CONSTRUCTION LOAN AGREEMENT
                           (Lakeside)

     THIS CONSTRUCTION LOAN AGREEMENT is made as of the 27th day
of February, 1998, by and among WALDEN/GRUPE ELK GROVE, L.P., a
Delaware limited partnership (the "Borrower"), having its
principal place of business at c/o The Grupe Company, 3255
W. March Lane, 4th Floor, Stockton, California 95219, BankBoston,
N.A., a national banking association, and the other lending
institutions which may become parties hereto pursuant to Section 21
(collectively, the "Banks"), and BankBoston, N.A., as Agent for
the Banks (the "Agent").

                      W I T N E S S E T H:

     WHEREAS, Borrower has requested that the Banks provide a
construction loan facility to Borrower;

     WHEREAS, Agent and the Banks are willing to provide such
facility to Borrower upon the terms and conditions set forth
herein;

     NOW, THEREFORE, for and in consideration of Ten and No/100
Dollars ($10.00), and other good and valuable considerations, the
receipt and sufficiency whereof are hereby acknowledged, the
parties hereto covenant and agree as follows:

          SECTION 1.  DEFINITIONS AND RULES OF INTERPRETATION.

     Section 1.1  Definitions.  The following terms shall have the
meanings set forth in this Section 1 or elsewhere in the provisions of
this Agreement or other Loan Documents referred to below:

          Advance.  Any disbursement of the proceeds of the Loan
made or to be made by the Banks pursuant to the terms of this
Agreement.

          Agent.  BankBoston, N.A. acting as agent for the Banks,
its successors and assigns.

          Agent's Head Office.  The Agent's head office located
at 100 Federal Street, Boston, Massachusetts 02110, or at such
other location as the Agent may designate from time to time by
notice to the Borrower and the Banks.

          Agent's Special Counsel.  Long Aldridge & Norman LLP or
such other counsel as may be approved by the Agent.

          Agreement.  This Agreement, including the Schedules and
Exhibits hereto.

          Agreement Regarding Fees.   See Section 5.1.

          Appraisal.  An appraisal of the value of the Project,
determined on a fair value basis, performed by a qualified
independent appraiser selected by the Agent who is not an
employee of the Borrower, the Guarantors, the Agent or a Bank,
the form and substance of such appraisal and the identity of the
appraiser to be in accordance with regulatory laws and policies
(both regulatory and internal) applicable to the Banks and
otherwise acceptable to the Majority Banks.

          Appraised Value.  The fair value of the Project
determined by the most recent Appraisal of such parcel or update
obtained pursuant to this Agreement, subject, however, to such
changes or adjustments to the value determined thereby as may be
required by the appraisal departments of the Majority Banks in
their good faith business judgment.

          Architect's Contract.  The contract(s) between the
Borrower and the Borrower's Architect, providing for the design
of the Improvements and the supervision of the construction
thereof.

          Assignment of Leases.  The Absolute Assignment of
Leases and Rents, dated or to be dated on or prior to the Closing
Date, made by the Borrower to the Agent for the benefit of the
Banks, as the same may be modified or amended, pursuant to which
the Borrower assigns its right, title and interest as landlord in
and to the Leases and the rents, issues and profits of the
Project, such Absolute Assignment of Leases and Rents to be in
form and substance satisfactory to the Agent.

          Assignment of Project Documents.  The Assignment of
Project Documents, dated or to be dated on or prior to the
Closing Date, made by the Borrower to the Agent for the benefit
of the Banks, as the same may be modified or amended, pursuant to
which the Borrower assigns and grants a security interest in the
Borrower's right, title and interest in and to the Architect's
Contract, the Construction Contract, the Plans and Specifications
and the Project Approvals, such Assignment of Project Documents
to be in form and substance satisfactory to the Agent.

          Balance Sheet Date.  As to the Borrower and the General
Partner February 27, 1998.  As to Walden and WDOP December 31,
1997.  As to The Grupe Company December 31, 1996.

          Banks.  BKB, the other lending institutions a party to
this Agreement and any other Person who becomes an assignee of
any rights of a Bank pursuant to Section 21 (but not including any
Participant, as defined in Section 21).

          Base Rate.  The annual rate of interest announced from
time to time by Agent at Agent's Head Office as its "base rate".
Any change in the rate of interest payable hereunder resulting
from a change in the Base Rate shall become effective as of the
opening of business on the day on which such change in the Base
Rate becomes effective.

          Base Rate Advances.  Those Advances bearing interest
calculated by reference to the Base Rate.

          BKB.  BankBoston, N.A.

          Borrower.  As defined in the preamble hereto.

          Borrower's Architect. Lee Jagoe Architecture/Planning,
having a usual place of business at 2800 W. March Lane, Suite
475, Stockton, California 95219.

          Borrower's Requisition.  See Section 3.1.

          Business Day.  Any day on which banking institutions in
Boston, Massachusetts are open for the transaction of banking
business and, in the case of LIBOR Rate Advances, which also is a
LIBOR Business Day.

          Capitalized Lease.  A lease under which a Person is the
lessee or obligor, the discounted future rental payment
obligations under which are required to be capitalized on the
balance sheet of the lessee or obligor in accordance with
generally accepted accounting principles.

          Closing Date.  The first date on which the conditions
set forth in Section 11 have been satisfied and any Advances are to be
made.

          Code.  The Internal Revenue Code of 1986 and the
regulations thereunder, as amended and in effect from time to
time.

          Collateral.  All of (a) the property, rights and
interests of the Borrower that are or are intended to be subject
to the security interests, assignments, and mortgage liens
created by the Security Documents, including, without limitation,
the Project, and (b) the Guaranty.

          Commitment.  With respect to each Bank, the amount set
forth on Schedule 1 hereto as the amount of such Bank's
Commitment to make or maintain Advances to the Borrower, as the
same may be reduced from time to time in accordance with the
terms of this Agreement.

          Commitment Percentage.  With respect to each Bank, the
percentage set forth on Schedule 1 hereto as such Bank's
percentage of the aggregate Commitments of all of the Banks.

          Completion Date.  April 30, 1999.

          Construction Contract.  The Construction Agreement,
dated as of  February 27, 1998, between the Borrower and
Marchbrook Building Company, providing for the construction of
the Improvements on the Land.

          Construction Inspector.  AECC, Inc., or, at the Agent's
option, another firm of consulting architects, engineers or
inspectors appointed by the Agent from time to time.

          Construction Schedule.  The schedule, broken down by
trade, job and subcontractor, of the estimated dates of
commencement and completion of construction of the Improvements,
prepared by the Contractor, approved by the Majority Banks and
attached hereto as Exhibit A.

          Contingency Reserve.  The amount(s) allocated as
contingency reserve in the Project Budget, to be advanced only in
accordance with the provisions of Section 2.6 hereof.

          Contractor. Marchbrook Building Company, a California
corporation, having a usual place of business at 3255 West March
Lane, Suite 400, Stockton, California 95219.

          Conversion Request.  A notice given by the Borrower to
the Agent of its election to convert or continue an Advance in
accordance with Section 5.3.

          Default.  A condition or event which would, with the
giving of notice or lapse of time or both, constitute an Event of
Default.

          Default Rate.  See Section 5.12.

          Defective Work.  See Section 2.4.

          Designee.  See Section 10.11.

          Direct Costs.  Direct Costs shall mean and include the
costs of the Land, the Personal Property, and all labor,
materials, fixtures, machinery and equipment required to
construct, equip and complete the Improvements in accordance with
the Plans and Specifications.

          Disbursement Schedule.  The schedule of the amounts of
Advances anticipated to be requisitioned by the Borrower each
month during the term of construction of the Improvements
(including an itemization of Direct Costs and Indirect Costs to
be included in each such requisition), approved by the Majority
Banks and attached hereto as Exhibit B.

          Distribution.  With respect to any Person, the
declaration or payment of any cash, cash flow, dividend or
distribution to any partner of such Person or on or in respect of
any shares of any class of capital stock or beneficial interest
of such Person, other than dividends or distributions payable
solely in equity securities of such Person; the purchase,
redemption, exchange or other retirement of any partnership
interest, shares of any class of capital stock or other
beneficial interest of such Person, directly or indirectly
through a Subsidiary of such Person or otherwise; the return of
capital by such Person to its partners, members or shareholders
as such; or any other distribution on or in respect of any
partnership interests or shares of any class of capital stock or
other beneficial interest of such Person.

          Dollars or $.  Dollars in lawful currency of the United
States of America.

          Domestic Lending Office.  Initially, the office of each
Bank designated as such in Schedule 1 hereto; thereafter, such
other office of such Bank, if any, located within the United
States that will be making or maintaining Base Rate Advances.

          Draw Request.  With respect to each Advance, the
Borrower's Requisition for such Advance, and documents required
by this Agreement to be furnished to the Agent as a condition to
such Advance.

          Drawdown Date.  The date on which any Advance is made
or is to be made, and the date on which any Advance which is made
prior to the Maturity Date is converted or combined in accordance
with Section 5.3.

          Employee Benefit Plan.  Any employee benefit plan
within the meaning of Section 3(3) of ERISA maintained or contributed to
by the Borrower or any ERISA Affiliate, other than a
Multiemployer Plan.

          Environmental Laws.  See Section 3.7 of the Security
Deed.

          ERISA.  The Employee Retirement Income Security Act of
1974, as amended and in effect from time to time and any rules or
regulations promulgated pursuant thereto.

          ERISA Affiliate.  Any Person which is treated as a
single employer with the Borrower under Section 414 of the Code.

          Event of Default.  See Section 13.1.

          Financing Statements.  Uniform Commercial Code Form 1
Financing Statement(s) from the Borrower to the Agent for the
benefit of the Banks giving notice of a security interest in the
Collateral, such financing statements to be in form and substance
satisfactory to the Agent.

          Generally accepted accounting principles.  Principles
that are (a) consistent with the principles promulgated or
adopted by the Financial Accounting Standards Board and its
predecessors, as in effect from time to time and (b) consistently
applied with past or pro forma financial statements of the
Borrower adopting the same principles; provided that a certified
public accountant would, insofar as the use of such accounting
principles is pertinent, be in a position to deliver an
unqualified opinion (other than a qualification regarding changes
in generally accepted accounting principles) as to financial
statements in which such principles have been properly applied.

          General Partner.  Elk Grove-Lakeside Apartments, L.P.,
a California limited partnership having its place of business at
c/o The Grupe Company, 3255 W. March Lane, 4th Floor, Stockton,
California 95219.

          Governmental Authority.  The United States of America,
the State of California, any political subdivision thereof, and
any agency, authority, department, commission, board, bureau, or
instrumentality of any of them.

          Gross Cash Receipts.  Gross Cash Receipts shall mean
the sum of cash received by or for the account of the Borrower in
connection with the ownership or operation of the Project,
including, without limitation, in payment of the following items:

          (a)  Rentals and any other amounts received from
               tenants occupying space in the Project;

          (b)  Parking revenues received by the Borrower in
               connection with the operation of any parking
               facilities; and

          (c)  Receipts from vending machines, recreational
               facilities and any and all other operating
               revenues received from the Project.

          Gross Cash Receipts shall be determined on the basis of
sound cash basis accounting practices applied on a consistent
basis.

          Guaranteed Pension Plan.  Any employee pension benefit
plan within the meaning of Section 3(2) of ERISA maintained or
contributed to by the Borrower or any ERISA Affiliate the
benefits of which are guaranteed on termination in full or in
part by the PBGC pursuant to Title IV of ERISA, other than a
Multiemployer Plan.

          Guarantors.  Collectively, WDOP, Walden, The Grupe
Company and any other Person that becomes a guarantor of the
Obligations.

          Guaranty.  Collectively, the Unconditional Guaranty of
Payment and Performance made by Walden and WDOP in favor of the
Agent and the Banks, the Unconditional Guaranty of Payment and
Performance made by The Grupe Company in favor of the Agent and
the Banks, and each Unconditional Guaranty of Payment and
Performance made by any other Guarantor in favor of the Agent and
the Banks, as the same may be modified and amended, such Guaranty
to be in form and substance satisfactory to the Agent.

          Hazardous Materials.  See Section 3.7 of the Security
Deed.

          Improvements.  The approximately 280-unit residential
apartment complex and related improvements to be constructed on
the Land in accordance with the Plans and Specifications.

          Indebtedness.  All obligations, contingent and
otherwise, that in accordance with generally accepted accounting
principles should be classified upon the obligor's balance sheet
as liabilities, or to which reference should be made by footnotes
thereto, including in any event and whether or not so classified:
(a) all debt and similar monetary obligations, whether direct or
indirect (including, without limitation, any obligations
evidenced by bonds, debentures, notes or similar debt instruments
and all subordinated debt); (b) all liabilities secured by any
mortgage, pledge, security interest, lien, charge, or other
encumbrance existing on property owned or acquired subject
thereto, whether or not the liability secured thereby shall have
been assumed; (c) all guarantees, endorsements and other
contingent obligations whether direct or indirect in respect of
indebtedness of others, including any obligation to supply funds
to or in any manner to invest in, directly or indirectly, a
Person to purchase indebtedness, or to assure the owner of
indebtedness against loss, through an agreement to purchase
goods, supplies, or services for the purpose of enabling the
debtor to make payment of the indebtedness held by such owner or
otherwise, and the obligations to reimburse the issuer in respect
of any letters of credit; and (d) any obligation as a lessee or
obligor under a Capitalized Lease.

          Indemnity Agreement.  The Indemnity Agreement Regarding
Hazardous Materials, dated or to be dated on or prior to the
Closing Date, made by the Borrower and the Guarantors in favor of
the Agent and the Banks, pursuant to which the Borrower and the
Guarantors agree to indemnify the Agent and the Banks with
respect to Hazardous Materials and Environmental Laws, such
Indemnity Agreement to be in form and substance satisfactory to
the Agent.

          Indirect Costs.  Indirect Costs shall mean and include
title insurance premiums, survey charges, engineering fees,
architectural fees, real estate taxes, appraisal costs,
commitment fees and interest payable to the Banks under the Loan,
premiums for insurance, marketing, advertising and leasing costs,
brokerage commissions, legal fees, accounting fees, overhead and
administrative costs, and all other expenses which are
expenditures relating to the Project and are not Direct Costs.

          Interest Payment Date.  The first day of each calendar
month during the term of the Loan, and in addition thereto with
respect to each LIBOR Rate Advance, the last day of the Interest
Period relating thereto.

          Interest Period.  With respect to each LIBOR Rate
Advance (a) initially, the period commencing on the Drawdown Date
of such Advance and ending one, two, three or six months
thereafter, and (b) thereafter, each period commencing on the day
following the last day of the next preceding Interest Period
applicable to such Advance and ending on the last day of one of
the periods set forth above, as selected by the Borrower in a
Conversion Request; provided that all of the foregoing provisions
relating to Interest Periods are subject to the following:

          (A)  if any Interest Period with respect to a LIBOR
     Rate Advance would otherwise end on a day that is not a
     LIBOR Business Day, that Interest Period shall end and the
     next Interest Period shall commence on the next preceding or
     succeeding LIBOR Business Day as determined conclusively by
     the Reference Bank in accordance with the then current bank
     practice in the applicable LIBOR interbank market;

          (B)  if the Borrower shall fail to give notice as
     provided in Section 5.3, the Borrower shall be deemed to have
     requested a conversion of the affected LIBOR Rate Advance to
     a Base Rate Advance on the last day of the then current
     Interest Period with respect thereto; and

          (C)  no Interest Period relating to any LIBOR Rate
     Advance shall extend beyond the Maturity Date.

          Investments. With respect to any Person, all shares of
capital stock, evidences of Indebtedness and other securities
issued by any other Person, all loans, advances, or extensions of
credit to, or contributions to the capital of, any other Person,
all purchases of the securities or business or integral part of
the business of any other Person and commitments and options to
make such purchases, all interests in real property, and all
other investments; provided, however, that the term "Investment"
shall not include (i) equipment, inventory and other tangible
personal property acquired in the ordinary course of business, or
(ii) current trade and customer accounts receivable for services
rendered in the ordinary course of business and payable in
accordance with customary trade terms.  In determining the
aggregate amount of Investments outstanding at any particular
time:  (a) the amount of any investment represented as a guaranty
shall be taken at not less than the principal amount of the
obligations guaranteed and still outstanding; (b) there shall be
included as an Investment all interest accrued with respect to
Indebtedness constituting an Investment unless and until such
interest is paid; (c) there shall be deducted in respect of each
such Investment any amount received as a return of capital (but
only by repurchase, redemption, retirement, repayment,
liquidating dividend or liquidating distribution); (d) there
shall not be deducted in respect of any Investment any amounts
received as earnings on such Investment, whether as dividends,
interest or otherwise, except that accrued interest included as
provided in the foregoing clause (b) may be deducted when paid;
and (e) there shall not be deducted from the aggregate amount of
Investments any decrease in the value thereof.

          Land.  The real property located in Sacramento County,
California, and described in Schedule B to the Security Deed.

          Leases.  Leases, licenses and agreements, whether
written or oral, relating to the use or occupation of space in
the Improvements or on the Land.

          LIBOR Business Day.  Any day on which commercial banks
are open for international business (including dealings in Dollar
deposits) in the London interbank market.

          LIBOR Lending Office.  Initially, the office of each
Bank designated as such in Schedule 1 hereto; thereafter, such
other office of such Bank, if any, that shall be making or
maintaining LIBOR Rate Loans.

          LIBOR Rate.  For any Interest Period with respect to a
LIBOR Rate Loan, the rate per annum as determined by the
Reference Bank's LIBOR Lending Office to be the rate (rounded
upwards to the nearest 1/16 of one percent) at which Dollar
deposits are offered to prime banks by such banks in the London
Interbank Market as are selected in good faith by the Reference
Bank at approximately 11:00 a.m. London time two LIBOR Business
Days prior to the beginning of such Interest Period for delivery
on the first day of such Interest Period for the number of days
comprised therein and in an amount comparable to the amount of
the LIBOR Rate Advance to which such Interest Period applies.

          LIBOR Rate Advance.  Those Advances bearing interest
calculated by reference to a LIBOR Rate.

          Liens.  See Section 10.5.

          Loan.  The construction loan which is the subject of
this Agreement.

          Loan Amount.  $19,423,157.00.

          Loan Checking Account.  See Section 3.3.

          Loan Documents.  This Agreement, the Notes, the
Indemnity Agreement and the Security Documents, and all other
agreements, documents and instruments now or hereafter
evidencing, securing or otherwise relating to the Loan.

          Majority Banks.  As of any date, the Bank or Banks
whose aggregate Commitment Percentage is equal to or greater than
the required percentage, as determined by the Banks, required to
approve such matter, as disclosed by the Agent to the Borrower
from time to time.

          Management Agreement.  That certain Management
Agreement, dated as of  February 27, 1998, between Borrower and
Franklin Landings Management Company providing for the management
of the operation of the Project, together with any renewals or
replacements thereof.

          Maturity Date.  February 27, 2001.

          Multiemployer Plan.  Any multiemployer plan within the
meaning of Section 3(37) of ERISA maintained or contributed to by the
Borrower or any ERISA Affiliate.

          Net Operating Income.  Net Operating Income shall mean
Gross Cash Receipts less Operating Expenses.

          Notes.  See Section 4.1.

          Obligations.  All indebtedness, obligations and
liabilities of the Borrower to any of the Banks or the Agent
under this Agreement or any of the other Loan Documents or in
respect of any of the Advances or the Notes or other instruments
at any time evidencing any of the foregoing, whether existing on
the date of this Agreement or arising or incurred hereafter,
direct or indirect, joint or several, absolute or contingent,
matured or unmatured, liquidated or unliquidated, secured or
unsecured, arising by contract, operation of law or otherwise.

          Operating Expenses.  Operating Expenses shall mean the
sum of the following:

          (a)  All taxes and assessments imposed upon the Project
               actually paid by or on behalf of the Borrower;

          (b)  The amounts paid by or on behalf of the Borrower
               on account of insurance premiums for insurance
               carried in connection with the Project or
               Borrower's ownership and operation thereof, and
               deductible amounts expended by the Borrower not
               reimbursed under any such insurance;

          (c)  Expenses paid by or on behalf of Borrower for the
               operation, marketing, maintenance and repair of
               the Project properly chargeable against income
               according to generally accepted accounting
               practices;

          (d)  Management fees in accordance with the Management
               Agreement; and

          (e)  An amount approved by the Agent as a reasonable
               reserve for expenses relating to the Project which
               are not payable on a regular basis (including, but
               not limited to, taxes and insurance), but
               excluding any amounts paid from funded reserves.

For the purposes of this Agreement, Operating Expenses shall not
include any of the following:

                  (i)    Foreign, U.S., state and local income taxes,
                         franchise taxes or other taxes based on the income
                         imposed on the Borrower generally and not as owner
                         of the Project;

                 (ii)    Depreciation and any other non-cash expenditures
                         of the Borrower for income tax purposes;

                (iii)    Any improvements to the completed portion of the
                         Project of a capital nature (as determined in
                         accordance with generally accepted accounting
                         practices), or reserves for such items;

                 (iv)    Any expense paid or incurred in connection with
                         the sale of all or any part of the Project or any
                         interest therein;

                  (v)    All costs, expenses, fees, commissions or other
                         compensation paid by or on behalf of the Borrower
                         in connection with the renovation of the completed
                         portion of the Project; and

                 (vi)    Any payment of principal or interest under the
                         Notes.

          Operating Expenses shall be determined on the basis of
sound cash basis accounting practices applied on a consistent
basis, modified as described above.

          Outstanding.  With respect to the Advances or the Loan,
the aggregate unpaid principal thereof as of any date of
determination.

          PBGC.  The Pension Benefit Guaranty Corporation created
by Section 4002 of ERISA and any successor entity or entities having
similar responsibilities.

          Permitted Liens.  Liens, security interests and other
encumbrances permitted by Section 10.5.

          Person.  Any individual, corporation, partnership,
trust, unincorporated association, business, or other legal
entity, and any government or any governmental agency or
political subdivision thereof.

          Personal Property.  All materials, furnishings,
fixtures, furniture, machinery, equipment and all items of
tangible personal property now or hereafter owned or acquired by
the Borrower, wherever located, and either (i) to be located on
or incorporated into the Land or the Improvements, (ii) used in
connection with the construction of the Improvements or (iii) to
be used in connection with the operation or maintenance of the
Land or the Improvements or both.

          Phase.  The applicable portion(s) of the Project
described on Schedule 1.1 attached hereto.

          Plans and Specifications.  The plans and specifications
for the Improvements prepared by the Borrower's Architect and
more particularly identified on Exhibit C attached hereto.

          Project.  The Land, Improvements and Personal Property.

          Project Approvals.  All approvals, consents, waivers,
orders, agreements, acknowledgments, authorizations, permits and
licenses required under applicable Requirements or under the
terms of any agreement, restriction, covenant or easement
affecting the Project, or otherwise necessary or desirable, for
the ownership and acquisition of the Land and the Improvements,
the construction and equipping of the Improvements, and the use,
occupancy and operation of the Project following completion of
construction of the Improvements, whether obtained from a
Governmental Authority or any other Person.

          Project Budget.  The budget for total estimated Project
Costs, submitted by the Borrower, approved by the Majority Banks
and the Construction Inspector, and attached hereto as Exhibit D,
which includes: (a) a line item cost breakdown for Direct Costs
by trades, jobs and subcontractors; (b) a line item cost
breakdown for Indirect Costs; and (c) a schedule of the sources
of funds to pay Project Costs, indicating by item the portion of
Project Costs to be funded through the Loan and Required Equity
Funds.

          Project Costs.  The sum of all Direct Costs and
Indirect Costs that will be incurred by the Borrower in
connection with the acquisition of the Land, the construction,
equipping and completion of the Improvements, the marketing and
leasing of leasable space in the Improvements, and the operation
and carrying of the Project through the Maturity Date.

          Real Estate.  All real property at any time owned,
leased (as lessee or sublessee) or operated by the Borrower or
the General Partner.

          Record.  The grid attached to any Note, or the
continuation of such grid, or any other similar record, including
computer records, maintained by any Bank with respect to any Loan
referred to in such Note.

          Reference Bank. Agent.

          Register.  See Section 21.2.

          Requirements.  Any law, ordinance, code, order, rule or
regulation of any Governmental Authority and any zoning
agreement, development agreement or similar agreement with any
Governmental Authority relating in any way to the acquisition and
ownership of the Project, the construction of the Improvements,
or the use, occupancy and operation of the Project following the
completion of construction of the Improvements, including those
relating to subdivision control, zoning, building, use and
occupancy, fire prevention, health, safety, sanitation,
handicapped access, historic preservation and protection,
tidelands, wetlands, flood control, access and earth removal, and
all Environmental Laws.

          Required Equity Funds.  The amount, if any, as the
Majority Banks shall determine must be deposited with Agent from
time to time pursuant to Section 9.16 hereof.

          Retainage.  See Section 2.3.

          Security Deed.  The Construction Deed of Trust with
Assignment of Rents, Security Agreement and Fixture Filing, dated
or to be dated on or prior to the Closing Date, made by the
Borrower to the Agent for the benefit of the Banks, pursuant to
which the Borrower grants a lien, security title and security
interest in and to the Project, such Security Deed to be in form
and substance satisfactory to the Agent.

          Security Documents.  The Security Deed, the Assignment
of Project Documents, the Assignment of Leases, the Financing
Statements and the Guaranty, and any other agreement, document or
instrument now or hereafter securing the Obligations.

          Stored Materials.  See Section 2.8.

          Subsidiary.  Any corporation, association, partnership,
trust, or other business entity of which the designated parent
shall at any time own directly or indirectly through a Subsidiary
or Subsidiaries at least a majority (by number of votes or
controlling interests) of the outstanding Voting Interests, and
any other entity the accounts of which are consolidated with the
accounts of the designated parent.

          Survey.  An instrument survey of the Land and the
Improvements prepared in accordance with the Agent's survey
requirements, such survey to be satisfactory to the Agent in form
and substance.

          Surveyor Certificate.  With respect to any Survey, a
certificate executed by the surveyor who prepares such Survey
dated as of a recent date and containing such information
relating to the Project as the Agent or the Title Insurance
Company may require, such certificate to be satisfactory to the
Agent in form and substance.

          Taking.  Any condemnation for public use of, or damage
by reason of, the action of any Governmental Authority, or any
transfer by private sale in lieu thereof, either temporarily or
permanently.

          Termination Date.  August 31, 1999, or the termination
of the Banks' obligations to make Advances pursuant to Section 13.2
hereof, whichever date occurs first.

          Title Insurance Company.  Chicago Title Insurance
Company.

          Title Policy.  An ALTA Loan Policy Form (10/17/70)
title insurance policy with ALTA form 1 coverage (LP 3)
construction loan package or its equivalent issued by the Title
Insurance Company (with such reinsurance or co-insurance as the
Agent may require, any such reinsurance to be with direct access
endorsements) in an amount not less than the Loan Amount insuring
the priority of the Security Deed as a first priority lien and
that the Borrower holds marketable fee simple title to the
Project, subject only to such exceptions as the Agent may approve
and which shall not contain exceptions for mechanics liens,
persons in occupancy or matters which would be shown by a survey,
shall not insure over any matter except to the extent that any
such affirmative insurance is acceptable to the Agent in its sole
discretion, and shall contain a pending disbursements clause or
endorsement and such other endorsements and affirmative insurance
as the Agent in its discretion may require including, without
limitation, a CLTA 111.5 variable rate of interest endorsement.

          Total Commitment.  The sum of the Commitments of the
Banks, as in effect from time to time.

