PROMISSORY NOTE SECURED BY DEED OF TRUST
                                                San Francisco, California
                                                $3,350,000 (U.S.) 
                                                October 15, 1998

FOR VALUE  RECEIVED, Westco Community Builders, Inc., a
California Corporation, ("Maker"), promises to pay to Dover Investments
Corporation, a Delaware corporation, or order ("Holder"), the principal
sum of Three Million Three Hundred Fifty Thousand Dollars
($3,350,000), or so much thereof as may be disbursed by Holder to or for
the benefit or account of Maker, together with interest on the outstanding
unpaid principal balance, all as hereinafter provided, and on the following
agreements, terms, and conditions:

The principal sum is being disbursed by Holder to Maker or for the
account of Maker in accordance with the terms and conditions of the
Construction Loan Agreement ("Construction Loan Agreement") entered
into between Maker and Holder of even date herewith. All capitalized
terms herein shall have the meanings ascribed to them in the Construction
Loan Agreement.

1. Purpose of Loan. Maker represents and warrants that the
proceeds of the Loan evidenced by this Note shall be used exclusively for
the business and/or commercial purposes more particularly set forth in the
Construction Loan Agreement and that no portion of the proceeds will be
used for personal, family, or household purposes. Maker further agrees and
acknowledges that the Loan evidenced by this Note was arranged by
Dabenica Investment Corporation, a licensed California real estate broker,
which represents Holder exclusively.

2. Interest Accrued and Payment. Interest on funds as disbursed
shall accrue at a rate equal to two (2) floating percentage points over the
prime rate established by Bank of America, NT&SA. Accrued interest on
the outstanding principal balance shall be paid in monthly installments on
the first day of each month, commencing on December 1, 1998.

3. Principal Payments; Maturity Date. The entire unpaid principal
balance and all unpaid accrued interest shall be due and payable twelve (12)
months after the date of the initial disbursement hereunder ("Maturity
Date") unless such Maturity Date is accelerated or extended as provided
herein. Provided Maker has not committed a default hereunder, Maker
shall have the right to extend the maturity date for two additional six (6)
month periods ("Extension Period"). In order to exercise such right,
written notice of exercise must be received by Holder not less than thirty
(30) days prior to the Maturity Date and together with such notice Maker
shall deliver to Holder an extension fee equal to 1/2% of the Principal
Sum of this Note then outstanding per each six month extension.. The
Extension Period is subject to the following additional condition precedent
"that there will have occurred no material adverse change, as determined
by Holder in its sole discretion, in the financial condition of Maker or any
guarantor or other person or entity in any manner obligated to Holder
under the Construction Loan Agreement from that which existed as of the
date of this Note."

4. Manner of Payment. All principal and interest shall be paid in
lawful money of the United States of America and in immediately available
funds. All payments shall be made to Holder at its offices located at 100
Spear Street, Suite 520, San Francisco, California 94105, or at such other
place as Holder may from time to time designate in writing.

If any installment of principal or interest is received by Holder later
than ten (10) days after the due date thereof, it shall bear interest from the
due date until paid at the Default Rate specified in Section 7. In addition to
any interest accruing on any delinquent amount, Maker shall pay to Holder
a late payment fee equal to six percent (6%) of the delinquent amount as
liquidated damages. Maker acknowledges that Holder will incur costs and
other damages not contemplated by this Note on account of a late payment,
that such damages and costs will be extremely difficult and impractical to
ascertain, and that the foregoing late payment fee represents a fair and
reasonable estimate of such damages and expenses considering all of the
circumstances existing on the date of this Note.

All payments received from Maker shall be applied first to any late
payment fee, second to any accrued interest due, and the remainder, if any,
to the prepayment of principal. Any other designation by Maker of the
manner in which a payment is to be applied shall be of no effect.

5. Deed of Trust. This Note and the debt evidenced hereby is
secured by a Construction Deed of Trust ("Deed of Trust") of even date
herewith covering certain real property described as follows:

                        LEGAL DESCRIPTION

REAL PROPERTY in the City of San Leandro, County of Alameda, State
of California, described as follows:

PARCEL ONE:

Beginning at a point on the Northeastern line of San Leandro Boulevard,
formerly Estudillo Street, distant thereon Northwesterly 110. 00 feet from
the point of intersection thereof with the Northwestern line of Williams
Street, as said streets are shown on the Map hereinafter referred to;
running thence Northeasterly alone the said line of San Leandro Boulevard
40.00 feet; thence at right angles Northeasterly 150.00 feet; thence at right
angles Southeasterly 40.00 feet; thence at right angles Southwesterly
150.00 feet to the point of beginning.

