EXHIBIT 10.3 (MORGENS) SECOND LOAN MODIFICATION AGREEMENT

EXHIBIT 10.3

(MORGENS)
SECOND LOAN MODIFICATION AGREEMENT

This Second Loan Modification Agreement ("Agreement") is entered into as of
_____________, 1997 between RGI HOLDINGS, INC., a Washington corporation
("Lender"), LEGEND PROPERTIES, INC., a Delaware corporation ("Borrower"), and
the affiliates and subsidiaries of Borrower identified on the signature pages of
this Agreement (the "Obligors").

Recitals

A. At the request of Borrower and Obligors, Lender agreed to modify the
Loan Documents as provided in the Loan Modification Agreement dated as of May
21, 1996 ("First Loan Modification"). Capitalized terms used herein and not
defined herein shall have the meanings set forth in the First Loan Modification.

B. Borrower and Obligors have now requested that Lender further modify
the Loan Documents to, among other things, reduce the interest rate on the Loan,
defer certain interest payments, and forbear from taking certain action against
Borrower and Obligors for certain periods of time.

C. Lender is willing to modify the Loan Documents on the terms and
conditions set forth herein.

NOW, THEREFORE, in consideration of the mutual covenants set forth below,
Lender, Borrower, and Obligors agree to the following:

1. Reaffirmation of Obligations Under Loan Documents. Borrower and
Obligors reaffirm all of their respective obligations under the Loan Documents.
Borrower and Obligors acknowledge and confirm that Borrower is justly indebted
to Lender under the Loan Documents and that the amounts owed by Borrower to
Lender under the Loan Agreement and Note are as set forth on Exhibit A attached
hereto.

2. Reduction in Interest Rate. Subject to the fulfillment of the
conditions precedent set forth in Section 6 hereof, Lender agrees to reduce the
interest rate on the Loan, effective as of January 1, 1997, from the Prime Rate
(as defined in Section 7(i) of the First Loan Modification) plus two percent
(2%) to the lesser of (a) the Prime Rate plus two percent (2%) or (b) Libor Rate
(as defined below) plus two and one-half percent (2.5%). The "Libor Rate" means
the one-month London Interbank Offered Rate as published in the Wall Street
Journal by Dow ▇▇▇▇▇ & Company, Inc.

3. Deferral of Interest Payments. Subject to the prior fulfillment of
the conditions precedent set forth in Section 6 hereof, Lender agrees that all
interest payments due on the Loan from and after January 1, 1997 shall be
deferred until the earlier of (a) December 31, 1997, (b) the date on which
Borrower refinances the Loan, or (c) the date on which Borrower has funds
available from other sources (such as the sale of certain properties) to pay
accrued interest on the Loan.

4. Use of Sale Proceeds from Lynnwood Shopping Center. Subject to the
prior fulfillment of the conditions precedent set forth in Section 6 hereof, the
definition of "NON-DEVELOPMENT PROPERTY," as set forth in Section 7(i) of the
First Loan Modification, is amended by deleting the second sentence relating to
the Lynnwood Shopping Center. It is the intent of the parties that
notwithstanding the provisions of subsections (a) and (b) of Section 2.4(B)(ii)
of the Credit Agreement, as modified by Section 7(g) of the First Loan
Modification, the proceeds from the sale of the Lynnwood Shopping Center are not
required to be paid to Lender and instead may be retained by Borrower and used
for other purposes.

5. Forbearance with Respect to Defaults. Subject to the prior
fulfillment of the conditions precedent set forth in Section 6 hereof, Lender
covenants and agrees that from the date hereof until December 31, 1997, for any
and all Events of Default or Potential Events of Default under the Loan
Documents as of the date hereof:

a. Lender shall not accelerate the Loan; and

b. Lender shall not attach, sequester, foreclose, replevin or
otherwise initiate any action against Borrower or Obligors or any of their
respective assets or properties.

6. Conditions Precedent. Lender's obligations under this Agreement are
subject to the prior fulfillment of the following conditions precedent:

a. This Agreement shall have been duly executed and delivered by
Lender, Borrower and Obligors.

b. The Effective Date shall have occurred under Section 4 of the
Stipulation and Agreement of Settlement signed in connection with the class
action litigation against Borrower in Delaware relating to the merger of
RGI U.S. Holdings, Inc. and Borrower, and Lender shall have received a
legal opinion satisfactory to it in form and substance confirming that the
effectiveness of said merger can no longer be challenged by the
shareholders of Borrower or any other party.

c. Lender shall have received certified copies of (i) the corporate
and/or partnership resolutions authorizing Borrower and Obligors to enter
into and perform this Agreement, (ii) an incumbency certificate for the
person signing this Agreement and related documents on behalf of Borrower
and Obligors, and (iii) such other statements, certificates, documents,
amendments and information with respect to the matters contemplated by this
Agreement and the Loan Documents as Lender may reasonably request.