          Type.  As to any Advance, its nature as a Base Rate
Advance or a LIBOR Rate Advance.

          Walden.  Walden Residential Properties, Inc., a
Maryland corporation.

          Walden Revolving Credit Agreement.  That certain
Revolving Credit Agreement dated as of December 15, 1997, among
Walden, WDOP, BKB, individually and as agent, and the other
lenders a party thereto, as the same may be modified, amended,
restated, consolidated or renewed.

          WDOP.  Walden/Drever Operating Partnership, L.P., a
Delaware limited partnership.

     Section 1.2  Rules of Interpretation.

          (a)  A reference to any agreement, budget, document or
schedule shall include such agreement, budget, document or
schedule as revised, amended, modified or supplemented from time
to time in accordance with its terms and the terms of this
Agreement.

          (b)  The singular includes the plural and the plural
includes the singular.

          (c)  A reference to any law includes any amendment or
modification to such law.

          (d)  A reference to any Person includes its permitted
successors and permitted assigns.

          (e)  Accounting terms not otherwise defined herein have
the meanings assigned to them by generally accepted accounting
principles applied on a consistent basis by the accounting entity
to which they refer.

          (f)  The words "include", "includes" and "including"
are not limiting.

          (g)  The words "approval" and "approved", as the
context so determines, means an approval in writing given to the
party seeking approval after full and fair disclosure to the
party giving approval of all material facts necessary in order to
determine whether approval should be granted.

          (h)  All terms not specifically defined herein or by
generally accepted accounting principles, which terms are defined
in the Uniform Commercial Code as in effect in the Commonwealth
of Massachusetts, have the meanings assigned to them therein.

          (i)  Reference to a particular "Section" refers to that
section of this Agreement unless otherwise indicated.

          (j)  The words "herein", "hereof", "hereunder" and
words of like import shall refer to this Agreement as a whole and
not to any particular section or subdivision of this Agreement.

           SECTION 2.  AGREEMENT TO MAKE ADVANCES; LIMITATIONS

     Section 2.1  Agreement to Make Advances.  Subject to the terms and
conditions of this Agreement, each of the Banks severally agrees
to lend to the Borrower and the Borrower may borrow from time to
time between the Closing Date and the Termination Date upon
submission by the Borrower of a Draw Request in accordance with
Section 3.1, such amounts as are requested by the Borrower up to a
maximum aggregate principal amount equal to such Bank's
Commitment Percentage of the Loan Amount to pay for Project Costs
actually incurred by the Borrower and reflected in the Project
Budget as being funded by the Loan; provided, however, that in no
event shall the maximum aggregate principal amount outstanding
exceed such Bank's Commitment.  The Advances shall be made pro
rata in accordance with each Bank's Commitment Percentage.  Each
Draw Request for an Advance hereunder shall constitute a
representation and warranty by the Borrower that the conditions
set forth in Section 11, in the case of the initial Advance, Section 12, in the
case of all other Advances, and Section 12.6, in the case of the Advance
of any Retainage withheld pursuant to Section 2.3, have been satisfied
on the date of such Draw Request.  No Bank shall have any
obligation to make Advances to the Borrower in the maximum
aggregate principal amount outstanding of more than the principal
face amount of its Note.

     Section 2.2  Project Budget.  The Project Budget reflects, by
category and line items, the purposes and the amounts for which
funds to be advanced by the Banks under this Agreement are to be
used.  The Banks shall not be required to disburse for any
category or line item more than the amount specified therefor in
the Project Budget.

     Section 2.3  Amount of Advances.  In no event shall any Bank be
obligated to advance more than its Commitment, or, if less, its
Commitment Percentage of total Project Costs actually incurred by
the Borrower less Required Equity Funds.  In no event shall any
Advance for Direct Costs of constructing the Improvements exceed
an amount equal to the sum of (a) the total value of the labor,
materials, fixtures, machinery and equipment completed, approved
and incorporated into the Land or the Improvements prior to the
date of the Draw Request for such Advance, minus (b) retainage in
an amount equal to ten percent (10%) of such total value
described in (a) ("Retainage"), minus (c) the total amount of any
Advances previously made by the Banks for such Direct Costs.
Notwithstanding the foregoing, an Advance in excess thereof may
be made hereunder for the purpose of making final payment of any
balance due any subcontractor (including materialmen or suppliers
within the term "subcontractor") after full and final completion
of the work on the Improvements being done by such subcontractor
or after full and final completion of the work on the
Improvements constituting a Phase of the Project being done by
such subcontractor, as certified by the Construction Inspector,
and delivery to the Agent of such items as are required by Section 12.6
as the Agent may deem applicable, including without limitation,
such evidence as may be reasonably required by the Agent to
assure the Banks that no party claims or has a right to claim any
statutory or common law lien arising out of such subcontractor's
work or the supplying of labor, equipment, material, and/or
services in connection therewith.  Retainage shall otherwise be
advanced by the Banks subject to the terms of this Agreement to
the Borrower upon satisfaction of the conditions set forth in
Section 12.6.  With respect to any other Direct Costs and all Indirect
Costs, in no event shall any Advance exceed an amount equal to
the amount of such Direct Costs and Indirect Costs approved by
the Agent, incurred by the Borrower prior to the date of the Draw
Request for such Advance, and theretofore paid or to be paid with
the proceeds of such Advance, less the total amount of any
Advances previously made by the Banks for such Direct Costs and
Indirect Costs.

     Section 2.4  Quality of Work.  No Advance shall be due unless all
work done at the date the Draw Request for such Advance is
submitted is done in a good and workmanlike manner and without
defects, as confirmed by the report of the Construction
Inspector.  Notwithstanding the foregoing, but without limiting
the provisions of Section 9.3, if a portion of the Work for which
payment is included within a Draw Request has not been performed
in a good and workmanlike manner and without defects as
determined by the Architect, the Contractor, the Construction
Inspector or the Agent ("Defective Work"), then the amount to be
advanced pursuant to such Draw Request shall be reduced by the
portion thereof attributable to the Defective Work provided that
all other conditions to the making of an Advance have been
satisfied.  No Advance shall be due thereafter upon a Draw
Request with respect to such Defective Work until such Defective
Work has been corrected and brought into full compliance with the
requirements of this Agreement.  No Advance shall be made upon
any Draw Request if, upon the date of submittal thereof, any
Defective Work has remained uncorrected for a period of more than
thirty (30) days, unless correction of such Defective Work is
under way and progressing reasonably satisfactorily to the Agent
and the Construction Inspector.

     Section 2.5  Cost Overruns and Savings.  If the Borrower becomes
aware of any change in Project Costs which will increase or
decrease a category or line item of Project Costs reflected on
the Project Budget (as the Project Budget is revised from time to
time and approved by the Majority Banks), the Borrower shall
immediately notify the Agent in writing and promptly submit to
the Agent a revised Project Budget for the approval of the
Majority Banks.  If the revised Project Budget indicates an
increase in a category or line item of Project Costs, no further
Advances need be made by the Banks unless and until (a) the
revised Project Budget so submitted by the Borrower is approved
by the Majority Banks, and (b) the Borrower has deposited with
the Agent any Required Equity Funds.  If the revised Project
Budget indicates a decrease in a line item of Project Costs, no
reductions in Project Costs will be made or savings reallocated
by the Borrower unless and until (c) the revised Project Budget
so submitted by the Borrower is approved by the Majority Banks,
and (d) in the case of decreases in a line item of Direct Costs,
the Borrower has furnished the Agent, the Majority Banks and the
Construction Inspector with evidence satisfactory to them that
the labor performed and materials supplied in connection with
such line item of Direct Costs have been satisfactorily completed
in accordance with the Plans and Specifications and paid for in
full.

     Section 2.6  Contingency Reserve.  The amount allocated as
Contingency Reserve in the Project Budget will only be disbursed
upon the prior approval of the Majority Banks.  The disbursement
of a portion of Contingency Reserve shall in no way prejudice the
Banks from withholding disbursement of any further portion of
Contingency Reserve.

     Section 2.7 Development Fee; Land Equity.  Except as expressly
provided herein, the Banks shall not be required to disburse any
funds for the amount allocated as "Development Fee" in the
Project Budget unless and until Agent shall have received all of
the items set forth in Section 12.6.  Except as expressly provided
herein, the Banks shall not be required to disburse any funds for
the amount allocated as "Land-Cash Equity" or "Land-Earned
Equity" (the total amount of those line items being $875,851.00)
in the Project Budget unless and until Agent shall have received
all of the items set forth in Section 12.6 and the Designee shall have
acquired the entire general partnership interest of the General
Partner in the Borrower in accordance with the terms and
conditions set forth in Section 10.11.

     Section 2.8  Stored Materials.  The Banks shall not be required to
disburse any funds for any materials, furnishings, fixtures,
machinery or equipment not yet incorporated into the Land or
Improvements ("Stored Materials") unless the following conditions
are satisfied:

          (a)  The Stored Materials are components in a form
ready for incorporation into the Land or the Improvements and
shall (subject to forces beyond Borrower's reasonable control) be
so incorporated within a period of 30 days;

          (b)  The Stored Material are stored at the Land or such
other location approved by the Agent, and are protected against
theft, vandalism and the elements;

          (c)  The Stored Materials have been paid for in full or
will be paid for with the funds to be disbursed, all lien rights
and claims of the supplier have been released or will be released
upon payment with disbursed funds and no seller or supplier
reserves or purports to reserve title or the right of removal or
repossession, or the right to consider such Store Materials
personal property after their incorporation into the
Improvements;

          (d)  Borrower has or shall have upon payment with
disbursed funds title to the Stored Materials subject to no
liens, charges, title retention agreements or other encumbrances
except those in favor of Agent, and Agent has or will have upon
payment with disbursed funds a perfected first priority security
interest in the Stored Materials;

          (e)  Borrower shall supply to the Agent evidence
reasonably satisfactory to the Agent that the Stored Materials
are included in the coverage of the insurance policies required
hereunder and are insured for an amount equal to their
replacement cost; and

          (f)  If the Stored Materials are not stored at the
Land, (i) the Stored Materials are stored and segregated in a
bonded warehouse or storage yard approved by the Agent, (ii) that
the warehouse or yard has been notified that the Agent has a
security interest in the subject Stored Materials, (iii) the
Contractor and the Borrower's Architect have inspected the fully
fabricated components at the off-site location, and have approved
the Draw Request for such Stored Materials, (iv) the Agent has
received from Borrower a copy of the warehouse receipt (which
copy shall include an acknowledgment from the owner or lessee of
the warehouse that such party has possession of the original
warehouse receipt) and color photographs of such Stored Materials
clearly identifying such Stored Materials, and (v) the Agent has
received satisfactory evidence that the Stored Materials are
protected against theft, damage, vandalism, and the elements,
have been suitably identified as belonging to Borrower for use in
the Project and that such seller, supplier or fabricator has been
notified of the security interest of the Agent therein.

     Section 2.9 Final Disbursement of Remaining Loan Proceeds.
Notwithstanding anything to the contrary contained herein
regarding the Banks' obligations to fund Advances in excess of
total Project Costs, the Agent and each of the Banks agrees that
contemporaneously with, but subject to the complete satisfaction
of each of the conditions to, the acquisition of all of the
General Partner's interest in Borrower by the Designee in
accordance with Section 10.11, the Banks shall, upon submission by
Borrower of a Borrower's Requisition and subject to the terms and
conditions contained in this Agreement, including without
limitation, Section 12, make a final Advance to the Borrower equal to
the sum of (a) the Loan Amount less (b) the aggregate amount of
all Advances theretofore made by the Banks pursuant to this
Agreement.


                     SECTION 3.  MAKING THE ADVANCES

     Section 3.1  Draw Request.  At such time as the Borrower shall
desire to obtain an Advance, the Borrower shall complete, execute
and deliver to the Agent the Borrower's Requisition in the form
of Exhibit E attached hereto (hereinafter referred to as
"Borrower's Requisition").  Each Borrower's Requisition shall be
accompanied by:

          (a)  a  written notice of the Borrower specifying (i)
the requested Type of Advance comprising such Advance, (ii) in
the case of an Advance comprised of a LIBOR Advance, the initial
Interest Period; and (iii) the amount of each Type of Advance;
provided, however, that each LIBOR Advance shall be in an amount
of $100,000.00 or integral multiple of $1,000.00 in excess
thereof;

          (b)  If the Borrower's Requisition includes payments
for Direct Costs, it shall be accompanied by a completed and
itemized Direct Cost Statement in form satisfactory to the Agent,
executed by the Borrower, together with copies of invoices for
all items of Direct Cost covered thereby;

          (c)  If the Borrower's Requisition includes amounts to
be paid to the Contractor under the Construction Contract, it
shall be accompanied by:  (i) a completed and fully itemized
Application and Certificate for Payment (AIA Document G702 or
similar form approved by the Agent) containing the certification
of the Contractor and the Borrower's Architect or other licensed
design professional acceptable to Agent as to the accuracy of
same, and showing all subcontractors and materialmen by name and
trade or job, the total amount of each subcontract or purchase
order, the amount theretofore paid to each subcontractor or
materialman as of the date of such application, and the amount to
be paid from the proceeds of the Advance to each subcontractor
and materialman; (ii) a certificate of the Contractor in the form
of Exhibit F attached hereto; (iii) a certificate of the
Borrower's Architect or other licensed design professional
acceptable to Agent in the form of Exhibit G attached hereto or
such other form as the Agent may approve; and (iv) copies of
requisitions and invoices from subcontractors and materialmen
supporting all items of cost covered by such application;

          (d)  If the Borrower's Requisition includes payments
for Indirect Costs, it shall be accompanied by a completed and
itemized Indirect Cost Statement in form satisfactory to the
Agent, executed by the Borrower, together with copies of invoices
for all items of Indirect Costs covered thereby;

          (e)  written lien waivers executed by the Contractor
and such laborers, subcontractors and materialmen whose
contract(s) for the provision of services or materials for
construction of the Project requires payment in excess of
$50,000.00, for work done and materials supplied by such Person
which were paid for pursuant to the next preceding Draw Request
in form acceptable to Agent, which form shall, to the extent
permitted by applicable law, contain lien subordinations from the
Contractor and each such laborer, subcontractor and materialman;

          (f)  a written request of the Borrower for any
necessary changes in the Plans and Specifications, the Project
Budget, the Disbursement Schedule or the Construction Schedule;

          (g)  copies of all change orders and construction
change directives, accompanied by a change order summary prepared
by and executed by the Borrower, copies of all subcontracts
involving work in the amount of $100,000.00 or more (if requested
by the Agent), and, to the extent requested by the Agent or the
Majority Banks, of all inspection or test reports and other
documents relating to the construction of the Improvements, not
previously delivered to the Agent; and

          (h)  If the Borrower's Requisition includes payment for
Stored Materials, it shall be accompanied by evidence as to the
satisfaction of the requirements set forth in Section 2.8 hereof; and

          (i)  such other information, documentation and
certification as the Agent or the Majority Banks shall reasonably
request.

Each Draw Request shall constitute a representation and warranty
by the Borrower that all of the conditions set forth in this
Agreement to such Advance, including, without limitation, Section 11,
have been satisfied on the date of such Draw Request.

     Section 3.2  Notice and Frequency of Advances.

          (a)  Each Draw Request shall be submitted to the Agent
at least ten (10) Business Days prior to the date of the
requested Advance, and no more frequently than once each month.
The Agent shall promptly notify each of the Banks following the
receipt of a Draw Request, but in any event no later than 2:00
p.m. five (5) Business Days prior to the proposed Drawdown Date.

          (b)  Except as provided in this Section 3.2, each such Draw
Request shall be irrevocable and binding on the Borrower and
shall obligate the Borrower to accept the Advance requested from
the Banks on the Drawdown Date.  If the Borrower does not specify
the Type of Advance requested in a Draw Request, the Borrower
shall be deemed to have selected a Base Rate Advance.  Any
failure by a Bank to fund its proportionate share of a requested
Advance shall not relieve the Borrower from its obligations under
this Agreement.  Nothing in this Section 3.2(b) shall prevent the
Borrower from seeking recourse against any Bank that fails to
advance its proportionate share of a requested Advance as
required by this Agreement; it being acknowledged that any Bank
that is prepared to fund its proportionate share of a requested
Advance shall have no liability with respect to any other Bank
that fails to advance its proportionate share.

          (c)  There shall be no more than five (5) LIBOR Rate
Advances outstanding at any one time.

     Section 3.3  Deposit of Funds Advanced.  The Borrower shall open
and maintain a checking account with Wells Fargo Bank, N.A. (the
"Loan Checking Account").  Except as otherwise provided for in
Section 3.4 and 3.5 hereof, the Agent shall deposit the proceeds of
each Advance into the Loan Checking Account.

     Section 3.4  Advances to Contractor.  In the event that the Agent
or the Majority Banks shall determine in the exercise of their
business judgment that cause exists to do so, the Agent may make
any or all advances for Direct Costs incurred under the
Construction Contract directly to the Contractor for deposit in
an appropriately designated special bank account, and the
execution of this Agreement by the Borrower shall, and hereby
does, constitute an irrevocable authorization so to advance the
proceeds of the Loan.  No further authorization from the Borrower
shall be necessary to warrant such direct advances to the
Contractor and all such advances shall satisfy pro tanto the
obligations of the Banks hereunder and shall be secured by the
Security Deed and the other Security Documents as fully as if
made directly to the Borrower.

     Section 3.5  Advances to Title Insurance Company or to Others.  In
the event that the Agent or the Majority Banks shall determine in
the exercise of their business judgment that cause exists to do
so, the Agent may make any or all advances through the Title
Insurance Company or a recognized construction disbursement
service and any portion of the Loan so disbursed by the Agent on
behalf of the Banks shall be deemed disbursed as of the date on
which the Bank makes such disbursement.  In the event that the
Agent or the Majority Banks shall determine in the exercise of
their business judgment that cause exists to do so, the Agent may
make advances of portions of the proceeds of the Loan to any
Person to whom the Agent or the Majority Banks in good faith
determine payment is due and any portion of the Loan so disbursed
by the Agent on behalf of the Banks shall be deemed disbursed as
of the date on which the Agent makes such disbursement.  The
execution of this Agreement by the Borrower shall, and hereby
does, constitute an irrevocable authorization so to advance the
proceeds of the Loan.  No further authorization from the Borrower
shall be necessary to warrant such direct advances and all such
advances shall satisfy pro tanto the obligations of the Banks
hereunder and shall be secured by the Security Deed and the other
Security Documents as fully as if made directly to the Borrower.

     Section 3.6  Advances Do Not Constitute a Waiver.  No Advance made
by the Banks shall constitute a waiver of any of the conditions
to the Banks' obligation to make further Advances nor, in the
event the Borrower fails to satisfy any such condition, shall any
such Advance have the effect of precluding the Banks from
thereafter declaring such failure to satisfy a condition to be an
Event of Default.

     Section 3.7.     Funds for Loans.

          (a)  Not later than 11:00 a.m. (Boston time) on the
proposed Drawdown Date of any Advance, each of the Banks will
make available to the Agent, at the Agent's Head Office, in
immediately available funds, the amount of such Bank's Commitment
Percentage of the amount of the requested Advance which may be
disbursed pursuant to Section 2.1.  Upon receipt from each Bank of such
amount, and upon receipt of the documents required by Secton 11 and Section 12
and the satisfaction of the other conditions set forth therein,
to the extent applicable, the Agent will make available to the
Borrower the aggregate amount of such Advance made available to
the Agent by the Banks by crediting such amount.  The failure or
refusal of any Bank to make available to the Agent at the
aforesaid time and place on any Drawdown Date the amount of its
Commitment Percentage of the requested Advance to the extent it
is obligated to fund such Advance hereunder shall not relieve any
other Bank from its several obligation hereunder to make
available to the Agent the amount of such other Bank's Commitment
Percentage of any requested Advance, including any additional
Advance that may be requested by the Borrower subject to the
terms and conditions hereof to provide funds to replace those not
advanced by the Bank so failing or refusing; provided that no
Bank shall be obligated to advance any amount in excess of the
limits set forth in Section 2.1.  In the event of any such failure or
refusal, the Banks not so failing or refusing shall be entitled
to a priority position as against the Bank or Banks so failing or
refusing for such Advance as provided in Section 13.5(b).

          (b)  Unless Agent shall have been notified by any Bank
prior to the applicable Drawdown Date that such Bank will not
make available to Agent such Bank's pro rata share of a proposed
Advance, Agent may in its discretion assume that such Bank has
made such Advance available to Agent in accordance with the
provisions of this Agreement and Agent may, if it chooses, in
reliance upon such assumption make such Advance available to
Borrower, and such Bank shall be liable to the Agent for the
amount of such advance.

     Section 3.8 Interest Reserve.

          (a)  The Project Budget includes a Construction Period
Interest reserve of $783,980.00.  By execution hereof, the
Borrower irrevocably authorizes the Agent, without the necessity
of any further authorization, to disburse directly to the Agent
for the account of the Banks rather than to the Borrower out of
the interest reserve such sums as are necessary to pay, on a
monthly basis, accrued interest; provided, however, that all Net
Operating Income shall be utilized by Borrower first to pay
accrued interest.  Upon disbursement, the amount that is
disbursed shall be disbursed pro rata by the Banks and shall be
added to the then outstanding principal sum of the Loan and shall
bear interest at the rate provided for in this Agreement.  Upon
the occurrence of an Event of Default under this Agreement or any
other Loan Document, the Agent shall have the right but not the
obligation to continue to disburse payments of monthly interest
installments from the interest reserve.  If the interest reserve
account is exhausted, or upon the occurrence of an Event of
Default, or if the Agent determines, in its sole discretion, that
the remaining funds in the interest reserve will be insufficient
to pay in full the then due and payable monthly interest
installments or any portions thereof through the Maturity Date,
then upon seven (7) days prior written notice of any such event
from the Agent, the Borrower shall commence the payment of
monthly interest installments.  Establishment of the interest
reserve shall in no way relieve the Borrower of its obligation to
make interest payments.  Upon the occurrence of a Default or an
Event of Default under any Loan Document, the Agent may, at its
option, cease making any further disbursement from the interest
reserve.

         SECTION 4.  THE NOTE; INTEREST; MATURITY AND PREPAYMENT

     Section 4.1   Notes.  The Advances shall be evidenced by separate
promissory notes of the Borrower in substantially the form of
Exhibit H hereto (collectively, the "Notes"), dated of even date
with this Agreement and completed with appropriate insertions.
One Note shall be payable to the order of each Bank in the
principal face amount equal to such Bank's Commitment and shall
be payable as set forth below.  The Borrower irrevocably
authorizes each Bank to make or cause to be made, at or about the
time of the Drawdown Date of any Advance or at the time of
receipt of any payment of principal thereof, an appropriate
notation on such Bank's Record reflecting the making of such
Advance or (as the case may be) the receipt of such payment.  The
outstanding amount of the Loan set forth on such Bank's Record
shall be prima facie evidence of the principal amount thereof
owing and unpaid to such Bank, but the failure to record, or any
error in so recording, any such amount on such Bank's Record
shall not limit or otherwise affect the obligations of the
Borrower hereunder or under any Note to make payments of
principal of or interest on any Note when due.

     Section 4.2.  Interest on Advances.

          (a)  Each Base Rate Advance shall bear interest for the
period commencing with the Drawdown Date thereof and ending on
the date on which such Base Rate Advance is paid in full or is
converted to a LIBOR Rate Advance from a Base Rate Advance at the
rate of one-half of one percent per annum (0.50%) plus the Base
Rate.

          (b)  Each LIBOR Rate Advance shall bear interest for
the period commencing with the Drawdown Date thereof and ending
on the last day of the Interest Period with respect thereto at
the rate of one and one-half percent (1.50%) per annum above the
LIBOR Rate determined for such Interest Period.

          (c)  The Borrower promises to pay interest on each
Advance in arrears on each Interest Payment Date with respect
thereto.

          (d)  Base Rate Advances and LIBOR Rate Advances may be
converted to Advances of the other Type as provided in Section 5.3.

     Section 4.3.  Stated Maturity.  The Borrower promises to pay on the
Maturity Date and there shall become absolutely due and payable
on the Maturity Date, all principal of the Loan outstanding on
such date, together with any and all accrued and unpaid interest
thereon.

     Section 4.4.  Optional Prepayments.  The Borrower shall have the
right, at its election, to prepay the outstanding amount of the
Loan, as a whole or in part, at any time without penalty or
premium; provided, that the full or partial prepayment of the
outstanding amount of any LIBOR Rate Advances pursuant to this
Section 4.4 may be made only on the last day of the Interest Period
relating thereto except as otherwise required pursuant to Section 5.7.
The Borrower shall give the Agent, no later than 10:00 a.m.,
Boston time, at least five (5) Business Days prior written notice
of any prepayment pursuant to this Section 4.4, in each case specifying
the proposed date of payment of the Loan and the principal amount
to be paid.

     Section 4.5.  Partial Prepayments.  Each partial prepayment of the
Loan under Section 4.4 shall be accompanied by the payment of accrued
interest on the principal prepaid to the date of payment and,
after payment of such interest, shall be applied, in the absence
of instruction by the Borrower, first to the principal of Base
Rate Advances and then to the principal of LIBOR Rate Advances.
No amounts of the Loan prepaid under Section 4.4 may be reborrowed.
Except as otherwise expressly provided herein, all payments shall
first be applied to accrued but unpaid interest and then to
principal.

                     SECTION 5.  GENERAL PROVISIONS

     Section 5.1  Commitment Fee.  The Borrower agrees to pay to BKB on
the Closing Date a commitment and loan structuring fee as
provided in the Agreement Regarding Fees between Borrower and BKB
(the "Agreement Regarding Fees") which shall be fully earned and
non-refundable when paid.

     SECTION 5.2.  INTENTIONALLY DELETED.

     Section 5.3.  Conversion Options.

          (a)  The Borrower may elect from time to time to
convert any outstanding Advance to an Advance of another Type and
such Advance shall thereafter bear interest as a Base Rate
Advance or a LIBOR Rate Advance, as applicable; provided that (i)
with respect to any such conversion of a LIBOR Rate Advance to a
Base Rate Advance, the Borrower shall give the Agent at least
three Business Days' prior written notice of such election, and
such conversion shall only be made on the last day of the
Interest Period with respect to such LIBOR Rate Advance; (ii)
with respect to any such conversion of a Base Rate Advance to a
LIBOR Rate Advance, the Borrower shall give the Agent at least
four LIBOR Business Days' prior written notice of such election
and the Interest Period requested for such Advance, the principal
amount of the Advance so converted shall be in a minimum
aggregate amount of $100,000.00 or an integral multiple of $1,000
in excess thereof and, after giving effect to the making of such
Advance, there shall be no more than five (5) LIBOR Rate Advances
outstanding at any one time; and (iii) no Advance may be
converted into a LIBOR Rate Advance when any Default or Event of
Default has occurred and is continuing.  All or any part of the
outstanding Advances of any Type may be converted as provided
herein, subject to the foregoing limits.  On the date on which
such conversion is being made, each Bank shall take, to the
extent it deems it necessary to do so, such action as is
necessary to transfer its Commitment Percentage of such Advance
to its Domestic Lending Office or its LIBOR Lending Office, as
the case may be.  Each Conversion Request relating to the
conversion of a Base Rate Advance to a LIBOR Rate Advance shall
be irrevocable by the Borrower.

