_______________________________________________________________
  _______________________________________________________________
  
  
  
  
  
  
  
  
  
  
  
  
  
                           REVOLVING
                        CREDIT AGREEMENT
  
  
                            BETWEEN
  
  
               ARDEN REALTY LIMITED PARTNERSHIP,
                A MARYLAND LIMITED PARTNERSHIP,
                          AS BORROWER,
  
  
                              AND
  
  
            WELLS FARGO BANK, NATIONAL ASSOCIATION,
                           AS LENDER
  
  
  
                    Dated as of May 5, 1997
  
  
  
  
  
  
  
  
  
  
  
  
  _______________________________________________________________
  _______________________________________________________________
  
                           TABLE OF CONTENTS
  
                                                           Page
  
ARTICLE 1  DEFINITIONS . . . . . . . . . . . . . . . . . . . .1
  
     1.1       Certain Defined Terms . . . . . . . . . . . . .1
     1.2       Computation of Time Periods . . . . . . . . . 27
     1.3       Terms . . . . . . . . . . . . . . . . . . . . 27
  
ARTICLE 2      ADVANCES. . . . . . . . . . . . . . . . . . . 28
  
     2.1       Loan Advances and Repayment . . . . . . . . . 28
     2.2       Authorization to Obtain Advances. . . . . . . 30
     2.3       Lender's Accounting . . . . . . . . . . . . . 31
     2.4       Interest on the Advances. . . . . . . . . . . 31
     2.5       Fees. . . . . . . . . . . . . . . . . . . . . 36
     2.6       Payments. . . . . . . . . . . . . . . . . . . 37
  
ARTICLE 3      CONDITIONS TO ADVANCES. . . . . . . . . . . . 38
  
     3.1       Conditions to Initial Advances. . . . . . . . 38
     3.2       Conditions Precedent to All Advances. . . . . 39
  
ARTICLE 4      REPRESENTATIONS AND WARRANTIES. . . . . . . . 41
  
     4.1       Representations and Warranties as to
               Borrower, Etc.  . . . . . . . . . . . . . . . 41
     4.2       Representations and Warranties as to the
               REIT. . . . . . . . . . . . . . . . . . . . . 47
  
ARTICLE 5      REPORTING COVENANTS . . . . . . . . . . . . . 51
  
     5.1       Financial Statements and Other Financial
               and Operating Information . . . . . . . . . . 51
     5.2       Environmental Notices . . . . . . . . . . . . 57
     5.3       Confidentiality . . . . . . . . . . . . . . . 58
  
ARTICLE 6      AFFIRMATIVE COVENANTS . . . . . . . . . . . . 58
  
     6.1       With Respect to Borrower. . . . . . . . . . . 59
     6.2       With Respect to the REIT. . . . . . . . . . . 61
  
ARTICLE 7      NEGATIVE COVENANTS. . . . . . . . . . . . . . 62
  
     7.1       With Respect to all Parties . . . . . . . . . 63
     7.2       Amendment of Constituent Documents. . . . . . 64
     7.3       Minimum Ownership Interest of Richard
               Ziman . . . . . . . . . . . . . . . . . . . . 65
     7.4       Management. . . . . . . . . . . . . . . . . . 65
     7.5       Margin Regulations. . . . . . . . . . . . . . 65
     7.6       Organization of Borrower, Etc . . . . . . . . 65
     7.7       With Respect to the REIT. . . . . . . . . . . 66
  
ARTICLE 8      FINANCIAL COVENANTS . . . . . . . . . . . . . 66
  
     8.1       Distributions . . . . . . . . . . . . . . . . 66
     8.2       Investments; Asset Mix. . . . . . . . . . . . 67
     8.3       Minimum Unencumbered Pool . . . . . . . . . . 68
     8.4       Secured Debt. . . . . . . . . . . . . . . . . 68
     8.5       Financial Covenants in 1996 Revolving
               Credit Agreement. . . . . . . . . . . . . . . 68
  
ARTICLE 9      EVENTS OF DEFAULT; RIGHTS AND REMEDIES. . . . 69
  
     9.1       Events of Default . . . . . . . . . . . . . . 69
     9.2       Rights and Remedies . . . . . . . . . . . . . 72
  
ARTICLE 10     MISCELLANEOUS . . . . . . . . . . . . . . . . 73
  
     10.1      Expenses. . . . . . . . . . . . . . . . . . . 73
     10.2      Indemnity . . . . . . . . . . . . . . . . . . 74
     10.3      Change in Accounting Principles and
               "Funds from Operations" Definition. . . . . . 75
     10.4      Amendments and Waivers. . . . . . . . . . . . 75
     10.5      Independence of Covenants . . . . . . . . . . 76
     10.6      Notices and Delivery. . . . . . . . . . . . . 76
     10.7      Survival of Warranties, Indemnities and
                 Agreements  . . . . . . . . . . . . . . . . 76
     10.8      Failure or Indulgence Not Waiver;
               Remedies Cumulative . . . . . . . . . . . . . 76
     10.9      Marshaling; Payments Set Aside. . . . . . . . 77
     10.10     Severability. . . . . . . . . . . . . . . . . 77
     10.11     Headings. . . . . . . . . . . . . . . . . . . 77
     10.12     Governing Law; Waiver . . . . . . . . . . . . 77
     10.13     Limitation of Liability . . . . . . . . . . . 77
     10.14     Successors and Assigns. . . . . . . . . . . . 78
     10.15     Consent to Jurisdiction and Service of
               Process: Waiver of Jury Trial . . . . . . . . 78
     10.16     Counterparts; Effectiveness;
               Inconsistencies . . . . . . . . . . . . . . . 79
     10.17     Performance of Obligations. . . . . . . . . . 79
     10.18     Construction. . . . . . . . . . . . . . . . . 79
     10.19     Entire Agreement. . . . . . . . . . . . . . . 79
  
  
  
                 LIST OF EXHIBITS AND SCHEDULES
  
  Exhibits:
  
  A       -    Form of Compliance Certificate
  B       -    Form of Fixed Rate Notice
  C       -    Form of Guaranty
  D       -    Form of Note
  E       -    Form of Notice of Borrowing
  F       -    Form of Solvency Certificate
  
  
  Schedules:
  
  1.1A         -    Applicable Spread
  1.1B         -    List of Predecessor Entity Properties
  2.2          -    Employees Authorized to Sign Notices of
                      Borrowing
  4.1(c)  -    Ownership of Borrower
  4.1(j)  -    List of Litigation
  4.1(s)  -    Environmental Matters
  4.1(v)  -    Management Agreements
  4.2(l)  -    Benefit Plans
  8.3          -    List of Unencumbered Assets

                       REVOLVING CREDIT AGREEMENT
  
  
          THIS REVOLVING CREDIT AGREEMENT, dated as of May 5,
  1997 (as amended, supplemented or modified from time to time,
  the "Agreement"), is made and entered into by and between ARDEN
  REALTY LIMITED PARTNERSHIP, a Maryland limited partnership
  ("Borrower"), and WELLS FARGO BANK, NATIONAL ASSOCIATION
  ("Lender").
  
          NOW, THEREFORE, the parties hereto agree as follows:
  
  
                           ARTICLE 1
  
                          DEFINITIONS
  
  
     1.1  Certain Defined Terms.   The following terms used in
  this Agreement shall have the following meanings (such meanings
  to be applicable, except to the extent otherwise indicated in a
  definition of a particular term, both to the singular and the
  plural forms of the terms defined):
  
          "Accountants" means any (i) "big six" accounting firm
  or (ii) another firm of certified public accountants of
  recognized national standing selected by Borrower and
  acceptable to Lender.
  
          "Acquisition Price" means the aggregate purchase
  price for an asset, including bona fide purchase money
  financing provided by the seller and all other Indebtedness
  encumbering such asset at the time of acquisition.
  
          "Advance" means each of the advances made or to be
  made to Borrower pursuant to Section 2.1, and includes each
  Base Rate Advance and each LIBOR Advance.
  
          "Affiliates" as applied to any Person, means any
  other Person directly or indirectly controlling, controlled by,
  or under common control with, that Person. For purposes of
  this definition, "control" (including, with correlative mean-
  ings, the terms "controlling", "controlled by" and "under
  common control with"), as applied to any Person, means (a) the
  possession, directly or indirectly, of the power to vote ten
  percent (10%) or more of the Securities having voting power for
  the election of directors of such Person or otherwise to direct
  or cause the direction of the management and policies of that
  Person, whether through the ownership of voting Securities or
  by contract or otherwise, or (b) the ownership of ten percent
  (10%) or more of the outstanding general partnership or other
  ownership interests of such Person.
  
          "Applicable Spread" means the percent per annum
  figure applicable pursuant to Schedule 1.1A as determined by
  Lender on the basis of an Applicable Spread Notice;
  notwithstanding the foregoing, immediately after the initial
  Advance is made, the Applicable Spread shall be 1.30%.
  
          "Applicable Spread Event" means any event or events
  which would increase or decrease Total Liabilities and/or Gross
  Asset Value by an amount sufficient to cause the then existing
  Applicable Spread to change.
  
          "Applicable Spread Notice" means written notice from
  Borrower to Lender of an Applicable Spread Event.  Each
  Applicable Spread Notice shall set forth in such reasonable
  detail as Lender may require (i) the nature of the Applicable
  Spread Event, (ii) the date or dates of the Applicable Spread
  Event and (iii) the amount of the increase or decrease in Total
  Liabilities and/or Gross Asset Value caused or to be caused by
  such Applicable Spread Event.
  
          "Base Rate" means, on any day, the higher of (a) the
  rate of interest per annum established from time to time by
  Lender at its principal office in San Francisco, California,
  and designated as its prime rate as in effect on such day and
  (b) the Federal Funds Rate in effect on such day plus one-half
  of one percent (0.5%) per annum.
  
          "Base Rate Advance" means an Advance bearing interest
  at the Base Rate.
  
          "Benefit Plan" means any employee pension benefit
  plan as defined in Section 3(2) of ERISA (other than a
  Multiemployer Plan) in respect of which a Person or an ERISA
  Affiliate is, or within the immediately preceding five (5)
  years was, an "employer" as defined in Section 3(5) of ERISA.
  
          "Borrower" means Arden Realty Limited Partnership, a
  Maryland limited partnership.
  
          "Business Day" means (a) with respect to any Advance,
  payment or rate determination of LIBOR Advances, a day, other
  than a Saturday or Sunday, on which Lender is open for business
  in San Francisco and on which dealings in Dollars are carried
  on in the London interbank market, and (b) for all other pur-
  poses any day excluding Saturday, Sunday and any day which is a
  legal holiday under the laws of the State of California, or is
  a day on which banking institutions located in California are
  required or authorized by law or other governmental action to
  close.
  
          "Capital Lease" means, as applied to any Person, any
  lease of any property (whether real, personal or mixed) by that
  Person as lessee which, in conformity with GAAP, is or should
  be accounted for as a capital lease on the balance sheet of
  that Person.
  
          "Capital Lease Obligations" means all monetary
  obligations of a Person under any Capital Lease.
  
          "Capitalized Loan Fees" means, with respect to the
  REIT and any Consolidated Entity, and with respect to any
  period, (a) any up-front, closing or similar fees paid by such
  Person in connection with the incurring or refinancing of
  Indebtedness during such period and (b) all other costs
  incurred in connection with the incurring or refinancing of
  Indebtedness during such period, including, without limitation,
  appraisal fees paid to lenders, costs and expenses incurred in
  connection with Swap Agreements, phase 1 environmental report
  review fees paid to lenders and legal fees, in each of the
  foregoing cases, that are capitalized on the balance sheet of
  such Person and amortized over the term of such Indebtedness.
  
          "Capital Stock" means, with respect to any Person,
  all (i) shares, interests, participations or other equivalents
  (howsoever designated) of capital stock or partnership or other
  equity interests of such Person and (ii) rights (other than
  debt securities convertible into capital stock or other equity
  interests), warrants or options to acquire any such capital
  stock or partnership or other equity interests of such Person. 
  The term "Capital Stock" includes the Partnership Units of the
  Borrower.
  
          "Cash" means, when used in connection with any
  Person, all monetary and nonmonetary items owned by that Person
  that are treated as cash in accordance with GAAP, consistently
  applied, less all liabilities for tenant deposits held by that
  Person.
  
          "Cash Equivalents" means (a) marketable direct
  obligations issued or unconditionally guaranteed by the
  United States Government or issued by an agency thereof and
  backed by the full faith and credit of the United States, in
  each case maturing within one (1) year after the date of
  acquisition thereof; (b) marketable direct obligations issued
  by any state of the United States of America or any political
  subdivision of any such state or any public instrumentality
  thereof maturing within ninety (90) days after the date of
  acquisition thereof and, at the time of acquisition, having one
  of the two highest ratings obtainable from any two of
  Standard & Poor's Ratings Services, a division of The McGraw-
  Hill Companies, Moody's Investors Service, Inc., Duff and
  Phelps, or Fitch Investors Service, Inc. (or, if at any time no
  two of the foregoing shall be rating such obligations, then
  from such other nationally recognized rating services as may be
  acceptable to Lender) and not listed for possible down-grade in
  Credit Watch published by Standard & Poor's Ratings Services, a
  division of The McGraw-Hill Companies; (c) commercial paper,
  other than commercial paper issued by Borrower or any of its
  Affiliates, maturing no more than ninety (90) days after the
  date of creation thereof and, at the time of acquisition,
  having a rating of at least A-1 or P-1 from either Standard &
  Poor's Ratings Services, a division of The McGraw-Hill
  Companies, or Moody's Investors Service, Inc. (or, if at any
  time neither Standard & Poor's Ratings Services, a division of
  The McGraw-Hill Companies, nor Moody's Investors Service, Inc.
  shall be rating such obligations, then the highest rating from
  such other nationally recognized rating services as may be
  acceptable to Lender); and (d) domestic and Eurodollar
  certificates of deposit or time deposits or bankers'
  acceptances maturing within ninety (90) days after the date of
  acquisition thereof, overnight securities repurchase
  agreements, or reverse repurchase agreements secured by any of
  the foregoing types of securities or debt instruments issued,
  in each case, by any commercial bank organized under the laws
  of the United States of America or any state thereof or the
  District of Columbia or Canada which at the time of acquisition
  (A) has (or, in the case of a bank which is a subsidiary, such
  bank's parent has) a rating of its senior unsecured debt
  obligations of not less than Baa-2 by Moody's Investors
  Service, Inc. or a comparable rating by a rating agency
  acceptable to Lender and (B) has total assets in excess of
  Ten Billion Dollars ($10,000,000,000).
  
          "City National Bank Loan" means revolving loans to
  be made by City National Bank to Borrower in an aggregate
  committed principal amount which shall not exceed $10,000,000
  pursuant to the terms of that certain Loan Agreement dated
  March 12, 1997 between Borrower and City National Bank.
  
          "Closing Date" means the date on which the applicable
  conditions contained in Sections 3.1 and 3.2 are satisfied or
  waived.  Within five (5) Business Days of the occurrence
  thereof, Lender shall deliver written notice to the Borrower
  confirming the date on which the Closing Date occurs.
  
          "CMBS Entities" means, collectively, one or more
  entities formed or to be formed by the REIT or Borrower in
  connection with the issuance of commercial mortgage-backed
  securities.
  
          "Code" means the Internal Revenue Code of 1986, as
  amended from time to time.
  
          "Commission" means the Securities and Exchange
  Commission.
  
          "Commitment" means $110,000,000.
  
          "Compliance Certificate" means a certificate in the
  form of Exhibit A hereto delivered to Lender by Borrower
  pursuant to Section 5.1(d) or other provision of this Agreement
  and covering compliance with the covenants contained in
  Section 7.3 and Article 8.
  
          "Consolidated Entity" means, collectively, (i) the
  Borrower and (ii) any other Person the accounts of which are
  consolidated with those of the REIT in the consolidated
  financial statements of the REIT in accordance with GAAP.
  
          "Construction in Progress" means land on which
  Borrower has commenced, and is diligently proceeding with, the
  construction of an Office Property.  If, after Borrower has
  commenced the construction of an Office Property, such
  construction ceases for 45 or more consecutive days, such land
  shall cease to be Construction in Progress and shall become
  Land until Borrower starts construction of the Office Property
  again.
  
          "Contaminant" means any pollutant (as that term is
  defined in 42 U.S.C. 9601(33)) or toxic pollutant (as that term
  is defined in 33 U.S.C. 1362(13)), hazardous substance (as that
  term is defined in 42 U.S.C. 9601(14)), hazardous chemical (as
  that term is defined by 29 CFR Section 1910.1200(c)), toxic
  substance, hazardous waste (as that term is defined in
  42 U.S.C. 6903(5)), radioactive material, special waste,
  petroleum (including crude oil or any petroleum-derived
  substance, waste, or breakdown or decomposition product
  thereof), any constituent of any such substance or waste,
  including, but not limited to, polychlorinated biphenyls and
  asbestos, or any other substance or waste deleterious to the
  environment the release, disposal or remediation of which is
  now or at any time becomes subject to regulation under any
  Environmental Law.
  
          "Contractual Obligation" as applied to any Person,
  means any provision of any Securities issued by that Person or
  any indenture, mortgage, deed of trust, lease, contract, under-
  taking, document or instrument to which that Person is a party
  or by which it or any of its properties is bound, or to which
  it or any of its properties is subject (including, without
  limitation, any restrictive covenant affecting such Person or
  any of its properties).
  
          "Contribution Agreement" means (i) that certain
  Contribution Agreement made as of October 9, 1996, by and among
  Richard S. Ziman, an individual, Montour Realty Associates, a
  California general partnership, Metropolitan Falls Partners, a
  California general partnership, Intercity Building Associates,
  a California general partnership, Victor J. Coleman, an indivi-
  dual, Coleman Enterprises, Inc., a California corporation,
  Ziman Realty Partners, a California general partnership, Broad
  Base Investments II, LLC, a Nevada limited liability company,
  Michele Byer, individually and as trustee of the Michele Byer
  Trust, a revocable inter vivos trust dated September 20, 1996,
  Anaheim Properties LLC, a California limited liability company,
  Arden Century Associates, a California general partnership,
  Arden Sawtelle Associates, a California general partnership,
  the REIT and Borrower and (ii) any other agreement between the
  Borrower and a CMBS Entity providing for contribution by the
  Borrower of certain contributions it receives from its limited
  partners with respect to Debt of the CMBS Entity and on
  substantially similar terms as the Contribution Agreement
  described in the foregoing clause (i).  Borrower shall deliver
  to Lender a copy of each Contribution Agreement entered into
  after the date of this Agreement.
  
          "Court Order" means any judgment, writ, injunction,
  decree, rule or regulation of any court or Governmental
  Authority binding upon the Person in question.
  
          "Debt" means, with respect to any Person, without
  duplication, the principal amount of (a) its liabilities for
  borrowed money, (b) its liabilities for the deferred purchase
  price of property acquired by such Person (excluding accounts
  payable in the ordinary course of business, but including,
  without limitation, all liabilities created or arising under
  any conditional sale or other title retention agreement with
  respect to any property), (c) its Capitalized Lease
  Obligations, (d) any liabilities for borrowed money secured by
  a Lien with respect to any property owned by such Person
  (whether or not it is assumed by such Person or such Person
  otherwise becomes liable for such liabilities), (e) all
  liabilities with respect to any unreimbursed draws on letters
  of credit and (f) any Guaranty of such Person with respect to
  any of the foregoing.
  
          "Debt Service" means, for any period, Interest
  Expense for such period plus scheduled principal amortization
  (excluding any balloon or bullet payment due at maturity) for
  such period on all Debt of the REIT and Consolidated Entities
  and on the REIT's and each Consolidated Entity's pro rata share
  of all Debt of each Unconsolidated Joint Venture.  For purposes
  of the foregoing definition, the REIT's and such Consolidated
  Entity's pro rata share of such Debt shall be deemed to be
  equal to the product of (i) such Debt, multiplied by (ii) the
  percentage of the total outstanding Capital Stock of such
  Unconsolidated Joint Venture held by the REIT or such
  Consolidated Entity, expressed as a decimal.
  
          "Depreciation and Amortization Expense" means
  (without duplication), for any period, the sum for such period
  of (i) total depreciation and amortization expense, whether
  paid or accrued, of the REIT and the Consolidated Entities,
  plus (ii) the REIT's and any Consolidated Entity's pro rata
  share of depreciation and amortization expenses of Unconsoli-
  dated Joint Ventures.  For purposes of this definition, the
  REIT's pro rata share of depreciation and amortization expense
  of any Unconsolidated Joint Venture shall be deemed equal to
  the product of (i) the depreciation and amortization expense of
  such Unconsolidated Joint Venture, multiplied by (ii) the
  percentage of the total outstanding Capital Stock of such
  Unconsolidated Joint Venture held by the REIT or any
  Consolidated Entity, expressed as a decimal.
  
          "Designated Market" means, with respect to any LIBOR
  Advance, the London interbank LIBOR market or such other
  interbank LIBOR market as may be designated in writing from
  time to time by Lender.
  
          "Disqualified Stock" means any capital stock,
  warrants, options or other rights to acquire capital stock (but
  excluding any debt security which is convertible, or
  exchangeable, for capital stock), which, by its terms (or by
  the terms of any security into which it is convertible or for
  which it is exchangeable), or upon the happening of any event,
  matures or is mandatorily redeemable prior to the Maturity
  Date, pursuant to a sinking fund obligation or otherwise, or is
  or may be redeemable at the option of the holder thereof, in
  whole or in part, prior to the Maturity Date.  Borrower's
  Partnership Units shall not be considered Disqualified Stock.
  
          "DOL" means the United States Department of Labor and
  any successor department or agency.
  
          "Dollars" and "$" means the lawful money of the
  United States of America.
  
          "EBITDA" means, for any period, Net Income, plus
  (without duplication) (a) Interest Expense, (b) Tax Expense,
  (c) Depreciation and Amortization Expense and (d) cash
  dividends and distributions actually received by the REIT or
  any Consolidated Entity from any Unconsolidated Joint Venture,
  in each case for such period.
  
          "Environmental Laws" has the meaning set forth in
  Section 4.1(s).
  
          "Environmental Lien" means a Lien in favor of any
  Governmental Authority for (a) any liability under Environ-
  mental Laws, or (b) damages arising from, or costs incurred by
  such Governmental Authority in response to, a Release or
  threatened Release of a Contaminant into the environment.
  
          "ERISA" means the Employee Retirement Income Security
  Act of 1974, as amended from time to time, and any successor
  statute.
  
          "ERISA Affiliate" means, with respect to any Person,
  any (a) corporation which is, becomes, or is deemed to be a
  member of the same controlled group of corporations (within the
  meaning of Section 414(b) of the Code) as such Person,
  (b) partnership, trade or business (whether or not
  incorporated) which is, becomes or is deemed to be under common
  control (within the meaning of Section 414(c) of the Code) with
  such Person, (c) solely for purposes of potential liability
  under Section 302(c)(11) of ERISA and Section 412(c)(11) of the
  Code and the lien created under Section 302(f) of ERISA and
  Section 412(n) of the Code, Person which is, becomes or is
  deemed to be a member of the same "affiliated service group"
  (as defined in Section 414(m) of the Code) as such Person, or
  (d) solely for purposes of potential liability under
  Section 302(c)(11) of ERISA and Section 412(c)(11) of the Code
  and the lien created under Section 302(f) of ERISA and
  Section 412(n) of the Code, other organization or arrangement
  described in Section 414(o) of the Code which is, becomes or is
  deemed to be required to be aggregated pursuant to regulations
  issued under Section 414(o) of the Code with such Person
  pursuant to Section 414(o) of the Code.
  