Being a portion of Lots "G", "L", "M", "N", in Block 27 as said
lots and block are shown on that certain Map entitled, "Map of the Town of
San Leandro, County Seat of Alameda County", filed February 27, 1855,
in Book 2 of Maps, Page 43, in the office of the County Recorder of
Alameda County

PARCEL TWO:

Beginning at a point on the Northeastern line of San Leandro Boulevard,
formerly Estudillo Street, distant thereon Northwesterly 75.00 feet from the
point of intersection thereof with the Northwestern line of intersection
thereof with the Northwestern line of Williams Street, as said streets are
shown on the Map hereinafter referred to; running thence Northwesterly
along the said line of San Leandro Boulevard 35.00 feet; thence at right
angles Northeasterly 150.00 feet; thence at right angles Southeasterly 35.00
feet; thence at right angles Southwesterly 150.00 feet to the point of
beginning.

Being a portion of Lots "L", "M", and "N", in Block 27, as said lots and
block are shown on that certain Map entitled, "Map of the Town of San
Leandro, County Seat of Alameda County, " filed February 27, 1855 in
Book 2 of Maps, Page 43, in the office of the County Recorder of Alameda
County.

Excepting from Parcels One and Two the land described as Parcels A & B
in the Final Order of Condemnation, recorded September 12, 1983, Series
No. 83-168337, Official Records.

A.P. No. 75-27-7-3

PARCEL THREE:

Lot 1, Tract 4879, filed June 5, 1984, Map Book 145, Pages I and 2,
Alameda County Records.

A.P. No. 75-27-8

PARCEL FOUR:

Those portions of lots H, I, J and K, Block 27, Map of Map of the Town
of San Leandro, etc., filed February 27, 1885, Map Book 1, Page 19,
Alameda County Records, described as follows:

Commencing at a point on the Western line of Carpentier Street, distant
thereon 98 feet Northerly from the point of intersection thereof with the
Northern line of Williams Street; running thence Northerly along said line
of Carpentier Street 52 feet; thence Westerly parallel with said line of
Williams Street 150 feet; thence Southerly parallel with said line of
Carpentier Street 100 feet; thence Easterly parallel with said line of
Williams Street 23 feet; thence Northerly parallel with said line if
Carpentier Street 48 feet; thence Easterly parallel with said line of 
Williams Street 127 feet to the point of beginning.

A.P. No. 75-27-2-1

Reference is made to the Deed of Trust for a description of the
nature and extent of the security afforded by the Deed of Trust, the rights
of Holder with respect to such security, and the terms and conditions upon
which this Note is secured.

6. Right of Prepayment in Full. Upon ten (10) days' prior written
notice to Holder, Maker shall have the right to prepay this Note in full with
accrued interest and late fees, if any, to date of full prepayment.

7. Default and Acceleration. In the event of any Default, Holder
may, in its sole discretion, declare all sums owed and to become owing on
this Note immediately due and payable irrespective of any Maturity Date
expressed herein. All such sums shall bear interest from the date of Default
until paid at five percentage points per annum over the interest rate
otherwise payable hereunder ("Default Rate"). For purposes of this Note, a
"Default" shall mean:

(a) a breach or default in payment when due of any indebtedness evidenced
by this Note; or                                                              

(b) a breach or default in the performance of any other term,
covenant, condition or agreement under this Note or the Deed of Trust, or
the Construction Loan Agreement, or any other document or agreement
executed by Maker in connection with the making of this loan, which
breach or default is not cured within ten (10) days after notice of such
breach or default or, if such breach or default is not reasonably capable of
being cured within such ten (10) day period, if Maker has not commenced
in good faith the curing of such breach or default within such ten (10) day
period or does not thereafter prosecute to completion with diligence and
continuity the curing thereof, which cure must in any event be completed
within thirty (30) days after such notice to Maker; or

(c) if Maker applies for or consents to the appointment of a
receiver, liquidator, custodian or trustee for it or any portion of its
property, or if such receiver, liquidator, custodian or trustee is appointed
for Maker or its property and is not discharged within ten (10) days after
the date of such appointment, or Maker makes an assignment for the
benefit of creditors, or Maker admits in writing its inability to pay its debts
as they become due, or Maker becomes insolvent, or a petition is filed by
Maker pursuant to any of the provisions of the Bankruptcy Code,11 U.
S.C. Sections 101 et  seq., as amended, or any similar or successor
statute, or such a petition is filed against Maker and is not dismissed or
vacated within ten (10) days after the date of such filing; or

(d) if there is an attachment or sequestration of any of the
property of Maker and the same is not discharged or bonded within thirty
(30) days; or

(e) if Maker shall cause or institute or there shall be instituted
against Maker any proceeding for the dissolution or termination of Maker;

(f) if any representation, warranty or disclosure made to Holder
by Maker proves to be materially false or misleading on the date as of
which made; or

(g) if Maker shall be in default in connection with any other
obligation of Maker to Holder, whether or not related to the obligations
arising under this Note.

