Document:

EXHIBIT 10.17

                                 August 17, 2000

    Supplement and Amendment to Annex 1-A of the Master Repurchase Agreement

This Supplement and Amendment to Annex 1-A of the Master Repurchase Agreement
(the "Supplement") entered into by and between the undersigned and dated as of
as of the 17th day of August, 2000 supplements and amends, and supersedes to the
extent inconsistent with, the terms of Annex 1-A of the Master Repurchase
Agreement ("Annex 1-A") entered into by and between the undersigned and dated as
of the 31st day of March, 2000. Except as otherwise amended herein, the
provisions of Annex 1-A shall apply to this Supplement. Capitalized terms not
otherwise defined herein shall have the meaning ascribed to them in Annex 1-A.

1.   Amendments.

     a) In Paragraph 1:

          (i) delete "$100,000,000" from the definition of "Maximum Amount" and
          insert "$150,000,000" in its place.

          (ii) insert ""Minimum Acceleration Amount" shall equal $120,000,000."
          after the definition of "Maximum Transfer Amount".

     b) In the first sentence of Paragraph 18:

          (i) delete "having, in the aggregate with all other Purchased CMBS
          with respect to which there was an acceleration of the Term Repurchase
          Date, Repurchase Prices not exceeding $10,000,000".

          (ii) insert "if the early termination is pursuant to sub-clause (B) of
          this sentence," after "provided that (i)" and before "Seller pays a
          fee".

                                       1
<PAGE>

          (iii) delete "(aa) if the early termination is pursuant to sub-clause
          (A) of this sentence, the Repurchase Prices of the affected Purchased
          CMBS or (bb) if the early termination is pursuant to sub-clause (B) of
          this sentence,".

          (iv) insert "if the early termination is pursuant to sub-clause (A) of
          this sentence, immediately after the transfer of the affected
          Purchased CMBS and the payment of the related Repurchase Price, the
          Amount of Transactions is not less that the Minimum Acceleration
          Amount, (iii)" after "the Maximum Amount, (ii)" and before
          "immediately after the transfer".

          (v) delete "(iii)" and insert "(iv)" in its place.

     c) In Paragraph 43, delete "$5,000,000" and insert "$7,500,000" in its
     place.

2. Modification. This Supplement may not be amended nor any provision hereof
waived or modified except by an instrument in writing signed by the Buyer and
Seller.

3. Governing Law. This Supplement shall be governed by, and construed in
accordance with, the substantive laws of the State of New York without regard to
conflicts of law principles.

                                       2
<PAGE>

IN WITNESS WHEREOF, the undersigned have executed this Supplement as of the date
set forth above.

                                       Bear, Stearns & Co., Inc.

                                       By: /s/ PAUL M. FRIEDMAN
                                          ---------------------------------
                                           Paul M. Friedman

                                       Title: Senior Managing Director
                                             ------------------------------
                                       November 06, 2000

                                       Bear, Stearns International Limited,

                                       By: /s/ PAUL M. FRIEDMAN
                                          ---------------------------------
                                           Paul M. Friedman

                                       Title: Director
                                             ------------------------------
                                       November 06, 2000

                                       LNR CMBS Holdings Corporation

                                       By: /s/ SHELLY RUBIN
                                          ---------------------------------
                                            Shelly Rubin

                                       Title: Vice President
                                             ------------------------------

                                       3
<PAGE>
================================================================================
   PSA    THE BOND MARKET
          TRADE ASSOCIATION

                           MASTER REPURCHASE AGREEMENT
                             September 1996 Version
================================================================================

                                            Dated as of March 31, 2000
                                                       -------------------------
Between:

BEAR, STEARNS INTERNATIONAL LIMITED
-----------------------------------

and

LNR CMBS HOLDING CORP.
----------------------

1. Applicability.

From time to time the parties hereto may enter into transactions in which one
party ("Seller") agrees to transfer to the other ("Buyer") securities or other
assets ("Securities") against the transfer of funds by Buyer, with a
simultaneous agreement by Buyer to transfer to Seller such Securities at a date
certain or on demand, against the transfer of funds by Seller. Each such
transaction shall be referred to herein as a "Transaction" and, unless otherwise
agreed in writing, shall be governed by this Agreement, including any
supplemental terms or conditions contained in Annex I hereto and in any other
annexes identified herein or therein as applicable hereunder.

2. Definitions.

(a)  "Act of Insolvency", with respect to any party, (i) the commencement by
     such party as debtor of any case or proceeding under any bankruptcy,
     insolvency, reorganization, liquidation, moratorium, dissolution,
     delinquency, or similar law, or such party seeking the appointment or
     election of a receiver, conservator, trustee, custodian or similar official
     for such party or any substantial part of its property, or the convening of
     any meeting of creditors for purposes of commencing any such case or
     proceeding or seeking such an appointment or election, (ii) the
     commencement of any such case or proceeding against such party, or another
     seeking such an appointment or election, or the filing against a party of
     an application for a protective decree under the provisions of the
     Securities Investor Protection Act of 1970, which (A) is consented to or
     not timely contested by such party, (B) results in the entry of an order
     for relief, such an appointment or election, the issuance of such a
     protective decree or the entry of an order having a similar effect, or (C)
     is not dismissed within 15 days, (iii) the making by such party of a
     general assignment for the benefit of creditors, or (iv) the admission in
     writing by such party of such party's inability to pay such party's debts
     as they become due;

(b)  "Additional Purchased Securities", Securities provided by Seller to Buyer
     pursuant to Paragraph 4(a) hereof;

(c)  "Buyer's Margin Amount", with respect to any Transaction as of any date,
     the amount obtained by application of the Buyer's Margin Percentage to the
     Repurchase Price for such Transaction as of such date;

(d)  "Buyer's Margin Percentage", with respect to any Transaction as of any
     date, a percentage (which may be equal to the Seller's Margin Percentage)
     agreed to by Buyer and Seller or, in the absence of any such agreement, the
     percentage obtained by dividing the Market Value of the Purchased
     Securities on the Purchase Date by the Purchase Price on the Purchase Date
     for such Transaction;

(e)  "Confirmation", the meaning specified in Paragraph 3(b) hereof;

(f)  "Income", with respect to any Security at any time, any principal thereof
     and all interest, dividends or other distributions thereon;

(g)  "Margin Deficit", the meaning specified in Paragraph 4(a) hereof;

(h)  "Margin Excess", the meaning specified in Paragraph 4(b) hereof;

(i)  "Margin Notice Deadline", the time agreed to by the parties in the relevant
     Confirmation, Annex I hereto or otherwise as the deadline for giving notice
     requiring same-day satisfaction of margin maintenance obligations as
     provided in Paragraph 4 hereof (or, in the absence of any such agreement,
     the deadline for such purposes established in accordance with market
     practice);

(j)  "Market Value", with respect to any Securities as of any date, the price
     for such Securities on such date obtained from a generally recognized
     source agreed to by the parties or the most recent closing bid quotation
     from such a source, plus
<PAGE>
     accrued income to the extent not included therein (other than any income
     credited or transferred to, or applied to the obligations of, Seller
     pursuant to Paragraph 5 hereof) as of such date (unless contrary to market
     practice for such Securities);

(k)  "Price Differential", with respect to any Transaction as of any date, the
     aggregate amount obtained by daily application of the Pricing Rate for such
     Transaction to the Purchase Price for such Transaction on a
     360-day-per-year basis for the actual number of days during the period
     commencing on (and including) the Purchase Date for such Transaction and
     ending on (but excluding) the date of determination (reduced by any amount
     of such Price Differential previously paid by Seller to Buyer with respect
     to such Transaction);

(l)  "Pricing Rate", the per annum percentage rate for determination of the
     Price Differential;

(m)  "Prime Rate", the prime rate of U.S. commercial banks as published in The
     Wall Street Journal (or, if more than one such rate is published, the
     average of such rates);

(n)  "Purchase Date", the date on which Purchased Securities are transferred by
     Seller to Buyer;

(o)  "Purchase Price", (i) on the Purchase Date, the price at which Purchased
     Securities are transferred by Seller to Buyer, and (ii) thereafter, except
     where Buyer and Seller agree otherwise, such price increased by the amount
     of any cash transferred by Buyer to Seller pursuant to Paragraph 4(b)
     hereof and decreased by the amount of any cash transferred by Seller to
     Buyer pursuant to Paragraph 4(a) hereof or applied to reduce Seller's
     obligations under clause (ii) of Paragraph 5 hereof;

(p)  "Purchased Securities", the Securities transferred by Seller to Buyer in a
     Transaction hereunder, and any Securities substituted therefor in
     accordance with Paragraph 9 hereof. The term "Purchased Securities" with
     respect to any Transaction at any time also shall include Additional
     Purchased Securities delivered pursuant to Paragraph 4(a) and shall exclude
     Securities returned pursuant to Paragraph 4(b) hereof;

(q)  "Repurchase Date", the date on which Seller is to repurchase the Purchased
     Securities from Buyer, including any date determined by application of the
     provisions of Paragraph 3(c) or 11 hereof;

(r)  "Repurchase Price", the price at which Purchased Securities are to be
     transferred from Buyer to Seller upon termination of a Transaction, which
     will be determined in each case (including Transactions terminable upon
     demand) as the sum of the Purchase Price and the Price Differential as of
     the date of such determination;

(s)  "Seller's Margin Amount", with respect to any Transaction as of any date,
     the amount obtained by application of the Seller's Margin Percentage to the
     Repurchase Price for such Transaction as of such date;

(t)  "Seller's Margin Percentage", with respect to any Transaction as of any
     date, a percentage (which may be equal to the Buyer's Margin Percentage)
     agreed to by Buyer and Seller or, in the absence of any such agreement, the
     percentage obtained by dividing the Market Value of the Purchased
     Securities on the Purchase Date by the Purchase Price on the Purchase Date
     for such Transaction.

3. Initiation; Confirmation; Termination.

(a)  An agreement to enter into a Transaction may be made orally or in writing
     at the initiation of either Buyer or Seller. On the Purchase Date for the
     Transaction, the Purchased Securities shall be transferred to Buyer or its
     agent against the transfer of the Purchase Price to an account of Seller.

(b)  Upon agreeing to enter into a Transaction hereunder, Buyer or Seller (or
     both), as shall be agreed, shall promptly deliver to the other party a
     written confirmation of each Transaction (a "Confirmation"). The
     Confirmation shall describe the Purchased Securities (including CUSIP
     number, if any), identify Buyer and Seller and set forth (i) the Purchase
     Date, (ii) the Purchase Price, (iii) the Repurchase Date, unless the
     Transaction is to be terminable on demand, (iv) the Pricing Rate or
     Repurchase Price applicable to the Transaction, and (v) any additional
     terms or conditions of the Transaction not inconsistent with this
     Agreement. The Confirmation, together with this Agreement, shall constitute
     conclusive evidence of the terms agreed between Buyer and Seller with
     respect to the Transaction to which the Confirmation relates, unless with
     respect to the Confirmation specific objection is made promptly after
     receipt thereof. In the event of any conflict between the terms of such
     Confirmation and this Agreement, this Agreement shall prevail.

(c)  In the case of Transactions terminable upon demand, such demand shall be
     made by Buyer or Seller, no later than such time as is customary in
     accordance with market practice, by telephone or otherwise on or prior to
     the business day on which such termination will be effective. On the date
     specified in such demand, or on the date fixed for termination in the case
     of Transactions having a fixed term, termination of the Transaction will be
     effected by transfer to Seller or its agent of the Purchased Securities and
     any Income in respect thereof received by Buyer (and not previously
     credited or transferred to, or applied to the obligations of, Seller
     pursuant to Paragraph 5 hereof) against the transfer of the Repurchase
     Price to an account of Buyer.

4. Margin Maintenance.

(a)  If at any time the aggregate Market Value of all Purchased Securities
     subject to all Transactions in which a particular party hereto is acting as
     Buyer is less than the aggregate Buyer's Margin Amount for all such
     Transactions (a "Margin Deficit"), then Buyer may by notice to Seller
     require Seller in such Transactions, at Seller's option, to transfer to
     Buyer cash or additional Securities reasonably acceptable to Buyer
     ("Additional Purchased Securities"), so that the cash and aggregate

<PAGE>

     Market Value of the Purchased Securities, including any such Additional
     Purchased Securities, will thereupon equal or exceed such aggregate Buyer's
     Margin Amount (decreased by the amount of any Margin Deficit as of such
     date arising from any Transactions in which such Buyer is acting as
     Seller).

(b)  If at any time the aggregate Market Value of all Purchased Securities
     subject to all Transactions in which a particular party hereto is acting as
     Seller exceeds the aggregate Seller's Margin Amount for all such
     Transactions at such time (a "Margin Excess"), then Seller may by notice to
     Buyer require Buyer in such Transactions, at Buyer's option, to transfer
     cash or Purchased Securities to Seller, so that the aggregate Market Value
     of the Purchased Securities, after deduction of any such cash or any
     Purchased Securities so transferred, will thereupon not exceed such
     aggregate Seller's Margin Amount (increased by the amount of any Margin
     Excess as of such date arising from any Transactions in which such Seller
     is acting as Buyer).

(c)  If any notice is given by Buyer or Seller under subparagraph (a) or (b) of
     this Paragraph at or before the Margin Notice Deadline on any business day,
     the party receiving such notice shall transfer cash or Additional Purchased
     Securities as provided in such subparagraph no later than the close of
     business in the relevant market on such day. If any such notice is given
     after the Margin Notice Deadline, the party receiving such notice shall
     transfer such cash or Securities no later than the close of business in the
     relevant market on the next business day following such notice.

(d)  Any cash transferred pursuant to this Paragraph shall be attributed to such
     Transactions as shall be agreed upon by Buyer and Seller.

(e)  Seller and Buyer may agree, with respect to any or all Transactions
     hereunder, that the respective rights of Buyer or Seller (or both) under
     subparagraphs (a) and (b) of this Paragraph may be exercised only where a
     Margin Deficit or Margin Excess, as the case may be, exceeds a specified
     dollar amount or a specified percentage of the Repurchase Prices for such
     Transactions (which amount or percentage shall be agreed to by Buyer and
     Seller prior to entering into any such Transactions).

(f)  Seller and Buyer may agree, with respect to any or all Transactions
     hereunder, that the respective rights of Buyer and Seller under
     subparagraphs (a) and (b) of this Paragraph to require the elimination of a
     Margin Deficit or a Margin Excess, as the case may be, may be exercised
     whenever such a Margin Deficit or Margin Excess exists with respect to any
     single Transaction hereunder (calculated without regard to any other
     Transaction outstanding under this Agreement).

5. Income Payments.

Seller shall be entitled to receive an amount equal to all Income paid or
distributed on or in respect of the Securities that is not otherwise received by
Seller, to the full extent it would be so entitled if the Securities had not
been sold to Buyer. Buyer shall, as the parties may agree with respect to any
Transaction (or, in the absence of any such agreement, as Buyer shall reasonably
determine in its discretion), on the date such Income is paid or distributed
either (i) transfer to or credit to the account of Seller such Income with
respect to any Purchased Securities subject to such Transaction or (ii) with
respect to Income paid in cash, apply the Income payment or payments to reduce
the amount, if any, to be transferred to Buyer by Seller upon termination of
such Transaction. Buyer shall not be obligated to take any action pursuant to
the preceding sentence (A) to the extent that such action would result in the
creation of a Margin Deficit, unless prior thereto or simultaneously therewith
Seller transfers to Buyer cash or Additional Purchased Securities sufficient to
eliminate such Margin Deficit, or (B) if an Event of Default with respect to
Seller has occurred and is then continuing at the time such Income is paid or
distributed.

6. Security Interest.

Although the parties intend that all Transactions hereunder be sales and
purchases and not loans, in the event any such Transactions are deemed to be
loans, Seller shall be deemed to have pledged to Buyer as security for the
performance by Seller of its obligations under each such Transaction, and shall
be deemed to have granted to Buyer a security interest in, all of the Purchased
Securities with respect to all Transactions hereunder and all Income thereon and
other proceeds thereof.

7. Payment and Transfer.

Unless otherwise mutually agreed, all transfers of funds hereunder shall be in
immediately available funds. All Securities transferred by one party hereto to
the other party (i) shall be in suitable form for transfer or shall be
accompanied by duly executed instruments of transfer or assignment in blank and
such other documentation as the party receiving possession may reasonably
request, (ii) shall be transferred on the book-entry system of a Federal Reserve
Bank, or (iii) shall be transferred by any other method mutually acceptable to
Seller and Buyer.

8. Segregation of Purchased Securities.

To the extent required by applicable law, all Purchased Securities in the
possession of Seller shall be segregated from other securities in its possession
and shall be identified as subject to this Agreement. Segregation may be
accomplished by appropriate identification on the books and records of the
holder, including a financial or securities intermediary or a clearing
corporation. All of Seller's interest in the Purchased Securities shall pass to
Buyer on the Purchase Date and, unless otherwise agreed by Buyer and Seller,
nothing in this Agreement shall preclude Buyer from engaging in repurchase
transactions with the Purchased Securities or otherwise selling, transferring,
pledging or hypothecating the Purchased Securities, but no such transaction
shall relieve Buyer of its obligations to transfer Purchased Securities to
Seller pursuant to Paragraphs 3, 4 or 11 hereof, or of Buyer's obligation to
credit or pay income to, or apply income to the obligations of, Seller pursuant
to Paragraph 5 hereof.

<PAGE>
--------------------------------------------------------------------------------
Required Disclosure for Transactions in Which the Seller Retains Custody of the
Purchased Securities

Seller is not permitted to substitute other securities for those subject to this
Agreement and therefore must keep Buyer's securities segregated at all times,
unless in this Agreement Buyer grants Seller the right to substitute other
securities. If Buyer grants the right to substitute, this means that Buyer's
securities will likely be commingled with Seller's own securities during the
trading day. Buyer is advised that, during any trading day that Buyer's
securities are commingled with Seller's securities, they [will]* [may]** be
subject to liens granted by Seller to [its clearing bank] [third parties] and
may be used by Seller for deliveries on other securities transactions. Whenever
the securities are commingled, Seller's ability to resegregate substitute
securities for Buyer will be subject to Seller's ability to satisfy [the
clearing] [any] lien or to obtain substitute securities.
--------------------------------------------------------------------------------
* Language to be used under 17 C.F.R. s.s.403.4(e) if Seller is a government
securities broker or dealer other than a financial institution.
** Language to be used under 17 C.F R. s.s.403.5(d) if Seller is a financial
institution.

9. Substitution.

(a)  Seller may, subject to agreement with and acceptance by Buyer, substitute
     other Securities for any Purchased Securities. Such substitution shall be
     made by transfer to Buyer of such other Securities and transfer to Seller
     of such Purchased Securities. After substitution, the substituted
     Securities shall be deemed to be Purchased Securities.

(b)  In Transactions in which the Seller retains custody of Purchased
     Securities, the parties expressly agree that Buyer shall be deemed, for
     purposes of subparagraph (a) of this Paragraph, to have agreed to and
     accepted in this Agreement substitution by Seller of other Securities for
     Purchased Securities; provided, however, that such other Securities shall
     have a Market Value at least equal to the Market Value of the Purchased
     Securities for which they are substituted.

10. Representations.

Each of Buyer and Seller represents and warrants to the other that (i) it is
duly authorized to execute and deliver this Agreement, to enter into the
Transactions contemplated hereunder and to perform its obligations hereunder and
has taken all necessary action to authorize such execution, delivery and
performance, (ii) it will engage in such Transactions as principal (or, if
agreed in writing, in the form of an annex hereto or otherwise, in advance of
any Transaction by the other party hereto, as agent for a disclosed principal),
(iii) the person signing this Agreement on its behalf is duly authorized to do
so on its behalf (or on behalf of any such disclosed principal), (iv) it has
obtained all authorizations of any governmental body required in connection with
this Agreement and the Transactions hereunder and such authorizations are in
full force and effect and (v) the execution, delivery and performance of this
Agreement and the Transactions hereunder will not violate any law, ordinance,
charter, by-law or rule applicable to it or any agreement by which it is bound
or by which any of its assets are affected. On the Purchase Date for any
Transaction Buyer and Seller shall each be deemed to repeat all the foregoing
representations made by it.

11. Events of Default.

In the event that (i) Seller fails to transfer or Buyer fails to purchase
Purchased Securities upon the applicable Repurchase Date, (ii) Seller or Buyer
fails to transfer Purchased Securities upon the applicable Repurchase Date,
(iii) Seller or Buyer fails to comply with Paragraph 4 hereof, (iv) Buyer fails,
after one business day's notice, to comply with Paragraph 5 hereof, (v) an Act
of Insolvency occurs with respect to Seller or Buyer, (vi) any representation
made by Seller or Buyer shall have been incorrect or untrue in any material
respect when made or repeated or deemed to have been made or repeated, or (vii)
Seller or Buyer shall admit to the other its inability to, or its intention not
to, perform any of its obligations hereunder (each an "Event of Default"):

(a)  The nondefaulting party may, at its option (which option shall be deemed to
     have been exercised immediately upon the occurrence of an Act of
     Insolvency), declare an Event of Default to have occurred hereunder and,
     upon the exercise or deemed exercise of such option, the Repurchase Date
     for each Transaction hereunder shall, if it has not already occurred, be
     deemed immediately to occur (except that, in the event that the Purchase
     Date for any Transaction has not yet occurred as of the date of such
     exercise or deemed exercise, such Transaction shall be deemed immediately
     canceled. The non defaulting party shall (except upon the occurrence of an
     Act of Insolvency) give notice to the defaulting party of the exercise of
     such option as promptly as practicable.

(b)  In all Transactions in which the defaulting party is acting as Seller, if
     the nondefaulting party exercises or is deemed to have exercised the option
     referred to in subparagraph (a) of this Paragraph, (i) the defaulting
     party's obligations in such Transactions to repurchase all Purchased
     Securities, at the Repurchase Price therefore on the Repurchase Date
     determined in accordance with subparagraph (a) of this Paragraph, shall
     thereupon become immediately due and payable, (ii) all Income paid after
     such exercise or deemed exercise shall be retained by the nondefaulting
     party and applied to the aggregate unpaid Repurchase Prices and any other
     amounts owing by the defaulting party hereunder, and (iii) the defaulting
     party shall immediately deliver to the nondefaulting party any Purchased
     Securities subject to such Transactions then in the defaulting party's
     possession or control.

(c)  In all Transactions in which the defaulting party is acting as Buyer, upon
     tender by the nondefaulting party of payment of the aggregate Repurchase
     Prices for all such Transactions, all right, title and interest in and
     entitlement to all Purchased Securities subject to such Transactions shall
     be deemed transferred to the nondefaulting party, and the defaulting party
     shall deliver all such Purchased Securities to the nondefaulting party.

<PAGE>

(d)  If the non defaulting party exercises or is deemed to have exercised the
     option referred to in subparagraph (a) of this paragraph, the nondefaulting
     party, without prior notice to the defaulting party, may:

     (i)  as to Transactions in which the defaulting party is acting as Seller,
          (A) immediately sell, in a recognized market (or otherwise in a
          commercially reasonable manner) at such price or prices as the
          nondefaulting party may reasonably deem satisfactory, any or all
          Purchased Securities subject to such Transactions and apply the
          proceeds thereof to the aggregate unpaid Repurchase Prices and any
          other amounts owing by the defaulting party hereunder or (B) in its
          sole discretion elect, in lieu of selling all or a portion of such
          Purchased Securities, to give the defaulting party credit for such
          Purchased Securities in an amount equal to the price therefor on such
          date, obtained from a generally recognized source or the most recent
          closing bid quotation from such a source, against the aggregate unpaid
          Repurchase Prices and any other amounts owing by the defaulting party
          hereunder; and

     (ii) as to Transactions in which the defaulting party is acting as Buyer,
          (A) immediately purchase, in a recognized market (or otherwise in a
          commercially reasonable manner) at such price or prices as the
          nondefaulting party may reasonably deem satisfactory, securities
          ("Replacement Securities") of the same class and amount as any
          Purchased Securities that are not delivered by the defaulting party to
          the nondefaulting party as required hereunder or (B) in its sole
          discretion elect, in lieu of purchasing Replacement Securities, to be
          deemed to have purchased Replacement Securities at the price therefor
          on such date, obtained from a generally recognized source or the most
          recent closing bid quotation from such a source.

          Unless otherwise provided in Annex I, the parties acknowledge and
          agree that (1) the Securities subject to any Transaction hereunder are
          instruments traded in a recognized market, (2) in the absence of a
          generally recognized source for prices or bid or offer quotations for
          any Security, the nondefaulting party may establish the source
          therefor in its sole discretion and (3) all prices, bids and offers
          shall be determined together with accrued Income (except to the extent
          contrary to market practice with respect to the relevant Securities.

(e)  As to Transactions in which the defaulting party is acting as Buyer, the
     defaulting party shall be liable to the nondefaulting party for any excess
     of the price paid (or deemed paid) by the nondefaulting party for
     Replacement Securities over the Repurchase Price for the Purchased
     Securities replaced thereby and for any amounts payable by the defaulting
     party under Paragraph 5 hereof or otherwise hereunder.

(f)  For purposes of this Paragraph 11, the Repurchase Price for each
     Transaction hereunder in respect of which the defaulting party is acting as
     Buyer shall not increase above the amount of such Repurchase Price for such
     Transaction determined as of the date of the exercise or deemed exercise by
     the nondefaulting party of the option referred to in subparagraph (a) of
     this Paragraph.

(g)  The defaulting party shall be liable to the nondefaulting party for (i) the
     amount of all reasonable legal or other expenses incurred by the
     nondefaulting party in connection with or as a result of an Event of
     Default, (ii) damages in an amount equal to the cost (including all fees,
     expenses and commissions) of entering into replacement transactions and
     entering into or terminating hedge transactions in connection with or as a
     result of an Event of Default, and (iii) any other loss damage, cost or
     expense directly arising or resulting from the occurrence of an Event of
     Default in respect of a Transaction.

(h)  To the extent permitted by applicable law, the defaulting party shall be
     liable to the nondefaulting arty for interest on any amounts owing by the
     defaulting party hereunder, from the date the defaulting party becomes
     liable for such amounts hereunder until such amounts are (I) paid in full
     by the defaulting party or (ii) satisfied in full by the exercise of the
     nondefaulting party's rights hereunder. Interest on any sum payable by the
     defaulting party to the nondefaulting party under this Paragraph 11 (h)
     shall be at a rate equal to the greater of the Pricing Rate for the
     relevant Transaction or the Prime Rate.

(i)  The nondefaulting party shall have, in addition to its rights hereunder,
     any rights otherwise available to it under any other agreement or
     applicable law.

12. Single Agreement.

Buyer and Seller acknowledge that, and have entered hereinto and will enter into
each Transaction hereunder in consideration of and in reliance upon the fact
that, all Transactions hereunder constitute a single business and contractual
relationship and have been made in consideration of each other. Accordingly,
each of Buyer and Seller agrees (i) to perform all of its obligations in respect
of each Transaction hereunder, and that a default in the performance of any such
obligations shall constitute a default by it in respect of all Transactions
hereunder, (ii) that each of them shall be entitled to set off claims and apply
property held by them in respect of any Transaction against obligations owing to
them in respect of any other Transactions hereunder and (iii) that payments,
deliveries and other transfers made by either of them in respect of any
Transaction shall be deemed to have been made in consideration of payments,
deliveries and other transfers in respect of any other Transactions hereunder,
and the obligations to make any such payments, deliveries and other transfers
may be applied against each other and netted.

13. Notices and Other Communications.

Any and all notices, statements, demands or other communications hereunder may
be given by a party to the other by mail, facsimile, telegraph, messenger or
otherwise to the address specified in Annex II hereto, or so sent to such party
at any other

<PAGE>

place specified in a notice of change of address hereafter received by the
other. All notices, demands and request hereunder may be made orally, to be
confirmed promptly in writing, or by other communication as specified the
preceding sentence.

14. Entire Agreement; Severability.

This Agreement shall supersede any existing agreements between the parties
containing general terms and conditions for repurchase transactions. Each
provision and agreement herein shall be treated as separate and independent from
any other provision or agreement herein and shall be enforceable notwithstanding
the unenforceability of any such other provision or agreement.

15. Non-assignability; Termination.

(a)  The rights and obligations of the parties under this Agreement and under
     any Transaction shall not be assigned by either party without the prior
     written consent of the other party, and any such assignment without the
     prior written consent of the other party shall be null and void. Subject to
     the foregoing, this Agreement and any Transactions shall be binding upon
     and shall inure to the benefit of the parties and their respective
     successors and assigns. This Agreement may be terminated by either party
     upon giving written notice to the other, except that this Agreement shall,
     notwithstanding such notice, remain applicable to any Transactions then
     outstanding.