          "Event of Default" means any of the occurrences so
  defined in Article 9.
  
          "FDIC" means the Federal Deposit Insurance
  Corporation or any successor thereto.
  
          "Federal Funds Rate" means, as of any date of deter-
  mination, the rate set forth in the weekly statistical release
  designated as H.15(519), or any successor publication,
  published by the Federal Reserve Board (including any such
  successor, "H.15(519)") for such date opposite the caption
  "Federal Funds (Effective)".  If for any relevant date such
  rate is not yet published in H.15(519), the rate for such date
  will be the rate set forth in the daily statistical release
  designated as the Composite 3:30 p.m. Quotations for
  U.S. Government Securities, or any successor publication,
  published by the Federal Reserve Bank of New York (including
  any such successor, the "Composite 3:30 p.m. Quotations") for
  such date under the caption "Federal Funds Effective Rate".  If
  on any relevant date the appropriate rate for such date is not
  yet published in either H.15(519) or the Composite 3:30 p.m.
  Quotations, the rate for such date will be the arithmetic mean
  of the rates for the last transaction in overnight Federal
  funds arranged prior to 9:00 a.m. (New York City time) on that
  date by each of three leading brokers of Federal Funds trans-
  actions in New York City selected by the Lender.  For purposes
  of this Agreement, any change in the Base Rate due to a change
  in the Federal Funds Rate shall be effective as of the opening
  of business on the effective date of such change.
  
          "Federal Reserve Board" means the Board of Governors
  of the Federal Reserve System or any governmental authority
  succeeding to its functions.
  
          "FIRREA" means the Financial Institutions Recovery,
  Reform and Enforcement Act of 1989, as amended from time to
  time.
  
          "Fiscal Quarter" means each three-month period ending
  on March 31, June 30, September 30 and December 31; provided,
  however, that notwithstanding the foregoing, the first "Fiscal
  Quarter" of the REIT and the Consolidated Entities shall be the
  period commencing on October 9, 1996 and ending on December 31,
  1996.
  
          "Fiscal Year" means the fiscal year of Borrower which
  shall be the twelve (12) month period ending on the last day of
  December in each year.
  
          "Fixed Rate Notice" means, with respect to a LIBOR
  Advance pursuant to Section 2.1(b), a notice substantially in
  the form of Exhibit B.
  
          "Fixed Rate Price Adjustment" has the meaning given
  to such term in Section 2.4(h)(iii).
  
          "Funding Date" means, with respect to any Advance,
  the date of the funding of such Advance.
  
          "Funds from Operations" shall be interpreted
  consistently with the NAREIT Definition and, subject to
  Section 10.3, shall mean, for any period, net income for such
  period excluding gains (or losses) from debt restructuring and
  sales of Real Property, plus the portion of Depreciation and
  Amortization Expenses during such period which is attributable
  to Real Property, and after adjustments for Unconsolidated
  Joint Ventures.  (Adjustments for Unconsolidated Joint Ventures
  shall be calculated to reflect funds from operations on the
  same basis.)
  
          "GAAP" means generally accepted accounting principles
  set forth in the opinions and pronouncements of the Accounting
  Principles Board and the American Institute of Certified Public
  Accountants and statements and pronouncements of the Financial
  Accounting Standards Board, or in such other statements by such
  other entity as may be in general use by significant segments
  of the accounting profession, which are applicable to the
  circumstances as of the date of determination.
  
          "Governmental Authority" means any nation or govern-
  ment, any federal, state, local, municipal or other political
  subdivision thereof or any entity exercising executive,
  legislative, judicial, regulatory or administrative functions
  of or pertaining to government.
  
          "Gross Asset Value" means, as of the date of
  determination, the sum of (without duplication):
  
          (i)  the product of (x) EBITDA of the REIT and the
  Consolidated Entities for the fiscal period consisting of the
  Fiscal Quarter most recently ended (less EBITDA attributable to
  Real Property acquired during such Fiscal Quarter from persons
  other than Predecessor Entities), multiplied by 4, multiplied
  by (y) 9.1743;
  
          (ii)  Cash and Cash Equivalents held by the REIT and
  the Consolidated Entities on the last day of such most recently
  ended Fiscal Quarter; and
  
          (iii)  ninety percent (90%) of the Acquisition Price
  for Real Property acquired (from persons other than Predecessor
  Entities) during such Fiscal Quarter.
  
          "Guaranty" means a guaranty of payment in the form of
  Exhibit C.
  
          "Guaranty Obligation" means, as to any Person, any
  (a) guarantee by that Person of Indebtedness of, or other
  obligation performable by, any other Person or (b) assurance
  given by that Person to an obligee of any other Person with
  respect to the performance of an obligation by, or the
  financial condition of, such other Person, whether direct,
  indirect or contingent, including any purchase or repurchase
  agreement covering such obligation or any collateral security
  therefor, any agreement to provide funds (by means of loans,
  capital contributions or otherwise) to such other Person, any
  agreement to support the solvency or level of any balance sheet
  item of such other Person or any "keep-well" or other
  arrangement of whatever nature given for the purpose of
  assuring or holding harmless such obligee against loss with
  respect to any obligation of such other Person; provided,
  however, that the term Guaranty Obligation shall not include
  endorsements of instruments for deposit or collection in the
  ordinary course of business.  The amount of any Guaranty
  Obligation in respect of Indebtedness shall be deemed to be an
  amount equal to the stated or determinable amount of the
  related Indebtedness (unless the Guaranty Obligation is limited
  by its terms to a lesser amount, in which case to the extent of
  such amount) or, if not stated or determinable, the maximum
  reasonably anticipated liability in respect thereof as
  determined by the Person in good faith.  The amount of any
  other Guaranty Obligation shall be deemed to be zero unless and
  until the amount thereof has been (or in accordance with
  Financial Accounting Standards Board Statement No. 5 should be)
  quantified and reflected or disclosed in the consolidated
  financial statements (or notes thereto) of such Person.
  
          "Indebtedness" means, as to any Person (without
  duplication), (a) all indebtedness, obligations or other
  liabilities of such Person for borrowed money, whether or not
  subordinated and whether with or without recourse beyond any
  collateral security, (b) all indebtedness, obligations or other
  liabilities of such Person evidenced by Securities or other
  similar instruments, (c) all reimbursement obligations and
  other liabilities of such Person with respect to letters of
  credit or banker's acceptances issued for such Person's
  account, (d) all obligations of such Person to pay the deferred
  purchase price of Property or services, (e) the principal
  portion of Capital Lease Obligations of such Person set forth
  in the financial statements of such Person and, with respect to
  each operating lease, including all ground leases to the extent
  not treated as Capital Leases, the present value of all rental
  payments due over the remaining term of such lease (using a
  discount rate of 10%), provided, however, that, to the extent
  any ground lease payment has been deducted in determining Net
  Income, then such present value shall not be counted as
  Indebtedness in calculating the ratio set forth in Section 9.2
  of the 1996 Revolving Credit Agreement (which Section Borrower
  is obligated to comply with, for purposes of this Agreement, by
  Section 8.5 of this Agreement), (f) all Guaranty Obligations of
  such Person, (g) all Contractual Obligations of such Person,
  (h) all indebtedness, obligations or other liabilities of such
  Person or others secured by a Lien on any asset of such Person,
  whether or not such indebtedness, obligations or liabilities
  are assumed by, or are a personal liability of, such Person
  (including, without limitation, the principal amount of any
  assessment or similar indebtedness encumbering any property),
  (i) all indebtedness, obligations or other liabilities (other
  than interest expense liability) in respect of foreign currency
  exchange agreements, (j) ERISA obligations currently due and
  payable, (k) as applied to the REIT and the Consolidated
  Entities, all indebtedness, obligations or other liabilities of
  Unconsolidated Joint Ventures which are recourse to the REIT
  and/or any of the Consolidated Entities, (l) the REIT's and
  Consolidated Entities' pro rata share of Nonrecourse Debt of
  Unconsolidated Joint Ventures, (m) the amount which would be
  owed by such Person to any counterparty under any Swap
  Agreement(s) in the event such Swap Agreement(s) were
  terminated as of any date of determination of Indebtedness,
  (n) improvement and assessment district taxes (including,
  without limitation, taxes under the Mello-Roos Community
  Facilities Act of 1982) assessed or otherwise due with respect
  to any Property of such Person, and (o) without duplication or
  limitation, all liabilities and other obligations included in
  the financial statements (or notes thereto) of such Person as
  prepared in accordance with GAAP.  For purposes of clause (l),
  the REIT's and the Consolidated Entities' pro rata share of
  Nonrecourse Debt of any Unconsolidated Joint Venture shall be
  deemed to be equal to the product of (i) the Nonrecourse Debt
  of such Unconsolidated Joint Venture, multiplied by (ii) the
  percentage of the total outstanding Capital Stock of such Joint
  Venture held by the REIT or any Consolidated Entity, expressed
  as a decimal.  With respect to any agreement entered into by
  such Person to purchase Real Property, "Indebtedness" shall not
  include any amount in excess of the amount (if any) which such
  Person is obligated to pay as liquidated damages under such
  agreement in the event such Person breaches its obligation to
  purchase such Real Property.
  
          "Intangible Assets" means assets that are considered
  intangible assets under GAAP, including customer lists, good-
  will, computer software, copyrights, trade names, trademarks,
  patents and Capitalized Loan Fees (other than capitalized
  interest with respect to construction in progress).
  
          "Interest Expense" means, for any period, the sum
  (without duplication) for such period of (i) total interest
  expense, whether paid or accrued, of the REIT and the
  Consolidated Entities and the portion of any Capitalized Lease
  Obligations allocable to interest expense during such period,
  including the REIT's and each Consolidated Entity's share of
  interest expenses in Unconsolidated Joint Ventures but exclud-
  ing amortization or writeoff of debt discount and expense
  (except as provided in clause (ii) below), (ii) amortization of
  costs related to Swap Agreements, (iii) capitalized interest,
  (iv) amortization of Capitalized Loan Fees, (v) to the extent
  not included in clauses (i), (ii), (iii) and (iv), the REIT's
  and each Consolidated Entity's pro rata share of interest
  expense and other amounts of the type referred to in such
  clauses of the Unconsolidated Joint Ventures, and (vi) interest
  incurred on any liability or obligation that constitutes a
  Guaranty Obligation of the REIT or any Consolidated Entity. 
  For purposes of clause (v), the REIT's and such Consolidated
  Entity's pro rata share of interest expense or other amount of
  any Unconsolidated Joint Venture shall be deemed equal to the
  product of (a) the interest expense or other relevant amount of
  such Unconsolidated Joint Venture, multiplied by (b) the
  percentage of the total outstanding Capital Stock of such
  Unconsolidated Joint Venture held by the REIT or such
  Consolidated Entity, expressed as a decimal.
  
          "Interest Period" means, with respect to each LIBOR
  Advance, a period commencing on a Business Day and ending
  one (1) or two (2) months thereafter, as specified by the
  Borrower pursuant to Section 2.1(b), provided that any such
  period that would otherwise end on a day that is not a Business
  Day shall be extended to the next succeeding Business Day
  unless such Business Day falls in another calendar month, in
  which case such period shall end on the immediately preceding
  Business Day.
  
          "Investment" means, with respect to any Person, (i)
  any direct or indirect purchase or other acquisition by that
  Person of stock or securities, or any beneficial interest in
  stock or other securities, of any other Person, any partnership
  interest (whether general or limited) in any other Person, or
  all or any substantial part of the business or assets of any
  other Person, (ii) any direct or indirect loan, advance or
  capital contribution by that Person to any other Person,
  including all indebtedness and accounts receivable from that
  other Person that are not current assets or did not arise from
  sales to that other Person in the ordinary course of business. 
  The amount of any Investment shall be the original cost of such
  Investment, plus the cost of all additions thereto, without any
  adjustments for increases or decreases in value, or write-ups,
  write-downs or write-offs with respect to such Investment.
  
          "Investment Mortgages" mean mortgages or deeds of
  trust securing indebtedness owned by Borrower.
  
          "IRS" means the Internal Revenue Service and any
  Person succeeding to the functions thereof.
  
          "Joint Venture" means a joint venture, partnership,
  limited liability company, business trust or similar arrange-
  ment, whether in corporate, partnership or other legal form;
  provided that, as to any such arrangement in corporate form,
  such corporation shall not, as to any Person of which such
  corporation is a Subsidiary, be considered to be a Joint
  Venture to which such Person is a party.
  
          "Land" means unimproved (except as otherwise provided
  in the definition of "Construction in Progress") land.  "Land"
  does not include Construction in Progress.
  
          "Lender Taxes" has the meaning given to such term in
  Section 2.4(g).
  
          "Liabilities and Costs" means all claims, judgments,
  liabilities, obligations, responsibilities, losses, damages
  (including lost profits), punitive or treble damages, costs,
  disbursements and expenses (including, without limitation,
  reasonable attorneys', experts' and consulting fees and costs
  of investigation and feasibility studies), fines, penalties and
  monetary sanctions, interest, direct or indirect, known or
  unknown, absolute or contingent, past, present or future.
  
          "LIBOR Advance" means an Advance bearing interest at
  a fixed rate of interest determined by reference to the LIBOR
  Rate.
  
          "LIBOR Office" means the office of Lender designated
  as such on the signature pages hereto or such other office of
  Lender as designated from time to time by notice from Lender to
  Borrower, whether or not outside the United States, which shall
  be making or maintaining LIBOR Advances of Lender.
  
          "LIBOR Rate" means, with respect to any LIBOR
  Advance, the rate per annum (determined solely by the Lender
  and rounded upward to the next 1/16th of one percent ) at which
  deposits in Dollars are offered by the Lender in the Designated
  Market at approximately 9:00 a.m. (California time) two (2)
  Business Days prior to the first day of the applicable Interest
  Period in an amount approximately equal to such LIBOR Advance,
  and for a period of time comparable to the number of days in
  the applicable Interest Period.  The determination of the LIBOR
  Rate by the Lender shall be conclusive in the absence of
  manifest error.  The foregoing rate of interest shall be
  reserve adjusted by dividing LIBOR by one (1.00) minus the
  LIBOR Reserve Percentage, with such quotient to be rounded
  upward to the nearest whole multiple of one-hundredth of one
  percent (0.01%).  All references in this Agreement or other
  Loan Documents to LIBOR include the aforesaid reserve
  adjustment.
  
          "LIBOR Reserve Percentage" means, relative to any
  Interest Period for LIBOR Advances made by the Lender, the
  reserve percentage (expressed as a decimal) equal to the actual
  aggregate reserve requirements (including all basic, emergency,
  supplemental, marginal and other reserves and taking into
  account any transactional adjustments or other scheduled
  changes in reserve requirements) announced within the Lender as
  the reserve percentage applicable to the Lender as specified
  under regulations issued from time to time by the Federal
  Reserve Board.  The LIBOR Reserve Percentage shall be based on
  Regulation D of the Federal Reserve Board or other regulations
  from time to time in effect concerning reserves for
  "Eurocurrency Liabilities" from related institutions as though
  the Lender were in a net borrowing position.
  
          "Lien" means any mortgage, deed of trust, pledge,
  negative pledge, hypothecation, collateral assignment, deposit
  arrangement, security interest, encumbrance (including, but not
  limited to, easements, rights-of-way, zoning restrictions and
  the like), lien (statutory or other), preference, priority or
  other security agreement or preferential arrangement of any
  kind or nature whatsoever, including without limitation any
  conditional sale or other title retention agreement, the
  interest of a lessor under a Capital Lease, any financing lease
  having substantially the same economic effect as any of the
  foregoing, and the filing of any financing statement or
  document having similar effect (other than a financing
  statement filed by a "true" lessor pursuant to 9408 of the
  Uniform Commercial Code) naming the owner of the asset to which
  such Lien relates as debtor, under the Uniform Commercial Code
  or other comparable law of any jurisdiction.
  
          "Loan Account" has the meaning given to such term in
  Section 2.3.
  
          "Loan Documents" means this Agreement, the Note, the
  Guaranty, and all other agreements, instruments and documents
  (together with amendments and supplements thereto and
  replacements thereof) now or hereafter executed by the REIT or
  Borrower which evidence, guarantee or secure the Obligations,
  in each case either as originally executed or as the same may
  from time to time be supplemented, modified, amended, renewed,
  extended or supplanted. 
  
          "Major Agreement" means, with respect to any Real
  Property included within the Unencumbered Pool or which
  Borrower proposes for inclusion within the Unencumbered Pool,
  (a) a lease of such Real Property with respect to 25,000 square
  feet or more of gross leasable area, and (b) each ground lease
  affecting such Real Property.  
  
          "Material Adverse Effect" means, with respect to a
  Person, a material adverse effect upon the condition (financial
  or otherwise), operations, performance or properties of such
  Person.  The phrase "has a Material Adverse Effect" or "will
  result in a Material Adverse Effect" or words substantially
  similar thereto shall in all cases be intended to mean "has
  resulted, or will or could reasonably be anticipated to result,
  in a Material Adverse Effect", and the phrase "has no (or does
  not have a) Material Adverse Effect" or "will not result in a
  Material Adverse Effect" or words substantially similar thereto
  shall in all cases be intended to mean "does not or will not or
  could not reasonably be anticipated to result in a Material
  Adverse Effect".
  
          "Maturity Date" has the meaning given to such term in
  Section 2.1(d).
  
          "Minority Interests" means that portion of "minority
  interests" as set forth in the REIT's financial statements
  which is attributable to the ownership interest in Borrower of
  Persons other than the REIT.
  
          "Multiemployer Plan" means an employee benefit plan
  defined in Section 4001(a)(3) of ERISA which is, or within the
  immediately preceding six (6) years was, contributed to by a
  Person or an ERISA Affiliate.
  
          "NAREIT Definition" has the meaning given to such
  term in Section 10.3.
  
          "Net Income" means, for any period, total net income
  (or loss) of the REIT and the Consolidated Entities for such
  period, provided that there shall be excluded therefrom (i) any
  charge attributable to, or otherwise on account of, the
  Minority Interests, (ii) any income or loss attributable to
  extraordinary items (including, without limitation, any income
  or loss attributable to restructuring of Indebtedness),
  (iii) gains and losses from sales of assets, (iv) the REIT's
  pro rata share of the income (or loss) of any Unconsolidated
  Joint Venture for such period, and (v) except to the extent
  otherwise included hereunder, the income (or loss) of any
  Person accrued prior to the date it becomes a Consolidated
  Entity or is merged with the REIT or any Consolidated Entity or
  such Person's assets are acquired by the REIT or any Consoli-
  dated Entity.  For purposes of this definition, the REIT's pro
  rata share of income (or loss) of any Unconsolidated Joint
  Venture shall be deemed equal to the product of (i) the income
  (or loss) of such Unconsolidated Joint Venture, multiplied by
  (ii) the percentage of the total outstanding Capital Stock of
  such Person held by the REIT or any Consolidated Entity,
  expressed as a decimal.
  
          "Net Offering Proceeds" means (a) all cash proceeds
  received by the REIT as a result of the sale of common,
  preferred or other classes of stock of the REIT (if and only to
  the extent reflected in stockholders' equity on the
  consolidated balance sheet of the REIT prepared in accordance
  with GAAP) less customary costs, expenses and discounts of
  issuance paid by the REIT, all of which proceeds shall have
  been concurrently contributed by the REIT to Borrower as
  additional capital, plus (b) all cash and the fair market value
  of the net equity of all properties contributed to Borrower by
  one or more Persons in exchange for limited partnership
  interests in Borrower.
  
          "1996 Revolving Credit Agreement" means that certain
  Revolving Credit Agreement, dated as of December 17, 1996, by
  and among Borrower, as borrower, and Lender, Commerzbank AG,
  Los Angeles Branch, Dresdner Bank AG, New York Branch and Grand
  Cayman Branch, Fleet National Bank, Keybank National
  Association, Manufacturers Bank, Union Bank of
  California, N.A., The First National Bank of Chicago, and PNC
  Bank, NA, as lenders, and Lender, as agent, as from time to
  time amended, supplemented or otherwise modified. 
  
          "Nonrecourse Debt" means any Debt:  (a) under the
  terms of which the payee's remedies upon the occurrence of a
  default are limited to specific, identified assets of the payor
  which secure such Debt; and (b) for the repayment of which the
  payor has no personal liability beyond the loss of such
  specified assets, except for liability for fraud, material
  misrepresentations or misuse or misapplication of insurance
  proceeds, condemnation awards or rents, existence of hazardous
  waste or other customary exceptions to nonrecourse provisions.
  
          "Note" means the Promissory Note made by Borrower to
  Lender evidencing the Advances, either as originally executed
  or as the same may from time to time be supplemented, modified,
  amended, renewed, extended or supplanted.  The Note shall be
  substantially in the form of Exhibit D.
  
          "Notice of Borrowing" means, with respect to a
  proposed Advance pursuant to Section 2.1(b), a notice
  substantially in the form of Exhibit E.
  
          "Obligations" means all present and future
  obligations and liabilities of the Borrower of every type and
  description arising under or in connection with this Agreement,
  the Note and the other Loan Documents due or to become due to
  the Lender or any Person entitled to indemnification, or any of
  their respective successors, transferees or assigns, whether
  for principal, interest, fees, expenses, indemnities or other
  amounts (including attorneys' fees and expenses) and whether
  due or not due, direct or indirect, joint and/or several,
  absolute or contingent, voluntary or involuntary, liquidated or
  unliquidated, determined or undetermined, and whether now or
  hereafter existing, renewed or restructured, whether or not
  from time to time decreased or extinguished and later
  increased, created or incurred, whether or not arising after
  the commencement of a proceeding under the Bankruptcy Code
  (including post-petition interest) and whether or not allowed
  or allowable as a claim in any such proceeding, and whether or
  not recovery of any such obligation or liability may be barred
  by a statute of limitations or such obligation or liability may
  otherwise be unenforceable.
  
          "Office Property" means any Real Property that is an
  office building and any related parking facility.
  
          "Officer's Certificate" means a certificate signed by
  a specified officer of a Person certifying as to the matters
  set forth therein.
  
          "Partnership Units" has the meaning established for
  that term in the Partnership Agreement of the Borrower.
  
          "PBGC" means the Pension Benefit Guaranty Corporation
  or any Person succeeding to the functions thereof.
  
          "Permit" means any permit, approval, authorization,
  license, variance or permission required from a Governmental
  Authority under an applicable Requirement of Law.
  
          "Permitted Liens" mean:
  
          (a)  Liens (other than Environmental Liens and any
       Lien imposed under ERISA) for taxes, assessments or
       charges of any Governmental Authority or claims not yet
       due and any such taxes, assessments, charges or claims
       which are due if they are being contested by Borrower in
       accordance with Section 6.1(d);
  
          (b)  Liens (other than any Lien imposed under ERISA)
       incurred or deposits made in the ordinary course of
       business (including without limitation surety bonds and
       appeal bonds) in connection with workers' compensation,
       unemployment insurance and other types of social security
       benefits or to secure the performance of tenders, bids,
       leases, contracts (other than for the repayment of
       Indebtedness), or statutory obligations;
  
          (c) Liens imposed by laws, such as mechanics' liens
       and other similar liens arising in the ordinary course of
       business which secure payment of obligations not more than
       thirty (30) days past due or are being contested as
       permitted under this Agreement;
  
          (d)  any Liens which are approved by Lender; and
  
          (e)  rights of lessees under leases and the rights of
       lessors under Capital Leases.
  