8. Due on Transfer. Holder may, at its option, declare immediately
due and payable all sums owing on this Note upon the sale or transfer,
without the Holder's prior written consent, of all or any part of the real
property, or any interest in the real property described in the above
described Construction Deed of Trust. A "sale or transfer" means the
conveyance of real property or any right, title or interest therein; whether 
legal or equitable; whether voluntary or involuntary; whether by outright sale, 
deed, installment sale contract, land contract, contract for deed, leasehold 
interest with a term greater than three (3) years, lease-option contract, or 
by sale, assignment, or transfer of any beneficial interest in or to any land 
trust holding title to the real property, or by any other method of conveyance 
of real property interest. If any Maker is a corporation or partnership, 
transfer also includes any change in ownership of more than twenty five percent
(25%) of the voting stock or partnership interests, as the case may be, of
Maker. However, this option shall not be exercised by Holder if such
exercise is prohibited by applicable law. Notwithstanding the above Holder
consents to the release provisions set forth in the Deed of Trust.

9.   Costs of Collection. Maker agrees to pay all costs and expenses which
Holder may incur by reason of any Default including, without limitation,
reasonable attorneys' fees with respect to legal services incurred in
connection with any Default, or the determination of any rights or remedies
of Holder under this Note or under the Deeds of Trust, whether or 
not a suit is actually commenced.

10. Liability. Maker waives diligence, presentment for payment,
protest, and demand with respect to this Note. Maker further waives notice
of protest, demand, dishonor, non-payment, and acceleration of this Note.
Maker agrees that any modification or extension of the terms of payment of
this Note that may be permitted from time to time by Holder with or
without notice to Maker, and the release of any property, whether real or
personal, or any part thereof, from the lien of the Deed of Trust, shall not
diminish or impair Maker's liability for the payment of this Note.

11. Notices. Any and all notices given under this Note shall be in
writing and shall be either personally delivered to the appropriate party or
shall be sent by United States registered or certified mail, postage prepaid,
and properly addressed as set forth below:

In the case of notice directed to Maker:
     Westco Community Builders, Inc.
     15225 Wicks Blvd.
     San Leandro, CA 94579

In the case of notice directed to Holder:
     Dover Investments Corporation
     100 Spear Street, Suite 520
     San Francisco, CA 94105

Any such notice shall be deemed given and effective upon personal delivery
or three days after being mailed in the manner set forth above.

12. Usury Savings Clause. All agreements between Maker and Holder
are hereby expressly limited so that in no contingency or event whatsoever
shall the amount paid or agreed to be paid to Holder for the use,
forbearance, or detention of the money to be loaned exceed the maximum
permissible under applicable law. If, from any circumstance whatsoever,
fulfillment of any provision hereof, at the time fulfillment of such provision
shall be due, shall be prohibited by law, the obligation to be fulfilled shall
be reduced to the maximum not so prohibited; and if from any
circumstance Holder should ever receive as interest an amount which
would exceed the highest lawful rate, such amount as would be excessive
interest shall be applied to the reduction of the principal of the Note and
not to the payment of interest. This provision shall control every other
provision of all agreements between Maker and Holder.

13. General Provisions

(a) Time is of the essence of this Note.

(b) This Note may not be changed, amended, or modified except
by a further written agreement between Maker and Holder.

(c) Any failure of Holder to exercise any of its rights under this
Note shall not constitute a waiver of those rights by Holder or a waiver by
Holder of any other rights.

(d) If Maker consists of one or more persons or entities, all
obligations under this Note shall be joint and several.

(e) This Note and the rights and duties of Maker and Holder shall
be governed by the laws of the State of California for all purposes.

(f) The terms of this Note shall inure to the benefit of and bind
Maker and Holder and their respective heirs, legatees, devisees,
administrators, legal representatives, successors, and assigns.

IN WITNESS WHEREOF, the undersigned Maker has executed the
within instrument as of the date first written above.

                 Westco Community Builders, Inc., a California Corporation

                 By:   /s/ Jerry Finch              
                       Jerry Finch, President

                 By:   /s/ Britt Evans                
                       Britt Evans, Executive Vice President




Dover Investments Corporation 100 Spear Street, #520 San Francisco,
California 94105

CONSTRUCTION DEED OF TRUST                          

THIS DEED OF TRUST IS DATED October 15,1998 and is entered
into by and among Westco Community Builders, Inc., a California
Corporation, whose address is 15225 Wicks Blvd, San Leandro, California
94579 (referred to below as "Trustor"); Dover Investments Corporation,
whose address is 100 Spear Street, Suite 520, San Francisco, CA 94105
(referred to below sometimes as "Lender" and sometimes as
"Beneficiary"); and First American Title Guaranty Company, whose
address is 5976 West Las Positas Blvd. #100, Pleasanton, California
945888543 (referred to below as "Trustee").