          (b)  Any Advance may be continued as such Type upon the
expiration of an Interest Period with respect thereto by
compliance by the Borrower with the terms of Section 5.3; provided that
no LIBOR Rate Advance may be continued as such when any Default
or Event of Default has occurred and is continuing, but shall be
automatically converted to a Base Rate Advance on the last day of
the Interest Period relating thereto ending during the
continuance of any Default or Event of Default.

          (c)  In the event that the Borrower does not notify the
Agent of its election hereunder with respect to any outstanding
Advance, such Advance shall be automatically converted to a Base
Rate Advance at the end of the applicable Interest Period.

     Section 5.4  Funds for Payments.

          (a)  All payments of principal, interest, fees and any
other amounts due hereunder or under any of the other Loan
Documents shall be made to the Agent, for the respective accounts
of the Banks and the Agent, as the case may be, at the Agent's
Head Office in each case not later than 11:00 a.m. (Boston time)
on the day when due in immediately available funds in lawful
money of the United States.

          (b)  All payments by the Borrower hereunder and under
any of the other Loan Documents shall be made without setoff or
counterclaim and free and clear of and without deduction for any
taxes, levies, imposts, duties, charges, fees, deductions,
withholdings, compulsory loans, restrictions or conditions of any
nature now or hereafter imposed or levied by any jurisdiction or
any political subdivision thereof or taxing or other authority
therein unless the Borrower is compelled by law to make such
deduction or withholding.  If any such obligation to deduct or
withhold is imposed upon the Borrower with respect to any amount
payable by it hereunder or under any of the other Loan Documents,
the Borrower will pay to the Agent for the account of the Banks
or the Agent, as the case may be, on the date on which such
amount is due and payable hereunder or under such other Loan
Document, such additional amount in dollars as shall be necessary
to enable the Banks or the Agent to receive the same amount which
the Banks or the Agent would have received on such due date had
no such obligation been imposed upon the Borrower.  The Borrower
will deliver promptly to the Agent certificates or other valid
vouchers for all taxes or other charges deducted from or paid
with respect to payments made by the Borrower hereunder or under
such other Loan Document.

     Section 5.5  Computations.  All computations of interest on the
Loan shall be based on a 360-day year and paid for the actual
number of days elapsed.  Except as otherwise provided in the
definition of the term "Interest Period", whenever a payment
hereunder or under any of the other Loan Documents becomes due on
a day that is not a Business Day, the due date for such payment
shall be extended to the next succeeding Business Day, and
interest shall accrue during such extension.  The outstanding
amount of the Loan as reflected on the records of the Agent from
time to time shall be considered prima facie evidence of such
outstanding amount.

     Section 5.6.  Inability to Determine LIBOR Rate.  In the event
that, prior to the commencement of any Interest Period relating
to any LIBOR Rate Advance, the Agent shall determine that
adequate and reasonable methods do not exist for ascertaining the
LIBOR Rate for such Interest Period, the Agent shall forthwith
give notice of such determination (which shall be conclusive and
binding on the Borrower and the Banks) to the Borrower and the
Banks.  In such event (a) any Draw Request with respect to LIBOR
Rate Advances shall be automatically withdrawn and shall be
deemed a Draw Request for Base Rate Advances and (b) each LIBOR
Rate Advance will automatically, on the last day of the then
current Interest Period thereof, become a Base Rate Advance, and
the obligations of the Banks to make LIBOR Rate Advances shall be
suspended until the Agent determines in the exercise of its good
faith business judgment that the circumstances giving rise to
such suspension no longer exist, whereupon the Agent shall so
notify the Borrower and the Banks.

     Section 5.7.  Illegality.  Notwithstanding any other provisions
herein, if any present or future law, regulation, treaty or
directive or the interpretation or application thereof shall make
it unlawful, or any central bank or other governmental authority
having jurisdiction over a Bank or its LIBOR Lending Office shall
assert that it is unlawful, for any Bank to make or maintain
LIBOR Rate Advances, such Bank shall forthwith give notice of
such circumstances to the Agent and the Borrower and thereupon
(a) the commitment of the Banks to make LIBOR Rate Advances or
convert Advances of another type to LIBOR Rate Advances shall
forthwith be suspended and (b) the LIBOR Rate Advances then
outstanding shall be converted automatically to Base Rate
Advances on the last day of each Interest Period applicable to
such LIBOR Rate Advances or within such earlier period as may be
required by law.

     Section 5.8.  Additional Interest.  If any LIBOR Rate Advance or
any portion thereof is repaid or is converted to a Base Rate
Advance for any reason on a date which is prior to the last day
of the Interest Period applicable to such LIBOR Rate Advance, the
Borrower will pay to the Agent upon demand for the account of the
Banks in accordance with their respective Commitment Percentages,
in addition to any amounts of interest otherwise payable
hereunder, any amounts required to compensate the Banks for any
losses, costs or expenses which may reasonably be incurred as a
result of such payment or conversion, including, without
limitation, an amount equal to daily interest for the unexpired
portion of such Interest Period on the LIBOR Rate Advance or
portion thereof so repaid or converted at a per annum rate equal
to the excess, if any, of (a) the interest rate calculated on the
basis of the LIBOR Rate applicable to such LIBOR Rate Advance
(including any spread over such LIBOR Rate) minus (b) the yield
obtainable by the Agent upon the purchase of debt securities
customarily issued by the Treasury of the United States of
America which have a maturity date most closely approximating the
last day of such Interest Period (it being understood that the
purchase of such securities shall not be required in order for
such amounts to be payable and that a Bank shall not be obligated
or required to have actually obtained funds at the LIBOR Rate or
to have actually reinvested such amount as described above).

     Section 5.9.  Additional Costs, Etc.  Notwithstanding anything
herein to the contrary, if any present or future applicable law,
which expression, as used herein, includes statutes, rules and
regulations thereunder and legally binding interpretations
thereof by any competent court or by any governmental or other
regulatory body or official with appropriate jurisdiction charged
with the administration or the interpretation thereof and
requests, directives, instructions and notices at any time or
from time to time hereafter made upon or otherwise issued to any
Bank or the Agent by any central bank or other fiscal, monetary
or other authority (whether or not having the force of law),
shall:

          (a)  subject any Bank or the Agent to any tax, levy,
impost, duty, charge, fee, deduction or withholding of any nature
with respect to this Agreement, the other Loan Documents, such
Bank's Commitment or the Loan (other than taxes based upon or
measured by the income or profits of such Bank or the Agent), or

          (b)  materially change the basis of taxation (except
for changes in taxes on income or profits) of payments to any
Bank of the principal of or the interest on any Advances or any
other amounts payable to any Bank under this Agreement or the
other Loan Documents, or

          (c)       impose or increase or render applicable any
special deposit, reserve, assessment, liquidity, capital adequacy
or other similar requirements (whether or not having the force of
law) against assets held by, or deposits in or for the account
of, or loans by, or commitments of an office of any Bank, or

          (d)  impose on any Bank or the Agent any other
conditions or requirements with respect to this Agreement, the
other Loan Documents, the Advances, such Bank's Commitment, or
any class of loans or commitments of which any of the Loans or
such Bank's Commitment forms a part; and the result of any of the
foregoing is

                     (i)     to increase the cost to any Bank of making,
     funding, issuing, renewing, extending or maintaining any of
     the Advances or such Bank's Commitment, or

                    (ii)     to reduce the amount of principal, interest or
     other amount payable to such Bank or the Agent hereunder on
     account of such Bank's Commitment or any of the Advances, or

                   (iii)     to require such Bank or the Agent to make any
     payment or to forego any interest or other sum payable
     hereunder, the amount of which payment or foregone interest
     or other sum is calculated by reference to the gross amount
     of any sum receivable or deemed received by such Bank or the
     Agent from the Borrower hereunder,

then, and in each such case, the Borrower will, within fifteen
(15) days of demand made by such Bank or (as the case may be) the
Agent at any time and from time to time and as often as the
occasion therefor may arise, pay to such Bank or the Agent such
additional amounts as such Bank or the Agent shall determine in
good faith to be sufficient to compensate such Bank or the Agent
for such additional cost, reduction, payment or foregone interest
or other sum.  Each Bank and the Agent in determining such
amounts may use any reasonable averaging and attribution methods,
generally applied by such Bank or the Agent.

     Section 5.10.  Capital Adequacy.  If after the date hereof any Bank
determines that (a) the adoption of or change in any law, rule,
regulation, guideline, directive or request (whether or not
having the force of law) regarding capital requirements for banks
or bank holding companies or any change in the interpretation,
application or administration thereof by any governmental
authority, central bank or comparable agency charged with the
interpretation or administration thereof, or (b) compliance by
such Bank or its parent bank holding company with any guideline,
request or directive of any such entity regarding capital
adequacy (whether or not having the force of law), has the effect
of reducing the return on such Bank's or such holding company's
capital as a consequence of such Bank's commitment to make
Advances hereunder to a level below that which such Bank or
holding company could have achieved but for such adoption, change
or compliance (taking into consideration such Bank's or such
holding company's then existing policies with respect to capital
adequacy and assuming the full utilization of such entity's
capital) by any amount deemed by such Bank to be material, then
such Bank may notify the Borrower thereof.  The Borrower agrees
to pay to such Bank the amount of such reduction in the return on
capital as and when such reduction is determined, upon
presentation by such Bank of a statement of the amount setting
forth the Bank's calculation thereof.  In determining such
amount, such Bank may use any reasonable averaging and
attribution methods.

     Section 5.11.  Indemnity of Borrower.  The Borrower agrees to
indemnify each Bank and to hold each Bank harmless from and
against any loss, cost or expense that such Bank may sustain or
incur as a consequence of (a) default by the Borrower in payment
of the principal amount of or any interest on any LIBOR Rate
Advances as and when due and payable, including any such loss or
expense arising from interest or fees payable by such Bank to
Banks of funds obtained by it in order to maintain its LIBOR Rate
Advances, or (b) default by the Borrower in making a borrowing or
conversion after the Borrower has given (or is deemed to have
given) a Draw Request or a Conversion Request.

     Section 5.12.  Interest on Overdue Amounts; Late Charge.  Overdue
principal and (to the extent permitted by applicable law)
interest on the Loan and all other overdue amounts payable
hereunder or under any of the other Loan Documents shall bear
interest payable on demand at a rate per annum equal to five
percent (5.0%) above the Base Rate until such amount shall be
paid in full (after as well as before judgment), or if such rate
shall exceed the maximum rate permitted by law, then at the
maximum rate permitted by law (the "Default Rate").  In addition,
the Borrower shall pay a late charge equal to three percent (3%)
of any amount of interest and/or principal payable on the Loan or
any other amounts payable hereunder or under the Loan Documents,
which is not paid within ten days of the date when due.

     Section 5.13.  Certificate.  A certificate, prepared in good faith
by a Bank consistent with such Bank's practice in calculating
such amounts, setting forth any amounts payable pursuant to Section 5.8,
Section 5.9, Section 5.10, Section 5.11 or Section 5.12 and a brief
explanation of such amounts which are due, submitted by any Bank or
the Agent to the Borrower, shall be conclusive in the absence of
manifest error.

     Section 5.14.  Limitation on Interest.  Notwithstanding anything in
this Agreement to the contrary, all agreements between the
Borrower and the Banks and the Agent, whether now existing or
hereafter arising and whether written or oral, are hereby limited
so that in no circumstance, whether by reason of acceleration of
the maturity of any of the Obligations or otherwise, shall the
interest contracted for, charged or received by the Banks exceed
the maximum amount permissible under applicable law.  If, from
any circumstance whatsoever, interest would otherwise be payable
to the Banks in excess of the maximum lawful amount, the interest
payable to the Banks shall be reduced to the maximum amount
permitted under applicable law; and if from any circumstance the
Banks shall ever receive anything of value deemed interest by
applicable law in excess of the maximum lawful amount, an amount
equal to any excessive interest shall be applied to the reduction
of the principal balance of the Obligations and to the payment of
interest or, if such excessive interest exceeds the unpaid
balance of principal of the Obligations, such excess shall be
refunded to the Borrower.  All interest paid or agreed to be paid
to the Banks shall, to the extent permitted by applicable law, be
amortized, prorated, allocated and spread throughout the full
period until payment in full of the principal of the Obligations
(including the period of any renewal or extension thereof) so
that the interest thereon for such full period shall not exceed
the maximum amount permitted by applicable law.  This section
shall control all agreements between the Borrower and the Banks
and the Agent.

            SECTION 6.  COLLATERAL SECURITY AND THE GUARANTY

     The Obligations shall be secured by a perfected first
priority mortgage lien and security interest in the Collateral,
whether now owned or hereafter acquired, pursuant to the terms of
the Security Documents to which the Borrower is a party.  The
obligations shall also be guaranteed pursuant to the terms of the
Guaranty.

                 SECTION 7.  CERTAIN RIGHTS OF THE BANKS

     Section 7.1  Right to Retain the Construction Inspector.  The Banks
acting through the Agent shall have the right to retain, at the
Borrower's cost and expense, the Construction Inspector to
perform the following services on behalf of the Banks:

          (a)  to review and advise the Agent and the Banks as to
the current status of the Project and the Project Budget;

          (b)  to review and advise the Agent and the Banks
whether in the opinion of the Construction Inspector, the Project
Budget accurately reflects all Project Costs;

          (c)  to review and advise the Agent and the Banks
whether, in the opinion of the Construction Inspector, the Plans
and Specifications are satisfactory for the intended purposes
thereof;

          (d)  to make periodic inspections (approximately at the
date of each Draw Request) for the purpose of assuring that
construction of the Improvements to date is in accordance with
the Plans and Specifications and to approve the Borrower's then
current Draw Request as being consistent with the Project Budget
and the Borrower's obligations under this Agreement, and to
advise the Agent and the Banks of the anticipated cost of and
time for completion of construction of the Improvements and the
adequacy of any Contingency Reserve;

          (e)  to review and advise the Agent and the Banks on
any proposed change orders or construction change directives; and

          (f)  to review the Construction Contract and
subcontracts, for the purpose of providing the Agent and the
Banks with an opinion as to the cost of construction to be
incurred to complete the Project, and also for the purpose of
assuring that all such subcontracts are for work required by the
Plans and Specifications to be performed.

     The fees of the Construction Inspector shall be paid by the
Borrower forthwith upon billing therefor and expenses incurred by
the Banks or the Agent on account thereof shall be reimbursed to
the Banks or the Agent as the case may be forthwith upon request
therefor, but neither the Banks, the Agent nor the Construction
Inspector shall have any liability to the Borrower on account of
(i) the services performed by the Construction Inspector,
(ii) any neglect or failure on the part of the Construction
Inspector to properly perform its services, or (iii) any approval
by the Construction Inspector of construction of the
Improvements.  Neither the Banks, the Agent nor the Construction
Inspector assumes any obligation to the Borrower or any other
Person concerning the quality of construction of the Improvements
or the absence therefrom of defects.

     Section 7.2  Right to Obtain Appraisals.  The Agent on behalf of
the Banks shall have the right to obtain from time to time, at
the Borrower's cost and expense, updated Appraisals of the
Project which will be ordered by the Agent, provided that so long
as no Default or Event of Default shall have occurred and be
continuing, the Borrower shall only be obligated to pay for the
costs and expenses associated with one such Appraisal during any
twenty-four (24) month period.  The costs and expenses incurred
by the Agent in obtaining such Appraisals shall be paid by the
Borrower forthwith upon billing or request by the Agent for
reimbursement therefor.

     Section 7.3  Charges Against Accounts.  The Agent and the Banks
shall have the right, and the Borrower hereby irrevocably
authorizes the Agent and the Banks, to charge any account of the
Borrower with the Agent or any Bank without the further approval
of the Borrower, for (i) any installment of interest due under
the Notes, (ii) any costs or expenses incurred by the Agent or
the Banks which are to be paid or reimbursed by the Borrower
under the terms of this Agreement or any of the other Loan
Documents (including, without limiting the generality of the
foregoing, all Construction Inspector, Appraisal and reasonable
attorney's fees) or (iii) any other sums due to the Agent or the
Banks under the Notes, this Agreement or any of the other Loan
Documents, all to the extent that the same are not paid by the
respective due dates thereof.

               SECTION 8.  REPRESENTATIONS AND WARRANTIES

     The Borrower represents and warrants to the Agent and the
Banks as follows:

     Section 8.1  Organization; Authority, Etc.

          (a)  Organization; Good Standing.  The Borrower is a
Delaware limited partnership duly organized pursuant to a limited
partnership agreement dated as of February 27, 1998 and is
validly existing and in good standing under the laws of the State
of Delaware.  Elk Grove-Lakeside Apartments, L.P., is a
California limited partnership duly organized pursuant to a
limited partnership agreement dated February 26, 1998, and a
certificate of limited partnership filed on October 23, 1997,
with the Secretary of State of the State of California, and is
validly existing and in good standing under the laws of the State
of California.  LSAC G.P. Corporation is the sole general partner
of Elk Grove-Lakeside Apartments, L.P. and is a California
corporation duly organized pursuant to its articles of
incorporation filed with the Secretary of State of the State of
California and is validly existing and in good standing under the
laws of the State of California.  Walden Development Corporation
is a corporation duly organized pursuant to its Certificate of
Incorporation filed on February 6, 1998 with the Secretary of
State of the State of Delaware and is validly existing and in
good standing under the laws of the State of Delaware.  Walden is
a Maryland corporation duly organized pursuant to its Articles of
Incorporation and amendments thereto filed with the Maryland
Secretary of State and is validly existing and in good standing
under the laws of the State of Maryland.  WDOP is a Delaware
limited partnership duly organized pursuant to a limited
partnership agreement dated August 12, 1997 and is validly
existing and in good standing under the laws of the State of
Delaware.  The Grupe Company is a corporation duly organized
pursuant to its amended and restated articles of incorporation
dated December 1, 1988 filed with the Secretary of State of the
State of California and is validly existing and in good standing
under the laws of the State of California.  Each of the Borrower,
the General Partner and the Guarantors (i) has all requisite
power to own its property and conduct its business as now
conducted and as presently contemplated, and (ii) is in good
standing as a foreign entity and is duly authorized to do
business in the jurisdiction where the Land is located and in
each other jurisdiction where such qualification is necessary
except where a failure to be so qualified in such other
jurisdiction would not have a materially adverse effect on its
business, assets or financial condition.  Walden is a real estate
investment trust in full compliance with and entitled to the
benefits of Section 856 of the Code.

          (b)  Subsidiaries.  The Borrower and the General
Partner do not, and will not, have any Subsidiaries.  Each of the
Subsidiaries of Walden and WDOP (i) is a corporation, limited
partnership, limited liability company or trust duly organized
under the laws of its State of organization and is validly
existing and in good standing under the laws thereof, (ii) has
all requisite power to own its property and conduct its business
as now conducted and as presently contemplated, and (iii) is in
good standing and is duly authorized to do business in each
jurisdiction where a failure to be so qualified could have a
materially adverse effect on the business, assets or financial
condition of Walden or WDOP, as applicable, or such Subsidiary.

          (c)  Authorization.  The execution, delivery and
performance of this Agreement and the other Loan Documents to
which the Borrower, the General Partner or the Guarantors is or
is to become a party and the transactions contemplated hereby and
thereby (i) are within the authority of such Person, (ii) have
been duly authorized by all necessary proceedings on the part of
such Person, (iii) do not and will not conflict with or result in
any breach or contravention of any provision of law, statute,
rule or regulation to which such Person is subject or any
judgment, order, award, writ, injunction, license or permit
applicable to such Person, (iv) do not and will not conflict with
or constitute a default (whether with the passage of time or the
giving of notice, or both) under any provision of the
organizational or formation documents of, or any agreement or
other instrument binding upon, such Person or any of its
properties, (v) do not require the approval or consent of, or
filing with, any governmental agency or authority other than
those already obtained and the filing of the Security Deed, the
Assignment of Leases and the Financing Statements in the
appropriate public records with respect thereto, and (vi) except
as provided in the Loan Documents, do not and will not result in
or require the imposition of any lien or other encumbrance on any
of the properties, assets or rights of such Person.

          (d)  Enforceability.  The execution and delivery of
this Agreement and the other Loan Documents to which the
Borrower, the General Partner or the Guarantors is to become a
party will result in valid and legally binding obligations of
such Person enforceable against it in accordance with the
respective terms and provisions hereof and thereof, except as
enforceability is limited by bankruptcy, insolvency,
reorganization, moratorium or other laws relating to or affecting
generally the enforcement of creditors' rights and except to the
extent that availability of the remedy of specific performance or
injunctive relief is subject to the discretion of the court
before which any proceeding therefor may be brought.

     Section 8.2  Title to Project and Other Properties.

          (a)  The Borrower holds good clear record and
marketable fee simple absolute title to the Land and the
Improvements, and owns the Personal Property, subject to no
rights of others, including any mortgages, leases, conditional
sale agreements, title retention agreements, liens or other
encumbrances, other than the permitted exceptions listed in the
Security Deed.

          (b)  The Borrower owns all of the assets reflected in
the balance sheet of the Borrower as at the Balance Sheet Date or
acquired since that date (except property and assets sold or
otherwise disposed of in the ordinary course of business since
that date), subject to no rights of others, including any
mortgages, leases, conditional sales agreements, title retention
agreements, liens or other encumbrances except Permitted Liens.

     Section 8.3  Financial Statements.  There has been furnished to the
Agent a balance sheet or financial statement of the Borrower, the
General Partner and each of the Guarantors, as of the applicable
Balance Sheet Date, and a statement of income for the fiscal year
then ended, certified by the chief financial officer of the
Borrower, the General Partner or the Guarantors, respectively.
Such balance sheets, financial statements and statements of
income have been prepared with respect to Borrower, General
Partner and The Grupe Company, using a federal income tax basis
of accounting consistently applied, and with respect to Walden
and WDOP, in accordance with generally accepted accounting
principles, and fairly present the financial condition of such
Person as at the close of business on the date thereof and the
results of operations for the fiscal year then ended.  As of the
date of this Agreement, there are no liabilities or contingent
liabilities of the Borrower, the General Partner or any of the
Guarantors which are not disclosed in said balance sheets or
financial statements and the related notes thereto other than the
Obligations.

     Section 8.4  No Material Changes, Etc.  Since the Balance Sheet
Date, there has occurred no materially adverse change in the
financial condition or business of the Borrower, the General
Partner or the Guarantors as shown on or reflected in the balance
sheets or financial statements of such Person as of the Balance
Sheet Date, other than changes in the ordinary course of business
that have not had any materially adverse effect either
individually or in the aggregate on the business or financial
condition of such Person.

     Section 8.5  Franchises, Patents, Copyrights, Etc.  The Borrower,
the General Partner and the Guarantors possess all franchises,
patents, copyrights, trademarks, trade names, licenses and
permits, and rights in respect of the foregoing, adequate for the
conduct of its business substantially as now conducted or as it
is intended to be conducted with respect to the Project, without
known conflict with any rights of others.  The Project is not
owned or operated under or by reference to any registered or
protected trademark, tradename, servicemark or logo.

     Section 8.6  Litigation.  There are no actions, suits, proceedings
or investigations of any kind pending or to the knowledge of such
Person, threatened against the Borrower, the General Partner or
any of the Guarantors before any court, tribunal, arbitrator,
mediator or administrative agency or board that, if adversely
determined, might either in any case or in the aggregate,
adversely affect the properties, assets, financial condition or
business of such Person, including, without limitation, the
Project, or materially impair the right of such Person to carry
on business substantially as now conducted by it, or result in
any liability not adequately covered by insurance, or for which
adequate reserves are not maintained on the balance sheet of such
Person, or which question the validity of this Agreement or any
of the other Loan Documents, any action taken or to be taken
pursuant hereto or thereto, or any lien or security interest
created or intended to be created pursuant hereto or thereto, or
which will adversely affect the ability of the Borrower, the
General Partner or the Guarantors to construct, use and occupy
the Improvements or to pay and perform the Obligations in the
manner contemplated by this Agreement and the other Loan
Documents.

     Section 8.7  No Materially Adverse Contracts, Etc.  None of the
Borrower, General Partner, the Guarantors or any of their
respective Subsidiaries is subject to any charter, corporate or
other legal restriction, or any judgment, decree, order, rule or
regulation that has or is expected in the future to have a
materially adverse effect on the business, assets or financial
condition of such Person.  None of the Borrower, General Partner,
the Guarantors or any of their respective Subsidiaries is a party
to any contract or agreement that has or is expected, in the
judgment of the officers or partners of such Person, to have any
materially adverse effect on the business of any of them.

     Section 8.8  Compliance with Other Instruments, Laws, Etc.  None of
the Borrower, the General Partner, the Guarantors or any of their
respective Subsidiaries is in violation of any provision of its
partnership documents, charter or other organizational documents
or bylaws or any agreement or instrument to which it may be
subject or by which it or any of its properties may be bound or
any decree, order, judgment, statute, license, rule or
regulation, in any of the foregoing cases in a manner that could
result in the imposition of substantial penalties or materially
and adversely affect the financial condition, properties or
business of such Person.

     Section 8.9  Tax Status.  The Borrower, the General Partner, the
Guarantors and each of their respective Subsidiaries (a) has made
or filed all federal and state income and all other tax returns,
reports and declarations required by any jurisdiction to which
any of them is subject, (b) has paid all taxes and other
governmental assessments and charges shown or determined to be
due on such returns, reports and declarations, except those being
contested in good faith and by appropriate proceedings, (c) if a
partnership, limited partnership, limited liability partnership,
or limited liability company, has and will maintain partnership
tax classification under the Code, and (d) has set aside on their
books provisions reasonably adequate for the payment of all taxes
for periods subsequent to the periods to which such returns,
reports or declarations apply.  There are no unpaid taxes in any
material amount claimed to be due by the taxing authority of any
jurisdiction, and the officers or partners of such Person know of
no basis for any such claim.

     Section 8.10  No Event of Default.  No Default or Event of Default
has occurred and is continuing.

     Section 8.11  Holding Company and Investment Company Acts.  None of
the Borrower, the General Partner, the Guarantors or any of their
respective Subsidiaries is a "holding company", or a "subsidiary
company" of a "holding company", or an "affiliate" of a "holding
company", as such terms are defined in the Public Utility Holding
Company Act of 1935; nor is any of such Persons an "investment
company", or an "affiliated company" or a "principal underwriter"
of an "investment company", as such terms are defined in the
Investment Company Act of 1940.

     Section 8.12  Absence of UCC Financing Statements, Etc.  Except
with respect to Permitted Liens, there is no financing statement,
security agreement, chattel mortgage, real estate mortgage or
other document filed or recorded with any filing records,
registry, or other public office, that purports to cover, affect
or give notice of any present or possible future lien on, or
security interest in, any Collateral or any other assets or
property of the Borrower or any rights related thereto.

     Section 8.13  Setoff, Etc.  The Collateral and the Agent's rights
with respect to the Collateral are not subject to any setoff,
claims, withholdings or other defenses.  The Borrower is the
owner of the Collateral free from any lien, security interest,
encumbrance and any other claim or demand.

     Section 8.14  Certain Transactions.  Except as set forth on
Schedule 8.14 hereto, none of the officers, trustees, directors,
partners or employees of the Borrower, General Partner or any of
the Guarantors is presently a party to any transaction with the
Borrower or the General Partner (other than for services as
employees, officers, directors, trustees and partners), including
any contract, agreement or other arrangement providing for the
furnishing of services to or by, providing for rental of real or
personal property to or from, or otherwise requiring payments to
or from any officer, trustee, director, partner or such employee
or, to the knowledge of the Borrower, any corporation,
partnership, trust or other entity in which any officer, trustee,
director, partner or any such employee has a substantial interest
or is an officer, director, trustee or partner.

