of such interest rates
and the calculation of each interest installment made by Lender (or a Loan
Servicer on behalf of Lender) shall not relieve Borrower from its obligations
hereunder.

         SECTION 2.06. INCREASED COSTS, ETC.

         (a) If, due to either (i) the introduction of or any change in or in
the interpretation of any law or regulation or (ii) the compliance with any
guideline or request from any central bank or other governmental authority
(whether or not having the force of law), there shall be any increase in the
cost to Lender of agreeing to make or of making, funding or maintaining any
Eurodollar Rate Advance (excluding for purposes of this SECTION 2.06 any such
increased costs resulting from (i) Taxes or Other Taxes (as to which SECTION
2.08 shall govern) and (ii) changes in the basis of taxation of overall net
income or overall gross income by the United States or by the foreign
jurisdiction or state under the laws of which Lender is organized or has its
Applicable Lending Office or any political subdivision thereof), then Borrower
shall from time to time, upon notice thereof and demand by Lender therefor, pay
to Lender additional

<PAGE>

                                       36

amounts sufficient to compensate Lender for such increased cost. A certificate
as to the amount of such increased cost, submitted to Borrower by Lender, shall
be presumptive evidence of the amount due.

         (b) If, due to either (i) the introduction of or any change in or in
the interpretation of any law or regulation or (ii) the compliance with any
guideline or request from any central bank or other governmental authority
(whether or not having the force of law), there shall be any increase in the
amount of capital required or expected to be maintained by Lender or any
corporation controlling Lender as a result of or based upon the existence of
Lender's commitment to lend hereunder and other commitments of such type, then,
upon demand by Lender, Borrower shall pay to Lender, from time to time as
specified by Lender, additional amounts sufficient to compensate Lender in the
light of such circumstances, to the extent that Lender reasonably determines
such increase in capital to be allocable to the existence of Lender's commitment
to lend hereunder. A certificate as to such amounts submitted to Borrower by
Lender shall be presumptive evidence of the amount due.

         (c) If, Lender notifies Borrower that the Eurodollar Rate for any
Interest Period will not adequately reflect the cost to Lender of making,
funding or maintaining any Advance as a Eurodollar Rate Advance for such
Interest Period, (i) such Advance will automatically, on the last day of the
then existing Interest Period therefor, convert from a Eurodollar Rate Advance
into a Base Rate Advance and (ii) the obligation of Lender to make or maintain
Eurodollar Rate Advances shall be suspended until Lender shall notify Borrower
that it has determined that the circumstances causing such suspension no longer
exist.

         (d) Notwithstanding any other provision of this Agreement, if the
introduction of or any change in or in the interpretation of any law or
regulation shall make it unlawful, or any central bank or other governmental
authority shall assert that it is unlawful, for Lender or its Eurodollar Lending
Office to perform its obligations hereunder to fund or maintain any Eurodollar
Rate Advances hereunder, then, on notice thereof and demand therefor by Lender
to Borrower (i) such Advances will automatically, upon such demand, convert into
Base Rate Advances and (ii) the obligation of the Lender to make or maintain
Eurodollar Rate Advances shall be suspended until Lender shall notify Borrower
that it has determined that the circumstances causing such suspension no longer
exist.

         SECTION 2.07. PAYMENTS AND COMPUTATIONS.

         (a) Borrower shall make each payment hereunder and under the Note,
irrespective of any right of counterclaim or set-off, not later than 3:00 P.M.
(New York City time) on each Interest Payment Date in U.S. dollars to Lender at
the Lender's Account in same day funds.

         (b) Borrower hereby authorizes Lender, if and to the extent payment
owed to Lender is not made when due hereunder or under the Note, to charge from
time to time against any or all of Borrower's accounts with Lender any amount so
due.

         (c) All computations of interest and fees shall be made by Lender (or
any Loan Servicer on behalf of Lender) on the basis of a year of 360 days, in
each case for the actual

<PAGE>

                                       37

number of days (including the first day but excluding the last day) occurring in
the period for which such interest, fees or commissions are payable. Each
determination by Lender (or any Loan Servicer on behalf of Lender) of an
interest rate or fee hereunder shall be presumptive evidence of the amount due.

         (d) Whenever any payment hereunder or under the Notes shall be stated
to be due on a day other than a Business Day, such payment shall be made on the
next succeeding Business Day, and such extension of time shall in such case be
included in the computation of payment of interest.

         SECTION 2.08. TAXES.

         (a) Any and all payments by Borrower hereunder or under the Note shall
be made, in accordance with SECTION 2.07, free and clear of and without
deduction for any and all present or future taxes, levies, imposts, deductions,
charges or withholdings, and all liabilities with respect thereto, EXCLUDING
taxes that are imposed on Lender's overall net income by the United States and
taxes that are imposed on the Lender's overall net income (and franchise taxes
imposed in lieu thereof) by the local, state or foreign jurisdiction under the
laws of which Lender is organized or any political subdivision thereof and taxes
that are imposed on Lender's overall net income (and franchise taxes imposed in
lieu thereof) by the local, state or foreign jurisdiction of Lender's Applicable
Lending Office or any political subdivision thereof (all such excluded taxes
being hereafter referred to as "EXCLUDED TAXES" and all such non-excluded taxes,
levies, imposts, deductions, charges, withholdings and liabilities in respect of
payments hereunder or under the Note being hereinafter referred to as "TAXES").
If Borrower shall be required by law to deduct any Taxes from or in respect of
any sum payable hereunder or under the Note to Lender (i) the sum payable shall
be increased as may be necessary so that after making all required deductions
(including deductions applicable to additional sums payable under this SECTION
2.08) Lender receives an amount equal to the sum it would have received had no
such deductions been made, (ii) Borrower shall make such deductions and (iii)
Borrower shall pay the full amount deducted to the relevant taxation authority
or other authority in accordance with applicable law.

         (b) In addition, Borrower shall pay any present or future stamp,
documentary, excise, property or similar taxes, charges or levies that arise
from any payment made hereunder or under the Note or from the execution,
delivery or registration of, performing under, or otherwise with respect to,
this Agreement or the Note other than Excluded Taxes (hereinafter referred to as
"OTHER TAXES").

         (c) Borrower shall indemnify Lender for and hold it harmless against
the full amount of Taxes and Other Taxes, and for the full amount of taxes of
any kind imposed by any jurisdiction on amounts payable by Borrower to Lender
under this SECTION 2.08, imposed on or paid by Lender and any liability
(including penalties, additions to tax, interest and expenses) arising therefrom
or with respect thereto (other than penalties, additions to tax, interest and
expenses resulting from a delay caused by Lender). This indemnification shall be
made within thirty (30) days from the date Lender makes written demand therefor.

         (d) Within thirty (30) days after the date of any payment of Taxes,
Borrower shall furnish to Lender, at its address referred to in SECTION 9.02,
the original or a certified copy

<PAGE>

                                       38

of a receipt evidencing such payment. In the case of any payment hereunder or
under the Note by or on behalf of Borrower through an account or branch outside
the United States or by or on behalf of Borrower by a payor that is not a United
States person, if Borrower determines that no Taxes are payable in respect
thereof, Borrower shall furnish, or shall cause such payor to furnish, to the
Lender, at such address, an opinion of counsel acceptable to Lender stating that
such payment is exempt from Taxes. For purposes of this SUBSECTION (D) and
SUBSECTION (E), the terms "UNITED STATES" and "UNITED STATES PERSON" shall have
the meanings specified in SECTION 7701 of the Internal Revenue Code.

         (e) Lender shall, on or prior to the date of its execution and delivery
of this Agreement, and from time to time thereafter as requested in writing by
Borrower (but only so long thereafter as Lender remains lawfully able to do so),
provide Borrower with two original Internal Revenue Service forms 1001 or 4224,
as appropriate, or any successor or other form prescribed by the Internal
Revenue Service, certifying that Lender is exempt from or entitled to a reduced
rate of United States withholding tax on payments pursuant to this Agreement or
the Note. If any form or document referred to in this SUBSECTION (E) requires
the disclosure of information, other than information necessary to compute the
tax payable and information required on the date hereof by Internal Revenue
Service form 1001 or 4224 that Lender reasonably considers to be confidential,
Lender shall give notice thereof to Borrower and shall not be obligated to
include in such form or document such confidential information, so long as
Borrower is still able to satisfy Internal Revenue Service requirements to
enable it not to withhold tax on payments or, if not able to satisfy such
requirements, Borrower will be entitled to withhold tax on such payments
hereunder.

         (f) For any period with respect to which Lender has failed to provide
Borrower with the appropriate form described in SUBSECTION (E) above (OTHER THAN
if such failure is due to a change in law occurring after the date on which a
form originally was required to be provided or if such form otherwise is not
required under SUBSECTION (E) above), Lender shall not be entitled to
indemnification under SUBSECTION (A) or (C) with respect to Taxes imposed by the
United States by reason of such failure; PROVIDED, HOWEVER, that should Lender
become subject to Taxes because of its failure to deliver a form required
hereunder, Borrower shall take such steps as Lender shall reasonably request to
assist Lender to recover such Taxes.

         SECTION 2.09. USE OF PROCEEDS. The proceeds of the Loan shall be
available (and Borrower agrees that it shall use such proceeds) solely to fund
or acquire Eligible Mortgage Loans or Eligible B Notes.

         SECTION 2.10. LATE CHARGE. In the event that any installment of
interest or principal shall become overdue for a period in excess of five (5)
days, a "late charge" in an amount equal to five percent (5%) of the amount so
overdue may be charged to Borrower by Lender for the purpose of defraying the
expenses incident to handling such delinquent payments. Such late charge shall
be in addition to, and not in lieu of, any other remedy the Lender may have and
is in addition to Lender's right to collect reasonable fees and charges of any
agents or attorneys which Lender may employ in connection with any Default.

         SECTION 2.11. SECURITY FOR THE ADVANCES. Subject to SECTION 9.12 the
Advances shall constitute one general obligation of Borrower to Lender and
Borrower's

<PAGE>

                                       39

obligations hereunder and under the other Loan Documents shall be secured by the
Collateral Documents and the security interests and Liens granted therein.

         SECTION 2.12. THE NOTE. Borrower's obligation to pay the principal of
and interest on the Advances shall be evidenced by the Note, duly executed and
delivered by Borrower on the Closing Date. The Note shall be payable as to
principal, interest and all other amounts due under the Loan Documents, as
specified in this agreement, the Note, and the other Loan Documents.

                                  ARTICLE III

                              CONDITIONS OF LENDING

         SECTION 3.01. CONDITIONS PRECEDENT TO INITIAL ADVANCE. The obligation
of Lender to make an Advance on or after the date of this Agreement (an "Initial
Advance") is subject to the satisfaction of the following conditions precedent
before or concurrently with the Closing Date:

         (a) Before giving effect to the transactions contemplated by this
Agreement, there shall have occurred no Material Adverse Change since May 31,
1999.

         (b) There shall exist no action, suit, investigation, litigation or
proceeding affecting Borrower or any of its Subsidiaries pending or threatened
before any court, governmental agency or arbitrator that (i) would be reasonably
likely to have a Material Adverse Effect other than the matters described on the
Disclosure Schedule (the "DISCLOSED LITIGATION") or (ii) purports to affect the
legality, validity or enforceability of this Agreement, the Note, any other Loan
Document or the consummation of the transactions contemplated hereby.

         (c) Borrower shall have paid all accrued expenses of Lender which
Borrower is required to pay under the Loan Documents (including the accrued,
reasonable fees and expenses of counsel to Lender).

         (d) Lender shall have received on or before the Closing Date the
following, each dated such day (unless otherwise specified), in form and
substance satisfactory to Lender (unless otherwise specified):

                  (i) The Note payable to the order of Lender.

                  (ii) Certified copies of the resolutions of the Board of
         Directors of Borrower approving this Agreement, the Note and each other
         Loan Document to which it is or is to be a party, and of all documents
         evidencing other necessary action and governmental and other third
         party approvals and consents, if any, with respect to the Advances,
         this Agreement, the Note and each other Loan Document.

                  (iii) A copy of the organizational Documents of Borrower,
         together with each amendment thereto, and, in the case of the
         certificate of incorporation of

<PAGE>

                                       40

         Borrower, certified (as of the Closing Date) by the Secretary of State
         of the jurisdiction of its formation or incorporation as being a true
         and correct copy thereof.

                  (iv) A copy of a certificate of the Secretary of State of the
         jurisdiction of its formation, dated reasonably near the Closing Date,
         certifying that (A) Borrower has paid all franchise taxes to the date
         of such certificate and (B) Borrower is duly incorporated or formed and
         in good standing under the laws of the State of the jurisdiction of its
         organization.

                  (v) A certificate of Borrower, signed on behalf of the
         Borrower by a duly authorized officer of Borrower, dated the Closing
         Date (the statements made in which certificate shall be true on and as
         of the Closing Date), certifying as to (A) the truth in all material
         respects of the representations and warranties contained in the Loan
         Documents as though made on and as of the Closing Date and (B) the
         absence of any event occurring and continuing, or resulting from any
         Advance, that constitutes a Default.

                  (vi) A certificate of the Secretary or an Assistant Secretary
         of an authorized officer of Borrower certifying the names and true
         signatures of the officers of Borrower authorized to sign this
         Agreement, the Note and each other Loan Document to which they are or
         are to be parties and the other documents to be delivered hereunder and
         thereunder.