(b)  Subparagraph (a) of this Paragraph 15 shall not preclude a party from
     assigning, charging or otherwise dealing with all or any part of its
     interest in any sum payable to it under Paragraph 11 hereof.

16. Governing Law.

This Agreement shall be governed by the laws of the State of New York without
giving effect to the conflict of law principles thereof.

17. No Waivers, Etc.

No express or implied waiver of any Event of Default by either party shall
constitute a waiver of any other Event of Default and no exercise of any remedy
hereunder by any party shall constitute a waiver of its right to exercise any
other remedy hereunder. No modification or waiver of any provision of this
Agreement and no consent by any party to a departure herefrom shall be effective
unless and until such shall be in writing and duly executed by both of the
parties hereto. Without limitation on any of the foregoing, the failure to give
a notice pursuant to subparagraphs 4(a) or 4(b) hereof will not constitute a
waiver of any right to do so at a later date.

18. Use of Employee Plan Assets.

(a)  If assets of an employee benefit plan subject to any provision of the
     Employee Retirement Income Security Act of 1974 ("ERISA") are intended to
     be used by either party hereto (the "Plan Party") in a Transaction, the
     Plan Party shall so notify the other party prior to the Transaction. The
     Plan Party shall represent in writing to the other party that the
     Transaction does not constitute a prohibited transaction under ERISA or is
     otherwise exempt therefrom, and the other party may proceed in reliance
     thereon but shall not be required so to proceed.

(b)  Subject to the last sentence of subparagraph (a) of this Paragraph, any
     such Transaction shall proceed only if Seller furnishes or has furnished to
     Buyer its most recent available audited statement of its financial
     condition and its most recent subsequent unaudited statement of its
     financial condition.

(c)  By entering into a Transaction pursuant to this Paragraph, Seller shall be
     deemed (i) to represent to Buyer that since the date of Seller's latest
     such financial statements, there has been no material adverse change in
     Seller's financial condition which Seller has not disclosed to Buyer, and
     (ii) to agree to provide Buyer with future audited and unaudited statements
     of its financial condition as they are issued, so long as it is a Seller in
     any outstanding Transaction involving a Plan Party.

19. Intent.

(a)  The parties recognize that each Transaction is a "repurchase agreement" as
     that term is defined in Section 101 of Title 11 of the United States Code,
     as amended (except insofar as the type of Securities subject to such
     Transaction or the term of such Transaction would render such definition
     inapplicable), and a "securities contract" as that term is defined in
     Section 741 of Title 11 of the United States Code, as amended (except
     insofar as the type of assets subject to such Transaction would render such
     definition inapplicable).

(b)  It is understood that either party's right to liquidate Securities
     delivered to it in connection with Transactions hereunder or to exercise
     any other remedies pursuant to Paragraph 11 hereof is a contractual right
     to liquidate such Transaction as described in Sections 555 and 559 of Title
     11 of the United States Code, as amended.

(c)  The parties agree and acknowledge that if a party hereto is an "insured
     depository institution,", as such term is defined the Federal Deposit
     Insurance Act, as amended ("FDIA"), then each Transaction hereunder is a
     "qualified financial contract," as that term is defined in FDIA and any
     rules, orders or policy statements thereunder (except insofar as the type
     of assets subject to such Transaction would render such definition
     inapplicable).

(d)  It is understood that this Agreement constitutes a "netting contracts as
     defined in and subject to Title IV of the Federal Deposit Insurance
     Corporation Improvement Act of 1991 ("FDICIA") and each payment entitlement
     and payment obligation under any Transaction hereunder shall constitute a
     "covered contractual payment entitlement" or "covered

<PAGE>

     contractual payment obligation", respectively, as defined in and subject to
     FDICIA (except insofar as one or both of the parties is not a Financial
     institutions as that term is defined in FDICIA).

20. Disclosure Relating to Certain Federal Protections.

The parties acknowledge that they have been advised that:

(a)  in the case of Transactions in which one of the parties is a broker or
     dealer registered with the Securities and Exchange Commission ("SEC") under
     Section 15 of the Securities Exchange Act of 1934 ("1934 Act"), the
     Securities Investor Protection Corporation has taken the position that the
     provisions of the Securities Investor Protection Act of 1970 ("SIPA") do
     not protect the other party with respect to any Transaction hereunder;

(b)  in the case of Transactions in which one of the parties is a government
     securities broker or a government securities dealer registered with the SEC
     under Section 15C of the 1934 Act, SIPA will not provide protection to the
     other party with respect to any Transaction hereunder; and

(c)  in the case of Transactions in which one of the parties is a financial
     institution, funds held by the financial institution pursuant to a
     Transaction hereunder are not a deposit and therefore are not insured by
     the Federal Deposit Insurance Corporation, the Federal Savings and Loan
     Insurance Corporation or the National Credit Union Share Insurance Fund, as
     applicable.

BEAR, STEARNS INTERNATIONAL LIMITED,         LNR CMBS Holdings Corporation

By: /s/ PAUL M. FRIEDMAN                     By:  /s/ SHELLY RUBIN
   --------------------------------             --------------------------------
    Paul M. Freidman                              Shelly Rubin

Title: Director                              Title:  Vice President
      -----------------------------                -----------------------------
Date: November 06, 2000                      Date:   4/14/00
     ------------------------------               ------------------------------

<PAGE>
                                     ANNEX I

                        Supplemental Terms and Conditions

This Annex I forms a part of the Master Repurchase Agreement (September 1996
Version) dated as of March 31, 1999 (the "Agreement") between BEAR STEARNS
INTERNATIONAL LIMITED ("Bear Stearns") and LNR CMBS Holdings Corporation
("Counterparty"). Capitalized terms used but not defined in this Annex I shall
have the meanings ascribed to them in the Agreement.

l.   Please initial in the space provided to select any/all of the optional
     Annexes listed below to form a part of the Agreement. The Annexes which are
     initialed will apply hereunder.

                                                               Initials
     (a)   Annex III (International Transactions)              ________
     (b)   Annex IV (Party Acting as Agent)                    ________
     (c)   Annex V (Margin for Forward Transactions )          ________
     (d)   Annex VI (Buy/Sell Back Transactions)               ________
     (e)   Annex VII (Transactions Involving Registered
                        Investment Companies)                  ________

2.   "Margin Notice Deadline" means 10:00 a.m. New York time.

3.   The definition of "Market Value" in Paragraph 2(j) shall be replaced with
     the following:

          "Market Value", with respect to any Securities as of any date, the
          price for such Securities on such date as determined by Bear Stearns,
          in its sole discretion, plus accrued Income to the extent not included
          therein (other than any Income credited or transferred to, or applied
          to the obligations of, Seller pursuant to Paragraph 5 hereof) as of
          such date (unless contrary to market practice for such Securities).

4.   The term "Transaction" includes any repurchase or reverse repurchase
     transaction outstanding on the date hereof.

5.   (a) The first sentence of Paragraph 3(c) is hereby replaced with the
     following: "In the case of Transactions terminable upon demand, such demand
     shall be made by Buyer or Seller, by telephone or otherwise on a business
     day of the recipient of the demand. Unless a later time is specified in the
     demand, if such demand is made prior to 10:00 a.m. New York time,
     termination shall be effective at 3:00 p.m. New York time on the day demand
     is made; if such demand is made after 10:00 a.m. New York time, termination
     shall be effective at 9:00 a.m. New York time on the next business day of
     the recipient of the demand. After such demand, another later time may be
     agreed to by Buyer and Seller if confirmed in writing by both. Bear Stearns
     shall have the right to specify in a demand an earlier time than aforesaid
     that termination is to be effected if reasonable under the circumstances
     (as, for example, and not by way of limitation, in periods of increased
     market volatility or illiquidity of securities). Such demand shall be
     deemed given after Bear Stearns telephones Robert Cherry at 305-229-6446 or
     a substitute (each, a "Counterparty Authorized Representative"), who may be
     designated in writing addressed to Bear Stearns at 245 Park Avenue, 4th
     Floor, New York, New York 10167, Attention: Senior Managing Director,
     Finance Desk.

     (b) The second sentence of Paragraph 3(c) is hereby amended by replacing
     the words "On the date specified in such demand" with the words "At the
     time specified in such demand (or such later time as agreed to in
     writing)".

6.   Demands by Bear Stearns for the delivery or return of cash or Additional
     Purchased Securities pursuant to Paragraphs 4(a) may be oral and need not
     be confirmed in writing.

7.   Notwithstanding the definition of Purchase Price in Paragraph 2 of the
     Agreement and the provisions of Paragraph 4 of the Agreement, the parties
     agree that (i) except as provided in Paragraph 6, 11 and 13 of Annex 1-A,
     the Purchase Price will not be increased or decreased by the amount of any
     cash transferred by one party to the other pursuant to Paragraph 4 of the
     Agreement and (ii) transfer of such cash shall be treated, as if it
     constituted a transfer of Securities (with a Market Value equal to the U.S.
     dollar amount of such cash) pursuant to Paragraph 4(a) (including for
     purposes of the definition of "Additional Purchased Securities.")

<PAGE>

8.   The following 2 paragraphs shall be added to Paragraph 9 of the Agreement:

     (c) In the case of any Transaction for which the Repurchase Date is other
     than the business day immediately following the Purchase Date and with
     respect to which Seller does not have any existing right to substitute
     substantially the same Securities for the Purchased Securities, Seller
     shall have the right, subject to the proviso to this sentence, upon notice
     to Buyer, which notice shall be given at or prior to 10 a.m. (New York
     time) on such business day, to substitute substantially the same Securities
     for any Purchased Securities; provided, however, that Buyer may elect, by
     the close of business on the business day notice is received, or by the
     close of the next business day if notice is given after 10 a.m. (New York
     time) on such day, not to accept such substitution. In the event such
     substitution is accepted by Buyer, such substitution shall be made by
     Seller's transfer to Buyer of such other Securities and Buyer's transfer to
     Seller of such Purchased Securities, and after such substitution, the
     substituted Securities shall be deemed to be Purchased Securities. In the
     event Buyer elects not to accept such substitution, Buyer shall offer
     Seller the right to terminate the Transaction.

     (d) In the event Seller exercises its right to substitute or terminate
     under sub-paragraph (c), Seller shall be obligated to pay to Buyer, by the
     close of the business day of such substitution or termination, as the case
     may be, an amount equal to (A) Buyer's actual cost (including all fees,
     expenses and commissions) of (i) entering into replacement transactions;
     (ii) entering into or terminating hedge transactions; and/or (iii)
     terminating transactions or substituting securities in like transactions
     with third parties in connection with or as a result of such substitution
     or termination, and (B) to the extent Buyer determines not to enter into
     replacement transactions, the loss incurred by Buyer directly arising or
     resulting from such substitution or termination. The foregoing amounts
     shall be solely determined and calculated by Buyer in good faith.

9.   The parties acknowledge and agree that (a) any Securities subject to any
     Transaction, including privately placed securities, may be sold under
     Paragraph 11 in a private sale, which shall be deemed commercially
     reasonable and (b) in any sale pursuant to Paragraph 11, Bear Stearns shall
     have the right to purchase the Securities.

10.  The words "obtained from a generally recognized source or the most recent
     closing bid quotation from such a source" in Paragraph 11(d)(i)(B), shall
     be replaced with the words "determined by Bear Stearns, in its sole
     discretion".

11.  Bear Stearns shall have no obligation to release any monies or Purchased
     CMBS to Counterparty with respect to any Transaction unless and until all
     Transactions are adequately margined pursuant to the terms of the
     Agreement.

     Bear Stearns International Limited      LNR CMBS Holdings Corporation

     By: /s/ PAUL M. FRIEDMAN                By: /s/ SHELLY RUBIN
         -------------------------------         --------------------------
         Name: Paul M. Friedman                  Name: Shelly Rubin
         Title: Director                         Title: Vice President

     Date: November 6, 2000
<PAGE>

                                    ANNEX I-A

This Annex I-A forms a part of the Master Repurchase Agreement dated as of March
31, 2000 (the "Repurchase Agreement") between BEAR, STEARNS INTERNATIONAL
LIMITED ("Buyer") and LNR CMBS Holdings Corporation (the "Seller" or "Hedging
Party"). This Annex I-A shall apply to Transactions in which Bear Stearns
International Limited is or will be the Buyer of certain subordinated commercial
mortgage-backed securities ("CMBS") issued with respect to pools of commercial
mortgage loans, which pools qualify under sections 860A through 860G of the
Internal Revenue Code as real estate mortgage investment conduits ("REMIC"),
from Seller in accordance with the terms described below (each, a "CMBS
Transaction"). For the avoidance of doubt, all CMBS Transactions between Seller
and Buyer will be subject to the Repurchase Agreement, Annex I, this Annex I-A,
each confirmation under the Repurchase Agreement (collectively, the "Agreement")
and the Institutional Account Agreement dated as of March 31, 2000 between Buyer
and Seller (the "Institutional Account Agreement") and each Purchased CMBS shall
constitute a Purchased Security under this Agreement. If there is any
inconsistency between the Repurchase Agreement, a confirmation under the
Repurchase Agreement, Annex I and this Annex I-A, this Annex I-A shall control.
Each CMBS Transaction shall constitute a sale by Seller to Buyer of the related
CMBS. As used in this Agreement "BSCO Repurchase Agreement" means that Master
Repurchase Agreement dated as of March 31, 2000 between Bear, Stearns & Co. Inc.
("BSCO") and Seller and all Annexes and Schedules thereto except as expressly
modified herein. All other capitalized terms not herein defined shall have the
meanings set forth in the BSCO Repurchase Agreement and/or the Agreement, as
applicable.

<PAGE>

1.   Definitions.

     "Affirmative Control" shall mean, with respect to any Purchased CMBS, the
     unilateral ability of the holder of any Related Purchased CMBS to exercise
     the rights of the Controlling Class, or, if the related CMBS Transaction
     does not provide for a Controlling Class, to unilaterally appoint, retain
     or remove the CMBS Transaction's special servicer.

     "Amount of Transactions" shall mean the aggregate amount of all "Purchase
     Prices" paid by any Bear Stearns entity for all repurchase transactions
     involving commercial mortgage backed securities, including the outstanding
     CMBS Transactions hereunder, and not repaid to Buyer, and all outstanding
     CMBS Transactions, if any, with any other Bear Stearns entity.

     "Business Day" shall mean each day on which BSCO is open for business.

     "Buyer's Base Margin Ratio" shall equal, with respect to any Purchased
     CMBS, the Buyer's Base Margin Ratio set forth on "Table Y" corresponding to
     the applicable Purchased CMBS.

     "Buyer's Margin Ratio" shall equal, with respect to any Purchased CMBS, (i)
     the decimal equivalent of Buyer's Base Margin Ratio applicable to such
     Purchased CMBS multiplied by (ii) the Concentration Adjustment Factor
     applicable to such Purchased CMBS.

                                        2

<PAGE>

     "Concentration Adjustment Factor" shall equal, with respect to any
     Purchased CMBS, the Concentration Adjustment Factor set forth on "Table X"
     corresponding to the Trust Concentration for such Purchased CMBS.

     "Contiguous Affirmative Control" shall mean, with respect to any Purchased
     CMBS, the ability of the holder of Related Purchased CMBS to exercise
     Affirmative Control, without interruption, regardless of any change in the
     Controlling Class or future reductions in the principal balance of the
     Related Purchased CMBS, unless and until (i) only one Related Purchased
     CMBS remains outstanding and (ii) such Related Purchased CMBS no longer
     qualifies as the Controlling Class.

     "Controlling Class" shall mean, with respect to each CMBS Transaction, the
     class and minimum amount of CMBS certificates that vest the holder with the
     unilateral right to appoint, retain or remove the transaction's special
     servicer (and to otherwise exercise the rights of the controlling class,
     however denominated in the issuing trust's governing documentation).

     "Initial Base Purchase Price" shall equal, with respect to any Purchased
     CMBS, the Initial Base Purchase Price set forth on "Table Y" corresponding
     to the Initial Base Purchase Price for such Purchased CMBS.

     "Initial Purchase Price" shall equal, with respect to any Purchased CMBS,
     (i) the Initial Base Purchase Price applicable to such Purchased CMBS
     multiplied by (ii) the Concentration Adjustment Factor applicable to such
     Purchased CMBS multiplied by (iii) the Market Value of the Purchased CMBS
     on the initial Purchase Date.

                                       3
<PAGE>

     "LIBOR" shall mean the London interbank offered rate for one month US
     Dollar deposits as quoted on Telerate Page 3750 at 8:30 am EST. Such rate
     will be determined by Buyer at the time a CMBS Transaction is entered into.
     LIBOR will be reset on a monthly basis on the 25th day of each month (or on
     such other date as Buyer may specify in each Confirmation), or, if such day
     is not a day on which banking institutions in London are generally open,
     such rate for the next day on which banking institutions in London are
     generally open thereafter.

     "Margin Deficit" when referring to Transactions under this Agreement, shall
     have the meaning specified in Paragraph 12 herein, and when referring to
     Transactions under the BSCO Repurchase Agreement, shall equal, the amount,
     at any time, that the Market Value of all Purchased Securities (as defined
     therein) subject to all Transactions (as defined therein) exceeds the
     aggregate Seller's Margin Amount (as defined therein) for all such
     Transactions at such time.

     "Maximum Amount" shall equal $100,000,000.

     "Maximum BSCO Transfer Amount" shall mean an amount determined, from time
     to time, by BSCO in its sole discretion.

     "Maximum Transfer Amount" shall mean an amount determined, from time to
     time, by Buyer in its sole discretion.

                                       4
<PAGE>

     "Purchased CMBS" shall mean all CMBS transferred by Seller to Buyer in a
     Transaction under the Agreement. The term "Purchased CMBS" with respect to
     any Transaction also shall include CMBS delivered pursuant to Paragraph
     4(a) of the Repurchase Agreement.

     "Related CMBS" shall mean any CMBS issued by the issuing trust that issued
     the Purchased CMBS.

     "Related Hedge" shall mean any repurchase transaction between Seller and
     BSCO or another affiliate of Buyer in which BSCO or such other affiliate of
     Buyer is the seller of United States Treasury Securities to Seller.

     "Related Purchased CMBS" shall mean, with respect to any Purchased CMBS,
     any Related CMBS that are also Purchased CMBS (including the Purchased
     CMBS).

     "Termination Date" shall mean March 31, 2003.

     "Trust Concentration" shall equal, with respect to any Purchased CMBS, the
     percentage equivalent, rounded to the next highest whole percentage, of (i)
     the sum of the most recent Market Value of all Related Purchased CMBS
     divided by (ii) the sum of the most recent Market Value of all Purchased
     CMBS.

                      [This space intentionally left blank]

                                        5
<PAGE>

                              Table X

                                                Concentration
           Trust                                Adjustment
           Concentration                        Factor
          ----------------------------------------------------
           less than or
           equal to                             1.0000
           10.0%
          ----------------------------------------------------
           11.0%                                0.9985
          ----------------------------------------------------
           12.0%                                0.9938
          ----------------------------------------------------
           13.0%                                0.9862
          ----------------------------------------------------
           14.0%                                0.9754
          ----------------------------------------------------
           15.0%                                0.9615
          ----------------------------------------------------
           16.0%                                0.9446
          ----------------------------------------------------
           17.0%                                0.9246
          ----------------------------------------------------
           18.0%                                0.9015
          ----------------------------------------------------
           19.0%                                0.8754
          ----------------------------------------------------
           20.0%                                0.8462
          ----------------------------------------------------
           21.0%                                0.8138
          ----------------------------------------------------
           22.0%                                0.7785
          ----------------------------------------------------
           23.0%                                0.7400
          ----------------------------------------------------
           24.0%                                0.6985
          ----------------------------------------------------
           25.0%                                0.6538
          ----------------------------------------------------
           26.0%                                0.6062
          ----------------------------------------------------
           27.0%                                0.5554
          ----------------------------------------------------
           28.0%                                0.5015
          ----------------------------------------------------
           29.0%                                0.4446
          ----------------------------------------------------
           30.0%                                0.3846
          ----------------------------------------------------
           31.0%                                0.3215
          ----------------------------------------------------
           32.0%                                0.2554
          ----------------------------------------------------
           33.0%                                0.1862
          ----------------------------------------------------
           34.0%                                0.1138
          ----------------------------------------------------
           35.0%                                0.0385
          ----------------------------------------------------
           greater
           than 35.0%                           0.0000
          ----------------------------------------------------

                                       6
<PAGE>

                                   Table Y

                                          Initial Base      Buyer's Base
     Ratings of CMBS*  Pricing Rate       Purchase Price    Margin Ratio
     ----------------  ---------------    --------------    ------------

     BBB-/Baa3 and
     higher            LIBOR+ 150 bps           70%              75%

     BB+/Bal           LIBOR + 155 bps          65%              75%

     BB/Ba2            LIBOR+ 165 bps           65%              75%

     BB-/Ba3           LIBOR + 175 bps          65%              75%

     B+/B1**           LIBOR + 195 bps          50%              60%

     B/B2              LIBOR + 210 bps          50%              60%

     B-/B3             LIBOR + 225 bps          33%              43%

     CCC/Caa           LIBOR + 250 bps          25%              35%

     Not Rated         LIBOR + 250 bps          25%              35%

     * Ratings as published by a nationally recognized statistical rating
     organization on Purchased CMBS. In the event a rating on a particular
     Purchased CMBS is changed, the Purchased CMBS shall be treated at the new
     rating for all purposes (including Buyer's Base Margin Ratio, Buyer's
     Margin Ratio and Pricing Rate, but excluding the Initial Base Purchase
     Price and Initial Purchase Price) from the time of the change of the
     rating. If more than one rating agency rates the Purchased CMBS, the lowest
     of the ratings shall be the rating for the purposes of this Annex 1-A. If
     either (i) no rating agency rates the Purchased CMBS or (ii) any rating
     agency withdraws its rating of the Purchased CMBS, the terms listed for
     "Not Rated" shall apply.

                                       7
<PAGE>

     ** Buyer will not enter into a Transaction with respect to a Purchased CMBS
     whose rating is B+/B1 or lower unless the holder of such Purchased CMBS
     would have Contiguous Affirmative Control or unless Buyer, at is sole
     discretion, accepts a written assignment of certain control rights.

2.   Buyer and Seller agree to enter into certain CMBS Transactions, subject to
     the terms of the Agreement and the Institutional Account Agreement. Each
     CMBS Transaction shall constitute a Transaction under the Repurchase
     Agreement. The aggregate amount of such CMBS Transactions outstanding at
     any time shall not exceed the Maximum Amount and no purchase by Buyer shall
     be made after the Purchase Date of the first CMBS purchased hereunder
     without the consent of Buyer, which it may withhold in its sole discretion.
     The transfer of each Purchased CMBS to Buyer under this Agreement shall
     constitute a separate Transaction and be subject to the terms and
     conditions set forth in this Agreement.

3.   Accrued Price Differentials incurred in connection with all CMBS
     Transactions will be paid to Buyer on a monthly basis, on the date stated
     as the Repurchase Date in the Confirmation with respect to such CMBS
     Transaction (as same may be re-issued from time to time) or, if such day is
     not a Business Day, the first Business Day thereafter.

4.   All outstanding CMBS Transactions under the terms of this Annex I-A will be
     repurchased by Seller on the Termination Date notwithstanding that a
     Confirmation may state a Repurchase Date other than the Termination Date;
     provided, however if Buyer, in

                                       8
<PAGE>

     its sole discretion, enters into new CMBS Transactions (including, without
     limitation, "rolling" any outstanding Transactions) after such date this
     Agreement shall continue to control such Transactions. The Repurchase
     Agreement is hereby amended to insert the word "Term" before "Repurchase
     Date" each time "Repurchase Date" occurs in the Repurchase Agreement and to
     delete section 2(q) and to substitute therefor the following:

               (q) "Term Repurchase Date", the date on which Seller is to
          repurchase the Purchased Securities from Buyer, including the
          Termination Date set forth in Annex 1-A and any date determined by
          application of the provisions of Paragraph 3(c) or 11 hereof;

5.   On the Term Repurchase Date, all Repurchase Prices and other amounts owed
     by Seller will be due and payable and Seller shall pay all such amounts as
     provided herein.

6.   Paragraph 4(b) of the Repurchase Agreement shall not apply to CMBS
     Transactions. The Purchase Price of any Purchased CMBS shall not be
     increased after the date of Buyer's purchase thereof with respect to any
     subsequent CMBS Transaction involving such Purchased CMBS, except to the
     extent of transfers of cash by Buyer to BSCO as provided herein.

7.   Notwithstanding any provision to the contrary contained in any other
     repurchase or other agreement, annexes or schedules thereto, with any other
     "Bear Stearns entity" (as defined in the Institutional Account Agreement),
     the Amount of Transactions shall not exceed, in the aggregate, the Maximum
     Amount at any time. If the Amount of Transactions exceeds the Maximum
     Amount, Seller shall repurchase sufficient Purchased CMBS to reduce the
     Amount of Transactions to not greater than the Maximum Amount not later
     than the first

                                       9
<PAGE>

     Business Day after notice from Buyer (which date shall constitute a Term
     Repurchase Date with respect to the Purchased CMBS to be repurchased
     hereunder and for the purpose of Section 1 l(ii) of the Repurchase
     Agreement).

8.   [RESERVED]

9.   Seller shall deliver to Buyer, in the case of physical securities, all of
     the CMBS proposed to be purchased hereunder with fully executed transfer
     documentation and, in the case of book entry CMBS, fully executed transfer
     documentation, in either case in form sufficient to allow transfer and
     registration of such Purchased CMBS to Buyer no later than the proposed
     initial Purchase Date for the relevant CMBS. Seller shall deliver to Buyer
     the related Prospectus or Private Placement Memorandum and Pooling and
     Servicing Agreement at least two Business Days prior to Buyer's purchase.
     Buyer shall have the right to cancel any Transaction and Seller agrees to
     pay to Buyer any Purchase Price paid by Buyer plus any accrued Price
     Differential within five Business Days of notice (which date shall
     constitute a Term Repurchase Date for the purpose of Section ll(ii) of the
     Repurchase Agreement) if a Trustee (in the case of physical Purchased CMBS)
     and/or DTC (in the case of book entry Purchased CMBS) fails or refuses to
     transfer or register the related Purchased CMBS into the name of Buyer.

10.  Seller shall provide to Buyer, within two Business Days of receipt, any
     written information received by Seller from the trustee or master servicer
     for each issuing trust corresponding to each Purchased CMBS including,
     without limitation, watch lists and

                                       10
<PAGE>

     borrower or periodic summary property financial reports but excluding (i)
     any periodic bond remittance reports that are otherwise available to Buyer
     directly from the trustee and (ii) any loan files corresponding to loans
     that have been transferred from the master servicer to the special servicer
     (Seller shall make items (i) or (ii) available to Buyer upon Buyer's
     request). Seller shall notify Buyer of any information, including, without
     limitation, credit standing or performance of the underlying mortgage
     loans, material correspondence, property level financial data or real
     estate market information known to Seller that could materially affect the
     market value of any Purchased CMBS. Seller shall make such notification
     within three business days of Seller's receipt of such information (except,
     in the case of information respecting the timing and amount of receipt of
     loan payments, Seller shall make such notification no earlier than
     permitted under the issuing trust's governing documentation). Seller's
     asset management and credit surveillance staff shall be reasonably made
     available to respond to periodic inquiries from Buyer regarding the status
     of the Purchased CMBS and the status of assets underlying the Purchased
     CMBS.

11.  Paragraph 4(d) of the Repurchase Agreement is deleted and "(d) [OMITTED]"
     substituted therefor and Paragraph 4(a) of the Repurchase Agreement is
     deleted and the following substituted therefor:

     "(a) Notwithstanding anything in the Agreement to the contrary, if on any
     day the Repurchase Price for any Purchased CMBS (on a single Purchased CMBS
     by single Purchased CMBS basis) exceeds (A) the Market Value of such
     Purchased CMBS on such day multiplied by (B) the applicable Buyer's Margin
     Ratio on such day for such

                                       11
<PAGE>

     Purchased CMBS (each such Purchased CMBS, an "Affected CMBS" and such
     amount shall constitute a "Margin Deficit"), then Buyer may by notice to
     Seller require Seller to transfer to Buyer sufficient cash or additional
     securities acceptable to Buyer in its sole discretion, which cash or
     additional securities shall constitute Additional Purchased Securities
     within the meaning of Paragraph 2(b) of the Repurchase Agreement, so that,
     after such transfer(s), the Repurchase Price for each Affected CMBS shall
     be less than or equal to (A) the Market Value of such Affected CMBS on such
     day multiplied by (B) the applicable Buyer's Margin Ratio for such Affected
     CMBS.