          "Person" means any natural person, corporation,
  limited partnership, general partnership, joint stock company,
  limited liability company, limited liability partnership, joint
  venture, association, company, trust, bank, trust company, land
  trust, business trust or other organization, whether or not a
  legal entity, or any other nongovernmental entity, or any
  Governmental Authority.
  
          "Plan" means an employee benefit plan defined in
  Section 3(3) of ERISA (other than a Multiemployer Plan) in
  respect of which Borrower or an ERISA Affiliate, as applicable,
  is an "employer" as defined in Section 3(5) of ERISA.
  
          "Predecessor Entity" means Arden Realty Group, Inc.,
  a California corporation ("Arden Realty California"), or any
  Person who was at any time an Affiliate of Arden Realty
  California or any Person that owned any of the Real Properties
  listed on Schedule 1.1B contributed such Real Properties to the
  REIT or the Borrower.
  
          "Price Adjustment Date" has the meaning given to such
  term in Section 2.4(h)(iii).
  
          "Proceedings" means, collectively, all actions, suits
  and proceedings before, and investigations commenced or
  threatened by or before, any court or Governmental Authority
  with respect to a Person.
  
          "Property" means, as to any Person, any real or
  personal property, building, facility, structure, equipment or
  unit, or other asset owned and operated by such Person in the
  ordinary course of its business.
  
          "Property Expenses" means, for any Office Property,
  all operating expenses relating to such Office Property,
  including the following items (provided, however, that Property
  Expenses shall not include Debt Service, tenant improvement
  costs, leasing commissions, capital improvements, Depreciation
  and Amortization Expenses and any extraordinary items not
  considered operating expenses under GAAP):
  
               (i)  all expenses for the operation of such
       Office Property, including any management fees payable
       under management contracts, landscaping costs, janitorial
       costs, costs for trash pickup and security costs and all
       insurance expenses, but not including any expenses
       incurred in connection with a sale or other capital or
       interim capital transaction;
  
               (ii)  water charges, property taxes, sewer rents
       and other impositions, other than fines, penalties,
       interest or such impositions (or portions thereof) that
       are payable by reason of the failure to pay an imposition
       timely;
  
               (iii)  the cost of routine maintenance, repairs
       and minor alterations, to the extent they can be expensed
       under GAAP; and
  
               (iv)  if Borrower's interest in such Office
       Property is a ground leasehold interest, rents paid by
       Borrower under the ground lease for such Office Property.
  
          "Property Income" means, for any Office Property, all
  gross revenue from the ownership and/or operation of such
  Office Property (but excluding income from a sale or other
  capital item transaction), service fees and charges, all tenant
  expense reimbursement income payable with respect to such
  Office Property (but not such reimbursement for expenditures
  not deducted as a Property Expense), and proceeds of business
  interruption insurance specifically allocable to such Office
  Property.
  
          "Property Information" means the following informa-
  tion and other items with respect to each Real Property which
  Borrower intends to designate as an Unencumbered Asset to be
  added to the Unencumbered Pool:
  
               (i)  A physical description of such Real
       Property, the date upon which such Real Property was
       acquired or is proposed to be acquired by Borrower, the
       Acquisition Price of such Real Property, if the building
       located on such Real Property or the use of such building
       does not conform to applicable zoning ordinances and laws,
       whether such building or use is a legal nonconforming use,
       a copy of any reports delivered to Borrower with respect
       to the structural integrity of improvements located on
       such Real Property and Borrower's preliminary budget for
       nonrevenue enhancing capital expenditures for such Real
       Property for the next succeeding eight (8) Fiscal
       Quarters;
  
               (ii)  A current operating statement for such
       Real Property, audited or certified by Borrower as being
       true and correct in all material respects and prepared in
       accordance with GAAP, and comparative operating statements
       for the current interim fiscal period and for the previous
       two (2) Fiscal Years (or such lesser period as it has been
       operating); provided, however, that, if Borrower shall
       have owned such Real Property for less than the period to
       be covered by such operating statements and comparative
       operating statements, then the audit and certification
       requirements shall extend only to the period of ownership
       by Borrower, and Borrower shall provide to Lender complete
       copies of any operating statements prepared by former
       owner(s) of such Real Property with respect to the
       remainder of the periods required hereunder, if the same
       are available to Borrower;
  
               (iii)  A current Rent Roll for such Real
       Property, certified by Borrower as being true and correct
       (or if Borrower does not presently own the Property, a
       copy of the Rent Roll prepared by the seller thereof);
  
               (iv)  A "Phase I" environmental assessment of
       such Real Property not more than twelve (12) months old,
       prepared by an environmental engineering firm reasonably
       acceptable to Lender;
  
               (v)  Copies of all Major Agreements affecting
       such Real Property;
  
               (vi)  A copy of Borrower's most recent Owner's
       or Leasehold Policy of Title Insurance, if any, covering
       such Real Property; and
  
               (vii)  If Borrower's interest in such Real
       Property is a ground leasehold interest, a copy of the
       ground lease pursuant to which Borrower leases such Real
       Property and all amendments thereto and memoranda thereof.
  
          "Property NOI" means, for any Office Property for any
  period, (i) all Property Income for such period, minus (ii) all
  Property Expenses for such period.
  
          "Real Property" means each lot or parcel (or portions
  thereof) of real property, improvements and fixtures thereon
  and appurtenances thereto now or hereafter owned or leased by
  the Borrower or any other Consolidated Entity.
  
          "Regulations G, T, U and X" mean such Regulations of
  the Federal Reserve Board as in effect from time to time.
  
          "REIT" means Arden Realty, Inc., a Maryland
  corporation.
  
          "Release" means the release, spill, emission,
  leaking, pumping, injection, deposit, disposal, discharge,
  dispersal, leaching or migration into the indoor or outdoor
  environment or into or out of any Property, including the
  movement of Contaminants through or in the air, soil, surface
  water, groundwater or property.
  
          "Remedial Action" means any action required by
  applicable Environmental Laws to (a) clean up, remove, treat or
  in any other way address Contaminants in the indoor or outdoor
  environment; (b) prevent the Release or threat of Release or
  minimize the further Release of Contaminants so they do not
  migrate or endanger or threaten to endanger public health or
  welfare or the indoor or outdoor environment; or (c) perform
  pre-remedial studies and investigations and post-remedial
  monitoring and care.
  
          "Rent Roll" means, with respect to any Real Property,
  a rent roll for such Real Property stating for each tenancy
  within such Real Property the identity of the lessee, the suite
  designation of the space leased, the gross leasable area
  included within such space, the date of commencement and the
  date of termination of such tenancy, the periods of any options
  to extend or terminate such tenancy, the base rent and any
  escalations or operating expense reimbursement payable in
  respect of such tenancy and the type of lease (i.e., gross or
  degree to which net of expenses, taxes and other items).
  
          "Reportable Event" means any of the events described
  in Section 4043(b) of ERISA, other than an event for which the
  thirty (30) day notice requirement is waived by regulations.
  
          "Requirements of Law" means, as to any Person, the
  charter and by-laws, partnership agreement or other organiza-
  tional or governing documents of such Person, and any law, rule
  or regulation, Permit, or determination of an arbitrator or a
  court or other Governmental Authority, in each case applicable
  to or binding upon such Person or any of its property or to
  which such Person or any of its property is subject, including
  without limitation, the Securities Act, the Securities Exchange
  Act, Regulations G, T, U and X, FIRREA and any certificate of
  occupancy, zoning ordinance, building, environmental or land
  use requirement or Permit or occupational safety or health law,
  rule or regulation.
  
          "Responsible Official" means (a) when used with
  reference to a Person other than an individual, any corporate
  officer of such Person, general partner of such Person,
  corporate officer of a corporate general partner of such
  Person, or corporate officer of a corporate general partner of
  a partnership that is a general partner of such Person, or any
  other responsible official thereof acting on behalf thereof,
  and (b) when used with reference to a Person who is an
  individual, such Person.
  
          "S-11" means the Form S-11 Registration Statement
  under the Securities Act filed by the REIT with the Commission
  on July 16, 1996, as amended.
  
          "Securities" means any stock, shares, voting trust
  certificates, bonds, debentures, notes or other evidences of
  indebtedness, secured or unsecured, convertible, subordinated
  or otherwise, or in general any instruments commonly known as
  "securities", or any certificate of interest, shares, or
  participations in temporary or interim certificates for the
  purchase or acquisition of, or any right to subscribe to,
  purchase or acquire any of the foregoing, but shall not include
  any evidence of the Obligations, provided that Securities shall
  not include Cash Equivalents, Investment Mortgages or equity
  investments in Unconsolidated Joint Ventures.
  
          "Securities Act" means the Securities Act of 1933, as
  amended to the date hereof and from time to time hereafter, and
  any successor statute.
  
          "Securities Exchange Act" means the Securities
  Exchange Act of 1934, as amended to the date hereof and from
  time to time hereafter, and any successor statute.
  
          "Solvency Certificate" means a certificate in the
  form of Exhibit F.
  
          "Solvent" means, as to any Person at the time of
  determination, that such Person (a) owns Property the value of
  which (both at fair valuation and at present fair saleable
  value) is greater than the amount required to pay all of such
  Person's liabilities (including the probable amount of
  contingent liabilities and debts); (b) is able to pay all of
  its debts as such debts mature (including through refinancing
  on commercially reasonable terms); and (c) has capital
  sufficient to carry on its business and transactions and all
  business and transactions in which it is about to engage.
  
          "Stockholders' Equity" means, as of any date of
  determination, the consolidated Stockholders' Equity of the
  REIT as of that date determined in accordance with GAAP and
  shown in the financial statements of the REIT and the
  Consolidated Entities; provided that there shall be excluded
  from Stockholders' Equity any amount attributable to
  Disqualified Stock.
  
          "Subsidiary" means, as of any date of determination
  and with respect to any Person, any corporation, limited
  liability company or partnership (whether or not, in either
  case, characterized as such or as a "joint venture"), whether
  now existing or hereafter organized or acquired:  (a) in the
  case of a corporation or limited liability company, of which a
  majority of the Securities having ordinary voting power for the
  election of directors or other governing body (other than
  Securities having such power only by reason of the happening of
  a contingency) are at the time beneficially owned by such
  Person and/or one or more Subsidiaries of such Person, or
  (b) in the case of a partnership, of which a majority of the
  partnership or other ownership interests are at the time
  beneficially owned by such Person and/or one or more of its
  Subsidiaries.
  
          "Swap Agreement" means a written agreement between
  Borrower and one or more financial institutions providing for
  "swap", "cap", "collar", "floor," "buy down" or other interest
  rate protection with respect to any Indebtedness.
  
          "Tax Expense" means (without duplication), for any
  period, total tax expense (if any) attributable to income and
  franchise taxes based on or measured by income, whether paid or
  accrued, of the REIT and the Consolidated Entities, including
  the REIT's and each Consolidated Entity's pro rata share of tax
  expenses in each Unconsolidated Joint Venture.  For purposes of
  this definition, the REIT's and such Consolidated Entity's pro
  rata share of any such tax expense of such Unconsolidated Joint
  Venture shall be deemed equal to the product of (i) such tax
  expense of such Unconsolidated Joint Venture, multiplied by
  (ii) the percentage of the total outstanding Capital Stock of
  such Unconsolidated Joint Venture held by the REIT or such
  Consolidated Entity, expressed as a decimal.
  
          "Termination Event" means (a) any Reportable Event,
  (b) the withdrawal of a Person or an ERISA Affiliate of such
  Person from a Benefit Plan during a plan year in which it was a
  "substantial employer" as defined in Section 4001(a)(2) of
  ERISA, (c) the occurrence of an obligation arising under
  Section 4041 of ERISA of a Person or an ERISA Affiliate of such
  Person to provide affected parties with a written notice of an
  intent to terminate a Benefit Plan in a distress termination
  described in Section 4041(c) of ERISA, (d) the institution by
  the PBGC of proceedings to terminate any Benefit Plan under
  Section 4042 of ERISA, (e) any event or condition which
  constitutes grounds under Section 4042 of ERISA for the
  appointment of a trustee to administer a Benefit Plan, (f) the
  partial or complete withdrawal of such Person or any ERISA
  Affiliate of such Person from a Multiemployer Plan, or (g) the
  adoption of an amendment by any Person or any ERISA Affiliate
  of such Person to terminate any Benefit Plan.
  
          "Total Liabilities" means, at any time, without
  duplication, the aggregate amount of (i) all Indebtedness and
  other liabilities of the REIT and the Consolidated Entities
  reflected in the financial statements of the REIT or disclosed
  in the financial notes thereto, plus (ii) all liabilities of
  all Unconsolidated Joint Ventures that are recourse to the REIT
  or any Consolidated Entity or any of its assets or that
  otherwise constitute Indebtedness of the REIT or any 
  Consolidated Entity, plus (iii) the REIT's pro rata share of
  all Indebtedness and other liabilities of any Unconsolidated
  Joint Venture not otherwise constituting Indebtedness of the
  REIT or any Consolidated Entity, plus (iv) all Guaranty
  Obligations of the REIT and the Consolidated Entities.  For
  purposes of clause (iii), the REIT's pro rata share of all
  Indebtedness and other liabilities of any Unconsolidated Joint
  Venture shall be deemed equal to the product of (a) such
  Indebtedness or other liabilities, multiplied by (b) the
  percentage of the total outstanding Capital Stock of such
  Person held by the REIT or any Consolidated Entity, expressed
  as a decimal.  Total Liabilities shall not include Minority
  Interests.
  
          "to the best knowledge of" means, when modifying a
  representation, warranty or other statement of any Person, that
  the fact or situation described therein is known by the Person
  (or, in the case of a person other than a natural person, known
  by a Responsible Official of that Person) making the
  representation, warranty or other statement, or with the
  exercise of reasonable due diligence under the circumstances
  (in accordance with the standard of what a reasonable Person in
  similar circumstances would have done) would have been known by
  the Person (or, in the case of a Person other than a natural
  Person, would have been known by a Responsible Official of that
  Person).
  
          "Unconsolidated Joint Venture" means any Joint
  Venture of the REIT or any Consolidated Entity in which the
  REIT or such Consolidated Entity holds any Capital Stock but
  which would not be combined with the REIT in the consolidated
  financial statements of the REIT in accordance with GAAP.
  
          "Unencumbered Asset Value" means, at any time, with
  respect to a specified Unencumbered Asset, (i) for Unencumbered
  Assets that have been Wholly-Owned by the Borrower or a
  Predecessor Entity for at least one full Fiscal Quarter at such
  time, the product of the Property NOI of such Unencumbered
  Assets during the period of the full Fiscal Quarter ended most
  recently multiplied by 4, divided by 10.0% (expressed as a
  decimal), or (ii) for Unencumbered Assets that have been
  Wholly-Owned by the Borrower or a Predecessor Entity for less
  than one full Fiscal Quarter at such time, an amount equal to
  ninety percent (90%) of the Acquisition Price for such
  Unencumbered Assets.
  
          "Unencumbered Asset" means any Real Property
  designated by Borrower that satisfies all of the following
  conditions:
  
            (i)  is an Office Property;
  
           (ii)  is free and clear of any Lien, other than
  (a) easements, covenants, and other restrictions, charges or
  encumbrances not securing Indebtedness that do not interfere
  materially with the ordinary operations of such Real Property
  and do not materially detract from the value of such Real
  Property; (b) building restrictions, zoning laws and other
  Requirements of Law, and (c) leases and subleases of such Real
  Property in the ordinary course of business, and (d) Permitted
  Liens;
  
          (iii)  is Wholly-Owned;
  
           (iv)  such Real Property is not less than 70%
  leased;
  
            (v)  after adding such Real Property to the
  Unencumbered Pool, the Real Properties in the Unencumbered Pool
  shall not be less than 85% leased; and
  
           (vi)  the Real Property has been expressly approved
  by Lender in writing as an Unencumbered Asset.
  
          As of the date hereof all Unencumbered Assets are
  described on Schedule 8.3, provided that if any Unencumbered
  Asset (including any of the properties listed on Schedule 8.3)
  no longer satisfies any of the conditions set forth in the
  foregoing clauses (i) through (v), inclusive, Lender shall have
  the right, at any time and from time to time, to notify the
  Borrower that, effective upon the giving of such notice, such
  asset shall no longer be considered an Unencumbered Asset.  If
  the Borrower intends to designate a Property as an Unencumbered
  Asset to be added to the Unencumbered Pool from time to time,
  it will notify the Lender of such intention, which notice will
  include, with respect to such Property, the Property Informa-
  tion with respect to such Property, and such other information
  and items as may be reasonably requested by Lender with respect
  to such Property.  If the Borrower at any time intends to
  withdraw any Property from the Unencumbered Pool, it shall
  (i) notify the Lender of its intention, and (ii) deliver to the
  Lender a certificate of its chief financial officer, chief
  executive officer or chief operating officer setting forth the
  calculations establishing that the Borrower will be in
  compliance with Section 8.3 with giving effect to such with-
  drawal (and any concurrent addition of Properties to the
  Unencumbered Pool), which calculations shall be in such detail,
  and otherwise in such form and substance, as Lender reasonably
  requires.  Effective automatically upon receipt of such notice
  and certificate by the Lender (or upon any later date stated in
  such notice), such Real Property shall no longer constitute an
  Unencumbered Asset.
  
          "Unencumbered Pool" means the pool of Unencumbered
  Assets.
  
          "Unencumbered Pool Statements" has the meaning given
  to such term in Section 5.1(f).
  
          "Unmatured Event Of Default" means an event which,
  with the giving of notice or the lapse of time, or both, would
  constitute an Event of Default.
  
          "Unused Facility Fee" has the meaning given to such
  term in Section 2.5(b).
  
          "WFB Swap Agreement" means any Swap Agreement entered
  into between Wells Fargo and Borrower , including, without
  limitation, that certain ISDA Master Agreement, dated as of
  December 17, 1996, between Borrower and Lender.
  
          "Wholly-Owned" means, with respect to any Real
  Property, that title to such Real Property is held in fee
  directly by the Borrower or that Borrower is the lessee under a
  ground lease approved by Lender.
  
     1.2  Computation of Time Periods.  In this Agreement, in
  the computation of periods of time from a specified date to a
  later specified date, the word "from" means "from and
  including" and the words "to" and "until" each mean "to and
  including".  Periods of days referred to in this Agreement
  shall be counted in calendar days unless Business Days are
  expressly prescribed.
  
     1.3  Terms.
  
               (a)  Any accounting terms used in this Agreement
  which are not specifically defined shall be construed in
  conformity with, and all financial data required to be
  submitted by this Agreement shall be prepared in conformity
  with, GAAP, except as otherwise specifically prescribed in this
  Agreement.
  
          (b)  In each case where the consent or approval of
  Lender is required, or its non-obligatory action is requested
  by Borrower, such consent, approval or action shall be in the
  sole and absolute discretion of Lender, unless otherwise
  specifically indicated.
  
          (c)  Any time the word "or" is used herein, unless
  the context otherwise clearly requires, it has the inclusive
  meaning represented by the phrase "and/or".  The words
  "hereof", "herein", "hereby", "hereunder" and similar terms
  refer to this Agreement as a whole and not to any particular
  provision of this Agreement.  Article, section, subsection,
  clause, exhibit and schedule references are to this Agreement
  unless otherwise specified.  Any reference in this Agreement to
  this Agreement or to any other Loan Document includes any and
  all amendments, modifications, supplements, renewals or
  restatements thereto or thereof, as applicable.
  
  
                           ARTICLE 2
  
                            ADVANCES
  
  
     2.1  Loan Advances and Repayment.
  
          (a)  Loan Availability.
  
               (i)  Subject to the terms and conditions set
       forth in this Agreement, Lender hereby agrees to make
       Advances to Borrower from time to time during the period
       from the Closing Date to the Business Day next preceding
       the Maturity Date, subject to the following:
  
                        (x)  The aggregate principal amount of
                all outstanding Advances shall not at any time
                exceed One Hundred Ten Million Dollars
                ($110,000,000); and
  
                        (y)  the aggregate principal amount of
                all outstanding Advances shall not at any time
                exceed the lesser of (1) the Commitment or (2) the
                amount which, when combined with all components of
                the unsecured Total Liabilities of the REIT and
                the Consolidated Entities (including, without
                limitation, all outstanding "Line B Advances" as
                defined in the 1996 Revolving Credit Agreement)
                other than outstanding Advances as of the date of
                determination, is equal to fifty percent (50%) of
                the aggregate Unencumbered Asset Value of the
                Unencumbered Pool as of such date.
  
      Advances may be voluntarily prepaid pursuant to
        Section 2.6(a) and, subject to the provisions of this
        Agreement, any amounts so prepaid may be reborrowed under
        this Section 2.1(a)(i).  Interest shall accrue and be
        payable on outstanding Advances as provided in
        Section 2.4.  The principal balance of the Advances shall
        be payable in full on the Maturity Date.  The obligation
        of Borrower to repay Advances will be evidenced by the
        Note.
  
              (b)  Notice of Borrowing.
  
                   (i)  Whenever Borrower desires to borrow
        under this Section 2.1, but in no event more than six (6)
        times during any one (1) calendar month, Borrower shall
        give Lender, at Wells Fargo Real Estate Group Disbursement
        Center, 2120 East Park Place, Suite 100, El Segundo,
        California 90245, Attention:  Ms. Rosalind McCall
        (telephone:  (310) 335-9451; telecopier:  (310) 615-1014),
        with a copy to: Wells Fargo Bank, Real Estate Group,
        333 South Grand Avenue, 12th Floor, Los Angeles,
        California 90071, Attention: Andrew Downs, or such other
        addresses as Lender shall designate, an original or
        facsimile Notice of Borrowing no later than 9:00 A.M.
        (San Francisco time), with respect to LIBOR Advances, not
        less than one (1) nor more than five (5) Business Days
        prior to the proposed Funding Date of each such Advance,
        and, with respect to Base Rate Advances, on the proposed
        Funding Date of each such Advance but not more than five
        (5) Business Days prior to such proposed Funding Date. 
        Each Notice of Borrowing shall specify (A) the Funding
        Date (which shall be a Business Day) of the proposed
        Advance, (B) the amount of the proposed Advance, provided
        that the aggregate amount of such proposed Advance shall,
        if such Advance is a LIBOR Advance, equal One Million
        Dollars ($1,000,000) or integral multiples of Fifty
        Thousand Dollars ($50,000) in excess thereof, and provided
        further that the aggregate amount of such proposed Advance
        shall, if such Advance is a Base Rate Advance, be equal to
        or greater than Two Hundred Fifty Thousand Dollars
        ($250,000), (C) whether the Advance to be made thereunder
        will be a Base Rate Advance or a LIBOR Advance and, if a
        LIBOR Advance, the Interest Period, and (D) the proposed
        use of such Advance.  Any Notice of Borrowing pursuant to
        this Section 2.1(b) shall be irrevocable.
  