                  (vii) An amended and restated security agreement in form and
         substance satisfactory to Lender pledging to Lender and granting Lender
         a security interest in all of Borrower's right, title and interest in
         the Collateral described therein (such agreement, as amended,
         supplemented or otherwise modified from time to time in accordance with
         its terms, the "SECURITY AGREEMENT"), duly executed by Borrower,
         together with:

                           (A) acknowledgment copies of proper financing
                  statements, delivered for filing on or before the Closing Date
                  under the Uniform Commercial Code of the State of Florida, as
                  well as any other jurisdictions deemed necessary or desirable
                  by Lender, covering the Collateral described in the Security
                  Agreement,

                           (B) completed requests for information, dated on or
                  before the Closing Date, listing all effective financing
                  statements filed in the jurisdictions referred to in clause
                  (A) above that name Borrower as debtor, together with copies
                  of such other financing statements, and

                           (C) evidence of the completion of all other
                  recordings and filings of or with respect to the Security
                  Agreement that Lender may deem necessary or desirable in order
                  to perfect and protect the Liens created thereby.

                  (viii) An Omnibus Amendment of even date herewith duly
         executed by Borrower, Lender and LNR.

<PAGE>

                                       41

                  (ix) A favorable opinion of (A) Bilzin Sumberg Dunn Price &
         Axelrod LLP with respect to the valid existence, due authorization and
         execution of the Loan Documents by Borrower and (B) Bilzin Sumberg Dunn
         Price & Axelrod LLP, special counsel for Borrower, with respect to the
         enforceability of the Loan Documents, in each case, in form
         satisfactory to Lender.

         (e) Prior to the Mortgage Loan Advances Termination Date and for so
long as any Mortgage Loan Advances remain outstanding, Borrower shall have
Facility Equity in an amount equal to or greater than the Minimum Collateral
Value.

         SECTION 3.02. CONDITIONS PRECEDENT TO EACH ADVANCE. The obligation of
Lender to make each Advance (including the Initial Advance), shall be subject to
the satisfaction of the following further conditions precedent before or
concurrently with the date of such Advance:

         (a) the following statements shall be true and Lender shall have
received a certificate signed by a duly authorized officer of a member of
Borrower, dated the date of such Advance, stating that (and each of the giving
of the applicable Notice of Borrowing and the acceptance by Borrower of the
proceeds of such Advance shall constitute a representation and warranty by
Borrower that both on the date of such Notice of Borrower and on the date of
such Advance such statements are true):

                  (i) the representations and warranties contained in each Loan
         Document are correct in all material respects on and as of such date,
         before and after giving effect to such Advance and to the application
         of the proceeds therefrom, as though made on and as of such date and
         each Mortgage Loan, in respect in which such Advance is made, is an
         Eligible Mortgage Loan, subject to any exceptions approved in advance
         by Lender;

                  (ii) no event has occurred and is continuing, or would result
         from such Advance or from the application of the proceeds therefrom,
         that constitutes a Default;

                  (iii) the funding of such Advance would not exceed the
         Borrowing Limit (based upon the Loan Values and Property Values at the
         time of Borrower's request for such Advance) or violate any of the
         limitations set forth in SECTION 2.02;

                  (iv) no Borrowing Base Deficiency (based upon the Loan Values
         and Property Values at the time of Borrower's request for such Advance)
         exists or would result from such Advance or from the application of the
         proceeds therefrom; and

                  (v) the information relating to the Mortgage Loans contained
         in the schedule attached hereto as EXHIBIT D shall be attached to such
         certificate and such certificate shall state that said information is
         true and correct.

         (b) Lender shall have received on or before the date of the proposed
Advance, the following, each dated such day (unless otherwise specified), in
form and substance satisfactory to Lender (unless otherwise specified):

<PAGE>

                                       42

                  (i) a Notice of Borrowing;

                  (ii) with respect to each Mortgage Loan Advance only, a
         Borrowing Base Certificate and duly executed Assignments of Mortgage
         and endorsements to each Mortgage Note prepared in blank and the
         Mortgage File for each Mortgage Loan added to the Collateral since the
         date of the last Advance; and

                  (iii) with respect to each B Note Advance only, either (1) if
         such B Note is a promissory note, the B Notes together with
         endorsements to each B Note prepared in blank or (2) if such B Note is
         a junior participation in a mortgage loan, a collateral assignment of
         such participation agreement in substantially the form of Exhibit I
         attached hereto.

         (c) Lender shall have received such other approvals, opinions or
documents as Lender may reasonably request.

                                   ARTICLE IV

                         REPRESENTATIONS AND WARRANTIES

         SECTION 4.01. REPRESENTATIONS AND WARRANTIES OF BORROWER. Borrower
represents and warrants as follows:

         (a) Borrower (i) is a corporation duly organized, validly existing and
in good standing under the laws of the jurisdiction of its formation, (ii) is
duly qualified and in good standing in each other jurisdiction in which it owns
or leases property or in which the conduct of its business requires it to so
qualify or be licensed except where the failure to so qualify or be licensed
would not have a Material Adverse Effect and (iii) has all requisite power and
authority to own or lease and operate its properties and to carry on its
business as now conducted and as proposed to be conducted.

         (b) The execution, delivery and performance by Borrower of this
Agreement, the Note and each other Loan Document to which it is or is to be a
party, and the consummation of the transactions contemplated hereby, are within
Borrower's powers, have been duly authorized by all necessary corporate action,
and do not (i) contravene Borrower's Organizational Documents, (ii) violate any
law (including, without limitation, the Securities Exchange Act of 1934 and the
Racketeer Influenced and Corrupt Organizations Chapter of the Organized Crime
Control Act of 1970), rule, regulation (including, without limitation,
Regulation X of the Board of Governors of the Federal Reserve System), order,
writ, judgment, injunction, decree, determination or award, (iii) conflict with
or result in the breach of, or constitute a default under, any contract, loan
agreement, indenture, mortgage, deed of trust, lease or other instrument binding
on or affecting Borrower or any of the Mortgaged Properties (in the case of the
Mortgage Loans) or mortgaged properties (in the case of the B Notes) or (iv)
except for the Liens created under the Loan Documents, result in or require the
creation or imposition of any Lien upon or with respect to any of the properties
of Borrower. Borrower is not in violation of any such law, rule, regulation,
order, writ, judgment, injunction, decree, determination or award or in breach
of any such contract, loan agreement, indenture, mortgage, deed of trust, lease

<PAGE>

                                       43

or other instrument, the violation or breach of which is reasonably likely to
have a Material Adverse Effect.

         (c) Except as already made or obtained, no Authorization or approval or
other action by, and no notice to or filing with, any Governmental Authority or
regulatory body or any other third party is required for (i) the due execution,
delivery, recordation, filing or performance by Borrower of this Agreement, the
Note or any other Loan Document to which it is or is to be a party, or for the
consummation of the transactions contemplated hereby, (ii) the grant by Borrower
of the Liens granted by it pursuant to the Collateral Documents, (iii) the
perfection or maintenance of the Liens created by the Collateral Documents
(including the first priority nature thereof), or (iv) the exercise by Lender of
its rights under the Loan Documents or the remedies in respect of the Collateral
pursuant to the Collateral Documents, except for items (iii) and (iv) above for
which a blanket UCC-1 Financing Statement and recording of the Assignment of
Mortgage is required.

         (d) This Agreement has been, and the Note and each other Loan Document
when delivered hereunder will have been, duly executed and delivered by
Borrower. This Agreement is, and the Note and each other Loan Document when
delivered hereunder will be, the legal, valid and binding obligation of
Borrower, enforceable against the Borrower in accordance with its terms.

         (e) The unaudited Consolidated balance sheet of LNR Property
Corporation ("LNR") and its Subsidiaries as at May 31, 1999, and the related
Consolidated statement of income and Consolidated statement of cash flows of LNR
and its Subsidiaries for the six month period then ended, fairly represent in
all material respects the Consolidated financial condition of LNR and its
Subsidiaries as at such date and the Consolidated results of the operations of
LNR and its Subsidiaries for the period ended on such date, all in accordance
with GAAP (subject to year-end audit adjustments), and since May 31, 1999, there
has been no Material Adverse Change.

         (f) No information, exhibit or report furnished by Borrower to Lender
in connection with the negotiation of the Loan Documents or pursuant to the
terms of the Loan Documents contained any untrue statement of a material fact or
omitted to state a material fact necessary to make the statements made therein
not misleading.

         (g) Except for any Disclosed Litigation, there is no action, suit,
investigation, litigation or proceeding affecting Borrower, including any
Environmental Action, pending or threatened before any court, governmental
agency or arbitrator that (i) would be reasonably likely to have a Material
Adverse Effect or (ii) purports to affect the legality, validity or
enforceability of this Agreement, the Note or any other Loan Document or the
consummation of the transactions contemplated hereby.

         (h) No proceeds of the Advances will be used to acquire any equity
security of a class that is registered pursuant to SECTION 12 of the Securities
Exchange Act of 1934, as amended.

<PAGE>

                                       44

         (i) Borrower is not engaged in the business of extending credit for the
purpose of purchasing or carrying Margin Stock, and no proceeds of the Advances
will be used to purchase or carry any Margin Stock or to extend credit to others
for the purpose of purchasing or carrying any Margin Stock.

         (j) Borrower is not and will not be an "employee benefit plan" as
defined in SECTION 3(3) of ERISA, which is subject to Title I of ERISA, and the
assets of Borrower do not and will not constitute "plan assets" of one or more
such plans for purposes of Title I of ERISA.

         (k) Borrower is not and will not be a "governmental plan" within the
meaning of SECTION 3(32) of ERISA and transactions by or with the Borrower are
not and will not be subject to state statutes applicable to Borrower regulating
investments of and fiduciary obligations with respect to governmental plans.

         (l) Borrower is not (i) an "investment company" or a company
"controlled" by an "investment company", within the meaning of the Investment
Company Act of 1940, as amended, (ii) a "holding company" or a "subsidiary
company" of a "holding company" or an "affiliate" of either a "holding company"
or a "subsidiary company" within the meaning of the Public Utility Holding
Company Act of 1935, as amended, or (iii) subject to any other Law that purports
to restrict or regulate its ability to borrow money.

         (m) Borrower is not a party to any indenture, loan or credit agreement
or any lease or other agreement or instrument or subject to any charter or
corporate restriction that would be reasonably likely to have a Material Adverse
Effect.

         (n) When recorded or filed with the appropriate governmental offices,
and when and as the related Mortgage Loan Documents have been delivered to the
Custodian, the Collateral Documents create a valid and perfected first priority
lien on and security interest in the Collateral, securing the payment of the
Secured Obligations. Borrower is the legal and beneficial owner of the
Collateral free and clear of any Lien, except for the liens and security
interests created or permitted under the Loan Documents.

         (o) Borrower has filed, has caused to be filed or has been included in
all tax returns (federal, state, local and foreign) required to be filed and has
paid all taxes shown thereon to be due, together with applicable interest and
penalties, for which the failure to file or pay would have a Material Adverse
Effect.

         (p) Borrower is Solvent.

         (q) The location of Borrower's principal place of business and chief
executive office is at the respective addresses set forth in SECTION 9.02.

         (r) Borrower is not a "foreign person" within the meaning ofss.
1445(f)(3) of the Code.

         (s) Borrower is not a party to any collective bargaining agreements.

<PAGE>

                                       45

                                   ARTICLE V

                            COVENANTS OF THE BORROWER

         SECTION 5.01. [RESERVED]

         SECTION 5.02. AFFIRMATIVE COVENANTS. So long as any Advance shall
remain unpaid or the Lender shall have any commitment hereunder, Borrower will:

         (a) COMPLIANCE WITH LAWS. ETC. Comply, and cause each of its
Subsidiaries to comply, in all material respects, with all applicable laws,
rules, regulations and orders, such compliance to include, without limitation,
compliance with ERISA and the Racketeer Influenced and Corrupt Organizations
Chapter of the Organized Crime Control Act of 1970, where the failure to so
comply would be reasonably likely to result in a Material Adverse Effect.

         (b) PAYMENT OF TAXES, ETC. Pay and discharge, and cause each of its
Subsidiaries to pay and discharge, before the same shall become delinquent, (i)
all taxes, assessments and governmental charges or levies imposed upon it or
upon its property and (ii) all lawful claims that, if unpaid, might by law
become a Lien upon its property unless the failure to pay or discharge same
would not have a Material Adverse Effect; PROVIDED, HOWEVER, that neither
Borrower nor any of its Subsidiaries shall be required to pay or discharge any
such tax, assessment, charge or claim that is being contested in good faith and
by proper proceedings and as to which appropriate reserves are being maintained,
unless and until any Lien resulting therefrom attaches to its property and
becomes enforceable against its other creditors.

         (c) COMPLIANCE WITH ENVIRONMENTAL LAWS. Comply, and cause each of its
Subsidiaries and all lessees and other Persons operating or occupying its
properties to comply, in all material respects, with all applicable
Environmental Laws, the failure to comply with which would be reasonably likely
to result in a Material Adverse Effect.

         (d) MAINTENANCE OF INSURANCE. Maintain, and cause each of its
Subsidiaries to maintain, insurance with responsible and reputable insurance
companies or associations in such amounts and covering such risks as is usually
carried by companies engaged in similar businesses and owning similar properties
in the same general areas in which Borrower or such Subsidiary operates, the
failure to comply with which would reasonably likely result in a Material
Adverse Effect.