     If Seller is required to transfer Additional Purchased Securities, Seller
     shall make such transfer by the close of the Federal Reserve wire for money
     transactions on the date notice is given if such notice is given before
     10:00 a.m. (New York time) or, if such notice is given after 10:00 a.m.
     (New York time), by the close of the Federal Reserve wire for money
     transactions on the next Business Day.

12.  Paragraph 2(c) of the Repurchase Agreement is amended to delete the text
     from and including "with respect to" through and including "such date" and
     to insert therefor "an amount equal to the Market Value of the Additional
     Purchased Securities required to be transferred pursuant to Paragraph 4(a)
     of the Repurchase Agreement.)

13.  Paragraph 2(o) of the Repurchase Agreement is amended by inserting in
     clause (ii) after "Paragraph 4(b) hereof" and before "and decreased by" the
     following: "and by the amount of cash transferred by Buyer to BSCO to meet
     a Margin Deficit under the BSCO Repurchase Agreement or otherwise to
     benefit or for the account of Seller."

                                       12
<PAGE>

14.  Paragraph 2(r) of the Repurchase Agreement is amended to insert: ", the
     Exit Fee (as defined in Paragraph 18 of Annex l-A)" after the words "sum of
     the Purchase Price" and before "and the Price Differential."

15.  [RESERVED]

16.  At all times the pool of mortgage loans relating to the Purchased CMBS
     shall be qualified as a REMIC. If at any time any pool of mortgage loans
     relating to a Purchased CMBS is not qualified as a REMIC then the Market
     Value of such Purchased CMBS shall be deemed to be zero.

17.  Paragraph 11 of the Repurchase Agreement is amended to delete the word "or"
     before (vii) and to add the following after "obligations hereunder" and
     prior to "(each an "Event of Default")":

     (viii) Seller fails to make any payment of Price Differential within one
     day after such payment becomes due, (and such Price Differential will be
     adjusted to reflect the date payment is actually received by Buyer), (ix)
     Seller fails to comply with Paragraph lO herein, (x) Seller fails to comply
     with Paragraph 11 herein, or (xi) Seller fails to comply with any other
     obligation to Buyer and such failure continues for a period of thirty days.

18.  Seller may accelerate the Term Repurchase Date and pay the Repurchase Price
     and other amounts due with respect to either (A) any Purchased CMBS having,
     in the aggregate

                                       13
<PAGE>

     with all other Purchased CMBS with respect to which there was an
     acceleration of the Term Repurchase Date, Repurchase Prices not exceeding
     $10,000,000 or (B) all, but not less than all, outstanding CMBS
     Transactions, in each case, upon five Business Days' prior written notice
     to Buyer, provided that (i) Seller pays a fee (the "Exit Fee") equal to the
     lesser of (a) the expenses incurred by Buyer due to such acceleration of
     the Term Repurchase Date (including, without limitation, costs of hedging
     and breakage expenses), as determined by Buyer in its sole discretion, or
     (b) (x) the number of whole and partial calendar months from the
     accelerated Term Repurchase Date to the Termination Date multiplied by (y)
     three and one-third basis points (0.033333 %) multiplied by (aa) if the
     early termination is pursuant to sub-clause (A) of this sentence, the
     Repurchase Prices of the affected Purchased CMBS or (bb) if the early
     termination is pursuant to sub-clause (B) of this sentence, the greater of
     (I) the sum of the Repurchase Prices (excluding the applicable Exit Fees)
     for all Purchased CMBS or (II) the Maximum Amount, (ii) immediately after
     the transfer of the affected Purchased CMBS and the payment of the related
     Repurchase Price, Seller is not in default of any of its obligations under
     this Agreement or the BSCO Repurchase Agreement and there will be no Margin
     Deficit under this Agreement or the BSCO Repurchase and (iii) all Related
     Hedges are terminated simultaneously with the termination of the
     corresponding CMBS Transactions and all obligations owed by Seller, or its
     affiliates, under the Related Hedges are satisfied. Notwithstanding the
     foregoing, Buyer will not be responsible for delays in the return of any
     Purchased CMBS to Seller if such Purchased CMBS has been sent to the
     related trustee or to DTC, as appropriate, for reregistration. In either
     event, Buyer agrees to notify Seller of any delays and will use its
     reasonable best efforts to return the related

                                       14
<PAGE>

     Purchased CMBS to Seller promptly. Seller shall pay the Exit Fee with
     respect to all Purchased CMBS transferred to Seller on any Term Repurchase
     Date that precedes the Termination Date with respect to such Purchased
     CMBS. The acceleration of the Term Repurchase Date for any reason shall not
     excuse Seller from paying the Exit Fee.

19.  Subject to Paragraph 43 herein, Buyer's sole recourse under the Agreement
     shall be to Purchased CMBS and to any and all other property held by or for
     Seller at or by any Bear Stearns entity or any agent thereof, any and all
     of Seller's right, title and interest in the Agreement, the BSCO Repurchase
     Agreement, the Transactions under the BSCO Repurchase Agreement, the
     Transactions under this Agreement, and all payments and performance due
     under this Agreement, the BSCO Repurchase Agreement and each Transaction
     under each such Agreement, and to all other Collateral (as such term is
     defined in the Institutional Account Agreement) and Buyer shall have no
     recourse to other assets or revenues of Seller, except that the foregoing
     limitation does not apply to damages sustained by Buyer if Seller or any
     affiliate has committed fraud, was grossly negligent, willfully impaired
     Buyer's ability to exercise any rights or remedies under the Agreement, the
     BSCO Repurchase Agreement or any other agreement with any other Bear
     Stearns entity, acted in bad faith or failed to provide Buyer with any
     material information, including, but not limited to the requirements set
     forth in Paragraph 10 herein, in each case with respect to the Agreement,
     the BSCO Repurchase Agreement or any other agreement with any other Bear
     Stearns entity, the BSCO Repurchase Agreement, this Agreement or any
     Purchased Security, provided, however, that Seller shall have no liability
     for any consequential, incidental, special, exemplary, punitive, or

                                       15
<PAGE>

     any similar damages. However, notwithstanding the proviso at the end of the
     preceding sentence, Seller shall be liable for, any costs, losses, damages
     and fees incurred in connection with a hedge entered into by Buyer after a
     default by Seller.

     The provisions of this section shall not, however, (a) constitute a waiver,
     release or impairment of any obligation evidenced or secured by the
     Agreement, or any other agreement with a Bear Stearns entity; (b) affect
     the validity or enforceability of, or any guaranty made in connection with,
     the Agreement, or any other agreement with a Bear Stearns entity or any of
     the rights and remedies of Buyer or other Bear Stearns entity thereunder;
     (c) impair the right of Buyer or other Bear Stearns entity to obtain the
     appointment of a receiver; (d) constitute a prohibition against Buyer or
     other Bear Stearns entity seeking a judgment against Seller in order to
     commence any appropriate action or proceeding in order for Buyer or other
     Bear Stearns entity to exercise its remedies against the Purchased
     Securities, cash or other property described in the first sentence of the
     preceding paragraph or any payments or performance due under the Agreement,
     or any other agreement with a Bear Stearns entity; or (e) constitute a
     waiver of the right of Buyer or any other Bear Stearns entity to enforce
     the liability and obligation of Seller, by money judgement or otherwise, to
     the extent of any loss, damage, cost, expense, liability, claim or other
     obligation by Buyer or any other Bear Stearns entity (including attorneys'
     fees and costs reasonably incurred) not incurred under the Agreement.

20.  Seller's obligations under the Agreement consist of a single obligation,
     notwithstanding that the CMBS Transactions are margined on a
     Transaction-by-Transaction basis. Upon

                                       16
<PAGE>

     an Event of Default, all Purchased Securities, cash and other property held
     pursuant to the Agreement and all payments and performance due under the
     Agreement may be utilized by Buyer to satisfy Seller's obligations under
     the Agreement or any other agreement with Buyer.

21.  Notwithstanding anything to the contrary in this Agreement, Buyer shall not
     be deemed to have waived any right which it may have or be deemed to have
     under Section 506(a), 506(b), 1111(b) or any other provisions of the U.S.
     Bankruptcy Code to file a claim for the full amount due and owing under the
     provisions of the Agreement.

22.  For so long as Seller is not in default of any of its obligations under
     this Agreement or the BSCO Repurchase Agreement, Buyer will refrain from
     exercising Affirmative Control and Seller may exercise such Affirmative
     Control. Buyer and Seller shall enter into such agreements as may be
     necessary to effect this provision on a pool by pool basis, provided,
     however, that nothing shall impair Buyer's right to exercise unilaterally
     Affirmative Control upon a default by Seller of any of its obligations
     under this Agreement or the BSCO Repurchase Agreement.

23.  Notwithstanding anything in the Agreement to the contrary, Buyer shall have
     the right to assign any or all of the Transactions to any of its affiliates
     provided that Buyer remains responsible for the performance by such
     affiliate of its obligations in respect of any transferred CMBS
     Transaction.

                                       17
<PAGE>

24.  Notwithstanding anything in the Agreement to the contrary and for so long
     as Seller is not in default of any provision of this Agreement, Seller may
     substitute Purchased CMBS with other CMBS acceptable to Buyer in its sole
     discretion. In the event such substitution is accepted by Buyer, such
     substitution shall be made by Seller's transfer to Buyer of such
     substituted CMBS and Buyer's transfer to Seller of such Purchased CMBS, and
     after such substitution, the substituted CMBS shall be deemed to be
     Purchased CMBS. In the event Buyer elects not to accept such substitution,
     Buyer shall offer Seller the right to terminate simultaneously all the
     outstanding CMBS Transactions pursuant to Paragraph 18 herein.

25.  Buyer may, in its sole discretion, from time to time permit Seller to
     utilize an amount less than or equal to the Maximum Transfer Amount (as
     defined herein) of any Purchased CMBS to meet a Margin Deficit for any
     other CMBS Transaction or any other Transaction under this Agreement.

26.  Buyer may, in its sole discretion and with the permission of BSCO, from
     time to time permit Seller to (x) utilize an amount less than or equal to
     the Maximum BSCO Transfer Amount to meet a Margin Deficit for any
     Transaction under this Agreement and (y) utilize an amount less than or
     equal to the Maximum Transfer Amount to meet a Margin Deficit under the
     BSCO Repurchase Agreement.

                                       18
<PAGE>

27.  Upon one Business Day's notice to Seller, Buyer, in its sole discretion,
     may determine at any time, with respect to any Transaction under this
     Agreement or the BSCO Repurchase Agreement, to revoke its permission for
     Seller to utilize some or all of the Maximum Transfer Amount to meet a
     Margin Deficit and such Maximum Transfer Amount shall thereafter not be
     available to meet a Margin Deficit, notwithstanding the prior utilization
     by Seller of such Maximum Transfer Amount to meet a Margin Deficit.

28.  Seller acknowledges that it shall not rely on any availability of any
     Maximum Transfer Amount to meet a Margin Deficit under this Agreement or
     the BSCO Repurchase Agreement in view of Buyer's not having any obligation
     to allow Maximum Transfer Amount to be used to meet a Margin Deficit or to
     continue to be used to meet a Margin Deficit, each such decision being
     within Buyer's sole discretion. Any failure on behalf of Buyer to require
     Seller to meet a Margin Deficit shall not be a waiver of any right to
     require the transfer of Additional Purchased Securities, or to otherwise
     meet a Margin Deficit, with respect to any Transaction at any time.

29.  Notwithstanding anything to the contrary in the Agreement, any Purchased
     CMBS utilized to meet a Margin Deficit for any other Transaction (under
     this Agreement or under the BSCO Repurchase Agreement) shall not be
     returned to Seller upon payment of the Repurchase Price of such other
     Transaction by reason of such Purchased CMBS having been used to meet a
     Margin Deficit for such other Transaction.

30.  [RESERVED]

                                       19
<PAGE>

31.  [RESERVED]

32.  [RESERVED]

33.  Notwithstanding anything to the contrary in the Agreement or the BSCO
     Repurchase Agreement, any Purchased CMBS utilized to meet a Margin Deficit
     under the BSCO Repurchase Agreement shall not be returned to Seller upon
     payment of its obligations with respect to such Transaction under the BSCO
     Repurchase Agreement by reason of such Purchased CMBS having been used to
     meet a Margin Deficit under the BSCO Repurchase Agreement. Buyer shall have
     no obligation to release any monies to Seller with respect to any
     Transaction unless and until all Transactions under this Agreement and
     under the BSCO Repurchase Agreement are adequately margined pursuant to
     this Agreement and the BSCO Repurchase Agreement.

34.  [RESERVED]

35.  At the request of BSCO, Buyer may, in its sole discretion, transfer cash in
     an amount less than Maximum Transfer Amount to BSCO to meet a Margin
     Deficit under the BSCO Repurchase Agreement; provided, however, that any
     such cash transferred in excess of any cash applied by BSCO to the
     obligations of Seller under the BSCO Repurchase Agreement, shall be
     returned to Buyer. At the request of Buyer, BSCO may, in its sole
     discretion, transfer cash in an amount less than the Maximum BSCO Transfer
     Amount, if

                                       20
<PAGE>

     any, to Buyer to meet a Margin Deficit under the Agreement provided,
     however, that any such cash transferred in excess of any cash applied by
     Buyer to the obligations of Seller under the Agreement shall be returned to
     BSCO.

36.  Funds transferred by Seller to Buyer may be co-mingled and funds may be
     held at various Bear Stearns entities. Seller may obtain repayment of funds
     transferred to Buyer by Seller at a time when there was no Margin Deficit
     under this Agreement or the BSCO Repurchase Agreement and no outstanding
     requests for margin on notice to Buyer if: (i) there is no default under
     the Agreement or the BSCO Repurchase Agreement, (ii) such withdrawal will
     not result in a Margin Deficit under this Agreement or the BSCO Repurchase
     Agreement and (iii) Seller has no outstanding obligations to any Bear
     Stearns entity.

37.  [RESERVED]

38.  [RESERVED]

39.  [RESERVED]

40.  The Agreement, the BSCO Repurchase Agreement and the Institutional Account
     Agreement constitute the entire agreement between the parties hereto with
     respect to the

                                       21
<PAGE>

     subject matter hereof, and supersede all prior agreements, understandings,
     negotiations and discussions between the parties hereto, whether verbal or
     written, with respect to such subject matter.

41.  Except for the Institutional Account Agreement, this Agreement shall
     supersede any agreement between Seller and any Bear Stearns entity with
     respect to all CMBS Transactions.

42.  Payments of principal of Purchased CMBS shall be applied to reduce the
     Repurchase Price of such Purchased CMBS. Payments of interest received in
     connection with Purchased CMBS shall be applied to reduce Seller's
     obligations to make monthly Price Differential payments. Any Income
     received by Buyer in excess of the amounts necessary to satisfy the
     obligations set forth in the prior two sentences shall be released to
     Seller, provided, however that such funds shall be released only if Seller
     is not in default of any of its obligations under this Agreement or the
     BSCO Repurchase Agreement and there will be no Margin Deficit under this
     Agreement or the BSCO Repurchase Agreement after the release of such cash.

43.  Seller shall post a Letter of Credit in an amount equal to $5,000,000 in
     form and substance acceptable to Buyer in its sole discretion issued by a
     financial institution whose long term-debt is rated at least "A" or
     equivalent and is acceptable to Buyer in its sole discretion. Such Letter
     of Credit shall be additional Collateral (as defined in the Institutional
     Account Agreement) as security for all obligations owed by Seller hereunder

                                       22
<PAGE>

     and such Letter of Credit shall be drawable 14 days before expiration if
     not renewed prior to such time. Such Letter of Credit shall be released by
     Buyer at its sole discretion.

                                       23
<PAGE>

BEAR, STEARNS INTERNATIONAL LIMITED,        LNR CMBS HOLDINGS CORPORATION

By: /s/ PAUL M. FRIEDMAN                    By: /s/ SHELLY RUBIN
   ---------------------------------           ---------------------------------
    Paul M. Friedman                             Shelly Rubin

Title: Director                             Title: Vice President
      ------------------------------              ------------------------------

Date: November 06, 2000                     Date: April 14, 2000
     -------------------------------             -------------------------------

                                            BEAR, STEARNS & CO., INC.

                                            By: /s/ PAUL M. FRIEDMAN
                                               ---------------------------------
                                                Paul M. Friedman

                                            Title: Senior Managing Director
                                                  ------------------------------

                                            Date: November 06, 2000
                                                 -------------------------------

                                       24
<PAGE>

                                    ANNEX II

             Names and Addresses for Communications Between Parties

PARTY A:          LNR Properties Corporation
                  760 NW 107th Avenue
                  Suite 300
                  Miami, FL 33172

                  ATTENTION: Shelly Rubin, Vice President
                  TELEPHONE: (305) 229-6440

PARTY B:          Bear, Stearns & Co. Inc.
                  Government Operations
                  1 Metrotech Center North
                  7th Floor
                  Brooklyn, NY 11201-3859

                  ATTENTION: Sr. Managing Director
                  TELEPHONE: (212) 272-1203

<PAGE>

                                    Annex III

                           International Transactions

This Annex III (including any Schedules hereto) forms a part of the Master
Repurchase Agreement dated as of March 31, 1999 (the "Agreement") between Bear
Stearns International Limited and LNR CMBS Holdings Corporation. Capitalized
terms used but not defined in this Annex III shall have the meaning ascribed to
them in the Agreement.

1.   Definitions. For purposes of the Agreement and this Annex III:

     (a) The following terms shall have the following meanings:

          "Base Currency", United States dollars or such other currency as Buyer
          and Seller may agree in the Confirmation with respect to any
          International Transaction or otherwise in writing;

          "Business Day" or "business day":

          (i)  relation to any International Transaction which (A) involves an
               International Security and (B) is to be settled through CEDEL or
               Euroclear, a day on which CEDEL or, as the case may be, Euroclear
               is open to settle business in the currency in which the Purchase
               Price and the Repurchase Price are denominated;

          (ii) in relation to any International Transaction which (A) involves
               an International Security and (B) is to be settled through a
               settlement system other than CEDEL or Euroclear, a day on which
               that settlement system is open to settle such International
               Transaction;

          (iii) in relation to any International Transaction which involves a
               delivery of Securities not falling within (I) or (ii) above, a
               day on which banks are open for business in the place where
               delivery of the relevant Securities is to be effected; and

          (iv) in relation to any International Transaction which involves an
               obligation to make a payment not falling within (I) or (ii)
               above, a day other than a Saturday or Sunday on which banks are
               open for business in the principal financial center of the
               country of which the currency in which the payment is denominated
               is the official currency and, if different, in the place where
               any account designated by the parties for the making or receipt
               of the payment is situated (or, in the case of ECU, a day on
               which ECU clearing operates);

               "CEDEL", CEDEL Bank, societe anonyme;

               "Contractual Currency", the currency in which the International
               Securities subject to any International Transaction are
               denominated or such other currency as may be specified in the
               Confirmation with respect to any International Transaction;

               "Euroclear", Morgan Guaranty Trust Company of New York, Brussels
               Branch, as operator of the Euroclear System;

               "International Security", any Security that (I) is denominated in
               a currency other than United States dollars or (ii) is capable of
               being cleared through a clearing facility outside the United
               States or (iii) is issued by an issuer organized under the laws
               of a jurisdiction other than the United States (or any political
               subdivision thereof);

               "International Transaction", any Transaction involving (I) an
               International Security or (ii) a party organized under the laws
               of a jurisdiction other than the United States (or any political
               subdivision thereof) or having its principal place of business
               outside the United States or (iii) a branch or office outside the
               United States designated in Annex I by a party organized under
               the laws of the United States (or any political subdivision
               thereof) as an office through which that party may act;

               "LIBOR", in relation to any sum in any currency, the offered rate
               for deposits for such sum in such currency for a period of three
               months which appears on the Reuters Screen LIBO page as of 11:00
               A.M., London time, on the date on which it is to be determined
               (or, if more than one such rate appears, the arithmetic mean of
               such rates);

               "Spot Rate", where an amount in one currency is to be converted
               into a second currency on any date, the spot rate of exchange of
               a comparable amount quoted by Buyer and Seller, for the sale by
               such bank of such second currency against a purchase by it of
               such first currency.

<PAGE>
     (b) Notwithstanding Paragraph 2 of the Agreement, the term "Prime Rate"
         shall mean, with respect to any International Transaction, LIBOR plus a
         spread, as may be specified in the Confirmation with respect to any
         International Transaction or otherwise in writing.

2.   Manner of Transfer. All transfers of International Securities (I) shall be
     in suitable form for transfer and accompanied by duly executed instruments
     of transfer or assignment in blank (where required for transfer) and such
     other documentation as the transferee may reasonably request, or (ii) shall
     be transferred through the book-entry system of Euroclear or CEDEL, or
     (iii) shall be transferred through any other agreed securities clearing
     system or (iv) shall be transferred by any other method mutually acceptable
     to Seller and Buyer.

3.   Contractual Currency.

     (a) Unless otherwise mutually agreed, all funds transferred in respect of
         the Purchase Price or the Repurchase Price in any International
         Transaction shall be in the Contractual Currency.

     (b) Nothwithstanding subparagraph (a) of this Paragraph 3, the payee of any
         payment may, at its option, accept tender thereof in any other
         currency; provided, however, that, to the extent permitted by
         applicable law, the obligation of the payor to make such payment will
         be discharge only to the extent of the amount of the Contractual
         Currency that such payee may, consistent with normal banking
         procedures, purchase with such other currency (after deduction of any
         premium and costs of exchange) for delivery within the customary
         delivery period for spot transactions in respect of the relevant
         currency.

     (c) If for any reason the amount in the Contractual Currency so received,
         including amounts received after conversion of any recovery under any
         judgment or order expressed in a currency other than the Contractual
         Currency, falls short of the amount in the Contractual Currency due in
         respect of the Agreement, the party required to make the payment shall
         (unless an Event of Default has occurred and such party is the
         nondefaulting party) as a separate and independent obligation (which
         shall not merge with any judgment or any payment or any partial payment
         or enforcement of payment) and to the extent permitted by applicable
         law, immediately pay such additional amount in the Contractual Currency
         as may be necessary to compensate for the shortfall.

     (d) If for any reason the amount of the Contractual Currency received by
         one party hereto exceeds the amount in the Contractual Currency due
         such party in respect of the Agreement, then (unless an Event of
         Default has occurred and such party is the nondefaulting party) the
         party receiving the payment shall refund promptly the amount of such
         excess.

4.   Notices. Any and all notices, statements, demands or other communications
     with respect to International Transactions shall be given in accordance
     with Paragraph 13 of the Agreement and shall be in the English language.

5.   Taxes.

     (a) Transfer taxes, stamp taxes and all similar costs with respect to the
         transfer of Securities shall be paid by Seller.

     (b) (i)  Unless otherwise agreed, all money payable by on party (the
              "Payor") to the other (the "Payee") in respect of any
              International Transaction shall be paid free and clear of, and
              without withholding or deduction for, any taxes or duties of
              whatsoever nature imposed, levied, collected, withheld or assessed
              by any authority having power to tax (a "Tax"), unless the
              withholding or deduction of such Tax is required by law. In that
              even, unless otherwise agreed, Payor shall pay such additional
              amounts as will result in the net amounts receivable by Payee
              (after taking account of such withholding or deduction) being
              equal to such amounts as would have been received by Payee had no
              such Tax been required to be withheld or deducted; provided that
              for purposes of Paragraphs 5 and 6 the term "Tax" shall not
              include any Tax that would not have been imposed but for the
              existence of any present or former connection between Payee and
              the jurisdiction imposing such Tax other than the mere receipt of
              payment from Payor or the performance of Payee's obligations under
              an International Transaction. The parties acknowledge and agree,
              for the avoidance of doubt, that the amount of Income required to
              be transferred, credited or applied by Buyer for the benefit of
              Seller under Paragraph 5 of the Agreement shall be determined
              without taking into account ant Tax required to be withheld or
              deducted from such Income, unless otherwise agreed.

         (ii) In the case of any Tax required to be withheld or deducted from
              any money payable to a party hereto acting as Payee by the other
              party hereto acting as Payor, Payee agrees to deliver to Payor
              (or, if applicable, to the authority imposing the Tax) any
              certificate or document reasonably requested by Payor that would
              entitle Payee to an exemption from, or reduction in the rate of,
<PAGE>
               withholding or deduction of Tax from money payable by Payor to
               Payee.

         (iii) Each party hereto agrees to notify the other party of any
               circumstance known or reasonably known to it (other than a Change
               of Tax Law, as defined in Paragraph 6 hereof) that causes a
               certificate or document provided by it pursuant to subparagraph
               (b)(ii) of this Paragraph to fail to be true.

         (iv)  Notwithstanding subparagraph (b)(i) of this Paragraph, no
               additional amounts shall be payable by Payor to Payee in respect
               of an International Transaction to the extent that such
               additional amounts are payable as a result of a failure by Payee
               to comply with its obligations under subparagraph (b)(ii) or
               (b)(iii) of this Paragraph with respect to such International
               Transaction.

6.   Tax Event.

     (a)  This Paragraph 6 shall apply if either party notifies the other, with
          respect to a Tax required to be collected by withholding or deduction
          that -

          (i)  any action taken by a taxing authority or brought in a court of
               competent jurisdiction after the date of an International
               Transaction is entered into, regardless of whether such action is
               taken or brought with respect to a party to the Agreement; or

          (ii) a change in the fiscal or regulatory regime after the date of
               International Transaction is entered into, (each, a "Change of
               Tax Law") has or will, in the notifying party's reasonable
               opinion, have a materiel adverse effect on such party in the
               context of an International Transaction.

     (b)  If so requested by the other party, the notifying party will furnish
          the other party with an opinion of a suitably qualified adviser that
          an event referred to in subparagraph (a)(i) or (a)(ii) of this
          Paragraph 6 has occurred and affects the notifying party.

     (c)  Where this Paragraph 6 applies, the party giving the notice referred
          to in subparagraph (a) above may, subject to subparagraph (d) below,
          terminate the International Transaction effective from a date
          specified in the notice, not being earlier (unless so agreed by the
          other party) than 30 days after the date of such notice, by nominating
          such date as the Repurchase Date.

     (d)  If the party receiving the notice referred to in subparagraph (a) of
          this Paragraph 6 so elects, it may override such notice by giving a
          counter-notice to the other party. If a counter-notice is given, the
          party which gives such counter-notice will be deemed to have agreed to
          indemnify the other party against the adverse effect referred to in
          subparagraph (a) of this Paragraph 6 so far as it relates to the
          relevant International Transaction and the original Repurchase Date
          will continue to apply.

     (e)  Where an International Transaction is terminated as described in this
          Paragraph 6, the party which has given the notice to terminate shall
          indemnify the other party against any reasonable legal and other
          professional expenses incurred by the other party by reason of the
          termination, but the other party may not claim any sum constituting
          consequential loss or damage in respect of a termination in accordance
          with this Paragraph 6.

     (f)  This Paragraph 6 is without prejudice to Paragraph 5 of this Annex
          III; but an obligation to pay additional amounts pursuant to Paragraph
          5 of this Annex III may, where appropriate, be a circumstance which
          causes this Paragraph 6 to apply.

7.   Margin. In the calculation of "Margin Deficit" and "Margin Excess" pursuant
     to Paragraph 4 of the Agreement, all sums not denominated in the Base
     Currency shall be deemed to be converted into the Base Currency at the Spot
     Rate on the date of such calculation.

8.   Events of Default.

     (a)  In addition to the Events of Default set forth in Paragraph 11 of the
          Agreement, it shall be an additional "Event of Default" if either
          party fails, after on business day's notice, to perform any covenant
          or obligation required to be performed by it under this Annex III,
          including, without limitation, the payment of taxes or additional
          amounts as required by Paragraph 5 of this Annex III.

     (b)  In addition to the other rights of a nondefaulting party under
          Paragraph 11 of the Agreement, following an Event of Default, the
          nondefaulting party may, at any time at its option, effect the
          conversion of any currency into a different currency of its choice at
          the Spot Rate on the date of the exercise of such option and offset
          obligations of the defaulting party denominated in different
          currencies against each other.
<PAGE>

                                 Schedule III.A

            International Transactions Relating to [Relevant Country]

This Schedule III.A forms a part of Annex III to the Master Repurchase Agreement
dated as of March 31, 1999 (the "Agreement" between Bear Stearns International
Ltd. and LNR CMBS Holdings Corporation. Capitalized terms used but not defined
in this Schedule III. A shall have the meaning ascribed to them in Annex III.