7. Covenants of Borrower and Obligors. In consideration for Lender's
agreement to enter into this Agreement, Borrower and Obligors covenant and agree
that:

a. Borrower and Obligors shall comply with the terms and conditions
of this Agreement and shall make commercially reasonable efforts to
continue to comply with all of their obligations under the Loan Documents,
as modified by this Agreement.

b. Borrower shall pay all of the costs and expenses reasonably
incurred by Lender in connection with the preparation of this Agreement and
all documents delivered in connection herewith, including the costs and
expenses of counsel to Lender.

c. Borrower and Obligors shall from time to time at their expense
execute such additional documents as are reasonably requested by Lender
(and Fokus Bank ASA, to whom Lender has assigned the Note and related
security documents as collateral for a loan made by Fokus Bank ASA to
Lender) to protect Lender's and Fokus Bank ASA's interest in all
collateral, whether now held or hereafter acquired.

8. Waiver of Defenses. Borrower and Obligors hereby waive and release
any and all defenses they may have with respect to any of the Loan Documents or
any obligations owing thereunder based on or otherwise relating to any events or
circumstances which occurred or existed on or prior to the date hereof, and
hereby release and forever discharge Lender, and its officers, directors,
fiduciaries, agents and employees, from every claim, demand or cause of action
whatsoever, of every kind and nature, whether presently known or unknown,
suspected or unsuspected, arising or alleged to have arisen or which shall arise
hereafter from any act, omission or condition which occurred or existed on or
prior to the date hereof. Borrower and Obligors expressly waive any right to
setoff any claim, if any, against Lender against any sum owed or to be owed by
Borrower or Obligors under any Loan Document.

9. Representations and Warranties of Borrower and Obligors.

a. Borrower and Obligors acknowledge that the concepts embodied
in this Agreement have been independently negotiated with Lender by
Borrower and Obligors, at all times represented by counsel of Borrower's
and Obligors' own choosing, and that this Agreement is satisfactory to and
in the best interests of Borrower and Obligors, and that Borrower and
Obligors have actively requested that Lender enter into this Agreement.

b. Borrower and Obligors hereby represent and warrant that the
execution, delivery and performance of this Agreement have been duly
authorized, and that when executed and delivered by Borrower and Obligors
this Agreement shall constitute a valid and binding obligation of Borrower
and Obligors, enforceable against them in accordance with its terms, except
as the enforceability thereof may be affected by bankruptcy, insolvency,
moratorium, fraudulent transfer and other similar laws affecting the rights
and remedies of creditors generally.

c. Borrower and Obligors hereby further represent and warrant that
the amounts set forth in Exhibit A hereto are true and correct as of the
date hereof, and they hereby agree to indemnify, defend and hold Lender
harmless from and against any and all claims, losses, damages, costs or
expenses which Lender may incur arising out of or relating to any errors or
inaccuracies in such Schedules.

d. Borrower and Obligors hereby further represent and warrant that
their articles of incorporation, bylaws, and/or partnership agreements, as
the case may be, as well as the articles of incorporation and bylaws of
their respective general partners (as applicable), have not been amended or
modified since the date the Credit Agreement was signed.

10. Loan Documents Remain in Effect; References to Loan Documents. Except
as expressly amended by this Agreement, the Credit Agreement and all other Loan
Documents shall remain in full force and effect. In addition, Lender, Borrower,
and Obligors agree that all references to the Credit Agreement in any of the
Loan Documents or any other agreements between Lender and Borrower shall mean
the Credit Agreement, as amended by the First Loan Modification and this
Agreement.

11. Miscellaneous.

a. Modification. This Agreement may not be modified in any manner
except by written agreement signed by all of the parties hereto.

b. No Waiver. No course of dealings heretofore or hereafter among
Borrower, Obligors and Lender or any failure on the part of Lender in
exercising any rights or remedies under this Agreement or any existing by
law shall operate as a waiver of any right or remedy of Lender with respect
to any obligations owed to them, and no single or partial exercise of any
right or remedy hereunder shall operate as a waiver or a preclusion to the
exercise of any other rights or remedies that Lender may have under any
other document.

c. Severability. Whenever possible, each provision of this
Agreement shall be interpreted in such a manner as to be effective and
valid under applicable law, but if any provision of this Agreement shall be
prohibited by or under applicable law, such provision shall be ineffective
to the extent of such prohibition or invalidity, without invalidating the
remainder of such provision and the remaining provisions of this Agreement.

d. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York, excluding
its conflict of law rules.

e. Agents, Successors, and Assigns. This Agreement shall be binding
upon and inure to the benefit of the parties and their agents, successors
and assigns.

f. Counterparts. This Agreement may be executed in any number of
counterparts and shall be a valid and binding agreement when all parties
execute the original or a counterpart.

EXECUTED as of the date set forth above.

BORROWER: LEGEND PROPERTIES, INC., a Delaware
Corporation

By: ____________________________
Printed Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Treasurer
Address:
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇

OBLIGORS: VMIF/ANDEN SOUTHBRIDG VENTURE, an
Illinois joint venture

By LPI SOUTHBRIDGE CORP., its
managing general partner