         (e) PRESERVATION OF CORPORATE EXISTENCE, ETC. Preserve and maintain,
and cause each of its Subsidiaries to preserve and maintain, its existence,
legal structure, legal name, rights (charter and statutory), permits, licenses,
approvals, privileges and franchises; PROVIDED, HOWEVER, that neither Borrower
nor any of its Subsidiaries shall be required to preserve any right, permit,
license, approval, privilege or franchise if Borrower or such Subsidiary shall
determine that the preservation thereof is no longer desirable in the conduct of
the business of the Borrower or such Subsidiary, as the case may be, and that
the loss thereof is not disadvantageous in any material respect to Borrower,
such Subsidiary or Lender.

         (f) VISITATION RIGHTS. From time to time, upon reasonable notice and
during normal business hours, permit Lender or any agents or representatives
thereof, to examine and

<PAGE>

                                       46

make copies of and abstracts from the records and books of account of, and visit
the offices of, Borrower and any of its Subsidiaries, and to discuss the
affairs, finances and accounts of Borrower and any of its Subsidiaries with any
of their officers or directors and with their independent certified public
accountants.

         (g) KEEPING OF BOOKS. Keep, and cause each of its Subsidiaries to keep,
proper books of record and account, in which full and correct entries shall be
made of all financial transactions and the assets and business of Borrower and
each such Subsidiary in accordance with generally accepted accounting principles
in effect from time to time.

         (h) TRANSACTIONS WITH AFFILIATES. Conduct, and cause each of its
Subsidiaries to conduct, all transactions otherwise permitted under the Loan
Documents with any of their Affiliates on terms that are fair and reasonable and
no less favorable to Borrower or such Subsidiary than it would obtain in a
comparable arm's-length transaction with a Person not an Affiliate; PROVIDED,
HOWEVER, Borrower or its Subsidiaries may enter into such a transaction with
Affiliates so long as such transaction would not result in a Material Adverse
Effect.

         (i) ERISA. Deliver to Lender such certifications or other evidence from
time to time, as reasonably requested by the Lender, that (1) Borrower is not an
"employee benefit plan" as defined in SECTION 3(3) of ERISA, which is subject to
Title I of ERISA, or a "governmental plan" within the meaning of SECTION 3(32)
of ERISA; (2) Borrower is not subject to state statutes regulating investments
and fiduciary obligations with respect to governmental plans; and (3) one or
more of the following circumstances is true:

                  (i) equity interests in Borrower are publicly offered
         securities, within the meaning of 29 C.F.R.ss. 2510.3-101(b)(2);

                  (ii) less than 25 percent of each outstanding class of equity
         interests in Borrower are held by "benefit plan investors" within the
         meaning of 29 C.F.R.ss.2510.3-101(f)(2); or

                  (iii) Borrower qualifies as an "operating company" or a "real
         estate operating company" within the meaning of 29 C.F.R. ss.
         2510.3-101(c) or (e) or an investment company registered under The
         Investment Company Act of 1940.

         (j) SERVICING OF MORTGAGE LOANS. Borrower, either directly or through
one or more of its Affiliates, shall make all reasonable efforts to collect all
payments called for under the terms and provisions of the Mortgage Loans
comprising Collateral, shall provide reasonable advance notice to Mortgagors of
required principal and/or interest payments and shall otherwise service and
administer such Mortgage Loans in accordance with applicable law and customary
and usual servicing practices consistent with the higher of (i) those that a
prudent institutional commercial and multifamily mortgage investor or lender
would use in servicing mortgage loans like the Mortgage Loans for its own
account and (ii) the care, skill, prudence and diligence with which Borrower and
its Affiliates service and administer commercial and multifamily mortgage loans
generally.

<PAGE>

                                       47

         SECTION 5.03. NEGATIVE COVENANTS. So long as any Advance shall remain
unpaid, or Lender shall have any remaining Commitment hereunder, Borrower will
not, at any time:

         (a) LIENS, ETC. Create, incur, assume or suffer to exist, or permit any
of its Subsidiaries to create, incur, assume or suffer to exist, any Lien on or
with respect to the Mortgage Loans or B Notes that are Collateral hereunder or
any interests therein or rights thereunder or any of its properties of any
character (including, without limitation, accounts) whether now owned or
hereafter acquired, or sign or file or suffer to exist, under the Uniform
Commercial Code of any jurisdiction, a financing statement that names Borrower
as debtor, or sign or suffer to exist, any security agreement authorizing any
secured party thereunder to file such financing statement, or assign any
accounts or other right to receive income, EXCLUDING, HOWEVER, from the
operation of the foregoing restrictions the following:

                  (i) Liens created under the Loan Documents;

                  (ii) Permitted Liens;

                  (iii) Liens existing on the date hereof and described on
         SCHEDULE B hereto;

                  (iv) Liens, deposits or pledges to secure the performance of
         bids, tenders, contracts (other than contracts for the payment of
         money), leases (permitted under the terms of this Agreement), public or
         statutory obligations, surety, stay, appeal, indemnity, performance or
         other similar bonds, or other similar obligations arising in the
         ordinary course of business;

                  (v) judgment and other similar liens arising in connection
         with court proceedings, provided the execution or other enforcement of
         such liens is effectively stayed and the claims secured thereby are
         being actively and contested in good faith and by appropriate
         proceeding;

                  (vi) easements, rights of way, restrictions and other similar
         encumbrances which, in the aggregate, do not materially interfere with
         the Borrower's occupation, use and enjoyment of the property or assets
         encumbered thereby in the normal course of its business or materially
         impair the value of the property subject thereto; and

                  (vii) the replacement, extension or renewal of any Lien
         permitted by clauses (ii) and (iii) above upon or in the same property
         theretofore subject thereto or the replacement, extension or renewal
         (without increase in the amount or change in any direct or contingent
         obligor) of the Debt secured thereby.

         (b) LEASE OBLIGATIONS. Create, incur, assume or suffer to exist, any
obligations as lessee (i) for the rental or hire of real or personal property in
connection with any sale and leaseback transaction, or (ii) for the rental or
hire of other real or personal property of any kind under leases or agreements
to lease, including Capitalized Leases having an original term of one year or
more, other than leases of equipment or office space entered into in the

<PAGE>

                                       48

ordinary course of business provided that the total annual monetary obligations
under any such leases shall not exceed $1,000,000 in aggregate.

         (c) ACCOUNTING CHANGES. Make or permit, or permit any of its
Subsidiaries to make or permit, any change in accounting policies or reporting
practices, except as required or permitted by GAAP as reasonably determined by
Borrower.

         (d) MERGERS, ETC. Merge into or consolidate with any Person or permit
any Person to merge into it, or permit any of its Subsidiaries to do so, except
that (i) any Subsidiary of Borrower may merge into or consolidate with any other
Subsidiary of Borrower provided that, in the case of any such merger or
consolidation, the Person formed by such merger or consolidation shall be a
Subsidiary of Borrower and (ii) Borrower may merge into or consolidate with LNR
or any of its Subsidiaries; PROVIDED, HOWEVER, that any such permitted merger
shall be subject to the following condition: if Borrower is not the surviving
entity, then the surviving entity must assume all of the obligations of Borrower
in and to the Loan Documents.

         (e) NEGATIVE PLEDGE. Enter into or suffer to exist any agreement
prohibiting the creation or assumption of any Lien upon any of its property or
assets unless such agreement shall exempt from such prohibitions Liens in favor
of Lender.

         (f) ERISA. Engage in any transaction which would cause any obligation,
or action taken or to be taken, hereunder (or the exercise by the Lender of any
of its rights under the Note, this Agreement and the Loan Documents) to be a
non-exempt (under a statutory or administrative class exemption) prohibited
transaction under ERISA.

         (g) FISCAL YEAR. Change its Fiscal Year.

         (h) CHANGE IN NATURE OF BUSINESS. Make, or permit any of its
Subsidiaries to make, any material change in the nature of its business as
carried on, or contemplated to be carried on, at the date hereof.

         (i) SERVICING. Enter into any servicing agreement or otherwise transfer
servicing rights with respect to the Mortgage Loans or B Notes with any Person
that is not an Affiliate of Borrower, other than in accordance with the
Servicing and Intercreditor Agreement or with the written consent of the Lender.

         SECTION 5.04. REPORTING REQUIREMENTS. So long as any Advance shall
remain unpaid or the Lender shall have any remaining commitment hereunder,
Borrower will furnish to Lender:

         (a) DEFAULT NOTICE. As soon as possible and in any event within five
(5) days after the occurrence of each Default or any event, development or
occurrence reasonably likely to have a Material Adverse Effect continuing on the
date of such statement, a statement of Borrower setting forth details of such
Default and the action that Borrower has taken and proposes to take with respect
thereto.

         (b) QUARTERLY FINANCIAL. As soon as available and in any event within
45 days after the end of each of the first three quarters of each Fiscal Year, a
Consolidated balance sheet

<PAGE>

                                       49

of Borrower and its Subsidiaries as of the end of such quarter and Consolidated
statement of income of Borrower and its Subsidiaries for the period commencing
at the end of the previous fiscal quarter and ending with the end of such fiscal
quarter and a Consolidated statement of income of Borrower and its Subsidiaries
for the period commencing at the end of the previous Fiscal Year and ending with
the end of such quarter, setting forth in each case in comparative form the
corresponding figures for the corresponding period of the preceding Fiscal Year,
all in reasonable detail and duly certified (subject to year-end audit
adjustments) by the chief financial officer of Borrower as having been prepared
in accordance with GAAP, together with a certificate of said officer stating
that no Default has occurred and is continuing or, if a Default has occurred and
is continuing, a statement as to the nature thereof and the action that Borrower
has taken and proposes to take with respect thereto.

         (c) ANNUAL FINANCIAL. As soon as available and in any event within one
hundred twenty (120) days after the end of each Fiscal Year, a copy of the
annual unaudited Consolidated balance sheet of Borrower and its Subsidiaries as
of the end of such Fiscal Year and a Consolidated statement of income of
Borrower and its Subsidiaries for such Fiscal Year, together with a certificate
of the chief financial officer of Borrower stating that no Default has occurred
and is continuing or, if a default has occurred and is continuing, a statement
as to the nature thereof and the action that Borrower has taken and proposes to
take with respect thereto.

         (d) LITIGATION. Promptly after the commencement thereof, notice of all
actions, suits, investigations, litigation and proceedings before any court or
governmental department, commission, board, bureau, agency or instrumentality,
domestic or foreign, affecting Borrower or any of its Subsidiaries of the type
described in SECTION 4.01(G), and promptly after the occurrence thereof, notice
of any material adverse change in the status or the financial effect on Borrower
or any of its Subsidiaries of the Disclosed Litigation from that described on
the Disclosure Schedule.

         (e) BORROWING BASE CERTIFICATE. As soon as available and in any event
within (a) fifteen (15) days after the end of each month and (ii) five (5) days
after any prepayment, sale, transfer or other disposition of any Mortgage Loans
or B Notes, a Borrowing Base Certificate, as at the end of the previous month
(or the previous week, if furnished more often than monthly), certified by a
Responsible Officer of Borrower.

         (f) MONTHLY ASSET REPORTS. As soon as available and in any event within
fifteen (15) days after the end of each calendar month, a cash flow report in
form reasonably acceptable to the Lender setting forth with respect to each
Mortgage Loan and B Note the information set forth on EXHIBIT E attached hereto.

         (g) OTHER INFORMATION. Such other information respecting the business,
condition (financial or otherwise), operations, performance, properties or
prospects of Borrower as Lender may from time to time reasonably request.

<PAGE>

                                       50

                                   ARTICLE VI

                                EVENTS OF DEFAULT

         SECTION 6.01. EVENTS OF DEFAULT. If any of the following events
("EVENTS OF DEFAULT") shall occur and be continuing:

         (a) (i) Borrower shall fail to pay the outstanding principal of the
Advances on the Maturity Date, (ii) Borrower shall fail to make any required
payment or pledge any additional collateral as required pursuant to SECTION
2.04(B)(III) within the two (2) Business Day period provided in such Section or
(iii) Borrower shall fail to pay any other required payment of principal or any
payment of interest on any Advance, or any other payment under any Loan
Document, in each case under this clause (iii), within five (5) Business Day(s)
after the same becomes due and payable; or

         (b) any representation or warranty made by Borrower (or any of its
officers) under or in connection with any Loan Document shall prove to have been
incorrect in any material respect when made; or

         (c) Borrower shall fail to perform or observe any term, covenant or
agreement contained in SECTION 5.02(E) or SECTION 5.03; or

         (d) Borrower shall fail to perform any other term, covenant or
agreement contained in any Loan Document on its part to be performed or observed
if such failure shall remain unremedied for thirty (30) days after the earlier
of the date on which (A) a Responsible Officer of Borrower becomes aware of such
failure or (B) written notice thereof shall have been given to Borrower by the
Lender; or

         (e) Borrower, or any of its Subsidiaries shall fail to pay any
principal of, premium or interest on or any other amount payable in respect of
any Debt that is outstanding in a principal amount of at least $1,000,000 either
individually or in the aggregate (but excluding Debt outstanding hereunder) of
such party, when the same becomes due and payable (whether by scheduled
maturity, required prepayment, acceleration, demand or otherwise), and such
failure shall continue after the applicable grace period, if any, specified in
the agreement or instrument relating to such Debt; or any other event shall
occur or condition shall exist under any agreement or instrument relating to any
such Debt, if the effect of such event or condition is to accelerate, or to
permit the acceleration of, the maturity of such Debt or otherwise to cause, or
to permit the holder thereof to cause, such Debt to mature; or any such Debt
shall be declared to be due and payable or required to be prepaid or redeemed
(other than by a regularly scheduled required prepayment or redemption),
purchased or defeased, or an offer to prepay, redeem, purchase or defease such
Debt shall be required to be made (other than by a regularly scheduled required
offer), in each case prior to the stated maturity thereof; PROVIDED, HOWEVER,
that if such failure or default shall be cured by Borrower and any acceleration
of the related Debt rescinded, such event shall no longer constitute an Event of
Default hereunder; or