     Section 8.15  Employee Benefit Plans; Multiemployer Plans;
Guaranteed Pension Plans.  Neither the Borrower nor any ERISA
Affiliate maintains or contributes to any Employee Benefit Plan,
Multiemployer Plan or Guaranteed Pension Plan.

     Section 8.16  Regulations U and X.  No portion of the Loan is to be
used for the purpose of purchasing or carrying any "margin
security" or "margin stock" as such terms are used in Regulations
U and X of the Board of Governors of the Federal Reserve System,
12 C.F.R. Parts 221 and 224.

     Section 8.17  Partners.  Elk Grove-Lakeside Apartments, L.P. is the
sole general partner of the Borrower and owns a 51% partnership
interest in Borrower.  LSAC G.P. Corporation is the sole general
partner of Elk Grove-Lakeside Apartments, L.P. and owns a 1%
interest in Elk Grove-Lakeside Apartments, L.P.  Walden
Development Corporation is the sole limited partner of the
Borrower and owns a 49% partnership interest in Borrower.  WDOP
owns all of the stock of Walden Development Corporation.

     Section 8.18  Availability of Utilities.  All utility services
necessary and sufficient for the construction, development and
operation of the Project for its intended purposes are presently
and will at all times be, available to the boundaries of the Land
through dedicated public rights of way or through perpetual
private easements, approved by the Agent, with respect to which
the Security Deed creates a valid and enforceable first lien,
including, but not limited to, water supply, storm and sanitary
sewer, gas, electric, telephone and cable facilities, and
drainage.  No such utility services are subject to any
moratorium, or would be subject to any threatened moratorium,
imposed by any authority having jurisdiction.

     Section 8.19  Access.  The rights of way for all roads necessary
for the full utilization of the Project for its intended purposes
have either been acquired by the appropriate Governmental
Authority or have been dedicated to public use and accepted by
such Governmental Authority, and all such roads have been
completed.  All curb cuts, driveways and traffic signals shown on
the Plans and Specifications are existing or have been fully
approved by the appropriate Governmental Authority and funds are
available for the construction thereof and after completion
thereof, shall be maintained at all times for the Project.

     Section 8.20  Condition of Project.  Neither the Project nor any
part thereof is now damaged or injured as result of any fire,
explosion, accident, flood or other casualty or has been the
subject of any Taking, and no Taking is pending or to the
knowledge of the Borrower contemplated.

     Section 8.21  Compliance with Requirements.  The Plans and
Specifications and construction of the Improvements pursuant
thereto and the use and occupancy of the Project contemplated
thereby comply with, and will at all times comply with, all
Requirements.  The Borrower will give all such notices to, and
take all such other actions with respect to, such Governmental
Authority as may be required under applicable Requirements to
construct the Improvements and to use, occupy and operate the
Project following the completion thereof.

     Section 8.22  Project Approvals.  Except as set forth on Schedule
8.22(a) hereto, the Borrower has obtained all Project Approvals.
All Project Approvals obtained by the Borrower are listed and
described on Schedule 8.22(b) hereto, have been validly issued
and are in full force and effect and the Project Approvals not
heretofore obtained by the Borrower will be obtained by the
Borrower in the ordinary course following completion of the
construction of the Improvements in accordance with the Plans and
Specifications.  No Project Approvals will terminate, or become
void or voidable or terminable, upon any sale, transfer or other
disposition of the Project, including any transfer pursuant to
foreclosure sale under the Security Deed.

     Section 8.23  Construction Contract.  The Construction Contract is
in full force and effect and both the Borrower and the Contractor
is in full compliance with its obligations under the Construction
Contract.  The work to be performed by the Contractor under the
Construction Contract is the work called for by the Plans and
Specifications, and all work required to complete the
Improvements in accordance with the Plans and Specifications is
provided for under the Construction Contract.

     Section 8.24  Architect's Contract.  The parties to the Architect's
Contract have fully performed and complied with their respective
obligations thereunder.

     Section 8.25  Other Contracts.  The Borrower has made no contract
or arrangement of any kind or type whatsoever (whether oral or
written, formal or informal), the performance of which by the
other party thereto could give rise to a lien or encumbrance on
the Project other than the Construction Contract and the
Architect's Contract other than with Agent's prior written
consent.

     Section 8.26  Real Property Taxes; Special Assessments.  There are
no unpaid or outstanding real estate or other taxes or
assessments on or against the Project or any part thereof which
are payable by the Borrower (except only real estate taxes not
yet due and payable).  The Borrower has delivered to the Agent
true and correct copies of real estate tax bills for the Project
for the past fiscal tax year.  No abatement proceedings are
pending with reference to any real estate taxes assessed against
the Project.  There are no betterment assessments or other
special assessments presently pending with respect to any part of
the Project, and the Borrower has received no notice of any such
special assessment being contemplated.

     Section 8.27  Violations.  The Borrower has received no notice of,
and otherwise has no knowledge of, any violation of any
applicable Requirements, Project Approvals or other agreement
affecting the Borrower or the Real Estate.

     Section 8.28  Plans and Specifications.  The Borrower has furnished
the Agent with true and complete sets of the Plans and
Specifications.  The Plans and Specifications so furnished to the
Agent comply (and the Improvements when constructed in accordance
with the Plans and Specifications will likewise comply) with all
Requirements, all Project Approvals, and all restrictions,
covenants, easements and other agreements affecting the Project,
and have been approved by the Contractor, the Borrower's
Architect, and such Governmental Authority as is required for
construction of the Improvements.

     Section 8.29  Project Budget.  The Project Budget accurately
reflects all Project Costs.

     Section 8.30  Feasibility.  Each of the Construction Schedule and
the Disbursement Schedule is realistic and feasible, and is
accurate to date.

     Section 8.31  Insurance.  The Borrower has not received any notice
from any insurer or its agent requiring performance of any work
with respect to the Real Estate or the Improvements or canceling
or threatening to cancel any policy of insurance, and the Project
complies with the requirements of the Borrower's and the
Contractor's insurance carriers, as applicable.

     Section 8.32 Other Material Agreements; No Options.  There are no
material agreements pertaining to or benefitting the Project or
the operation or maintenance thereof (including, without
limitation, purchase options) other than as described in this
Agreement, or otherwise disclosed in writing to the Agent by the
Borrower, and no Person has any right or option to acquire the
Project or any portion thereof or interest therein.

     Section 8.33  Brokers.  None of the Borrower, the General Partner
or the Guarantors has engaged or otherwise dealt with any broker,
finder or similar entity in connection with this Agreement or the
Loan contemplated hereunder.

     Section 8.34 Management Agreement.  The Borrower has delivered to
the Agent a true, correct and complete copy of the Management
Agreement providing for the management of the Project.  Such
Management Agreement is subordinate to the terms of the Security
Documents.

     Section 8.35 Tenants.  As of the date hereof, there are no tenants
in possession or Persons having rights to occupy the Project or
any portion thereof.

     Section 8.36 Construction of Improvements.  Except as set forth on
Schedule 8.36 hereto, as of the date hereof, no construction of
the Improvements has been performed and no other work has
commenced at the Land.  To the extent any work or construction
has been commenced prior to the date hereof, all such work and
construction has been performed in compliance with the Plans and
Specifications, the Requirements and the Project Approvals and
Schedule 8.36 attached hereto sets forth the identity of all
contractors, subcontractors, equipment suppliers, laborers,
mechanics, materialmen or other parties that may have a right to
claim a lien against the Project.  Any and all amounts due and
payable to such Persons have been paid as of the date hereof or
will be paid from the proceeds of the initial Advance to be made
hereunder.  As of the date hereof, the Borrower has not paid any
sums to the Contractor under the Construction Contract or to any
other Person on account of any work performed or to be performed
in connection with the construction of the Improvements.

     Section 8.37 Loan Documents.  All of the representations and
warranties made by or on behalf of the Borrower, the General
Partner or the Guarantors in this Agreement and the other Loan
Documents or any document or instrument delivered to the Agent or
the Banks pursuant to or in connection with any of such Loan
Documents are true and correct in all material respects, and
neither the Borrower, the General Partner nor the Guarantors has
failed to disclose such information as is necessary to make such
representations and warranties not misleading.

     Section 8.38  Solvency.  As of the Closing Date and after giving
effect to the transactions contemplated by this Agreement and the
other Loan Documents, including the Loan to be made hereunder,
none of the Borrower, the General Partner or any Guarantor is
insolvent on a balance sheet basis such that the sum of such
Person's assets exceeds the sum of such Person's liabilities, the
Borrower and the Guarantors are able to pay their respective
debts as they become due, and the Borrower and the Guarantors
have sufficient capital to carry on their respective businesses.

     Section 8.39  Effect of Draw Request.  Each Draw Request submitted
to the Agent as provided in Section 3.1 hereof shall constitute an
affirmation that, except to the extent of changes disclosed in
writing to Agent resulting from transactions contemplated or
permitted by the Loan Documents and any changes occurring in the
ordinary course of business that singly or in the aggregate are
not materially adverse, the representations and warranties
contained in Section 8 of this Agreement and in the other Loan Documents
remain true and correct as of the date thereof; and, except to
the extent of changes disclosed in writing to Agent prior to the
Drawdown Date of the requested Advance or any portion thereof,
resulting from transactions contemplated or permitted by the Loan
Documents and any changes occurring in the ordinary course of
business that singly or in the aggregate are not materially
adverse, shall constitute an affirmation that the same remain
true and correct on the Drawdown Date.


            SECTION 9.  AFFIRMATIVE COVENANTS OF THE BORROWER

     The Borrower covenants and agrees that, so long as the Loan
is outstanding or the Banks have any obligation to make any
Advances:

     Secton 9.1  Punctual Payment.  The Borrower will duly and
punctually pay or cause to be paid the principal and interest on
the Loan and all other amounts provided for in the Notes, this
Agreement and the other Loan Documents to which the Borrower is a
party, all in accordance with the terms of the Notes, this
Agreement and such other Loan Documents.

     Section 9.2  Commencement, Pursuit and Completion of Construction.
The Borrower will commence construction of the Improvements
within thirty (30) days after the date hereof.  The Borrower will
diligently pursue construction of the Improvements in accordance
with the Construction Schedule, and will complete construction of
the Improvements on or before the Completion Date, all in
accordance with the Plans and Specifications, in full compliance
with all restrictions, covenants and easements affecting the
Project, all Requirements, and all Project Approvals, and with
all terms and conditions of the Loan Documents, without deviation
from the Plans and Specifications unless the Borrower obtains the
prior approval of the Majority Banks.  Notwithstanding the
foregoing, but without limiting or affecting any provision in any
other Section of this Agreement, the Borrower may without the
prior consent of the Majority Banks authorize changes in the
Construction Contract through customary change orders or
construction change directives provided that (a) such changes
individually do not exceed $50,000.00 or in the aggregate with
all prior change orders do not exceed $150,000.00, (b) none of
such changes individually or in the aggregate will in the
determination of the Agent delay the completion of the Project
beyond the Completion Date, (c) none of such changes individually
or in the aggregate will materially affect the size, utilization,
appearance or value of the Improvements for the purposes
contemplated by the Plans and Specifications, and (d) the
Construction Inspector (or another architect or engineer
designated by the Agent) shall have certified to the Agent in
writing that such changes do not constitute a substantial change
in the Plans and Specifications and do not constitute a change in
the scope of the work under the Construction Contract.  Borrower
shall promptly deliver to the Agent copies of all "change orders"
whether or not the prior consent of the Agent thereto is
required.  The Borrower will pay all sums and perform all such
acts as may be necessary or appropriate to complete such
construction of the Improvements in accordance with the Plans and
Specifications and in full compliance with all restrictions,
covenants and easements affecting the Project, all Requirements
and all Project Approvals, and with all terms and conditions of
the Loan Documents, all of which shall be accomplished on or
before the Completion Date, free from any liens, claims or
assessments (actual or contingent) asserted against the Project
for any material, equipment, labor or other items furnished in
connection therewith.  The Borrower will furnish evidence of
satisfactory compliance with this Section 9.2 to the Agent on or before
the Completion Date.

     Section 9.3  Correction of Defects.  The Borrower will promptly
correct or cause to be corrected all defects in the Improvements
or any departure from the Plans and Specifications not previously
approved by the Majority Banks.  The Borrower agrees that any
Advance made by the Agent or the Banks, whether before or after
such defects or departures from the Plans and Specifications are
discovered by, or brought to the attention of, the Agent or the
Banks, shall not constitute a waiver of the Agents' and the
Banks' right to require compliance with this Section 9.3.

     Section 9.4  Maintenance of Office.  The Borrower will maintain its
chief executive office in Stockton, California, or at such other
place in the United States of America as the Borrower shall
designate upon prior written notice to the Agent, where notices,
presentations and demands to or upon the Borrower in respect of
the Loan Documents may be given or made.

     Section 9.5  Records and Accounts.  The Borrower will (a) keep
true and accurate records and books of account in which full,
true and correct entries will be made in accordance with federal
income tax accounting principles consistently applied, which
records and books will not be maintained on a consolidated basis
with those of any other Person, including, any affiliate of the
Borrower and (b) maintain adequate accounts and reserves for all
taxes (including income taxes), depreciation and amortization of
its properties, contingencies, and other reserves, all of which
accounts shall not be commingled with accounts of any other
Person, including any affiliate of the Borrower, and (c) in order
to assist the Agent and the Banks in monitoring the financial
condition of the Borrower and the Collateral, maintain, or cause
to be maintained, at the Agent all operating accounts and escrow
accounts of the Borrower, except as may be otherwise agreed by
the Agent in writing.

     Section 9.6  Financial Statements, Certificates and Information.
The Borrower will deliver to the Agent and each of the Banks:

          (a)  as soon as practicable, but in any event not later
than one hundred and twenty (120) days after the end of each
fiscal year of the Borrower, the balance sheet of the Borrower at
the end of such year, and the related statement of income,
statement of retained earnings, changes in capital and statement
of cash flows for such year, each setting forth in comparative
form the figures for the previous fiscal year and all such
statements to be in reasonable detail, prepared using a federal
income tax basis of accounting consistently applied, together
with the certification of the chief financial officer of the
General Partner that the information contained in such statements
fairly presents the financial position of the Borrower as of the
date thereof (provided that upon the request of the Agent, such
statements shall be accompanied by an auditor's report prepared
without qualification by an independent certified public
accountant acceptable to the Majority Banks);

          (b)  as soon as practicable, but in any event not later
than thirty (30) days after the end of each calendar month
(commencing with the first calendar month after the opening of
the Project), copies of the statement of income, statement of
retained earnings, changes in capital and statement of cash flows
for such month and the portion of the Borrower's fiscal year then
elapsed, a statement showing the aging of all receivables and
payables for the Project, all in reasonable detail and prepared
using a federal income tax basis of accounting consistently
applied, together with a certification by the principal financial
or accounting officer of the General Partner that the information
contained in such financial statements fairly presents the
financial position of the Borrower on the date thereof (subject
to year-end adjustments);

          (c)  contemporaneously with the delivery of the
financial statements referred to in clause (a) above, a statement
of all contingent liabilities of the Borrower which are not
reflected in such financial statements or referred to in the
notes thereto, and a statement of projected cash flows of the
Borrower for the current fiscal year, all in reasonable detail
and certified by the principal financial or accounting officer of
the General Partner;

          (d)  within fifteen (15) days after the end of each
calendar quarter, a leasing report setting forth the Borrower's
efforts to market and lease the then unleased space in the
Improvements and the results of such efforts;

          (e)  within fifteen (15) days after the end of each
calendar month (commencing after the date on which the
Improvements are occupied by any tenant under a Lease) a current
rent roll and summary thereof in form satisfactory to the Agent
as of the end of such month, together with a listing of each
tenant that has taken occupancy of the Improvements during such
month, stating the name of the tenant, the date of the occupancy
and the unit so occupied;

          (f)  promptly after they are filed with the Internal
Revenue Service, copies of all annual federal income tax returns
and amendments thereto of the Borrower and the General Partner;

          (g)  contemporaneously with the mailing thereof, copies
of all information of a financial nature having a material impact
on the Borrower or the Project sent to the partners of the
Borrower; and

          (h)  from time to time such other financial data and
information (including accountants' management letters) as the
Agent or the Majority Banks may reasonably request.

     Section 9.7  Notices

          (a)  Defaults.  The Borrower will promptly notify the
Agent in writing of the occurrence of any Default or Event of
Default, specifying the nature and existence of such Default or
Event of Default and what action the Borrower is taking or
proposes to take with respect thereto.  If any Person shall give
any notice or take any other action in respect of a claimed
default (whether or not constituting an Event of Default) under
this Agreement or under any note, evidence of indebtedness,
indenture or other obligation to which or with respect to which
the Borrower, the General Partner or any of the Guarantors is a
party or obligor, whether as principal or surety, and such
default would permit the holder of such note or obligation or
other evidence of indebtedness to accelerate the maturity
thereof, which acceleration would have a material adverse effect
on the Borrower, the General Partner or such Guarantor, the
Borrower shall forthwith give written notice thereof to the
Agent, describing the notice or action and the nature of the
claimed default.

          (b)  Environmental Events.  The Borrower will promptly
give notice to the Agent (i) of any violation of any
Environmental Law that the Borrower or the General Partner
reports in writing or is reportable by such Person in writing (or
for which any written report supplemental to any oral report is
made) to any federal, state or local environmental agency and
(ii) upon becoming aware thereof, of any inquiry, proceeding,
investigation, or other action, including a notice from any
agency of potential environmental liability, or any federal,
state or local environmental agency or board, that in either case
involves the Project or has the potential to materially affect
the assets, liabilities, financial conditions or operations of
the Borrower or the General Partner or the Agent's liens or
security interests pursuant to the Security Documents.

          (c)  Notification of Claims Against Collateral.  The
Borrower will, immediately upon becoming aware thereof, notify
the Agent in writing of any setoff, claims, withholdings or other
defenses to which any of the Collateral, or the Agent's rights
with respect to the Collateral, are subject.

          (d)  Notice of Nonpayment.  The Borrower will
immediately notify the Agent in writing if the Borrower receives
any notice, whether oral or written, from any laborer,
subcontractor, materialman or supplier to the effect that such
laborer, subcontractor, materialman or supplier has not been paid
when due for any labor, equipment or materials furnished in
connection with the construction of the Improvements.

          (e)  Notice of Litigation and Judgments.  The Borrower
will give notice to the Agent in writing within fifteen (15) days
of becoming aware of any litigation or proceedings threatened in
writing or any pending litigation and proceedings affecting the
Project or affecting the Borrower or the General Partner or any
of the Guarantors or to which any of such Persons is to become a
party involving an uninsured claim against any of such Persons
that could reasonably be expected to have a materially adverse
effect on such Person and stating the nature and status of such
litigation or proceedings.  The Borrower will give notice to the
Agent, in writing, in form and detail satisfactory to the Agent,
within ten (10) days of any judgment not covered by insurance,
final or otherwise, against the Borrower, the General Partner or
any of the Guarantors in an amount in excess of $100,000.00

     Section 9.8  Existence; Maintenance of Properties.  The Borrower
will do or cause to be done all things necessary to preserve and
keep in full force and effect its existence as a Delaware limited
partnership.  The Borrower will cause the General Partner to do
or cause to be done all things necessary to preserve and keep in
full force and effect its legal existence.  The Borrower will do
or cause to be done all things necessary to preserve and keep in
full force all of its rights and franchises.  The Borrower
(a) will cause all of its properties used or useful in the
conduct of its business to be maintained and kept in first class
condition, repair and working order and supplied with all
necessary equipment, (b) will cause to be made all necessary
repairs, renewals, replacements, betterments and improvements
thereof, all as in the judgment of the Borrower may be necessary
so that the business carried on in connection therewith may be
properly and advantageously conducted at all times, and (c) will
continue to engage primarily in the businesses now conducted by
it and in related businesses.

     Section 9.9  Insurance.  The Borrower will obtain and maintain
insurance with respect to the Project as required by the Security
Deed.  The Borrower will maintain with respect to its other
properties and business insurance with financially sound and
reputable insurers against such casualties and contingencies as
shall be in accordance with the general practices of businesses
engaged in similar activities in similar geographic areas and in
amounts, containing such terms, in such forms and for such
periods as may be reasonable and prudent.

     Section 9.10  Taxes.

          (a)  The Borrower will pay all taxes, assessments and
other governmental charges imposed upon it with respect to the
Project or imposed upon the Project at the time and in the manner
required by the Security Deed.

          (b)  The Borrower will duly pay and discharge, or cause
to be paid and discharged, before the same shall become overdue,
all taxes, assessments and other governmental charges imposed
upon it and its other real properties, sales and activities, or
any part thereof, or upon the income or profits therefrom, that
if unpaid might by law become a lien or charge upon any of its
property; provided that any such tax, assessment, charge or levy
with respect to properties other than the Project need not be
paid if the validity or amount thereof shall currently be
contested in good faith by appropriate proceedings and if the
Borrower shall have set aside on its books adequate reserves with
respect thereto; and provided further that the Borrower will pay
all such taxes, assessments, charges or levies forthwith upon the
commencement of proceedings to foreclose any lien that may have
attached as security therefor.  Nothing in this Section 9.10(b) shall
limit, negate or affect the provisions of Section 9.24(a) or (b) hereof.

     Section 9.11  Inspection of Project, Other Properties and Books.

          (a)  The Borrower shall permit the Banks, through the
Agent or any representative designated by the Agent, and the
Construction Inspector, at the Borrower's expense, to visit and
inspect the Project and all materials to be used in the
construction thereof and will cooperate with the Agent and the
Construction Inspector during such inspections (including making
available working drawings of the Plans and Specifications);
provided that this provision shall not be deemed to impose on the
Banks, the Agent or the Construction Inspector any obligation to
undertake such inspections.

          (b)  The Borrower shall permit the Banks, through the
Agent or any representative designated by the Agent, at the
Borrower's expense, to obtain updated commercial finance
examinations of the books of account of the Borrower and the
General Partner (and to make copies thereof and extracts
therefrom) and to discuss the affairs, finances and accounts of
the Borrower or the General Partner with, and to be advised as to
the same by, its officers, all at such reasonable times and
intervals as the Agent or any Bank may reasonably request.

     Section 9.12  Compliance with Laws, Contracts, Licenses, and
Permits.  The Borrower will comply with (a) the applicable laws
and regulations wherever its business is conducted, including all
Environmental Laws and all Requirements, (b) the provisions of
its partnership agreement, (c) all agreements and instruments by
which it or any of its properties may be bound, including the
Architect's Contract, the Construction Contract, and all
restrictions, covenants and easements affecting the Project,
(d) all applicable decrees, orders and judgments, and (e) all
licenses and permits required by applicable laws and regulations
for the conduct of its business or the ownership, use or
operation of its properties, including all Project Approvals.

     Section 9.13  Project Approvals.  The Borrower will promptly obtain
all Project Approvals not heretofore obtained by the Borrower
(including those listed and described on Schedule 8.22(a) hereto
and any other Project Approvals which may hereafter become
required, necessary or desirable) and will furnish the Agent with
evidence that the Borrower has obtained such Project Approvals
promptly upon its request.  The Borrower will give all such
notices to, and take all such other actions with respect to, such
Governmental Authority as may be required under applicable
Requirements to construct the Improvements and to use, occupy and
operate the Project following the completion of the construction
of the Improvements.  The Borrower will also promptly obtain all
utility installations and connections required for the operation
and servicing of the Project for its intended purposes, and will
furnish the Agent with evidence thereof.  The Borrower will duly
perform and comply with all of the terms and conditions of all
Project Approvals obtained at any time, including all Project
Approvals listed and described on Schedules 8.22(a) and 8.22(b)
hereto.

     Section 9.14  Use of Proceeds.  The Borrower will use the proceeds
of the Loan solely for the purpose of paying for Project Costs in
accordance with the Project Budget as the same may be revised
from time to time in accordance with the terms hereof.

     Section 9.15  Project Costs.  The Borrower will pay when due all
Project Costs in excess of the Loan Amount, regardless of the
amount.

     Section 9.16  Insufficiency of Loan Proceeds.  The Borrower will
deposit funds with the Agent for the benefit of the Banks as
follows: If at any time while the Loan is outstanding or the
Banks have any obligation to make Advances hereunder, the Agent
or the Majority Banks shall in their reasonable discretion
determine that the remaining undisbursed portion of the Loan,
together with the undisbursed balance of Required Equity Funds,
if any, and any other sums previously deposited by the Borrower
with the Agent in connection with the Loan, is or will be
insufficient to fully complete and equip the Improvements in
accordance with the Plans and Specifications, to operate and
carry the Project after completion of the Improvements until
payment in full of the Loan by the Borrower, to pay all other
Project Costs, to pay all interest accrued or to accrue on the
Loan during the term of the Loan from and after the date hereof,
and to pay all other sums due or to become due under the Loan
Documents (or as to any budget category or line item in the
Project Budget, if the undisbursed funds for such category or
line item are or will be insufficient to fully pay for the costs
attributed to such budget category or line item), regardless of
how such condition may be caused, the Borrower will, within ten
(10) Business Days after written notice of such determination
from the Agent, deposit with the Agent such sums of money in cash
as the Agent or the Majority Banks may reasonably require, in an
amount sufficient to remedy the condition described in such
notice, and sufficient to pay any liens for labor, equipment and
materials alleged to be due and payable at that time in
connection with the Improvements, and, at the Agent's or the
Majority Bank's option, no further Advances of the Loan shall be
made by the Banks until the provisions of this Section 9.16 have been
fully complied with.  All such deposited sums shall stand as
additional security for the obligations and shall be disbursed by
the Agent on behalf of Banks in the same manner as Advances under
this Agreement before any further Advances of the Loan proceeds
shall be made.  Neither the Agent nor the Banks shall have any
obligation to pay Borrower any interest with respect to the
deposited funds.

     Section 9.17  Leases.  The Borrower will take or cause to be taken
all steps within the power of the Borrower to market and lease
the leasable area of the Improvements to such tenants and upon
such terms and conditions as may be approved by the Agent, as
hereinafter provided.  Any proposed standard form of lease to be
used by the Borrower in connection with the Improvements shall be
submitted to and approved by the Agent prior to its submission to
any proposed tenant, and the Borrower will make such amendments,
modifications or additions thereto as may be reasonably required
by the Agent.  Borrower shall not, and shall not permit the
management company under the Management Agreement to become a
party to, or agree to come a party to, any Lease without the
prior approval of the Agent.  Notwithstanding the foregoing,
following the Agent's approval of the standard form of Lease to
be used by Borrower for the Project, Borrower or the management
company under the Management Agreement may, without the prior
approval of the Agent, enter into Leases with individuals (as
opposed to corporations or any other entities) for a single
apartment unit in the ordinary course of business and in
accordance with sound and customary leasing practices for similar
properties in the Sacramento, California area.  Additionally,
Borrower shall not, and shall not permit the management company
under the Management Agreement to, amend, supplement or otherwise
modify, or terminate or cancel, or accept the surrender of, or
grant any concessions to or waive the performance of any
obligations of any tenant under, any Lease, without the prior
approval of the Agent.  Notwithstanding anything herein to the
contrary, the Borrower or the management company under the
Management Agreement may amend, supplement or otherwise modify or
terminate or cancel, or accept the surrender of, or grant
concessions to or waive the performance of any obligations of a
tenant under any Lease with an individual for a single apartment
unit in the ordinary course of business and otherwise in a manner
consistent with sound and customary leasing and management
practices for similar properties in the Sacramento, California
area.  The Borrower shall not, directly or indirectly, cause or
permit to exist any condition which would result in the
termination or cancellation of, or which would relieve the
performance of any obligations of any tenant under, any Lease.