                   (ii)  Borrower may elect (A) to convert LIBOR
        Advances or any portion thereof into Base Rate Advances,
        or (B) to convert Base Rate Advances or any portion
        thereof to LIBOR Advances, or (C) to convert LIBOR
        Advances or any portion thereof into new LIBOR Advances,
        provided, however, that the aggregate amount of the
        Advances being converted into or continued as LIBOR
        Advances shall, in the aggregate, equal One Million
        Dollars ($1,000,000) or an integral multiple of Fifty
        Thousand Dollars ($50,000) in excess thereof.  The
        conversion of a LIBOR Advance to a Base Rate Advance or to
        a new LIBOR Advance shall only occur on the last Business
        Day of the Interest Period relating to such LIBOR Advance. 
        Each election under clause (B) above shall be made by
        Borrower giving Lender an original or facsimile Notice of
        Borrowing no later than 9:00 A.M. (San Francisco time),
        not less than three (3) nor more than five (5) Business
        Days prior to the date of proposed conversion to a LIBOR
        Advance.  Each election under clause (C) above shall be
        made by Borrower giving Lender an original or facsimile
        Notice of Borrowing no later than 9:00 A.M. (San Francisco
        time), not less than three (3) nor more than five (5)
        Business Days prior to the last day of the Interest Period
        for the LIBOR Advance in question.  Each Notice of
        Borrowing delivered pursuant to this Section 2.1(b)(ii)
        shall specify (1) the amount of the new LIBOR Advance or
        Base Rate Advance, as the case may be, (2) if a LIBOR
        Advance, the Interest Period therefor, and (3) the date of
        the effectiveness of the LIBOR Rate or Base Rate, as the
        case may be (which date shall be a Business Day).
  
                   (iii)  Upon receipt of a Notice of Borrowing
        in proper form requesting LIBOR Advances under
        subparagraph (i) or (ii) above, Lender shall determine the
        LIBOR Rate applicable to the Interest Period for such
        LIBOR Advances, and shall, two (2) Business Days prior to
        the beginning of such Interest Period, give (by facsimile)
        a Fixed Rate Notice in respect thereof to Borrower;
        provided, however, that failure to give such notice to
        Borrower shall not affect the validity of such rate.  Each
        determination by Lender of the LIBOR Rate shall be
        conclusive and binding upon the parties hereto in the
        absence of manifest error.
  
                   (iv)  If Borrower does not make a timely
        election to convert all or a portion of a LIBOR Advance
        into a new LIBOR Advance in accordance with
        Section 2.1(b)(ii), such LIBOR Advance shall be
        automatically converted to a Base Rate Advance upon
        expiration of the Interest Period applicable to such LIBOR
        Advance.
  
              (c)  Making of Advances.  Except as otherwise
  provided herein, Lender shall deposit the proceeds of each
  Advance in Borrower's account number 4600-598-411 at the
  Los Angeles main office of Lender.
  
              (d)  Term.  The outstanding balance of the
  Advances shall be payable in full on the earlier to occur of,
  (i) June 30, 1997 or (ii) the acceleration of the Advances
  pursuant to Section 9.2(a) (said earlier date referred to
  herein as the "Maturity Date"). 
  
      2.2  Authorization to Obtain Advances.  Schedule 2.2 sets
  forth the names of those employees of Borrower authorized by
  Borrower to sign Notices of Borrowing, and Lender shall be
  entitled to rely on such Schedule until notified in writing by
  Borrower of any change(s) of the persons so authorized.  Lender
  shall be entitled to act on the instructions of anyone
  identifying himself or herself as one of the Persons authorized
  to execute a Notice of Borrowing, and Borrower shall be bound
  thereby in the same manner as if such Person were actually so
  authorized.  Borrower agrees to indemnify, defend and hold
  Lender harmless from and against any and all Liabilities and
  Costs which may arise or be created by the acceptance of
  instructions in any Notice of Borrowing, unless caused by the
  gross negligence or willful misconduct of Lender.
  
      2.3  Lender's Accounting.  Lender shall maintain a loan
  account (the "Loan Account") on its books in which shall be
  recorded (a) the principal amount of Advances owing to Lender
  from time to time, and (b) all repayments of principal and
  payments of accrued interest, as well as payments of fees
  required to be paid pursuant to this Agreement.  All entries in
  the Loan Account shall be made in accordance with Lender's
  customary accounting practices as in effect from time to time. 
  Monthly or at such other interval as is customary with Lender's
  practice, Lender will render a statement of the Loan Account to
  Borrower.  Each such statement shall be deemed final, binding
  and conclusive upon Borrower in all respects as to all matters
  reflected therein (absent manifest error), unless Borrower
  delivers to Lender written notice of any objections which
  Borrower may have to any such statement on or before the first
  to occur of (a) thirty (30) days after the date such statement
  is mailed or otherwise delivered to Borrower, or (b) ten
  (10) days after discovery by Borrower of an error with respect
  to which Borrower had no knowledge and which could not have
  been determined after reasonable inquiry during said 30-day
  period.  In the event that Borrower gives timely notice of
  objection, only those items expressly objected to in such
  notice shall be deemed to be disputed by Borrower. 
  
      2.4     Interest on the Advances.
  
              (a)  Base Rate Advances.  Subject to
  Section 2.4(d), all Base Rate Advances shall bear interest on
  the daily unpaid principal amount thereof from the date made
  until paid in full at a fluctuating rate per annum equal to the
  Base Rate.  Base Rate Advances shall be made in minimum amounts
  of Two Hundred Fifty Thousand Dollars ($250,000).
  
              (b)  LIBOR Advances.  Subject to Sections 2.4(d)
  and 2.4(h), LIBOR Advances shall bear interest on the unpaid
  principal amount thereof during the Interest Period applicable
  thereto at a rate per annum equal to the sum of the LIBOR Rate
  for such Interest Period plus the Applicable Spread.  Not less
  than 3 days prior to the occurrence of an Applicable Spread
  Event, Borrower shall give Lender an Applicable Spread Notice
  with respect thereto.  Thereafter, Borrower shall give Lender
  written notice of the occurrence of such Applicable Spread
  Event within 3 days after such occurrence, which notice shall
  state whether any of the information set forth in the
  Applicable Spread Notice delivered with respect to such
  Applicable Spread Event changed since the date of such Notice
  and, if so, shall describe such change or changes.  The
  Applicable Spread shall be automatically changed to reflect
  such Applicable Spread Event as of the date Lender receives
  such notice.  Lender shall promptly thereafter confirm in
  writing to Borrower the new Applicable Spread and the effective
  date thereof.  LIBOR Advances shall be in amounts of One
  Million Dollars ($1,000,000) or Fifty Thousand Dollar ($50,000)
  increments in excess thereof.  No more than six (6) LIBOR
  Advances shall be outstanding at any one time.  Notwithstanding
  anything to the contrary contained herein and subject to the
  default interest provisions contained in Section 2.4(d), if an
  Event of Default occurs and as a result thereof the Commitment
  is terminated, all LIBOR Advances will convert to Base Rate
  Advances upon the expiration of the applicable Interest Periods
  therefor or the date all Advances become due, whichever occurs
  first.
  
              (c)  Interest Payments.  Subject to
  Section 2.4(d), interest accrued on all Advances shall be
  payable by Borrower, in the manner provided in Section 2.6(b),
  in arrears on the first Business Day of the first calendar
  month following the Closing Date, the first Business Day of
  each succeeding calendar month thereafter, and on the Maturity
  Date.
  
              (d)  Default Interest.  Notwithstanding the rates
  of interest specified in Sections 2.4(a) and 2.4(b) and the
  payment dates specified in Section 2.4(c), effective at the
  option of Lender following the occurrence and during the
  continuance of any Event of Default, the principal balance of
  all Advances then outstanding and, to the extent permitted by
  applicable law, any interest payments not paid when due, shall
  bear interest, payable upon demand, at a rate which is five
  percent (5%) per annum in excess of the rate(s) of interest
  otherwise payable from time to time under this Agreement. 
  Notwithstanding anything to the contrary in any of the other
  Loan Documents, all other amounts due Lender (whether directly
  or for reimbursement) under this Agreement or any of the other
  Loan Documents if not paid when due, or if no time period is
  expressed, if not paid within ten (10) days after demand, shall
  bear interest from and after demand at the rate set forth in
  this Section 2.4(d).
  
              (e)  Late Fee.  Borrower acknowledges that late
  payment to Lender will cause Lender to incur costs not
  contemplated by this Agreement.  Such costs include, without
  limitation, processing and accounting charges.  Therefore, if
  Borrower fails timely to pay any sum due and payable hereunder
  through the Maturity Date, unless waived by Lender, a late
  charge of four cents ($.04) for each dollar of any such
  principal payment, interest or other charge which is due hereon
  and which is not paid within fifteen (15) days after such
  payment is due, shall be charged by Lender and paid by Borrower
  for the purpose of defraying the expense incident to handling
  such delinquent payment.  Borrower and Lender agree that this
  late charge represents a reasonable sum considering all of the
  circumstances existing on the date hereof and represents a fair
  and reasonable estimate of the costs that Lender will incur by
  reason of late payment.  Borrower and Lender further agree that
  proof of actual damages would be costly and inconvenient. 
  Acceptance of any late charge shall not constitute a waiver of
  the default with respect to the overdue installment, and shall
  not prevent Lender from exercising any of the other rights
  available hereunder or any other Loan Document.  Such late
  charge shall be paid without prejudice to any other rights of
  Lender.  Lender agrees that, notwithstanding the foregoing, no
  such late charge shall be charged by Lender if the outstanding
  Advances are then bearing interest at the default rate of
  interest set forth in Section 2.4(d).
  
              (f)  Computation of Interest. Interest shall be
  computed on the basis of the actual number of days elapsed in
  the period during which interest or fees accrue and a year of
  three hundred sixty (360) days.  In computing interest on any
  Advance, the date of the making of the Advance shall be
  included and the date of payment shall be excluded; provided,
  however, that if an Advance is repaid on the same day on which
  it is made, one (1) day's interest shall be paid on that
  Advance.  Notwithstanding any provision in this Section 2.4,
  interest in respect of any Advance shall not exceed the maximum
  rate permitted by applicable law.
  
              (g)  Changes; Legal Restrictions.  In the event
  that, after the Closing Date, (i) the adoption of or any change
  in any law, treaty, rule, regulation, guideline or
  determination of a court or Governmental Authority or any
  change in the interpretation or application thereof by a court
  or Governmental Authority, or (ii) compliance by Lender with
  any request or directive made or issued after the Closing Date
  (whether or not having the force of law and whether or not the
  failure to comply therewith would be unlawful) from any central
  bank or other Governmental Authority or quasi-governmental
  authority:
  
                   (A)  subjects Lender to any tax, duty or
        other charge of any kind with respect to the Commitment,
        this Agreement or any of the other Loan Documents,
        including the Note, or the Advances or changes the basis
        of taxation of payments to Lender of principal, fees,
        interest or any other amount payable hereunder, except for
        net income, gross receipts, gross profits or franchise
        taxes imposed by any jurisdiction and not specifically
        based upon loan transactions (all such non-excepted taxes,
        duties and other charges being hereinafter referred to as
        "Lender Taxes");
  
                   (B)  imposes, modifies or holds applicable,
        in the determination of Lender, any reserve, special
        deposit, compulsory loan, FDIC insurance, capital
        allocation or similar requirement against assets held by,
        or deposits or other liabilities in or for the account of,
        advances or loans by, or other credit extended by, or any
        other acquisition of funds by, Lender or any applicable
        lending office (except to the extent that the reserve and
        FDIC insurance requirements are reflected in the "Base
        Rate" or in determining the LIBOR Rate); or
  
                   (C)  imposes on Lender any other condition
        materially more burdensome in nature, extent or
        consequence than those in existence as of the Closing
        Date,
  
  and the result of any of the foregoing is to increase the cost
  to Lender of making, renewing, maintaining or participating in
  the Advances or to reduce any amount receivable thereunder;
  then, in any such case, Borrower shall promptly pay to Lender,
  within seven (7) days after Borrower's receipt of written
  demand, such amount or amounts (based upon a reasonable
  allocation thereof by Lender to the financing transactions
  contemplated by this Agreement and affected by this
  Section 2.4(g)) as may be necessary to compensate Lender for
  any such additional cost incurred or reduced amounts received. 
  Lender shall deliver to Borrower a written statement of the
  claimed additional costs incurred or reduced amounts received
  and the basis therefor as soon as reasonably practicable after
  Lender obtains knowledge thereof.  If Lender subsequently
  recovers any amount of Lender Taxes previously paid by Borrower
  pursuant to this Section 2.4(g), whether before or after
  termination of this Agreement, then, upon receipt of good funds
  with respect to such recovery, Lender will refund such amount
  to Borrower if no Event of Default or Unmatured Event of
  Default then exists or, if an Event of Default or Unmatured
  Event of Default then exists, such amount will be credited to
  the Obligations in the manner determined by Lender.
  
              (h)  Certain Provisions Regarding LIBOR Advances.
  
                   (i)  LIBOR Lending Unlawful.  If Lender shall
        determine (which determination shall, upon notice thereof
        to Borrower, be conclusive and binding on the parties
        hereto) that after the Closing Date the introduction of or
        any change in or in the interpretation of any law makes it
        unlawful, or any central bank or other Governmental
        Authority asserts that it is unlawful, for Lender to make
        or maintain any Advance as a LIBOR Advance, (A) the
        obligations of Lender to make or maintain any Advances as
        LIBOR Advances shall, upon such determination, forthwith
        be suspended until Lender shall notify Borrower that the
        circumstances causing such suspension no longer exist (and
        Lender shall give notice if such circumstances no longer
        exist), and (B) if required by such law or assertion, the
        existing LIBOR Advances shall automatically convert into
        Base Rate Advances.
  
                   (ii)  Deposits Unavailable.  If Lender shall
        have determined in good faith that adequate means do not
        exist for ascertaining the interest rate applicable
        hereunder to LIBOR Advances, then, upon notice from Lender
        to Borrower the obligations of Lender to make or maintain
        Advances as LIBOR Advances shall forthwith be suspended
        until Lender shall notify Borrower that the circumstances
        causing such suspension no longer exist.  Lender will give
        such notice when it determines, in good faith, that such
        circumstances no longer exist; provided, however, that
        Lender shall not have any liability to any Person with
        respect to any delay in giving such notice.
  
                   (iii)  Fixed Rate Price Adjustment.  Borrower
        acknowledges that prepayment or acceleration of a LIBOR
        Advance during an Interest Period shall result in Lender
        incurring additional costs, expenses and/or liabilities
        and that it is extremely difficult and impractical to
        ascertain the extent of such costs, expenses and/or
        liabilities.  (For all purposes of this subpara-
        graph (iii), any Advance not being made as a LIBOR Advance
        in accordance with the Notice of Borrowing therefor, as a
        result of Borrower's cancellation thereof, shall be
        treated as if such LIBOR Advance had been prepaid.) 
        Therefore, on the date a LIBOR Advance is prepaid or the
        date all sums payable hereunder become due and payable, by
        acceleration or otherwise ("Price Adjustment Date"),
        Borrower shall pay to Lender (in addition to all other
        sums then owing), an amount ("Fixed Rate Price
        Adjustment") equal to the then present value of (A) the
        amount of interest that would have accrued on the LIBOR
        Advance for the remainder of the Interest Period at the
        rate applicable to such LIBOR Advance, less (B) the amount
        of interest that would accrue on the same LIBOR Advance
        for the same period if the LIBOR Rate were set on the
        Price Adjustment Date.  The present value shall be
        calculated by using as a discount rate the LIBOR Rate
        quoted on the Price Adjustment Date.
  
              By initialing this provision where indicated
                Borrower waives any right Borrower may have under
                California Civil Code Section 2954.10 to repay any
                LIBOR Advances, in whole or in part, without
                payment of the Fixed Rate Price Adjustment upon
                acceleration of the maturity date of such
                Advances, and Borrower further confirms that
                Lender's agreement to make LIBOR Advances at the
                interest rates and on the other terms set forth
                herein constitutes adequate and valuable
                consideration, given individual weight by
                Borrower, for this waiver and agreement.
  
              BORROWER'S INITIALS:/s/ DML
  
  
      Within seven (7) days after Borrower's receipt of written
        notice from Lender, Borrower shall immediately pay to
        Lender the Fixed Rate Price Adjustment as calculated by
        Lender.  Such written notice (which shall include
        calculations in reasonable detail) shall, in the absence
        of manifest error, be conclusive and binding on the
        parties hereto.
  
                   (iv)  Borrower understands, agrees and
        acknowledges the following: (A) Lender has no obligation
        to purchase, sell and/or match funds in connection with
        the use of the LIBOR Rate as a basis for calculating the
        rate of interest on a LIBOR Rate Advance or a Fixed Rate
        Price Adjustment; (B) the LIBOR Rate is used merely as a
        reference in determining such rate and/or Fixed Rate Price
        Adjustment; and (C) Borrower has accepted the LIBOR Rate
        as a reasonable and fair basis for calculating such rate
        and a Fixed Rate Price Adjustment.  Borrower further
        agrees to pay the Fixed Rate Price Adjustment and Lender
        Taxes, if any, whether or not Lender elects to purchase,
        sell and/or match funds.
  
      2.5     Fees.
  
              (a)  Commitment Fee.  Borrower shall pay to Lender
  a commitment fee pursuant to a separate agreement between
  Lender and Borrower.
  
              (b)  Unused Facility Fee.  From and after the
  Closing Date and until the Obligations are paid in full and
  this Agreement is terminated or, if sooner, the date the
  Commitment terminates, Borrower shall pay to Lender a fee (the
  "Unused Facility Fee") accruing at the "Unused Facility Fee
  Rate" (as that term is hereinafter defined) upon an amount
  equal to the average daily difference between (x) the
  Commitment and (y) the aggregate amount of all Advances
  outstanding hereunder during the Fiscal Quarter in question. 
  The Unused Facility Fee Rate shall be computed as follows:
  
              (1)  For any Fiscal Quarter in which the average
                     daily principal balance of all outstanding
                     Advances is less than or equal to
                     $55,000,000, the Unused Facility Fee Rate
                     shall be one-quarter of one percent (0.25%)
                     per annum;
  
              (2)  For any Fiscal Quarter in which the average
                     daily principal balance of all outstanding
                     Advances is greater than $55,000,000, the
                     Unused Facility Fee Rate shall be one-eighth
                     of one percent (0.125%) per annum.
  
  The Unused Facility Fee shall be payable, in the manner
  provided in Section 2.5(c), in arrears on the first Business
  Day in each Fiscal Quarter, beginning with the first Fiscal
  Quarter after the Closing Date, and ending on the date of
  payment in full of all Obligations or, if sooner, the date the
  Commitment terminates, with the Unused Facility Fee to be
  prorated for any period of less than a Fiscal Quarter.
  
              (c)  Payment of Fees.  The fees described in this
  Section 2.5 represent compensation for services rendered and to
  be rendered separate and apart from the lending of money or the
  provision of credit and do not constitute compensation for the
  use, detention or forbearance of money, and the obligation of
  Borrower to pay the fees described herein shall be in addition
  to, and not in lieu of, the obligation of Borrower to pay
  interest, other fees and expenses otherwise described in this
  Agreement.  All fees shall be payable when due in immediately
  available funds and shall be nonrefundable when paid.  If
  Borrower fails to make any payment of fees or expenses
  specified or referred to in this Agreement due to Lender,
  including without limitation those referred to in this
  Section 2.5, in Section 10.1, or otherwise under this Agreement
  or any separate fee agreement between Borrower and Lender
  relating to this Agreement, when due, the amount due shall bear
  interest until paid at the Base Rate and after ten (10) days at
  the rate specified in Section 2.4(d) (but not to exceed the
  maximum rate permitted by applicable law), and shall constitute
  part of the Obligations.
  
      2.6  Payments.
  
              (a)  Voluntary Prepayments.  Borrower may, upon
  not less than three (3) Business Days prior written notice to
  Lender not later than 11:00 A.M. (San Francisco time) on the
  date given, at any time and from time to time, prepay any
  Advances in whole or in part.  Any notice of prepayment given
  to Lender under this Section 2.6(a) shall specify the date of
  prepayment and the aggregate principal amount of the
  prepayment.  In the event of a prepayment of LIBOR Advances,
  Borrower shall pay any Fixed Rate Price Adjustment payable in
  respect thereof in accordance with Section 2.4(h).
  
              (b)  Manner and Time of Payment.  All payments of
  principal, interest and fees hereunder payable to Lender shall
  be made without condition or reservation of right and free of
  set-off or counterclaim, in Dollars and by wire transfer
  (pursuant to Lender's written wire transfer instructions) of
  immediately available funds, to Lender not later than
  11:00 A.M. (San Francisco time) on the date due; and funds
  received by Lender after that time and date shall be deemed to
  have been paid on the next succeeding Business Day.
  
              (c)  Payments on Non-Business Days.  Whenever any
  payment to be made by Borrower hereunder shall be stated to be
  due on a day which is not a Business Day, payments shall be
  made on the next succeeding Business Day and such extension of
  time shall be included in the computation of the payment of
  interest hereunder and of any of the fees specified in
  Section 2.5, as the case may be.
  
  
  
                           ARTICLE 3
  
                     CONDITIONS TO ADVANCES
  
      3.1  Conditions to Initial Advances.  The obligation of
  Lender to make the initial Advance shall be subject to the
  satisfaction or waiver by Lender of each of the following
  conditions precedent on or before May 15, 1997:
  
              (a)  Borrower Loan Documents.  Borrower shall have
  executed and delivered to Lender each of the following, in form
  and substance acceptable to Lender:
  
                     (i)  this Agreement;
  
                    (ii)  the Note; 
  
                   (iii)  all other documents which Lender
        reasonably requires to be executed by or on behalf of
        Borrower.
  
              (b)  REIT Loan Documents.  The REIT shall have
  executed and delivered to Lender each of the following, in form
  and substance acceptable to Lender:
  
                    (i)  the Guaranty; and
  
                   (ii)  all other documents which Lender
        reasonably requires to be executed by or on behalf of the
        REIT.
  
              (c)  Corporate and Partnership Documents.  Lender
  shall have received the corporate and partnership formation and
  other governing documents of the Borrower and the REIT, and a
  certificate of each such entity's Secretary or an officer
  comparable thereto with respect to authorization, incumbency
  and all organizational documents.
  
              (d)  Solvency.  Each of the REIT and Borrower
  shall be Solvent and shall have delivered to Lender a Solvency
  Certificate to that effect.
  
              (e)  Fees and Expenses.  Lender shall have
  received  all fees then due to Lender and shall have received
  reimbursement for all costs and expenses for which Borrower is
  obligated pursuant to Section 10.1 and for which Borrower has
  received an invoice, and Borrower shall have performed all of
  its other obligations as set forth in the Loan Documents to
  make payments to Lender on or before the Closing Date and all
  expenses of Lender incurred prior to such Closing Date and for
  which Borrower has received an invoice shall have been paid by
  Borrower.
  
              (f)  Opinion of Counsel.  Lender shall have
  received favorable opinions of counsel for Borrower and the
  REIT dated as of the Closing Date, in form and substance
  reasonably satisfactory to Lender and its counsel.
  
              (g)  Consents and Approvals.  All material
  licenses, permits, consents, regulatory approvals and corporate
  action necessary to enter into the financing transactions
  contemplated by this Agreement shall have been obtained by
  Borrower and the REIT.
  
      3.2  Conditions Precedent to All Advances.  The obligation
  of Lender to make any Advance (including the initial Advance)
  requested to be made by it, on any date, is subject to the
  satisfaction or waiver by Lender of the following conditions
  precedent as of such date:
  
              (a)  Notice of Borrowing.  With respect to a
  request for an Advance, Lender shall have received, on or
  before the Funding Date and in accordance with the provisions
  of Section 2.1(b), an original and duly executed Notice of
  Borrowing.
  