         (f) Borrower or any of its Subsidiaries shall generally not pay its
debts as such debts become due, or shall admit in writing its inability to pay
its debts generally, or shall

<PAGE>

                                       51

make a general assignment for the benefit of creditors; or any proceeding shall
be instituted by or against Borrower or any of it Subsidiaries seeking to
adjudicate it a bankrupt or insolvent, or seeking liquidation, winding up,
reorganization, arrangement, adjustment, protection, relief, or composition of
it or its debts under any law relating to bankruptcy, insolvency or
reorganization or relief of debtors, or seeking the entry of an order for relief
or the appointment of a receiver, trustee, or other similar official for it or
for any substantial part of its property and, in the case of any such proceeding
instituted against it (but not instituted by it) that is being diligently
contested by it in good faith, either such proceeding shall remain undismissed
or unstayed for a period of sixty (60) days or any of the actions sought in such
proceeding (including, without limitation, the entry of an order for relief
against, or the appointment of a receiver, trustee, custodian or other similar
official for, it or any substantial part of its property) shall occur; or
Borrower or any of its Subsidiaries shall take any corporate action to authorize
any of the actions set forth above in this SUBSECTION (F); PROVIDED, HOWEVER,
that to the extent any of the foregoing relates to a Subsidiary, no Event of
Default shall be deemed to have occurred unless it is reasonably likely to cause
a Material Adverse Effect; or

         (g) any judgment or order for the payment of money in excess of
$1,000,000 shall be rendered against Borrower or any of its Subsidiaries and
either (i) enforcement proceedings shall have been commenced by any creditor
upon such judgment or order or (ii) there shall be any period of ten (10)
consecutive days during which a stay of enforcement of such judgment or order,
by reason of a pending appeal or otherwise, shall not be in effect; PROVIDED,
HOWEVER, that to the extent any judgment or order is rendered against a
Subsidiary, no Event of Default shall be deemed to have occurred unless it also
has a Material Adverse Effect; or

         (h) any non-monetary judgment or order shall be rendered against
Borrower or any of its Subsidiaries that is reasonably likely to have a Material
Adverse Effect, and there shall be any period of thirty (30) consecutive days
during which a stay of enforcement of such judgment or order, by reason of a
pending appeal or otherwise, shall not be in effect; or

         (i) any provision of any Loan Document after delivery thereof pursuant
to SECTION 3.01 or 3.02 shall for any reason cease to be valid and binding on or
enforceable against Borrower, or Borrower shall so state in writing;

         (j) any Collateral Document after delivery thereof pursuant to SECTION
3.01 or 3.02 shall for any reason (other than pursuant to the terms thereof)
cease to create a valid and perfected first priority lien on and security
interest in the Collateral purported to be covered thereby and the same shall
result in a Borrowing Base Deficiency (determined assuming a zero Loan Value for
the applicable Collateral) unless such Borrowing Base Deficiency shall be cured
by Borrower within five (5) Business Days after notice of such event; or

         (k) LNR shall fail to perform or observe any term, covenant or
agreement contained in the Guaranty;

then, and in any such event, Lender may declare its obligation to make Advances
to be terminated, whereupon the same shall forthwith terminate, and (ii) may, by
written notice to Borrower, declare the Note, all interest thereon and all other
amounts payable under this Agreement and the other Loan Documents to be
forthwith due and payable, whereupon the Note,

<PAGE>

                                       52

all such interest and all such amounts shall become and be forthwith due and
payable, without presentment, demand, protest or further notice of any kind, all
of which are hereby expressly waived by Borrower; PROVIDED, HOWEVER, that in the
event of an actual or deemed entry of an order for relief with respect to
Borrower under the Federal Bankruptcy Code, (x) the obligation of Lender to make
Advances shall automatically be terminated and (y) the Note, all such interest
and all such amounts shall automatically become and be due and payable, without
presentment. demand, protest or any notice of any kind, all of which are hereby
expressly waived by Borrower.

                                  ARTICLE VII

                           SECONDARY MARKET; SERVICING

         SECTION 7.01. PARTICIPATIONS.

         (a) Lender may sell participations to one or more Persons (other than
its Affiliates) in or to all or a portion of its rights and obligations under
this Agreement (including, without limitation, all or a portion of the Note held
by it); PROVIDED, HOWEVER, that (i) such Lender's obligations under this
Agreement shall remain unchanged, (ii) Lender shall remain solely responsible to
the other parties hereto for the performance of such obligations and (iii)
Lender shall remain the holder of any such Note for all purposes of this
Agreement.

         (b) Lender may, in connection with any participation or proposed
participation pursuant to this SECTION 7.01, disclose to the participant or
proposed participant any information relating to Borrower furnished to Lender by
or on behalf of Borrower; PROVIDED, HOWEVER, that, prior to any such disclosure,
the participant or proposed participant shall agree to preserve the
confidentiality of any information received by it from Lender.

         (c) Notwithstanding any other provision set forth in this Agreement,
Lender may at any time create a security interest in all or any portion of its
rights under this Agreement (including, without limitation, the Advances owing
to it and the Note or Notes held by it) in favor of any Federal Reserve Bank in
accordance with Regulation A of the Board of Governors of the Federal Reserve
System.

         SECTION 7.02. SERVICING. On or after the Closing Date, Lender shall
have the right to transfer the servicing of the Loan and administration of the
Loan Documents to a loan servicer designated by Lender in its sole discretion
(together with any servicer appointed by Lender "LOAN SERVICER"). From and after
the engagement of the Loan Servicer (a) the Loan Servicer shall have such right
to exercise all rights of Lender and enforce all obligations of Borrower
pursuant to the provisions of this Agreement, the Note and the other Loan
Documents; (b) Borrower shall deliver to the Loan Servicer duplicate originals
of all notices and other instruments which Borrower may deliver pursuant to this
Agreement, the Note and the other Loan Documents (and no delivery of such
notices or other instruments by Borrower shall be of any force or effect unless
delivered to Lender and Loan Servicer as provided above); and (c) Lender shall
deliver to Borrower written notice of such transfer with a copy of the agreement
with the Loan Servicer at least three (3) days prior to such transfer.

<PAGE>

                                       53

                                  ARTICLE VIII

                          PARTIAL RELEASE OF COLLATERAL

         SECTION 8.01. PARTIAL RELEASE OF COLLATERAL. Borrower shall be entitled
to a partial release of the applicable Mortgage Loan or B Note and release of
Lender's security interests and liens thereon (a "PARTIAL RELEASE") subject to
the following terms and conditions:

         (a) Borrower shall have delivered to the Lender a written request for a
Partial Release in the form of EXHIBIT K which request shall include (A) the
proposed effective date of the Partial Release and (B) documents effecting the
Partial Release in form and substance satisfactory to Lender;

         (b) No Default or Event of Default shall have occurred and be
continuing;

         (c) Lender shall have received, simultaneously with the Partial
Release, prepayment in full of the Release Price with respect to the Mortgage
Loans or B Notes subject to the requested Partial Release (reduced by
application of any amounts applied pursuant to SECTION 2.04), and payment of all
reasonable costs and expenses, including, without limitation, legal fees and
disbursements, incurred by Lender in effecting the Partial Release; and

         (d) Lender shall have received, simultaneously with the Partial
Release, a certificate signed by a duly authorized officer of Borrower, dated
the date of the Partial Release, stating that (A) all of the conditions set
forth in this SECTION 8.01 have been satisfied and (B) the Partial Release of
the applicable Mortgage Loan or B Note complies with all of the terms and
provisions of this Agreement.

Provided the conditions precedent to such Partial Release set forth in this
SECTION 8.01 have been satisfied, Lender shall, simultaneously with such
payment, execute and deliver to Borrower all documents provided by Borrower and
required to effect the Partial Release and deliver to Borrower all Mortgage Loan
Documents or B Note and related documents, as the case may be, in its
possession.

                                   ARTICLE IX

                                  MISCELLANEOUS

         SECTION 9.01. AMENDMENTS, ETC. No amendment or waiver of any provision
of this Agreement or the Notes or any other Loan Document, nor consent to any
departure by the Borrower therefrom, shall in any event be effective unless the
same shall be in writing and signed (or, in the case of the Collateral
Documents, consented to) by Lender, and then such waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
given.

         SECTION 9.02. NOTICES, ETC. All notices and other communications
provided for hereunder shall be in writing (including telegraphic, telecopy or
telex communication) and mailed, telegraphed, telecopied, telexed or delivered,
if to Borrower, at its address at c/o LNR

<PAGE>

                                       54

Property Corporation, 760 Northwest 107th Avenue, Miami, Florida 33172,
Attention: Ms. Shelly Rubin, Chief Financial Officer, and if to the Lender, at
its address at 31 West 52nd Street, New York, New York 10019, Attention: Mr. Ian
McColough; or as to each other party, at such other address as shall be
designated by such party in a written notice to Borrower and Lender. All such
notices and communications shall, when mailed, telegraphed, telecopied or
telexed, be effective three (3) days after deposited in the mails, when
delivered to the telegraph company, transmitted by telecopier or confirmed by
telex answerback, one day after delivered to a reputable overnight courier or
otherwise upon receipt, respectively, except that notices and communications to
Lender pursuant to ARTICLE II, III OR VII shall not be effective until received
by Lender. Delivery by telecopier of an executed counterpart of any amendment or
waiver of any provision of this Agreement or the Note or of any Exhibit hereto
to be executed and delivered hereunder shall be effective as delivery of a
manually executed counterpart thereof.

         SECTION 9.03. NO WAIVER; REMEDIES. No failure on the part of Lender to
exercise, and no delay in exercising, any right hereunder or under any Note
shall operate as a waiver thereof; nor shall any single or partial exercise of
any such right preclude any other or further exercise thereof or the exercise of
any other right. The remedies herein provided are cumulative and not exclusive
of any remedies provided by law.

         SECTION 9.04. COSTS, EXPENSES.

         (a) The Borrower agrees to pay on demand (i) all reasonable
out-of-pocket costs and expenses of the Lender in connection with the
preparation, execution, delivery, administration, modification and amendment of
the Loan Documents (including, without limitation, (A) all out-of-pocket due
diligence, collateral review, syndication, transportation, computer,
duplication, appraisal, audit, insurance, consultant, search, filing and
recording fees and expenses and (B) the reasonable fees and expenses of counsel
for Lender with respect thereto, with respect to advising Lender as to its
rights and responsibilities, or the perfection, protection or preservation of
rights or interests, under the Loan Documents, with respect to negotiations with
Borrower or with other creditors of Borrower or any of its Subsidiaries arising
out of any Default or any events or circumstances that may give rise to a
Default and with respect to presenting claims in or otherwise participating in
or monitoring any bankruptcy, insolvency or other similar proceeding involving
creditors' rights generally and any proceeding ancillary thereto); PROVIDED,
HOWEVER, that (i) such reasonable fees of counsel for Lender in connection with
the establishment of the facility contemplated by this Agreement shall not
exceed $50,000; and (ii) all out-of-pocket costs and expenses of Lender in
connection with the enforcement of the Loan Documents, whether in any action,
suit or litigation, any bankruptcy, insolvency or other similar proceeding
affecting creditors' rights generally (including, without limitation, the
reasonable fees and expenses of counsel for the Lender and with respect
thereto).

         (b) Borrower agrees to indemnify and hold harmless Lender, the Loan
Servicer and each of their respective Affiliates and their officers, directors,
employees, agents and advisors (each, an "INDEMNIFIED PARTY") from and against
any and all claims, damages, losses, liabilities and expenses (including,
without limitation, reasonable fees and expenses of counsel) that may be
incurred by or asserted or awarded against any Indemnified Party, in each case
arising out of or in connection with or by reason of (including, without
limitation, in connection with any investigation, litigation or proceeding or
preparation of a defense in

<PAGE>

                                       55

connection therewith) (i) the Advances, the actual or proposed use of the
proceeds of the Advances, the Loan Documents or any of the transactions
contemplated thereby, including, without limitation, any acquisition or proposed
acquisition or (ii) the actual or alleged presence of Hazardous Materials on any
Mortgaged Property or any Environmental Action relating in any way to any
Mortgaged Property, except to the extent such claim, damage, loss, liability or
expense is found in a final, non-appealable judgment by a court of competent
jurisdiction to have resulted from such Indemnified Party's negligence or
willful misconduct. In the case of an investigation, litigation or other
proceeding to which the indemnity in this SECTION 9.04(B) applies, such
indemnity shall be effective whether or not such investigation, litigation or
proceeding is brought by Borrower, its directors, shareholders or creditors or
an Indemnified Party or any Indemnified Party is otherwise a party thereto and
whether or not the transactions contemplated hereby are consummated. Borrower
also agrees not to assert any claim against Lender or any of its Affiliates, or
any of their respective officers, directors, employees, attorneys and agents, on
any theory of liability, for special, indirect, consequential or punitive
damages arising out of or otherwise relating to the Loan, the actual or proposed
use of the proceeds of the Advances, the Loan Documents or any of the
transactions contemplated thereby.