CONVEYANCE AND GRANT. For valuable consideration, Trustor
irrevocably grants, transfers and assigns to Trustee in trust, with power of
sale, for the benefit of Lender as Beneficiary, all of Trustor's right, title,
and interest in and to the following described real property, together with
all existing or subsequently erected or affixed buildings, improvements and
fixtures; all easements, right of way, and appurtenances; all water, water
rights and ditch rights (including stock in utilities with ditch or irrigation
rights); and all other rights, royalties, and profits relating to the real
property, including without limitation all minerals, oil, gas, geothermal and
similar matters, located in Alameda County, State of California (the "Real
Property"):

                        LEGAL DESCRIPTION

REAL PROPERTY in the City of San Leandro, County of Alameda, State
of California, described as follows:

PARCEL ONE:

Beginning at a point on the Northeastern line of San Leandro Boulevard,
formerly Estudillo Street, distant thereon Northwesterly 110. 00 feet from
the point of intersection thereof with the Northwestern line of Williams
Street, as said streets are shown on the Map hereinafter referred to;
running thence Northeasterly along the said line of San Leandro Boulevard
40.00 feet; thence at right angles Northeasterly 150.00 feet; thence at right
angles Southeasterly 40.00 feet; thence at right angles Southwesterly
150.00 feet to the point of beginning.

Being a portion of Lots "G", "L", "M", "N", in Block 27 as said
lots and block are shown on that certain Map entitled, "Map of the Town of
San Leandro, County Seat of Alameda County", filed February 27, 1855,
in Book 2 of Maps, Page 43, in the office of the County Recorder of
Alameda County

PARCEL TWO:

Beginning at a point on the Northeastern line of San Leandro Boulevard,
formerly Estudillo Street, distant thereon Northwesterly 75.00 feet from the
point of intersection thereof with the Northwestern line of intersection
thereof with the Northwestern line of Williams Street, as said streets are
shown on the Map hereinafter referred to; running thence Northwesterly
along the said line of San Leandro Boulevard 35.00 feet; thence at right
angles Northeasterly 150.00 feet; thence at right angles Southeasterly 35.00
feet; thence at right angles Southwesterly 150.00 feet to the point of
beginning.

Being a portion of Lots "L", "M", and "N", in Block 27, as said lots and
block are shown on that certain Map entitled, "Map of the Town of San
Leandro, County Seat of Alameda County, " filed February 27, 1855 in
Book 2 of Maps, Page 43, in the office of the County Recorder of Alameda
County.

Excepting from Parcels One and Two the land described as Parcels A & B
in the Final Order of Condemnation, recorded September 12, 1983, Series
No. 83-168337, Official Records.

A.P. No. 75-27-7-3

PARCEL THREE:

Lot 1, Tract 4879, filed June 5, 1984, Map Book 145, Pages 1 and 2,
Alameda County Records.

A.P. No. 75-27-8

PARCEL FOUR:

Those portions of lots H, I, J and K, Block 27, Map of Map of the Town
of San Leandro, etc., filed February 27, 1885, Map Book 1, Page 19,
Alameda County Records, described as follows:

Commencing at a point on the Western line of Carpentier Street, distant
thereon 98 feet Northerly from the point of intersection thereof with the
Northern line of Williams Street; running thence Northerly along said line
of Carpentier Street 52 feet; thence Westerly parallel with said line of
Williams Street 150 feet; thence Southerly parallel with said line of
Carpentier Street 100 feet; thence Easterly parallel with said line of
Williams Street 23 feet; thence Northerly parallel with said line if
Carpentier Street 48 feet; thence Easterly parallel with said line of Williams
Street 127 feet to the point of befinning.

A.P. No. 75-27-2-1

Trustor presently assigns to Lender (also known as Beneficiary in this Deed
of Trust) all of Trustor's right, title, and interest in and to all present and
future leases of the Property and all Rents from the Property. This is an
absolute assignment pursuant to California Civil Code Section 2938. In
addition, Trustor grants Lender a Uniform Commercial Code security
interest in the Rents and the Personal Property defined below.
DEFINITIONS. The following words shall have the following meanings
when used in this Deed of Trust. Terms not otherwise defined in this Deed
of Trust shall have the meanings attributed to such terms in the Uniform
Commercial Code or as specifically defined in the Related Documents. All 
references to dollar amounts shall mean amounts in lawful money of the United 
States of America.

Beneficiary. The word "Beneficiary" means Dover Investments
Corporation, its successors and assigns Dover Investments Corporation also
is referred to as "Lender" in this Deed of Trust.