     Section 9.18  Laborers, Subcontractors and Materialmen.  The
Borrower will furnish to the Agent, upon request at any time, and
from time to time, affidavits listing all laborers, suppliers,
subcontractors, materialmen, and any other Persons who might or
could claim statutory or common law liens in excess of $50,000.00
and are furnishing or have furnished labor, equipment or material
to the Project or any part thereof, together with affidavits, or
other evidence satisfactory to the Agent, showing that such
parties have been paid (or will be paid from proceeds of the next
Advance) all amounts then due for labor, equipment and materials
furnished to the Project.  The Borrower will also furnish to the
Agent, at any time and from time to time upon demand by the
Agent, lien waivers bearing a date not prior to the Drawdown Date
of the immediately preceding Draw Request and prepared on a form
satisfactory to the Agent from the Contractor and such
subcontractors, suppliers or materialmen as the Agent may
reasonably designate.

     Section 9.19  Further Assurance of Title.  The Borrower will
further assure title as follows: If at any time the Agent or the
Agent's counsel has reason to believe that any Advance is not
secured or will or may not be secured by the Security Deed as a
first lien or security interest on the Project, then the Borrower
shall, within ten (10) days after written notice from the Agent,
do all things and matters reasonably necessary to assure to the
satisfaction of the Agent and the Agent's counsel that any
Advance previously made hereunder or to be made hereunder is
secured or will be secured by the Security Deed as a first lien
or security interest on the Project, and the Agent, at its
option, may decline to make further Advances hereunder until the
Agent has received such assurance; but nothing in this Section 9.19
shall limit the Agent's right to require endorsements extending
the effective date of the Title Policy as herein set forth.

     SECTION 9.20  INTENTIONALLY DELETED.

     Section 9.21  Publicity.  The Borrower will permit the Agent and
the Banks to obtain publicity in connection with the construction
of the Improvements through press releases and participation in
such events as ground breaking and opening ceremonies.  The
Borrower will give the Agent and the Banks ample advance notice
of such events and will cooperate with and provide to the Agent
and the Banks as much assistance as possible in connection with
obtaining such publicity.

     Section 9.22  Sign Regarding Construction Financing.  At Agent's
option, Borrower shall erect promptly and maintain on a suitable
site on the Land a sign indicating that construction financing is
being provided by the Banks, such location and sign to be subject
to the approval of the Agent.  Borrower further covenants and
agrees to prevent the destruction or removal of said sign without
the prior written approval of the Agent.

     Section 9.23  Further Assurances.

          (a)  Regarding Construction.  The Borrower will furnish
or cause to be furnished to the Agent all instruments, documents,
boundary surveys, footing or foundation surveys, certificates,
plans and specifications, title and other insurance, reports and
agreements and each and every other document and instrument
required to be furnished by the terms of this Agreement or the
other Loan Documents, all at the Borrower's expense.

          (b)  Regarding Preservation of Collateral.  The
Borrower will execute and deliver to the Agent and the Banks such
further documents, instruments, assignments and other writings,
and will do such other acts necessary or desirable, to preserve
and protect the Collateral at any time securing or intended to
secure the Obligations, as the Agent may reasonably require.

          (c)  Regarding this Agreement.  The Borrower will
cooperate with, and will do such further acts and execute such
further instruments and documents as the Agent shall reasonably
request to carry out to its satisfaction the transactions
contemplated by this Agreement and the other Loan Documents.

     Section 9.24 Fundamental Changes of Borrower.  The Borrower:  (a)
does not own and will not own any encumbered asset other than (i)
the Project, and (ii) incidental personal property necessary for
the operation of the Project (which will only be encumbered by
liens in favor of the Agent); (b) is not engaged and will not
engage in any business other than the ownership, management and
operation of the Project; (c) will not enter into any contract or
agreement with any partner, principal or affiliate of the
Borrower or any affiliate of any partner of the Borrower except
upon terms and conditions that are intrinsically fair and
substantially similar to those that would be available on an
arms length basis with third parties other than an affiliate; (d)
has not made and will not make any loans or advances to any third
party (including any affiliate); (e) is and will be solvent and
pay its debt from its assets as the same shall become due; (f)
has done or caused to be done and will do all things necessary to
preserve its existence, and will not, nor will any partner,
limited or general, or shareholder thereof, amend, modify or
otherwise change its partnership certificate, partnership
agreement, articles of incorporation or by laws in a manner which
adversely affects the Borrower's existence as a single purpose
entity; (g) will conduct and operate its business as presently
conducted and operated; (h) will maintain books and records and
bank accounts separate from those of its affiliates, including
its general partners; (i) will be, and at all times will hold
itself out to the public as, a legal entity separate and distinct
from any other entity (including any affiliate thereof, including
any partner or any affiliate of any partner of the Borrower); (j)
will file its own tax returns; (k) will maintain adequate capital
for the normal obligations reasonably foreseeable in a business
of its size and character and in light of its contemplated
business operations; (l) will not seek the dissolution or winding
up, in whole or in part, of the Borrower; (m) will not commingle
the funds and other assets of the Borrower with those of any
general partner, any affiliate or any other person; (n) has and
will maintain its assets in such a manner that it is not costly
or difficult to segregate, ascertain or identify its individual
assets from those of any affiliate or any other person; and (o)
does not and will not hold itself out to be responsible for the
debts or obligations of any other person.

     Section 9.25.  Registered Servicemark.  Without the prior written
consent of the Agent, such consent not to be unreasonably
withheld or delayed, the Project shall not be owned or operated
by the Borrower under any registered or protected trademark,
tradename, servicemark or logo.  Without limiting the foregoing,
the Agent may condition its consent to the use of any of the
foregoing upon the granting to the Agent for the benefit of the
Banks of a perfected first priority security interest therein.

     Section 9.26.  ERISA.  The Borrower will do, or cause to be done,
all things necessary to ensure that its underlying assets will
not be deemed to be "plan assets" within the meaning of the
regulations promulgated under ERISA at 29 CFR 2510.3-101 (the
"Plan Asset Regulations").  Borrower has certified to the Banks
that it shall conduct its affairs so as to constitute a "real
estate operating company" within the meaning of the Plan Asset
Regulations.  Borrower has provided the Agent with a copy of such
certification.

             SECTION 10.  NEGATIVE COVENANTS OF THE BORROWER

     The Borrower covenants and agrees that, so long as the Loan
is outstanding or any of the Banks has any obligation to make any
Advances:

     Section 10.1  Restriction on Change Orders.  Except as permitted in
Section 9.2, the Borrower will not cause, permit or suffer to exist any
deviations from the Plans and Specifications and will not approve
or consent to any change order or construction change directive
without the prior approval of the Agent.

     Section 10.2  Restrictions on Easements, Covenants and
Restrictions.  The Borrower will not create or suffer to be
created or to exist any easement, right of way, restriction,
covenant, condition, license or other right in favor of any
Person which affects or might affect title to the Project or the
use and occupancy of the Project or any part thereof without (i)
submitting to the Agent the proposed instrument creating such
easement, right of way, covenant, condition, license or other
right, accompanied by a survey showing the exact proposed
location thereof and such other information as the Agent may
reasonably request, and (ii) obtaining the prior approval of the
Agent, such approval not to be unreasonably withheld or delayed.

     Section 10.3  No Amendments, Terminations or Waivers.

          (a)  Except as permitted in Section 9.2, the Borrower will not
amend, supplement or otherwise modify, whether by change order or
otherwise, any of the terms and conditions of the Architect's
Contract or the Construction Contract without in each case the
prior approval of the Majority Banks.  The Borrower shall enter
into no contracts of any kind relating to the development,
construction or operation of the Project other than (i) the
Construction Contract for the construction of Improvements to the
Project, and (ii) bona fide service contracts with unaffiliated
third parties terminable without cause upon thirty (30) days
prior written notice, without the prior written consent of the
Agent, such approval not to be unreasonably withheld or delayed.

          (b)  The Borrower will not, directly or indirectly,
terminate or cancel, or cause or permit to exist any condition
which would result in the termination or cancellation of, or
which would relieve the performance of any obligations of any
other party under, the Architect's Contract or the Construction
Contract.

          (c)  The Borrower will not, directly or indirectly,
waive or agree or consent to the waiver of, the performance of
any obligations of any other party under the Architect's Contract
or the Construction Contract.

     Section 10.4  Restrictions on Indebtedness.  The Borrower will not
create, incur, assume, guarantee or be or remain liable,
contingently or otherwise, with respect to any Indebtedness other
than:

          (a)  Indebtedness to the Agent and the Banks arising
under any of the Loan Documents;

          (b)  current liabilities of the Borrower incurred in
the ordinary course of business but not incurred through (i) the
borrowing of money, or (ii) the obtaining of credit except for
credit on an open account basis customarily extended and in fact
extended in connection with normal purchases of goods and
services;

          (c)  Indebtedness in respect of taxes, assessments,
governmental charges or levies to the extent that payment
therefor shall not at the time be required to be made in
accordance with the provisions of Section 9.10;

          (d)  Indebtedness in respect of judgments or awards
that have been in force for less than the applicable period for
taking an appeal so long as execution is not levied thereunder or
in respect of which the Borrower shall at the time in good faith
be prosecuting an appeal or proceedings for review and in respect
of which a stay of execution shall have been obtained pending
such appeal or review; and

          (e)  endorsements for collection, deposit or
negotiation and warranties of products or services, in each case
incurred in the ordinary course of business.

     Section 10.5  Restrictions on Liens, Etc.  The Borrower will not
(a) create or incur or suffer to be created or incurred or to
exist any lien, encumbrance, mortgage, pledge, negative pledge,
charge, restriction or other security interest of any kind upon
any of its property or assets of any character whether now owned
or hereafter acquired, or upon the income or profits therefrom;
(b) transfer any of its property or assets or the income or
profits therefrom for the purpose of subjecting the same to the
payment of Indebtedness or performance of any other obligation in
priority to payment of its general creditors; (c) acquire, or
agree or have an option to acquire, any property or assets upon
conditional sale or other title retention or purchase money
security agreement, device or arrangement; (d) suffer to exist
for a period of more than thirty (30) days after the same shall
have been incurred any Indebtedness or claim or demand against it
that if unpaid might by law or upon bankruptcy or insolvency, or
otherwise, be given any priority whatsoever over its general
creditors; (e) permit any liens or claims of lien of
warehousemen, mechanics, materialmen and other like liens and
claims of lien to exist against the Project without causing any
such lien or claim of lien to be released of record or bonded off
in the full amount of the lien plus any interest, costs or
penalties accruing thereon during the pendency of any suit
contesting the same within twenty (20) days after notice thereof
by the Agent to the Borrower;  (f) sell, assign, pledge or
otherwise transfer or encumber any accounts, contract rights,
general intangibles, chattel paper or instruments, with or
without recourse; or (g) incur or maintain any obligation to any
holder of Indebtedness of the Borrower which prohibits the
creation or maintenance of any lien securing the Obligations
(collectively "Liens"); provided that the Borrower may create or
incur or suffer to be created or incurred or to exist:

                     (i)     liens to secure taxes, assessments and other
     governmental charges in respect of obligations not overdue;

                    (ii)     liens to secure claims for labor, material or
     supplies in respect of obligations not overdue to the extent
     the same are not required to be released or bonded off
     pursuant to this Agreement.

                   (iii)     liens in respect of judgments or awards, the
     Indebtedness with respect to which is permitted by Section 10.4(d);

                    (iv)     liens in favor of the Agent under the Loan
     Documents; and

                     (v)     other liens on the Project consisting of
     easements, rights of way, covenants and restrictions if and
     to the extent the same have been approved by the Agent.

         Section 10.6  Restrictions on Investments.  The Borrower will not
make or permit to exist or to remain outstanding any Investment
except Investments in:

         (a)  marketable direct or guaranteed obligations of the
United States of America that mature within one (1) year from the
date of purchase by the Borrower;

         (b)  demand deposits, certificates of deposit, bankers
acceptances and time deposits of United States banks having total
assets in excess of $1,000,000,000; and

         (c)  securities commonly known as "commercial paper"
issued by a corporation organized and existing under the laws of
the United States of America or any state thereof that at the
time of purchase have been rated and the ratings for which are
not less than "P 1" if rated by Moody's Investors Services, Inc.,
and not less than "A 1" if rated by Standard and Poor's.

    Section 10.7  Merger, Consolidation and Disposition of Assets.

         (a)  The Borrower will not become a party to any
merger, consolidation or other business combination, or agree to
or effect any asset acquisition or stock acquisition or other
acquisition of beneficial or legal ownership interests.

         (b)  Except as expressly provided herein, the Borrower
will not become a party to or agree to or effect any disposition
of the Project or any part thereof.

         (c)  The Borrower will not become a party to or agree
to effect any disposition of assets, other than assets not
included in the Project in the ordinary course of business.

    Section 10.8  Sale and Leaseback.  The Borrower will not enter into
any arrangement directly or indirectly whereby the Borrower shall
sell or transfer any property owned by it in order then or
thereafter to lease such property or lease other property that
the Borrower intends to use for substantially the same purpose as
the property being sold or transferred.

    Section 10.9  Compliance with Environmental Laws.  The Borrower
will not do any of the following:  (a) use any of the Real Estate
or any portion thereof as a facility for the handling,
processing, storage or disposal of Hazardous Materials; (b) cause
or permit to be located on any of the Real Estate any underground
tank or other underground storage receptacle for Hazardous
Materials; (c) generate any Hazardous Materials on any of the
Real Estate except for de minimis quantities necessary for the
operation of the Project in the ordinary course of business in
full compliance with Environmental Laws; or (d) conduct any
activity at any Real Estate or use any Real Estate in any manner
so as to cause a Release.

    Section 10.10  Distributions.  The Borrower will not make any
Distributions.

    Section 10.11  Restrictions on Partnership Transfers.  The Borrower
will not cause or permit (a) the General Partner, or any general
partner, member or shareholder of any direct or indirect general
partner of Borrower, or (b) Walden Development Corporation, the
sole limited partner of Borrower, to assign, pledge, encumber,
mortgage, grant a security interest in, sell, transfer or
otherwise convey in any manner whatsoever, all or a portion of
any such partner's, member's or shareholder's interest in
Borrower, or to admit any new partners to the Borrower, without
the prior written consent of the Majority Banks, which consent
may be granted by the Majority Banks in their sole discretion;
provided, however, that subject to the full and complete
satisfaction of each and every condition set forth in (a)-(c) of
this Section 10.11 below, without the consent of the Majority Banks, an
entity designated by Walden (the "Designee") and reasonably
acceptable to Agent may acquire the entire general partnership
interest of Elk Grove-Lakeside Apartments, L.P. in the Borrower
(the Borrower and each Guarantor hereby acknowledging that Agent
shall have no obligation approve the transfer of the General
Partner's interest in Borrower to any entity (A) that would cause
Walden or WDOP to become, directly or indirectly, (i) the general
partner of Borrower or (ii) liable for the Obligations other than
pursuant to the Guaranty executed by Walden and WDOP, or (B) that
may in any manner affect otherwise limit or the obligations of
Walden or WDOP under the Guaranty executed by Walden and WDOP):

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

         (b)  The Designee shall have executed an agreement in
form and substance satisfactory to the Agent assuming the
obligations of the General Partner under the Borrower's
partnership agreement and under the Loan Documents; and

         (c)  The Borrower, the Designee, Walden and WDOP shall
have executed such other agreements, acknowledgments and
ratifications as the Agent may reasonably request, each in form
and substance reasonably satisfactory to Agent.

The Agent and the Banks each acknowledge and agree that upon the
transfer of all of the General Partner's interest in Borrower to
the Designee in accordance with the terms and conditions of this
Section 10.11 (a) General Partner shall not be liable to Agent or any
Bank for any Obligation accruing after the date of such transfer
unless related to or arising out of any act or omission of
General Partner occurring prior to such transfer, (b) the
Guaranty executed by The Grupe Company shall terminate and be
returned to The Grupe Company, and (c) The Grupe Company shall be
released from any liability under the Indemnity Agreement on
account of any loss or damage incurred by any of the "Indemnified
Parties" (as defined in the Indemnity Agreement) as a result of
any occurrence arising after the date of such transfer.

    Section 10.12  Improvement District; Covenants, Conditions and
Restrictions.  Borrower shall not consent to, vote in favor of,
or directly or indirectly advocate or assist in the incorporation
of any part of the Project into any improvement or other district
without the prior written consent of the Agent in each instance.
Also, Borrower shall not, without the prior written consent of
the Agent in each instance, amend, modify or terminate any
Requirement or any covenants, conditions and restrictions which
Agent has approved, affecting any part of the Project.

               SECTION 11.  CONDITIONS TO INITIAL ADVANCE

    The obligation of the Agent and the Banks to make the
initial Advance shall be subject to the satisfaction of the
following conditions precedent:

    Section 11.1  Loan Documents.  Each of the Loan Documents shall
have been duly executed and delivered by the respective parties
thereto, shall be in full force and effect and shall be in form
and substance satisfactory to the Majority Banks.  The Agent
shall have received a fully executed copy of each such document,
except that each Bank shall have received a fully executed
counterpart of the Note.

    Section 11.2  Construction Documents.  The Construction Contract
shall have been duly executed and delivered by the respective
parties thereto, shall be in full force and effect, and shall be
in form and substance satisfactory to the Majority Banks.  The
Agent shall have received a certified or a fully executed copy of
each such document.  The Borrower's Architect and the Contractor
shall have duly executed and delivered to the Agent for the
benefit of the Banks a consent to the assignment of the
Architect's Contract and the Construction Contract, in form and
substance satisfactory to the Agent, and the Agent shall have
received a fully executed copy thereof.

    Section 11.3  Subcontracts.  The Borrower shall have delivered to
the Agent, and the Agent shall have approved, a list of all
subcontractors and materialmen who have been or, to the extent
identified by the Borrower, whose contract for supplying labor,
equipment or materials for the Project exceeds $25,000.00, a copy
of the standard form of subcontract to be used by the Contractor,
and correct and complete photocopies of all executed subcontracts
and contracts.

    Section 11.4  Other Contracts.  The Borrower shall have delivered
to the Agent correct and complete photocopies of all other
executed contracts with contractors, subcontractors, engineers or
consultants for the Project, and of all development, management,
brokerage, sales or leasing agreements for the Project.

    Section 11.5  Certified Copies of Organization Documents.  The
Agent shall have received from the Borrower, each of its direct
and indirect general partners and the Guarantors a copy,
certified as of a recent date by the Secretary of State of the
State of its organization, as applicable, to be true and
complete, of its partnership agreement and certificate or
articles of incorporation, as applicable, and any other of its
organization documents as in effect on such date of
certification, and as to the Borrower and the General Partner, a
certificate from the Secretary of State of the State of
California of their qualification to do business in the State of
California.

    Section 11.6  Resolutions; Bylaws.  All action necessary for the
valid execution, delivery and performance by the Borrower, each
of its direct and indirect general partners and the Guarantors of
this Agreement and the other Loan Documents to which it is or is
to become a party shall have been duly and effectively taken, and
evidence thereof satisfactory to the Agent shall have been
provided to the Agent.  The Agent shall have received from the
Borrower, each of its direct and indirect general partners and
the Guarantors true copies of their respective bylaws (as
applicable) and the resolutions adopted by its partners or board
of directors, as applicable, authorizing the transactions
described herein, each certified by its general partners or
secretary as of a recent date to be true and complete.

    Section 11.7  Incumbency Certificate; Authorized Signers.  The
Agent shall have received from any direct or indirect general
partner of the Borrower that is a corporation and the Guarantors
an incumbency certificate, dated as of the Closing Date, signed
by a duly authorized officer of such Person, and giving the name
and bearing a specimen signature of each individual who shall be
authorized:  (a) to sign, in the name and on behalf of the
Borrower, such general partner or such Guarantor, each of the
Loan Documents to which such Person is or is to become a party;
(b) in the case of the Borrower, to make Draw Requests; and (c)
to give notices and to take other action on its behalf under the
Loan Documents.

    Section 11.8  Validity of Liens.  The Security Documents shall be
effective to create in favor of the Agent a legal, valid and
enforceable first lien and security interest in the Collateral.
All filings, recordings, deliveries of instruments and other
actions necessary or desirable in the opinion of the Agent to
protect and preserve such lien and security interest shall have
been duly effected.  The Agent shall have received evidence
thereof in form and substance satisfactory to the Agent.

    Section 11.9  Deliveries.  The following items or documents shall
have been delivered to the Agent by the Borrower and shall be in
form and substance satisfactory to the Agent:

         (a)  Plans and Specifications.  Two complete sets of
the Plans and Specifications and approval thereof by any
necessary Governmental Authority, with a certification from the
Borrower's Architect (or such other licensed professionals as
Agent in its discretion shall deem acceptable) that the
Improvements to be constructed comply with all Requirements and
Project Approvals and that the Construction Contract
satisfactorily provides for the construction of the Improvements.

         (b)  Title Policy.  The Title Policy, together with
proof of payment of all fees and premiums for such policy and
true and accurate copies of all documents listed as exceptions
under such policy.

         (c)  Other Insurance.  Duplicate originals or certified
copies of all policies of insurance required by the Security Deed
to be obtained and maintained by the Borrower during the
construction of the Improvements, and certificates of insurance
evidencing the insurance required by the Security Deed be
obtained and maintained by the Borrower and the Contractor.

         (d)  Evidence of Sufficiency of Funds.  Evidence that
the proceeds of the Loan will be sufficient to cover all Project
Costs reasonably anticipated to be incurred to complete the
Improvements prior to Completion Date, to carry the Project
through the Maturity Date, and to satisfy the obligations of the
Borrower to the Agent and the Banks under this Agreement.

         (e)  Evidence of Access, Availability of Utilities,
Project Approvals.  Evidence as to:

                     (i)     the methods of access to and egress from the
     Project, and nearby or adjoining public ways, meeting the
     reasonable requirements of the Project and the status of
     completion of any required improvements to such access;

                    (ii)     the availability of water supply and storm and
     sanitary sewer facilities meeting the reasonable
     requirements of the Project;

                   (iii)     the availability of all other required
     utilities, in location and capacity sufficient to meet the
     reasonable needs of the Project; and

                    (iv)     the obtaining of all Project Approvals which
     are required, necessary or desirable for the construction of
     the Improvements and the access thereto, together with
     copies of all such Project Approvals.

              (f)  Environmental Report.  An environmental site
assessment report or reports of one or more qualified
environmental engineering or similar inspection firms approved by
the Agent, which report or reports shall indicate a condition of
the Land and any existing improvements thereon in compliance with
all Requirements and in all respects satisfactory to the Agent in
its sole discretion and upon which report or reports the Agent
and the Banks are expressly entitled to rely.

         (g)  Soils Report.  A soils report for the Land
prepared by a soils engineer approved by the Agent, which report
shall indicate that, based upon actual surface and subsurface
examinations of the Land, the soils conditions are fully
satisfactory for the proposed construction and operation of the
Improvements in accordance with the Plans and Specifications.

         (h)  Survey.  A Survey of the Land (and any existing
improvements thereon) and Surveyor's Certificate.

         (i)  Taxes.  Evidence of payment of all real estate
taxes and municipal charges on the Land (and any existing
improvements thereon) which were due and payable prior to the
Closing Date.

         (j)  INTENTIONALLY DELETED.

         (k)  Draw Request.  A Draw Request complying with the
provisions of Section 3.1 hereof.

         (l)  Form Lease.  The standard form of Lease to be used
by the Borrower in connection with the Improvements in form and
substance satisfactory to the Agent.

    Section 11.10  Construction Inspector Report.  The Agent shall have
received a report or written confirmation from the Construction
Inspector that (a) the Construction Inspector has reviewed the
Plans and Specifications, (b) the Plans and Specifications have
been received, reviewed and approved by each Governmental
Authority to which the Plans and Specifications are required
under applicable Requirements to be submitted, (c) the
Construction Contract satisfactorily provides for the
construction of the Improvements, and (d) in the opinion of the
Construction Inspector, construction of the Improvements can be
completed on or before the Completion Date for an amount not
greater than the amount allocated for such purpose in the Project
Budget.

    Section 11.11  Legal Opinions.  The Agent shall have received
favorable opinions in form and substance satisfactory to the
Agent and the Agent's counsel, addressed to the Agent and the
Banks and dated as of the Closing Date, from counsel to the
Borrower, the General Partner, the Guarantors and such other
parties as the Agent may reasonably require as to such matters as
the Agent shall reasonably request (including without limitation
an opinion that the assets of the Borrower will not be
consolidated with the assets of any other entity or the General
Partner, in the event of bankruptcy or insolvency of such entity
or the General Partner).

    Section 11.12  Lien Search.  The Agent shall have received a
certification from Title Insurance Company or counsel
satisfactory to the Agent (which shall be updated from time to
time at the Borrower's expense upon request by the Agent) that a
search of the public records disclosed no conditional sales
contracts, security agreements, chattel mortgages, leases of
personalty, financing statements or title retention agreements
which affect the Collateral.

    Section 11.13  Approval of Existing Work.  The Agent shall have
received such items contemplated by Section 12.5 as the Agent may
require with respect to any work done to the Land or any
construction of the Improvements performed prior to the date
hereof, if any.

    Section 11.14  Notices.  All notices required by any Governmental
Authority under applicable Requirements to be filed prior to
commencement of construction of the Improvements shall have been
filed.

    Section 11.15  Appraisal.  The Agent shall have received and
approved an Appraisal, in form and substance satisfactory to the
Majority Banks, stating that the Project, assuming completion in
accordance with the Plans and Specifications, has an Appraised
Value of at least the Loan Amount.

    Section 11.16  Commitment Fee.  The Borrower shall have paid to the
Agent the commitment fee pursuant to Section 5.1.

    Section 11.17  Performance; No Default.  The Borrower shall have
performed and complied with all terms and conditions herein
required to be performed or complied with by it on or prior to
the Drawdown Date of the initial Advance, and on the Drawdown
Date of the initial Advance, there shall exist no Default or
Event of Default.

    Section 11.18  Representations and Warranties.  The representations
of warranties made by the Borrower and the Guarantors in the Loan
Documents or otherwise made by or on behalf of the Borrower, the
General Partner or the Guarantors in connection therewith or
after the date thereof shall have been true and correct in all
respects when made and shall also be true and correct in all
respects on the Drawdown Date of the initial Advance.

    Section 11.19  Proceedings and Documents.  All proceedings in
connection with the transactions contemplated by this Agreement
and the other Loan Documents shall be satisfactory to the Agent
and the Agent's counsel in form and substance, and the Agent
shall have received all information and such counterpart
originals or certified copies of such documents and such other
certificates, opinions or documents as the Agent and the Agent's
counsel may reasonably require.

    Section 11.20.  Other.  The Agent shall have received such other
documents, instruments, certificates, opinions, assurances,
consents and approvals as the Agent or the Agent's counsel may
reasonably have requested.

             SECTION 12.  CONDITIONS OF SUBSEQUENT ADVANCES

    The obligation of the Banks to make any Advance after the
initial Advance shall be subject to the satisfaction of the
following conditions precedent:

    Section 12.1  Prior Conditions Satisfied.  All conditions precedent
to the initial Advance and any prior Advance shall continue to be
satisfied as of the Drawdown Date of such subsequent Advance.

    Section 12.2  Performance; No Default.  The Borrower shall have
performed and complied with all terms and conditions herein
required to be performed or complied with by it on or prior to
the Drawdown Date of such Advance, and on the Drawdown Date of
such Advance there shall exist no Default or Event of Default.