         (c) Without limitation to the provisions of SECTION 2.04(A), if any
payment of principal of any Eurodollar Rate Advance is made by the Borrower
other than on the last day of the applicable Interest Period, as a result of an
acceleration of the maturity of the Notes pursuant to SECTION 6.01 or for any
other reason, Borrower shall, upon demand by the Lender, pay to the Lender an
amount sufficient to compensate the Lender for any LIBOR Breakage with respect
to such payment.

         (d) If Borrower fails to pay when due any costs, expenses or other
amounts payable by it under any Loan Document, including, without limitation,
fees and expenses of counsel and indemnities, such amount may be paid on behalf
of Borrower by Lender, in its sole discretion.

         (e) Without prejudice to the survival of any other agreement of
Borrower hereunder or under any other Loan Document, the agreements and
obligations of Borrower contained in this SECTION 9.04 shall survive the payment
in full of principal, interest and all other amounts payable hereunder and under
any of the other Loan Documents.

         SECTION 9.05. RIGHT OF SET-OFF. Upon the occurrence and during the
continuance of any Event of Default the Lender and each of its respective
Affiliates is hereby authorized at any time and from time to time, to the
fullest extent permitted by law, to set off and otherwise apply any and all
deposits (general or special, time or demand, provisional or final) at any time
held and other indebtedness at any time owing by Lender or such Affiliate to or
for the credit or the account of Borrower against any and all of the Obligations
of Borrower then owing whether now or hereafter existing under this Agreement
and the Note. Lender agrees promptly to notify Borrower after any such set-off
and application; PROVIDED, HOWEVER, that the failure to give such notice shall
not affect the validity of such set-off and application. The rights of Lender
and its Affiliates under this Section are in addition to other rights and
remedies (including, without limitation, other rights of set-off) that Lender
and its Affiliates may have.

<PAGE>

                                       56

         SECTION 9.06. BINDING EFFECT. This Agreement shall become effective
when it shall have been executed by Borrower and Lender and thereafter shall be
binding upon and inure to the benefit of Borrower and Lender and their
respective successors and assigns, except that Borrower shall not have the right
to assign its rights hereunder or any interest herein without the prior written
consent of Lender.

         SECTION 9.07. EXECUTION IN COUNTERPARTS. This Agreement may be executed
in any number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed shall be deemed to be an original
and all of which taken together shall constitute one and the same agreement.
Delivery of an executed counterpart of a signature page to this Agreement by
telecopier shall be effective as delivery of a manually executed counterpart of
this Agreement.

         SECTION 9.08. JURISDICTION, ETC.

         (a) Each of the parties hereto hereby irrevocably and unconditionally
submits, for itself and its property, to the nonexclusive jurisdiction of any
New York State court or federal court of the United States of America sitting in
New York City, and any appellate court from any thereof, in any action or
proceeding arising out of or relating to this Agreement or any of the other Loan
Documents to which it is a party, or for recognition or enforcement of any
judgment, and each of the parties hereto hereby irrevocably and unconditionally
agrees that all claims in respect of any such action or proceeding may be heard
and determined in any such New York State court or, to the extent permitted by
law, in such federal court. Each of the parties hereto agrees that a final
judgment in any such action or proceeding shall be conclusive and may be
enforced in other jurisdictions by suit on the judgment or in any other manner
provided by law. Nothing in this Agreement shall affect any right that any party
may otherwise have to bring any action or proceeding relating to this Agreement
or any of the other Loan Documents in the courts of any jurisdiction.

         (b) Each of the parties hereto irrevocably and unconditionally waives,
to the fullest extent it may legally and effectively do so, any objection that
it may now or hereafter have to the laying of venue of any suit, action or
proceeding arising out of or relating to this Agreement or any of the other Loan
Documents to which it is a party in any New York State or federal court. Each of
the parties hereto hereby irrevocably waives, to the fullest extent permitted by
law, the defense of an inconvenient forum to the maintenance of such action or
proceeding in any such court.

         SECTION 9.09. GOVERNING LAW. This Agreement and the Notes shall be
governed by, and construed in accordance with, the laws of the State of New
York.

         SECTION 9.10. WAIVER OF JURY TRIAL. To the maximum extent permitted by
law, each of Borrower and Lender irrevocably waives all right to trial by jury
in any action, proceeding or counterclaim (whether based on contract, tort or
otherwise) arising out of or relating to any of the Loan Documents, the Advances
or the actions of Lender in the negotiation, administration, performance or
enforcement thereof.

<PAGE>

                                       57

         SECTION 9.11. CONFIDENTIALITY. Borrower and Lender acknowledge and
agree on behalf of themselves and each of their respective Affiliates,
directors, officers, members, employees and agents that the existence, terms and
conditions of the facility contemplated by this Agreement are confidential and
shall not be disclosed by either party without the prior written consent of the
other party except to the extent required (a) by applicable laws or (b) in
connection with any litigation to which the applicable Person is a party.
Without limiting the foregoing, Borrower shall not advertise, publish or promote
the existence of this facility or the identity of the Lender or any of its
Affiliates to loan customers of Borrower as a source of ultimate funding for
loans or otherwise.

         SECTION 9.12. RECOURSE LIMITATION.

         (a) Notwithstanding anything to the contrary contained in this
Agreement or in any other Loan Document (but subject to the provisions of this
SECTION 9.12), Lender shall not enforce the liability and obligation of Borrower
to perform and observe the obligations contained in this Agreement or in the
Note by any action or proceeding to collect damages or wherein a money judgment
or any deficiency judgment or order or any judgment establishing any personal
obligation or liability shall be sought against Borrower or any principal,
director, officer, employee, beneficiary, shareholder, partner, member, trustee,
agent or affiliate of Borrower or any person owning, directly or indirectly, any
legal or beneficial interest in Borrower, or any successors or assigns of any of
the foregoing (collectively, the "EXCULPATED PARTIES"). Lender may bring any
appropriate action or proceeding to enable Lender to enforce and realize upon
the Collateral Documents, and the interest in the Mortgage Loans, B Notes and
other Collateral given to Lender pursuant to the Collateral Documents; PROVIDED,
HOWEVER, subject to the provisions of this SECTION 9.12, that any judgment in
any action or proceeding shall be enforceable against Borrower only to the
extent of Borrower's interest in the Mortgage Loans, B Notes and any other
Collateral given to Lender in connection with the Note. Lender agrees that it
shall not, except as otherwise provided below, sue for or demand any deficiency
judgment against Borrower or any of the Exculpated Parties in any action or
proceeding, under or by reason of or under or in connection with this Agreement,
the Note, or the other Loan Documents.

         (b) The provisions of subsection (a) above shall not (i) constitute a
waiver, release or impairment of the Obligations; (ii) impair the right of
Lender to name Borrower as a party defendant in any action or suit for under
Collateral Documents; (c) affect the validity or enforceability of any
indemnity, guaranty, master lease or similar instrument made in connection with
the Loan Documents; (d) impair the right of Lender to obtain the appointment of
a receiver; or (e) impair the enforcement of any Assignment of Mortgage and
Assignment of Rents executed in connection herewith.

         (c) Notwithstanding the provisions of subsection (a) to the contrary,
Borrower shall be personally liable to Lender for the losses Lender incurs due
to: (a) fraud or intentional misrepresentation by Borrower or any other person
or entity in connection with the execution and the delivery of this Agreement,
the Note, or the other Loan Documents; (b) Borrower's misapplication or
misappropriation of principal payments received by Borrower with respect to any
Mortgage Loan or B Note; or (c) criminal acts perpetrated by it.

<PAGE>

                                       58

         SECTION 9.13. AMENDMENT OF EXISTING AGREEMENT. This Agreement in all
respects amends, restates, replaces and supercedes the prior existing agreement
executed as of May 15, 1998 between the same parties.

                                      * * *

                            [SIGNATURES ON NEXT PAGE]

<PAGE>


         IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective officers thereunto duly authorized, as of the date
first above written.

                                       BORROWER:

                                       LNR FLORIDA FUNDING, INC.

                                       By:
                                          ------------------------------------
                                          Name:
                                          Title:


                                       LENDER:

                                       GERMAN AMERICAN CAPITAL CORPORATION

                                       By:
                                          ------------------------------------
                                          Name:
                                          Title:

                                       By:
                                          ------------------------------------
                                          Name:
                                          Title:

<PAGE>

                                    GUARANTY

                                      from

                            LNR PROPERTY CORPORATION

                                  as Guarantor,

                                   in favor of

                      GERMAN AMERICAN CAPITAL CORPORATION,

                                    as Lender

                           DATED AS OF OCTOBER 4, 1999

<PAGE>

                                    GUARANTY

         THIS GUARANTY (this "GUARANTY"), made as of the 4th day of October,
1999, by LNR PROPERTY CORPORATION, a Delaware corporation, having an address at
760 Northwest 107th Avenue, Miami, Florida 33172 (the "GUARANTOR"), in favor
GERMAN AMERICAN CAPITAL CORPORATION, a Maryland corporation, having an address
at 31 West 52nd Street, 23rd Floor, New York, New York 10019 ("Lender").

                              W I T N E S S E T H:
                               - - - - - - - - - -

         WHEREAS, LNR FLORIDA FUNDING, INC., a Florida corporation ("BORROWER"),
and Lender have entered into that certain Amended and Restated Credit Agreement,
dated of even date hereof (as the same may be amended, modified or supplemented
from time to time, the "AGREEMENT"; capitalized terms not otherwise defined
herein shall have the meaning ascribed to such terms in the Agreement) pursuant
to which Lender agreed to finance Mortgage Loans and B Notes for Borrower and
Borrower agreed to pledge Mortgage Loans and B Notes to Lender as security for
Advances, all in accordance with the terms and conditions of the Agreement;

         WHEREAS, as a condition to entering into the Agreement with Borrower,
Lender has required that the Guarantor guarantee payment and performance of the
Guaranteed Obligations (as hereafter defined); and

         WHEREAS, Borrower is indirectly controlled by the Guarantor, and the
Guarantor will derive substantial economic benefit from Lender financing
Mortgage Loans and B Notes for Borrower, and, therefore, the Guarantor has
agreed to guaranty payment to Lender and performance of the Guaranteed
Obligations.

         NOW, THEREFORE, to induce Lender to make Advances pursuant to the
Agreement and in consideration of the foregoing premises and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Guarantor hereby covenants and agrees for the benefit of
Lender, as follows:

         1. Guaranteed Obligations.

                  (a) The Guarantor absolutely and unconditionally guarantees to
Lender the punctual and complete payment and performance when due (whether at
the stated maturity, by acceleration or otherwise), of all obligations of
Borrower under the Agreement and any other document executed in connection
therewith with respect to B Notes and B Note Advances, including, without
limitation, payment of the aggregate outstanding principal amount of each B Note
Advance for the applicable B Notes that are pledged to Lender from time to time
pursuant to the Agreement. (The obligations described in this CLAUSE (A) are
referred to herein as the "GUARANTEED OBLIGATIONS"). It is specifically
understood and agreed that the Guaranteed Obligations do not include, and this
Guaranty does not cover in any way nor does Guarantor have any payment or
performance obligations hereunder with respect to, any and all of the Mortgage
Loan Advances or any and all obligations of Borrower under the Agreement and/or
any other documents executed in connection therewith with respect to the
Mortgage Loan Advances or Mortgage Loans.

                                       1
<PAGE>

                  (b) INTENTIONALLY OMITTED.

                  (c) If Borrower shall fail to (i) pay when due the outstanding
principal amount of each B Note Advance for the applicable B Notes that are
pledged to Lender or (ii) pay or perform when due (including any applicable
grace, notice and/or cure periods) any of the other Guaranteed Obligations,
Lender may, subject only to the express limitations set forth in this Guaranty,
call upon the Guarantor to pay the unpaid amount or perform the unsatisfied
Guaranteed Obligation. The Guarantor shall, upon demand, immediately pay such
unpaid amount to Lender or perform such unsatisfied condition.

         2. REINSTATEMENT OF OBLIGATIONS. If at any time all or any part of any
payment made by the Guarantor or received by Lender from the Guarantor under or
with respect to this Guaranty is or must be rescinded or returned for any reason
whatsoever (including but not limited to, the insolvency, bankruptcy or
reorganization of the Guarantor or Borrower), then the obligations of the
Guarantor hereunder shall, to the extent of the payment rescinded or returned,
be deemed to have continued in existence notwithstanding such previous payment
made by the Guarantor, or receipt of payment by Lender, and the obligations of
the Guarantor hereunder shall continue to be effective or be reinstated, as the
case may be, as to such payment, all as though such previous payment by the
Guarantor had never been made.

         3. GUARANTY ABSOLUTE. The Agreement shall conclusively be deemed to
have been entered into by Lender and any B Note Advances thereunder shall be
made in reliance upon this Guaranty and all dealings and documents executed
hereafter between Lender and Borrower related to the Guaranteed Obligations
shall likewise be conclusively presumed to have been undertaken or consummated
in reliance upon this Guaranty. This Guaranty shall, subject to the terms
hereof, be construed as a continuing, absolute and unconditional guaranty of
payment and guaranty of performance of obligations. The liability of the
Guarantor under this Guaranty shall be absolute and unconditional irrespective
of (a) any lack of genuineness, regularity, legality, validity or enforceability
of the Agreement or any part thereof, (b) any change in the time, manner or
place of payment of any amount payable under the Agreement, or in any other term
of the Agreement, including, but not limited to, any increase or decrease in the
Base Rate or Eurodollar Rate, or any other amendment or waiver or consent to
departure from the Agreement including, without limiting the generality of the
foregoing, the waiver of any default thereunder or the making of any arrangement
with, or the accepting of any compromise or settlement from, Borrower or any
other person or entity liable in respect of any amount payable under the
Agreement, unless Lender expressly agrees in writing any of the foregoing
applies to this Guaranty (c) any exchange, release or non-perfection of any
interest of Lender in any B Notes, or any release or amendment or waiver of or
consent to departure from any other guaranty securing the obligations of
Borrower under the Agreement, (d) any act, omission, circumstance or occurrence
that might otherwise vary the risk of the Guarantor or be deemed a legal or
equitable discharge of the Guarantor or which might otherwise constitute a
defense available to Borrower or the Guarantor or (e) any dealings or
transactions between Lender, Borrower or any other person or entity liable in
respect of the payment to Lender of the aggregate outstanding principal amount
of each B Note Advance or the payment or performance of any of the other
obligations of Borrower under the Agreement or any other document executed in
connection therewith.