Deed of Trust. The words "Deed of Trust" mean this Deed of
Trust among Trustor, Lender, and Trustee, and includes without
limitation all assignment and security interest provisions relating to the
Personal Property and Rents.

Guarantor. The word "Guarantor" means and includes without
limitation, any and all guarantors, sureties, and accommodation parties in
connection with the Indebtedness.

Improvements. The word "Improvements" means and includes
without limitation all existing and future improvements, fixtures, buildings,
structures, mobile homes affixed on the Real Property, facilities, additions
and other construction on the Real Property.

Indebtedness. The word "Indebtedness" means all principal and
interest payable under the Line of Credit Note and any amounts expended
or advanced by Lender to discharge obligations of Trustor or expenses
incurred by Trustee or Lender to enforce obligations of Trustor under this
Deed of Trust, together with interest on such amounts as provided in this
Deed of Trust.

Lender. The word "Lender" means Dover Investments Corporation
its successors and assigns.

Note. The word "Note" means the Secured Promissory Note dated
October 15, 1998, in the principal amount of $3,350,00 from Trustor to
Lender, together with all renewals, extensions, modifications, refinances,
and substitutions for the Note.

Personal Property. The words "Personal Property" mean all
equipment, fixtures, and other articles of personal property now or
hereafter owned by Trustor, and now or hereafter attached or affixed to the
Real Property; together with all accessions, parts, and additions to, all
replacements of, and all substitutions for, any of such property; and
together with all proceeds (including without limitation all insurance
proceeds and refunds of premiums) from any sale of other disposition of
Property. The words "Personal Property" also include all tangible and
intangible items obtained or owned by, or in the possession of Trustor that
are directly or indirectly related to the acquisition, development, design,
construction, permitting, marketing, or habitation of the Real Property or
the Improvements to be constructed on the Real Property, whether
heretofore or hereafter issued, prepared, or executed, including without
limitation all permits, licenses, authorizations and approvals, trademarks
and trade names, and any and all land use entitlements, development rights,
sewer capacity, approvals, density allocations and other rights or approvals
relating to or authorizing the development or occupancy of the Property,  
plus all utility or other deposits, reimbursement right, studies, tests,
contracts, plans and specifications, relating to the Property and
Improvements.

Property. The word "Property" means collectively the Real Property and the 
Personal Property.

Real Property. The words "Real Property" mean the property, interests and 
rights described above in the "Conveyance and Grant" section.

Related Documents. The words "Related Documents" mean and
include without limitation all Promissory Notes, Credit Agreements,
Construction Loan Agreements, Guaranties, Environmental Indemnity
Agreements, Security Agreements, Mortgages, Deeds of Trust, and all
other instruments, agreements and documents, whether now or hereafter
existing, executed in connection with the Indebtedness.

Rents. The word "Rents" means all present and future rents,
revenues, income, issues, royalties, profits, and other benefits derived from
the Property.

Trustee. The word "Trustee" means First American Title Guaranty
Company and any substitute or successor trustees.

Trustor. The word "Trustor" means any an all persons and entities
executing this Deed of Trust, including without limitations all Trustors
named above.

THE DEED OF TRUST, INCLUDING THE ASSIGNMENT OF RENTS AND THE SECURITY INTEREST 
IN THE RENTS AND PERSONAL PROPERTY, IS GIVEN TO SECURE (1) PAYMENT OF THE
INDEBTEDNESS AND (2) PERFORMANCE OF ANY AND ALL OBLIGATIONS OF TRUSTOR UNDER 
THE NOTE, THE RELATED DOCUMENTS, AND THIS DEED OF TRUST. THIS DEED OF
TRUST, INCLUDING THE ASSIGNMENT OF RENTS AND THE SECURITY INTEREST IN THE 
RENTS AND PERSONAL PROPERTY, IS ALSO GIVEN TO SECURE ANY AND ALL OBLIGATIONS 
OF TRUSTOR UNDER THAT CERTAIN CONSTRUCTION LOAN AGREEMENT BETWEEN TRUSTOR AND 
LENDER OF EVEN DATE HEREWITH. ANY EVENT OF DEFAULT UNDER THE CONSTRUCTION 
LOAN AGREEMENT, OR ANY OF THE RELATED DOCUMENTS REFERRED TO THEREIN, SHALL 
ALSO BE AN EVENT OF DEFAULT UNDER THIS DEED OF TRUST. THE NOTE AND THIS DEED 
OF TRUST ARE GIVEN AND ACCEPTED ON THE FOLLOWING TERMS:

PAYMENT AND PERFORMANCE. Except as otherwise provided in this
Deed of Trust, Trustor shall pay to Lender all amounts secured by this
Deed of Trust as they become due, and shall strictly and in a timely manner
perform all of Trustor's obligations under the Note, this Deed of Trust, and
the Related Documents.