               [Insert provisions applicable to relevant country]

<PAGE>
                                    Annex IV

                              Party Acting as Agent

* Bear Stearns International Limited            ** LNR CMBS Holdings Corporation

This Annex IV forms a part of the Master Repurchase Agreement dated as of March
31, 1999, 19__ (the "Agreement") between *________ and **________. This Annex IV
sets forth the terms and conditions governing all transactions in which a party
selling securities or buying securities, as the case may be) "Agent"), in a
Transaction is acting as agent for one or more third parties (each, a
"Principal"). Capitalized terms used but not defined in this Annex IV shall have
the meanings ascribed to them in the Agreement.

1.  Additional Representations. In addition to the representations set forth in
    Paragraph 10 of the Agreement, Agent hereby makes the following
    representations, which shall continue during the term of any Transaction:
    Principal has duly authorized Agent to execute and deliver the Agreement on
    its behalf, has the power to so authorize Agent and to enter into the
    Transactions contemplated by the Agreement and to perform the obligations of
    Seller or Buyer, as the case may be, under such Transactions, and has taken
    all necessary action to authorize such execution and delivery by Agent and
    such performance by it.

2.  Identification of Principals. Agent agrees (a) to provide the other party,
    prior to the date on which the parties agree to enter into any transaction
    under the Agreement, with a written list of Principals for which it intends
    to act as Agent (which list may be amended in writing from time to time with
    the consent of the other party), and (b) to provide the other party, before
    the close of business on the next business day after orally agreeing to
    enter into a Transaction, with notice of the specific Principal or
    Principals for whom it is acting in connection with such Transaction. If (i)
    Agent fails to identify such Principal or Principals prior to the close of
    business on such next business day or (ii) the other party shall determine
    in its sole discretion that any Principal or Principals identified by Agent
    are not acceptable to it, the other party may reject and rescind any
    Transaction with such Principal or Principals, return to Agent any Purchased
    Securities or portion of the Purchase Price, as the case may be, previously
    transferred to the other party and refuse any further performance under such
    Transaction, and Agent shall immediately return to the other party any
    portion of the Purchase Price or Purchased Securities, as the case may be,
    previously transferred to Agent in connection with such Transaction;
    provided, however, that (A) the other party shall promptly (and in any event
    within one business day) notify Agent of its determination to reject and
    rescind such Transaction and (B) to the extent that any performance was
    rendered by any party under any Transaction rejected by the other party,
    such party shall remain entitled to any Price Differential or other amounts
    that would have been payable to it with respect to such performance if such
    Transaction had not been rejected. The other party acknowledges that Agent
    shall not have any obligation to provide it with confidential information
    regarding the financial status of its Principals; Agent agrees, however,
    that it will assist the other party in obtaining from Agent's Principals
    such information regarding the financial status of such Principals as the
    other party may reasonably request.

3.  Limitation of Aqent's Liability. The parties expressly acknowledge that if
    the representations of Agent under the Agreement, including this Annex IV,
    are true and correct in all material respects during the term of any
    Transaction and Agent otherwise complies with the provisions of this Annex
    IV, then (a) Agent's obligations under the Agreement shall not include a
    guarantee of performance by its Principal or Principals and (b) the other
    party's remedies shall not include a right of setoff in respect of rights or
    obligations, if any, of Agent arising in other transaction in which Agent is
    acting as principal.

4.  Multiple Principals.

    (a) In the event that Agent proposes to act for more than one Principal
    hereunder, Agent and the other party shall elect whether (I) to treat
    Transactions under the Agreement as transactions entered into on behalf of
    separate Principals or (ii) to aggregate such Transactions as if they were
    transactions by a single Principal. Failure to make such an election in
    writing shall be deemed an election to treat Transactions under the
    Agreement as transactions on behalf of separate Principals.

    (b) In the event that Agent and the other party elect (or are deemed to
    elect) to treat Transactions under the Agreement as transaction on behalf of
    separate Principals, the parties agree that (I) Agent will provide the other
    party, together with the notice described in Paragraph 2(b) of this Annex
    IV, notice specifying the portion of each Transaction allocable to the
    account of each of the Principals for which it is acting (to the extent that
    any such Transaction is allocable to the account of more than one
    Principal); (ii) the portion of any individual Transaction allocable to each
    Principal shall be deemed a separate Transaction under the Agreement; (iii)
    the margin maintenance obligations of Buyer and Seller under Paragraph 4 of
    the Agreement shall be determined on a Transaction- by- Transaction basis
    (unless the parties agree to determine such obligations on a
    Principal-by-Principal basis); and (iv) Buyer's and Seller's remedies under
    the Agreement had entered into a separate
<PAGE>

    Agreement with the other party on behalf of each of its Principals.

    (c) In the event that Agent and the other party elect to treat Transactions
    under the Agreement as if they were transactions by a single Principal, the
    parties agree that (1) Agent's notice under Paragraph 2(b) of this Annex IV
    need only identify the names of its Principals but not the portion of each
    Transaction allocable to each Principal's account; (ii) the margin
    maintenance obligations of Buyer and Seller under Paragraph 4 of the
    Agreement shall, subject to any greater requirement imposed by applicable
    law, be determined on an aggregate basis for all Transactions entered into
    by Agent on behalf of any Principal, and (iii) buyer's and Seller's remedies
    upon the occurrence of an Event of Default shall be determined as if all
    Principals were a single Seller or Buyer, as the case may be.

    (d) Notwithstanding any other provision of the Agreement (including, without
    limitation, this Annex IV), the parties agree that any Transactions by Agent
    on behalf of an employee benefit plan under ERISA shall be treated as
    Transactions on behalf of separate Principals in accordance with Paragraph
    4(b) of this Annex IV (and all margin maintenance obligations of the parties
    shall be determined on a Transaction-by-Transaction basis).

5.  Interpretation of Terms. All references to "Seller" or "Buyer", as the case
    may be, in the Agreement shall, subject to the provisions of this Annex IV
    (including, among other provisions, the limitations on Agent's liability in
    Paragraph 3 of this Annex IV), be construed to reflect that (1) each
    Principal shall have, in connection with any Transaction or Transactions
    entered into by Agent on its behalf, the entering into such Transaction or
    Transactions with the other party under the Agreement, and (ii) Agent's
    Principal or Principals have designated Agent as their sole agent for
    performance of Seller's obligations to Buyer or buyer's obligations to
    Seller, as the case may be, and for receipt of performance by Buyer of its
    obligations to Seller or Seller of its obligations to Buyer, as the case may
    be, in connection with any Transaction or Transactions under the Agreement
    (including, among other things, as Agent for each Principal in connection
    with transfers of Securities, cash or other property and as agent for giving
    and receiving all notices under the Agreement). Both Agent and its Principal
    or Principals shall be deemed "parties" to the Agreement and all references
    to a "party" or "either party" in the Agreement shall be deemed revised
    accordingly (and any Act of Insolvency with respect to Agent or any other
    Event of Default by Agent under Paragraph 11 of the Agreement shall be
    deemed an Event of Default by Seller or Buyer, as the case may be).

<PAGE>

                                     Annex V

                         Margin for Forward Transactions

* Bear Stearns International Limited            ** LNR CMBS Holdings Corporation

This Annex V forms a part of the Master Repurchase Agreement dated as of March
31, 1999, 19__ (the "Agreement") between *________ and **________. Capitalized
terms used but not defined in this Annex V shall have the meanings ascribed to
them in the Agreement.

1.   Definitions. For purposed of the Agreement and this Annex V, the following
     terms shall have the following meanings:

     "Forward Exposure", the amount of loss a party would incur upon canceling a
     Forward Transaction and entering into a replacement transaction, determined
     in accordance with market practice or as otherwise agreed by the parties;

     "Forward Transaction", any Transaction agreed to by the parties as to which
     the Purchase Date has not yet occurred;

     "Net Forward Exposures", the aggregate amount of a party's Forward Exposure
     to the other party under all Forward Transaction hereunder reduced by the
     aggregate amount of any Forward Exposure of the other party to such party
     under all Forward Transactions hereunder;

     "Net Unsecured Forward Exposure", a party's Net Forward Exposure reduced by
     the Market Value of any Forward Collateral transferred to such party (and
     not returned) pursuant to Paragraph 2 of this Annex V.

2.   Margin Maintenance.

(a)  If at any time a party (the In-the-Money Party") shall have a Net Unsecured
     Forward Exposure to the other party (the "Out-of-the-Money Party") under
     one or more Forward Transactions, the In-the-Money Party may by notice to
     the Out-of-the-Money Party Securities require the Out-of-Money Party to
     transfer to the In-the-Money Party Securities or cash reasonably acceptable
     to the In-the-Money Party (together with any In come thereon and proceeds
     thereof, Forward Collateral") having a Market Value sufficient to eliminate
     such Net Unsecured Forward Exposure. the Out-of-the-Money Party may by
     notice to the In-the-Money Party require the In-the-Money Party to transfer
     to the Out-of-the-Money Party Forward Collateral having a Market Value that
     exceeds the In-the-Money Party's Net Forward Exposure ("Excess Forward
     Collateral Amount"). The rights of the parties under this subparagraph
     shall be in addition to their rights under subparagraphs (a) and (b) of
     Paragraph 4 and any other provisions of the Agreement.

(b)  The parties may agree, with respect to any or all Forward Transactions
     hereunder, that the respective rights of the parties under subparagraph (a)
     of this Paragraph may be exercised only where a Net Unsecured Forward
     exposure or Excess Forward Collateral Amount, as the case may be, exceeds a
     specified dollar amount or other specified threshold for such Forward
     transactions (which amount or threshold shall be agreed to by the parties
     prior to entering into any such Forward Transactions).

(c)  The parties may agree, with respect to any or all Forward Transaction
     hereunder, that the respective rights of the parties under subparagraph (a)
     of this Paragraph to require the elimination of a Net Unsecured Forward
     Exposure or Excess Forward collateral Amount, as the case may be, may be
     exercised whenever such a Net Unsecured Forward Exposure or Excess Forward
     Collateral Amount exists with respect to any single Forward Transaction
     hereunder (calculated without regard to any other Forward Transaction
     outstanding hereunder).

(d)  The parties may agree, with respect to any or all Forward Transaction
     hereunder, that (1) one party shall transfer to the other party Forward
     Collateral having a Market Value equal to a specified dollar amount or
     other specified threshold no later than the Margin Notice Deadline on the
     day such Forward Transaction is entered into by the parties or (ii) one
     party shall not be required to make any transfer, the Market Value of the
     Forward Collateral held by such party would be less than a specified dollar
     amount or other specified thresh old (which amount or threshold shall be
     agreed to by the parties prior to entering into any such Forward
     Transactions).

(e)  If any notice is given by a party to the other under subparagraph (a) of
     this Paragraph at or before the Margin Notice Deadline on any business day,
     the party receiving such notice shall transfer Forward Collateral as
     provided in such subparagraph no later than the close of business in the
     relevant market on such business day. If any such notice is given after the
     Margin Notice Deadline, the party receiving such notice shall transfer

<PAGE>

     such Forward Collateral later than the close of business in the relevant
     market on the next business day.

(f)  Upon the occurrence of the Purchase Date for any Forward Transaction and
     the performance by the parties of their respective obligations to transfer
     cash and Securities on such date, any Forward Collateral in respect of such
     Forward Transaction, together with any Income thereon and proceeds thereof,
     shall be transferred by the party holding such Forward Collateral to the
     other party; provided, however, that neither party shall be required to
     transfer such Forward Collateral to the other if such transfer would result
     in the creation of a Net Unsecured Forward Exposure of the transferor.

(g)  The Pledgor (as defined below) of Forward Collateral may, subject to
     agreement with and acceptance by the Pledgee (as defined below) thereof,
     substitute other Securities reasonably acceptable to the Pledgee for any
     Securities Forward Collateral. Such substitution shall be made by transfer
     to the Pledgee of such other Securities and transfer to the Pledgor of such
     Securities Forward Collateral. After substitution, the substituted
     Securities shall constitute Forward Collateral.

3.   Security Interest.

(a)  In addition to the rights granted to the parties under Paragraph 6 of the
     Agreement, each party ("Pledgor") hereby pledges to the other party
     ("Pledgee") as security for the performance of its obligations hereunder,
     and grants Pledgee a security interest in and right of setoff against, any
     Forward Collateral and any other cash, Securities or property, and all
     proceeds of any of the foregoing, transferred by or on behalf of Pledgor or
     due from Pledgee to Pledgor in connection with the Agreement and the
     Forward Transactions hereunder.

(b)  Unless otherwise agreed by the parties, a party to whom Forward Collateral
     has been transferred shall have the right to engage in repurchase
     transaction with Forward collateral or otherwise sell, transfer, pledge or
     hypothecate Forward Collateral, including in respect of loans or other
     extensions of credit to such party that may be in amounts greater than the
     forward Collateral such party is entitled to as security for obligations
     hereunder, and that may extend for periods of time longer than the periods
     during which such party is entitled to Forward Collateral as security for
     obligations hereunder; provided, however, that no such transaction shall
     relieve such party of its obligations to transfer Forward Collateral
     pursuant to Paragraph 2 or 4 of this Annex V or Paragraph 11 of the
     Agreement.

4.   Events of Default

(a)  In addition to the Events of Default set forth in Paragraph 11 of the
     Agreement, it shall be an additional "Event of Default" if either party
     fails, after one business day's notice, to perform any covenant or
     obligation required to be performed by it under Paragraph 2 or any other
     provision of this Annex.

(b)  In addition to the other rights of a nondefaulting party under Paragraphs
     11 and 12 of the Agreement, if the nondefaulting party exercised or is
     deemed to have exercised the option referred to in Paragraph 11(a) of the
     Agreement:

     (i)  The nondefaulting party, without prior notice to the defaulting party,
          may (A) immediately sell, in a recognized market (or otherwise in a
          commercially reasonable manner) at such price or prices as the
          nondefaulting party may reasonably deem satisfactory, any or all price
          or prices as the nondefaulting party may reasonably deem satisfactory,
          any or all Forward Collateral subject to any or all Forward
          Transactions hereunder and apply the proceeds thereof to any amounts
          owing by the defaulting party hereunder or (B) in its sole discretion
          elect, in lieu of selling all or a portion of such Forward Collateral
          in an amount equal to the price therefor on such date, obtained from a
          generally recognized source or the most recent closing bid quotation
          from such a source, against any amounts owing by the defaulting party
          hereunder.

     (ii) Any Forward Collateral held by the defaulting party, together with any
          Income thereon and proceeds thereof, shall be immediately transferred
          by the defaulting party to the nondefaulting party. The nondefaulting
          party may, as its option (which option shall be deemed to have been
          exercised immediately

<PAGE>

          upon the occurrence of an Act of Insolvency), and without prior notice
          to the defaulting party, (I) immediately purchase, in a recognized
          market (or otherwise in a commercially reasonable manner) at such
          price or prices as the nondefaulting party may reasonably deem
          satisfactory, securities ("Replacement Securities") of the same party
          to the nondefaulting party as required hereunder or (ii) in its sole
          discretion elect, in lieu of purchasing Replacement Securities, to be
          deemed to have purchased Replacement Securities at the price therefor
          on such date, obtained from a generally recognized source or the most
          recent closing offer quotation from such a source, whereupon the
          defaulting party shall be liable for the price of such Replacement
          Securities together with the amount of any cash Forward Collateral not
          delivered by the defaulting party to the nondefaulting party as
          required hereunder.

Unless otherwise provided in Annex I, the parties acknowledge and agree that (1)
the Forward Collateral subject to any Forward transaction hereunder are
instruments traded in a recognized market, (2) in the absence of a generally
recognized source for prices or bid quotations for any Forward Collateral, the
non-defaulting party may establish the source therefor in its sole discretion
and (3) all prices and bids shall be determined together with accrued Income
(except to the extent contrary to market practice with respect to the relevant
Forward Collateral).

5.   No Waivers, Etc. Without limitation of the provisions of Paragraph 17 of
     the Agreement, the failure to give a notice pursuant to subparagraph (a),
     (b), (c) or (d) of Paragraph 2 of this Annex V will not constitute a waiver
     of any right to do so at a later date.

<PAGE>
                                      Annex VI

                             Buy/Sell Back Transactions

This Annex VI forms a part of the Master Repurchase Agreement dated as of March
31, 1999, 19__ (the "Agreement") between Bear Stearns International Ltd. and LNR
CMBS Holdings Corporation. Capitalized terms used but not defined in this Annex
Vl shall have the meaning ascribed to them in the Agreement.

1.   In the event of any conflict between the terms of this Annex Vl and any
     other term of the Agreement, the terms of this Annex Vl shall prevail.

2.   Each Transaction shall be identified at the time it is entered into and in
     the relevant Confirmation as either a Repurchase Transaction or a Buy/Sell
     Back Transaction.

3.   In the case of a buy/Sell Back Transaction, the Confirmation delivered in
     accordance with Paragraph 3 of the Agreement may consist of a single
     document in respect of both of the transfers of funds against Securities
     which together form the Buy/Sell Back Transaction or separate Confirmations
     may be delivered in respect of each such transfer.

4.   Definitions. The following definitions shall apply to Buy/Sell Back
     Transactions:

(a)  "Accrued Interest", with respect to any Purchased Securities subject to a
     Buy/Sell Back Transaction, unpaid Income that has accrued during the period
     from (and including) the issue date or the last Income payment date
     (whichever is later) in respect of such Purchased Securities to (but
     excluding) the date of calculation. For these purposes unpaid Income shall
     be deemed to accrue on a daily basis from (and including) the issue date or
     the last Income payment date (as the case may be) to (but excluding) the
     next Income payment date or the maturity date (whichever is earlier);

(b)  "Sell Back Differential", with respect to any buy/Sell Back Transaction as
     of any date, the aggregate amount obtained by daily application of the
     Pricing Rate for such Buy/Sell Back Transaction to the Purchase Price for
     such Buy/Sell Back Transaction on a 360 day per year basis (unless
     otherwise agreed by the parties for the Transaction) for the actual number
     of days during the period commencing on (and including) the Purchase Date
     for such Buy/Sell Back Transaction and ending on (but excluding) the date
     of determination;

(c)  "Sell Back Price", with respect to any Buy/Sell Back Transaction:

     (i) in relation to the date originally specified by the parties as the
     Repurchase Date pursuant to Paragraph 2(q) of the Agreement, the price
     agreed by the Parties in relation to such Buy/Sell Back Transaction, and

     (ii) in any other case (including for the purposes of the application of
     Paragraph 4 or Paragraph 11 of the Agreement), the product of the formula
     (P + D) - (IR + C), where -

     P = the Purchase Price

     D = the Sell Back Differential

     IR = the amount of any Income in respect of the Purchased Securities paid
     by the issuer on any date falling between the Purchase Date and the
     Repurchase Date

     C = the aggregate amount obtained by daily application of the Pricing Rate
     for such buy/Sell Back Transaction to any such Income from (and including)
     the date of payment by the issuer to (but excluding) the date of
     calculation.

5.   When entering into a buy/Sell Back Transaction the parties shall also agree
     on the Sell Back Price and the Pricing Rate to apply in relation to such
     Buy/Sell Back Transaction on the scheduled Repurchase Date. The parties
     shall record the Pricing Rate in a least one Confirmation applicable to
     such Buy/Sell Back Transaction.

6.   Termination of a Buy/Sell Back Transaction shall be effected on the
     Repurchase Date by transfer to Seller or its agent of Purchased Securities
     against the payment by Seller of (i) in a case where the Repurchase Date is
     the date originally agreed to by the parties pursuant to Paragraph 2(q) of
     the Agreement, the Sell Back Price referred to in Paragraph 4(c)(ii) of
     this Annex; and (ii) in any other case, the Sell Back Price referred to in
     Paragraph 4(c)(ii) of this Annex.

7.   For the avoidance of doubt, the parties acknowledge and agree that the
     Purchase Price and the Sell Back

<PAGE>

Price in Buy/Sell Back Transactions shall include Accrued Interest (except to
the extent contrary to market practice with respect to the Securities subject to
such Buy/Sell Back Transaction, in which event (i) an amount equal to the
Purchase Price plus Accrued Interest to the Purchase Date shall be paid to
Seller on the Purchase Date and shall be used, in lieu of the Purchase Price,
for calculating the Sell Back Differential, (ii) an amount equal to the Sell
Back Price plus the amount of Accrued Interest to the Repurchase Date shall be
paid to Buyer on the Repurchase Date, and (iii) the formula in Paragraph
4(c)(ii) of this Annex Vl shall be replaced by the formula "(P + Al + D) - (IR +
C)", where "AI" equals Accrued Interest to the Purchase Date).

8.   Unless the parties agree in Annex I to the Agreement that a Buy/Sell Back
     Transaction is not to be re-priced, they shall at the time of re-pricing
     agree on the Purchase Price, the Sell Back Price and the Pricing Rate
     applicable to such Transaction.

9.   Paragraph 5 of the Agreement shall not apply to Buy/Sell Back Transaction.
     Seller agrees, on the date such Income is received, to pay to Buyer any
     Income received by Seller in respect of Purchased Securities that is paid
     by the issuer on any date falling between the Purchased Date and the
     Repurchase Date.

10.  References to "Repurchase Price" throughout the Agreement shall be
     construed as references to "Repurchase Price or the Sell Back Price, as the
     case may be".

11.  In Paragraph 11 of the Agreement, references to the "Repurchase Prices"
     shall be construed as references to "repurchase Prices and Sell Back
     Prices."

<PAGE>

                                    Annex VII

             Transactions Involving Registered Investment Companies

This Annex VII (including any Schedules hereto) forms a part of the Master
Repurchase Agreement dated as of March 31, 1999, 19__ (the "Agreement") between
LNR CMBS Holdings Corp ("Counterparty") and each investment company identified
on Schedule Vll.A hereto (as such schedule may be amended from time to time)
acting on behalf of its respective series or portfolios identified on such
Schedule VII>A, or in the case of those investment companies for which no
separate series or portfolios are identified on such Schedule VII.A, or in the
case of those investment companies for which no separate series or portfolios
are identified on such Schedule VII.A, acting for and on behalf of itself (each
such series, portfolio or investment company, as the case may be, hereinafter
referred to as a "Fund"). In the event of any conflict between the terms of this
Annex VII and any other term of the Agreement, the terms of this Annex VII shall
prevail. Capitalized terms used but not defined in this Annex VII shall have the
meanings ascribed to them in the Agreement.

1.   Multiple Funds. For any Transaction in which a fund is acting as Buyer (or
     Seller, as the case may be), each reference in the Agreement and this Annex
     Vll to Buyer (or Seller, as the case may be) shall be deemed a reference
     solely to the particular Fund to which such Transaction relates, as
     identified to Seller (or Buyer, as the case may be) by the Fund and as may
     be specified in the Confirmation therefor. In no circumstances shall the
     rights, obligations, or remedies of either party with respect to a
     particular Fund constitute a right, obligation or remedy applicable to any
     other Fund. Specifically, and without otherwise limiting the scope of this
     Paragraph: (a) the margin maintenance obligations of Buyer and Seller
     specified in Paragraph 4 or any other provisions of the Agreement and the
     single agreement provisions of Paragraph 12 of the Agreement shall be
     applied based solely upon Transactions entered into by a particular Fund,
     (b) Buyer's and Seller's remedies under the Agreement upon the occurrence
     of an Event of Default shall be determined as if each Fund had entered into
     a separate Agreement with Counterparty, and (c) Seller and buyer shall have
     no right to set off claims related to Transactions entered into by a
     particular Fund against claims related to Transactions entered into by any
     other Fund.

2.   Margin Percentage. For any Transaction in which a Fund is acting as buyer,
     the buyer's Margin Percentage shall always be equal to at least ___%, or
     such other percentage as the parties hereto may from time to time mutually
     determine: provided, that in no event shall such percentage be less than
     100%. For any Transaction in which a Fund is acting as Seller, the Buyer's
     Margin Percentage shall be such percentage as the parties hereto may from
     time to time mutually determine; provided, that in no event shall such
     percentage be less than 100%.

3.   Confirmations. Unless otherwise agreed, Counterparty shall promptly issue a
     Confirmation to the Fund pursuant to Paragraph 3 of the Agreement. Upon the
     transfer of substituted or Additional Purchased Securities by either party,
     Counterparty shall promptly provide notice to the Fund confirming such
     transfer.

4.   Financial condition. Each party represents that is has delivered the
     following financial information to the other party to the Agreement: in the
     case of a party that is a registered broker-dealer, its most recent
     statements required to be furnished to customers by Rule 17a-5(c) under the
     1934 Act; in the case of a party that is a Fund, its most recent audited or
     unaudited financial statements required to be furnished to its shareholders
     by Rule 30d-1 under the Investment Company Act of 1940; in the case of any
     other party, its most recent audited or unaudited statements of financili
     condition or other comparable information concerning its financial
     condition.

     Each party represents that the financial statements or information so
     delivered fairly reflect its financial condition and, if applicable, its
     net capital ratio, on the date as of which such financial statements or
     information were prepared. Each party agrees that it will make available
     and deliver to the other party, promptly upon request, all such financial
     statements that subsequently are required to be delivered to its customers
     or shareholders pursuant to Rule 17-a-5(c) or Rule 30d-1, as the case may
     be, or, m in the case of a party that is neither a registered broker-dealer
     nor a Fund, all such financial information that subsequently becomes
     available to the public.

     Each Fund acknowledges and agrees that it has made an independent
     evaluation of the creditworthiness of the other party that is required
     pursuant to the Investment Company Act of 1940 or the regulations
     thereunder. Each fund agrees that its agreement to enter into each
     transaction hereunder shall constitute an acknowledgement and agreement
     that it has made such an evaluation.

<PAGE>

5.   Segregation of Purchased Securities. Unless otherwise agreed by the
     parties, any transfer of Purchased Securities to a Fund shall be effected
     by delivery or other transfer (in the manner agreed upon pursuant to
     Paragraph 7 of the Agreement) to the custodian or subcustodian designated
     for such Fund in Schedule VII.A hereto ("Custodian") for credit to the
     Fund's custodial account with such Custodian. If the party effecting such
     transfer is the Fund's Custodian, such party shall, unless otherwise
     directed by the Fund, (a) transfer and maintain such Purchased Securities
     to and in the Fund's custodial account with such party and (b) so indicate
     in a notice to the Fund.

<PAGE>

                                 Schedule VII.A

                Supplemental Terms and Conditions of Transactions

                    Involving Registered Investment Companies

This Schedule VII.A forms a part of Annex VII to the Master Repurchase Agreement
dated as of March 31, 1999, 19__ (the "Agreement") between Bear Stearns
International and LNR CMBS Holdings Corporation. Capitalized terms used but not
defined in this Schedule VII.A shall have the meanings ascribed to them in Annex
VII.

1. This Agreement is entered into by or on behalf of the following Fund, and
unless otherwise indicated by the appropriate Fund in connection with a
Transaction, the following Custodians are designated to receive transfers of
Purchased Securities on behalf of such Funds for credit to the appropriate
Fund's custodial account:

Name of Fund                                            Custodian
------------                                            ---------

[ ]. Limitation of Liability. If the Fund is organized as a business trust (or
a series thereof), the parties agree as follows: [insert appropriate language
limiting liability or trustees, officers and others]Exhibit (10)(a)

                        PAK MAIL CENTERS OF AMERICA, INC.