                                       2
<PAGE>

         Without limiting the generality of the foregoing and subject to the
terms hereof the Guarantor's liability under this Guaranty shall, subject to the
terms hereof, be absolute and unconditional irrespective of any right of set-off
or counterclaim which Borrower or the Guarantor may from time to time have in
respect of any moneys or liabilities owing by, or any claims against, Lender and
the Guarantor irrevocably waives any defense or claim based upon any such right
of set-off or counterclaim. This Guaranty shall continue to be effective or be
reinstated, as the case may be, if at any time any part of the aggregate
outstanding principal amount of each B Note Advance or any other amount paid to
Lender with respect to the Guaranteed Obligations is rescinded or must otherwise
be returned by Lender upon the insolvency, bankruptcy or reorganization of
Borrower, all as though such payment had not been made.

         4. WAIVER. The Guarantor hereby waives protest, promptness, diligence,
notice of acceptance, demand for payment and notice of default or non-payment in
respect of the Agreement and waives all other notices of every kind and
description with respect to any of the B Note Advances now or hereafter provided
by any statute or rule of law, except as expressly provided herein. The
Guarantor hereby waives any requirement that Lender protect, secure, perfect or
insure any security interest or lien or any property subject thereto or exhaust
any right or take any action against Borrower, against the Guarantor hereunder
or any other person, entity or any collateral. The Guarantor hereby waives, to
the fullest extent permitted by applicable law, the benefit of any statute of
limitations which may affect its liability hereunder or the enforcement hereof.
Any payment by Borrower or other circumstance that operates to toll any statute
of limitations as to Borrower shall operate to toll the statute of limitations
as to the Guarantor.

         5. NATURE OF GUARANTY. This Guaranty is a guaranty of payment and
performance of obligations and not of collection, is continuing in nature and
applies to all Guaranteed Obligations, whether existing now or in the future,
including (a) interest and other Guaranteed Obligations arising or accruing
after bankruptcy of Borrower or the Guarantor or any sale or other disposition
of any B Notes or any other collateral, and (b) any Guaranteed Obligations that
survive the repayment by Borrower of all B Note Advances Purchased Securities
and the termination of Lender's obligation to finance any further B Notes with
Borrower. This Guaranty and any security for this Guaranty shall continue to be
effective or be reinstated, as the case may be, if at any time any payment or
performance of any Guaranteed Obligations is rescinded or must otherwise be
returned by Lender or any other person upon the bankruptcy, insolvency or
reorganization of Borrower or the Guarantor or otherwise, all as though such
payment or performance had not occurred. The Guarantor shall have no authority
to revoke this Guaranty, but if any such revocation shall be deemed to have
occurred by operation of law or otherwise, the provisions of this Guaranty shall
continue to apply notwithstanding such revocation.

         6. OBLIGATIONS INDEPENDENT. The obligations of the Guarantor under this
Guaranty are independent of the obligations of Borrower under the Agreement
(such obligations, including the Borrower's obligations in respect of the
Guaranteed Obligations, being referred to in this Guaranty as the "OTHER
OBLIGATIONS") and any security or collateral therefor, and the enforceability of
any security for this Guaranty is likewise independent of any such Other
Obligations and any other security or collateral. Lender may bring action
against the Guarantor and otherwise enforce this Guaranty without bringing
action against Borrower or any other party

                                       3
<PAGE>

or joining in any action against the Guarantor, and otherwise independently of
any other remedy at law or in equity that may be available to Lender at any time
with respect to any Other Obligations, security or collateral. The Guarantor
waives any right to require Lender at any time to proceed against Borrower or
any other party, or otherwise enforce, proceed against or exhaust any Other
Obligations or pursue any other remedy in Lender's power.

         7. FULL RECOURSE. Notwithstanding any provisions of the Agreement or
any other document executed in connection therewith to the contrary, all of the
terms and provisions of this Guaranty are recourse obligations of the Guarantor
and not restricted by any limitation on personal liability.

         8. SURVIVAL. To the fullest extent permitted by law, this Guaranty
shall be deemed to be continuing in nature and shall remain in full force and
effect and shall survive the exercise of any remedy by Lender under the
Agreement or any other document executed in connection therewith.

         9. WAIVER OF SUBROGATION. Until such time as the aggregate outstanding
principal amount of each B Note Advance has been paid for all B Notes, all other
Guaranteed Obligations of Borrower under the Agreement and other documents
executed in connection therewith have been satisfied and Lender has no further
obligation to finance B Notes with Borrower, the Guarantor hereby irrevocably
waives all rights of subrogation and any other claims that it may now or
hereafter acquire against Borrower or any insider that arise from the existence,
payment, performance or enforcement of the Guarantor's obligations under this
Guaranty, including, without limitation, any right of reimbursement,
exoneration, contribution or indemnification and any right to participate in any
claim or remedy of Lender against Borrower or any insider, whether or not such
claim, remedy or right arises in equity or under contract, statute or common
law, including, without limitation, the right to take or receive from Borrower
or any insider, directly or indirectly, in cash or other property or by set-off
or in any other manner, payment or security on account of such claim, remedy or
right. If any amount shall be paid to the Guarantor in violation of the
foregoing at any time prior to Lender being paid the aggregate outstanding
principal amount of each B Note Advance for all B Notes, all other Guaranteed
Obligations of Borrower under the Agreement and other documents executed in
connection therewith being satisfied and Lender having no obligation to finance
any further B Notes with Borrower, such amount shall be held in trust for the
benefit of Lender and shall forthwith be paid to Lender to be credited and
applied to all amounts payable under this Guaranty or to be held as collateral
for any amounts payable under this Guaranty thereafter arising. The Guarantor
acknowledges that it has and will receive direct and indirect benefits from the
arrangements contemplated by the Agreement and that the waiver set forth in this
SECTION 9 is knowingly made in contemplation of such benefits.

         10. RESERVATION OF RIGHTS. Nothing contained in this Guaranty shall
prevent or in any way diminish or interfere with any rights or remedies,
including, without limitation, the right to contribution, which Lender may have
against Borrower, under any applicable federal, state or local laws, all such
rights being hereby expressly reserved.

         11. RIGHTS CUMULATIVE; PARENTS. Lender's rights under this Guaranty
shall be in addition to all rights of Lender under the Agreement and any other
document executed in

                                       4
<PAGE>

connection therewith. TO THE EXTENT THAT PAYMENTS ARE MADE HEREUNDER BY THE
GUARANTOR WITH RESPECT TO OBLIGATIONS AND LIABILITIES FOR WHICH BORROWER IS NOT
LIABLE UNDER THE AGREEMENT OR ANY OTHER DOCUMENT EXECUTED IN CONNECTION
THEREWITH, SUCH PAYMENTS MADE BY THE GUARANTOR UNDER THIS GUARANTY SHALL NOT
REDUCE IN ANY RESPECT BORROWER'S OBLIGATIONS AND LIABILITIES UNDER THE AGREEMENT
OR ANY OTHER DOCUMENT EXECUTED IN CONNECTION THEREWITH.

         12. NO LIMITATION ON LIABILITY. The Guarantor hereby consents and
agrees that Lender may at any time and from time to time without further consent
from the Guarantor do or consent to any of the following events, and the
liability of the Guarantor under this Guaranty shall be unconditional and
absolute and shall in no way be impaired or limited by any of the following
events, whether occurring with or without notice to the Guarantor or with or
without consideration: (i) grant extensions of time for performance required by
the Agreement; (ii) sell, assign or transfer in any manner any B Notes or any
security for the payment of the aggregate outstanding principal amount of each B
Note Advance or performance of Borrower's other obligations under the Agreement
or any other document executed in connection therewith; (iii) a change in the
composition of Borrower, including, without limitation, the withdrawal or
removal of the Guarantor from any current or future position of ownership,
management or control of Borrower; (iv) the waiver of any inaccuracy of the
representations and warranties made by the Guarantor herein or by Borrower in
the Agreement or any document executed in connection therewith; (v) the release
of Borrower or of any other person or entity from performance or observance of
any of the agreements, covenants, terms or conditions contained in the Agreement
or any document executed in connection therewith by operation of law, Lender's
voluntary act or otherwise; (vi) release or substitute in whole or in part of
any security for the payment of the aggregate outstanding principal amount of
each B Note Advance or the other obligations of Borrower under the Agreement or
any other document executed in connection therewith; (vii) Lender's failure to
perfect, protect, secure or insure any lien or security interest given as
security for the payment of the aggregate outstanding principal amount of each B
Note Advance or the other obligations of Borrower under the Agreement or any
other documents executed in connection therewith; (viii) modify the terms of the
Agreement or any document executed in connection therewith; or (ix) take or fail
to take any action of any type whatsoever. No such action which Lender shall
take or fail to take in connection with the Agreement or any document executed
in connection therewith or any collateral for the repayment of the aggregate
outstanding principal amount of each B Note Advance, nor any course or dealing
with Borrower or any other person, shall limit, impair or release the
Guarantor's obligations hereunder, affect this Guaranty in any way or afford the
Guarantor any recourse against Lender. Nothing contained in this Section shall
be construed to require Lender to take or refrain from taking any action
referred to herein.

         13. ENFORCEMENT. This Guaranty is subject to enforcement at law or in
equity, including actions for damages or specific performance.

         14. ATTORNEYS' FEES. In the event it is necessary for Lender to retain
the services of an attorney or any other consultants in order to enforce this
Guaranty, or any portion thereof, the Guarantor agrees to pay to Lender any and
all costs and expenses, including, without limitation,

                                       5
<PAGE>

reasonable attorneys' fees, costs and disbursements, incurred by Lender as a
result thereof and such costs, fees and expenses shall be included as a
Guaranteed Obligation.

         15. SUCCESSIVE ACTION. A separate right of action hereunder shall arise
each time Lender acquires knowledge of any matter indemnified or guaranteed by
the Guarantor under this Guaranty. Separate and successive actions may be
brought hereunder to enforce any of the provisions hereof at any time and from
time to time. No action hereunder shall preclude any subsequent action, and the
Guarantor hereby waives and covenants not to assert any defense in the nature of
splitting of causes of action or merger of judgments.

         16. RELIANCE. Lender would not enter into the Agreement without the
Guarantor entering into this Guaranty. Accordingly, the Guarantor intentionally
and unconditionally enters into the covenants and agreements as set forth above
and understands that, in reliance upon and in consideration of such covenants
and agreements, the Agreement shall be executed and, as part and parcel thereof,
specific monetary and other obligations have been, are being and shall be
entered into which would not be made or entered into but for such reliance.

         17. WAIVER BY THE GUARANTOR. The Guarantor covenants and agrees that,
upon the commencement of a voluntary or involuntary bankruptcy proceeding by or
against Borrower, the Guarantor shall not seek in Borrower's bankruptcy
proceeding a supplemental stay or other relief, whether injunctive or otherwise,
pursuant to 11 U.S.C. ss. 105 or any other provision of the Bankruptcy Reform
Act of 1978, as amended, or pursuant to any other debtor relief law (whether
statutory, common law, case law or otherwise) of any jurisdiction whatsoever,
now or hereafter in effect, which may be or become applicable, to stay,
interdict, condition, reduce or inhibit the ability of Lender to enforce any
rights of Lender against the Guarantor.

         18. REPRESENTATIONS AND WARRANTIES. The Guarantor represents and
warrants to Lender that as of the date hereof:

                  (a) ORGANIZATION. The Guarantor (i) is a corporation duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its formation, (ii) is duly qualified and in good standing in
each other jurisdiction in which it owns or leases property or in which the
conduct of its business requires it to so qualify or be licensed except where
the failure to so qualify or be licensed would not have a Material Adverse
Effect and (iii) has all requisite power and authority to own or lease and
operate its properties and to carry on its business as now conducted.

                  (b) AUTHORIZATION. The execution, delivery and performance by
the Guarantor of this Guaranty and the consummation of the transaction
contemplated hereby, are within the Guarantor's powers, have been duly
authorized by all necessary corporate action, and do not (i) contravene the
Guarantor's by-laws or certificate of incorporation or (ii) violate any law
(including, without limitation, the Securities Exchange Act of 1934 and the
Racketeer Influenced and Corrupt Organizations Chapter of the Organized Crime
Control Act of 1970), rule, regulation (including, without limitation,
Regulation X of the Board of Governors of the Federal Reserve System), order,
writ, judgment, injunction, decree, determination or award,

                                       6
<PAGE>

                  (c) APPROVAL. Except as already made or obtained, no
authorization or approval or other action by, and no notice to or filing with,
any Governmental Authority or regulatory body or any other third party is
required for (i) the due execution, delivery, recordation, filing or performance
by the Guarantor of this Guaranty or any other document related hereto or (ii)
the exercise by Lender of its rights hereunder.