              (b)  Additional Matters.  As of the Funding Date
  for any Advance and after giving effect to the Advance being
  requested:
  
                   (i)  No Default.  After giving effect to the
        requested Advance, no Event of Default or Unmatured Event
        of Default shall have occurred and be continuing or would
        result from the making of the requested Advance (it being
        intended that Lender shall have no obligation to fund any
        Advance during the period allowed under this Agreement for
        cure of any event or condition which, if not cured during
        such period, would become an Event of Default), and all of
        the covenants contained in Sections 7.3 and 7.4 and
        Article 8 shall be satisfied; 
  
                   (ii)  Representations and Warranties.  All of
        the representations and warranties contained in this
        Agreement and in any other Loan Document (other than those
        representations and warranties which expressly provide
        that they speak as of a certain date (e.g., "as of the
        Closing Date")) shall be true and correct in all material
        respects on and as of such Funding Date, as though made on
        and as of such date, and Borrower shall so certify;
  
                   (iii)  No Material Adverse Change (Borrower
        and REIT).  No change shall have occurred which shall have
        a Material Adverse Effect on Borrower or the REIT, as
        determined by Lender;
  
                   (iv)  Material Adverse Effect (Unencumbered
        Asset).  If a change shall have occurred which shall have
        a Material Adverse Effect on any Unencumbered Asset or the
        operating performance thereof, as determined by Lender,
        the Unencumbered Asset Value of such Unencumbered Asset
        shall not be included in the aggregate Unencumbered Asset
        Value of the Unencumbered Pool for purposes of
        Section 2.1(a)(i)(y); and
  
                   (v)  Litigation Proceedings.  There shall not
        have been instituted or threatened any litigation or
        proceeding in any court or before any Governmental
        Authority affecting or threatening to affect Borrower or
        the REIT which has a Material Adverse Effect on Borrower
        or the REIT, as reasonably determined by Lender.
  
                   (vi)  Compliance with Section 8.3.  Borrower
        shall be in compliance with Section 8.3 after such Advance
        is made.
  
  Each submission by Borrower to Lender of a Notice of Borrowing
  with respect to an Advance and the acceptance by Borrower of
  the proceeds of such Advance shall constitute a representation
  and warranty by Borrower as of the Funding Date in respect of
  such Advance that all the conditions contained in this
  Section 3.2 have been satisfied.
  
  
                           ARTICLE 4
  
                 REPRESENTATIONS AND WARRANTIES
  
      4.1  Representations and Warranties as to Borrower, Etc. 
  In order to induce Lender to make the Advances, Borrower hereby
  represents and warrants to Lender as follows:
  
              (a)  Organization; Partnership Powers.  Borrower
  (i) is a limited partnership duly organized, validly existing
  and in good standing under the laws of Maryland, (ii) is duly
  qualified to do business as a foreign limited partnership and
  in good standing under the laws of California and each other
  jurisdiction in which it owns or leases real property or in
  which the nature of its business requires it to be so quali-
  fied, except for those jurisdictions where failure to so
  qualify and be in good standing would not have a Material
  Adverse Effect on Borrower, and (iii) has all requisite
  partnership power and authority to own, operate and encumber
  its Property and assets and to conduct its business as
  presently conducted and as proposed to be conducted in
  connection with and following the consummation of the
  transactions contemplated by the Loan Documents.
  
              (b)  Authority.  Borrower has the requisite
  partnership power and authority to execute, deliver and perform
  each of the Loan Documents to which it is or will be a party. 
  The execution, delivery and performance thereof, and the
  consummation of the transactions contemplated thereby, have
  been duly authorized by all necessary actions.  Each of the
  Loan Documents to which Borrower is a party has been duly and
  validly executed and delivered by Borrower and constitutes its
  legal, valid and binding obligation, enforceable against it in
  accordance with its terms, subject to bankruptcy, insolvency
  and other laws affecting creditors' rights generally and
  general equitable principles.
  
              (c)  Ownership of Borrower.  All of the
  Partnership Units of the Borrower are validly issued and non-assessable and 
  as of the Closing Date are owned of record in
  the percentage amounts and by the Persons set forth on
  Schedule 4.1(c), as amended from time to time.  As of the
  Closing Date, the REIT owns 21,692,833 Partnership Units of the
  Borrower, free and clear of any Liens.  Such Partnership Units
  were offered and sold in compliance in all material respects
  with all Requirements of Law (including, without limitation,
  federal and state securities laws).  Except as set forth in
  Schedule 4.1(c), there are no outstanding securities
  convertible into or exchangeable for Partnership Units of the
  Borrower, or options, warrants or rights to purchase any such
  Partnership Units, or commitments of any kind for the issuance
  of additional Partnership Units or any such convertible or
  exchangeable securities or options, warrants or rights to
  purchase such Partnership Units.  The REIT is the sole general
  partner of the Borrower.
  
              (d)  No Conflict.  The execution, delivery and
  performance by Borrower of the Loan Documents to which it is or
  will be a party, and each of the transactions contemplated
  thereby, do not and will not (i) conflict with or violate
  Borrower's limited partnership agreement or certificate of
  limited partnership or other organizational documents, as the
  case may be, or (ii) conflict with, result in a breach of or
  constitute (with or without notice or lapse of time or both) a
  default under any Requirement of Law, Contractual Obligation or
  Court Order of or binding upon Borrower, which would have a
  Material Adverse Effect on Borrower or (iii) require termina-
  tion of any Contractual Obligation, which termination would
  have a Material Adverse Effect on Borrower or (iv) result in or
  require the creation or imposition of any Lien whatsoever upon
  any of the Properties or assets of Borrower (other than
  Permitted Liens).
  
              (e)  Consents and Authorizations.  Borrower has
  obtained all consents and authorizations required pursuant to
  its Contractual Obligations with any other Person, and shall
  have obtained all consents and authorizations of, and effected
  all notices to and filings with, any Governmental Authority, as
  may be necessary to allow Borrower to lawfully execute, deliver
  and perform its obligations under the Loan Documents to which
  Borrower is a party, except to the extent that failure to
  obtain any such consent or authorization or to effect such
  notice or filing would not have a Material Adverse Effect on
  Borrower.
  
              (f)  Governmental Regulation.  Neither Borrower
  nor the REIT is subject to regulation under the Public Utility
  Holding Company Act of 1935, the Federal Power Act, the
  Interstate Commerce Act, the Investment Company Act of 1940 or
  any other federal or state statute or regulation such that its
  ability to incur indebtedness is limited or its ability to
  consummate the transactions contemplated by the Loan Documents
  is materially impaired.
  
              (g)  Financial Statements; Projections and
  Forecasts.  Each of the financial statements to be delivered to
  Lender pursuant to Section 5.1(b) and (c) (i) has been, or will
  be, as applicable, prepared in accordance with the books and
  records of the REIT and the Consolidated Entities on a
  consolidated basis, and (ii) either fairly present in all
  material respects, or will fairly present in all material
  respects, as applicable, the financial condition of the REIT
  and the Consolidated Entities on a consolidated basis, at the
  dates thereof (and, if applicable, subject to normal year-end
  adjustments) and the results of its operations and cash flows,
  on a consolidated basis, for the period then ended.  Each of
  the projections delivered to Lender prior to the date hereof
  and each of the projected consolidated cash flows to be
  delivered to Lender pursuant to Section 5.1(e), (A) has been,
  or will be, as applicable, prepared by the REIT in light of the
  past business and performance of the REIT or its predecessors
  in interest on a consolidated basis and (B) represent, or will
  represent, as of the date thereof, the reasonable good faith
  estimates of the REIT's financial personnel as of their
  respective dates.
  
              (h)  Prior Operating Statements.  Each of the
  operating statements pertaining to each of the Unencumbered
  Assets in the Unencumbered Pool prepared by Borrower and
  delivered to Lender prior to the date hereof was prepared in
  accordance with GAAP in effect on the date such operating
  statement of each Unencumbered Asset was prepared and fairly
  presents the results of operations of such Unencumbered Asset
  for the period then ended; provided, however, that no
  representation is made with respect to any period prior to the
  ownership of such Unencumbered Asset by Borrower or a
  Predecessor Entity.
  
              (i)  Unencumbered Pool Statements and Projections. 
  Each of the Unencumbered Pool Statements to be delivered to
  Lender pursuant to Section 5.1(f) (i) has been or will be, as
  applicable, prepared in accordance with the books and records
  of the applicable Unencumbered Asset and (ii) fairly presents
  or will fairly present in all material respects, as applicable,
  the results of operations of such Unencumbered Asset for the
  period then ended; provided, however, that no representation is
  made with respect to any period prior to the ownership of such
  Unencumbered Asset by Borrower or a Predecessor Entity.
  
              (j)  Litigation; Adverse Effects.
  
                    (i)  Except as otherwise disclosed on
        Schedule 4.1(j), there is no action, suit, proceeding,
        governmental investigation or arbitration, at law or in
        equity, or before or by any Governmental Authority,
        pending or, to the best of Borrower's knowledge,
        threatened against Borrower or any Property of Borrower
        which will result in a Material Adverse Effect on
        Borrower.
  
                   (ii)  Borrower is not (A) in violation of any
        applicable law, which violation has a Material Adverse
        Effect on Borrower, or (B) subject to or in default with
        respect to any Court Order which has a Material Adverse
        Effect on Borrower.  There are no material Proceedings
        pending or, to the best of Borrower's knowledge,
        threatened against Borrower or any Unencumbered Asset,
        which, if adversely decided, would have a Material Adverse
        Effect on Borrower.
  
           (k)  No Material Adverse Change.  Since the "Closing
  Date" (as defined in the 1996 Revolving Credit Agreement),
  there has occurred no event which has a Material Adverse Effect
  on Borrower, and no material adverse change in Borrower's
  ability to perform its obligations under the Loan Documents to
  which it is a party or the transactions contemplated thereby.
  
           (l)  Payment of Taxes.  All tax returns and reports
  to be filed by Borrower have been timely filed, and all taxes,
  assessments, fees and other governmental charges shown on such
  returns or otherwise payable by Borrower have been paid when
  due and payable (other than real property taxes, which may be
  paid prior to delinquency so long as no penalty or interest
  shall attach thereto), except such taxes, if any, as are
  reserved against in accordance with GAAP and are being
  contested in good faith by appropriate proceedings or such
  taxes, the failure to make payment of which when due and
  payable will not have, in the aggregate, a Material Adverse
  Effect on Borrower.  Borrower has no knowledge of any proposed
  tax assessment against Borrower that will have a Material
  Adverse Effect on Borrower, which is not being actively
  contested in good faith by Borrower.
  
           (m)  Material Adverse Agreements.  Borrower is not a
  party to or subject to any Contractual Obligation or other
  restriction contained in its limited partnership agreement,
  certificate of limited partnership or similar governing
  documents which has a Material Adverse Effect on Borrower.
  
           (n)  Performance.  Borrower is not in default in the
  performance, observance or fulfillment of any of the obliga-
  tions, covenants or conditions contained in any Contractual
  Obligation applicable to it, and no condition exists which,
  with the giving of notice or the lapse of time or both, would
  constitute a default under such Contractual Obligation, except
  where the consequences, direct or indirect, of such default or
  defaults, if any, will not have a Material Adverse Effect on
  Borrower.
  
           (o)  Federal Reserve Regulations.  No part of the
  proceeds of the Advances hereunder will be used to purchase or
  carry any "margin security" as defined in Regulation G or for
  the purpose of reducing or retiring any indebtedness which was
  originally incurred to purchase or carry any margin security or
  for any other purpose which might constitute this transaction a
  "purpose credit" within the meaning of said Regulation G. 
  Neither Borrower nor the REIT is engaged primarily in the
  business of extending credit for the purpose of purchasing or
  carrying any "margin stock" as defined in Regulation U.  No
  part of the proceeds of the Advances hereunder will be used for
  any purpose that violates, or which is inconsistent with, the
  provisions of Regulation X or any other regulation of the
  Federal Reserve Board.
  
           (p)  Disclosure.  The representations and warranties
  of Borrower contained in the Loan Documents and all certifi-
  cates, financial statements and other documents delivered to
  Lender in connection therewith, do not contain any untrue
  statement of a material fact or omit to state a material fact
  necessary in order to make the statements contained herein or
  therein, in light of the circumstances under which they were
  made, not misleading; provided no representation is made as to
  any information in the financial reports for any Real Property
  prior to its ownership by Borrower.  The factual information in
  any document, certificate or written statement (including,
  without limitation, the S-11) furnished to the Lender by or on
  behalf of the REIT or any other Consolidated Entity with
  respect to the business, assets, prospects, results of opera-
  tions or financial condition of the REIT, the Borrower or any
  other Consolidated Entity, including operating statements and
  Rent Rolls for periods when the Real Property covered by such
  statements or Rent Rolls is owned by Borrower, for use in
  connection with the transactions contemplated by this Agreement
  is true and correct in all material respects.  There is no fact
  known to the REIT, Borrower or any Consolidated Entity that has
  a Material Adverse Effect on Borrower, the REIT and/or any such
  Consolidated Entity or could reasonably be expected to have a
  Material Adverse Effect on Borrower, the REIT and/or any such
  Consolidated Entity, which has not been disclosed herein or in
  such other documents, certificates and statements.  Borrower
  has given to Lender true, correct and complete copies of all
  Major Agreements, organizational documents, financial state-
  ments of the REIT and the Consolidated Entities, Unencumbered
  Pool Statements and all other documents and instruments
  referred to in the Loan Documents as having been delivered to
  Lender.  Borrower has not intentionally withheld any material
  fact from Lender in regard to any matter raised in the Loan
  Documents which would cause its representations and warranties
  to be misleading.  Notwithstanding the foregoing, with respect
  to projections of Borrower's future performance such represen-
  tations and warranties are made in good faith and to the best
  judgment of Borrower as of the date thereof.
  
           (q)  Requirements of Law.  The REIT and the
  Consolidated Entities are in compliance with all Requirements
  of Law (including without limitation the Securities Act and the
  Securities Exchange Act, and the applicable rules and
  regulations thereunder, state securities law and "Blue Sky"
  laws) applicable to it and its respective businesses, in each
  case, where the failure to so comply will have a Material
  Adverse Effect on any such Person.  The REIT has made all
  filings with and obtained all consents of the Commission
  required under the Securities Act and the Securities Exchange
  Act in connection with the execution, delivery and performance
  by the REIT of the Loan Documents.
  
           (r)  Patents, Trademarks, Permits, etc.  The REIT and
  the Consolidated Entities own, are licensed or otherwise have
  the lawful right to use, or have, all permits and other
  governmental approvals, patents, trademarks, trade names,
  copyrights, technology, know-how and processes used in or
  necessary for the conduct of each such Person's business as
  currently conducted, the absence of which would have a Material
  Adverse Effect upon such Person.  The use of such permits and
  other governmental approvals, patents, trademarks, trade names,
  copyrights, technology, know-how and processes by each such
  Person does not infringe on the rights of any Person, subject
  to such claims and infringements as do not, in the aggregate,
  give rise to any liability on the part of any such Person which
  would have a Material Adverse Effect on any such Person.
  
           (s)  Environmental Matters.  Except as set forth on
  Schedule 4.1(s) or in any Phase I or other reports delivered to
  Lender, to the best knowledge of Borrower (i) the operations of
  the REIT and Borrower comply in all material respects with all
  applicable, local, state and federal environmental, health and
  safety Requirements of Law ("Environmental Laws"); (ii) none of
  the Unencumbered Assets or operations thereon are subject to
  any Remedial Action or other Liabilities and Costs arising from
  the Release or threatened Release of a Contaminant into the
  environment in violation of any Environmental Laws, which
  Remedial Action or other Liabilities and Costs would have a
  Material Adverse Effect on Borrower and/or the REIT;
  (iii) neither the REIT nor the Borrower has filed any notice
  under applicable Environmental Laws reporting a Release of a
  Contaminant into the environment in violation of any Environ-
  mental Laws, except as the same may have been heretofore
  remedied; (iv) there is not now on or in any Unencumbered
  Assets (except in compliance in all material respects with all
  applicable Environmental Laws): (A) any underground storage
  tanks, (B) any asbestos-containing material, or (C) any
  polychlorinated biphenyls (PCB's) used in hydraulic oils,
  electrical transformers or other equipment owned by such
  Person; and (v) neither the REIT nor Borrower has received any
  notice or claim to the effect that it is or may be liable to
  any Person as a result of the Release or threatened Release of
  a Contaminant into the environment which would have a Material
  Adverse Effect on the REIT or any of the Consolidated Entities.
  
           (t)  Solvency.  Borrower is and will be Solvent after
  giving effect to the disbursements of the Advances and the
  payment and accrual of all fees then payable.  
  
           (u)  Title to Assets; No Liens.  Borrower has good,
  indefeasible and merchantable title to all Properties owned or
  leased by it.
  
           (v)  Management Agreements.  Except as disclosed on
  Schedule 4.1(v) (as amended from time to time), Borrower is not
  a party or subject to any management or "ground" leasing
  agreement with respect to any of the Properties included within
  the Unencumbered Pool.
  
      4.2  Representations and Warranties as to the REIT.  In
  order to induce Lender to make the Advances, Borrower hereby
  represents and warrants to Lender as follows:
  
           (a)  Organization; Corporate Powers.  The REIT (i) is
  a corporation duly organized, validly existing and in good
  standing under the laws of Maryland, (ii) is duly qualified to
  do business as a foreign corporation and in good standing under
  the laws of each jurisdiction in which it owns or leases real
  property or in which the nature of its business requires it to
  be so qualified, except for those jurisdictions where failure
  to so qualify and be in good standing will not have a Material
  Adverse Effect on the REIT, and (iii) has all requisite
  corporate power and authority to own, operate and encumber its
  property and assets and to conduct its business as presently
  conducted and as proposed to be conducted in connection with
  and following the consummation of the transactions contemplated
  by the Loan Documents.
  
           (b)  Authority.  The REIT has the requisite corporate
  power and authority to execute, deliver and perform each of the
  Loan Documents to which it is or will be a party.  The execu-
  tion, delivery and performance thereof, and the consummation of
  the transactions contemplated thereby, have been duly
  authorized by the Board of Directors of the REIT, and no other
  corporate proceedings on the part of the REIT are necessary to
  consummate such transactions.  Each of the Loan Documents to
  which the REIT is a party has been duly executed and delivered
  by the REIT and constitutes its legal, valid and binding
  obligation, enforceable against it in accordance with its
  terms, subject to bankruptcy, insolvency and other laws
  affecting creditors' rights generally and general equitable
  principles.
  
           (c)  No Conflict.  The execution, delivery and
  performance by the REIT of the Loan Documents to which it is
  party, and each of the transactions contemplated thereby, do
  not and will not (i) conflict with or violate its articles of
  incorporation, by-laws or other organizational documents,
  (ii) conflict with, result in a breach of or constitute (with
  or without notice or lapse of time or both) a default under any
  Requirement of Law, Contractual Obligation or Court Order of or
  binding upon the REIT, which would have a Material Adverse
  Effect on the REIT, (iii) require termination of any
  Contractual Obligation, which termination would have a Material
  Adverse Effect on the REIT, (iv) result in or require the
  creation or imposition of any Lien whatsoever upon any of the
  Properties or assets of the REIT, or (v) require any approval
  of the stockholders of the REIT.
  
           (d)  Consents and Authorizations.  The REIT has
  obtained all consents and authorizations required pursuant to
  its Contractual Obligations with any other Person, and shall
  have obtained all consents and authorizations of, and effected
  all notices to and filings with, any Governmental Authority, as
  may be necessary to allow the REIT to lawfully execute, deliver
  and perform its obligations under the Loan Documents to which
  the REIT is a party.
  
           (e)  Capitalization.  All of the capital stock of the
  REIT has been issued in compliance in all material respects
  with all applicable Requirements of Law.
  
           (f)  Litigation; Adverse Effects.
  
                (i)  There is no action, suit, proceeding,
        governmental investigation or arbitration, at law or in
        equity, by or before any Governmental Authority, pending
        or, to best of Borrower's knowledge, threatened, against
        the REIT or any Property of the REIT, which will
        (A) result in a Material Adverse Effect on the REIT,
        (B) materially and adversely affect the ability of any
        party to any of the Loan Documents to perform its
        obligations thereunder, or (C) materially and adversely
        affect the ability of the REIT to perform its obligations
        as contemplated in the Loan Documents.
  
                (ii)  The REIT is not (A) in violation of any
        applicable law, which violation has a Material Adverse
        Effect on the REIT, or (B) subject to or in default with
        respect to any Court Order which has a Material Adverse
        Effect on the REIT.  There are no Proceedings pending or,
        to the best of Borrower's knowledge, threatened against
        the REIT, which, if adversely decided, would have a
        Material Adverse Effect on the REIT or Borrower.
  
           (g)  No Material Adverse Change.  Since the "Closing
  Date" (as defined in the 1996 Revolving Credit Agreement),
  there has occurred no event which has a Material Adverse Effect
  on the REIT, and no material adverse change has occurred in the
  REIT's ability to perform its obligations under the Loan
  Documents to which it is a party or the transactions
  contemplated thereby.
  
           (h)  Payment of Taxes.  All tax returns and reports
  to be filed by the REIT have been timely filed, and all taxes,
  assessments, fees and other governmental charges shown on such
  returns have been paid when due and payable, except such taxes,
  if any, as are reserved against in accordance with GAAP and are
  being contested in good faith by appropriate proceedings or
  such taxes, the failure to make payment of which when due and
  payable would not have, in the aggregate, a Material Adverse
  Effect on the REIT.  The REIT has no knowledge of any proposed
  tax assessment against the REIT that would have a Material
  Adverse Effect on the REIT, which is not being actively
  contested in good faith by the REIT.
  
           (i)  Material Adverse Agreements.  The REIT is not a
  party to or subject to any Contractual Obligation or other
  restriction contained in its charter, by-laws or similar
  governing documents which has a Material Adverse Effect on the
  REIT or the ability of the REIT to perform its obligations
  under the Loan Documents to which it is a party.
  
           (j)  Performance.  The REIT is not in default in the
  performance, observance or fulfillment of any of the obliga-
  tions, covenants or conditions contained in any Contractual
  Obligation applicable to it, and no condition exists which,
  with the giving of notice or the lapse of time or both, would
  constitute a default under such Contractual Obligation, except
  where the consequences, direct or indirect, of such default or
  defaults, if any, would not have a Material Adverse Effect on
  the REIT.
  
           (k)  Disclosure.  The representations and warranties
  of the REIT contained in the Loan Documents, and all certifi-
  cates, financial statements and other documents delivered to
  Lender in connection therewith, do not contain any untrue
  statement of a material fact or omit to state a material fact
  necessary in order to make the statements contained herein or
  therein, in light of the circumstances under which they were
  made, not misleading.  The REIT has not intentionally withheld
  any material fact from Lender in regard to any matter raised in
  the Loan Documents which would cause its representations and
  warranties to be misleading.  Notwithstanding the foregoing,
  with respect to projections of the REIT's future performance
  such representations and warranties are made in good faith and
  to the best judgment of the management of the REIT as of the
  date thereof.
  