    Section 12.3  Representations and Warranties.  Each of the
representations and warranties made by the Borrower and the
Guarantors in the Loan Documents or otherwise made by or on
behalf of the Borrower, the General Partner or the Guarantors in
connection therewith after the date thereof shall have been true
and correct in all respects on the date when made and shall also
be true and correct in all material respects on the Drawdown Date
of such Advance (except to the extent of changes disclosed in
writing to Agent resulting from transactions contemplated or
permitted by the Loan Documents and changes occurring in the
ordinary course of business that singly or in the aggregate are
not materially adverse).

    Section 12.4  No Damage or Taking.  The Improvements shall not have
been injured or damaged by fire, explosion, accident, flood or
other casualty and neither the Improvements nor the Land shall be
affected by any condemnation proceeding, unless the Agent shall
have received insurance proceeds or condemnation award sufficient
in the judgment of the Agent to effect the satisfactory
restoration of the Improvements and to permit the completion
thereof on or prior to the Completion Date and the Borrower is
entitled otherwise to receive the net proceeds thereof pursuant
to the Security Deed.

    Section 12.5  Receipt of the Agent.  The Agent shall have received:

         (a)  Draw Request.  A Draw Request complying with the
requirements hereof, including those set forth in Section 3.1 hereof;

         (b)  Endorsement to Title Policy.  A CLTA Form 122
"date down" endorsement or its equivalent to the Title Policy
indicating no change in the state of title and containing no
survey exceptions not approved by the Agent, which endorsement
shall, expressly or by virtue of a proper "pending disbursements"
clause or endorsement in the Title Policy, increase the coverage
of the Title Policy to the aggregate amount of all proceeds of
the Loan advanced on or before the effective date of such
endorsement.  Additionally, the Agent shall have received a CLTA
Form 102.5 endorsement or its equivalent to the Title Policy upon
completion of the foundation for the Project;

         (c)  Current Survey.  An updated Survey if required by
the Title Insurance Company or the Agent after approval of the
initial survey.  The Agent shall require updated surveys only to
show completed foundations and, upon completion, to show the
Improvements "as-built", unless the Agent shall reasonably
believe that there exists any encroachment, any matter which
might materially and adversely affect title to the Project, or
any material deviation from the Plans and Specifications, in
which event additional updated surveys may be required by the
Agent;

         (d)  Approval by Construction Inspector.  Approval of
the Draw Request for such Advance by the Construction Inspector,
accompanied by a certificate or report from the Construction
Inspector to the effect that in its opinion, based on on-site
observations and submissions by the Contractor, the construction
of the Improvements to the date thereof was performed in a good
and workmanlike manner and in accordance with the Plans and
Specifications, stating the estimated total cost of construction
of the Improvements, stating the percentage of in-place
construction of the Improvements, and stating that the remaining
non-disbursed portion of the Loan and Required Equity Funds
allocated for such purpose in the Project Budget is adequate to
complete the construction of the Improvements;

         (e)  Contracts.  Evidence that one hundred percent
(100%) of the cost of the remaining construction work is covered
by a firm fixed price or guaranteed maximum price contract or
subcontracts, or orders for the supplying of materials, with
contractors, subcontractors, materialmen or suppliers
satisfactory to the Agent.

    Section 12.6  Release of Retainage.  In addition to the conditions
hereinbefore set forth in this Section 12, the Banks' obligation to make
any Advance of Retainage shall, except as provided in Section 2.3, be
subject to receipt by the Agent, of the following:

         (a)  Project Approvals.  Evidence satisfactory to the
Agent that the Borrower has obtained all Project Approvals from,
given all notices to, and taken all such other actions with
respect to, such Governmental Authority as may be required under
applicable Requirements for the permanent use and occupancy of
the Improvements for their intended uses, together with copies of
all such Project Approvals.

         (b)  Approval by Construction Inspector.  Notification
from the Construction Inspector to the effect that the
Improvements have been completed in a good and workmanlike manner
in accordance with the Plans and Specifications.

         (c)  Final Survey.  A final Survey acceptable to the
Agent showing the as-built location of the completed
Improvements.

         (d)  [INTENTIONALLY DELETED]

         (e)  Certificate of the Borrower's Design Professional.
A certificate of the Borrower's Architect or such other licensed
design professional(s) acceptable to Agent that the Improvements
have been completed in accordance with the Plans and
Specifications and that the Improvements comply with all
applicable Requirements and Project Approvals and are in all
respects ready for occupancy.

         (f)  Payment of Costs.  Evidence satisfactory to the
Agent that all sums due in connection with the construction of
the Improvements have been paid in full (or will be paid out of
the funds requested to be advanced) and that no party claims or
has a right to claim any statutory or common law lien arising out
of the construction of the Improvements or the supplying of
labor, material, equipment and/or services in connection
therewith.

         (g)  Final Lien Waivers.  Final unconditional lien
waivers in such form as may be permitted by applicable law to
remove or dissolve any unfiled lien claims, or such other form
satisfactory to the Agent, from each Contractor and such
suppliers, subcontractors and materialmen as may be reasonably
requested by the Agent, duly executed and notarized.

         (h)  Notice of Completion.  Evidence satisfactory to
the Agent that a valid Notice of Completion for the Improvements
has been recorded in the appropriate public records.

         (i)  INTENTIONALLY DELETED.

         (j)  Warranties.  Copies of the warranty issued by the
Contractor to the Borrower pursuant to the Construction Contract
and of all other warranties issued to the Borrower by
subcontractors and manufacturers for labor performed and
materials supplied in connection with the construction of the
Improvements.

         (k)  Insurance.  Duplicate original or certified copies
of all policies of insurance required by the Security Deed to be
obtained and maintained by the Borrower following completion of
construction of the Improvements.

         (l)  Title Endorsement.  An endorsement to the Title
Policy changing the effective date thereof to the date of the
satisfaction by the Borrower of the conditions set forth in this
Section 12.6 and insuring lien free completion of the Improvements,
which endorsement shall expressly or by virtue of a "pending
disbursements" clause increase the coverage of the Title Policy
to the aggregate amount of all Advances outstanding on the
effective date of such endorsement without additional exceptions
except for matters approved by the Agent.


               SECTION 13.  EVENTS OF DEFAULT AND REMEDIES

    Section 13.1  Events of Default.  If any of the following events
("Events of Default" or, if the giving of notice or the lapse of
time or both is required, then, prior to such notice or lapse of
time, "Defaults") shall occur:

         (a)  any failure by the Borrower to pay as and when due
and payable any interest on or principal of or other sum payable
under the Notes, whether on the Maturity Date or any accelerate
date of maturity or at any other date fixed for payment; or

         (b)  any failure by the Borrower to deposit with the
Agent any funds required by Section 9.16 hereof to be deposited with the
Agent, at the time and otherwise in accordance with Section 9.16; or

         (c)  any failure by the Borrower to pay as and when due
and payable any other sums to be paid by the Borrower to the
Agent or the Banks under this Agreement or any of the other Loan
Documents; or

         (d)  title to the Collateral is or becomes
unsatisfactory to the Majority Banks by reason of any lien,
charge, encumbrance, title condition or exception (including
without limitation, any mechanic's, materialman's or similar
statutory or common law lien or notice thereof), and such matter
causing title to be or become unsatisfactory is not cured or
removed (including by bonding) within twenty (20) days after
notice thereof from the Agent to the Borrower; or

         (e)  any refusal by the Title Insurance Company to
insure any Advance as being secured by the Security Deed as a
valid first lien and security interest on the Project and
continuance of such refusal for a period of twenty (20) days
after notice thereof by the Agent to the Borrower; or

         (f)  the Improvements are not completed by the
Completion Date or, in the reasonable judgment of the Majority
Banks, construction of the Improvements will not be completed by
the Completion Date; or

         (g)  the Project or any part thereof is injured by
fire, explosion, accident, flood or other casualty, unless the
Agent shall have received insurance proceeds sufficient in the
reasonable judgment of the Majority Banks to effect the
satisfactory restoration of the Project and to permit the
completion of the Improvements on or prior to the date that is
six (6) months prior to the Maturity Date and the Borrower is
otherwise entitled to receive the net insurance proceeds to
restore the Project as provided in the Security Deed; or

         (h)  the Project or any part thereof is subject to a
Taking either temporarily or permanently; or

         (i)  any cessation at any time in construction of the
Improvements for more than ten (10) consecutive days except for
strikes, acts of God, fire or other casualty, or other causes
entirely beyond the Borrower's control, or any cessation at any
time in construction of the Improvements for more than thirty
(30) consecutive days, regardless of the cause thereof; or

         (j)  any failure by the Borrower to duly observe or
perform any term, covenant, condition or agreement contained in
Section 9.9, 9.14, 9.20 or 10 hereof; or

         (k)  any Guarantor denies that such Guarantor has any
liability or obligations under the Guaranty or the Indemnity
Agreement, or shall notify the Agent or any Bank of such
Guarantor's intention to attempt to cancel or terminate the
Guaranty or the Indemnity Agreement, or shall fail to observe or
comply with any term, covenant, condition and agreement under the
Guaranty or the Indemnity Agreement; or

         (l)  any representation or warranty made or deemed to
be made by or on behalf of the Borrower, the General Partner or
any Guarantor in this Agreement or in any of the other Loan
Documents, or in any report, certificate, financial statement,
Draw Request, document or other instrument delivered pursuant to
or in connection with this Agreement, any Advance or any of the
other Loan Documents, shall prove to have been false or incorrect
in any material respect upon the date when made or deemed to be
made or repeated; or

         (m)  any dissolution, termination, partial or complete
liquidation, merger or consolidation of the Borrower, the General
Partner or any Guarantor, or any sale, transfer or other
disposition of all or substantially all of the assets of the
Borrower, the General Partner or any Guarantor, other than as
permitted under the terms of this Agreement or the applicable
Guaranty; or

         (n)  any suit or proceeding shall be filed against the
Borrower, the General Partner, any Guarantor or the Project which
in the good faith business judgment of the Majority Banks after
giving consideration to the likelihood of success of such suit or
proceeding and the availability of insurance to cover any
judgment with respect thereto and based on the information
available to them, if adversely determined, would have a
materially adverse affect on the ability of the Borrower or the
Guarantor to perform each and every one of their respective
obligations under and by virtue of the Loan Documents; or

         (o)  any failure by the Borrower to obtain any Project
Approvals, or the revocation or other invalidation of any Project
Approvals previously obtained; or

         (p)  Marshall B. Edwards, Mark S. Dillinger and the
members of the board of directors of Walden that are also
officers of Walden shall in the aggregate own directly or
indirectly less than five percent (5.0%) of the issued and
outstanding shares of the capital stock of Walden; or

         (q)  any change in the legal or beneficial ownership of
the Borrower, the General Partner, any general partner of any
direct or indirect partner of the Borrower or any Guarantor
except as permitted in this Agreement or the applicable Guaranty;
or

         (r)  any failure by the Borrower, the General Partner
or any Guarantor or any of their respective Subsidiaries to pay
at maturity, or within any applicable period of grace, any
obligation for borrowed money or credit received, or any failure
to observe or perform any material term, covenant or agreement
contained in any agreement by which it is bound, evidencing or
securing borrowed money or credit received for such period of
time as would permit (assuming the giving of appropriate notice
if required) the holder or holders thereof or of any obligations
issued thereunder to accelerate the maturity thereof; or

         (s)  the Borrower, the General Partner, any Guarantor
or any of their respective Subsidiaries (i) shall make an
assignment for the benefit of creditors, or admit in writing its
general inability to pay or generally fail to pay its debts as
they mature or become due, or shall petition or apply for the
appointment of a trustee or other custodian, liquidator or
receiver of the Borrower, the General Partner or any Guarantor or
of any substantial part of the assets of any such Person,
including, without limitation, the Project, (ii) shall commence
any case or other proceeding relating to the Borrower, the
General Partner or any Guarantor under any bankruptcy,
reorganization, arrangement, insolvency, composition,
readjustment of debt, dissolution or liquidation or similar law
of any jurisdiction, now or hereafter in effect, or (iii) shall
take any action to authorize or in furtherance of any of the
foregoing;

         (t)  a petition or application shall be filed for the
appointment of a trustee or other custodian, liquidator or
receiver of the Borrower, the General Partners or any Guarantor
or any of their respective Subsidiaries or any substantial part
of the assets of any such Person, including, without limitation,
the Project, or a case or other proceeding shall be commenced
against any such Person under any bankruptcy, reorganization,
arrangement, insolvency, composition, readjustment of debt,
dissolution or liquidation or similar law of any jurisdiction,
now or hereafter in effect, and any such Person shall indicate
its approval thereof, consent thereto or acquiescence therein or
such petition, application, case or proceeding shall not have
been dismissed within sixty (60) days following the filing or
commencement thereof;

         (u)  a decree or order is entered appointing any such
trustee, custodian, liquidator or receiver or adjudicating the
Borrower, the General Partner, any Guarantor or any of their
respective Subsidiaries bankrupt or insolvent, or approving a
petition in any such case or other proceeding, or a decree or
order for relief is entered in respect of any such Person, in an
involuntary case under federal bankruptcy laws as now or
hereafter constituted;

         (v)  any uninsured final judgment shall be rendered
against the Borrower or the General Partner, or any uninsured
final judgment shall be rendered against any of the Guarantors
such that, with other outstanding uninsured final judgments
against such Persons, the amount of such uninsured final
judgments exceeds in the aggregate $1,000,000.00, and shall
remain in force, undischarged, unsatisfied and unstayed for more
than thirty (30) days, whether or not consecutive; or

         (w)  any of the Loan Documents shall be canceled,
terminated, revoked or rescinded otherwise than in accordance
with the terms thereof or with the express prior approval of the
Banks, or any action at law, suit in equity or other legal
proceeding to cancel, revoke or rescind any of the Loan Documents
shall be commenced by or on behalf of the Borrower or the
Guarantor which is a party thereto or any of their respective
stockholders, partners or beneficiaries, or any court or any
other governmental or regulatory authority or agency of competent
jurisdiction shall make a determination that, or issue a
judgment, order, decree or ruling to the effect that, any one or
more of the Loan Documents is illegal, invalid or unenforceable
in accordance with the terms thereof; or

         (x)  the Borrower or the General Partner or any
Guarantor shall be indicted for a federal crime, a punishment for
which could include the forfeiture of any of its assets; or

         (y)  any failure by the Borrower, the General Partner
or the Guarantors to duly observe or perform any other term,
covenant, condition or agreement in this Agreement or in any of
the other Loan Documents (other than those specified above in
this Section 13.1); or

         (z)  Marshall B. Edwards shall cease to be the
President of, or Mark S. Dillinger shall cease to be the Chief
Financial Officer of, Walden, and a competent and experienced
successor for such Person shall not be approved by the Majority
Banks within six (6) months of such event, such approval not to
be unreasonably withheld; or

         (aa) any "Event of Default", as defined in any of the
other Loan Documents, shall occur; or

         (bb) without limiting Section 13.1(r) above, any "Event of
Default" (as defined in the Walden Revolving Credit Agreement)
occurs under the Walden Revolving Credit Agreement (the parties
hereto covenanting and agreeing, for the purposes of this
Agreement, that in the event the Walden Revolving Credit
Agreement or the other "Loan Documents" (as such term is defined
in the Walden Revolving Credit Agreement) shall terminate or no
longer be in full force and effect prior to the payment and
performance by the Borrower of all of the Obligations, the
provisions of the Walden Revolving Credit Agreement and such
"Loan Documents" shall for the purposes hereof continue in full
force and effect as if the same had not been terminated and the
Walden Revolving Credit Agreement and such "Loan Documents"
remained in full force and effect); or

         (cc) INTENTIONALLY DELETED.

         (dd) the occurrence of a default by any party under the
Management Agreement, or the termination of the Management
Agreement without the prior written consent of Agent;

then, and in any such event, the Agent may, and upon the request
of the Majority Banks shall, by notice in writing to the Borrower
declare all amounts owing with respect to this Agreement, the
Notes and the other Loan Documents to be, and they shall
thereupon forthwith become, immediately due and payable without
presentment, demand, protest or other notice of any kind, all of
which are hereby expressly waived by the Borrower; provided,
that, in the event of any Event of Default specified in Section 13.1(s),
Section 13.1(t) or Section 13.1(u), all such amounts shall become immediately
due and payable automatically and without any requirement of
notice from any of the Banks or the Agent.  The Borrower and any
other Person shall be entitled to conclusively rely on a
statement from the Agent that it has the authority to act for and
bind the Banks pursuant to this Agreement and the other Loan
Documents.

    Section 13.1A.   Limitation of Cure Periods.

         (a)  Notwithstanding anything contained in Section 13.1 to the
contrary, (i) no Event of Default shall exist hereunder upon the
occurrence of any failure described in Section 13.1(a) or Section 13.1(b) or
Section 13.1(c), in the event that the Borrower cures such default
within five (5) days following receipt of written notice of such
default, provided, however, that Borrower shall not be entitled
to receive more than two (2) notices in the aggregate pursuant to
this clause (i) in any period of 365 days ending on the date of
any such occurrence of default, and provided further that no such
cure period shall apply to any payments due upon the maturity of
the Notes, and (ii) no Event of Default shall exist hereunder
upon the occurrence of any failure described in Section 13.1(y) in the
event that the Borrower cures such default within thirty (30)
days following receipt of written notice of such default,
provided that the provisions of this clause (ii) shall not
pertain to any default excluded from any provision of cure of
defaults contained in any of the other Loan Documents.

    Section 13.2.  Termination of Commitments.  If any one or more
Events of Default specified in Section 13.1(s), Section 13.1(t) or
Section 13.1(u) shall occur, then immediately and without any action on
the part of the Agent or any Bank any unused portion of the credit
hereunder shall terminate and the Banks shall be relieved of all
obligations to make Advances to the Borrower.  If any other Event
of Default shall have occurred, the Agent, upon the election of
the Majority Banks, may by notice to the Borrower terminate the
obligation to make Advances to the Borrower.  No termination
under this Section 13.2 shall relieve the Borrower, the General Partner
or the Guarantors of their respective obligations to the Banks
arising under this Agreement or the other Loan Documents.

    Section 13.3 Completion of Project.  If any one or more of the
Events of Default shall have occurred, and whether or not the
Agent or the Majority Banks shall have terminated the Banks'
obligations to make Advances and/or accelerated the maturity of
the Loan pursuant to this Agreement as provided above, the Agent,
if the construction of the Improvements has not been fully
completed, may cause the Project to be completed and may enter
upon and take possession of the Land, whether in person, by agent
or by court appointed receiver, and construct, equip and complete
the Project in accordance with the Plans and Specifications, with
such changes therein as the Majority Banks may, from time to
time, and in their sole discretion, deem appropriate.  In
connection with any construction of the Project undertaken by the
Agent pursuant to the provisions of this Section 13.3, the Agent may:

         (a)  use any funds of the Borrower, including any
balance which may be held by the Agent as security or in escrow,
and any funds remaining unadvanced under the Loan;

         (b)  employ existing contractors, subcontractors,
agents, architects, engineers, and the like, or terminate the
same and employ others;

         (c)  employ security watchmen to protect the Project;

         (d)  make such additions, changes and corrections in
the Plans and Specifications as shall, in the judgment of the
Agent or the Majority Banks, be necessary or desirable;

         (e)  take over and use any and all Personal Property
contracted for or purchased by the Borrower, if appropriate, or
dispose of the same as the Agent or the Majority Banks see fit;

         (f)  execute all applications and certificates on
behalf of the Borrower which may be required by any Governmental
Authority or Requirements or contract documents or agreements;

         (g)  pay, settle or compromise all existing or future
bills and claims which are or may be liens against the Project,
or may be necessary for the completion of the Improvements or the
clearance of title to the Project;

         (h)  complete the marketing and leasing of leasable
space in the Improvements, enter into new Leases, and modify or
amend existing Leases, all as the Agent or the Majority Banks
shall deem to be necessary or desirable;

         (i)  prosecute and defend all actions and proceedings
in connection with the construction of the Improvements or in any
other way affecting the Land or the Improvements; and

         (j)  take such action hereunder, or refrain from acting
hereunder, as the Agent or the Majority Banks may, in their sole
and absolute discretion, from time to time determine, and without
any limitation whatsoever, to carry out the intent of this Section 13.3.

The Borrower shall be liable to the Agent and the Banks for all
costs paid or incurred for the construction, equipping and
completion of the Project, whether the same shall be paid or
incurred pursuant to the provisions of this Section 13.3 or otherwise,
and all payments made or liabilities incurred by the Agent and
the Banks hereunder of any kind whatsoever shall be deemed
Advances made to the Borrower under this Agreement and shall be
secured by the Security Deed and the other Security Documents.
To the extent that any costs so paid or incurred by the Agent or
the Banks, together with all other Advances made by the Agent and
the Banks hereunder, exceed the Loan Amount, the amount of such
excess costs shall be added to the Loan Amount, and the
Borrower's obligation to repay the same, together with interest
thereon at the Default Rate, shall be deemed to be evidenced by
this Agreement and secured by the Security Deed and the other
Security Documents.  In the event the Agent takes possession of
the Project and assumes control of such construction as
aforesaid, (A) Agent shall not be obligated to continue such
construction longer than it shall see fit and may thereafter, at
any time, change any course of action undertaken by it or abandon
such construction and decline to make further payments for the
account of the Borrower whether or not the Project shall have
been completed, and (B) Agent shall not have assumed any
liability to Borrower or any other Person for completing the
Improvements or for the quality of any such construction.  For
the purpose of this Section 13.3, the construction, equipping and
completion of the Project shall be deemed to include any action
necessary to cure any Event of Default by the Borrower under any
of the terms and provisions of any of the Loan Documents.

    Section 13.4  Other Remedies.  If any one or more of the Events of
Default shall have occurred, and whether or not the Agent or the
Majority Banks shall have terminated the Banks' obligations to
make Advances pursuant to Section 13.2 and/or accelerated the maturity
of the Loan pursuant to Section 13.1, the Agent may proceed to protect
and enforce the rights and remedies of the Agent and the Banks
under this Agreement, the Notes or any of the other Loan
Documents by suit in equity, action at law or other appropriate
proceeding, whether for the specific performance of any covenant
or agreement contained in this Agreement and the other Loan
Documents or any instrument pursuant to which the Obligations are
evidenced, including as permitted by applicable law the obtaining
of the ex parte appointment of a receiver, and, if any amount
owed to the Agent or the Banks shall have become due, by
declaration or otherwise, proceed to enforce the payment thereof
or any other legal or equitable right of the Agent or the Banks.
No remedy conferred upon the Agent or the Banks or the holder of
any Note in this Agreement or in any of the other Loan Documents
is intended to be exclusive of any other remedy and each and
every remedy shall be cumulative and shall be in addition to
every other remedy given hereunder or thereunder or now or
hereafter existing at law or in equity or by statute or any other
provision of law.

    Section 13.5  Distribution of Collateral Proceeds.  In the event
that, following the occurrence or during the continuance of any
Default or Event of Default, the Agent receives any monies in
connection with the enforcement of any of the Security Documents,
or otherwise with respect to the realization upon any of the
Collateral, such monies shall be distributed for application as
follows:

         (a)  First, to the payment of, or (as the case may be)
the reimbursement of the Agent for or in respect of, all
reasonable costs, expenses, disbursements and losses which shall
have been incurred or sustained by the Agent in connection with
the collection of such monies by the Agent, for the exercise,
protection or enforcement by the Agent of all or any of the
rights, remedies, powers and privileges of the Agent under this
Agreement or any of the other Loan Documents or in respect of the
Collateral or in support of any provision of adequate indemnity
to the Agent against any taxes or liens which by law shall have,
or may have, priority over the rights of the Agent to such
monies;

         (b)  Second, to all other Obligations in such order or
preference as the Majority Banks shall determine; provided,
however, that (i) in the event that any Bank shall have
wrongfully failed or refused to make an advance under Section 3.7 and
such failure or refusal shall be continuing, advances made by
other Banks during the pendency of such failure or refusal shall
be entitled to be repaid as to principal and accrued interest in
priority to the other Obligations described in this subsection
(b), and (ii) Obligations owing to the Banks with respect to each
type of Obligation such as interest, principal, fees and
expenses, shall be made among the Banks pro rata; and provided
further that the Majority Banks may in their discretion make
proper allowance to take into account any Obligations not then
due and payable; and

         (c)  Third, the excess, if any, shall be returned to
the Borrower or to such other Persons as are entitled thereto.

    Section 13.6  Power of Attorney.  For the purposes of carrying out
the provisions and exercising the rights, remedies, powers and
privileges granted by or referred to in this Section 13, the Borrower
hereby irrevocably constitutes and appoints the Agent its true
and lawful attorney-in-fact, with full power of substitution, to
execute, acknowledge and deliver any instruments and do and
perform any acts which are referred to in this Section 13, in the name
and on behalf of the Borrower.  The power vested in such
attorney-in-fact is, and shall be deemed to be, coupled with an
interest and irrevocable.

    Section 13.7  Waivers.  The Borrower hereby waives to the extent
not prohibited by applicable law (a) all presentments, demands
for performance, notices of nonperformance (except to the extent
required by the provisions hereof or of any of the other Loan
Documents), protests and notices of dishonor, (b) any requirement
of diligence or promptness on the Agent's or the Bank's part in
the enforcement of their rights (but not fulfillment of its
obligations) under the provisions of this Agreement or any of the
other Loan Documents, and (c) any and all notices of every kind
and description which may be required to be given by any statute
or rule of law (other than those required to be delivered to the
Borrower pursuant to the Loan Documents) not  and any defense of
any kind which the Borrower may now or hereafter have with
respect to its liability under this Agreement or under any of the
other Loan Documents.

                           SECTION 14.  SETOFF

    Regardless of the adequacy of any collateral, during the
continuance of any Event of Default, any deposits (general or
specific, time or demand, provisional or final, regardless of
currency, maturity, or the branch of the Bank where such deposits
are held) or other sums credited by or due from any of the Banks
to the Borrower or the Guarantors and any securities or other
property of the Borrower in the possession of such Bank may be
applied to or set off against the payment of the Obligations and
any and all other liabilities, direct, or indirect, absolute or
contingent, due or to become due, now existing or hereafter
arising, of the Borrower to such Bank.  Each of the Banks agrees
with each other Bank not to exercise any such setoff rights
without the prior written consent of the Agent and that if such
Bank shall receive from the Borrower or the Guarantors, whether
by voluntary payment, exercise of the right of setoff, or
otherwise, and shall retain and apply to the payment of the Note
or Notes held by such Bank any amount in excess of its ratable
portion of the payments received by all of the Banks with respect
to the Notes held by all of the Banks, such Bank will make such
disposition and arrangements with the other Banks with respect to
such excess, either by way of distribution, pro tanto assignment
of claims, subrogation or otherwise as shall result in each Bank
receiving in respect of the Notes held by it its proportionate
payment as contemplated by this Agreement; provided that if all
or any part of such excess payment is thereafter recovered from
such Bank, such disposition and arrangements shall be rescinded
and the amount restored to the extent of such recovery, but
without interest.

                         SECTION 15.  THE AGENT.

    Section 15.1.  Authorization.  The Agent is authorized to take such
action on behalf of each of the Banks and to exercise all such
powers as are hereunder and under any of the other Loan Documents
and any related documents delegated to the Agent, together with
such powers as are reasonably incident thereto, provided that no
duties or responsibilities not expressly assumed herein or
therein shall be implied to have been assumed by the Agent.  The
obligations of Agent hereunder are primarily administrative in
nature, and nothing contained in this Agreement or any of the
other Loan Documents shall be construed to constitute the Agent
as a trustee for any Bank or to create an agency or fiduciary
relationship.  The Borrower and any other Person shall be
entitled to conclusively rely on a statement from the Agent that
it has the authority to act for and bind the Banks pursuant to
this Agreement and the other Loan Documents.