                               FRANCHISE AGREEMENT

                                       Franchisee:
                                                  -----------------------------
                                       Date:
                                                  -----------------------------
                                       Franchised Location:
                                                           --------------------

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

<PAGE>

                        PAK MAIL CENTERS OF AMERICA, INC.
                               FRANCHISE AGREEMENT
                                TABLE OF CONTENTS

1.       PURPOSE...............................................................1

2.       GRANT OF FRANCHISE....................................................1
         2.1.     Grant of Franchise...........................................1
         2.2.     Scope of Franchise Operation.................................1

3.       FRANCHISED LOCATION AND TERRITORIAL RIGHTS............................2
         3.1.     Franchised Location..........................................2
         3.2.     Protected Territory..........................................2
         3.3.     Limitation on Franchise Rights...............................2
         3.4.     A.M. P.M. MOVERS Program.....................................2
         3.5.     Franchisor's Reservation of Rights...........................2

4.       INITIAL FRANCHISE FEE.................................................3
         4.1.     Initial Franchise Fee........................................3

5.       DEVELOPMENT OF FRANCHISED LOCATION....................................3
         5.1.     Approval of Franchised Location..............................3
         5.2.     Approval of Lease............................................3
         5.3.     Conversion and Design........................................4
         5.4.     Signs........................................................4
         5.5.     Equipment....................................................4
         5.6.     Permits and Licenses.........................................4
         5.7.     Commencement of Operations...................................6

6.       TRAINING..............................................................6
         6.1.     Initial Training Program.....................................6
         6.2.     Length of Training...........................................6
         6.3.     Additional Training..........................................6

7.       DEVELOPMENT ASSISTANCE................................................8
         7.1.     Franchisor's Development Assistance..........................8

8.       OPERATIONS MANUAL.....................................................9
         8.1.     Operations Manual............................................9
         8.2.     Confidentiality of Operations Manual Contents................9
         8.3.     Changes to Operations Manual.................................9

9.       OPERATING ASSISTANCE..................................................9
         9.1.     Franchisor's Services........................................9
         9.2.     Additional Franchisor Services..............................10

10.      FRANCHISEE'S OPERATIONAL COVENANTS...................................10
         10.1.    Business Operations.........................................10

11.      ROYALTIES............................................................12
         11.1.    Monthly Royalty.............................................12
         11.2.    Royalty Based Revenues......................................12
         11.3.    Royalty Payments............................................12
         11.4.    Application of Payments.....................................13

<PAGE>

12.      ADVERTISING..........................................................13
         12.1.    Approval of Advertising.....................................13
         12.2.    Marketing Material Beginning Inventory......................14
         12.3.    Advertising Contribution....................................15
         12.4.    Regional Advertising Programs...............................16

13.      QUALITY CONTROL......................................................16
         13.1.    Compliance with Operations Manual...........................16
         13.2.    Standards and Specifications................................18
         13.3.    Inspections.................................................18
         13.4.    Restrictions on Services and Products.......................18
         13.5.    Approved Suppliers..........................................18
         13.6.    Request to Approve Supplier.................................18
         13.7.    Shopping Service............................................19

14.      MARKS, TRADE NAMES AND PROPRIETARY INTERESTS.........................19
         14.1.    Marks.......................................................19
         14.2.    No Use of Other Marks.......................................19
         14.3.    System......................................................19
         14.4.    Mark Infringement...........................................20
         14.5.    Franchisee's Business Name..................................20
         14.6.    Change of Marks.............................................20

15.      REPORTS, RECORDS AND FINANCIAL STATEMENTS............................20
         15.1.    Franchisee Reports..........................................20
         15.2.    Verification................................................21
         15.3.    Books and Records...........................................21
         15.4.    Audit of Books and Records..................................21

16.      TRANSFER.............................................................22
         16.1.    Transfer by Franchisee......................................22
         16.2.    Pre-Conditions to Franchisee's Transfer.....................22
         16.3.    Franchisor's Approval of Transfer...........................23
         16.4.    Right of First Refusal......................................23
         16.5.    Specific Types of Transfers.................................24
         16.6.    Assignment by the Franchisor................................24
         16.7.    Franchisee's Death or Disability............................24

17.      TERM AND EXPIRATION..................................................26
         17.1.    Term........................................................26
         17.2.    Continuation................................................26
         17.3.    Rights Upon Expiration......................................26
         17.4.    Exercise of Option for Successor Franchise..................26
         17.5.    Conditions of Refusal.......................................27

18.      DEFAULT AND TERMINATION..............................................27
         18.1.    Termination by Franchisee...................................27
         18.2.    Termination by Franchisor - Effective Upon Notice...........27
         18.3.    Termination by Franchisor - Thirty Days Notice..............28
         18.4.    Right to Purchase...........................................29
         18.5.    Obligations of Franchisee Upon Termination or Expiration....30
         18.6.    Acknowledgement.............................................31
         18.7.    State and Federal Law.......................................31

<PAGE>

19.      BUSINESS RELATIONSHIP................................................31
         19.1.    Independent Businesspersons.................................31
         19.2.    Payment of Third Party Obligations..........................32
         19.3.    Indemnification.............................................32

20.      RESTRICTIVE COVENANTS................................................32
         20.1.    Non-Competition During Term.................................32
         20.2.    Post-Termination Covenant Not to Compete....................33
         20.3.    Confidentiality of Proprietary Information..................33
         20.4.    Confidentiality Agreement...................................33

21.      INSURANCE............................................................34
         21.1.    Insurance Coverage..........................................34
         21.2.    Proof of Insurance Coverage.................................34

22.      MISCELLANEOUS PROVISIONS.............................................34
         22.1.    Governing Law/Consent to Venue and Jurisdiction.............34
         22.2.    Modification................................................34
         22.3.    Entire Agreement............................................35
         22.4.    Delegation by the Franchisor................................35
         22.5.    Effective Date..............................................35
         22.6.    Review of Agreement.........................................35
         22.7.    Attorneys' Fees.............................................35
         22.8.    Injunctive Relief...........................................36
         22.9.    Payment of Taxes............................................36
         22.10.   No Waiver...................................................36
         22.11.   No Right to Set Off.........................................36
         22.12.   Invalidity..................................................36
         22.13.   Notices.....................................................36
         22.14.   Acknowledgement.............................................36

                                    EXHIBITS
                                    --------
I.                Addendum to Franchise Agreement - Location Approval

II.               Guaranty and Assumption of Franchisee's Obligations

III.              Statement of Ownership

IV.               Authorization Agreement for Prearranged Payments

V.                Build-Out Program Addendum

VI.               Amendment to Franchise Agreement - Renewal

<PAGE>

                        PAK MAIL CENTERS OF AMERICA, INC.
                               FRANCHISE AGREEMENT

     THIS AGREEMENT (the "Agreement") is made this ____ day of ________, 20___,
by and between PAK MAIL CENTERS OF AMERICA, INC., a Colorado corporation,
located at 7173 South Havana Street, Suite 600, Englewood, Colorado 80112 (the
"Franchisor") and ______________________________________________________________
___________________________________________________, located at
________________________ _______________________________________________________
(the "Franchisee"), who, on the basis of the following understandings and
agreements, agree as follows:

                                   1. PURPOSE

1.1. The Franchisor has developed methods for establishing, operating and
promoting stores offering a variety of packaging, shipping, crating, freight
forwarding, mailing, communications and information services ("PAK MAIL Centers"
or "Centers") which use the service mark "PAK MAIL" and related trade names and
trademarks ("Marks") and the Franchisor's proprietary methods of doing business
("System").

1.2. The Franchisor grants the right to others to develop and operate a PAK MAIL
Center, under the Marks and pursuant to the System.

1.3. The Franchisee desires to establish a PAK MAIL Center at a location
identified herein or to be later identified, and the Franchisor desires to grant
the Franchisee the right to operate a PAK MAIL Center at such location under the
terms and conditions which are contained in this Agreement.

                             2. GRANT OF FRANCHISE

2.1. Grant of Franchise.
     -------------------

     The Franchisor grants to the Franchisee, and the Franchisee accepts from
the Franchisor, the right to use the Marks and System in connection with the
establishment and operation of a PAK MAIL Center, at the location described in
Article 3 of this Agreement. The Franchisee agrees to use the Marks and System,
as they may be changed, improved, and further developed by the Franchisor from
time to time, only in accordance with the terms and conditions of this
Agreement.

2.2. Scope of Franchise Operation.
     -----------------------------

     The Franchisee agrees at all times to faithfully, honestly and diligently
perform the Franchisee's obligations hereunder, and to continuously use best
efforts to promote the PAK MAIL Center. The Franchisee agrees to utilize the
Marks and System to operate all aspects of the business franchised hereunder in
accordance with the methods and systems developed and prescribed from time to
time by the Franchisor, all of which are a part of the System. The Franchisee's
PAK MAIL Center shall offer all products and services as the Franchisor shall
designate and shall be restricted from offering or selling any products and
services not previously approved by the Franchisor in writing.

<PAGE>

                  3. FRANCHISED LOCATION AND TERRITORIAL RIGHTS

3.1. Franchised Location.
     --------------------

     The Franchisee is granted the right and franchise to own and operate a PAK
MAIL Center at the address and location which shall be set forth in Exhibit I,
attached hereto ("Franchised Location"). If, at the time of execution of this
Agreement, the Franchised Location cannot be designated as a specific address
because a location has not been selected and approved, then the Franchisee shall
promptly take steps to choose and acquire a location for its PAK MAIL Center
within the Designated Area, set forth in Exhibit I. In such circumstances, the
Franchisee shall, within 90 days after the execution of this Agreement, select
and propose to the Franchisor for the Franchisor's prior approval a specific
location for the Franchised Location which, once approved by the Franchisor,
shall hereinafter be set forth in the rider to Exhibit I.

3.2. Protected Territory.
     --------------------

     So long as the Franchisee is in compliance with this Agreement, the
Franchisor shall not establish or license another person or entity to establish
a PAK MAIL Center within a certain geographic area as set forth in Exhibit I
("Protected Territory").

3.3. Limitation on Franchise Rights.
     -------------------------------

     The  rights  that  are  granted  to the  Franchisee  are for  the  specific
Franchised  Loc ation and Protected  Territory and cannot be  transferred  to an
alternative  Franchised Location or Protected Territory,  or any other location,
without the prior written  approval of the Franchisor,  which approval shall not
be  unreasonably  withheld.  The Franchisee  shall not operate another Center or
offer  services  which  are  part of the  System  at any  site  other  than  the
Franchised  Location  without the  Franchisor's  prior written  approval,  which
approval can be withheld for any reason, in the Franchisor's sole discretion.

3.4. A.M. P.M. MOVERS Program
     ------------------------

     The Franchisor may offer the Franchisee the opportunity to participate in
the "A.M. P.M. MOVERS Program," whereby local moving services for individuals
and small business customers are either provided by the Franchisee or arranged
by the Franchisee with a third party using the A.M. P.M. MOVERS Mark. The
Franchisee may not participate in the A.M. P.M. MOVERS Program without the
Franchisor's prior written permission, which will be given when the Franchisor
and the Franchisee sign the Franchisor's then current A.M. P.M. MOVERS Program
Amendment to this Agreement.

3.5. Franchisor's Reservation of Rights.
     -----------------------------------

     The Franchisee acknowledges that its franchise rights as granted are
non-exclusive and that the Franchisor retains the rights, among others: (1) to
use, and to license others to use, the Marks and System in connection with the
operation of a PAK MAIL Center, at any location other than in the Protected
Territory; (2) to use the Marks to identify services and products other than
those which the Franchisee sells, to identify promotional and marketing efforts
and related items, and to identify services and products similar to those which
the Franchisee sells, made available through alternative channels of
distribution, at any location; and (3) to use and license the use of other
proprietary marks or methods in connection with the sale of products and
services similar to those which the Franchisee will sell, whether in alternative

                                       2

<PAGE>

channels of distribution or in connection with the operation of packaging and
mailing businesses at any location, which businesses are the same as, or similar
to, or different from PAK MAIL Centers, on any terms and conditions as the
Franchisor deems advisable.

                            4. INITIAL FRANCHISE FEE

4.1. Initial Franchise Fee.
     ----------------------

     In consideration for the right to develop and operate one PAK MAIL Center,
the Franchisee agrees to pay to the Franchisor an initial franchise fee of
$27,950 as of the date of execution of this Agreement. The Franchisee
acknowledges and agrees that the initial franchise fee represents payment for
the initial grant of the rights to use the Marks and System, that the Franchisor
has earned the initial franchise fee upon receipt thereof and that the fee is
under no circumstances refundable to the Franchisee after it is paid, unless
otherwise specifically set forth in this Agreement.

                     5. DEVELOPMENT OF FRANCHISED LOCATION

5.1. Approval of Franchised Location.
     --------------------------------

     The Franchisee shall follow the Franchisor's site selection procedures in
locating a Franchised Location for the PAK MAIL Center. The Franchisee shall
seek the Franchisor's approval of any site proposed as a Franchised Location, by
submitting a complete site submittal package, including demographics and other
materials requested by the Franchisor, containing all information reasonably
required by the Franchisor to assess a proposed Franchised Location. The
Franchisor will not unreasonably withhold approval of a proposed site that meets
all of the Franchisor's site selection criteria.

5.2. Approval of Lease.
     ------------------

     The Franchisee shall obtain the Franchisor's prior written approval before
executing any lease or purchase agreement for the Franchised Location. Any lease
for the Franchised Location shall, at the option of the Franchisor, contain a
provision: (1) allowing for assignment of the lease to the Franchisor in the
event that this Agreement is terminated or not renewed for any reason; (2)
giving the Franchisor the right to cure any default by the Franchisee under such
lease; and (3) providing the Franchisor with the right, exercisable upon and as
a condition of the approval of the Franchised Location, to execute the lease
agreement or other document providing entitlement to the use of the Franchised
Location in its own name or jointly with the Franchisee as lessee and, upon the
exercise of such option, the Franchisor shall provide the Franchisee with the
right to use the premises as its sublessee, assignee, or other similar capacity
upon the same terms and conditions as obtained by the Franchisor. The lease
shall be collaterally assigned to the Franchisor as security for the
Franchisee's timely performance of all obligations under this Agreement; the
Franchisee shall obtain the lessor's consent to such collateral assignment. The
Franchisee shall deliver a copy of the signed lease for the Franchised Location
to the Franchisor within 15 days of its execution. The Franchisee acknowledges
that approval of a lease for the Franchised Location by the Franchisor does not
constitute a recommendation, endorsement or guarantee by the Franchisor of the
suitability or profitability of the location or the lease and the Franchisee
should take all steps necessary to ascertain whether such location and lease are
acceptable to the Franchisee.

                                       3

<PAGE>

5.3. Conversion and Design.
     ----------------------

     The Franchisee acknowledges that the layout, design, decoration and color
scheme of PAK MAIL Centers are an integral part of the Franchisor's proprietary
System and accordingly, the Franchisee shall convert, design and decorate the
Franchised Location in accordance with the Franchisor's plans and specifications
and with the assistance of contractors and suppliers designated by or otherwise
approved by the Franchisor. The Franchisee shall obtain the Franchisor's written
consent to any conversion, design or decoration of the premises before
remodeling or decorating begins, recognizing that any related costs are the
Franchisee's sole responsibility. It shall be the Franchisee's responsibility to
have prepared all required construction plans and specifications to suit the
shape and dimensions of the Franchised Location and to insure compliance with
applicable laws and the lease.

5.4. Signs.
     ------

     The Franchisee shall purchase or otherwise obtain for use at the Franchised
Location and in connection with the PAK MAIL Center signs which comply with the
standards and specifications of the Franchisor as set forth in the Operations
Manual, as that term is defined in Section 8.1. It is the Franchisee's sole
responsibility to insure that any signs comply with applicable local ordinances,
mall regulations, building codes and zoning regulations. Any modifications to
the Franchisor's standards and specifications for signs which must be made due
to local ordinances, codes or regulations shall be submitted to the Franchisor
for prior written approval. The Franchisee acknowledges the Marks, or any other
name, symbol or identifying marks on any signs shall only be used in accordance
with the Franchisor's standards and specifications and only with the prior
written approval of the Franchisor.

5.5. Equipment.
     ----------

     The Franchisee shall purchase or otherwise obtain for use at the Franchised
Location equipment of a type and in an amount which complies with the standards
and specifications of the Franchisor. The Franchisee acknowledges that the type,
quality, configuration, capability and/or performance of the equipment are all
standards and specifications which are a part of the System and therefore such
equipment must be purchased, leased, or otherwise obtained in accordance with
the Franchisor's standards and specifications and only from sources approved by
the Franchisor. The Franchisee shall equip the Center with computerized
point-of-sale systems ("POS System"), computer hardware and software, copiers,
printers, facsimile machines and other designated equipment as are consistent
with the standards and specifications of the Franchisor. The Franchisee shall
also obtain and maintain an account with an internet service provider which
meets the Franchisor's standards and specifications.

5.6. Permits and Licenses.
     ---------------------

     The Franchisee agrees to obtain all such permits and certifications as may
be required for the lawful construction and operation of the PAK MAIL Center
together with all certifications from government authorities having jurisdiction
over the site that all requirements for construction and operation have been
met, including without limitation, zoning, access, sign, health, safety
requirements, building and other required construction permits, licenses to do
business and fictitious name registrations, sales tax permits, health and
sanitation permits and ratings and fire clearances. The Franchisee agrees to
obtain all customary contractors' sworn statements and partial and final lien
waivers for construction, remodeling, decorating and installation of equipment

                                       4

<PAGE>

at the Franchised Location. Copies of all subsequent inspection reports,
warnings, certificates and ratings issued by any governmental entity during the
term of this Agreement in connection with the conduct of the PAK MAIL Center
which indicates the Franchisee's failure to meet or maintain the highest
governmental standards, or less than full compliance by the Franchisee with any
applicable law, rule or regulation, shall be forwarded to the Franchisor within
five days of the Franchisee's receipt thereof.

                                       5

<PAGE>

5.7. Commencement of Operations.
     ---------------------------

     Unless otherwise agreed to in writing by the Franchisor and the Franchisee,
the Franchisee has 180 days from the date of this Agreement within which to: (1)
secure all necessary financing for the Center; (2) complete the initial training
program described in Section 6.1 of this Agreement; (3) select, lease and
develop the Franchised Location; (4) purchase an opening inventory of materials
and supplies; (5) obtain and provide evidence of insurance as described in
Section 21.1 below; and (6) commence operation of the PAK MAIL Center. The
Franchisor will extend the time in which the Franchisee has to commence
operations for a reasonable period of time in the event factors beyond the
Franchisee's reasonable control prevent the Franchisee from meeting this
development schedule, so long as the Franchisee has made reasonable and
continuing efforts to comply with such development obligations and the
Franchisee requests, in writing, an extension of time in which to have its PAK
MAIL Center established before such development period lapses. The Franchisee
shall obtain the Franchisor's approval prior to opening the Center for business.

                                  6. TRAINING

6.1. Initial Training Program.
     -------------------------

     The Franchisee or, if the Franchisee is not an individual, the person
designated by the Franchisee to assume primary responsibility for the management
of the PAK MAIL Center ("Principal Operator"), is required to attend and
successfully complete the initial training program which is offered by the
Franchisor at one of the Franchisor's designated training facilities. Up to two
individuals are eligible to participate in the Franchisor's initial training
program without charge of a tuition or fee. The Franchisee shall be responsible
for any and all traveling and living expenses incurred in connection with
attendance at the training program. At least one individual must successfully
complete the initial training program prior to the Franchisee's commencement of
operation of its PAK MAIL Center.

6.2. Length of Training.
     -------------------

     The initial training program shall consist of a total of 12 days, nine of
which shall be classroom instruction at a location designated by the Franchisor
and three of which shall be on-site at the Franchised Location at or around the
time the Center opens for business. The Franchisee, and if applicable, the
Principal Operator, shall attend the on-site training at the Franchised
Location. The Franchisor reserves the right to waive a portion of the training
program or alter the training schedule, if in the Franchisor's sole discretion,
the Franchisee or Principal Operator has sufficient prior experience or
training.

6.3. Additional Training.
     --------------------

     From time to time, the Franchisor may present seminars, conventions or
continuing development programs or conduct meetings for the benefit of the
Franchisee. The Franchisee or its Principal Operator shall be required to attend
any ongoing mandatory seminars, conventions, programs or meetings as may be
offered by the Franchisor. The Franchisor shall give the Franchisee at least 30
days prior written notice of any ongoing seminar, convention or program which is
deemed mandatory. The Franchisor shall not require that the Franchisee attend
any ongoing training more often than once a year. All mandatory training will be
offered without charge of a tuition or fee; provided, however, the Franchisee
will be responsible for all traveling and living expenses which are associated
with attendance at the same.

                                       6

<PAGE>

                                       7

<PAGE>

                            7. DEVELOPMENT ASSISTANCE

7.1. Franchisor's Development Assistance.
     ------------------------------------

     The Franchisor shall provide the Franchisee with assistance in the initial
establishment of the PAK MAIL Center as follows:

          a. Provision of the initial training program to be conducted at the
     Franchisor's designated training facilities or at another location
     designated by the Franchisor, as described in Article 6 above.

          b. Provision of written specifications for a Franchised Location which
     shall include, without limitation, specifications for space requirements,
     build out and the demographics and character of the surrounding market
     area. In addition, if this Agreement governs the Franchisee's first PAK
     MAIL Center, the Franchisor shall send one representative to the proposed
     Franchised Location for up to one day to evaluate and, if possible, approve
     a site for the Franchised Location. The Franchisee acknowledges that the
     Franchisor shall have no other obligation to provide assistance in the
     selection and approval of a Franchised Location other than the provision of
     such written specifications and approval or disapproval of a proposed
     Franchised Location, which approval or disapproval shall be based on
     information submitted to the Franchisor in a form sufficient to assess the
     proposed location as may be reasonably required by the Franchisor.

          c. Directives regarding the required conversion, design and decoration
     of the PAK MAIL Center premises, plus specifications concerning signs,
     decor, color, equipment, machines, uniforms and equipment.

          d. Information regarding the selection of suppliers of equipment,
     items and materials used and inventory and services offered for sale in
     connection with the PAK MAIL Center. After execution of this Agreement, the
     Franchisor will provide the Franchisee with a list of approved suppliers,
     if any, of such equipment, items, materials, inventory and services and, if
     available, a description of any national or central purchase and supply
     agreements offered by such approved suppliers for the benefit of PAK MAIL
     franchisees.

          e. Provision of an operations manual in accordance with Section 8.1
     below.

          f. The Franchisor will make available to the Franchisee at or around
     the commencement of operations of the Franchisee's PAK MAIL Center a
     representative to be present for three days during the initial operation of
     the Franchisee's PAK MAIL Center. The representative will assist the
     Franchisee's employees in the initial operation of the Center at a time
     scheduled by the Franchisor, unless in the Franchisor's determination, the
     Franchisee or the Principal Operator have had sufficient prior training or
     experience.

          g. The Franchisor will grant the Franchisee a nonexclusive,
     nontransferable license to use certain proprietary computer programs and
     related materials developed for use in the operation of PAK MAIL Centers
     ("Program") in accordance with the terms of the Franchisor's then current
     standard Software License Agreement ("Software License Agreement"). The
     Franchisee will use the Program in accordance with the terms of the
     Software License Agreement, including using computer equipment on which the
     Program has been installed and other computer equipment designated by the
     Franchisor as meeting its specifications.

                                       8

<PAGE>

                              8. OPERATIONS MANUAL

8.1. Operations Manual.
     ------------------

     The Franchisor agrees to provide to the Franchisee one or more manuals,
technical bulletins, or other written materials (collectively referred to as
"Operations Manual") covering certain standards and specifications for
packaging, shipping, crating, freight forwarding, mailing, communications and
information products and services and other operating and marketing techniques
for the PAK MAIL Center. The Franchisee agrees that it shall comply with the
Operations Manual as an essential aspect of its obligations under this Agreement
and failure by the Franchisee to substantially comply with the Operations Manual
may be considered by the Franchisor to be a breach of this Agreement.

8.2. Confidentiality of Operations Manual Contents.
     ----------------------------------------------

     The Franchisee agrees to use the Marks and System only as specified in the
Operations Manual. The Operations Manual is the sole property of the Franchisor
and shall be used by the Franchisee only during the term of this Agreement and
in strict accordance with the terms and conditions hereof. The Franchisee shall
not duplicate the Operations Manual nor disclose its contents to persons other
than its employees or officers who have signed a confidentiality and
noncompetition agreement in a form approved by the Franchisor. The Franchisee
shall return the Operations Manual to the Franchisor upon the expiration,
termination or assignment of this Agreement.

8.3. Changes to Operations Manual.
     -----------------------------

     The Franchisor reserves the right to revise the Operations Manual from time
to time as it deems necessary to update or change operating and marketing
techniques or standards and specifications. The Franchisee, upon receipt of any
updated information, shall update its copy of the Operations Manual as
instructed by the Franchisor and shall conform its operations with the updated
provisions within a reasonable time thereafter. The Franchisee acknowledges that
a master copy of the Operations Manual maintained by the Franchisor at its
principal office shall be controlling in the event of a dispute relative to the
content of any Operations Manual.

                            9. OPERATING ASSISTANCE

9.1. Franchisor's Services.
     ----------------------

     The Franchisor agrees that, during the Franchisee's operation of the PAK
MAIL Center, the Franchisor shall make available to the Franchisee the following
services:

          a. Upon the reasonable request of the Franchisee, consultation by
     telephone, facsimile or electronic mail, regarding the continued operation
     and management of a PAK MAIL Center and advice regarding the packaging and
     shipping services, quality control, inventory issues, customer and supplier
     relations issues and similar advice.

                                       9

<PAGE>

          b. Access to advertising and promotional materials as may be developed
     by the Franchisor, the cost of which may be passed on to the Franchisee, at
     the Franchisor's option.

          c. On-going updates of information and programs regarding the
     packaging and shipping industry, the competition, the PAK MAIL concept and
     the System, including, without limitation, information about special or new
     products which may be developed and made available to PAK MAIL franchisees
     as a part of the System.

          d. On-going maintenance, updates and technical support for the
     Program, as set forth in the Software License Agreement and technical
     support for the hardware components of the POS System purchased from the
     Franchisor, except to the extent that such components are covered by
     manufacturer's warranties. The Franchisor reserves the right to charge an
     annual maintenance fee for maintenance and update services, as set forth in
     the Software License Agreement.

          e. The Franchisor shall make the initial training program available to
     replacement or additional Principal Operators during the term of this
     Agreement. The Franchisee shall be responsible for all travel and living
     expenses incurred by its personnel during the training program. The
     availability of the training programs shall be subject to space
     considerations and prior commitments to new PAK MAIL franchisees.

9.2. Additional Franchisor Services.
     -------------------------------

     Although not obligated to do so, the Franchisor may make its employees or
designated agents available to the Franchisee for on-site advice and assistance
in connection with the on-going operation of the PAK MAIL Center governed by
this Agreement.

                     10. FRANCHISEE'S OPERATIONAL COVENANTS

10.1. Business Operations.
      --------------------

      The Franchisee acknowledges that it is solely responsible for the
successful operation of its PAK MAIL Center and that the continued successful
operation thereof is, in part, dependent upon the Franchisee's compliance with
this Agreement and the Operations Manual. In addition to all other obligations
contained in this Agreement and in the Operations Manual, the Franchisee
covenants that:

            a. The Franchisee shall maintain clean, efficient and high quality
      PAK MAIL Center operations and shall operate the business in accordance
      with the Operations Manual and in such a manner as not to detract from or
      adversely reflect upon the name and reputation of the Franchisor and the
      goodwill associated with the PAK MAIL name and Marks.

            b. The Franchisee will conduct itself and operate its PAK MAIL
      Center in compliance with all applicable laws, health department
      regulations and other ordinances and in such a manner so as to promote a
      good public image in the business community. In connection therewith, the
      Franchisee will be solely and fully responsible for obtaining any and all
      licenses to carry on business at the PAK MAIL Center.

                                       10

<PAGE>

            c. The Franchisee acknowledges that proper management of the PAK
      MAIL Center is important and shall insure that the Franchisee or a
      designated Principal Operator who has completed the Franchisor's initial
      training program be responsible for the management of the PAK MAIL Center.

            d. The Franchisee shall offer only products and services through its
      Center which meet or exceed the minimum standards and specifications
      established by the Franchisor more fully described in the Operations
      Manual. The Franchisee shall offer all types of products and services as
      from time to time may be prescribed by the Franchisor and shall refrain
      from offering any other types of products or services, or operating or
      engaging in any other type of business or profession, from or through the
      PAK MAIL Center.

            e. The Franchisee will pay on a timely basis all amounts due and
      owing to the Franchisor pursuant to any separate agreements between the
      Franchisee and the Franchisor and all amounts due and owing by the
      Franchisee to all third parties, including national vendors and taxing
      authorities, with whom the Franchisee does business at or through the
      Center. In connection with any amounts due and owing by the Franchisee to
      third parties, the Franchisee expressly acknowledges that a default by the
      Franchisee with respect to such indebtedness may be considered a default
      hereunder and the Franchisor may avail itself of all remedies provided for
      herein in the event of default.

            f. The Franchisee shall comply with all agreements with third
      parties related to the PAK MAIL Center including, in particular, all
      provisions of any premises lease and any equipment leases.

            g. The Franchisee and all employees of the Franchisee shall present
      a professional appearance, as described in the Operations Manual, and
      shall render competent and courteous service to customers of the PAK MAIL
      Center while working at the Franchised Location. The Franchisee is
      required, at the Franchisee's expense, to purchase specified wearing
      apparel from suppliers approved by the Franchisor. All Principal
      Operators, employees of the Franchisee, the Franchisee and its owners,
      shall wear the specified uniform at all times while working at the
      Franchised Location. The Franchisor has the right, in its sole and
      absolute discretion, to change or modify such dress code guidelines.

            h. The Franchisee agrees to renovate, refurbish, remodel or replace,
      at its own expense, the real and personal property and equipment,
      including but not limited to, computer hardware, software, the Program and
      the POS System, used in the operation of the PAK MAIL Center, when
      reasonably required by the Franchisor in order to comply with the image,
      standards of operation and performance capability established by the
      Franchisor from time to time. If the Franchisor changes its image or
      standards of operation, it shall give the Franchisee a reasonable period
      of time within which to comply with such changes.

            i. The Franchisee shall be responsible for training all of its
      employees who work in any capacity in the PAK MAIL Center and shall be
      fully responsible for all employees' compliance with the operational
      standards which are part of the System. The Franchisee must conduct its
      employee training in the manner and according to the standards as
      prescribed in the Operations Manual. Any employee who does not

                                       11

<PAGE>

      satisfactorily complete the training shall not work in any capacity in the
      Franchisee's PAK MAIL Center.

            j. The Franchisee shall at all times during the term of this
      Agreement own and control the PAK MAIL Center authorized hereunder. Upon
      request of the Franchisor, the Franchisee shall promptly provide
      satisfactory proof of such ownership to the Franchisor. The Franchisee
      represents that the Statement of Ownership, attached hereto as Exhibit III
      and by this reference incorporated herein, is true, complete, accurate and
      not misleading, and, in accordance with the information contained in the
      Statement of Ownership, the controlling ownership of the PAK MAIL Center
      is held by the Franchisee. The Franchisee shall promptly provide the
      Franchisor with a written notification if the information contained in the
      Statement of Ownership changes at any time during the term of this
      Agreement and shall comply with the applicable transfer provisions
      contained in Article 16 herein. In addition, if the Franchisee is an
      entity, all of the owners of the Franchisee shall sign the Personal
      Guaranty attached hereto as Exhibit II.

            k. The Franchisee shall at all times during the term of this
      Agreement keep its PAK MAIL Center open during the business hours as may
      be designated by the Franchisor from time to time in the Operations Manual
      and shall maintain sufficient supplies of products and employ adequate
      personnel at all times so as to operate the Center at its maximum capacity
      and efficiency.