           (l)  ERISA.  Neither the REIT nor any ERISA Affiliate
  thereof (including, for all purposes under this Section 4.2(1),
  Borrower and the other Consolidated Entities) has in the past
  five (5) years maintained or contributed to or currently
  maintains or contributes to any Benefit Plan other than the
  Benefit Plans identified on Schedule 4.2(1) (as such Schedule
  may be amended from time to time).  Neither the REIT nor any
  ERISA Affiliate thereof has during the past five (5) years
  maintained or contributed to or currently maintains or
  contributes to any employee welfare benefit plan within the
  meaning of Section 3(1) of ERISA which provides benefits to
  retirees other than benefits required to be provided under
  Section 4980B of the Code and Sections 601 through 608 of ERISA
  (or any successor provisions thereto) or applicable state law. 
  Neither the REIT nor any ERISA Affiliate thereof is now
  contributing nor has it ever contributed to or been obligated
  to contribute to any Multiemployer Plan, no employees or former
  employees of the REIT, or such ERISA Affiliate, have been
  covered by any Multiemployer Plan in respect of their employ-
  ment by the REIT, and no ERISA Affiliate of the REIT has or is
  likely to incur any withdrawal liability with respect to any
  Multiemployer Plan which would have a Material Adverse Effect
  on the REIT.
  
           (m)  Solvency.  The REIT is and will be Solvent after
  giving effect to the disbursements of the Advances and the
  payment and accrual of all fees then payable.
  
           (n)  Status as a REIT.  The REIT (i) shall for its
  first taxable year elect to qualify (but has not so elected as
  of the Closing Date), and for each subsequent taxable year
  shall maintain its classification, as a real estate investment
  trust as defined in Section 856 of the Code, (ii) has not
  engaged in any "prohibited transactions" as defined in Section
  856(b)(6)(iii) of the Code, (iii) for its current "tax year"
  (as defined in the Code) is, and for all taxable years
  subsequent to its election to be a real estate investment trust
  shall remain, entitled to a dividends paid deduction which
  meets the requirements of Section 857 of the Code and (iv) its
  ownership and method of operation enable it to meet the
  requirements for taxation as a real estate investment trust
  under the Code.
  
           (o)  Ownership.  As of the Closing Date, the REIT
  does not own or have any direct interest in any other Person,
  other than its ownership of the general partnership interests
  in Borrower.
  
           (p)  NYSE Listing.  The common stock of the REIT is,
  and is reasonably expected to be, listed for trading and traded
  on the New York Stock Exchange.
  
  
                           ARTICLE 5
  
                      REPORTING COVENANTS
  
           Borrower covenants and agrees that, on and after the
  date hereof, until payment in full of all of the Obligations,
  the expiration of the Commitment and termination of this
  Agreement:
  
      5.1  Financial Statements and Other Financial and
  Operating Information.  Borrower shall maintain or cause to be
  maintained a system of accounting established and administered
  in accordance with sound business practices and consistent with
  past practice to permit preparation of quarterly and annual
  financial statements in conformity with GAAP, and each of the
  financial statements described below shall be prepared on a
  consolidated basis for the REIT and the other Consolidated
  Entities from such system and records.  Borrower shall deliver
  or cause to be delivered to Lender (and delivery of any of the
  following to the Agent under the 1996 Credit Agreement shall
  constitute delivery hereunder):
  
           (a)  Commission Filings.  Promptly following their
  filing with the Commission, copies of all required reports and
  filings filed with the Commission, including, without
  limitation, the Annual Report on Form 10-K, the Quarterly
  Reports on Form 10-Q, registration statements, proxy statements
  and the annual reports delivered to the shareholders of the
  REIT and the Consolidated Entities.
  
           (b)  Annual Financial Statements.  Within ninety
  (90) days after the close of each Fiscal Year, consolidated
  balance sheets, statements of operations, stockholders' equity
  and cash flows for the REIT and the Consolidated Entities (in
  the form provided to the Commission on the REIT's Form 10-K),
  audited and certified without qualification by the Accountants
  and accompanied by a statement that, in the course of their
  audit (conducted in accordance with generally accepted auditing
  standards), the Accountants obtained no knowledge that an Event
  of Default or Unmatured Event of Default occurred.  To the
  extent Lender desires additional details or supporting informa-
  tion with respect to Unconsolidated Joint Ventures or
  individual Properties which are not Unencumbered Assets within
  the Unencumbered Pool and which details and information are not
  contained in the REIT's Form 10-K, Borrower shall provide
  Lender with such details or supporting information as Lender
  requests which is reasonably available to Borrower.  Without
  limiting the foregoing, at Lender's request, within ninety
  (90) days after the end of each Fiscal Year, Borrower, with
  respect to Real Property which is not included within the
  Unencumbered Pool, shall provide to Lender operating statements
  and a schedule setting forth the percentage of leasable area
  leased to tenants in occupancy, with footnotes indicating which
  leases are in default in rent payments by more than forty-five
  (45) days (other than technical, nonmaterial disputes
  concerning percentage rentals due) and any other material
  provisions in respect to which Borrower has issued a notice of
  default, for each such Real Property.
  
           (c)  Quarterly Financial Statements Certified by CFO. 
  As soon as practicable, and in any event within forty-five
  (45) days after the end of each Fiscal Quarter, consolidated
  balance sheets, statements of operations, stockholders' equity
  and statements of cash flow for the REIT and the Consolidated
  Entities, which may, in the case of the first three Fiscal
  Quarters, be in the form provided to the Commission on the
  REIT's Form 10-Q, and certified by the REIT's chief executive
  officer, chief operating officer, chief financial officer or
  chief accounting officer.
  
           (d)  Officer's Certificate of Borrower.  (i) Together
  with each delivery of any financial statement pursuant to
  subsection (c) above, an Officer's Certificate of the REIT,
  stating that the executive officer who is the signatory thereto
  (which officer shall be the chief executive officer, the chief
  operating officer, the chief financial officer or the chief
  accounting officer of the REIT) has reviewed, or caused under
  his or her supervision to be reviewed, the terms of this
  Agreement and the other principal Loan Documents, and has made,
  or caused to be made under his or her supervision, a review in
  reasonable detail of the transactions and condition of the REIT
  and the Consolidated Entities during the accounting period
  covered by such financial statements of the REIT and the
  Consolidated Entities, and that such review has not disclosed
  the existence at the end of such accounting period, and that
  the signers do not have knowledge of the existence as of the
  date of the Officer's Certificate, of any condition or event
  which constitutes an Event of Default or Unmatured Event of
  Default, or, if any such condition or event exists, specifying
  the nature and period of existence thereof and what action has
  been taken, is being taken and is proposed to be taken with
  respect thereto; and (ii) together with each delivery pursuant
  to subsection (c), above, a Compliance Certificate demonstrat-
  ing in reasonable detail (which detail shall include actual
  calculations and such supporting information as Lender may
  reasonably require) compliance at the end of such accounting
  periods with the covenants contained in Section 7.3 and
  Article 8.
  
           (e)  Cash Flow Projections.  As soon as practicable,
  and in any event, within one hundred twenty (120) days after
  the end of each Fiscal Year projected consolidated cash flows
  for the REIT and the Consolidated Entities for such Fiscal
  Year.  Borrower shall also provide such additional supporting
  details as Lender may reasonably request.
  
           (f)  Unencumbered Pool Statements and Operating
  Results.  As soon as practicable, and in any event within
  forty-five (45) days after the end of each Fiscal Quarter,
  quarterly operating statements, in a form approved by Lender,
  which operating statements shall include actual quarterly and
  year-to-date operating income results, Rent Rolls for each
  Unencumbered Asset within the Unencumbered Pool dated as of the
  last day of such Fiscal Quarter (the "Quarterly Unencumbered
  Pool Statements"), in form and substance satisfactory to
  Lender, certified as being true and correct in all material
  respects by the REIT's chief financial officer, chief
  accounting officer, chief executive officer or chief operating
  officer.  In addition, as soon as practicable, and in any event
  within forty-five (45) days after the end of the fourth Fiscal
  Quarter, a year-end operating statement, in form approved by
  Lender, which operating statement shall include year-to-date
  net operating income and net cash flow results for each
  Unencumbered Asset within the Unencumbered Pool dated as of the
  last day of such Fiscal Quarter (collectively, with the
  Quarterly Unencumbered Pool Statements, the "Unencumbered Pool
  Statements").  Lender shall have the right to request the
  foregoing information with respect to any Real Property owned
  by the REIT or any Consolidated Entity.
  
           (g)  Budgets for Unencumbered Pool.  Not later than
  one (1) day prior to the beginning of each Fiscal Year, annual
  operating budgets (including, without limitation, overhead
  items and capital expenditures) for each Unencumbered Asset in
  the Unencumbered Pool for the immediately following Fiscal
  Year, prepared on an annual basis, in a form approved by
  Lender, together with all supporting details reasonably
  requested by Lender, and certified by the chief executive
  officer, chief operating officer, chief financial officer or
  chief accounting officer of the REIT as being based upon the
  REIT's reasonable good faith estimates, upon information and
  assumptions at the time.
  
           (h)  [Intentionally Left Blank.]
  
           (i)  Knowledge of Event of Default.  Promptly upon a
  Responsible Official of Borrower obtaining knowledge (i) of any
  condition or event which constitutes an Event of Default or
  Unmatured Event of Default or (ii) of any condition or event
  which has a Material Adverse Effect on Borrower or the REIT, an
  Officer's Certificate specifying the nature and period of
  existence of any such condition or event and what action
  Borrower and/or the REIT has taken, is taking and proposes to
  take with respect thereto.
  
           (j)  Litigation, Arbitration or Government
  Investigation.  Promptly upon a Responsible Official of
  Borrower or the REIT obtaining knowledge of (i) the institution
  of, or threat of, any material action, suit, proceeding,
  governmental investigation or arbitration against or affecting
  Borrower or the REIT not previously disclosed in writing by
  Borrower to Lender pursuant to this Section 5.1(j), or (ii) any
  material development in any action, suit, proceeding,
  governmental investigation or arbitration already disclosed,
  which, in either case, has a Material Adverse Effect on
  Borrower or the REIT, a notice thereof to Lender and such other
  information as may be reasonably available to it to enable
  Lender and its counsel to evaluate such matters.
  
           (k)  ERISA Termination Event.  As soon as possible,
  and in any event within thirty (30) days after a Responsible
  Official of Borrower or the REIT knows that a Termination Event
  has occurred, a written statement of the chief financial
  officer of the REIT describing such Termination Event and the
  action, if any, which Borrower, the REIT or any ERISA Affiliate
  of any of them has taken, is taking or proposes to take, with
  respect thereto, and, when known, any action taken or
  threatened by the IRS, the DOL or the PBGC with respect
  thereto.
  
           (l)  Prohibited ERISA Transaction.  As soon as
  possible, and in any event within thirty (30) days, after a
  Responsible Official of Borrower, the REIT or any ERISA
  Affiliate of any of them knows that a prohibited transaction
  (defined in Section 406 of ERISA and Section 4975 of the Code
  and which is not subject to a statutory or prohibited
  transaction class exemption) has occurred, a statement of the
  chief financial officer of the REIT describing such
  transaction.
  
           (m)  Benefit Plan Annual Report.  On request of
  Lender, within thirty (30) days after the filing thereof with
  the DOL, the IRS or the PBGC, copies of each annual report,
  including Schedule B thereto, filed with respect to each
  Benefit Plan of Borrower, the REIT or any ERISA Affiliate of
  any of them.
  
           (n)  Benefit Plan Funding Waiver Request.  Within
  thirty (30) days after the filing thereof with the IRS, a copy
  of each funding waiver request filed with respect to any
  Benefit Plan of Borrower, the REIT or any ERISA Affiliate of
  any of them and all communications received by Borrower, the
  REIT or any ERISA Affiliate of any of them with respect to such
  request.
  
           (o)  Establishment of Benefit Plan and Increase in
  Contributions to the Benefit Plan.  Not less than ten (10) days
  prior to the effective date thereof, a notice to Lender of the
  establishment of a Benefit Plan (or the incurrence of any
  obligation to contribute to a Multiemployer Plan) by Borrower,
  the REIT or any ERISA Affiliate of any of them.  Within thirty
  (30) days after the first to occur of an amendment of any then
  existing Benefit Plan of Borrower, the REIT or any ERISA
  Affiliate of any of them which will result in an increase in
  the benefits under such Benefit Plan or a notification of any
  such increase, or the establishment of any new Benefit Plan by
  Borrower, the REIT or any ERISA Affiliate of any of them or the
  commencement of contributions to any Benefit Plan to which
  Borrower, the REIT or any ERISA Affiliate of any of them was
  not previously contributing, a copy of said amendment,
  notification or Benefit Plan.
  
           (p)  Qualification of ERISA Plan.  Promptly upon, and
  in any event within thirty (30) days after, receipt by
  Borrower, the REIT or any ERISA Affiliate of any of them of an
  unfavorable determination letter from the IRS regarding the
  qualification of a Plan under Section 401(a) of the Internal
  Revenue Code, a copy of said determination letter, if such
  disqualification would have a Material Adverse Effect on
  Borrower or the REIT.
  
           (q)  Multiemployer Plan Withdrawal Liability. 
  Promptly upon, and in any event within thirty (30) days after
  receipt by Borrower, the REIT or any ERISA Affiliate of any of
  them of a notice from a Multiemployer Plan regarding the
  imposition of material withdrawal liability, a copy of said
  notice.
  
           (r)  Failure to Make Section 412 Payment.  Promptly
  upon, and in any event within thirty (30) days after, Borrower,
  the REIT or any ERISA Affiliate of any of them fails to make a
  required installment under subsection (m) of Section 412 of the
  Internal Revenue Code or any other payment required under
  Section 412 of the Internal Revenue Code on or before the due
  date for such installment or payment, a notification of such
  failure, if such failure could result in either the imposition
  of a Lien under said Section 412 or otherwise have or could
  reasonably be anticipated to have a Material Adverse Effect on
  Borrower or the REIT.
  
           (s)  Failure of the REIT to Qualify as Real Estate
  Investment Trust.  Promptly upon, and in any event within
  forty-eight (48) hours after a Responsible Official of Borrower
  first has actual knowledge of (i) the REIT failing to continue
  to qualify as a real estate investment trust as defined in
  Section 856 of the Internal Revenue Code (or any successor
  provision thereof), (ii) any act by the REIT causing its
  election to be taxed as a real estate investment trust to be
  terminated, (iii) any act causing the REIT to be subject to the
  taxes imposed by Section 857(b)(6) of the Internal Revenue Code
  (or any successor provision thereto), or (iv) the REIT failing
  to be entitled to a dividends paid deduction which meets the
  requirements of Section 857 of the Internal Revenue Code, a
  notice of any such occurrence or circumstance.
  
           (t)  Asset Acquisitions and Dispositions, Indebted-
  ness, Merger, Etc.  Without limiting any restriction in the
  Loan Documents, concurrently with notice to Borrower's priority
  mailing list and in all events not later than any public
  disclosure, written notice of any material investments (other
  than in Cash Equivalents), material acquisitions, asset
  purchases, dispositions, disposals, divestitures or similar
  transactions involving Property, the raising of additional
  equity or the incurring or repayment of material Debt, or any
  material merger, by or with Borrower or the REIT, and, promptly
  upon consummation of such transaction, a Compliance Certifi-
  cate, in form and substance reasonably acceptable to Lender,
  demonstrating in reasonable detail (which detail shall include
  actual calculations and such supporting information as Lender
  may reasonably require) compliance, after giving effect to such
  proposed transaction(s), with the covenants contained in
  Section 7.3 and Article 8.  For purposes of this
  Section 5.1(t), any investment, acquisition, asset purchase,
  disposition, disposal, divestiture, merger or similar
  transaction shall be considered "material" if it involves
  assets exceeding five percent (5%) of the Borrower's assets (as
  existing prior to giving effect to such transaction) or if it
  involves the acquisition or disposition of Real Property. 
  Borrower's written notice of each Real Property acquisition or
  disposition shall contain a description of all improvements
  which are a part of such Real Property, the square footage of
  such improvements, the acquisition or disposition price and
  such other information with respect thereto reasonably
  requested by the Lender.
  
           (u)  Other Information.  Such other information,
  reports, contracts, schedules, lists, documents, agreements and
  instruments in the possession of the REIT or Borrower with
  respect to (i) the Unencumbered Assets or any other assets of
  the REIT or Borrower (either on an individual or an aggregate
  basis), (ii) any material change in the REIT's investment,
  finance or operating policies, or (iii)  the REIT's, the
  Borrower's or any other Consolidated Entity's business,
  condition (financial or otherwise), operations, performance,
  properties or prospects as Lender may from time to time
  reasonably request, including, without limitation, annual
  information with respect to cash flow projections, budgets,
  operating statements (current year and immediately preceding
  year), Rent Rolls, lease expiration reports, leasing status
  reports, note payable summaries, bullet note summaries, equity
  funding requirements, contingent liability summaries, line of
  credit summaries, line of credit collateral summaries, wrap
  note or note receivable summaries, schedules of outstanding
  letters of credit, summaries of cash and Cash Equivalents,
  projections of leasing fees and overhead budgets.  Provided
  that Lender gives Borrower reasonable prior notice and an
  opportunity to participate, Borrower hereby authorizes Lender
  to communicate with the Accountants and authorizes the
  Accountants to disclose to Lender any and all financial
  statements and other information of any kind, including copies
  of any management letter or the substance of any oral informa-
  tion, that such accountants may have with respect to the
  Unencumbered Assets or Borrower's or the REIT's condition
  (financial or otherwise), operations, properties, performance
  and prospects.  Concurrently therewith, Lender will notify
  Borrower of any such communication at Lender's request,
  Borrower shall deliver a letter addressed to the Accountants
  instructing them to disclose such information in compliance
  with this Section 5.1(u).
  
           (v)  Press Releases; SEC Filings and Financial
  Statements.  Telephonic or telecopy notice to Lender
  concurrently with or prior to issuance of any material press
  release concerning the REIT or Borrower and, as soon as
  practicable after filing with the Commission, all reports and
  notices, proxy statements, registration statements and
  prospectuses of the REIT.  All materials sent or made available
  generally by the REIT to the holders of its publicly-held
  Securities or filed with the Commission, including all periodic
  reports required to be filed with the Commission, will be
  delivered to Lender as soon as available.
  
           (w)  Accountant Reports.  Copies of all reports
  prepared by the Accountants and submitted to Borrower or the
  REIT in connection with each annual, interim or special audit 
  or review of the financial statements or practices of Borrower
  or the REIT, including the comment letter submitted by the
  Accountants in connection with their annual audit.
  
      5.2  Environmental Notices.  Borrower shall notify Lender,
  in writing; as soon as practicable, and in any event within ten
  (10) days after a Responsible Official of Borrower's or the
  REIT's learning thereof, of any: (a) written notice or claim to
  the effect that Borrower or the REIT is or may be liable to any
  Person as a result of any material Release or threatened
  Release of any Contaminant into the environment (b) written
  notice that Borrower or the REIT is subject to investigation by
  any Governmental Authority evaluating whether any Remedial
  Action is needed to respond to the Release or threatened
  Release of any Contaminant into the environment; (c) written
  notice that any Property is subject to an Environmental Lien;
  (d) written notice of violation to Borrower or the REIT or
  awareness of a condition which might reasonably result in a
  notice of violation of any Environmental Laws by Borrower or
  the REIT; (e) commencement or written threat of any judicial or
  administrative proceeding alleging a violation of any
  Environmental Laws; (f) written notice from a Governmental
  Authority of any changes to any existing Environmental Laws
  that will have a Material Adverse Effect on the operations of
  Borrower or the REIT; or (g) any proposed acquisition of stock,
  assets, real estate or leasing of property, or any other action
  by Borrower that, to the best of Borrower's knowledge, could
  subject Borrower or the REIT to environmental, health or safety
  Liabilities and Costs that will have a Material Adverse Effect
  on Borrower or the REIT.  With regard to the matters referred
  to in clauses (a) through (e) above, the same shall apply in
  respect of each Unencumbered Asset only if the matter will have
  a Material Adverse Effect on such Uncumbered Asset and, in the
  case of other Real Property of Borrower or the REIT, only if
  the matter will have a Material Adverse Effect on Borrower or
  the REIT.
  
      5.3  Confidentiality.  Confidential information obtained
  by Lender pursuant to this Agreement or in connection with the
  Advances shall not be disseminated by Lender and shall not be
  disclosed to third parties except to regulators, taxing
  authorities and other Governmental Authorities having
  jurisdiction over Lender or otherwise in response to
  Requirements of Law, to its auditors and legal counsel and in
  connection with regulatory, administrative and judicial
  proceedings as necessary or relevant including enforcement
  proceedings relating to the Loan Documents.  In connection with
  disclosures of confidential information to any non-governmental
  third-party, Lender shall, to the extent feasible and
  permitted, give prior notice of such request to Borrower;
  however, Lender shall not incur any liability to Borrower for
  failure to do so.  For purposes hereof, "confidential
  information" shall mean all nonpublic information obtained by
  Lender, unless and until such information becomes publicly
  known, other than as a result of unauthorized disclosure by
  Lender of such information.
  
  
                           ARTICLE 6
  
                     AFFIRMATIVE COVENANTS
  
           Borrower covenants and agrees that, on and after the
  date hereof, until payment in full of all of the Obligations,
  the expiration of the Commitment and termination of this
  Agreement:
  
      6.1  With Respect to Borrower:
  
           (a)  Existence.  Borrower shall at all times maintain
  its existence as a limited partnership and preserve and keep in
  full force and effect its rights and franchises unless the
  failure to maintain such rights and franchises does not have a
  Material Adverse Effect on Borrower.
  
           (b)  Qualification, Name.  Borrower shall qualify and
  remain qualified to do business in each jurisdiction in which
  the nature of its business requires it to be so qualified
  except for those jurisdictions where failure to so qualify does
  not have a Material Adverse Effect on Borrower.  Borrower will
  transact business solely in its own name.
  
           (c)  Compliance with Laws, Etc.  Borrower shall
  (i) comply with all Requirements of Law, and all restrictive
  covenants affecting Borrower or the Properties, performance,
  prospects, assets or operations of Borrower, and (ii) obtain as
  needed all Permits necessary for its operations and maintain
  such in good standing, except in each of the foregoing cases
  where the failure to do so will not have a Material Adverse
  Effect on Borrower.
  
           (d)  Payment of Taxes and Claims.  Borrower shall pay
  (i) all taxes, assessments and other governmental charges
  imposed upon it or on any of its properties or assets or in
  respect of any of its franchises, business, income or Property
  before any penalty or interest accrues thereon, the failure to
  make payment of which will have a Material Adverse Effect on
  Borrower, and (ii) all claims (including, without limitation,
  claims for labor, services, materials and supplies) for sums,
  material in the aggregate to Borrower, which have become due
  and payable and which by law have or may become a Lien other
  than a judgment lien upon any of Borrower's Properties or
  assets, prior to the time when any penalty or fine shall be
  incurred with respect thereto.  Notwithstanding the foregoing,
  Borrower may contest, by appropriate legal proceedings
  conducted in good faith and with due diligence, the amount,
  validity or application, in whole or in part, of any taxes,
  assessments, other governmental charges or claims described
  above, provided that Borrower shall provide such security as
  may be reasonably required by Lender to insure ultimate payment
  of the same and to prevent any sale or forfeiture of any of
  Borrower's Property (or any portion thereof or interest
  therein), provided however, that the provisions of this
  Section 6.1(d) shall not be construed to permit Borrower to
  contest the payment of any obligations or any other sums
  payable by Borrower to Lender hereunder or under any other Loan
  Document.  Notwithstanding any of the foregoing, Borrower shall
  indemnify, defend and save Lender harmless from and against any
  liability, cost or expense of any kind that may be imposed on
  Lender in connection with any such contest and any loss
  resulting therefrom.
  