POSSESSION AND MAINTENANCE OF THE PROPERTY. Trustor
agrees that Trustor's possession and use of the Property shall be governed
by the following provisions.

Possession and Use. Until the occurrence of an Event of Default,
Trustor may (a) remain in possession and control of the Property, (b) use,
operate or manage the Property, and (c) collect any Rents from the
Property.

Duty to Maintain. Trustor shall maintain the Property in tenant able
condition and promptly perform all repairs, replacements, and maintenance
necessary to preserve its value.

Environmental Compliance.

(A)  In addition to and without limiting any other
obligations of Trustor under this Deed of Trust and the Related Documents,
Trustor shall comply with all Environmental Laws relating to the
Premises and the conduct of Trustor's business connection therewith.
Trustor shall immediately remove and dispose of any hazardous substance
found on, in, under or affecting the Premises. All such removals and
disposals shall be undertaken and performed in compliance with
Environmental Laws and at Trustor's expense. Trustor shall not release, or
permit, allow or suffer any release or threat of release, of any Hazardous
Substance on, in, under or affecting the Premises or from the Premises
onto any properties adjacent to the Premises except for such de minimums
release typically associated with the use of portions of the Premises for
driving and parking motor vehicles, and which are not likely to result in
any liability under any Environmental Laws. Trustor shall not generate or
permit, allow or suffer any Hazardous Substances to be generated on, in,
or under the Premises. Trustor shall not store or permit, allow or suffer
Hazardous Substances to be stored on, in or under the Premises. Trustor
shall not permit, allow or suffer any lien under any Environmental Law to
attach to or encumber the Premises or any part thereof or interest therein.

(B)  Trustor shall indemnify Trustee and Beneficiary,
defend Trustee and Beneficiary (with attorneys acceptable to Trustee and
Beneficiary) and hold Trustee and Beneficiary harmless from and against
any and all environmental losses, except those caused by the sole
negligence or actions of Trustee or Beneficiary or their agents.

(C)  If Trustor shall fail to comply with any of the
provisions of this Section or any provision of any of the Related Documents
relating to Hazardous Substances and/or Environmental Laws, Beneficiary
shall have the right, but not the obligation, to enter upon the Premises and
to expend funds to cure such failure by performing such remedial work as
may be necessary to make the Premises conform to Environmental Laws.
Any amounts expended by Beneficiary as a result thereof shall be due and
payable by Trustor to Beneficiary on demand and shall earn interest from
and after the date the same are expended by Beneficiary, whether or not
demand for repayment is then made, at the interest rate applicable under
the Note from and after maturity. All such amounts and all interest thereon
shall be a lien on and security in the Premises and shall be secured by this
Deed of Trust in addition to all other obligations of Trustor to Beneficiary
secured hereby. Any partial exercise by Beneficiary of Beneficiary's
remedies herein, including any partial undertaking by Beneficiary of
remedial work, shall not obligate Beneficiary to continue to exercise such
remedies or complete any remedial work commenced or to take any further
or additional actions or require Beneficiary to expend or incur any further
sums in connection therewith. The exercise by Beneficiary and
Beneficiary's remedies or approval rights herein shall not operate to place
upon Beneficiary any responsibility for the operation, control, care,
management or repair of the Premises, or make Beneficiary the "owner"
or "operator" of the Premises or a "responsible party" within the meaning
of Environmental Laws.

(D)  Trustor shall promptly advise Beneficiary in writing
of (i) Trustor's receipt of any notice from any federal, state, local or other
governmental agency or authority in connection with any Hazardous
Substances on, in, under or affecting the Premises or emanating from the
Premises, or of any governmental or regulatory actions instituted or
threatened in writing under any governmental laws affecting the Premises
or any indemnity hereunder, including, without limitation, any notice of
inspection, abatement or noncompliance, (ii) all claims made or threatened
in writing by any third party against Trustor or the Premises relating to
any Hazardous Substances or in violation of any Environmental Laws, and
(iii) Trustor's discovery of the presence of any Hazardous Substances on
the Premises or any property adjacent thereto or any release or threat of
release of any Hazardous Substances on, in or under or affecting the
Premises or emanating from the Premises, or of any occurrence or
condition on the Premises or any real property adjoining the Premises
which could subject Trustor or the Premises to a claim under any
Environmental Laws or to any restrictions on ownership, occupancy,
transferability or use of the Premises under any Environmental Laws in
connection with the matters covered by this section on environmental
compliance.

(E)  The obligations of Trustor under this Section on
environmental compliance or secured obligations under this Deed of Trust
for so long as this Deed of Trust shall remain in effect, and thereafter shall
survive and be unsecured obligations of Trustor to the extent permitted by
applicable law. The obligations of Trustor under this Section are intended
to be supplementary to and not in substitution for or in derogation of the
provisions of the Environmental Indemnity Agreement.