                                 11. ROYALTIES

11.1. Monthly Royalty.
      ----------------

      The Franchisee agrees to pay to the Franchisor a monthly royalty
("Royalty") equal to 5% of the total amount of its "Royalty Based Revenues"
(defined in Section 11.2 below) for the first $200,000 of the Center's Royalty
Based Revenues, 4 1/2% for the next $50,000 of the Center's Royalty Based
Revenues, 4% for the next $50,000 of the Center's Royalty Based Revenues, 3 1/2%
for the next $50,000 of the Center's Royalty Based Revenues, and 3% for all
subsequent Royalty Based Revenues of the Center received in that calendar year.

11.2. Royalty Based Revenues.
      -----------------------

      "Royalty Based Revenues" shall mean and include the aggregate amount of
all sales of services, products or merchandise of every kind or nature
performed, sold from, at or in connection with the operation of the Center or
arising out of the operation or conduct of business by the Center, including
sales made at or away from the Center, whether for cash or credit, but excluding
all: (i) federal, state or municipal sales or service taxes collected from
customers and paid to the appropriate taxing authority; (ii) income generated
from the sale of postage stamps; (iii) key deposits; and (iv) other exclusions
as may be authorized in writing by the Franchisor.

11.3. Royalty Payments.
      -----------------

      Royalty payments shall be made monthly and sent to the Franchisor by
electronic funds transfer no later than the 10th day of each month or such other
day which the Franchisor will designate from time to time ("Due Date") based on
Royalty Based Revenues for the immediately preceding month. At the Franchisor's
request and in no event later than 30 days prior to the opening of the Center,
the Franchisee shall execute an Authorization Agreement for Prearranged Payments

                                       12

<PAGE>

of Royalties and Advertising Contributions by electronic transfer of funds from
the Franchisee's bank account to the Franchisor's bank account, in the form
attached to this Agreement as Exhibit IV. No later than the Due Date of each
month, the Franchisee shall report to the Franchisor by electronic means or in
written form, as may be reasonably directed by the Franchisor, in a manner more
fully described in Section 15.1 below, with such information and pursuant to
such standard transmittal procedures regarding the Franchisee's Royalty Based
Revenues and such additional information as may be requested by the Franchisor.
The Franchisor reserves the right to require Royalty payments be made on a
weekly or bi-weekly basis if the Franchisee does not timely or fully submit the
required payments or reports. The Franchisor shall have the right to verify such
Royalty payments from time to time as it deems necessary, in any reasonable
manner. In the event that the Franchisee fails to have sufficient funds in its
account or otherwise fails to pay any Royalties as of the Due Date, the
Franchisee shall owe, in addition to such Royalties, interest after the Due Date
at the highest applicable legal rate for open account business credit, not to
exceed 1 1/2% per month. The Franchisee acknowledges that this Section 11.3
shall not constitute the Franchisor's or its affiliates' agreement to accept
such payments after they are due or a commitment to extend credit to or
otherwise finance operation of the Center. The Franchisor reserves the right to
automatically assess a monthly $50 late charge for any report and/or financial
statement required under Section 15.1 below which is not timely filed by the
Franchisee. Such late charge shall continue to accrue each month that said
report(s) and financial statement(s) remain unfiled, and shall be due and
payable in full upon demand by the Franchisor. In the event such late charge(s)
is/are not paid upon demand, the Franchisor may elect to pursue its remedies as
further set forth in this Agreement. In no event shall the Franchisee be
required to pay a late payment and/or interest at a rate greater than the
maximum interest rate permitted by applicable law.

11.4. Application of Payments.
      ------------------------

      Notwithstanding any designation by the Franchisee, the Franchisor shall
have sole discretion to apply any payments by the Franchisee, and any credits
received by the Franchisor on the Franchisee's behalf from third party vendors,
to any of Franchisee's past due indebtedness to Franchisor for Royalties,
Advertising Contributions, purchases from the Franchisor or its affiliates,
interest or any other indebtedness.

                                12. ADVERTISING

12.1. Approval of Advertising.
      ------------------------

      The Franchisee shall obtain the Franchisor's prior written approval of all
written advertising or other marketing or promotional programs regarding the PAK
MAIL Center, including, without limitation, "Yellow Pages" advertising,
newspaper ads, flyers, brochures, coupons, direct mail pieces, Internet
advertising, including sites on the World Wide Web, specialty and novelty items
and radio and television advertising. The Franchisee shall also obtain the
Franchisor's prior written approval before using any promotional materials as
may be provided by vendors. The proposed written advertising or a description of
the marketing or promotional program shall be submitted to the Franchisor at
least 30 days prior to publication, broadcast or use. The Franchisee
acknowledges that advertising and promoting the PAK MAIL Center in accordance
with the Franchisor's standards and specifications is an essential aspect of the
System, and the Franchisee agrees to comply with all advertising standards and
specifications. The Franchisee shall display all required promotional materials,
signs, point of purchase displays and other marketing materials in its PAK MAIL
Center and in the manner prescribed by the Franchisor.

                                       13

<PAGE>

12.2. Marketing Material Beginning Inventory.
      ---------------------------------------

      If this Agreement governs the first Center to be opened and operated by
the Franchisee, then the Franchisee shall pay to the Franchisor and other
suppliers a nonrefundable, nonrecurring fee for marketing material beginning
inventory ("Marketing Material Beginning Inventory") in an amount between $550
and $1,000 for Franchisor's provision of a beginning inventory of marketing
material for the Franchisee's PAK MAIL Center. The exact amount payable for the
Marketing Material Beginning Inventory fee shall be determined by the
Franchisee. All or a part of that amount will be due and payable to the
Franchisor and other suppliers by the Franchisee on or before the Franchisee's
commencement of the initial training program. The Marketing Material Beginning
Inventory will be provided by the Franchisor and other suppliers at or around
the opening of the Franchisee's Center.

                                       14

<PAGE>

12.3. Advertising Contribution.
      -------------------------

      The Franchisee shall contribute to an advertising fund established by the
Franchisor ("Advertising Fund") a fee equal to 2% of the total amount of the
Franchisee's Royalty Based Revenues ("Advertising Contribution"). The
Advertising Contribution shall be paid to the Franchisor in addition to
Royalties and the following terms and conditions shall apply:

            a. The Advertising Contribution shall be payable to "Pak Mail
      National Ad Fund" and made concurrently with the payment of the Royalties
      by electronic transfer of funds from the Franchisee's bank account to a
      bank account designated by the Franchisor, no later than the 10th day of
      each month, for the Advertising Contribution based on the Royalty Based
      Revenues of the immediately preceding month.

            b. The Advertising Contributions will be subject to the same late
      charges as the Royalties, in an amount and manner set forth in Section
      11.3 above.

            c. Upon the request of the Franchisee, the Franchisor will make
      available to the Franchisee, no later than 30 days after the end of each
      fiscal quarter, an unaudited financial statement which indicates how the
      Advertising Fund has been spent.

            d. The Franchisor shall direct all advertising and marketing
      programs financed by the Advertising Fund, with sole discretion over the
      creative concepts, materials and endorsements used therein, geographic,
      market and media placement and allocation, and the administration thereof.
      The Franchisee agrees that the Advertising Fund may be used to pay the
      costs of preparing and producing video and audio and written advertising
      materials; administering multi-regional advertising programs, including,
      without limitation, purchasing direct mail and other media advertising and
      employing advertising agencies and staff to assist therewith; and
      supporting public relations, market research and other advertising and
      marketing activities.

            e. The Advertising Fund shall be accounted for separately from the
      Franchisor's other funds and shall not be used to defray any of the
      Franchisor's general operating expenses, except for such reasonable
      administrative costs, salaries and overhead as the Franchisor may incur in
      activities related to the administration of the Advertising Fund and its
      marketing programs, including, without limitation, conducting market
      research, preparing material, incurring related accounting and legal
      expenses, collecting and accounting for Advertising Fund contributions and
      all costs and expenses related to the Franchise System Advisory Council.
      The Franchisor may spend in any fiscal year an amount greater or less than
      the aggregate contribution of all PAK MAIL Centers to the Advertising Fund
      in that year and the Advertising Fund may borrow from the Franchisor or
      other lenders to cover deficits or cause the Advertising Fund to invest
      any surplus for future use. All interest earned on monies contributed to
      the Advertising Fund will be first used to pay costs. The Advertising Fund
      may be incorporated or operated through an entity separate from the
      Franchisor at such time as the Franchisor deems appropriate, and such
      successor entity shall have all rights and duties of the Franchisor
      pursuant to this Section 12.3.

            f. The Franchisee understands and acknowledges that the Advertising
      Fund is intended to maximize recognition of the Marks and patronage of PAK
      MAIL Centers. Although the Franchisor will endeavor to utilize the
      Advertising Fund to develop advertising and marketing materials and
      programs and to place advertising that will benefit all PAK MAIL Centers,

                                       15

<PAGE>

      the Franchisor undertakes no obligation to ensure that expenditures by the
      Advertising Fund in or affecting any geographic area are proportionate or
      equivalent to the contributions by PAK MAIL Centers operating in that
      geographic area or that any PAK MAIL Center will benefit directly from or
      in proportion to its contribution to the development of advertising and
      marketing materials or the placement of advertising. Except as expressly
      provided in this Section 12.3, the Franchisor assumes no direct or
      indirect liability or obligation to the Franchisee with respect to the
      maintenance, direction or administration of the Advertising Fund.

            g. The Franchisor reserves the right to terminate the Advertising
      Fund, upon 30 days' written notice to the Franchisee. All unspent monies
      on the date of termination shall be distributed to the Franchisor's
      franchisees in proportion to their respective contributions to the
      Advertising Fund during the preceding 12 month period. The Franchisor
      shall have the right to reinstate the Advertising Fund upon the same terms
      and conditions set forth herein upon 30 days' prior written notice to the
      Franchisee.

12.4. Regional Advertising Programs.
      ------------------------------

      The Franchisor reserves the right, upon 30 days prior written notice to
the Franchisee, to create a regional advertising association ("Association") for
the benefit of PAK MAIL franchisees located within a particular geographic area.
If an Association is established for the area where the Franchisee is located,
the Franchisee will be required to participate in the Association for the
purpose of selecting and participating in regional marketing and promotion
programs for PAK MAIL Centers. The Franchisor, in its sole discretion, may
contribute up to one-half of the Advertising Fund payments received by the
Franchisor from franchisees in the Association for such marketing and
advertising programs. The Franchisee will be required to remain a member of and
be bound by the decisions of the majority of the members of the Association
regarding expenditures, assessments and dues charged by the Association, to the
extent that they are approved by the Franchisor. Each Association has the right,
by majority vote, to require its members to pay additional monthly dues to the
Association. The failure of the Franchisee to participate in the Association or
pay any dues required by the Association, may, at the option of the Franchisor,
be deemed to be a breach of this Agreement. The Franchisor has the right, in its
sole discretion, to form and terminate all Associations and to determine the
composition of all geographic territories and market areas for the
implementation of such regional advertising and promotion campaigns and to
require that the Franchisee participate in such regional advertising programs as
and when they may be established by the Franchisor. If a regional advertising
program is implemented on behalf of a particular region by the Franchisor, the
Franchisor, to the extent reasonably calculable, will only use contributions
from PAK MAIL franchisees within such region for the particular regional
advertising program. The Franchisor also reserves the right to establish an
Association in the form of a cooperative for a particular region and enable the
cooperative Association to self-administer the regional advertising program. If
the Franchisor creates an Association, either as a cooperative or otherwise, the
Franchisor has the right to charge the Association for the actual costs of
forming and administering the Association.

                              13. QUALITY CONTROL

13.1. Compliance with Operations Manual.
      ----------------------------------

      The Franchisee agrees to maintain and operate the PAK MAIL Center in
compliance with this Agreement and the standards and specifications contained in
the Operations Manual, as the Operations Manual may be modified from time to
time by the Franchisor.

                                       16

<PAGE>

                                       17

<PAGE>

13.2. Standards and Specifications.
      -----------------------------

      The Franchisor will make available to the Franchisee standards and
specifications for products and services offered at or through the PAK MAIL
Center and for decor, displays, uniforms, materials, forms, items, supplies and
services used in connection with the Center. The Franchisor reserves the right
to change standards and specifications for services and products offered at or
through the PAK MAIL Center and for the decor, displays, uniforms, materials,
forms, items, supplies and services used in connection with the Center, upon 30
days prior written notice to the Franchisee. The Franchisee shall, throughout
the term of this Agreement, remain in compliance with and strictly adhere to all
of the Franchisor's current standards and specifications for the PAK MAIL Center
as prescribed from time to time.

13.3. Inspections.
      ------------

      The Franchisor shall have the right to examine the Franchised Location,
including the inventory, products, equipment, materials, supplies or services
used or sold there, to ensure compliance with all standards and specifications
set by the Franchisor. The Franchisor shall conduct such inspections during
regular business hours and the Franchisee may be present at such inspections.
The Franchisor, however, reserves the right to conduct the inspections without
prior notice to the Franchisee.

13.4. Restrictions on Services and Products.
      --------------------------------------

      The Franchisee is prohibited from offering or selling any products or
services not authorized by the Franchisor as being a part of the System.
However, if the Franchisee proposes to offer, conduct or utilize any products,
services, materials, forms, items, supplies or services for use in connection
with or sale through the PAK MAIL Center which are not previously approved by
the Franchisor as meeting its specifications, the Franchisee shall first notify
the Franchisor in writing requesting approval. The Franchisor may, in its sole
discretion, for any reason whatsoever, elect to withhold such approval; however,
in order to make such determination, the Franchisor may require submission of
specifications, information, or samples of such products, services, materials,
forms, items or supplies. The Franchisor will advise the Franchisee within a
reasonable time whether such products, services, materials, forms, items or
supplies meet its specifications.

13.5. Approved Suppliers.
      -------------------

      The Franchisee shall purchase all products, services, supplies and
materials required for the operation of the PAK MAIL Center from suppliers
designated or approved by the Franchisor or, if there is no designated or
approved supplier for a particular product, service, supply or material, from
such other suppliers who meet all of the Franchisor's specifications and
standards as to quality, composition, finish, appearance and service, and who
shall adequately demonstrate their capacity and facilities to supply the
Franchisee's needs in the quantities, at the times, and with the reliability
requisite to an efficient operation of the PAK MAIL Center.

13.6. Request to Approve Supplier.
      ----------------------------

      In the event the Franchisee desires to purchase or use products, services,
supplies or materials from suppliers other than those previously approved by the
Franchisor, the Franchisee shall, prior to purchasing from or otherwise
utilizing any supplier, give the Franchisor a written request to approve the
supplier. In the event the Franchisor rejects the Franchisee's requested new
supplier, the Franchisor must, within 60 days of the receipt of the Franchisee's
request to approve the supplier, notify the Franchisee in writing of its

                                       18

<PAGE>

rejection. The Franchisor may periodically inspect any suppliers' facilities and
products to assure compliance with the Franchisor's standards and
specifications. Permission to conduct periodic inspections and payment of the
Franchisor's costs incurred in conducting periodic inspections shall be a
condition of the continued approval of such supplier. The Franchisor may, at its
sole discretion, for any reason whatsoever, elect to withhold approval of the
supplier; however, in order to make such determination, the Franchisor may
require that samples from a proposed new supplier be delivered to the Franchisor
for testing prior to approval and use. A charge not to exceed the actual cost of
the test may be made by the Franchisor and shall be paid by the Franchisee.

13.7. Shopping Service.
      -----------------

      The Franchisor reserves the right to use third party shopping services
from time to time to evaluate the conduct of the Franchisee's PAK MAIL Center,
including such things as customer service, cleanliness, merchandising and proper
use of the POS System. Franchisor may use such shopping services to inspect the
Franchisee's PAK MAIL Center at any time at the Franchisor's expense, without
prior notification to the Franchisee. The Franchisor may make the results of any
such service evaluation available to the Franchisee, in the Franchisor's sole
discretion.

                14. MARKS, TRADE NAMES AND PROPRIETARY INTERESTS

14.1. Marks.
      ------

      The Franchisee acknowledges that the Franchisor has the sole right to own,
license and control the Franchisee's use of the PAK MAIL service mark and other
of the Marks, and that such Marks shall remain under the sole and exclusive
ownership and control of the Franchisor. The Franchisee acknowledges that it has
not acquired any right, title or interest in such Marks except for the right to
use such marks in the operation of its PAK MAIL Center as it is governed by this
Agreement. Except as may be permitted in the Operations Manual, the Franchisee
agrees not to use any of the Marks as part of an electronic mail address or on
any sites on the Internet or the World Wide Web and the Franchisee agrees not to
use or register any of the Marks as a domain name on the Internet.

14.2. No Use of Other Marks.
      ----------------------

      The Franchisee agrees that no service mark other than "PAK MAIL" or such
other Marks as may be specified by the Franchisor shall be used in the
identification, marketing, promotion or operation of the PAK MAIL Center.

14.3. System.
      -------

      The Franchisee acknowledges that the Franchisor owns and controls the
distinctive plan for the establishment, operation and promotion of the PAK MAIL
Center and all related licensed methods of doing business, previously defined as
the "System," which include, but are not limited to, methods for shipping,
crating, freight forwarding, mailing, communications, information services,
inventory type and control, technical equipment standards, customer relations,
marketing techniques, written promotional materials, advertising, and accounting
systems, all of which constitute confidential trade secrets of the Franchisor,
and the Franchisee acknowledges that the Franchisor has valuable rights in and
to such trade secrets. The Franchisee further acknowledges that it has not
acquired any right, title or interest in the System except for the right to use

                                       19

<PAGE>

the System in the operation of the PAK MAIL Center as it is governed by this
Agreement and that it is obligated to maintain the confidentiality of the System
in accordance with Section 20.3 below.

14.4. Mark Infringement.
      ------------------

      The Franchisee agrees to notify the Franchisor in writing of any possible
infringement or illegal use by others of a trademark the same as or confusingly
similar to one or more of the Marks which may come to its attention. The
Franchisee also agrees to notify the Franchisor in writing of any possible
infringement or illegal use by others of the Franchisor's copyrighted "Pak, Ship
and Sell" software Program. The Franchisee acknowledges that the Franchisor
shall have the right, in its sole discretion, to determine whether any action
will be taken on account of any possible infringement or illegal use. The
Franchisor may commence or prosecute such action in the Franchisor's own name
and may join the Franchisee as a party to the action if the Franchisor
determines it to be reasonably necessary for the continued protection and
quality control of the Marks, the System or the Program. The Franchisor shall
bear the reasonable cost of any such action, including attorneys' fees. The
Franchisee agrees to fully cooperate with the Franchisor in any such litigation.

14.5. Franchisee's Business Name.
      ---------------------------

      The Franchisee acknowledges that the Franchisor has a prior and superior
claim to the "PAK MAIL" trade name. The Franchisee shall not use one or both of
the words "PAK MAIL" in the legal name of its corporation, partnership or any
other business entity used in conducting the business provided for in this
Agreement. The Franchisee also agrees not to register or attempt to register a
trade name using one or both of the words "PAK MAIL" in the Franchisee's name or
that of any other person or business entity, without prior written consent of
the Franchisor. The Franchisee shall not identify itself as being "Pak Mail
Centers of America, Inc." or as being associated with the Franchisor in any
manner other than as a franchisee or licensee. The Franchisee further agrees
that in all advertising and promotion and promotional materials it will display
its business name only in obvious conjunction with the phrase "PAK MAIL
Licensee" or "PAK MAIL Franchisee" or with such other words and in such other
phrases to identify itself as an independent owner of the PAK MAIL Center, as
may from time to time be prescribed in the Operations Manual.

14.6. Change of Marks.
      ----------------

      In the event that the Franchisor, in its sole discretion, shall determine
it necessary to modify or discontinue use of any proprietary Marks, or to
develop additional or substitute marks, the Franchisee shall, within a
reasonable time after receipt of written notice of such a modification or
discontinuation from the Franchisor, take such action, at the Franchisee's sole
expense, as may be necessary to comply with such modification, discontinuation,
addition or substitution.

                 15. REPORTS, RECORDS AND FINANCIAL STATEMENTS

15.1. Franchisee Reports.
      -------------------

      The Franchisee shall establish and maintain, at its own expense,
bookkeeping, accounting and data processing systems which conform to the
specifications which the Franchisor may prescribe from time to time (including,
without limitation, requirements for timely entry of information into data bases
of the Program, periodic printouts of reports generated by the Program and the

                                       20

<PAGE>

Franchisor's access to all Program data by modem). Each transaction of the
Center shall be processed on the Program in the manner prescribed by the
Franchisor. The Franchisor shall have the right of access to the Program and all
data processed thereon with respect to the Center. The Franchisee shall provide
the Franchisor with electronic access to the Program and its data at any time by
obtaining and maintaining an account with an internet service provider, paying
an annual fee to the Franchisor for an electronic mail connection and obtaining
and maintaining computer hardware which meets the Franchisor's standards and
specifications. The Franchisee shall supply to the Franchisor such types of
reports in a manner and form as the Franchisor may from time to time reasonably
require, including:

            a. within 10 days after the end of each calendar month (or weekly if
      the Franchisor requires the Franchisee to pay the Royalty described in
      Section 11.1 hereof on a weekly basis), a report on the Center's Royalty
      Based Revenues for such calendar month (or week);

            b. within 90 days after the end of the Franchisee's fiscal year, a
      balance sheet and profit and loss statement for the Center for such year
      (or monthly or quarterly if required by the Franchisor, in which case such
      statements shall also reflect year-to-date information); and

            c. upon request of the Franchisor, within 10 days after such returns
      are filed, exact copies of federal and state income, sales and any other
      tax returns and such other forms, records, books and other information as
      the Franchisor may periodically require.

The Franchisor reserves the right to require that the Franchisee submit
financial statements on a quarterly or monthly basis and within such time
periods as may be reasonable under the circumstances. The Franchisor also
reserves the right to disclose data derived from such reports, without
identifying the Franchisee, except to the extent identification of the
Franchisee is required by law. The Franchisee consents to the Franchisor
obtaining financial and account information regarding the Center and its
operations from third parties with whom the Franchisee does business, as and
when deemed necessary by the Franchisor.

15.2. Verification.
      -------------

      Each report and financial statement to be submitted to the Franchisor
pursuant to this Agreement shall be signed and verified by the Franchisee.

15.3. Books and Records.
      ------------------

      The Franchisee shall maintain all books and records for its PAK MAIL
Center in accordance with generally accepted accounting principles, consistently
applied, and in a manner as reasonably prescribed by the Franchisor, and shall
preserve these records for at least five years after the fiscal year to which
they relate.

15.4. Audit of Books and Records.
      ---------------------------

      The Franchisee shall permit the Franchisor to inspect and audit the books
and records of the PAK MAIL Center at any reasonable time, at the Franchisor's
expense. If any audit discloses a deficiency in amounts for payments owed to the
Franchisor pursuant to this Agreement, then such amounts shall become
immediately payable to the Franchisor by the Franchisee, with interest from the
date such payments were due at the lesser of 1 1/2% per month or the maximum
rate allowed by law. In the event such inspection or audit is made necessary by

                                       21

<PAGE>

the Franchisee's failure to furnish required reports, supporting records or
other information, or by the Franchisee's failure to furnish such information on
a timely basis for two or more consecutive reporting periods, or if the
Franchisee has received advance notice from the Franchisor and fails to have the
books and records available for such audit or otherwise fails to cooperate
therewith or if an understatement of Royalty Based Revenues for the period of
any audit is determined by any such audit or inspection to be greater than 5%,
the Franchisee shall reimburse the Franchisor for the cost of such audit or
inspection, including, without limitation, the charges of attorneys and any
independent accountants and the travel expenses, room and board and compensation
of the Franchisor's employees.

                                  16. TRANSFER

16.1. Transfer by Franchisee.
      -----------------------

      The franchise granted herein is personal to the Franchisee and, except as
stated below, the Franchisor shall not allow or permit any transfer, assignment,
subfranchise or conveyance of this Agreement or any interest hereunder. As used
in this Agreement, the term "transfer" shall mean and include the voluntary,
involuntary, direct or indirect assignment, sale, gift or other disposition by
the Franchisee (or any of its owners) of any interest in: (1) this Agreement;
(2) the ownership of the Franchisee; or (3) the Center or any assets of the
Center. Transfer shall include an assignment, sale, gift or other disposition
resulting from a divorce, insolvency, corporate or partnership dissolution
proceeding or otherwise by operation of law or, in the event of the death of the
Franchisee, or an owner of the Franchisee, by will, declaration of or transfer
in trust or under the laws of intestate succession.

16.2. Pre-Conditions to Franchisee's Transfer.
      ----------------------------------------

      The Franchisee shall not transfer its rights under this Agreement or any
interest in it, or any part or portion of any business entity that owns it or
all or a substantial portion of the assets of the PAK MAIL Center, unless the
Franchisee obtains the Franchisor's written consent and complies with the
following requirements:

            a. Payment of all amounts due and owing pursuant to this Agreement
      by the Franchisee to the Franchisor or its affiliates or to third parties
      holding a security interest in any asset of the franchised business;

            b. Agreement by the proposed transferee to satisfactorily complete
      the initial training program described in this Agreement, which training
      may be completed by the transferee either prior to or immediately after
      transfer of rights under this Agreement;

            c. Execution of a Franchise Agreement in a form then currently
      offered by the Franchisor, which shall supersede this Agreement in all
      respects. If a new Franchise Agreement is signed, the terms thereof may
      differ from the terms of this Agreement; provided, however, the transferee
      will not be required to pay any additional initial franchise fee;

            d. Provision by the Franchisee of written notice to the Franchisor
      30 days' prior to the proposed effective date of the transfer, such notice
      to contain information reasonably detailed to enable the Franchisor to
      evaluate the terms and conditions of the proposed transfer;

                                       22

<PAGE>

            e. The proposed transferee shall have provided information to the
      Franchisor sufficient for the Franchisor to assess the proposed
      transferee's business experience, aptitude and financial qualification,
      and the Franchisor shall have ascertained that the proposed transferee
      meets such qualifications;

            f. Execution by Franchisee of a general release, in a form
      satisfactory to the Franchisor, of any and all claims against the
      Franchisor, its affiliates and their respective officers, directors,
      employees and agents;

            g. Payment by the Franchisee or the proposed transferee of $4,000;
      and

            h. Agreement by the Franchisee to abide by the post-termination
      covenant not to compete set forth in Section 20.2 below.