    Section 15.2.  Employees and Agents.  The Agent may exercise its
powers and execute its duties by or through employees or agents
and shall be entitled to take, and to rely on, advice of counsel
concerning all matters pertaining to its rights and duties under
this Agreement and the other Loan Documents. The Agent may
utilize the services of such Persons as the Agent may reasonably
determine, and all reasonable fees and expenses of any such
Persons shall be paid by the Borrower.

    Section 15.3.  No Liability.  Neither the Agent nor any of its
shareholders, directors, officers or employees nor any other
Person assisting them in their duties nor any agent, or employee
thereof, shall be liable to any of the Banks for any waiver,
consent or approval given or any action taken, or omitted to be
taken, in good faith by it or them hereunder or under any of the
other Loan Documents, or in connection herewith or therewith, or
be responsible for the consequences of any oversight or error of
judgment whatsoever, except that the Agent or such other Person,
as the case may be, shall be liable for losses due to its willful
misconduct or gross negligence.

    Section 15.4.  No Representations.  The Agent shall not be
responsible for the execution or validity or enforceability of
this Agreement, the Notes, any of the other Loan Documents or any
instrument at any time constituting, or intended to constitute,
collateral security for the Notes, or for the value of any such
collateral security or for the validity, enforceability or
collectability of any such amounts owing with respect to the
Notes, or for any recitals or statements, warranties or
representations made herein, in the other Loan Documents, or in
any agreement, instrument, Draw Request or certificate delivered
in connection therewith or in any of the other Loan Documents or
in any certificate or instrument hereafter furnished to it by or
on behalf of the Borrower or any Guarantor or any of their
respective Subsidiaries, or be bound to ascertain or inquire as
to the performance or observance of any of the terms, conditions,
covenants or agreements herein or in any other of the Loan
Documents.  The Agent shall not be bound to ascertain whether any
notice, consent, waiver or request delivered to it by the
Borrower or any Guarantor or any holder of any of the Notes shall
have been duly authorized or is true, accurate and complete.  The
Agent has not made nor does it now make any representations or
warranties, express or implied, nor does it assume any liability
to the Banks, with respect to the creditworthiness or financial
condition of the Borrower, its partners, the Guarantors, any of
their respective Subsidiaries or the value of or ability of the
Banks to realize upon any Collateral.  Each Bank acknowledges
that it has, independently and without reliance upon the Agent or
any other Bank, and based upon such information and documents as
it has deemed appropriate, made its own credit analysis and
decision to enter into this Agreement.  Each Bank also
acknowledges that it will, independently and without reliance
upon the Agent or any other Bank, based upon such information and
documents as it deems appropriate at the time, continue to make
its own credit analysis and decisions in taking or not taking
action under this Agreement and the other Loan Documents.

    Section 15.5.  Payments.

         (a)  A payment by the Borrower or the Guarantors to the
Agent hereunder or under any of the other Loan Documents for the
account of any Bank shall constitute a payment to such Bank.  The
Agent agrees to distribute to each Bank not later than one
Business Day after the Agent's receipt of good funds, determined
in accordance with the Agent's customary practices, such Bank's
pro rata share of payments received by the Agent for the account
of the Banks except as otherwise expressly provided herein or in
any of the other Loan Documents.

         (b)  If in the opinion of the Agent the distribution of
any amount received by it in such capacity hereunder, under the
Notes or under any of the other Loan Documents might involve it
in liability, it may refrain from making distribution until its
right to make distribution shall have been adjudicated by a court
of competent jurisdiction.  If a court of competent jurisdiction
shall adjudge that any amount received and distributed by the
Agent is to be repaid, each Person to whom any such distribution
shall have been made shall either repay to the Agent its
proportionate share of the amount so adjudged to be repaid or
shall pay over the same in such manner and to such Persons as
shall be determined by such court.

         (c)  Notwithstanding anything to the contrary contained
in this Agreement or any of the other Loan Documents, any Bank
that fails (i) to make available to the Agent its pro rata share
of any Advance or (ii) to comply with the provisions of Section 14 with
respect to making dispositions and arrangements with the other
Banks, where such Bank's share of any payment received, whether
by setoff or otherwise, is in excess of its pro rata share of
such payments due and payable to all of the Banks, in each case
as, when and to the full extent required by the provisions of
this Agreement, shall be deemed delinquent (a "Delinquent Bank")
and shall be deemed a Delinquent Bank until such time as such
delinquency is satisfied.  A Delinquent Bank shall be deemed to
have assigned any and all payments due to it from the Borrower
and the Guarantor, whether on account of outstanding Advances,
interest, fees or otherwise, to the remaining nondelinquent Banks
for application to, and reduction of, their respective pro rata
shares of all outstanding Advances.  The Delinquent Bank hereby
authorizes the Agent to distribute such payments to the
nondelinquent Banks in proportion to their respective pro rata
shares of all outstanding Advances.  A Delinquent Bank shall be
deemed to have satisfied in full a delinquency when and if, as a
result of application of the assigned payments to all outstanding
Advances of the nondelinquent Banks or as a result of other
payments by the Delinquent Banks to the nondelinquent Banks, the
Banks' respective pro rata shares of all outstanding Advances
have returned to those in effect immediately prior to such
delinquency and without giving effect to the nonpayment causing
such delinquency.

    Section 15.6.  Holders of Notes.  Subject to the terms of Article
21, the Agent may deem and treat the payee of any Note as the
absolute owner or purchaser thereof for all purposes hereof until
it shall have been furnished in writing with a different name by
such payee or by a subsequent holder, assignee or transferee.

    Section 15.7.  Indemnity.  The Banks ratably agree hereby to
indemnify and hold harmless the Agent from and against any and
all claims, actions and suits (whether groundless or otherwise),
losses, damages, costs, expenses (including any expenses for
which the Agent has not been reimbursed by the Borrower as
required by Section 16), and liabilities of every nature and character
arising out of or related to this Agreement, the Notes or any of
the other Loan Documents or the transactions contemplated or
evidenced hereby or thereby, or the Agent's actions taken
hereunder or thereunder, except to the extent that any of the
same shall be directly caused by the Agent's willful misconduct
or gross negligence.

    Section 15.8.  Agent as Bank.  In its individual capacity, any Bank
acting as Agent shall have the same obligations and the same
rights, powers and privileges in respect to its Commitment and
the Advances made by it, and as the holder of any of the Notes as
it would have were it not also the Agent.

    Section 15.9.  Resignation.  The Agent may resign at any time by
giving 60 calendar days' prior written notice thereof to the
Banks and the Borrower.  Upon any such resignation, the Majority
Banks shall have the right to appoint as a successor Agent any
Bank or any other bank whose senior debt obligations are rated
not less than "A" or its equivalent by Moody's Investors Service,
Inc. or not less than "A" or its equivalent by Standard & Poor's
corporation and which has a net worth of not less than
$500,000,000.  Unless a Default or Event of Default shall have
occurred and be continuing, such successor Agent shall be
reasonably acceptable to the Borrower.  If no successor Agent
shall have been appointed and shall have accepted such
appointment within thirty (30) days after the retiring Agent's
giving of notice of resignation, then the retiring Agent may, on
behalf of the Banks, appoint a successor Agent, which shall be
any Bank or a bank whose debt obligations are rated not less than
"A" or its equivalent by Moody's Investors Service, Inc. or not
less than "A" or its equivalent by Standard & Poor's Corporation
and which has a net worth of not less than $500,000,000.  Upon
the acceptance of any appointment as Agent hereunder by a
successor Agent, such successor Agent shall thereupon succeed to
and become vested with all the rights, powers, privileges and
duties of the retiring or removed Agent, and the retiring Agent
shall be discharged from its duties and obligations hereunder as
Agent.  After any retiring Agent's resignation, the provisions of
this Agreement and the other Loan Documents shall continue in
effect for its benefit in respect of any actions taken or omitted
to be taken by it while it was acting as Agent.  Upon any change
in the Agent under this Agreement, the resigning Agent shall
execute such assignments of and amendments to the Loan Documents
as may be necessary to substitute the successor Agent for the
resigning Agent.

    Section 15.10.  Duties in the Case of Enforcement.  In case one or
more Events of Default have occurred and shall be continuing, and
whether or not acceleration of the Obligations shall have
occurred, the Agent shall, if (a) so requested by the Majority
Banks and (b) the Banks have provided to the Agent such
additional indemnities and assurances against expenses and
liabilities as the Agent may reasonably request, proceed to
exercise all or any legal and equitable and other rights or
remedies as it may have.  The Majority Banks may direct the Agent
in writing as to the method and the extent of any such exercise,
the Banks hereby agreeing to indemnify and hold the Agent
harmless from all liabilities incurred in respect of all actions
taken or omitted in accordance with such directions, provided
that the Agent need not comply with any such direction to the
extent that the Agent reasonably believes the Agent's compliance
with such direction to be unlawful or commercially unreasonable
in any applicable jurisdiction.

                         SECTION 16.  EXPENSES.

    The Borrower agrees to pay (a) the reasonable costs of
producing and reproducing this Agreement, the other Loan
Documents and the other agreements and instruments mentioned
herein, (b) any taxes (including any interest and penalties in
respect thereto) payable by the Agent or any of the Banks (other
than taxes based upon the Agent's or any Bank's gross or net
income), including any recording, mortgage, documentary stamp or
intangibles taxes in connection with the Security Deed or the
other Loan Documents, or other taxes payable on or with respect
to the transactions contemplated by this Agreement, including any
such taxes payable by the Agent or any of the Banks after the
Closing Date (the Borrower hereby agreeing to indemnify the Agent
and each Bank with respect thereto), (c) all title insurance
premiums and the reasonable fees, expenses and disbursements of
the Agent's counsel or any local counsel to the Agent incurred in
connection with the preparation, administration or interpretation
of the Loan Documents and other instruments mentioned herein
(excluding, however, the preparation of agreements evidencing
participations granted under Section 21.4), the making of each Advance
hereunder, and amendments, modifications, approvals, consents or
waivers hereto or hereunder, (d) the reasonable fees, expenses
and disbursements of the Agent (determined in good faith and in
accordance with the Agent's internal policies applicable
generally to its customers) incurred in connection with the
preparation, administration or interpretation of the Loan
Documents and other instruments mentioned herein, and the making
of each Advance hereunder (including all , appraisal fees,
engineer's fees, charges for commercial finance examinations and
engineering and environmental reviews, all fees paid to the
Construction Inspector and surveyor fees), (e) all reasonable
out-of-pocket expenses, including reasonable attorneys' fees and
costs, which attorneys may be employees of the Agent or any Bank,
and the fees and costs of consultants, accountants, auctioneers,
receivers, brokers, property managers, appraisers, investment
bankers or other experts retained by the Agent in connection with
(i) the enforcement of or preservation of rights under any of the
Loan Documents against the Borrower, the General Partner or any
Guarantor or the administration thereof after the occurrence of a
Default or Event of Default, and (ii) any litigation, proceeding
or dispute whether arising hereunder or otherwise, in any way
related to the Agent's or any Bank's relationship with the
Borrower, the General Partner or the Guarantors, (f) all
reasonable fees, expenses and disbursements (including reasonable
attorney's fees and costs) incurred by BKB in connection with the
syndication of interests in the Loan by BKB, (g) all reasonable
costs, expenses and disbursements incurred by the Agent in
providing draw requests, documents, financial statements and
reports, or other information from time to time provided to the
Banks, and (h) all reasonable fees, expenses and disbursements of
the Agent incurred in connection with UCC searches, UCC filings,
title rundowns or title searches.  The covenants of this Section 16
shall survive payment or satisfaction of payment of all amounts
owing with respect to the Note.

                      SECTION 17.  INDEMNIFICATION

    The Borrower agrees to indemnify and hold harmless the Agent
and each Bank and each director, officer, employee, agent and
Person who controls the Agent or any Bank from and against any
and all claims, actions and suits, whether groundless or
otherwise, and from and against any and all liabilities, losses,
damages and expenses of every nature and character arising out of
this Agreement or any of the other Loan Documents or the
transactions contemplated hereby and thereby including, without
limitation, (a) any leasing fees and any brokerage, finders or
similar fees asserted against any Person indemnified under this
Section 17 based upon any agreement, arrangement or action made or
taken, or alleged to have been made or taken by the Borrower, the
General Partner, the Guarantors or any of their respective
Subsidiaries, (b) any disbursement of the proceeds of any of the
Advances, (c) any condition of the Project whether related to the
quality of construction or otherwise, (d) any actual or proposed
use by the Borrower of the proceeds of any of the Advances, (e)
any actual or alleged infringement of any patent, copyright,
trademark, service mark or similar right of the Borrower, the
General Partner, the Guarantors or any of their respective
Subsidiaries, (f) any actual or alleged violation of any
Requirements or Project Approvals, (g) the Borrower entering into
or performing this Agreement or any of the other Loan Documents
or (h) with respect to the Borrower and the General Partner and
their respective properties and assets, the violation by Borrower
or the General Partner of any Environmental Law, the Release or
threatened Release of any Hazardous Materials or any action,
suit, proceeding or investigation brought or threatened with
respect to any Hazardous Materials (including, but not limited
to, claims with respect to wrongful death, personal injury or
damage to property), in each case including, without limitation,
the reasonable fees and disbursements of counsel and allocated
costs of internal counsel incurred in connection with any such
investigation, litigation or other proceeding; provided, however,
the Borrower shall not be obligated under this Section 17 to indemnify
any Person for liabilities arising from such Person's own gross
negligence or willful misconduct.  In litigation, or the
preparation therefor, the Agent and the Banks shall be entitled
to select a single law firm as their own counsel and, in addition
to the foregoing indemnity, the Borrower agrees to pay promptly
the reasonable fees and expenses of such counsel.  The
obligations of the Borrower under this Section 17 shall survive the
repayment of the Loan and shall continue in full force and effect
so long as the possibility of such claim, action or suit exists.
If, and to the extent that, the obligations of the Borrower under
this Section 17 are unenforceable for any reason, the Borrower hereby
agrees to make the maximum contribution to the payment in
satisfaction of such obligations which is permissible under
applicable law.

            SECTION 18.  LIABILITY OF THE AGENT AND THE BANKS

    No action shall be commenced by the Borrower for any claim
against the Agent or any Bank under the terms of this Agreement
unless written notice thereof, specifically setting forth the
claim of the Borrower, shall have been given to such Person
within fifteen (15) days after the Borrower has acquired
knowledge of the occurrence of the event which the Borrower
alleges gave rise to such claim, and failure to give such notice
shall constitute a waiver of any such claim.  The liability of
the Agent or any Bank to the Borrower for any breach of the terms
of this Agreement by such Person shall not exceed a sum equal to
the amount which such Person shall be determined to have failed
to advance in consequence of a breach by such Person of its
obligations under this Agreement, together with interest thereon
at the rate payable by the Borrower under the terms of the Note
for Advances which the Borrower is to receive hereunder, computed
from the date when the Advance should have been made by such
Person to the date when the Advance is, in fact, made by such
Person, and, upon the making of any such payment by such Person
to the Borrower, the same shall be treated as an Advance under
this Agreement, in the same fashion as any other Advance under
the terms of this Agreement.  In no event shall the Agent or any
Bank be liable to the Borrower, or anyone claiming by, under or
through the Borrower, for any special, exemplary, punitive or
consequential damages, whatever the nature of the breach of the
terms of this Agreement by the Agent or any Bank, such damages
and claims therefor being expressly waived by the Borrower.

                  SECTION 19.  RIGHTS OF THIRD PARTIES

    All conditions to the performance of the obligations of the
Agent and the Banks under this Agreement, including the
obligation to make Advances, are imposed solely and exclusively
for the benefit of the Agent and the Banks and no other Person
shall have standing to require satisfaction of such conditions in
accordance with their terms or be entitled to assume that the
Agent and the Banks will refuse to make Advances in the absence
of strict compliance with any or all thereof and no other Person
shall, under any circumstances, be deemed to be a beneficiary of
such conditions, any and all of which may be freely waived in
whole or in part by the Agent and the Banks at any time if in
their sole discretion they deems it desirable to do so.  In
particular, the Agent and the Banks make no representations and
assume no obligations as to third parties concerning the quality
of the construction by the Borrower of the Improvements or the
absence therefrom of defects.

                SECTION 20.  SURVIVAL OF COVENANTS, ETC.

    All covenants, agreements, representations and warranties
made herein, in the Notes, in any of the other Loan Documents or
in any documents or in other papers delivered by or on behalf of
the Borrower, the General Partner, the Guarantors, or any of
their respective Subsidiaries pursuant hereto and thereto shall
be deemed to have been relied upon by the Agent and the Banks,
notwithstanding any investigation heretofore or hereafter made by
any of them, and shall survive the making by the Banks of the
Advances, as herein contemplated, and shall continue in full
force and effect so long as any amount due under this Agreement
or the Notes or any of the other Loan Documents remains
outstanding or any Bank has any obligation to make any Advances.
The indemnification obligations of the Borrower provided herein
and the other Loan Documents shall survive the full repayment of
amounts due and the termination of the obligations of the Banks
hereunder and thereunder to the extent provided herein and
therein.  All statements contained in any certificate or other
paper delivered to any Bank or the Agent at any time by or on
behalf of the Borrower, the General Partner, the Guarantors, or
any of their respective Subsidiaries pursuant hereto or in
connection with the transactions contemplated hereby shall
constitute representations and warranties by such Person
hereunder.

               SECTION 21.  ASSIGNMENT AND PARTICIPATION.

    Section 21.1.  Conditions to Assignment by Banks.  Except as
provided herein, each Bank may assign to one or more banks or
other entities all or a portion of its interests, rights and
obligations under this Agreement (including all or a portion of
its Commitment Percentage and Commitment and the same portion of
the Advances at the time owing to it, and the Notes held by it);
provided that (a) the Agent shall have given its prior written
consent to such assignment, which consent shall not be
unreasonably withheld or delayed (provided that such consent
shall not be required for any assignment to another Bank to a
bank which is under common control with the assigning Bank or to
a wholly-owned Subsidiary of such Bank provided that such
assignee shall remain a wholly-owned Subsidiary of such Bank),
(b) each such assignment shall be of a constant, and not a
varying, percentage of all the assigning Bank's rights and
obligations under this Agreement, (c) the parties to such
assignment shall execute and deliver to the Agent, for recording
in the Register (as hereinafter defined), a notice of such
assignment, together with any Notes subject to such assignment,
(d) in no event shall any voting, consent or approval rights of a
Bank be assigned to any Person controlling, controlled by or
under common control with, or which is not otherwise free from
influence or control by, the Borrower, the General Partner or the
Guarantors, which rights shall instead be allocated pro rata
among the other remaining Banks, (e) such assignee shall have a
net worth as of the date of such assignment of not less than
$500,000,000, (f) such assignment is subject to the terms of any
intercreditor agreement among the Banks and the Agent, and
(g) such assignee shall acquire an interest in the Loan of not
less than $5,000,000.00.  Upon such execution, delivery,
acceptance and recording, of such notice of assignment, (i) the
assignee thereunder shall be a party hereto and all other Loan
Documents executed by the Banks and, to the extent provided in
such assignment, have the rights and obligations of a Bank
hereunder, (ii) the assigning Bank shall, to the extent provided
in such assignment and upon payment to the Agent of the
registration fee referred to in Section 21.2, be released from its
obligations under this Agreement, and (iii) the Agent may
unilaterally amend Schedule 1 to reflect such assignment.  In
connection with each assignment, the assignee shall represent and
warrant to the Agent, the assignor and each other Bank as to
whether such assignee is controlling, controlled by, under common
control with or is not otherwise free from influence or control
by, the Borrower, the General Partner, and the Guarantors.

    Section 21.2.  Register.  The Agent shall maintain a copy of each
assignment delivered to it and a register or similar list (the
"Register") for the recordation of the names and addresses of the
Banks and the Commitment Percentages of, and principal amount of
the Loan owing to the Banks from time to time.  The entries in
the Register shall be conclusive, in the absence of manifest
error, and the Borrower, the Agent and the Banks may treat each
Person whose name is recorded in the Register as a Bank hereunder
for all purposes of this Agreement.  The Register shall be
available for inspection by the Borrower and the Banks at any
reasonable time and from time to time upon reasonable prior
notice.  Upon each such recordation, the assigning Bank agrees to
pay to the Agent a registration fee in the sum of $2,000.

    Section 21.3.  New Notes.  Upon its receipt of an assignment
executed by the parties to such assignment, together with each
Note subject to such assignment, the Agent shall (a) record the
information contained therein in the Register, and (b) give
prompt notice thereof to the Borrower and the Banks (other than
the assigning Bank).  Within five (5) Business Days after receipt
of such notice, the Borrower at its own expense shall execute and
deliver to the Agent, in exchange for each surrendered Note, a
new Note to the order of such assignee in an amount equal to the
amount assumed by such assignee pursuant to such assignment and,
if the assigning Bank has retained some portion of its
obligations hereunder, a new Note to the order of the assigning
Bank in an amount equal to the amount retained by it hereunder,
and shall cause the Guarantors to deliver to the Agent an
acknowledgment in form and substance reasonably satisfactory to
the Agent to the effect that the Guaranty extends to and is
applicable to each new Note.  Such new Notes shall provide that
they are replacements for the surrendered Notes, shall be in an
aggregate principal amount equal to the aggregate principal
amount of the surrendered Notes, shall be dated the effective
date of such assignment and shall otherwise be in substantially
the form of the assigned Notes.  The surrendered Notes shall be
canceled and returned to the Borrower.

    Section 21.4.  Participations.  Each Bank may sell participations
to one or more banks or other entities in all or a portion of
such Bank's rights and obligations under this Agreement and the
other Loan Documents; provided that (a) any such sale or
participation shall not affect the rights and duties of the
selling Bank hereunder to the Borrower, (b) such sale and
participation shall not entitle such participant to any rights or
privileges under this Agreement or the Loan Documents, including,
without limitation, the right to approve waivers, amendments or
modifications, (c) such participant shall have no direct rights
against the Borrower, the General Partner or the Guarantors
except the rights granted to the Banks pursuant to Section 14, (d) such
sale is effected in accordance with all applicable laws, and
(e) such participant shall not be a Person controlling,
controlled by or under common control with, or which is not
otherwise free from influence or control by, the Borrower, the
General Partner or the Guarantors.  Any Bank which sells a
participation shall promptly notify the Agent of such sale and
the identity of the purchaser of such interest.

    Section 21.5.  Pledge by Bank.  Any Bank may at any time pledge all
or any portion of its interest and rights under this Agreement
(including all or any portion of its Note) to any of the twelve
Federal Reserve Banks organized under Section 4 of the Federal Reserve
Act, 12 U.S.C. SEction 341.  No such pledge or the enforcement thereof
shall release the pledgor Bank from its obligations hereunder or
under any of the other Loan Documents.

    Section 21.6.  No Assignment by Borrower.  The Borrower shall not
assign or transfer any of its rights or obligations under any of
the Loan Documents without the prior written consent of each of
the Banks.

    Section 21.7.  Disclosure.  The Borrower agrees that in addition to
disclosures made in accordance with standard banking practices
any Bank may disclose information obtained by such Bank pursuant
to this Agreement to assignees or participants and potential
assignees or participants hereunder.

                        SECTION 22.  RELATIONSHIP

    The relationship between each Bank and the Borrower is
solely that of a lender and borrower, and nothing contained
herein or in any of the other Loan Documents shall in any manner
be construed as making the parties hereto partners, joint
venturers or any other relationship other than lender and
borrower.

                          SECTION 23.  NOTICES

    Each notice, demand, election or request provided for or
permitted to be given pursuant to this Agreement (hereinafter in
this Section 23 referred to as "Notice") must be in writing and shall be
deemed to have been properly given or served by personal delivery
or by sending same by overnight courier or by depositing same in
the United States Mail, postpaid and registered or certified,
return receipt requested, or as expressly permitted herein, by
telegraph, telecopy, telefax or telex, and addressed as follows:

    If to the Agent or any Bank, at the address set forth on the
signature page for the Agent or such Bank; and

    If to the Borrower:
                   Walden/Grupe Elk Grove, L.P.
                   c/o The Grupe Company
                   3255 W. March Lane, 4th Floor
                   Stockton, California   95219
                   Attn:  Ms. Niem Dang

    With a copy to:

                   Robin K. Minick, Esq.
                   Munsch Hardt Kopf Harr & Dinan
                   4000 Fountain Place
                   1445 Ross Avenue
                   Dallas, Texas  75202

and to each other Bank which may hereafter become a party to the
Agreement at such address as may be designated by such Bank.
Each Notice shall be effective upon being personally delivered or
upon being sent by overnight courier or upon being deposited in
the United States Mail as aforesaid.  The time period in which a
response to such Notice must be given or any action taken with
respect thereto (if any), however, shall commence to run from the
date of receipt if personally delivered or sent by overnight
courier, or if so deposited in the United States Mail, the
earlier of three (3) Business Days following such deposit or the
date of receipt as disclosed on the return receipt.  Rejection or
other refusal to accept or the inability to deliver because of
changed address for which no notice was given shall be deemed to
be receipt of the Notice sent.  By giving at least fifteen (15)
days prior Notice thereof, the Borrower, a Bank or the Agent
shall have the right from time to time and at any time during the
term of this Agreement to change their respective addresses and
each shall have the right to specify as its address any other
address within the United States of America.

    SECTION 24.  GOVERNING LAW; CONSENT TO JURISDICTION AND SERVICE.

    THIS AGREEMENT AND EACH OF THE OTHER LOAN DOCUMENTS EXCEPT
AS OTHERWISE SPECIFICALLY PROVIDED THEREIN, ARE CONTRACTS UNDER
THE LAWS OF THE COMMONWEALTH OF MASSACHUSETTS AND SHALL FOR ALL
PURPOSES BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS
OF SUCH STATE (EXCLUDING THE LAWS APPLICABLE TO CONFLICTS OR
CHOICE OF LAW).  THE BORROWER AGREES THAT ANY SUIT FOR THE
ENFORCEMENT OF THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS
MAY BE BROUGHT IN THE COURTS OF THE COMMONWEALTH OF MASSACHUSETTS
OR ANY FEDERAL COURT SITTING THEREIN AND CONSENT TO THE
NONEXCLUSIVE JURISDICTION OF SUCH COURT AND THE SERVICE OF
PROCESS IN ANY SUCH SUIT BEING MADE UPON THE BORROWERS BY MAIL AT
THE ADDRESS SPECIFIED IN SECTION 23 THE BORROWER HEREBY WAIVES ANY
OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE VENUE OF ANY
SUCH SUIT OR ANY SUCH COURT OR THAT SUCH SUIT IS BROUGHT IN AN
INCONVENIENT COURT.

    SECTION 25.  HEADINGS.

    The captions in this Agreement are for convenience of
reference only and shall not define or limit the provisions
hereof.

    SECTION 26.  COUNTERPARTS.

    This Agreement and any amendment hereof may be executed in
several counterparts and by each party on a separate counterpart,
each of which when so executed and delivered shall be an
original, and all of which together shall constitute one
instrument.  In proving this Agreement it shall not be necessary
to produce or account for more than one such counterpart signed
by the party against whom enforcement is sought.

    SECTION 27.  ENTIRE AGREEMENT, ETC.