           (e)  Maintenance of Properties; Insurance.  Borrower
  shall maintain in good repair, working order and condition,
  excepting ordinary wear and tear, all of its Property and will
  make or cause to be made all appropriate repairs, renewals and
  replacements thereof.  Borrower shall maintain:  (a) insurance
  with responsible companies in such amounts and against such
  risks as is usually carried by companies engaged in similar
  businesses and owning similar properties in the same general
  areas in which Borrower operates, (b) insurance required by any
  Governmental Authority having jurisdiction over Borrower, and
  (c) all other insurance reasonably required by Lender from time
  to time.
  
           (f)  Inspection of Property; Books and Records;
  Discussion.  Borrower shall permit, and shall cause the REIT to
  permit, any authorized representatives designated by Lender to
  visit and inspect, upon reasonable prior notice, any of its
  Properties (subject to rights of tenants), including all
  Unencumbered Assets, to inspect financial and accounting
  records and leases, and to make copies and take extracts
  therefrom, all at such times during normal business hours and
  as often as Lender may reasonably request.  In connection
  therewith, Borrower shall pay all expenses required by
  Section 10.1.  Borrower will keep proper books of record and
  account in which entries, in conformity with GAAP and as
  otherwise required by this Agreement and applicable
  Requirements of Law, shall be made of all dealings and
  transactions in relation to its businesses and activities and
  as otherwise required under Section 5.1.
  
           (g)  Maintenance of Permits, Etc.  Borrower will
  maintain in full force and effect all Permits, franchises,
  patents, trademarks, trade names, copyrights, authorizations or
  other rights necessary for the operation of its business,
  except where the failure to obtain any of the foregoing would
  not have a Material Adverse Effect on Borrower; and notify
  Lender in writing, promptly after learning thereof, of the
  suspension, cancellation, revocation or discontinuance of or of
  any pending or threatened action or proceeding seeking to
  suspend, cancel, revoke or discontinue any material Permit,
  patent, trademark, trade name, copyright, governmental
  approval, franchise authorization or right.
  
           (h)  Conduct of Business.  Except for Investments
  expressly permitted pursuant to Section 8.2 and investments in
  Cash and Cash Equivalents, Borrower shall engage only in the
  business of acquiring, developing, owning, operating and
  managing income producing Office Properties within the
  continental United States and any business activities and
  investments of Borrower incidental thereto.
  
           (i)  Use of Proceeds.  Borrower shall use the
  proceeds of the Advances only for pre-developments costs,
  development costs, acquisition costs, capital improvements,
  working capital, equity investments, repayment of Indebtedness,
  including required interest and/or principal payments thereon
  and for any other general corporate purposes, including
  distributions permitted hereunder.
  
      6.2  With Respect to the REIT:
  
           (a)  Corporate Existence.  The REIT shall at all
  times maintain its corporate existence and preserve and keep in
  full force and effect its rights and franchises unless the
  failure to maintain such rights and franchises will not have a
  Material Adverse Effect on the REIT.
  
           (b)  Qualification, Name.  The REIT shall qualify and
  remain qualified to do business in each jurisdiction in which
  the nature of its business requires it to be so qualified
  except for those jurisdictions where failure to so qualify does
  not have a Material Adverse Effect on the REIT.  The REIT will
  transact business solely in its own name.
  
           (c)  Securities Law Compliance.  The REIT shall
  comply in all material respects with all rules and regulations
  of the Commission and file all reports required by the
  Commission relating to the REIT's publicly-held Securities.
  
           (d)  Continued Status a REIT; Prohibited
  Transactions.  The REIT (i) will continue to be a real estate
  investment trust as defined in Section 856 of the Internal
  Revenue Code (or any successor provision thereto), (ii) will
  not revoke its election (once made) to be a real estate
  investment trust, (iii) will not engage in any "prohibited
  transactions" as defined in Section 856(b)(6)(iii) of the
  Internal Revenue Code (or any successor provision thereto), and
  (iv) will continue to be entitled to a dividend paid deduction
  meeting the requirements of Section 857 of the Internal Revenue
  Code.
  
           (e)  NYSE Listed Company.  The common stock of the
  REIT shall at all times be listed for trading on the New York
  Stock Exchange.
  
           (f)  Compliance with Laws, Etc.  The REIT shall
  (i) comply with all Requirements of Law and restrictive
  covenants affecting the REIT and (ii) obtain as needed all
  Permits necessary for its operations and maintain such in good
  standing, except in each of the foregoing cases where the
  failure to do so will not have a Material Adverse Effect on the
  REIT.
  
           (g)  Payment of Taxes and Claims.  The REIT shall pay
  (i) all taxes, assessments and other governmental charges
  imposed upon it or on any of its properties or assets or in
  respect of any of its franchises, business, income or Property
  before any penalty or interest accrues thereon, the failure to
  make payment of which will have a Material Adverse Effect on
  the REIT, and (ii) all claims (including, without limitation,
  claims for labor, services, materials and supplies) for sums,
  material in the aggregate to the REIT, which have become due
  and payable and which by law have or may become a lien other
  than a judgment lien upon any of the REIT's Properties or
  assets, prior to the time when any penalty or fine shall be
  incurred with respect thereto.  Notwithstanding the foregoing,
  REIT may contest by appropriate legal proceedings conducted in
  good faith and with due diligence, the amount, validity or
  application, in whole or in part, of any taxes, assessments,
  other governmental charges or claims described above, provided
  that REIT shall provide such security as may be required by
  Lender to insure ultimate payment of the same and to prevent
  any sale or forfeiture of any of the REIT's Property (or any
  portion thereof or interest therein), provided, however, that
  the provisions of this Section 6.2(g) shall not be construed to
  permit REIT to contest the payment of any Obligations or any
  other sums payable by REIT to Lender hereunder or under any
  other Loan Document.  Notwithstanding any of the foregoing,
  REIT shall indemnify, defend and save Lender harmless from and
  against any liability, cost or expense of any kind that may be
  imposed on Lender in connection with any such contest and any
  loss resulting therefrom.
  
           (h)  Net Offering Proceeds.  Unless otherwise agreed
  in writing by Lender, the REIT shall immediately contribute any
  Net Offering Proceeds to Borrower.
  
  
                           ARTICLE 7
  
                       NEGATIVE COVENANTS
  
           Borrower covenants and agrees that, on and after the
  date hereof, until payment in full of all of the Obligations,
  the expiration of the Commitment and termination of this
  Agreement:
  
      7.1  With Respect to all Parties.  Neither Borrower nor
  the REIT shall:
  
           (a)  Restrictions on Fundamental Changes.
  
                (i)  The REIT and Consolidated Entities shall
        not enter into any merger, consolidation or reorganization
        or any sale of all or a substantial portion of the assets
        of the REIT and the Consolidated Entities, taken as a
        whole, or liquidate, wind up or dissolve, except that
        (1) any Person engaged in the development and operation of
        class A suburban Office Properties may merge or
        consolidate with and into the REIT, the Borrower or any
        other Consolidated Entity, provided (A) no Event of
        Default or event which, with the giving of notice or the
        passage of time or both, could become an Event of Default,
        then exists or would result therefrom, (B) the REIT,
        Borrower or such Consolidated Entity, as the case may be,
        is the surviving entity, (C) Lender reasonably determines
        that such merger or consolidation will not have a Material
        Adverse Effect on the Borrower or the REIT and (D) the
        Borrower delivers to Lender, prior to the REIT, the
        Borrower or such Consolidated Entity becoming obligated
        (conditionally or otherwise) to proceed with such
        transaction, a certificate, in form and substance and in
        such detail as Lender may reasonably require, of the
        REIT's chief financial officer, chief executive officer or
        chief operating officer demonstrating compliance with this
        Agreement on a proforma basis giving effect to such
        transaction, and (2) Borrower and the REIT may acquire
        interests in the CMBS Entities and Borrower may contribute
        assets to such CMBS Entities;
  
                (ii)  Change its Fiscal Year; or
  
                (iii)  Engage in any line of business other than
        as expressly permitted under Section 6.1(h).
  
           (b)  ERISA.  Permit any ERISA Affiliates to do any of
  the following to the extent that such act or failure to act
  would result in the aggregate, after taking into account any
  other such acts or failure to act, in a Material Adverse Effect
  on Borrower or the REIT:
  
                (i)  Engage, or knowingly permit an ERISA
        Affiliate to engage, in any prohibited transaction
        described in Section 406 of ERISA or Section 4975 of the
        Code which is not exempt under Section 407 or 408 of ERISA
        or Section 4975(d) of the Code for which a class exemption
        is not available or a private exemption has not been
        previously obtained from the DOL;
  
                (ii)  Permit to exist any accumulated funding
        deficiency (as defined in Section 302 of ERISA and
        Section 412 of the Code), whether or not waived;
  
                (iii)  Fail, or permit an ERISA Affiliate to
        fail, to pay timely required contributions or annual
        installments due with respect to any waived funding
        deficiency to any Plan if such failure could result in the
        imposition of a Lien or otherwise would have a Material
        Adverse Effect on Borrower or the REIT;
  
                (iv)  Terminate, or permit an ERISA Affiliate to
        terminate, any Benefit Plan which would result in any
        liability of Borrower or an ERISA Affiliate under Title IV
        of ERISA or the REIT; or
  
                (v)  Fail, or permit any ERISA Affiliate to
        fail, to pay any required installment under section (m) of
        Section 412 of the Internal Revenue Code or any other
        payment required under Section 412 of the Internal Revenue
        Code on or before the due date for such installment or
        other payment, if such failure could result in the
        imposition of a Lien or otherwise would have a Material
        Adverse Effect on Borrower or the REIT.
  
           (c)  Debt and Guaranty Obligations.  Create, incur or
  assume any Debt or Guaranty Obligations except:
  
                (i)   Subject to Section 8.4, below, Debt from
        financial institutions which are not Affiliates of the
        Borrower or any Consolidated Entity which is secured by
        Real Property;
  
               (ii)  the City National Bank Loan;
  
              (iii)  Guaranty Obligations which do not exceed
        Five Hundred Thousand Dollars ($500,000);
  
               (iv)  publicly-issued indebtedness or privately-placed unsecured
                     fixed rate term Debt;
  
                (v)  the Contribution Agreement;
  
               (vi)  the WFB Swap Agreement; or
  
              (vii)  Debt under the 1996 Revolving Credit
        Agreement.
  
      7.2  Amendment of Constituent Documents.  The Borrower
  shall not materially amend its partnership agreement or
  certificate of limited partnership without the prior written
  consent of Lender, except as may be required by applicable law
  or to comply with Section 6.2(d).  The REIT shall not
  materially amend its articles of incorporation or by-laws
  without the prior written consent of Lender, except (i) as
  required by applicable law or (ii) as may be required to comply
  with Section 6.2(d).
  
      7.3  Minimum Ownership Interest of Richard Ziman.  Richard
  Ziman shall at all times retain directly or indirectly
  ownership (the "Ownership Interest"), in the aggregate, of no
  less than sixty-five percent (65%) of the Capital Stock of the
  REIT and Partnership Units of Borrower owned, directly or
  indirectly, by Richard Ziman upon completion of the offering of
  the REIT's common stock as set forth in the S-11; provided,
  however, that Partnership Units may be exchanged for Capital
  Stock of the REIT; and provided further, however, that Richard
  Ziman may transfer some or all of his Capital Stock of the REIT
  and Partnership Units of Borrower to an inter vivos trust over
  which he holds the power of revocation or to his wife or his
  children or a trust for the benefit of his wife or children;
  and provided further, however, that neither any such trust, his
  wife nor any of his children (collectively, together with
  Richard Ziman, the "Family") may transfer any interest in such
  Capital Stock or Partnership Units to any Person other than
  another Family member.
  
      7.4  Management.  Richard Ziman shall not cease to be
  active on a full-time, continuing basis in the senior
  management of Borrower and the REIT; provided, however, that,
  if due to death or incapacity, Richard Ziman is unable to act
  in such capacity, Borrower shall have one hundred twenty
  (120) days to obtain the approval of Lender with respect to the
  new management.  In the event Borrower shall fail to obtain
  approval of Lender within such 120-day period, then Borrower
  shall, at the election and upon the demand of Lender pay in
  full all Obligations under the Loan Documents not later than
  sixty (60) days after the end of such 120-day period, whereupon
  this Agreement and all Commitments shall be terminated.  No
  further Advances shall be permitted until Borrower shall have
  obtained approval of Lender under this Section 7.4. 
  
      7.5  Margin Regulations.  No portion of the proceeds of
  any Advances shall be used in any manner which might cause the
  extension of credit or the application of such proceeds to
  violate Regulation G, U or X or any other regulation of the
  Federal Reserve Board or to violate the Securities Exchange Act
  or the Securities Act, in each case as in effect on the
  applicable Funding Date.
  
      7.6  Organization of Borrower, Etc.  Borrower shall remain
  a Maryland limited partnership with the REIT as its sole
  general partner.  At no time shall Borrower be taxed as an
  association under the Internal Revenue Code.
  
      7.7  With Respect to the REIT:
  
           (a)  The REIT shall not own any material assets or
  engage in any line of business other than the ownership of the
  partnership interests described in Section 4.2(o) and as
  otherwise permitted under Section 7.1(a) and Section 8.2.
  
           (b)  The REIT shall not directly or indirectly
  create, incur, assume or otherwise become or remain directly or
  indirectly liable with respect to, any Debt, except the
  obligations and other Indebtedness of Borrower, and
  Indebtedness constituting obligations of its Consolidated
  Entities or Unconsolidated Joint Ventures and obligations under
  the Guaranty.
  
           (c)  The REIT shall not directly or indirectly
  create, incur, assume or permit to exist any Lien on or with
  respect to any of its Property or assets except Liens in favor
  of Lender securing the Obligations.
  
           (d)  The REIT will not directly or indirectly convey,
  sell, transfer, assign, pledge or otherwise encumber or dispose
  of any of its partnership interests in Borrower held as of the
  Closing Date, except to secure the Obligations.
  
  
                           ARTICLE 8
  
                      FINANCIAL COVENANTS
  
           Borrower covenants and agrees that, on and after the
  date of this Agreement and until payment in full of all the
  Obligations, the expiration of the Commitment and the
  termination of this Agreement:
  
      8.1  Distributions.
  
           (a)  Subject to subsection (b) below, aggregate
  distributions to shareholders of the REIT and all limited
  partners of Borrower shall not exceed, for any four (4)
  consecutive Fiscal Quarters, ninety-five percent (95%) of Funds
  from Operations.  For purposes of this Section 8.1, the term
  "distributions" shall mean all dividends and other
  distributions to, and the repurchase of stock or limited
  partnership interests from, the holder of any equity interests
  in Borrower or the REIT (other than the redemption of limited
  partnership interests in Borrower in exchange for REIT stock).
  
           (b)  Aggregate distributions during the continuance
  of any Event of Default shall not exceed the lesser of (i) the
  aggregate amount permitted to be made during the continuance
  thereof under subsection (a) above, and (ii) the minimum amount
  that the REIT must distribute to its shareholders in order to
  avoid federal tax liability and to remain qualified as a real
  estate investment trust as defined in Section 856 of the Code.
  
      8.2  Investments; Asset Mix.
  
           (a)  The REIT shall not at any time make or own any
  Investment in any Person, or purchase, lease or own any other
  asset or property, except (i) any Investment in the Borrower,
  (ii) any Investment in the CMBS Entities, (iii) any Capital
  Stock in the Consolidated Entities (other than the Borrower),
  and (iv) any cash or other property that is being distributed
  to the shareholders of the REIT substantially contemporaneously
  with the REIT's receipt of such cash or other property.
  
           (b)  Except as permitted under Section 7.1(a), the
  Borrower shall not at any time make or own any Investment in
  any Person, or purchase, lease or own any Real Property or
  other asset, except that the Borrower may own or lease the
  following, subject to the limitations set forth below:
  
  
       Asset Type                         Limitation on Value
                                          for Each Asset Type
                                          at the Time of
                                          Determination
  1. Wholly-Owned Office Property
              and related Property       Unlimited

  2. Wholly-Owned Land                   5% of Gross Asset Value

  3. Wholly-Owned Real Property
       (other than Office Properties
       or Land referred to in
              clause 2)                  10% of Gross Asset Value

  4. Wholly-owned Capital Stock of
              any corporation            10% of Gross Asset Value

  5. Investment Mortgages                15% of Gross Asset Value

  6. Wholly-owned Capital Stock of
       Joint Ventures (other than
              corporations)              15% of Gross Asset Value

  7. Construction in Progress
       (exclusive of tenant
              improvements)              12.5% of all Office Properties 
                                         (based on the total gross
                                         leasable area, measured in square
                                         feet) (provided that
                                         this category shall
                                         not, with respect to
                                         any construction in
                                         progress (for any
                                         Office Property) which
                                         is not pre-leased on a
                                         basis consistent with
                                         the leasing criteria
                                         set forth in this
                                         Agreement, exceed 7%
                                         of the total gross
                                         leasable area,
                                         measured in square
                                         feet, of all Office
                                         Properties)

           Notwithstanding the foregoing, Investments and other
  assets in the foregoing categories 2 through 6 may not, in the
  aggregate exceed, at any time, 25% of Gross Asset Value.  All
  values of Investments and other assets shall be the original
  cost of such Investments and assets, except as otherwise
  expressly provided.
  
      8.3  Minimum Unencumbered Pool.  The aggregate
  Unencumbered Asset Value of the Unencumbered Pool shall not, at
  any time, be less than 200% of the unsecured Total Liabilities
  (including, without limitation, all "Line B Advances" as
  defined in the 1996 Revolving Credit Agreement) of the REIT and
  the Consolidated Entities.
  
      8.4  Secured Debt.  The aggregate amount of all Debt
  secured by Real Property shall not, at any time, exceed 35% of
  Gross Asset Value.
  
      8.5  Financial Covenants in 1996 Revolving Credit
  Agreement.  Borrower shall comply (subject to any applicable
  cure period) with the covenants contained in Sections 9.1, 9.2,
  9.3, 9.4 and 9.6 of the 1996 Revolving Credit Agreement without
  regard to whether the 1996 Revolving Credit Agreement has been
  terminated.
  
  
                           ARTICLE 9
  
             EVENTS OF DEFAULT; RIGHTS AND REMEDIES
  
      9.1  Events of Default.  Each of the following occurrences
  shall constitute an Event of Default under this Agreement:
  
           (a)  Failure to Make Payments When Due.  Borrower
  shall fail to pay (i) any amount due on the Maturity Date,
  (ii) any principal when due, or (iii) any interest on any
  Advance, or any fee or other amount payable under any Loan
  Documents within three (3) days after the same becomes due.
  
           (b)  Distributions.  Borrower or the REIT shall
  breach any covenant set forth in Section 6.2(d) or 8.1.
  
           (c)  Borrower shall fail to satisfy any financial
  covenant set forth in Article 8.
  
           (d)  Other Defaults.  Borrower or the REIT shall fail
  duly and punctually to perform or observe any agreement,
  covenant or obligation binding on Borrower or the REIT under
  this Agreement or under any of the other Loan Documents (other
  than as described in any other provision of this Section 9.1),
  and such failure shall continue for thirty (30) days after
  Borrower or the REIT knew of such failure (or such lesser
  period of time as is mandated by applicable Requirements of
  Law).
  
           (e)  Breach of Representation or Warranty.  Any
  representation or warranty made or deemed made by Borrower or
  the REIT to Lender herein or in any of the other Loan Documents
  or in any statement, certificate or financial statements at any
  time given by Borrower pursuant to any of the Loan Documents
  shall be false or misleading in any material respect on the
  date as of which made.
  
           (f)  Default as to Other Debt.  The REIT or Borrower
  or any other Consolidated Entity shall have defaulted (beyond
  any applicable grace period) under any Debt of such party
  (other than the Obligations) if the aggregate amount of such
  other Debt is One Million Dollars ($1,000,000) or more and such
  default shall not have been cured or waived; provided, however,
  that the foregoing $1,000,000 limitation shall be increased to
  Ten Million Dollars ($10,000,000) in the case of Nonrecourse
  Debt.
  
           (g)  Involuntary Bankruptcy; Appointment of Receiver, etc.
  
                (i)  An involuntary case shall be commenced
        against the REIT or Borrower or any other Consolidated
        Entity and the petition shall not be dismissed within
        sixty (60) days after commencement of the case, or a court
        having jurisdiction shall enter a decree or order for
        relief in respect of any such Person in an involuntary
        case, under any applicable bankruptcy, insolvency or other
        similar law now or hereinafter in effect; or any other
        similar relief shall be granted under any applicable
        federal, state or foreign law; or
  
                (ii)  A decree or order of a court having
        jurisdiction for the appointment of a receiver,
        liquidator, sequestrator, trustee, custodian or other
        officer having similar powers over the REIT or Borrower or
        any other Consolidated Entity, or over all or a
        substantial part of the property of any such Person, shall
        be entered; or an interim receiver, trustee or other
        custodian of any such Person or of all or a substantial
        part of the property of any such Person, shall be
        appointed or a warrant of attachment, execution or similar
        process against any substantial part of the property of
        any such Person, shall be issued and any such event shall
        not be stayed, vacated, dismissed, bonded or discharged
        within sixty (60) days of entry, appointment or issuance.
  
           (h)  Voluntary Bankruptcy; Appointment of Receiver,
  Etc.  The REIT or Borrower or any other Consolidated Entity
  shall have an order for relief entered with respect to it or
  commence a voluntary case under any applicable bankruptcy,
  insolvency or other similar law now or hereafter in effect, or
  shall consent to the entry of an order for relief in an
  involuntary case, or to the conversion of an involuntary case
  to a voluntary case, under any such law, or shall consent to
  the appointment of or taking of possession by a receiver,
  trustee or other custodian for all or a substantial part of its
  property; any such Person shall make any assignment for the
  benefit of creditors or shall be unable or fail, or admit in
  writing its inability, to pay its debts as such debts become
  due; or the general partner of Borrower or any other
  Consolidated Entity or the REIT's Board of Directors (or any
  committee thereof) adopts any resolution or otherwise
  authorizes any action to approve any of the foregoing.
  
           (i)  Judgments and Attachments.  (i) Any money
  judgment (other than a money judgment covered by insurance but
  only if the insurer has admitted liability with respect to such
  money judgment), writ or warrant of attachment, or similar
  process involving in any case an amount in excess of
  One Million Dollars ($1,000,000) shall be entered or filed
  against the REIT, Borrower, any other Consolidated Entity or
  their respective assets and shall remain undischarged,
  unvacated, unbonded or unstayed for a period of thirty (30)
  days, or (ii) any judgment or order of any court or administra-
  tive agency awarding material damages shall be entered against
  any such Person in any action under the Federal securities laws
  seeking rescission of the purchase or sale of, or for damages
  arising from the purchase or sale of, any Securities, such
  judgment or order shall have become final after exhaustion of
  all available appellate remedies and, in Lender's judgment, the
  payment of such judgment or order would have a Material Adverse
  Effect on such Person.
  
           (j)  Dissolution.  Any order, judgment or decree
  shall be entered against the REIT, Borrower or any other
  Consolidated Entity decreeing its involuntary dissolution or
  split up and such order shall remain undischarged and unstayed
  for a period in excess of thirty (30) days; or the REIT or
  Borrower shall otherwise dissolve or cease to exist.
  