                  (d) EXECUTION. This Guaranty has been, and each other document
related hereto, when delivered hereunder will have been, duly executed and
delivered by the Guarantor. This Guaranty is, and each document related hereto,
when delivered hereunder will be, the legal, valid and binding obligation of the
Guarantor, enforceable against the Guarantor in accordance with its terms,
except as may be limited or otherwise affected by bankruptcy, insolvency,
reorganization, liquidation, receivership, moratorium or other laws relating or
affecting creditor's rights generally, or by general principles of equity.

                  (e) NO CONFLICT. The execution and delivery by the Guarantor
of this Guaranty and the Guarantor's performance of its obligations hereunder,
(i) will not be in conflict with, result in a breach of, or constitute (with due
notice or lapse of time or both) a default under, or result in the creation or
imposition of any lien of any nature whatsoever upon any of the property or
assets of the Guarantor pursuant to, any indenture or material agreement or
instrument and (ii) will not conflict with or result in the breach of, or
constitute a default under, any contract, loan agreement, indenture, mortgage,
deed of trust, lease or other instrument binding on or affecting the Guarantor,
which is reasonably likely to have a Material Adverse Effect.

                  (f) LITIGATION. There are no actions, suits or proceedings at
law or in equity by or before any governmental authority or other agency now
pending and served or, to the best knowledge of the Guarantor, threatened
against the Guarantor, which actions, suits or proceedings, if determined
against the Guarantor, are reasonably likely to result in a Material Adverse
Effect.

                  (g) AGREEMENTS. The Guarantor is not in default in the
performance, observance or fulfillment of any of the obligations, covenants or
conditions contained in any agreement or instrument to which it is a party or by
which the Guarantor is bound which is reasonably likely to have a Material
Adverse Effect. The Guarantor is not a party to any agreement or instrument or
subject to any restriction which is reasonably likely to have a Material Adverse
Effect.

                  (h) FINANCIAL CONDITION. The unaudited Consolidated balance
sheet of the Guarantor and its Subsidiaries as at May 31, 1999, and the related
Consolidated statement of income and Consolidated statement of cash flows of the
Guarantor and its Subsidiaries for the six-month period then ended, fairly
represent in all material respects the Consolidated financial condition of the
Guarantor and its Subsidiaries as at such date and the Consolidated results of
the operations of the Guarantor and its Subsidiaries for the period ended on
such date, all in accordance with GAAP (subject to year-end adjustments), and
have been delivered to Lender, and since May 31, 1999, no event which would
result in a Material Adverse Effect has occurred.

                                       7
<PAGE>

                  (i) MISLEADING OR UNTRUE INFORMATION. No information, exhibit
or report furnished by the Guarantor to Lender pursuant to the terms of this
Guaranty taken as a whole contained any untrue statement of a material fact or
omitted to state a material fact necessary to make the statements made therein
in light of the circumstances under which they were made not misleading.

                  (j) REGULATION U. The Guarantor is not primarily engaged in
the business of' extending credit for the purpose of purchasing or carrying
Margin Stock.

                  (k) CERTAIN REGULATIONS. The Guarantor is not (i) an
"investment company" within the meaning of the Investment Company Act of 1940,
as amended or (ii) a "holding company" within the meaning of the Public Utility
Holding Company Act of 1935, as amended.

(l) PLACE OF BUSINESS. The location of the Guarantor's principal place of
business and chief executive office, as of the date hereof, is at 760 Northwest
107th Avenue, Miami, Florida 33172.

                  (m) TAXES. The Guarantor has filed, has caused to be filed, or
has been included in all Federal tax returns (and all other material tax
returns, state, local and foreign) required to be filed and has paid all taxes
shown thereon to be due, together with applicable interest and penalties other
than taxes being contested in good faith by the Guarantor, in each case where
the failure to file or pay would be reasonably likely to cause a Material
Adverse Effect.

                  (n) FOREIGN STATUS. The Guarantor is not a "foreign person"
within the meaning ofss.1445(f)(3) of the Code.

                  (o) GOVERNMENTAL REGULATIONS. The Guarantor is in compliance
with all applicable statutes, laws, ordinances, rules, orders and regulations of
any Governmental Authority in all jurisdictions in which it is presently doing
business, and the Guarantor has all licenses and permits necessary thereunder
for the conduct of its business, other than those the non-compliance with or not
obtaining of which could not (individually or in the aggregate) be reasonably
likely to have a Material Adverse Effect.

                  (p) NO BANKRUPTCY FILING. The Guarantor is not contemplating
either the filing of a petition by it under any state or federal bankruptcy or
insolvency laws or the liquidation of all or a major portion of its assets or
property. To the best knowledge of the Guarantor, no Person is contemplating the
filing of any such petition against it.

                  (q) FULL AND ACCURATE DISCLOSURE. No statement of fact made by
or on behalf of the Guarantor in this Guaranty contains any untrue statement of
a material fact or omits to state any material fact necessary to make statements
contained herein not misleading.

         19. NEGATIVE COVENANTS OF THE GUARANTOR. On and as of the date of this
Guaranty, the Guarantor covenants that it will not and will not permit any of
its Subsidiaries to:

                  (a) MERGERS, ETC. Merge into or consolidate with any Person or
permit any Person to merge into it, or permit any of its Subsidiaries to do so,
except that (i) any Subsidiary

                                       8
<PAGE>

of the Guarantor may merge into or consolidate with any other Subsidiary or
Affiliate of the Guarantor provided that, in the case of any such merger or
consolidation, the Person formed by such merger or consolidation shall be a
Subsidiary or Affiliate of the Guarantor, (ii) any Subsidiary of the Guarantor
may merge into or consolidate with any other Person provided that such merger or
consolidation is not reasonably likely to have a Material Adverse Effect or
(iii) the Guarantor may merge into or consolidate with any of its Subsidiaries;
provided, however, that any such permitted merger shall be subject to the
following condition: if the Guarantor is not the surviving entity, then the
surviving entity must assume all of the obligations of the Guarantor hereunder.

                  (b) CHANGE IN NATURE OF BUSINESS. Make, or permit any of its
Subsidiaries to make, any material change in the nature of its business as
carried on, or contemplated to be carried on, at the date hereof, if the result
of such change would be reasonably likely to cause a Material Adverse Effect.

                  (c) INVESTMENT COMPANY ACT OF 1940. Become an "investment
company" registered under the Investment Company Act of 1940.

                  (d) VOLUNTARY BANKRUPTCY. Commence or join voluntarily in any
proceeding seeking to adjudicate it a bankrupt or insolvent, or seek
liquidation, winding up, reorganization, arrangement, adjustment, protection,
relief, or composition of it or its debts under any laws relating to bankruptcy,
insolvency or reorganization or relief of debtors, or seeking the entry of an
order for relief or the appointment of a receiver, trustee, or other similar
official for it or for any substantial part of its property; PROVIDED, HOWEVER,
as to any Subsidiary, any of the foregoing is reasonably likely to cause a
Material Adverse Effect.

                  (e) ACCOUNTING CHANGES. Make or permit any change in
accounting policies or reporting practices, except as required or permitted by
GAAP.

                  (f) FISCAL YEAR. Change its Fiscal Year.

                  (g) CHARTER AMENDMENTS. Amend its by-laws or certificate of
incorporation without the consent of Lender other than such changes which could
not be reasonably likely to have a Material Adverse Effect.

         20. AFFIRMATIVE COVENANTS OF THE GUARANTOR. On and as of the date of
this Guaranty, the Guarantor covenants that it will, and will cause its
Subsidiaries to:

                  (a) DOCUMENTATION OF REPRESENTATIONS. Provide Lender with
copies of such documentation as Lender may reasonably request evidencing the
truthfulness of the representations set forth in PARAGRAPH 18.

                  (b) COMPLIANCE WITH LAWS, ETC. Comply with all applicable
laws, rules, regulations and orders, such compliance to include, without
limitation, compliance with ERISA and the Racketeer Influenced and Corrupt
Organizations Chapter of the Organized Crime Control Act of 1970, in each case,
where the failure to so comply could be reasonably likely to result in a
Material Adverse Effect.

                                       9
<PAGE>

                  (c) PAYMENT OF TAXES, ETC. Pay and discharge, and cause each
of its Subsidiaries to pay and discharge, before the same shall become
delinquent, (i) all taxes, assessments and governmental charges or levies
imposed upon it or upon its property and (ii) all lawful claims that, if unpaid
or undischarged, might by law become a lien upon its property unless the failure
to pay or discharge same would not have a Material Adverse Effect; PROVIDED,
HOWEVER, that neither the Guarantor nor any of its Subsidiaries shall be
required to pay or discharge any such tax, assessment, charge or claim that is
being contested in good faith and by proper proceedings and as to which
appropriate reserves are being maintained, unless and until any lien resulting
therefrom attaches to its property and becomes enforceable against Guarantor or
any Subsidiaries by its other creditors.

                  (d) PRESERVATION OF EXISTENCE, ETC. Except as otherwise
permitted under PARAGRAPH 19(A), preserve and maintain, and cause each of its
Subsidiaries to preserve and maintain, its existence, legal structure, rights
(charter and statutory), permits, licenses, approvals, privileges and
franchises; PROVIDED, HOWEVER, that neither the Guarantor nor any of its
Subsidiaries shall be required to preserve or maintain any right, permit,
license, approval, privilege or franchise, or in the case of any Subsidiary its
existence or legal structure, if the Guarantor or such Subsidiary shall
determine that the preservation or maintenance thereof is no longer desirable in
the conduct of the business of the Guarantor or such Subsidiary, as the case may
be, and that the loss thereof is not reasonably likely to cause a Material
Adverse Effect.

                  (e) INSPECTION RIGHTS. From time to time, upon reasonable
notice and during normal business hours, permit Lender or any agents or
representatives thereof, to examine and make copies of and abstracts from the
records and books of account of, and visit the offices of, the Guarantor and any
of its Subsidiaries, and to discuss the affairs, finances and accounts of the
Guarantor and any of its Subsidiaries with any of its officers or directors and
with its independent certified public accountants.

                  (f) KEEPING OF BOOKS. Maintain and implement administrative
and operating procedures and keep proper books of record and account, in which
full and correct entries shall be made of all financial transactions and the
assets and business of the Guarantor and any of its Subsidiaries in accordance
with GAAP.

                  (g) SECURITIES EXCHANGE FILINGS. Promptly file with the
appropriate national securities exchange or other appropriate Governmental
Authority all proxy statements, financial statements, registration statements
and all regular, periodic and special reports that the Guarantor is required by
law to file with the Securities and Exchange Commission or any Governmental
Authority that may be substituted therefor, or with any national securities
exchange, which failure to file is reasonably likely to have a Material Adverse
Effect.

                  (h) FURTHER ASSURANCES. Without expense or cost to Lender,
from time to time hereafter, execute, acknowledge, file, record, do and deliver
all and any further acts, and other instruments as Lender may from time to time
reasonably require in order to carry out more effectively the purposes of this
Guaranty or for carrying out the intention of or facilitating the performance of
the terms of this Guaranty.

                                       10
<PAGE>

                  (i) TRANSACTIONS WITH AFFILIATES. Conduct, and cause each of
its Subsidiaries to conduct, all transactions with any of their Affiliates on
terms that are fair and reasonable and no less favorable to the Guarantor or
such Subsidiary than it would obtain in a comparable arm's-length transaction
with a Person not an Affiliate; provided, HOWEVER, the Guarantor or its
Subsidiaries may enter into any such transaction with Affiliates so long as such
transaction would not be reasonably likely to result in a Material Adverse
Effect.

         21. FINANCIAL COVENANTS OF THE GUARANTOR. Guarantor shall not permit
with respect to itself any of the following to be breached, as determined
quarterly on a Consolidated basis in conformity with GAAP as set forth in or
based upon the financial statements of the Guarantor delivered pursuant to
Section 22 hereof:

                  (i)      MINIMUM NET WORTH. Net Worth to be less than
         $500,000,000;

                  (ii)     INDEBTEDNESS TO EQUITY. The ratio of Indebtedness to
         Net Worth to exceed 3.5 to 1; or

                  (iii)    EBITDA TO INTEREST EXPENSE. The ratio of EBITDA to
         Interest Expense to be less than 1.5 to 1.

         22. REPORTING REQUIREMENTS OF THE GUARANTOR.

                  (a) DEFAULT NOTICE. As soon as possible and in any event
within five (5) days after the occurrence of each default under this Guaranty or
any event, development or occurrence reasonably likely to have a Material
Adverse Effect continuing on the date of such statement, a statement of the
Guarantor setting forth details of such default and the action that the
Guarantor has taken and proposes to take with respect thereto.

                  (b) QUARTERLY FINANCIAL. As soon as available and in any event
within sixty (60) days after the end of each of the first three quarters of each
Fiscal Year, an unaudited Consolidated balance sheet of the Guarantor and its
Subsidiaries as of the end of such quarter and Consolidated statement of income
of the Guarantor and its Subsidiaries for the period commencing at the end of
the previous fiscal quarter and ending with the end of such fiscal quarter and a
Consolidated statement of income of the Guarantor and its Subsidiaries for the
period commencing at the end of the previous Fiscal Year and ending with the end
of such quarter, setting forth in each case in comparative form the
corresponding figures for the corresponding period of the preceding Fiscal Year,
all in reasonable detail and duly certified (subject to year-end audit
adjustments) by the chief financial officer of the Guarantor as having been
prepared in accordance with GAAP, together with a certificate of said officer
stating that no default under this Guaranty or Material Adverse Effect has
occurred and is continuing or, if a default or Material Adverse Effect has
occurred and is continuing, a statement as to the nature thereof and the action
that the Guarantor has taken and proposes to take with respect thereto.
Notwithstanding the foregoing, provided that the Guarantor files a Form 10-Q
with the Securities & Exchange Commission ("SEC") and provides a copy of same to
Lender within five (5) Business Days of the filing of such report with the SEC,
such report shall satisfy the conditions of the this subparagraph (b), provided
that the Guarantor provides to Lender with such report a certificate of an
officer of the Guarantor stating that no default under this Guaranty or Material
Adverse Effect has occurred and is continuing or, if a default or Material

                                       11
<PAGE>

Adverse Effect has occurred and is continuing, a statement as to the nature
thereof and the action that the Guarantor has taken and proposes to take with
respect thereto.