    The Loan Documents and any other documents executed in
connection herewith or therewith express the entire understanding
of the parties with respect to the transactions contemplated
hereby.  Neither this Agreement nor any term hereof may be
changed, waived, discharged or terminated, except as provided in
Section 30.

    SECTION 28.  WAIVER OF JURY TRIAL AND CERTAIN DAMAGE CLAIMS.

    THE BORROWER, THE AGENT AND THE BANKS EACH HEREBY WAIVES ITS
RIGHT TO A JURY TRIAL WITH RESPECT TO ANY ACTION OR CLAIM ARISING
OUT OF ANY DISPUTE IN CONNECTION WITH THIS AGREEMENT, ANY NOTE OR
ANY OF THE OTHER LOAN DOCUMENTS, ANY RIGHTS OR OBLIGATIONS
HEREUNDER OR THEREUNDER OR THE PERFORMANCE OF SUCH RIGHTS AND
OBLIGATIONS.  EXCEPT TO THE EXTENT EXPRESSLY PROHIBITED BY LAW,
THE BORROWER HEREBY WAIVES ANY RIGHT IT MAY HAVE TO CLAIM OR
RECOVER IN ANY SUCH LITIGATION ANY SPECIAL, EXEMPLARY, PUNITIVE
OR CONSEQUENTIAL DAMAGES OR ANY DAMAGES OTHER THAN, OR IN
ADDITION TO, ACTUAL DAMAGES.  THE BORROWER (A) CERTIFIES THAT NO
REPRESENTATIVE, AGENT OR ATTORNEY OF ANY BANK OR THE AGENT HAS
REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH BANK OR THE AGENT
WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE
FOREGOING WAIVERS AND (B) ACKNOWLEDGES THAT THE AGENT AND THE
BANKS HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE
OTHER LOAN DOCUMENTS TO WHICH THEY ARE PARTIES BY, AMONG OTHER
THINGS, THE WAIVERS AND CERTIFICATIONS CONTAINED IN THIS SECTION 28.
BORROWER ACKNOWLEDGES THAT IT HAS HAD AN OPPORTUNITY TO REVIEW
THIS SECTION 28 WITH ITS LEGAL COUNSEL AND THAT BORROWER AGREES TO THE
FOREGOING AS ITS FREE, KNOWING AND VOLUNTARY ACT.

    SECTION 29.  DEALINGS WITH THE BORROWER.

    The Banks and their affiliates may accept deposits from,
extend credit to and generally engage in any kind of banking,
trust or other business with the Borrower, the Guarantors, their
respective Subsidiaries or any of their affiliates regardless of
the capacity of the Bank hereunder.

    SECTION 30.  CONSENTS, AMENDMENTS, WAIVERS, ETC.

    Except as otherwise expressly provided in this Agreement,
any consent or approval required or permitted by this Agreement
may be given, and any term of this Agreement or of any other
instrument related hereto or mentioned herein may be amended, and
the performance or observance by the Borrower of any terms of
this Agreement or such other instrument or the continuance of any
Default or Event of Default may be waived (either generally or in
a particular instance and either retroactively or prospectively)
with, but only with, the written consent of the Majority Banks.
Notwithstanding the foregoing, none of the following may occur
without the written consent of each Bank:  a change in the rate
of interest on and the term of the Notes; a change in the amount
of the Commitments of the Banks; a forgiveness, reduction or
waiver of the principal of any unpaid Loan or any interest
thereon or fee payable under the Loan Documents; a change in the
amount of any fee payable to a Bank hereunder; the postponement
of any date fixed for any payment of principal of or interest on
the Loan; an extension of the Maturity Date; a change in the
manner of distribution of any payments to the Banks or the Agent;
the release of the Borrower or a Guarantor except as otherwise
provided herein; an amendment of the definition of Majority Banks
or of any requirement for consent by all of the Banks; any
modification to require a Bank to fund a pro rata share of a
request for an advance of the Loan made by the Borrower other
than based on its Commitment Percentage; an amendment to this
Section 30; an amendment of the definition of Majority Banks; or an
amendment of any provision of this Agreement or the Loan
Documents which requires the approval of all of the Banks or the
Majority Banks to require a lesser number of Banks to approve
such action.  The amount of the Agent's fee payable for the
Agent's account and the provisions of Section 15 may not be amended
without the written consent of the Agent.  No waiver shall extend
to or affect any obligation not expressly waived or impair any
right consequent thereon.  No course of dealing or delay or
omission on the part of the Agent or any Bank in exercising any
right shall operate as a waiver thereof or otherwise be
prejudicial thereto.  No notice to or demand upon the Borrower
shall entitle the Borrower to other or further notice or demand
in similar or other circumstances.

    SECTION 31.  SEVERABILITY.

    The provisions of this Agreement are severable, and if any
one clause or provision hereof shall be held invalid or
unenforceable in whole or in part in any jurisdiction, then such
invalidity or unenforceability shall affect only such clause or
provision, or part thereof, in such jurisdiction, and shall not
in any manner affect such clause or provision in any other
jurisdiction, or any other clause or provision of this Agreement
in any jurisdiction.

    SECTION 32.  TIME OF THE ESSENCE.

    Time is of the essence with respect to each and every
covenant, agreement and obligation of the Borrower under this
Agreement and the other Loan Documents.

    SECTION 33.  NO UNWRITTEN AGREEMENTS.

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

    SECTION 34.  REPLACEMENT OF NOTES.

    Upon receipt of evidence reasonably satisfactory to the
Borrower of the loss, theft, destruction or mutilation of any
Note, and in the case of any such loss, theft or destruction,
upon delivery of an indemnity agreement reasonably satisfactory
to the Borrower or, in the case of any such mutilation, upon
surrender and cancellation of the applicable Note, the Borrower
will execute and deliver, in lieu thereof, a replacement Note,
identical in form and substance to the applicable Note and dated
as of the date of the applicable Note and upon such execution and
delivery all references in the Loan Documents to such Note shall
be deemed to refer to such replacement Note.






           [Remainder of page intentionally left blank]
    IN WITNESS WHEREOF, the undersigned have duly executed this
Agreement as a sealed instrument as of the date first set forth
above.

                             WALDEN/GRUPE ELK GROVE, L.P., a
                             Delaware limited partnership

                             By:  Elk Grove-Lakeside Apartments,
                                  L.P., a California limited
                                  partnership, general partner

                                  By:  LSAC G.P. Corporation, a
                                       California corporation,
                                       general partner


                                       By:___________________________
                                       Name:________________________
                                                 Print or Type
Name
                                       Title:__________________________

                                                 [SEAL]



               [SIGNATURES CONTINUED ON NEXT PAGE]

<PAGE>
                             BankBoston, N.A., individually and
                             as Agent

                             By: _______________________________
                                   Jeffrey L. Warwick,
                                   Director


BankBoston, N.A.
115 Perimeter Center Place, N.E.
Suite 500
Atlanta, Georgia  30346
Attn:  Jeffrey L. Warwick
Facsimile: 770/390-8434

and

BankBoston, N.A.
100 Federal Street
Boston, Massachusetts  02110
Attn: Real Estate Division
Facsimile: 617/434-7108




I:\FINANCE\SECFIL~1\10-K-97\EX-10-25.WPD
            3/11/98

<PAGE>
                            EXHIBIT A

                      Construction Schedule

                            EXHIBIT B

                      Disbursement Schedule

<PAGE>
                            EXHIBIT C

                     Plans and Specifications

<PAGE>
                            EXHIBIT D

                          Project Budget
<PAGE>
                            EXHIBIT E

                      Borrower's Requisition



<PAGE>
                           EXHIBIT F

              Contractor's Requisition Certificate



<PAGE>
                           EXHIBIT G

         Borrower's Architect's Requisition Certificate



<PAGE>
                            EXHIBIT H

                           FORM OF NOTE


<PAGE>
                            SCHEDULE 1

                      BANKS AND COMMITMENTS

Name and Address                  Commitment       Commitment
Percentage

BankBoston                        $19,423,157.00       100%
100 Federal Street
Boston, Massachusetts  02110
Attn:  Real Estate Division


LIBOR Lending Office
100 Federal Street
Boston, Massachusetts  02110
Attn:  Real Estate Division



<PAGE>
                          SCHEDULE 1.1

                     DESCRIPTION OF PHASES



<PAGE>
                          SCHEDULE 8.14

                   TRANSACTIONS WITH AFFILIATES



    1.  _____ shall serve as the manager of the Project.

                          SCHEDULE 8.22

                        PROJECT APPROVALS

                          SCHEDULE 8.36

            SCHEDULE OF CONTRACTORS AND SUBCONTRACTORS


                        TABLE OF CONTENTS


Section 1.  DEFINITIONS AND RULES OF INTERPRETATION.. . . . . . . . . .1
    Section 1.1  Definitions.   . . . . . . . . . . . . . . . . . . . .1
    Section 1.2  Rules of Interpretation. . . . . . . . . . . . . . . 14

Section 2.  AGREEMENT TO MAKE ADVANCES; LIMITATIONS . . . . . . . . . 15
    Section 2.1  Agreement to Make Advances.  . . . . . . . . . . . . 15
    Section 2.2  Project Budget.  . . . . . . . . . . . . . . . . . . 15
    Section 2.3  Amount of Advances.  . . . . . . . . . . . . . . . . 15
    Section 2.4  Quality of Work.   . . . . . . . . . . . . . . . . . 16
    Section 2.5  Cost Overruns and Savings.   . . . . . . . . . . . . 16
    Section 2.6  Contingency Reserve.   . . . . . . . . . . . . . . . 17
    Section 2.7  Development Fee; Land Equity . . . . . . . . . . . . 17
    Section 2.8  Stored Materials.  . . . . . . . . . . . . . . . . . 17
    Section 2.9  Final Disbursement of Remaining Loan Proceeds. . . . 18

Section 3.  MAKING THE ADVANCES . . . . . . . . . . . . . . . . . . . 18
    Section 3.1  Draw Request.  . . . . . . . . . . . . . . . . . . . 18
    Section 3.2  Notice and Frequency of Advances.  . . . . . . . . . 20
    Section 3.3  Deposit of Funds Advanced.   . . . . . . . . . . . . 20
    Section 3.4  Advances to Contractor.  . . . . . . . . . . . . . . 20
    Section 3.5  Advances to Title Insurance Company or to Others.  . 20
    Section 3.6  Advances Do Not Constitute a Waiver.   . . . . . . . 21
    Section 3.7.  Funds for Loans . . . . . . . . . . . . . . . . . . 21
    Section 3.8  Interest Reserve . . . . . . . . . . . . . . . . . . 22

Section 4.  THE NOTE; INTEREST; MATURITY AND PREPAYMENT . . . . . . . 22
    Section 4.1   Notes.. . . . . . . . . . . . . . . . . . . . . . . 22
    Section 4.2.  Interest on Advances. . . . . . . . . . . . . . . . 22
    Section 4.3.  Stated Maturity.  . . . . . . . . . . . . . . . . . 23
    Section 4.4.  Optional Prepayments.   . . . . . . . . . . . . . . 23
    Section 4.5.  Partial Prepayments.  . . . . . . . . . . . . . . . 23

Section 5.  GENERAL PROVISIONS. . . . . . . . . . . . . . . . . . . . 23
    Section 5.1  Commitment Fee . . . . . . . . . . . . . . . . . . . 23
    Section 5.2.  INTENTIONALLY DELETED . . . . . . . . . . . . . . . 23
    Section 5.3.  Conversion Options. . . . . . . . . . . . . . . . . 23
    Section 5.4  Funds for Payments . . . . . . . . . . . . . . . . . 24
    Section 5.5  Computations.  . . . . . . . . . . . . . . . . . . . 25
    Section 5.6.  Inability to Determine LIBOR Rate.  . . . . . . . . 25
    Section 5.7.  Illegality.   . . . . . . . . . . . . . . . . . . . 25
    Section 5.8.  Additional Interest.  . . . . . . . . . . . . . . . 26
    Section 5.9.  Additional Costs, Etc.  . . . . . . . . . . . . . . 26
    Section 5.10.  Capital Adequacy.  . . . . . . . . . . . . . . . . 27
    Section 5.11.  Indemnity of Borrower.   . . . . . . . . . . . . . 27
    Section 5.12.  Interest on Overdue Amounts; Late Charge.  . . . . 28
    Section 5.13.  Certificate.   . . . . . . . . . . . . . . . . . . 28
    Section 5.14.  Limitation on Interest.  . . . . . . . . . . . . . 28

Section 6.  COLLATERAL SECURITY AND THE GUARANTY. . . . . . . . . . . 28

Section 7.  CERTAIN RIGHTS OF THE BANKS . . . . . . . . . . . . . . . 29
    Section 7.1  Right to Retain the Construction Inspector.  . . . . 29
    Section 7.2  Right to Obtain Appraisals.  . . . . . . . . . . . . 29
    Section 7.3  Charges Against Accounts.  . . . . . . . . . . . . . 30

Section 8.  REPRESENTATIONS AND WARRANTIES. . . . . . . . . . . . . . 30
    Section 8.1  Organization; Authority, Etc.. . . . . . . . . . . . 30
    Section 8.2  Title to Project and Other Properties. . . . . . . . 31
    Section 8.3  Financial Statements.  . . . . . . . . . . . . . . . 32
    Section 8.4  No Material Changes, Etc.  . . . . . . . . . . . . . 32
    Section 8.5  Franchises, Patents, Copyrights, Etc.  . . . . . . . 32
    Section 8.6  Litigation.  . . . . . . . . . . . . . . . . . . . . 32
    Section 8.7  No Materially Adverse Contracts, Etc.  . . . . . . . 33
    Section 8.8  Compliance with Other Instruments, Laws, Etc.  . . . 33
    Section 8.9  Tax Status.  . . . . . . . . . . . . . . . . . . . . 33
    Section 8.10  No Event of Default.  . . . . . . . . . . . . . . . 33
    Section 8.11  Holding Company and Investment Company Acts.  . . . 34
    Section 8.12  Absence of UCC Financing Statements, Etc.   . . . . 34
    Section 8.13  Setoff, Etc.  . . . . . . . . . . . . . . . . . . . 34
    Section 8.14  Certain Transactions.   . . . . . . . . . . . . . . 34
    Section 8.15  Employee Benefit Plans; Multiemployer Plans;
                  Guaranteed Pension Plans.   . . . . . . . . . . . . . 34
    Section 8.16  Regulations U and X.  . . . . . . . . . . . . . . . 34
    Section 8.17  Partners.   . . . . . . . . . . . . . . . . . . . . 34
    Section 8.18  Availability of Utilities.  . . . . . . . . . . . . 34
    Section 8.19  Access.   . . . . . . . . . . . . . . . . . . . . . 35
    Section 8.20  Condition of Project.   . . . . . . . . . . . . . . 35
    Section 8.21  Compliance with Requirements.   . . . . . . . . . . 35
    Section 8.22  Project Approvals.  . . . . . . . . . . . . . . . . 35
    Section 8.23  Construction Contract.  . . . . . . . . . . . . . . 35
    Section 8.24  Architect's Contract.   . . . . . . . . . . . . . . 35
    Section 8.25  Other Contracts.  . . . . . . . . . . . . . . . . . 36
    Section 8.26  Real Property Taxes; Special Assessments.   . . . . 36
    Section 8.27  Violations.   . . . . . . . . . . . . . . . . . . . 36
    Section 8.28  Plans and Specifications.   . . . . . . . . . . . . 36
    Section 8.29  Project Budget.   . . . . . . . . . . . . . . . . . 36
    Section 8.30  Feasibility.  . . . . . . . . . . . . . . . . . . . 36
    Section 8.31  Insurance.  . . . . . . . . . . . . . . . . . . . . 36
    Section 8.32  Other Material Agreements; No Options.  . . . . . . 36
    Section 8.33  Brokers.  . . . . . . . . . . . . . . . . . . . . . 37
    Section 8.34  Management Agreement.   . . . . . . . . . . . . . . 37
    Section 8.35  Tenants.  . . . . . . . . . . . . . . . . . . . . . 37
    Section 8.36  Construction of Improvements.   . . . . . . . . . . 37
    Section 8.37  Loan Documents.   . . . . . . . . . . . . . . . . . 37
    Section 8.38  Solvency.   . . . . . . . . . . . . . . . . . . . . 37
    Section 8.39  Effect of Draw Request.   . . . . . . . . . . . . . 37

Section 9.  AFFIRMATIVE COVENANTS OF THE BORROWER . . . . . . . . . . 38
    Section 9.1  Punctual Payment.  . . . . . . . . . . . . . . . . . 38
    Section 9.2  Commencement, Pursuit and Completion of Construction.38
    Section 9.3  Correction of Defects.   . . . . . . . . . . . . . . 39
    Section 9.4  Maintenance of Office.   . . . . . . . . . . . . . . 39
    Section 9.5  Records and Accounts.  . . . . . . . . . . . . . . . 39
    Section 9.6  Financial Statements, Certificates and Information.  39
    Section 9.7  Notices. . . . . . . . . . . . . . . . . . . . . . . 40
    Section 9.8  Existence; Maintenance of Properties.  . . . . . . . 41
    Section 9.9  Insurance. . . . . . . . . . . . . . . . . . . . . . 42
    Section 9.10  Taxes.. . . . . . . . . . . . . . . . . . . . . . . 42
    Section 9.11  Inspection of Project, Other Properties and Books.. 42
    Section 9.12  Compliance with Laws, Contracts, Licenses, and
                  Permits.  . . . . . . . . . . . . . . . . . . . . . . 43
    Section 9.13  Project Approvals.  . . . . . . . . . . . . . . . . 43
    Section 9.14  Use of Proceeds.  . . . . . . . . . . . . . . . . . 43
    Section 9.15  Project Costs.  . . . . . . . . . . . . . . . . . . 43
    Section 9.16  Insufficiency of Loan Proceeds.   . . . . . . . . . 43
    Section 9.17  Leases.   . . . . . . . . . . . . . . . . . . . . . 44
    Section 9.18  Laborers, Subcontractors and Materialmen.   . . . . 45
    Section 9.19  Further Assurance of Title.   . . . . . . . . . . . 45
    Section 9.20  INTENTIONALLY DELETED.  . . . . . . . . . . . . . . 45
    Section 9.21  Publicity.  . . . . . . . . . . . . . . . . . . . . 45
    Section 9.22  Sign Regarding Construction Financing.  . . . . . . 45
    Section 9.23  Further Assurances. . . . . . . . . . . . . . . . . 46
    Section 9.24  Fundamental Changes of Borrower.  . . . . . . . . . 46
    Section 9.25.  Registered Servicemark.  . . . . . . . . . . . . . 47
    Section 9.26.  ERISA. . . . . . . . . . . . . . . . . . . . . . . 47

Section 10.  NEGATIVE COVENANTS OF THE BORROWER . . . . . . . . . . . 47
    Section 10.1  Restriction on Change Orders.   . . . . . . . . . . 47
    Section 10.2  Restrictions on Easements, Covenants and
                  Restrictions.   . . . . . . . . . . . . . . . . . . . 47
    Section 10.3  No Amendments, Terminations or Waivers. . . . . . . 47
    Section 10.4  Restrictions on Indebtedness.   . . . . . . . . . . 48
    Section 10.5  Restrictions on Liens, Etc.   . . . . . . . . . . . 48
    Section 10.6  Restrictions on Investments.  . . . . . . . . . . . 49
    Section 10.7  Merger, Consolidation and Disposition of Assets.. . 50
    Section 10.8  Sale and Leaseback.   . . . . . . . . . . . . . . . 50
    Section 10.9  Compliance with Environmental Laws.   . . . . . . . 50
    Section 10.10  Distributions.   . . . . . . . . . . . . . . . . . 50
    Section 10.11  Restrictions on Partnership Transfers.   . . . . . 50
    Section 10.12 Improvement District; Covenants, Conditions and
                  Restrictions. . . . . . . . . . . . . . . . . . . . . 51

Section 11.  CONDITIONS TO INITIAL ADVANCE. . . . . . . . . . . . . . 51
    Section 11.1  Loan Documents.   . . . . . . . . . . . . . . . . . 51
    Section 11.2  Construction Documents.   . . . . . . . . . . . . . 51
    Section 11.3  Subcontracts.   . . . . . . . . . . . . . . . . . . 52
    Section 11.4  Other Contracts.  . . . . . . . . . . . . . . . . . 52
    Section 11.5  Certified Copies of Organization Documents.   . . . 52
    Section 11.6  Resolutions; Bylaws.  . . . . . . . . . . . . . . . 52
    Section 11.7  Incumbency Certificate; Authorized Signers.   . . . 52
    Section 11.8  Validity of Liens.  . . . . . . . . . . . . . . . . 53
    Section 11.9  Deliveries.   . . . . . . . . . . . . . . . . . . . 53
    Section 11.10  Construction Inspector Report.   . . . . . . . . . 54
    Section 11.11  Legal Opinions.  . . . . . . . . . . . . . . . . . 54
    Section 11.12  Lien Search.   . . . . . . . . . . . . . . . . . . 55
    Section 11.13  Approval of Existing Work.   . . . . . . . . . . . 55
    Section 11.14  Notices.   . . . . . . . . . . . . . . . . . . . . 55
    Section 11.15  Appraisal.   . . . . . . . . . . . . . . . . . . . 55
    Section 11.16  Commitment Fee.  . . . . . . . . . . . . . . . . . 55
    Section 11.17  Performance; No Default.   . . . . . . . . . . . . 55
    Section 11.18  Representations and Warranties.  . . . . . . . . . 55
    Section 11.19  Proceedings and Documents.   . . . . . . . . . . . 55
    Section 11.20.  Other.  . . . . . . . . . . . . . . . . . . . . . 56

Section 12.  CONDITIONS OF SUBSEQUENT ADVANCES. . . . . . . . . . . . 56
    Section 12.1  Prior Conditions Satisfied.   . . . . . . . . . . . 56
    Section 12.2  Performance; No Default.  . . . . . . . . . . . . . 56
    Section 12.3  Representations and Warranties.   . . . . . . . . . 56
    Section 12.4  No Damage or Taking.  . . . . . . . . . . . . . . . 56
    Section 12.5  Receipt of the Agent.   . . . . . . . . . . . . . . 56
    Section 12.6  Release of Retainage.   . . . . . . . . . . . . . . 57

Section 13.  EVENTS OF DEFAULT AND REMEDIES . . . . . . . . . . . . . 59
    Section 13.1  Events of Default.  . . . . . . . . . . . . . . . . 59
    Section 13.2.  Termination of Commitments . . . . . . . . . . . . 63
    Section 13.3  Completion of Project.  . . . . . . . . . . . . . . 63
    Section 13.4  Other Remedies.   . . . . . . . . . . . . . . . . . 65
    Section 13.5  Distribution of Collateral Proceeds.  . . . . . . . 65
    Section 13.6  Power of Attorney.  . . . . . . . . . . . . . . . . 66
    Section 13.7  Waivers.  . . . . . . . . . . . . . . . . . . . . . 66

Section 14.  SETOFF . . . . . . . . . . . . . . . . . . . . . . . . . 66

Section 15.  THE AGENT. . . . . . . . . . . . . . . . . . . . . . . . 67
    Section 15.1.  Authorization.   . . . . . . . . . . . . . . . . . 67
    Section 15.2.  Employees and Agents.  . . . . . . . . . . . . . . 67
    Section 15.3.  No Liability.  . . . . . . . . . . . . . . . . . . 67
    Section 15.4.  No Representations.  . . . . . . . . . . . . . . . 67
    Section 15.5.  Payments.. . . . . . . . . . . . . . . . . . . . . 68
    Section 15.6.  Holders of Notes.  . . . . . . . . . . . . . . . . 69
    Section 15.7.  Indemnity.   . . . . . . . . . . . . . . . . . . . 69
    Section 15.8.  Agent as Bank.   . . . . . . . . . . . . . . . . . 69
    Section 15.9.  Resignation.   . . . . . . . . . . . . . . . . . . 69
    Section 15.10.  Duties in the Case of Enforcement.  . . . . . . . 70

Section 16.  EXPENSES.. . . . . . . . . . . . . . . . . . . . . . . . 70

Section 17.  INDEMNIFICATION. . . . . . . . . . . . . . . . . . . . . 71

Section 18.  LIABILITY OF THE AGENT AND THE BANKS . . . . . . . . . . 72

Section 19.  RIGHTS OF THIRD PARTIES. . . . . . . . . . . . . . . . . 72

Section 20.  SURVIVAL OF COVENANTS, ETC.. . . . . . . . . . . . . . . 73

Section 21.  ASSIGNMENT AND PARTICIPATION.. . . . . . . . . . . . . . 73
    Section 21.1.  Conditions to Assignment by Banks.   . . . . . . . 73
    Section 21.2.  Register.  . . . . . . . . . . . . . . . . . . . . 74
    Section 21.3.  New Notes.   . . . . . . . . . . . . . . . . . . . 74
    Section 21.4.  Participations.  . . . . . . . . . . . . . . . . . 74
    Section 21.5.  Pledge by Bank.  . . . . . . . . . . . . . . . . . 75
    Section 21.6.  No Assignment by Borrower.   . . . . . . . . . . . 75
    Section 21.7.  Disclosure.  . . . . . . . . . . . . . . . . . . . 75

Section 22.  RELATIONSHIP . . . . . . . . . . . . . . . . . . . . . . 75

Section 23.  NOTICES. . . . . . . . . . . . . . . . . . . . . . . . . 75

Section 24.  GOVERNING LAW; CONSENT TO JURISDICTION AND SERVICE . . . 76

Section 25.  HEADINGS . . . . . . . . . . . . . . . . . . . . . . . . 77

Section 26.  COUNTERPARTS . . . . . . . . . . . . . . . . . . . . . . 77

Section 27.  ENTIRE AGREEMENT, ETC. . . . . . . . . . . . . . . . . . 77

Section 28.  WAIVER OF JURY TRIAL AND CERTAIN DAMAGE CLAIMS . . . . . 77

Section 29.  DEALINGS WITH THE BORROWER . . . . . . . . . . . . . . . 78

Section 30.  CONSENTS, AMENDMENTS, WAIVERS, ETC.. . . . . . . . . . . 78

Section 31.  SEVERABILITY . . . . . . . . . . . . . . . . . . . . . . 78

Section 32.  TIME OF THE ESSENCE. . . . . . . . . . . . . . . . . . . 79

Section 33.  NO UNWRITTEN AGREEMENTS. . . . . . . . . . . . . . . . . 79

Section 34.  REPLACEMENT OF NOTES . . . . . . . . . . . . . . . . . . 79


EXHIBITS
    A  Construction Schedule
    B  Disbursement Schedule
    C  Plans and Specifications
    D  Project Budget
    E  Borrower Requisition
    F  Contractor's Requisition Certificate
    G  Borrower's Architect's Requisition Certificate
    H  Form of Note


SCHEDULES
Schedule 1  Banks and Commitments
Schedule 1.1  Description of Phases
Schedule 8.14 Transactions with Affiliates
Schedule 8.22 Project Approvals
Schedule 8.36 Schedule of Contractors and Subcontractors










                  CONSTRUCTION LOAN AGREEMENT


                 DATED AS OF FEBRUARY 27, 1998

                             among

                 WALDEN/GRUPE ELK GROVE, L.P.,

                              and

                       BANKBOSTON, N.A.,
                     THE OTHER BANKS WHICH
                 ARE A PARTY TO THIS AGREEMENT,

                              and

                THE OTHER BANKS WHICH MAY BECOME
                   PARTIES TO THIS AGREEMENT

                              and

                       BANKBOSTON, N.A.,
                            AS AGENT