16.3. Franchisor's Approval of Transfer.
      ----------------------------------

      The Franchisor has 30 days from the date of the written notice of the
proposed transfer to approve or disapprove in writing, of the Franchisee's
proposed transfer. The Franchisee acknowledges that the proposed transferee
shall be evaluated for approval by the Franchisor based on the same criteria as
is currently being used to assess new franchisees of the Franchisor and that
such proposed transferee shall be provided, if appropriate, with such
disclosures as may be required by state or federal law. The Franchisor shall
have the right to approve the material terms and conditions of the transfer,
including, without limitation, the right to confirm that the price and terms of
payment are not so burdensome as to affect adversely the transferee's operation
of the Center. If the Franchisee (and/or the transferring owners) finance any
part of the sale price of the transferred interest, if any, unless waived in
writing by the Franchisor, the Franchisee and/or its owners must agree that all
obligations of the transferee under or pursuant to any promissory notes,
agreements or security interests reserved by the Franchisee or its owners in the
assets of the Center or the Franchised Location shall be subordinate to the
transferee's obligations to pay Royalties, Advertising Contributions and other
amounts due to the Franchisor and its affiliates and to otherwise comply with
this Agreement. If the Franchisee and the proposed transferee comply with all
conditions for assignment set forth herein and the Franchisor has not given the
Franchisee notice of its approval or disapproval within the 30 day period,
approval is deemed granted.

16.4. Right of First Refusal.
      -----------------------

      In the event the Franchisee wishes to transfer its rights under this
Agreement or any interest in it, or any part or portion of any business entity
that owns it, or all or a substantial portion of the assets of the PAK MAIL
Center, the Franchisee agrees to grant to the Franchisor a 30 day right of first
refusal to purchase such rights, interest or assets on the same terms and
conditions as are contained in the written offer to purchase submitted to the
Franchisee by the proposed purchaser; provided, however, the following
additional terms and conditions shall apply:

            a. The Franchisee shall notify the Franchisor of such offer by
      sending a written notice to the Franchisor (which notice may be the same
      notice as required by Section 16.2(d) above), enclosing a copy of the
      written offer from the proposed purchaser;

            b. The 30 day right of first refusal period will run concurrently
      with the period in which the Franchisor has to approve or disapprove the
      proposed transferee;

                                       23

<PAGE>

            c. Such right of first refusal is effective for each proposed
      transfer and any material change in the terms or conditions of the
      proposed transfer shall be deemed a separate offer on which a new 30 day
      right of first refusal shall be given to the Franchisor;

            d. If the consideration or manner of payment offered by a third
      party is such that the Franchisor may not reasonably be required to
      furnish the same, then the Franchisor may purchase the interest which is
      proposed to be sold for the reasonable cash equivalent. If the parties
      cannot agree within a reasonable time on the cash consideration, an
      independent appraiser shall be designated by the Franchisor, whose
      determination will be binding upon the parties. All expenses of the
      appraiser shall be paid for equally between the Franchisor and the
      Franchisee; and

            e. If the Franchisor chooses not to exercise its right of first
      refusal, the Franchisee shall be free to complete the sale, transfer or
      assignment, subject to compliance with Sections 16.2 and 16.3 above.
      Absence of a reply to the Franchisee's notice of a proposed sale within
      the 30 day period is deemed a waiver of such right of first refusal.

16.5. Specific Types of Transfers.
      ----------------------------

      The Franchisee acknowledges that the Franchisor's right to approve or
disapprove of a proposed transfer, and all other requirements and rights related
to such proposed transfer, as provided for above, shall apply (1) if the
Franchisee is a partnership or other business association, to the addition or
deletion of a partner or members of the association or the transfer of any
partnership or membership among existing partners or members; (2) if the
Franchisee is a corporation, to any proposed transfer of 25% or more of the
stock of the corporate Franchisee, whether such transfer occurs in a single
transaction or several transactions; and (3) if the Franchisee is an individual,
to the transfer from such individual or individuals to a corporation controlled
by them, in which case the Franchisor's approval will be conditioned upon: (i)
the continuing personal guarantee of the individual (or individuals) for the
performance of obligations under this Agreement; (ii) the issuance and/or
transfer of shares which would affect a change in ownership of 25% or more of
the stock in the corporation being conditioned on the Franchisor's prior written
approval; (iii) a limitation on the corporation's business activity to that of
operating the PAK MAIL Center and related activities; and (iv) other reasonable
conditions. With respect to a proposed transfer as described in subsection (1)
and (3) of this Section, the Franchisor's right of first refusal to purchase, as
set forth above, shall not apply and the Franchisor will waive any transfer fee
chargeable to the Franchisee for a transfer under these circumstances.

16.6. Assignment by the Franchisor.
      -----------------------------

      This Agreement is fully assignable by the Franchisor and shall inure to
the benefit of any assignee or other legal successor in interest, and the
Franchisor shall in such event be fully released from the same.

16.7. Franchisee's Death or Disability.
      ---------------------------------

      Upon the death or permanent disability of the Franchisee (or the
Franchisee's individual controlling the Franchisee entity), the executor,
administrator, conservator, guardian or other personal representative of such
person shall transfer the Franchisee's interest in this Agreement or such
interest in the Franchisee entity to an approved third party. Such disposition
of this Agreement or such interest (including, without limitation, transfer by
bequest or inheritance) shall be completed within a reasonable time, not to
exceed 120 days from the date of death or permanent disability, and shall be

                                       24

<PAGE>

subject to all terms and conditions applicable to transfers contained in this
Article 16. Provided, however, that for purposes of this Section 16.7, there
shall be no fee charged by the Franchisor for the initial training program
offered to the transferee. Failure to transfer the interest in this Agreement or
such interest in the Franchisee entity within said period of time shall
constitute a breach of this Agreement. For the purposes hereof, the term
"permanent disability" shall mean a mental or physical disability, impairment or
condition that is reasonably expected to prevent or actually does prevent the
Franchisee or the owner of a controlling interest in the Franchisee entity from
supervising the management and operation of the PAK MAIL Center for a period of
120 days from the onset of such disability, impairment or condition.

                                       25

<PAGE>

                             17. TERM AND EXPIRATION

17.1. Term.
      -----

      The term of this Agreement is for a period of 10 years from the date of
this Agreement, unless sooner terminated as provided herein.

17.2. Continuation.
      -------------

      If the Franchisee continues to operate the Center with the Franchisor's
express or implied consent following the expiration or termination of this
Agreement, the continuation will be a month-to-month extension of this
Agreement. This Agreement will then be terminable by either party on 30 days
written notice. Otherwise, all provisions of this Agreement will apply while the
Franchisee continues to operate the Center.

17.3. Rights Upon Expiration.
      -----------------------

      At the end of the initial term hereof the Franchisee shall have the option
to renew its franchise rights for an additional term, by acquiring successor
franchise rights, if the Franchisor does not exercise its right not to offer a
successor franchise in accordance with Section 17.5 below and if the Franchisee:

            a. At least 30 days prior to expiration of the term, executes the
      form of Franchise Agreement then in use by the Franchisor;

            b. Has complied with all provisions of this Agreement during the
      current term, including the payment on a timely basis of all Royalties and
      other fees due hereunder. "Compliance" shall mean, at a minimum, that the
      Franchisee has not received any written notification from the Franchisor
      of breach hereunder more than four times during the term hereof;

            c. Upgrades and/or remodels the PAK MAIL Center and its operations
      at the Franchisee's sole expense (the necessity of which shall be in the
      sole discretion of the Franchisor) to conform with the then current
      Operations Manual;

            d. Executes a general release, in a form satisfactory to the
      Franchisor, of any and all claims against the Franchisor and its
      affiliates, and their respective officers, directors, employees and agents
      arising out of or relating to this Agreement; and

            e. Pays a successor franchise fee of $2,500.

17.4. Exercise of Option for Successor Franchise.
      -------------------------------------------

      The Franchisee may exercise its option for a successor franchise by giving
written notice of such exercise to the Franchisor not later than 180 days prior
to the scheduled expiration of this Agreement. The Franchisee's successor
franchise rights shall become effective by signing the Franchise Agreement then
currently being offered to new franchisees of the Franchisor.

                                       26

<PAGE>

17.5. Conditions of Refusal.
      ----------------------

      The Franchisor shall not be obligated to offer the Franchisee a successor
franchise upon the expiration of this Agreement if the Franchisee fails to
comply with any of the above conditions of renewal. In such event (except for
failure to execute the then current Franchise Agreement or pay the successor
franchise fee) the Franchisor shall give notice of expiration at least 180 days
prior to the expiration of the term, and such notice shall set forth the reasons
for such refusal to offer successor franchise rights. Upon the expiration of
this Agreement, the Franchisee shall comply with the provisions of Section 18.5
below.

                           18. DEFAULT AND TERMINATION

18.1. Termination by Franchisee.
      --------------------------

      If the Franchisee and its owners are in compliance with this Agreement and
the Franchisor fails to comply with this Agreement and fails to correct such
failure within 30 days after written notice of failure to comply is delivered to
the Franchisor, the Franchisee may terminate this Agreement effective 10 days
after delivery to the Franchisor of notice of termination. A termination of this
Agreement by the Franchisee for any other reason, or without notice and right to
cure, shall be deemed a termination by the Franchisee without cause and in no
way shall release the Franchisee from the terms and conditions of this
Agreement.

18.2. Termination by Franchisor - Effective Upon Notice.
      --------------------------------------------------

      The Franchisor shall have the right, at its option, to terminate this
Agreement and all rights granted the Franchisee hereunder, without affording the
Franchisee any opportunity to cure any default (subject to any state laws to the
contrary, where state law shall prevail), effective upon receipt of notice by
the Franchisee, addressed as provided in Section 22.13, upon the occurrence of
any of the following events:

            a. Abandonment. If the Franchisee ceases to operate the PAK MAIL
      Center or otherwise abandons the PAK MAIL Center for a period of three
      consecutive days, or any shorter period that indicates an intent by the
      Franchisee to discontinue operation of the PAK MAIL Center, unless and
      only to the extent that full operation of the PAK MAIL Center is suspended
      or terminated due to fire, flood, earthquake or other similar causes
      beyond the Franchisee's control and not related to the availability of
      funds to the Franchisee;

            b. Insolvency; Assignments. If the Franchisee becomes insolvent or
      is adjudicated a bankrupt; or any action is taken by the Franchisee, or by
      others against the Franchisee under any insolvency, bankruptcy or
      reorganization act, (this provision may not be enforceable under federal
      bankruptcy law, 11 U.S.C. ss.ss. 101 et seq.), or if the Franchisee makes
      an assignment for the benefit of creditors, or a receiver is appointed by
      the Franchisee;

            c. Unsatisfied Judgments; Levy; Foreclosure. If any material
      judgment (or several judgments which in the aggregate are material) is
      obtained against the Franchisee and remains unsatisfied or of record for
      30 days or longer (unless a supersedeas or other appeal bond has been
      filed); or if execution is levied against the Franchisee's business or any
      of the property used in the operation of the PAK MAIL Center and is not
      discharged within five days; or if the real or personal property of the
      Franchisee's business shall be sold after levy thereupon by any sheriff,
      marshal or constable;

                                       27

<PAGE>

            d. Criminal Conviction. If the Franchisee is convicted of a felony,
      a crime involving moral turpitude, or any crime or offense that is
      reasonably likely, in the sole opinion of the Franchisor, to materially
      and unfavorably affect the System, Marks, goodwill or reputation thereof;

            e. Failure to Make Payments. If the Franchisee fails to pay any
      amounts due the Franchisor or affiliates, including any amounts which may
      be due as a result of any subleases or lease assignments between the
      Franchisee and the Franchisor, within 10 days after receiving notice that
      such fees or amounts are overdue;

            f. Misuse of Marks. If the Franchisee misuses or fails to follow the
      Franchisor's directions and guidelines concerning use of the Franchisor's
      Marks and fails to correct the misuse or failure within ten days after
      notification from the Franchisor;

            g. Unauthorized Disclosure. If the Franchisee intentionally or
      negligently discloses to any unauthorized person the contents of or any
      part of the Franchisor's Operations Manual, the Program, the POS System or
      any other trade secrets or confidential information of the Franchisor;

            h. Repeated Noncompliance. If the Franchisee has received two
      previous notices of default from the Franchisor and is again in default of
      this Agreement within a 12 month period, regardless of whether the
      previous defaults were cured by the Franchisee; or

            i. Unauthorized Transfer. If the Franchisee sells, transfers or
      otherwise assigns the Franchise, an interest in the Franchise or the
      Franchisee entity, this Agreement, the PAK MAIL Center or a substantial
      portion of the assets of the PAK MAIL Center owned by the Franchisee
      without complying with the provisions of Article 16 above.

18.3. Termination by Franchisor - Thirty Days Notice.
      -----------------------------------------------

      The Franchisor shall have the right to terminate this Agreement (subject
to any state laws to the contrary, where state law shall prevail), effective
upon 30 days written notice to the Franchisee, if the Franchisee breaches any
other provision of this Agreement and fails to cure the default during such 30
day period. In that event, this Agreement will terminate without further notice
to the Franchisee, effective upon expiration of the 30 day period. Defaults
shall include, but not be limited to, the following:

            a. Failure to Maintain Standards. The Franchisee fails to maintain
      the then current operating procedures and adhere to the specifications and
      standards established by the Franchisor as set forth herein or in the
      Operations Manual or otherwise communicated to the Franchisee;

            b. Deceptive Practices. The Franchisee engages in any unauthorized
      business or practice or sells any unauthorized product or service under
      the Franchisor's Marks or under a name or mark which is confusingly
      similar to the Franchisor's Marks;

            c. Failure to Obtain Consent. The Franchisee fails, refuses or
      neglects to obtain the Franchisor's prior written approval or consent as
      required by this Agreement;

            d. Failure to Comply with Manual. The Franchisee fails or refuses to
      comply with the then-current requirements of the Operations Manual; or

                                       28

<PAGE>

            e. Breach of Related Agreement. The Franchisee defaults under any
      term of the purchase contract, lease, sublease or lease assignment for the
      Franchised Location, any other agreement material to the PAK MAIL Center,
      any other Franchise Agreement between the Franchisor and the Franchisee or
      any other agreement between the Franchisor and the Franchisee and such
      default is not cured within the time specified in such purchase contract,
      lease, sublease, other agreement or other Franchise Agreement. Provided,
      however, so long as financing from the United States Small Business
      Administration remains outstanding, the Franchisee will be given the same
      opportunity to cure defaults under any agreement between the Franchisor or
      its affiliates and the Franchisee, as the Franchisee is given under this
      Agreement.

Notwithstanding the foregoing, if the breach is curable, but is of a nature
which cannot be reasonably cured within such 30 day period and the Franchisee
has commenced and is continuing to make good faith efforts to cure the breach
during such 30 day period, the Franchisee shall be given an additional
reasonable period of time to cure the same, and this Agreement shall not
automatically terminate without written notice from the Franchisor.

18.4. Right to Purchase.
      ------------------

      Upon termination or expiration of this Agreement for any reason, the
Franchisor shall have the option to purchase the PAK MAIL Center or a portion of
the assets of the Center, which may include, at the Franchisor's option, all of
the Franchisee's interest, if any, in and to the real estate upon which the PAK
MAIL Center is located, and all buildings and other improvements thereon,
including leasehold interests, at fair market value, less any amount apportioned
to the goodwill of the PAK MAIL Center which is attributable to the Franchisor's
Marks and System, and less any amounts owed to the Franchisor by the Franchisee.
The following additional terms shall apply to the Franchisor's exercise of this
option:

            a. The Franchisor's option hereunder shall be exercisable by
      providing the Franchisee with written notice of its intention to exercise
      the option given to the Franchisee no later than the effective date of
      termination, in the case of termination, or at least 90 days prior to the
      expiration of the term of the franchise, in the case of non-renewal.

            b. The Franchisor and the Franchisee agree that the terms and
      conditions of this right and option to purchase may be recorded, if deemed
      appropriate by the Franchisor, in the real property records and the
      Franchisor and the Franchisee further agree to execute such additional
      documentation as may be necessary and appropriate to effectuate such
      recording.

            c. The Franchisor shall set the closing for the purchase of the PAK
      MAIL Center to take place no later than 60 days after the termination or
      nonrenewal date. The Franchisor will pay the purchase price in full at the
      closing, or, at its option, in five equal consecutive monthly installments
      with interest at a rate of ten percent per annum. The Franchisee must sign
      all documents of assignment and transfer as are reasonably necessary for
      purchase of the PAK MAIL Center or its assets by the Franchisor.

            d. During the time after the Franchisor notifies the Franchisee of
      the exercise of the option but before the closing ("Interim Period"), the
      Franchisor has the right to obtain an independent appraisal of the fair
      market value of the assets being purchased and, if the Franchisor requests
      that such an appraisal be obtained, the Franchisor and the Franchisee

                                       29

<PAGE>

      shall each select an appraiser who, in turn, shall select a third
      appraiser, whose appraisal shall be binding on both parties. The
      obligation of the Franchisor to close shall be contingent on the appraisal
      being acceptable to the Franchisor.

In the event that the Franchisor does not exercise the Franchisor's right to
purchase the Franchisee's PAK MAIL Center as set forth above, the Franchisee
will be free to keep or to sell, after such termination or expiration, to any
third party, all of the physical assets of its PAK MAIL Center; provided,
however, that all appearances of the Marks are first removed in a manner
approved in writing by the Franchisor.

18.5. Obligations of Franchisee Upon Termination or Expiration.
      ---------------------------------------------------------

      The Franchisee is obligated upon termination or expiration of this
Agreement to immediately:

            a. Pay to the Franchisor all Royalties, Advertising Contributions,
      other fees, and any and all amounts or accounts payable then owed the
      Franchisor or its affiliates pursuant to this Agreement, or pursuant to
      any other agreement, whether written or oral, including subleases and
      lease assignments, between the parties;

            b. Cease to identify itself as a PAK MAIL franchisee or publicly
      identify itself as a former Franchisee or use any of the Franchisor's
      trade secrets, signs, symbols, devices, trade names, trademarks, or other
      materials.

            c. Immediately cease to identify the Franchised Location as being,
      or having been, associated with the Franchisor and, if deemed necessary by
      the Franchisor, paint or otherwise change the interior and exterior of the
      Center to distinguish it from a PAK MAIL Center and immediately cease
      using any proprietary mark of the Franchisor or any mark in any way
      associated with the PAK MAIL Marks and System;

            d. Deliver to the Franchisor all items which bear the PAK MAIL
      Marks, signs, sign-faces, advertising materials, forms and other materials
      bearing any of the Marks or otherwise identified with the Franchisor and
      obtained by and in connection with this Agreement;

            e. Immediately deliver to the Franchisor the Operations Manual and
      all other information, documents and copies thereof which are proprietary
      to the Franchisor;

            f. Take such action as may be required to cancel all fictitious or
      assumed names or equivalent registrations relating to its use of any Marks
      which are under the exclusive control of the Franchisor or, at the option
      of the Franchisor, assign the same to the Franchisor;

            g. Notify the telephone company and all telephone directory
      publishers of the termination or expiration of the Franchisee's right to
      use any telephone number and any regular, classified or other telephone
      directory listings associated with any Mark and to authorize transfer
      thereof to the Franchisor or its designee. The Franchisee acknowledges
      that, as between the Franchisee and the Franchisor, the Franchisor has the
      sole rights to and interest in all telephone, telecopy or facsimile
      machine numbers and directory listings associated with any Mark. The
      Franchisee authorizes the Franchisor, and hereby appoints the Franchisor
      and any of its officers as the Franchisee's attorney-in-fact, to direct

                                       30

<PAGE>

      the telephone company and all telephone directory publishers to transfer
      any telephone, telecopy or facsimile machine numbers and directory
      listings relating to the PAK MAIL Center to the Franchisor or its
      designee, should the Franchisee fail or refuse to do so, and the telephone
      company and all telephone directory publishers may accept such direction
      or this Agreement as conclusive of the Franchisor's exclusive rights in
      such telephone numbers and directory listings and the Franchisor's
      authority to direct their transfer;

            h. If applicable, take such action as may be required to remove from
      the internet all sites referring to the Franchisee's former PAK MAIL
      Center or any of the Marks and to cancel or assign to the Franchisor, in
      the Franchisor's sole discretion, all rights to any domain names for any
      sites on the internet that refer to the Franchisee's former PAK MAIL
      Center or any of the Marks;

            i. Comply with all applicable provisions of the Software License
      Agreement; and

            j. Abide by all restrictive covenants set forth in Article 20 of
      this Agreement.

18.6. Acknowledgement.
      ----------------

      In the event this Agreement is terminated by the Franchisor prior to its
expiration as set forth in Sections 18.2 and 18.3 above, the Franchisee
acknowledges and agrees that, in addition to all other available remedies, the
Franchisor shall have the right to recover lost future royalties during any
period in which the Franchisee fails to pay such royalties through and including
the remainder of the then current term of this Agreement.

18.7. State and Federal Law.
      ----------------------

      THE PARTIES ACKNOWLEDGE THAT IN THE EVENT THAT THE TERMS OF THIS AGREEMENT
REGARDING TERMINATION OR EXPIRATION ARE INCONSISTENT WITH APPLICABLE STATE OR
FEDERAL LAW, SUCH LAW SHALL GOVERN THE FRANCHISEE'S RIGHTS REGARDING TERMINATION
OR EXPIRATION OF THIS AGREEMENT.

                           19. BUSINESS RELATIONSHIP

19.1. Independent Businesspersons.
      ----------------------------

      The parties agree that each of them are independent businesspersons, their
only relationship is by virtue of this Agreement and that no fiduciary
relationship is created hereunder. Neither party is liable or responsible for
the other's debts or obligations, nor shall either party be obligated for any
damages to any person or property directly or indirectly arising out of the
operation of the other party's business authorized by or conducted pursuant to
this Agreement. The Franchisor and the Franchisee agree that neither of them
will hold themselves out to be the agent, employer or partner of the other and
that neither of them has the authority to bind or incur liability on behalf of
the other.

                                       31

<PAGE>

19.2. Payment of Third Party Obligations.
      -----------------------------------

      The Franchisor shall have no liability for the Franchisee's obligations to
pay any third parties, including without limitation, any product vendors, or any
sales, use, service, occupation, excise, gross receipts, income, property or
other tax levied upon the Franchisee, the Franchisee's property, the PAK MAIL
Center or upon the Franchisor in connection with the sales made or business
conducted by the Franchisee (except any taxes the Franchisor is required by law
to collect from the Franchisee with respect to purchases from the Franchisor).

19.3. Indemnification.
      ----------------

      The Franchisee agrees to indemnify, defend and hold harmless the
Franchisor, its subsidiaries and affiliates, and their respective shareholders,
directors, officers, employees, agents, successors and assignees, (the
"Indemnified Parties") against, and to reimburse them for all claims,
obligations and damages described in this Section 19.3, any and all third party
obligations described in Section 19.2 and any and all claims and liabilities
directly or indirectly arising out of the operation of the PAK MAIL Center or
arising out of the use of the Marks and System in any manner not in accordance
with this Agreement. For purposes of this indemnification, claims shall mean and
include all obligations, actual and consequential damages and costs reasonably
incurred in the defense of any claim against the Indemnified Parties, including,
without limitation, reasonable accountants', attorneys' and expert witness fees,
costs of investigation and proof of facts, court costs, other litigation
expenses and travel and living expenses. The Franchisor shall have the right to
defend any such claim against it. This indemnity shall continue in full force
and effect subsequent to and notwithstanding the expiration or termination of
this Agreement.

                           20. RESTRICTIVE COVENANTS

20.1. Non-Competition During Term.
      ----------------------------

      The Franchisee acknowledges that, in addition to the license of the Marks
hereunder, the Franchisor has also licensed commercially valuable information
which comprises and is a part of the System, including without limitation,
operations, marketing, advertising and related information and materials and
that the value of this information derives not only from the time, effort and
money which went into its compilation, but from the usage of the same by all the
franchisees of the Franchisor using the Marks and System. The Franchisee
therefore agrees that other than the PAK MAIL Center licensed herein or
authorized by separate agreement with the Franchisor, neither the Franchisee nor
any of the Franchisee's officers, directors, shareholders or partners, nor any
member of his or their immediate families, shall during the term of this
Agreement:

            a. have any direct or indirect controlling interest as a disclosed
      or beneficial owner in a "Competitive Business" as defined below;

            b. perform services as a director, officer, manager, employee,
      consultant, representative, agent or otherwise for a Competitive Business;
      or

            c. divert or attempt to divert any business related to, or any
      customer or account of the PAK MAIL Center, the Franchisor's business or
      any other PAK MAIL franchisee's business, by direct inducement or
      otherwise, or divert or attempt to divert the employment of any employee
      of the Franchisor or another franchisee licensed by the Franchisor to use
      the Marks and System, to any Competitive Business by any direct inducement
      or otherwise.

                                       32

<PAGE>

      The term "Competitive Business" as used in this Agreement shall mean any
business operating, or granting franchises or licenses to others to operate, a
packaging, crating, freight forwarding and/or mailing business or any similar
business (excluding operating or granting franchises or licenses to others for
PAK MAIL Centers operated under franchise agreements with the Franchisor).
Notwithstanding the foregoing, the Franchisee shall not be prohibited from
owning securities in a Competitive Business if such securities are listed on a
stock exchange or traded on the over-the-counter market and represent 5% or less
of that class of securities issued and outstanding.

20.2. Post-Termination Covenant Not to Compete.
      -----------------------------------------

      Upon termination or expiration of this Agreement for any reason, the
Franchisee and its officers, directors, shareholders, and/or partners agree
that, for a period of two years commencing on the effective date of termination
or expiration, or the date on which the Franchisee ceases to conduct business,
whichever is later, neither Franchisee nor its officers, directors,
shareholders, and/or partners shall have any direct or indirect interest
(through a member of any immediate family of the Franchisee or its Owners or
otherwise) as a disclosed or beneficial owner, investor, partner, director,
officer, employee, consultant, representative or agent or in any other capacity
in any Competitive Business, defined in Section 20.1 above, located or operating
within a 25 mile radius of the Franchised Location or within 25 miles of any
other franchised or company-owned PAK MAIL Center. The restrictions of this
Section shall not be applicable to the ownership of shares of a class of
securities listed on a stock exchange or traded on the over-the-counter market
that represent 5% or less of the number of shares of that class of securities
issued and outstanding. The Franchisee and its officers, directors,
shareholders, and/or partners expressly acknowledge that they possess skills and
abilities of a general nature and have other opportunities for exploiting such
skills. Consequently, enforcement of the covenants made in this Section will not
deprive them of their personal goodwill or ability to earn a living.

20.3. Confidentiality of Proprietary Information.
      -------------------------------------------

      The Franchisee shall treat all information it receives which comprises or
is a part of the System licensed hereunder as proprietary and confidential and
will not use such information in an unauthorized manner or disclose the same to
any unauthorized person without first obtaining the Franchisor's written
consent. The Franchisee acknowledges that the Marks and the System have valuable
goodwill attached to them, that the protection and maintenance thereof is
essential to the Franchisor and that any unauthorized use or disclosure of the
Marks and System will result in irreparable harm to the Franchisor.

20.4. Confidentiality Agreement.
      --------------------------

      The Franchisor reserves the right to require that the Franchisee cause
each of its officers, directors, partners, shareholders, and Principal Operator,
and, if the Franchisee is an individual, immediate family members, to execute a
Nondisclosure and Noncompetition Agreement containing the above restrictions, in
a form approved by the Franchisor.

                                       33

<PAGE>

                                 21. INSURANCE

21.1. Insurance Coverage.
      -------------------

      The Franchisee shall procure, maintain and provide evidence of (i)
comprehensive general liability insurance for the Franchised Location and its
operations with a limit of not less than $1,000,000 combined single limit, or
such greater limit as may be required as part of any lease agreement for the
Franchised Location; (ii) automobile liability insurance covering all employees
of the PAK MAIL Center with authority to operate a motor vehicle in an amount
not less than $1,000,000 or, with the prior written consent of the Franchisor,
such lesser amount as may be available at a commercially reasonable rate, but in
no event less than any statutorily imposed minimum coverage; (iii) unemployment
and worker's compensation insurance with a broad form all-states endorsement
coverage sufficient to meet the requirements of the law; and (iv) all-risk
personal property insurance in an amount equal to at least 100% of the
replacement costs of the contents and tenant improvements located at the PAK
MAIL Center. All of the required policies of insurance shall name the Franchisor
as an additional named insured and shall provide for a 30 day advance written
notice to the Franchisor of cancellation.

21.2. Proof of Insurance Coverage.
      ----------------------------

      The Franchisee will provide proof of insurance to the Franchisor prior to
commencement of operations at its PAK MAIL Center. This proof will show that the
insurer has been authorized to inform the Franchisor in the event any policies
lapse or are cancelled. The Franchisor has the right to change the minimum
amount of insurance the Franchisee is required to maintain by giving the
Franchisee prior reasonable notice, giving due consideration to what is
reasonable and customary in the similar business. Noncompliance with the
insurance provisions set forth herein shall be deemed a material breach of this
Agreement; in the event of any lapse in insurance coverage, in addition to all
other remedies, the Franchisor shall have the right to demand that the
Franchisee cease operations of the PAK MAIL Centers until coverage is
reinstated, or, in the alternative, pay any delinquencies in premium payments
and charge the same back to the Franchisee.