           (k)  Loan Documents.  If for any reason any Loan
  Document shall cease to be in full force and effect and such
  condition or event shall continue for fifteen (15) days after
  Borrower or the REIT knew of such condition or event.
  
           (l)  ERISA Liabilities.  Any Termination Event occurs
  which will or is reasonably likely to subject Borrower or the
  REIT or any ERISA Affiliate of any of them to a liability which
  Lender reasonably determines will have a Material Adverse
  Effect on Borrower or the REIT, or the plan administrator of
  any Benefit Plan applies for approval under Section 412(d) of
  the Internal Revenue Code for a waiver of the minimum funding
  standards of Section 412(a) of the Internal Revenue Code and
  Lender reasonably determines that the business hardship upon
  the Section 412(d) waiver was based will or would reasonably be
  anticipated to subject Borrower or the REIT to a liability
  which Lender determines will have a Material Adverse Effect on
  Borrower or the REIT.
  
           (m)  Environmental Liabilities.  Borrower or the REIT
  becomes subject to any Liabilities and Costs which Lender
  reasonably deems to have a Material Adverse Effect on such
  Person arising out of or related to (i) the Release or
  threatened Release at any Property of any Contaminant into the
  environment, or any Remedial Action in response thereto, or
  (ii) any violation of any Environmental Laws.
  
           (n)  Solvency.  Borrower or the REIT shall cease to
  be Solvent.
  
           (o)  Breach of Guaranty.  The REIT shall fail to duly
  and punctually perform or observe any agreement, covenant or
  obligation under its Guaranty.
  
           (p)  Sole General Partner.  The REIT shall cease to
  be the sole general partner of Borrower or cease to own 51% or
  more of the Partnership Units of Borrower.
  
  
           (q)  1996 Revolving Credit Agreement.  An "Event of
  Default" occurs under the 1996 Revolving Credit Agreement
  and/or an "Event of Default" occurs under any "Loan Document"
  (as defined in the 1996 Revolving Credit Agreement), which has
  not been waived or cured.
  
           An Event of Default shall be deemed "continuing"
  until cured or waived in writing in accordance with
  Section 10.4.
  
      9.2  Rights and Remedies.
  
           (a)  Acceleration, Etc.  Upon the occurrence of any
  Event of Default described in the foregoing Section 9.1(g) or
  9.1(h) with respect to the REIT or Borrower or any other
  Consolidated Entity, the Commitment shall automatically and
  immediately terminate and the unpaid principal amount of and
  any and all accrued interest on the Advances shall
  automatically become immediately due and payable, with all
  additional interest, fees, costs and expenses from time to time
  accrued thereon and/or payable hereunder, and without
  presentment, demand or protest or other requirements of any
  kind (including, without limitation, valuation and appraise-
  ment, diligence, presentment, notice of intent to demand or
  accelerate or notice of acceleration), all of which are hereby
  expressly waived by Borrower, and the obligation of Lender to
  make any Advances hereunder shall thereupon terminate; and upon
  the occurrence and during the continuance of any other Event of
  Default, Lender may, by written notice to Borrower, (i) declare
  that the Commitment is terminated, whereupon the Commitment and
  the obligation of Lender to make any Advance hereunder shall
  immediately terminate, and/or (ii) declare the unpaid principal
  amount of, any and all accrued and unpaid interest on the
  Advances and all of the other Obligations to be, and the same
  shall thereupon be, immediately due and payable with all
  additional interest from time to time accrued thereon and
  without presentment, demand, or protest or other requirements
  of any kind (including without limitation, valuation and
  appraisement, diligence, presentment, notice of intent to
  demand or accelerate and of acceleration), all of which are
  hereby expressly waived by Borrower.  Without limiting Lender's
  authority hereunder, on or after the Maturity Date, Lender may
  exercise any or all rights and remedies under the Loan
  Documents or applicable law.
  
           (b)  Access to Information.  Notwithstanding anything
  to the contrary contained in the Loan Documents, upon the
  occurrence of and during the continuance of an Event of
  Default, Lender shall be entitled to request and receive, by or
  through Borrower or appropriate legal process, any and all
  information concerning the REIT, Borrower, or any Property of
  any of them, which is reasonably available to or obtainable by
  Borrower.
  
           (c)  Waiver of Demand.  Demand, presentment, protest
  and notice of nonpayment are hereby waived by Borrower. 
  Borrower also waives, to the extent permitted by law, the
  benefit of all valuation, appraisal and exemption laws.
  
           (d)  Waivers, Amendments and Remedies.  No delay or
  omission of Lender to exercise any right under any Loan
  Document shall impair such right or be construed to be a waiver
  of any Event of Default or an acquiescence therein, and any
  single or partial exercise of any such right shall not preclude
  other or further exercise thereof or the exercise of any other
  right, and no waiver, amendment or other variation of the
  terms, conditions or provisions of the Loan Documents whatso-
  ever shall be valid unless in a writing signed by Lender, and
  then only to the extent in such writing specifically set forth. 
  All remedies contained in the Loan Documents or by law afforded
  shall be cumulative and all shall be available to Lender until
  the Obligations have been paid in full, the Commitment has
  expired or terminated and this Agreement has been terminated.
  
  
                           ARTICLE 10
  
                         MISCELLANEOUS
  
      10.1  Expenses.
  
           (a)  Generally.  Borrower agrees to pay, or reimburse
  Lender for, within seven (7) days after receipt of written
  demand, all of Lender's external audit, legal, appraisal,
  valuation and investigation expenses and for all other
  reasonable out-of-pocket costs and expenses of every type and
  nature (including, without limitation, the fees and charges of
  outside appraisers and reasonable fees, expenses and
  disbursements of Lender's internal appraisers, environmental
  advisors or legal counsel) incurred by Lender at any time
  (whether prior to, on or after the date of this Agreement) in
  connection with (i) its own audit and investigation of Borrower
  and the REIT; (ii) the negotiation, preparation and execution
  of this Agreement (including, without limitation, the
  satisfaction or attempted satisfaction of any of the conditions
  set forth in Article 3), and the other Loan Documents and the
  making of the Advances; (iii) review and investigation of Real
  Property which is proposed for inclusion within the
  Unencumbered Pool and Unencumbered Assets within the
  Unencumbered Pool; (iv) administration of this Agreement, the
  other Loan Documents, and the Advances, including, without
  limitation, consultation with attorneys in connection
  therewith; and (v) the protection, collection or enforcement of
  any of the Obligations.
  
           (b)  After Event of Default. Borrower further agrees
  to pay, or reimburse Lender, for all reasonable out-of-pocket
  costs and expenses, including, without limitation, the
  reasonable attorneys' fees and disbursements of one law firm
  incurred by Lender after the occurrence and during the
  continuance of an Event of Default (i) in enforcing any
  Obligation or exercising or enforcing any other right or remedy
  available by reason of such Event of Default; (ii) in connec-
  tion with any refinancing or restructuring of the credit
  arrangements provided under this Agreement in the nature of a
  "work-out" or in any insolvency or bankruptcy proceeding;
  (iii) in commencing, defending or intervening in any litigation
  or in filing a petition, complaint, answer, motion or other
  pleadings in any legal proceeding relating to Borrower or the
  REIT and related to or arising out of the transactions
  contemplated hereby; or (iv) in taking any other action in or
  with respect to any suit or proceeding (whether in bankruptcy
  or otherwise).
  
      10.2  Indemnity.  Borrower further agrees to defend,
  protect, indemnify and hold harmless Lender, its Affiliates and
  its officers, directors, employees, agents, attorneys and
  consultants (including, without limitation, those retained in
  connection with the satisfaction or attempted satisfaction of
  any of the conditions set forth in Article 3) (collectively
  called the "Indemnitees") from and against any and all
  Liabilities and Costs imposed on, incurred by, or asserted
  against such Indemnitees (whether based on any federal or state
  laws or other statutory regulations, including, without
  limitation, securities and commercial laws and regulations,
  under common law or in equity, and based upon contract or
  otherwise, including any liability and costs arising as a
  result of a "prohibited transaction" under ERISA to the extent
  arising from or in connection with the past, present or future
  operations of the REIT or Borrower or their respective
  predecessors in interest) in any manner relating to or arising
  out of this Agreement, or the other Loan Documents, or any act,
  event or transaction related or attendant thereto, the making
  of the Advances and the management of the Advances, or the use
  or intended use of the proceeds of the Advances (collectively,
  the "Indemnified Matters"); provided, however, that Borrower
  shall have no obligation to an Indemnitee hereunder with
  respect to (a) matters for which such Indemnitee has been
  compensated pursuant to or for which an exemption is provided
  in Section 2.4(g) or any other provision of this Agreement, and
  (b) Indemnified Matters to the extent caused by or resulting
  from the willful misconduct or gross negligence of that
  Indemnitee, as determined by a court of competent jurisdiction. 
  To the extent that the undertaking to indemnify, pay and hold
  harmless set forth in the preceding sentence may be
  unenforceable because it is violative of any law or public
  policy, Borrower shall contribute the maximum portion which it
  is permitted to pay and satisfy under applicable law, to the
  payment and satisfaction of, all Indemnified Matters incurred
  by the Indemnitees.
  
      10.3  Change in Accounting Principles and "Funds from
  Operations" Definition.  Except as otherwise provided herein,
  if any changes in accounting principles from those used in the
  preparation of the most recent financial statements delivered
  to Lender pursuant to the terms hereof are hereafter required
  or permitted by the rules, regulations, pronouncements and
  opinions of the Financial Accounting Standards Board or the
  American Institute of Certified Public Accountants (or
  successors thereto or agencies with similar functions) and are
  adopted by the REIT or Borrower with the agreement of its
  Accountants and such changes result in a change in the method
  of calculation of any of the financial covenants, standards or
  terms found herein, the parties hereto agree to enter into
  negotiations in order to amend such provisions so as to
  equitably reflect such changes with the desired result that the
  criteria for evaluating the financial condition of the REIT and
  the Consolidated Entities shall be the same after such changes
  as if such changes had not been made.  The definition of "Funds
  from Operations" set forth in Article 1 is based upon the
  definition of "Funds From Operations" promulgated by the
  National Association of Real Estate Investment Trusts and
  effective as of January 1, 1996 (the "NAREIT Definition").  If
  the NAREIT Definition is modified after the date of this
  Agreement, the parties hereto agree to enter into negotiations
  if any party so requests in order to amend the definition of
  "Funds from Operations" set forth in this Agreement to make it
  consistent with the modified NAREIT Definition; provided
  however, that if the effect of such change in the definition of
  "Funds from Operations" is to restrict the amount of
  distributions permitted under this Agreement to amounts less
  than what are required to maintain the REIT's status as a real
  estate investment trust under the Code, then Borrower shall be
  permitted to make the minimum distribution necessary to
  maintain the REIT's status as a real estate investment trust
  under the Code so long as such distribution would have been
  permitted under the "Funds from Operations" definition in
  effect as of the Closing Date.
  
      10.4  Amendments and Waivers.  (a) No amendment or
  modification of any provision of this Agreement shall be
  effective without the written agreement of Lender, and (b) no
  termination or waiver of any provision of this Agreement, or
  consent to any departure by Borrower therefrom, shall in any
  event be effective without the written agreement of Lender,
  which Lender shall have the right to grant or withhold at its
  sole discretion.  Any waiver or consent shall be effective only
  in the specific instance and for the specific purpose for which
  it was given.  No notice to or demand on Borrower in any case
  shall entitle Borrower to any other further notice or demand in
  similar or other circumstances.
  
      10.5  Independence of Covenants.  All covenants hereunder
  shall be given independent effect so that if a particular
  action or condition is not permitted by any of such covenants,
  the fact that it would be permitted by an exception to, or be
  otherwise within the limitations of, another covenant shall not
  avoid the occurrence of an Event of Default or Unmatured Event
  of Default if such action is taken or condition exists, and if
  a particular action or condition is expressly permitted under
  any covenant, unless expressly limited to such covenant, the
  fact that it would not be permitted under the general
  provisions of another covenant shall not constitute an Event of
  Default or Unmatured Event of Default if such action is taken
  or condition exists.
  
      10.6  Notices and Delivery.  Unless otherwise specifically
  provided herein, any consent, notice or other communication
  herein required or permitted to be given shall be in writing
  and may be personally served, telecopied or sent by courier
  service or United States mail and shall be deemed to have been
  given when delivered in person or by courier service, upon
  receipt of a telecopy (or on the next Business Day if such
  telecopy is received on a non-Business Day or after 5:00 p.m.
  on a Business Day) or four (4) Business Days after deposit in
  the United States mail (registered or certified, with postage
  prepaid and properly addressed).  Notices to Lender pursuant to
  Article 2 shall not be effective until received by Lender.  For
  the purposes hereof, the addresses of the parties hereto (until
  notice of a change thereof is delivered as provided in this
  Section 10.6) shall be as set forth below each party's name on
  the signature pages hereof, or, as to each party, at such other
  address as may be designated by such party in a written notice
  to all of the other parties.
  
      10.7  Survival of Warranties, Indemnities and Agreements. 
  All agreements, representations, warranties and indemnities
  made or given herein shall survive the execution and delivery
  of this Agreement and the other Loan Documents and the making
  and repayment of the Advances hereunder and such indemnities
  shall survive termination hereof.
  
      10.8  Failure or Indulgence Not Waiver; Remedies
  Cumulative.  No failure or delay on the part of Lender in the
  exercise of any power, right or privilege under any of the Loan
  Documents shall impair such power, right or privilege or be
  construed to be a waiver of any default or acquiescence
  therein, nor shall any single or partial exercise of any such
  power, right or privilege preclude other or further exercise
  thereof or of any other right, power or privilege.  All rights
  and remedies existing under the Loan Documents are cumulative
  to and not exclusive of any rights or remedies otherwise
  available.
  
      10.9  Marshaling; Payments Set Aside.  Lender shall not be
  under any obligation to marshall any assets in favor of
  Borrower or any other party or against or in payment of any or
  all of the Obligations.  To the extent that Borrower makes a
  payment or payments to Lender or Lender exercises its right of
  setoff, and such payment or payments or the proceeds of such
  setoff or any part thereof are subsequently invalidated,
  declared to be fraudulent or preferential, set aside and/or
  required to be repaid to a trustee, receiver or any other party
  under any bankruptcy law, state or federal law, common law or
  equitable cause, then to the extent of such recovery, the
  Obligation or part thereof originally intended to be satisfied,
  and all rights and remedies therefor, shall be revived and
  continued in full force and effect as if such payment had not
  been made or such enforcement or setoff had not occurred.
  
      10.10  Severability.  In case any provision in or
  obligation under this Agreement or the other Loan Documents
  shall be invalid, illegal or unenforceable in any jurisdiction,
  the validity, legality and enforceability of the remaining
  provisions or obligations, or of such provision or obligation
  in any other jurisdiction, shall not in any way be affected or
  impaired thereby, provided, however, that if the rates of
  interest or any other amount payable hereunder, or the
  collectibility thereof, are declared to be or become invalid,
  illegal or unenforceable, Lender's obligation to make Advances
  shall not be enforceable.
  
      10.11  Headings.  Section headings in this Agreement are
  included herein for convenience of reference only and shall not
  constitute a part of this Agreement for any other purpose or be
  given any substantive effect.
  
      10.12  Governing Law; Waiver.  THIS AGREEMENT SHALL BE
  GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE
  WITH, THE LAWS OF THE STATE OF CALIFORNIA.
  
      10.13  Limitation of Liability.  To the extent permitted
  by applicable law, no claim may be made by Borrower or any
  other Person against Lender, or the affiliates, directors,
  officers, employees, attorneys or agents of Lender, for any
  special, indirect, consequential or punitive damages in respect
  of any claim for breach of contract or any other theory of
  liability arising out of or related to the transactions
  contemplated by this Agreement, or any act, omission or event
  occurring in connection therewith; and Borrower and Lender
  hereby waive, release and agree not to sue upon any claim for
  any such damages, whether or not accrued and whether or not
  known or suspected to exist in its favor.
  
      10.14  Successors and Assigns.  This Agreement and the
  other Loan Documents shall be binding upon the parties hereto
  and their respective successors and assigns and shall inure to
  the benefit of the parties hereto and the successors and
  permitted assigns of Lender.  Borrower's rights and interests
  hereunder and under the other Loan Documents, and Borrower's
  duties and Obligations hereunder and under the other Loan
  Documents, shall not be assigned or otherwise transferred
  without the prior written consent of Lender.  Without first
  obtaining the written consent of Borrower, which consent shall
  not be unreasonably withheld, Lender shall not assign all or
  any portion of its rights and obligations under this Agreement
  or any other Loan Document.
  
      10.15  Consent to Jurisdiction and Service of Process:
  Waiver of Jury Trial.  ALL JUDICIAL PROCEEDINGS BROUGHT AGAINST
  BORROWER WITH RESPECT TO THIS AGREEMENT OR ANY OTHER LOAN
  DOCUMENT MAY BE AND ALL JUDICIAL PROCEEDINGS BROUGHT BY
  BORROWER WITH RESPECT TO THIS AGREEMENT OR ANY OTHER LOAN
  DOCUMENT SHALL BE BROUGHT IN ANY STATE OR FEDERAL COURT OF
  COMPETENT JURISDICTION HAVING SITUS WITHIN THE BOUNDARIES OF
  THE FEDERAL COURT DISTRICT OF THE SOUTHERN DISTRICT OF
  CALIFORNIA, AND BY EXECUTION AND DELIVERY OF THIS AGREEMENT,
  BORROWER ACCEPTS, FOR ITSELF AND IN CONNECTION WITH ITS
  PROPERTIES, GENERALLY AND UNCONDITIONALLY, THE JURISDICTION OF
  THE AFORESAID COURTS, AND IRREVOCABLY AGREES TO BE BOUND BY ANY
  FINAL JUDGMENT RENDERED THEREBY FROM WHICH NO APPEAL HAS BEEN
  TAKEN OR IS AVAILABLE.  BORROWER IRREVOCABLY CONSENTS TO THE
  SERVICE OF PROCESS OF ANY OF THE AFOREMENTIONED COURTS IN ANY
  SUCH ACTION OR PROCEEDING BY THE MAILING OF COPIES THEREOF BY
  REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO ITS NOTICE
  ADDRESS SPECIFIED ON THE SIGNATURE PAGES HEREOF.  BORROWER AND
  LENDER IRREVOCABLY WAIVE (A) TRIAL BY JURY IN ANY ACTION OR
  PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY OTHER LOAN
  DOCUMENT, AND (B) ANY OBJECTION (INCLUDING, WITHOUT LIMITATION,
  ANY OBJECTION OF THE LAYING OF VENUE OR BASED ON THE GROUNDS OF
  FORUM NON CONVENIENS) WHICH IT MAY NOW OR HEREAFTER HAVE TO THE
  BRINGING OF ANY SUCH ACTION OR PROCEEDING WITH RESPECT TO THIS
  AGREEMENT OR ANY OTHER LOAN DOCUMENT IN ANY JURISDICTION SET
  FORTH ABOVE.  NOTHING HEREIN SHALL AFFECT THE RIGHT TO SERVE
  PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR SHALL LIMIT THE
  RIGHT OF LENDER TO BRING PROCEEDINGS AGAINST BORROWER IN THE
  COURTS OF ANY OTHER JURISDICTION.
  
      10.16  Counterparts; Effectiveness; Inconsistencies.  This
  Agreement and any amendments, waivers, consents or supplements
  hereto may be executed in counterparts, each of which when so
  executed and delivered shall be deemed an original, but all of
  which, taken together, shall constitute but one and the same
  instrument.  This Agreement shall become effective when
  (i) Borrower and Lender have duly executed and delivered
  signature pages of this Agreement to each other and (ii) Lender
  has received all fees due under this Agreement.  Lender shall
  send written confirmation of the Closing Date to Borrower
  promptly following the occurrence thereof.  This Agreement and
  each of the other Loan Documents shall be construed to the
  extent reasonable to be consistent one with the other, but to
  the extent that the terms and conditions of this Agreement are
  actually and directly inconsistent with the terms and
  conditions of any other Loan Document, this Agreement shall
  govern.
  
      10.17  Performance of Obligations.  Borrower agrees that
  Lender may, but shall have no obligation to, make any payment
  or perform any act required of Borrower under any Loan Document
  which Borrower has failed to make or do.
  
      10.18  Construction.  The parties to this Agreement
  acknowledge that each party and its counsel have reviewed and
  revised this Agreement and that the normal rule of construction
  to the effect that any ambiguities are to be resolved against
  the drafting party shall not be employed in the interpretation
  of this Agreement or any amendments or exhibits hereto.
  
      10.19  Entire Agreement.  This Agreement, taken together
  with all of the other Loan Documents and all certificates and
  other documents delivered by Borrower to Lender, embodies the
  entire agreement and supersede all prior agreements, written
  and oral, relating to the subject matter hereof.
  
           IN WITNESS WHEREOF, this Agreement has been duly
  executed as of the date set forth above.
  
  
  BORROWER:                  ARDEN REALTY LIMITED PARTNERSHIP, 
                             a Maryland limited partnership
  
                        By:  ARDEN REALTY, INC.,
                             a Maryland corporation,
                             Its sole general partner
  
  
                             By /s/ Diana M. Laing
                                Diana Laing
                                Its Chief Financial Officer
  
  
  
    ADDRESS FOR NOTICE AND DELIVERY:
  
    Arden Realty Limited Partnership
    9100 Wilshire Boulevard, Suite 700
    Beverly Hills, CA  90212
    Attention:  Ms. Diana Laing
    
    Tel: (310) 271-8600
    Fax: (310) 274-6218
  
  
  
  
  LENDER:                    WELLS FARGO BANK, NATIONAL ASSOCIATION,
                               as a Lender
  
  
                     By /s/ Andrew Downs
                            Andrew Downs
                            Its Vice President
  
  
    ADDRESS FOR NOTICE AND DELIVERY:
  
    Wells Fargo Bank, N.A.
    Real Estate Group
      MAC 2064-129
    333 South Grand Avenue, 12th Floor
    Los Angeles, California 90071
    Attention:  Mr. Andrew Downs
  
    Tel: (213) 253-7344
    Fax: (213) 620-1460
  
  
  
    LIBOR OFFICE:
  
    Real Estate Group        Disbursement Center
    2120 East Park Place, Suite 100
    El Segundo, California 90245
    Attention:  Ms. Ann Colvin
  
    Tel: (310) 335-9458
    Fax: (310) 615-1014
  
  
  
                             Schedule 1.1A
  
  
                       Applicable Spread
  
  
  
  Total Liabilities to Gross Asset Value        Applicable Spread
  
  Less than or equal to 35%                     1.20%          
  
  Greater than 35%, but less than 45%           1.30%          
  
  Equal to or greater than 45%                  1.45%          

                           Schedule 4.1(j)
  
  
                           Litigation
  
  
  
                             None.

                            Schedule 4.1(s)
  
  
                     Environmental Matters
  
  
  
                             None.

                            Schedule 4.1(v)
  
  
                     Management Agreements
  
  
  
                             None.

                            Schedule 4.2(l)
  
  
                         Benefit Plans
  
  
  
  Arden Realty 401(k) Plan and Trust, pursuant to Agreement dated
  December 30, 1996, by and between Arden Realty Limited Partnership
  and Victor J. Coleman