                  (c) ANNUAL FINANCIAL. As soon as available and in any event
within one hundred twenty (120) days after the end of each Fiscal Year, a copy
of the annual unaudited Consolidated balance sheet of the Guarantor and its
Subsidiaries as of the end of such Fiscal Year and a Consolidated statement of
income and a Consolidated statement of cash flows of the Guarantor and its
Subsidiaries for such Fiscal Year, together with a certificate of the chief
financial officer of the Guarantor stating that no default under this Guaranty
or Material Adverse Effect has occurred and is continuing or, if a default or
Material Adverse Effect has occurred and is continuing, a statement as to the
nature thereof and the action that the Guarantor has taken and proposes to take
with respect thereto. Notwithstanding the foregoing, provided that the Guarantor
files a Form 10-K with the SEC and provides a copy of same to Lender within five
(5) Business Days of the filing of such report with the SEC, such report shall
satisfy the conditions of this subparagraph (c), provided that the Guarantor
provides to Lender with such report a certificate of an officer of the Guarantor
stating that no default under this Guaranty or Material Adverse Effect has
occurred and is continuing or, if a default or Material Adverse Effect has
occurred and is continuing, a statement as to the nature thereof and the action
that the Guarantor has taken and proposes to take with respect thereto.

                  (d) LITIGATION. Promptly after the commencement thereof,
notice of all actions, suits, investigations, litigation and proceedings before
any court or governmental department, commission, board, bureau, agency or
instrumentality, domestic or foreign, affecting the Guarantor or any of its
Subsidiaries which could if determined adversely result in a Material Adverse
Effect and, promptly after the occurrence thereof, notice of any material
adverse change in the status or the financial effect on the Guarantor and its
Subsidiaries, taken as a whole, of the disclosed litigation described on EXHIBIT
A hereto.

                  (e) SECURITIES AND EXCHANGE COMMISSION REPORTS. Promptly after
the sending or filing thereof, copies of all proxy statements, financial
statements and reports that the Guarantor sends to all of its stockholders, and
copies of all regular, periodic and special reports, and all registration
statements, that the Guarantor or any of its Subsidiaries files with the
Securities and Exchange Commission or any Governmental Authority that may be
substituted therefor, or with any national securities exchange.

                  (f) OTHER REPORTS. Promptly after the furnishing thereof,
copies of any statement or report furnished to any other category of holders of
the securities generally of the Guarantor pursuant to the terms of any
indenture, loan or credit or similar agreement and not otherwise required to be
furnished to Lender pursuant to any other clause of this PARAGRAPH 22.

                  (g) OTHER INFORMATION. Such other information respecting the
business, condition (financial or otherwise), operations, performance,
properties or prospects of the Guarantor as Lender may from time to time
reasonably request.

         23. GOVERNING LAW. This Guaranty shall be governed by, and construed in
accordance with, the laws of the State of New York.

                                       12
<PAGE>

         24. REMEDIES. The obligations of the Guarantor under this Guaranty are
independent of the Borrower's obligations under the Agreement or any other
document executed in connection therewith, and a separate action or actions may
be brought and prosecuted against the Guarantor to enforce this Guaranty,
irrespective of whether any action is brought against Borrower or whether
Borrower is joined in any such action or actions. Any one or more successive
and/or concurrent actions may be brought hereon against the Guarantor either in
the same action, if any, brought against Borrower or in separate actions, as
often as Lender, in its sole discretion, may deem advisable.

         25. CERTIFIED STATEMENT. The Guarantor agrees it will, at any time and.
from time to time, within ten (10) days following the reasonable request of
Lender, execute and deliver to Lender a statement certifying that this Guaranty
is unmodified and in full force and effect (or if modified, that the same is in
full force and effect as modified and stating such modifications).

         26. NOTICES. Unless otherwise provided herein, all notices and other
communications provided for hereunder shall be in writing (including telegraphic
facsimile or telex communication) and such notices and other communications
shall, when mailed, telegraphed, communicated by facsimile transmission or
telexed, be effective when received at the address for notices for the party to
whom such notice or communications is to be given as follows: if to Lender:
German American Capital Corporation, 31 West 52nd Street, New York, New York
10019, Attention: Ian McColough, Telephone: (212) 469-5695, Telecopy: (212)
469-8518; with a copy to Deutsche Bank AG, New York Branch, 31 West 52nd Street,
New York, New York 10019; Attention: Marianne Maffuccia, Esq., Telephone: (212)
469-8481, Telecopy: (212) 469-8173; with a copy to Latham & Watkins, 885 Third
Avenue, New York, New York 10022, Attention: Brian Krisberg, Esq., Telephone:
(212) 906-1209, Telecopy: (212) 751-4864; and if to the Guarantor, LNR Property
Corporation, 760 Northwest 107th Avenue, Miami, Florida 33172, Attention: Mr.
Robert Cherry, Telephone: (305) 229-6446, Telecopy: (305) 226-7691; with a copy
to Bilzin Sumberg Dunn Price & Axelrod LLP, 2500 First Union Financial Center,
200 South Biscayne Boulevard, Miami, Florida 33131, Attention: Alan D. Axelrod,
Esq., Telephone: (305) 350-2369, Telecopy: (305) 374-7593; PROVIDED, HOWEVER,
that a facsimile transmission shall be deemed to be received when transmitted so
long as the transmitting machine has provided an electronic confirmation of such
transmission, and provided further, however, that all financial statements
delivered shall be hand delivered or sent by first-class mail to Lender at such
address.

         27. CONTINUING AGREEMENT; SUCCESSORS AND ASSIGNS. This Guaranty is a
continuing obligation of the Guarantor and shall (i) remain in full force and
effect until (A) the payment in full of the aggregate outstanding principal
amount of each B Note Advance for all B Notes, (B) the payment and performance
by Borrower of all of the Guaranteed Obligations and (C) such time as Lender has
no obligation to finance any further B Notes for Borrower, (ii) be binding upon
the Guarantor and its permitted successors and assigns and (iii) inure to the
benefit of and be enforceable by Lender and its successors, transferees and
assigns or by any person to whom Lender's interest in the Agreement and any
document executed in connection therewith may be assigned.

         28. CERTAIN NOTICES. Lender shall endeavor to give notice to the
Guarantor of any amendment or modification of the Agreement or any other
document executed in connection

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therewith; PROVIDED, HOWEVER, that failure to provide any such notice shall in
no manner adversely affect the rights and remedies of Lender hereunder or under
the Agreement or any other document executed in connection herewith or therewith
or in any manner limit the waivers made by the Guarantor under Section 4.

         29. WAIVERS AND AMENDMENTS. No supplement to, modification or amendment
of, or waiver, consent or approval under, any provision of this Guaranty shall
be effective unless in writing and signed by Lender, and any waiver, consent or
approval shall be effective only in the specific instance and for the specific
purpose for which given.

         30. WAIVER OF JURY TRIAL. Lender and the Guarantor waive trial by jury
in any action or other proceeding (including counterclaims), whether at law or
equity, brought by Lender or the Guarantor against the other on matters arising
out of or in any way related to or connected with this Guaranty, the Agreement
or any other documents executed in connection therewith, any of the B Note
Advances, or any other transaction contemplated by, or the relationship between
Lender, the Guarantor and/or Borrower or any action or inaction by any party
under the Agreement or any document executed in connection therewith.

         31. DEFINITIONS. The following terms shall for the purposes of this
Guaranty have the following meaning:

                  "AFFILIATE" means, as to any Person, any other Person that,
         directly or indirectly, controls, is controlled by or is under common
         control with such Person or is a director or officer of such Person.
         For purposes of this definition, the term "control" (including the
         terms "controlling," "controlled by" and "under common control with")
         of a Person means the possession, direct or indirect, of the power to
         vote ten percent (10%) or more of the Voting Stock of such Person or to
         direct or cause the direction of the management and policies of such
         Person, whether through the ownership of Voting Stock, by contract or
         otherwise;

                  "CODE" means the Internal Revenue Code of 1986, as amended,
         and as it may be further amended from time to time, any successor
         statutes thereto, and applicable U.S. Department of Treasury
         regulations issued pursuant thereto in temporary or final form;

                  "CONSOLIDATED" refers to the consolidation of accounts in
         accordance with GAAP;

                  "EBITDA" means with respect to Guarantor and its Subsidiaries
         for any period, Consolidated net income of Guarantor and its
         Subsidiaries for such period determined in accordance with GAAP plus,
         without duplication and to the extent reflected as a charge in the
         statement of such Consolidated net income for such period, the sum of
         (a) total income tax expense, (b) total interest expense, (c) total
         depreciation and amortization expense and (d) amortization of
         intangibles (including, but not limited to, goodwill) and any
         organization costs;

                  "FISCAL YEAR" means a fiscal year of the Guarantor and its
         Consolidated Subsidiaries ending on November 30 in any calendar year or
         such other fiscal year as the Guarantor may select from time to time
         and promptly advise Lender in writing thereof;

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<PAGE>

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

                  "GAAP" means generally accepted accounting principles set
         forth in the opinions and pronouncements of the Accounting Principles
         Board of the American Institute of Certified Public Accountants and
         statements and pronouncements of the Financial Accounting Standards
         Board or in such other statements by such other entity as have been
         approved by a significant segment of the accounting profession, which
         are in effect at the relevant time;

                  "GOVERNMENTAL AUTHORITY" means any nation or government, any
         state, county, municipality or other political subdivision or branch
         thereof, and any entity exercising executive, legislative, judicial,
         regulatory or administrative functions of or pertaining to government,
         including any agency, board, commission, court, department or officer
         thereof;

                  "INDEBTEDNESS" means at any time the indebtedness of Guarantor
         and its Subsidiaries at such time determined on a Consolidated basis in
         accordance with GAAP;

                  "INTEREST EXPENSE" means for any period, total interest
         expense of Guarantor and its Subsidiaries for such period as determined
         on a Consolidated basis in accordance with GAAP;

                  "LEGAL REQUIREMENTS" means all governmental statutes, laws,
         rules, orders, regulations, ordinances, judgments, decrees and
         injunctions of Governmental Authorities affecting the Guarantor;

                  "LIEN" means any mortgage, lien, encumbrance, charge or other
         security interest, whether arising under contract, by operation of law,
         judicial process or otherwise;

                  "MARGIN STOCK" shall have the meaning specified in Regulation
         U;

                  "MATERIAL ADVERSE EFFECT" means a material adverse effect on
         (a) the business, condition (financial or otherwise), operations,
         performance, properties or prospects of the Guarantor and its
         Subsidiaries taken as a whole, (b) the rights and remedies of Lender
         under this Guaranty or any Loan Document to which it is a party or (c)
         the ability of the Guarantor to perform its obligations under this
         Guaranty;

                  "NET WORTH" means the amount which would be included under
         stockholders' equity on a consolidated balance sheet of Guarantor and
         its Subsidiaries determined on a consolidated basis in accordance with
         GAAP;

                  "PERSON" means any individual, corporation, limited liability
         company, partnership, joint venture, estate, trust, unincorporated
         association, any federal, state, county or municipal government or any
         bureau, department or agency thereof and any fiduciary acting in such
         capacity on behalf of any of the foregoing;

                                       15
<PAGE>

                  "REGULATION U" shall mean Regulation U of the Board of
         Governors of the Federal Reserve System, as in effect from time to
         time;

                  "SUBSIDIARY" of any Person means any corporation, partnership,
         joint venture, limited liability company, trust or estate of which (or
         in which) more than fifty percent (50%) of (a) the issued and
         outstanding capital stock having ordinary voting power to elect a
         majority of the board of directors of such corporation (irrespective of
         whether at the time capital stock of any other class or classes of such
         corporation shall or might have voting power upon the occurrence of any
         contingency), (b) the interest in the capital or profits of such
         partnership, joint venture or limited liability company or (c) the
         beneficial interest in such trust or estate, is at the time directly or
         indirectly owned or controlled by such Person, by such Person and one
         or more of its other Subsidiaries or by one or more of such Person's
         other Subsidiaries; and

                  "VOTING STOCK" means capital stock issued by a corporation, or
         equivalent interests in any other Person, the holders of which are
         ordinarily, in the absence of contingencies, entitled to vote for the
         election of directors (or persons performing similar functions) of such
         Person, even if the right so to vote has been suspended by the
         happening of such a contingency.

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         IN WITNESS WHEREOF, the Guarantor has executed this Guaranty as a
sealed instrument as of the day and year first above written.

                                               LNR PROPERTY CORPORATION,
                                               a Delaware corporation

                                               By:
                                                  ------------------------------
                                                    Name: Mark A. Griffith
                                                    Title: Vice President

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                                    EXHIBIT A

                              DISCLOSED LITIGATION

None.