                          22. MISCELLANEOUS PROVISIONS

22.1. Governing Law/Consent to Venue and Jurisdiction.
      ------------------------------------------------

      Except to the extent governed by the United States Trademark Act of 1946
(Lanham Act, 15 U.S.C. Sections 1051 et seq.) or other federal law, this
Agreement shall be interpreted under the laws of the state of Colorado and any
dispute between the parties shall be governed by and determined in accordance
with the substantive laws of the state of Colorado, which laws shall prevail in
the event of any conflict of law. The Franchisee and the Franchisor have
negotiated regarding a forum in which to resolve any disputes which may arise
between them and have agreed to select a forum in order to promote stability in
their relationship. Therefore, if a claim is asserted in any legal proceeding
involving the Franchisee, its officers or directors (collectively, "Franchisee
Affiliates") and the Franchisor, its officers, directors or sales employees
(collectively, "Franchisor Affiliates") both parties agree that the exclusive
venue for disputes between them shall be in the state and federal courts of
Colorado and each waive any objection either may have to the personal
jurisdiction of or venue in the state and federal courts of Colorado. The
Franchisor, the Franchisor Affiliates, the Franchisee and the Franchisee
Affiliates each waive their rights to a trial by jury.

22.2. Modification.
      -------------

      The Franchisor and/or the Franchisee may modify this Agreement only upon
execution of a written agreement between the two parties. The Franchisee
acknowledges that the Franchisor may modify its standards and specifications and
operating and marketing techniques set forth in the Operations Manual

                                       34

<PAGE>

unilaterally under any conditions and to the extent in which the Franchisor, in
its sole discretion, deems necessary to protect, promote, or improve the Marks
and the quality of the System, but under no circumstances will such
modifications be made arbitrarily without such determination.

22.3. Entire Agreement.
      -----------------

      This Agreement, including all exhibits and addenda, contains the entire
agreement between the parties and supersedes any and all prior agreements
concerning the subject matter hereof. The Franchisee agrees and understands that
the Franchisor shall not be liable or obligated for any oral representations or
commitments made prior to the execution hereof or for claims of negligent or
fraudulent misrepresentation and that no modifications of this Agreement shall
be effective except those in writing and signed by both parties. The Franchisor
does not authorize and will not be bound by any representation of any nature
other than those expressed in this Agreement. The Franchisee further
acknowledges and agrees that no representations have been made to it by the
Franchisor regarding projected sales volumes, market potential, revenues,
profits of the Franchisee's PAK MAIL Center, or operational assistance other
than as stated in this Agreement or in any disclosure document provided by the
Franchisor or its representatives.

22.4. Delegation by the Franchisor.
      -----------------------------

      From time to time, the Franchisor shall have the right to delegate the
performance of any portion or all of its obligations and duties hereunder to
third parties, whether the same are agents of the Franchisor or independent
contractors which the Franchisor has contracted with to provide such services.
The Franchisee agrees in advance to any such delegation by the Franchisor of any
portion or all of its obligations and duties hereunder.

22.5. Effective Date.
      ---------------

      This Agreement shall not be effective until accepted by the Franchisor as
evidenced by the signing and dating of this Agreement by an officer of the
Franchisor.

22.6. Review of Agreement.
      --------------------

      The Franchisee acknowledges that it had a copy of this Agreement in its
possession for a period of time not less than ten full business days, during
which time the Franchisee has had the opportunity to submit same for
professional review and advice of the Franchisee's choosing prior to freely
executing this Agreement.

22.7. Attorneys' Fees.
      ----------------

      In the event of any default on the part of either party to this Agreement,
in addition to all other remedies, the party in default will pay the aggrieved
party all amounts due and all damages, costs and expenses, including reasonable
attorneys' fees, incurred by the aggrieved party in any legal action,
arbitration or other proceeding as a result of such default, plus interest at
the highest rate allowable by law, accruing from the date of such default.

                                       35

<PAGE>

22.8. Injunctive Relief.
      ------------------

      Nothing herein shall prevent the Franchisor or the Franchisee from seeking
injunctive relief to prevent irreparable harm, in addition to all other
remedies. If the Franchisor seeks an injunction, the Franchisor will not be
required to post a bond or bonds in excess of $500.

22.9. Payment of Taxes.
      -----------------

      The Franchisee shall reimburse the Franchisor, or its affiliates and
designees, promptly and when due, the amount of all sales taxes, use taxes,
personal property taxes and similar taxes imposed upon, required to be collected
or paid by the Franchisor, or its affiliates or designees, on account of
services or goods furnished by the Franchisor, its affiliates or designees, to
the Franchisee through sale, lease or otherwise, or on account of collection by
the Franchisor of the initial franchise fee, Royalties, Advertising
Contributions or any other payments made by the Franchisee to the Franchisor
required under the terms of this Agreement.

22.10. No Waiver.
       ----------

       No waiver of any condition or covenant contained in this Agreement or
failure to exercise a right or remedy by the Franchisor or the Franchisee shall
be considered to imply or constitute a further waiver by the Franchisor or the
Franchisee of the same or any other condition, covenant, right, or remedy.

22.11. No Right to Set Off.
       --------------------

       The Franchisee shall not be allowed to set off amounts owed to the
Franchisor for Royalties, fees or other amounts due hereunder, against any
monies owed to Franchisee, nor shall the Franchisee in any event withhold such
amounts due to any alleged nonperformance by the Franchisor hereunder, which
right of set off is hereby expressly waived by the Franchisee.

22.12. Invalidity.
       -----------

       If any provision of this Agreement is held invalid by any tribunal in a
final decision from which no appeal is or can be taken, such provision shall be
deemed modified to eliminate the invalid element and, as so modified, such
provision shall be deemed a part of this Agreement as though originally
included. The remaining provisions of this Agreement shall not be affected by
such modification.

22.13. Notices.
       --------

       All notices required to be given under this Agreement shall be given in
writing, by certified mail, return receipt requested, or by an overnight
delivery service providing documentation of receipt, at the address set forth in
the first Section of this Agreement or at such other addresses as the Franchisor
or the Franchisee may designate from time to time, and shall be effectively
given when deposited in the United States mails, postage prepaid, or when
received via overnight delivery, as may be applicable.

22.14. Acknowledgement.
       ----------------

       BEFORE SIGNING THIS AGREEMENT, THE FRANCHISEE SHOULD READ IT CAREFULLY
WITH THE ASSISTANCE OF LEGAL COUNSEL. THE FRANCHISEE ACKNOWLEDGES THAT:

                                       36

<PAGE>

              (A) THE SUCCESS OF THE BUSINESS VENTURE CONTEMPLATED HEREIN
       INVOLVES SUBSTANTIAL RISKS AND DEPENDS UPON THE FRANCHISEE'S ABILITY AS
       AN INDEPENDENT BUSINESS PERSON AND ITS ACTIVE PARTICIPATION IN THE DAILY
       AFFAIRS OF THE BUSINESS, AND

              (B) NO ASSURANCE OR WARRANTY, EXPRESS OR IMPLIED, HAS BEEN GIVEN
       AS TO THE POTENTIAL SUCCESS OF SUCH BUSINESS VENTURE OR THE EARNINGS
       LIKELY TO BE ACHIEVED, AND

              (C) NO STATEMENT, REPRESENTATION OR OTHER ACT, EVENT OR
       COMMUNICATION, EXCEPT AS SET FORTH IN THIS AGREEMENT, AND IN ANY OFFERING
       CIRCULAR SUPPLIED TO THE FRANCHISEE IS BINDING ON THE FRANCHISOR IN
       CONNECTION WITH THE SUBJECT MATTER OF THIS AGREEMENT.

                                       37

<PAGE>

       IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first set forth above.

PAK MAIL CENTERS OF AMERICA, INC.,          FRANCHISEE
a Colorado corporation
                                            ----------------------------------
                                            (Print Name)

By:
   -------------------------------          ----------------------------------
Name:
     -----------------------------          Individually
Title:                                      Title:
      ----------------------------                -----------------------------
                                            Address:
                                                    ---------------------------
                                            City:
                                                 ------------------------------
                                            State:               Zip:
                                                  --------------     ----------

                                            OR:

                                            (if a corporation or partnership)

                                            -----------------------------------
                                            Company Name

                                            By:
                                               --------------------------------
                                            Name:
                                                 ------------------------------
                                            Title:
                                                 ------------------------------
                                            Address:
                                                    ---------------------------
                                            City:
                                                 ------------------------------
                                            State:               Zip:
                                                  --------------     ----------

(2/28/01)

                                       38

<PAGE>

                                                                    EXHIBIT I TO
                                                             FRANCHISE AGREEMENT

                  ADDENDUM TO PAK MAIL CENTERS OF AMERICA, INC.
                               FRANCHISE AGREEMENT

     1. Franchised Location and Protected Territory. The Franchised Location,
set forth in Section 3.1 of theAgreement shall be:
                                                 ------------------------------
-------------------------------------------------------------------------------
The Protected Territory described in Section 3.2 of the Agreement, shall be:
                                                                            ---
-------------------------------------------------------------------------------.

         OR

     Designated Area. The Franchisor and the Franchisee acknowledge that the
Franchised Location cannot be designated in Section 1 above as a specific
address because the location has not been selected and approved; therefore,
within 90 days following the date of the Agreement, the Franchisee shall take
steps to choose and acquire a location for its PAK MAIL Center within the
following geographic area ("Designated Area"):
                                              ---------------------------------
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
---------------------------.

     2. Acknowledgement. By executing this Exhibit and/or the Rider hereto, the
Franchisee acknowledges that the Franchisor's approval of a site does not
constitute a representation or warranty of any kind, express or implied, as to
the suitability of the site for a PAK MAIL Center or for any other purpose and
that the Franchisee's acceptance of a franchise for the operation of a PAK MAIL
Center at the site is based on its own independent investigation of the
suitability of the site.

     Fully executed this       day of                  ,   20  .
                        ------        -----------------      --

PAK MAIL CENTERS OF AMERICA, INC.,          FRANCHISEE
a Colorado corporation
                                            -----------------------------------
                                            (Print Name)

By:
   -------------------------------          -----------------------------------
Name:
     -----------------------------          Individually
Title:                                      Title:
      ----------------------------                -----------------------------
                                            Address:
                                                    ---------------------------
                                            City:
                                                 ------------------------------
                                            State:               Zip:
                                                  --------------     ----------

                                            OR:

                                            (if a corporation or partnership)

                                            -----------------------------------
                                            Company Name

                                            By:
                                               --------------------------------
                                            Name:
                                                 ------------------------------
                                            Title:
                                                  -----------------------------
                                            Address:
                                                    ---------------------------
                                            City:
                                                 ------------------------------
                                            State:               Zip:
                                                  ------------       ----------

<PAGE>

                                                                     EXHIBIT I-1
                                                          TO FRANCHISE AGREEMENT

                      RIDER TO ADDENDUM - LOCATION APPROVAL

     1. Franchised Location. The Franchised Location, set forth in Section 3.1
of the Agreement shall be:
                          -----------------------------------------------------
 . ----------------------------------------------------------------------------.

     2. Legal Address. The business address for any notices mailed pursuant to
Section 22.13 of the Agreement shall be changed to read as follows:
                                                                   ------------
-------------------------------------------------------------------------------
 .

     3. Protected Territory. The Protected Territory described in Section 3.2 of
the Agreement, shall be: -------------------------------------------------------
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
 .

 Fully executed this day        of                             ,   20  .
                        --------  -----------------------------      --

PAK MAIL CENTERS OF AMERICA, INC.,          FRANCHISEE
a Colorado corporation
                                            -----------------------------------
                                            (Print Name)

By:
   -------------------------------          -----------------------------------
Name:
     -----------------------------          Individually
Title:                                      Title:
      ----------------------------                -----------------------------
                                            Address:
                                                    ---------------------------
                                            City:
                                                 ------------------------------
                                            State:                Zip:
                                                  ---------------     ---------

                                            OR:

                                            (if a corporation or partnership)

                                            -----------------------------------
                                            Company Name

                                            By:
                                               --------------------------------
                                            Name:
                                                 ------------------------------
                                            Title:
                                                  -----------------------------
                                            Address:
                                                    ---------------------------
                                            City:
                                                 ------------------------------
                                            State:               Zip:
                                                  --------------     ----------

<PAGE>

                                                                      EXHIBIT II
                                                          TO FRANCHISE AGREEMENT

               GUARANTY AND ASSUMPTION OF FRANCHISEE'S OBLIGATIONS
               ---------------------------------------------------

     In consideration of, and as an inducement to, the execution of the above
Franchise Agreement (the "Agreement") by Pak Mail Centers of America, Inc. (the
"Franchisor"), each of the undersigned hereby personally and unconditionally:

     Guarantees to the Franchisor and its successors and assigns, for the term
     of this Agreement, including renewals thereof, that the franchisee as that
     term is defined in the Agreement ("Franchisee") shall punctually pay and
     perform each and every undertaking, agreement and covenant set forth in the
     Agreement; and

     Agrees to be personally bound by, and personally liable for the breach of,
     each and every provision in the Agreement and all obligations related
     thereto.

Each of the undersigned waives the following:

          1. Acceptance and notice of acceptance by the Franchisor of the
          foregoing undertaking;

          2. Notice of demand for payment of any indebtedness or nonperformance
          of any obligations hereby guaranteed;

          3. Protest and notice of default to any party with respect to the
          indebtedness or nonperformance of any obligations hereby guaranteed;

          4. Any right he or she may have to require that any action be brought
          against Franchisee or any other person as a condition of liability;
          and

          5. Any and all other notices and legal or equitable defenses to which
          he or she may be entitled.

Each of the undersigned consents and agrees that:

          1. His or her direct and immediate liability under this guaranty shall
          be joint and several;

          2. He or she shall render any payment or performance required under
          the Agreement upon demand if Franchisee fails or refuses punctually to
          do so;

          3. Such liability shall not be contingent or conditioned upon pursuit
          by the Franchisor of any remedies against Franchisee or any other
          person; and

          4. Such liability shall not be diminished, relieved or otherwise
          affected by any extension of time, credit or other indulgence which
          the Franchisor may from time to time grant to Franchisee or to any
          other person, including without limitation the acceptance of any
          partial payment or performance, or the compromise or release of any
          claims, none of which shall in any way modify or amend this guaranty,
          which shall be continuing and irrevocable during the term of the
          Agreement, including renewals thereof.

     IN WITNESS WHEREOF, each of the undersigned has affixed his or her
signature effective on the same day and year as the Agreement was executed.

WITNESS                                     GUARANTOR(S)

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

<PAGE>

                                                                     EXHIBIT III
                                                          TO FRANCHISE AGREEMENT

                             STATEMENT OF OWNERSHIP

Franchisee:
            -------------------------------------------------------------------

Trade Name (if different from above):

                                Form of Ownership
                                   (Check One)

                                                                   Limited
______ Individual  ______ Partnership  ______ Corporation  ______  Liability
                                                                   Company

     If a Partnership, provide name and address of each partner showing
percentage owned, whether active in management, and indicate the state in which
the partnership was formed.

     If a Limited Liability Company, provide name and address of each member and
each manager showing percentage owned and indicate the state in which the
Limited Liability Company was formed.

     If a Corporation, give the state and date of incorporation, the names and
addresses of each officer and director, and list the names and addresses of
every shareholder showing what percentage of stock is owned by each.

--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
     Franchisee acknowledges that this Statement of Ownership applies to the PAK
MAIL Center authorized under the Franchise Agreement.

     Use additional sheets if necessary. Any and all changes to the above
information must be reported to the Franchisor in writing.

Date                                        Name
     -----------------------------              -------------------------------

<PAGE>

                                                                      EXHIBIT IV
                                                          TO FRANCHISE AGREEMENT

                AUTHORIZATION AGREEMENT FOR PREARRANGED PAYMENTS
                                 (DIRECT DEBITS)

The undersigned depositor ("Depositor") hereby (1) authorizes Pak Mail Centers
of America, Inc. ("Company") to initiate debit entries and/or credit correction
entries to the undersigned's checking and/or savings account indicated below and
(2) authorizes the depository designated below ("Depository") to debit such
account pursuant to Company's instructions.

----------------------------------          -----------------------------------
Depository                                  Branch

----------------------------------          -----------------------------------
City                                        State                     Zip Code

--------------------------------------------------------------------------------
Bank Transit/ABA Number                                          Account Number

This authority is to remain in full force and effect until Depository has
received joint written notification from Company and Depositor of the
Depositor's termination of such authority in such time and in such manner as to
afford Depository a reasonable opportunity to act on it. Notwithstanding the
foregoing, Depository shall provide Company and Depositor with 30 days' prior
written notice of the termination of this authority. If an erroneous debit entry
is initiated to Depositor's account, Depositor shall have the right to have the
amount of such entry credited to such account by Depository, if (a) within 15
calendar days following the date on which Depository sent to Depositor a
statement of account or a written notice pertaining to such entry or (b) 45 days
after posting, whichever occurs first, Depositor shall have sent to Depository a
written notice identifying such entry, stating that such entry was in error and
requesting Depository to credit the amount thereof to such account. These rights
are in addition to any rights Depositor may have under federal and state banking
laws.

----------------------------------          -----------------------------------
DEPOSITOR (Print Name)                      DEPOSITORY (Print Name)

By:                                         By:
   -------------------------------             --------------------------------
Its:                                        Its:
    ------------------------------              -------------------------------
Date:                                       Date:
     -----------------------------               ------------------------------

<PAGE>

                                                                       EXHIBIT V
                                                          TO FRANCHISE AGREEMENT

                       ADDENDUM TO FRANCHISE AGREEMENT --
                                BUILD-OUT PROGRAM

     THIS ADDENDUM ("Addendum") to the Franchise Agreement dated_______________
__________________, 20____ is made effective as of the same date, by and between
PAK MAIL CENTERS OF AMERICA, INC. ("Franchisor") and
________________________________________________________________ ("Franchisee"),
to supplement and amend certain terms of the Agreement. To the extent not
defined herein, all initial-capitalized references in this Agreement shall have
the same meaning as defined in the Agreement.

                                     PURPOSE

     A. The Agreement grants the Franchisee a franchise for the establishment
and operation of a PAK MAIL Center in a retail location ("Center").

     B. The Franchisor provides or makes available construction, development and
build-out services ("Build-Out Services") to assist qualified franchisees in
constructing, developing and equipping a Center.

     C. The Franchisee desires to obtain the Build-Out Services and the
Franchisor desires to provide or make available the Build-Out Services to the
Franchisee under the terms and conditions which are contained in this Addendum.

     The Franchisor and the Franchisee therefore agree as follows:

     1. Build-Out Services. The Franchisor shall provide or make available,
itself or through arrangements with independent contractors, the following
Build-Out Services to the Franchisee, for the development and construction of
the Center:

          a. Procurement of suitable plans and specifications conforming to the
     Franchisor's requirements for dimensions, exterior design, materials,
     interior design, layout, signs, counters, equipment and decorating for the
     Center, in compliance with applicable ordinances, building codes, permit
     requirements and lease requirements and restrictions.

          b. Obtaining of required construction-related permits and licenses.

          c. Procurement of fixtures, materials, equipment, modular furniture,
     counters and other such materials required for the construction of the
     Center.

          d. Securing of all contractors and/or subcontractors to construct
     improvements and install equipment and fixtures in the Center.

          e. Completion of the construction of required improvements to the
     Center premises and decorate the premises in compliance with the plans and
     specifications, and delivery of the completed Center.

<PAGE>

          f. Furnishing and installing the required signage for the Center, if
     mutually agreed to by the parties.

          g. Furnishing and installing certain optional equipment, if mutually
     agreed to by the parties.

     2. Commencement of Build-Out Services. The Franchisor shall not be
obligated to commence the Build-Out Services until the Franchisee submits an
executed lease or other authority ("Lease") to occupy the location for the
Center, which Lease has been previously approved by the Franchisor, and pays the
first installment of the costs for build-out, as prescribed in Section 4.a below
("Start Date").

     3. Completion of Build-Out Obligations. Conditional upon the timely payment
of the costs for build-out, an estimate of which have been acknowledged and
agreed to by the parties in writing ("Build-Out Costs"), and submission of an
executed Lease for the location of the Center, the Franchisor agrees to use its
best efforts to complete development of and have the Center ready to open and
commence the operation of business within a reasonable time after the Franchisor
obtains possession of the premises, as may be necessary, and to obtain all
required construction permits.

     4. Build-Out Costs and Additional Expenses. The Build-Out Costs shall be
calculated in the Build-Out Schedule and executed by the Franchisor and the
Franchisee no later than the Start Date. The Franchisee acknowledges that the
Build-Out Costs do not include other charges, costs and expenses for which the
Franchisee is responsible and liable, such as construction extras, landlord
chargebacks and additional costs and expenses as may be incurred due to the
Franchisee's failure to tender the Build-Out Costs as required by this
Agreement. The Franchisee acknowledges that the Build-Out Costs include a fee to
the Franchisor, denoted herein as the "Development Fee". In addition:

          a. The Build-Out Costs shall be paid prior to the commencement of the
     Build-Out Services. The Franchisee acknowledges and understands that
     construction of the Center by the Franchisor will not begin until the
     Build-Out Costs have been paid to the Franchisor in full; provided,
     however, upon receipt by the Franchisor of evidence of a binding finance
     commitment from a third party to the Franchisee, the Franchisor may elect,
     in its sole discretion, to commence construction of the Center without
     receiving payment of all of the Build-Out Costs and/or to otherwise vary
     the payment schedule for the Build-Out Costs.

          b. The Franchisee is solely and exclusively responsible and liable for
     and shall pay when due all sales, use, property or other taxes (including
     any penalties and interest) owed due to the construction of the Center, the
     improvement of the premises where the Center is located and the purchase of
     all materials, equipment, fixtures, furniture, labor, or other items
     utilized in the development and/or construction of the Center.

          c. To the extent not covered by the Build-Out Costs, the Franchisee
     shall be responsible for and shall pay when due all other costs and
     expenses incurred in the development of the Center.

                                       2

<PAGE>

          d. Franchisee grants to Franchisor a Security Interest in all
     equipment, supplies, furniture and inventory located at the Center until
     such time as full payment is received by Franchisor and all third parties
     for the Build-Out Services provided.

          e. The Franchisee acknowledges and agrees that the actual cost of the
     build-out shall be computed upon completion of the Build-Out Services and
     the Development Fee as estimated in writing shall be adjusted to reflect
     the actual cost of the build-out of the Center.

     5. Control of Build-Out. The Franchisee acknowledges that the development
of the Center, all design changes, modifications to the Center design, all
construction issues, trade fixture and equipment changes, and all other matters
related to the development of the Center and the construction thereof, shall be
within the sole discretion of the Franchisor. The Center shall be turned over to
Franchisee ready to open for business, subject to a punch list of items to be
corrected within 60 days of the turnover to the Franchisee. Franchisee shall be
responsible and liable for obtaining all business licenses, permits and the like
not related to construction, required by state or local authorities for the
operation of the Center.

     6. Conversion and Design, Signs, Equipment and Permits and Licenses.
Sections 5.3, 5.4, 5.5 and 5.6 of the Agreement are amended by adding the
following to the end of each section:

     Notwithstanding the foregoing, the Franchisor acknowledges the necessary
     conversion and design of the location, if any, meets the Franchisor's plans
     and specifications; any signs meet the standards and specifications of the
     Franchisor and comply with applicable mall regulations, local ordinances,
     building codes and zoning regulations; the equipment and POS System meet
     the Franchisor's standards and specifications; and the necessary permits
     and licenses relating to the construction of the Center have been obtained.
     To the extent applicable, however, all of the Franchisee's covenants set
     forth in this Section apply to the Franchisee's operation of the Center.

     7. Improvements and Warranties. Within 30 days after completion of the
Center, the Franchisor shall provide the Franchisee a schedule listing all
leasehold improvements, equipment, furniture and fixtures installed in the
Center, and any and all equipment warranties provided by third parties, if not
already forwarded to the Franchisee.

     8. Excuse of Performance. Notwithstanding anything in this Addendum to the
contrary, the obligations of the Franchisor to pursue and complete the Build-Out
Services shall be excused from such delay of performance as may be caused by any
legal directive; intervention of any governmental order, regulation, direction,
request or contingency; acts of God; or any cause beyond the reasonable control
of the Franchisor; provided, however, that such excuse of performance shall be
limited to the period of delay directly related to such cause.

     9. Conflict. In the event of a conflict between the terms of the Agreement
and the terms of this Addendum, the terms of this Addendum shall control.

     10. Effective Date. This Addendum shall not become effective until accepted
by the Franchisor as evidenced by the signing and dating of this Addendum by an
officer of the Franchisor.

                                       3

<PAGE>

     IN WITNESS WHEREOF, the parties hereto have executed this Addendum on the
date first set forth above.

PAK MAIL CENTERS OF AMERICA, INC.,          FRANCHISEE
a Colorado corporation
                                            -----------------------------------
                                            (Print Name)

By:
   -------------------------------          -----------------------------------
Name:
     -----------------------------          Individually
Title:                                      Title:
      ----------------------------                -----------------------------
                                            Address:
                                                    ---------------------------
                                            City:
                                                 ------------------------------
                                            State:               Zip:
                                                  --------------     ----------

                                            OR:

                                            (if a corporation or partnership)

                                            -----------------------------------
                                            Company Name

                                            By:
                                               --------------------------------
                                            Name:
                                                 ------------------------------
                                            Title:
                                                  -----------------------------
                                            Address:
                                                    ---------------------------
                                            City:
                                                 ------------------------------
                                            State:               Zip:
                                                  -------------      ----------

(2/28/01)

                                       4

<PAGE>

                                                                      EXHIBIT VI
                                                          TO FRANCHISE AGREEMENT

                                  AMENDMENT TO
                          PAK MAIL FRANCHISE AGREEMENT
                                    (RENEWAL)

     PAK MAIL CENTERS OF AMERICA, INC. ("Franchisor") and _____________________
__________________________________ ("Franchisee") entered into a certain
Franchise Agreement ("Agreement") on ,_______________ 20__, and desire to
supplement and amend certain terms and conditions of such Agreement by this
Amendment to Franchise Agreement ("Amendment"). The parties therefore agree as
follows:

     1. Initial Franchise Fee. Section 4.1 is deleted in its entirety.

     2. Approval of Franchised Location. Section 5.1 is deleted in its entirety.

     3. Center Upgrades. Sections 5.3, 5.4 and 5.5 are amended to include the
following:

          Within _________ (__) days of the date of this Agreement, Franchisee
     agrees to upgrade the PAK MAIL Center as follows__________________________
     _________________________________________________________________________.

     4. Commencement of Operations. Section 5.7 is deleted in its entirety.

     5. Initial Training. Sections 6.1 and 6.2 are deleted in their entirety.

     6. Franchisor's Development Assistance. Section 7.1 is deleted in its
entirety

     7. Marketing Material Beginning Inventory. Section 12.2 is deleted in its
entirety.

     8. Release. Franchisee for itself, its successors, assigns, agents,
representatives, employees, officers, directors, managers and owners hereby
fully and forever unconditionally releases and discharges Franchisor and its
affiliates, and their respective current and former successors, assigns, agents,
representatives, employees, officers, directors and shareholders (collectively
referred to as "Franchisor Affiliates") from any and all claims, demands,
obligations, actions, liabilities and damages of every kind and nature
whatsoever, in law or in equity, whether known or unknown to it, which it may
now have against Franchisor or Franchisor Affiliates, or which may hereafter be
discovered, in connection with, as a result of, or in any way arising from, any
relationship or transaction with Franchisor or Franchisor Affiliates, however
characterized or described, which relates in any way to the former PAK MAIL
franchise agreement between Franchisee and Franchisor or the former franchise
relationship, from the beginning of time until the date of this Agreement.

     9. Successor Fee. Franchisor acknowledges receipt of $________ from
Franchisee in payment of the successor franchise fee.

<PAGE>

     10. Effectiveness of Agreement. The terms and conditions of this Amendment
are in addition to or in explanation of the existing terms and conditions of the
Agreement and shall prevail over and supersede any inconsistent terms and
conditions thereof.

     Fully executed this ____ day of ____________________, 20__.

                                            PAK MAIL CENTERS OF AMERICA, INC.

                                            By:
                                               --------------------------------
                                            Title:
                                                  -----------------------------
                                            Date:
                                                  -----------------------------

                                            FRANCHISEE:

                                            By:
                                               --------------------------------
                                            Title:
                                                  -----------------------------
                                            Date:
                                                  -----------------------------

                                            -----------------------------------
                                            Individually

                                            -----------------------------------
                                            Individually

                                       2

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00020-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00020-of-00352.parquet"}]]