Nuisance, Waste. Trustor shall not cause, conduct or permit any
nuisance nor commit, pen-nit, or suffer any stripping of or waste on or to
the Property or any portion of the Property. Without limiting the generality
of the foregoing, Trustor will not remove, or grant to any other party the
right to remove, any timber, minerals (including oil and gas), soil, gravel
or rock products without the prior written consent of Lender.

Removal of Improvements. Trustor shall not demolish or remove
Improvements from the Real Property without the prior written consent of
Lender. As a condition to the removal of any Improvements, Lender may
require Trustor to make arrangements satisfactory to Lender to replace
such Improvements with Improvements of at least equal value.

Lender's Right to Enter. Lender and its agents and representatives
may enter upon the Real Property at all reasonable times to attend to
Lender's interests and to inspect the Property for purposes of Trustor's
compliance with the terms and conditions of this Deed of Trust.

Compliance with Governmental Requirements. Trustor shall
promptly comply with all laws, ordinances, and regulations, now or
hereafter in effect, of all governmental authorities applicable to the use or
occupancy of the Property. Trustor may contest in good faith any such law,
ordinance, or regulation and withhold compliance during any proceeding,
including appropriate appeals, so long as Trustor has notified Lender in
writing prior to doing so and so long as, in Lender's sole opinion, Lender's
interests in the Property are not jeopardized. Lender
may require Trustor to post adequate security or a surety bond, reasonably
satisfactory to Lender, to protect Lender's interest.

Duty to Protect. Trustor agrees neither to abandon nor leave
unattended the Property. Trustor shall do all other acts, in addition to those
acts set forth above in this section, which from the character and use of the
Property are reasonably necessary to protect and preserve the Property.

DUE ON SALE - CONSENT BY LENDER. Lender may, at its option,
declare immediately due and payable all sums secured by this Deed of
Trust upon the sale or transfer, without the Lender's prior written consent,
of all or any part of the Real Property, or any interest in the Real Property.
A "sale or transfer" means the conveyance of Real Property or any right,
title or interest therein; whether legal or equitable; whether voluntary or
involuntary; whether by outright sale, deed, installment sale contract, land
contract, contract for deed, leasehold interest with a term greater than three
(3) years, lease-option contract, or by sale, assignment, or transfer of any
beneficial interest in or to any land trust holding title to the Real Property,
or by any other method of conveyance of Real Property interest. If any
Trustor is a corporation or partnership, transfer also includes any change in
ownership of more than twenty-five percent (25%) of the voting stock or
partnership interests, as the case may be, of Trustor. However, this option
shall not be exercised by Lender if such exercise is prohibited by applicable
law. Notwithstanding the above and provided that (1) the Note is not in
default, and (ii) the final subdivision map of Tract 7001 subdividing the
Real Property into twenty five lots is of record, individual lots shall be
released from the lien of this Deed of Trust upon receipt by Holder of an
amount equal to $134,000 per lot/house to be released.

TAXES AND LIENS. The following provisions relating to the taxes and
liens on the Property are a part of this Deed of Trust.

Payment. Trustor shall pay when due (and in all events at least ten
(10) days prior to delinquency) all taxes, special taxes, assessments,
charges (including water and sewer), fines and impositions levied against or
on account of the Property, and shall pay when due all claims for work
done on or for services rendered or material furnished to the Property.
Trustor shall maintain the Property free of all liens having priority over or
equal to the interest of Lender under this Deed of Trust, except for the lien
of taxes and assessments not due and except as otherwise provided in this
Deed of Trust.

Right To Contest. Trustor may withhold payment of any tax,
assessment, or claim in connection with a good faith dispute over the
obligation to pay, so long as Lender's interest in the Property is not
jeopardized. If a lien arises or is filed as a result of nonpayment, Trustor
shall within thirty (30) days after the lien arises or, if a lien is filed, 
within thirty (30) days after Trustor has notice of the filing, secure the 
discharge of the lien, or if requested by Lender, deposit with Lender cash or a
sufficient corporate surety bond or other security satisfactory to Lender in
an amount sufficient to discharge the lien plus any costs and attorneys' fees
or other charges that could accrue as a result of a foreclosure or sale under
the lien. In any contest, Trustor shall defend itself and Lender and shall
satisfy any adverse judgment before enforcement against the Property.
Trustor shall name Lender as an additional oblige under any surety bond
furnished in the contest proceedings.

Evidence of Payment. Trustor shall upon demand furnish to Lender
satisfactory evidence of payment of the taxes or assessments and shall
authorize the appropriate governmental official to deliver to Lender at any
time a written statement of the taxes and assessments against the Property.

Notice of Construction. Trustor shall notify Lender at least fifteen
(15) days before any work is commenced, any services are furnished, or
any materials are supplied to the Property, if any mechanic's lien, material
men's lien, or other lien could be asserted on account of the work,
services, or materials. Trustor will upon request of Lender famish to
Lender advance assurances satisfactory to Lender that Trustor can and will
pay the cost of such improvements.

PROPERTY DAMAGE INSURANCE. The following provisions relating to insuring the 
Property are a part of this Deed of Trust.

Maintenance of Insurance. Trustor shall procure and maintain
policies of fire insurance with standard extended coverage endorsements on
a replacement basis for the full insurable value covering all improvements
on the Real Property in an amount sufficient to avoid application of any
coinsurance, clause, and with a standard mortgagee clause in favor of
Lender, together with such other insurance, including but not limited to
hazard, liability, and business interruption, as Lender may reasonably
require. Notwithstanding the foregoing, in no event shall Trustor be
required to provide hazard insurance in excess of the replacement value of
the improvements on the Real property. Policies shall be written in form,
amounts, coverages and basis reasonably acceptable to lender and issued by
a company or companies reasonably acceptable to Lender. Trustor, upon
request of Lender, will deliver to Lender from time to time the policies or
certificates of insurance in form satisfactory to Lender, including
stipulations that coverages will not be canceled of diminished without at
least ten (10) days' prior written notice to Lender. Should the Real
Property at any time become located in an area designated by the Director
of the Federal Emergency Management Agency as a special flood hazard
area, Trustor agrees to obtain and maintain Federal Flood Insurance to the
extent such insurance is required and is or becomes available, for the term
of the loan and for the full unpaid principal balance of the loan, or the
maximum limit of coverage that is available, whichever is less.

Application of Proceeds. Trustor shall promptly notify Lender of
any loss or damage to the Property. Lender may make proof of loss if
Trustor fails to do so within fifteen (15) days of the casualty. If in Lender's
sole judgment Lender's security interest in the Property has been impaired,
Lender may, at its election, receive and retain the proceeds and apply the
proceeds to the reduction of the Indebtedness, payment of any lien affecting
the Property, or the restoration and repair of the Property. If the proceeds
are to be applied to restoration and repair, Trustor shall repair or replace
the damaged or destroyed Improvements in a manner satisfactory to
Lender. Lender shall, upon satisfactory proof of such expenditure, pay or
reimburse Trustor from the proceeds for the reasonable cost of repair or
restoration if trustor is not in default under this Deed of Trust. Any
proceeds which have not been disbursed within 180 days after their receipt
and which Lender has not committed to the repair or restoration of the
Property shall be used first to pay any amount owing to Lender under this
Deed of Trust, then to pay accrued interest, and the remainder, if any, shall
be applied to the principal balance of the Indebtedness. If Lender holds any
proceeds after payment in full of the Indebtedness, such proceeds shall be
paid to Trustor as Trustor's interests may appear.

Unexpired Insurance at Sale. Any unexpired insurance shall insure
to the benefit of, and pass to, the purchaser of the Property covered by this
Deed of Trust at any trustee's sale or other sale held under the provisions
of this Deed of Trust, or at any foreclosure sale of such Property.

Trustor's Report on Insurance. Upon request of Lender, however
not more than once a year, Trustor shall furnish to Lender a report on each
existing policy of insurance showing: (a) the name of the insurer; (b) the
risks insured; (c) the amount of the policy; (d) the property insured, the
then current replacement value of such property, and the manner of
determining that value; and (e) the expiration date of the policy. Trustor
shall, upon request of Lender, have an independent appraiser satisfactory to
Lender determine the cash value replacement cost of the Property.

EXPENDITURES BY LENDER. If Trustor fails to comply with any
provision of this Deed of Trust, or if any action or proceeding is
commenced that would materially affect Lender's interests in the Property,
Lender on Trustor's behalf may, but shall not be required to, take any
action that Lender deems appropriate. Any amount that Lender expends in
so doing will bear interest at the rate charged under the Note from the date
incurred or paid by lender to the date of repayment by Trustor. All such
expenses, at Lender's option, will (a) be payable on demand, (b) be added
to the balance of the Note and be apportioned among and be payable with
any installment payments to become due during either (i) the term of any
applicable insurance policy or (ii) the remaining term of the Note, or (c) be
treated as a balloon payment which will be due and payable at the Note's
maturity. This Deed of Trust also will secure payment of these amounts.
The rights provided for in this paragraph shall be in addition to any other
rights or any remedies to which Lender may be entitled on account of the
default. Any such action by Lender shall not be construed as curing the
default so as to bar Lender from any remedy that it otherwise would have
had.

WARRANTY; DEFENSE OF TITLE. The following provisions relating to
ownership of the Property are a part of this Deed of Trust.

Title. Trustor warrants that: (a) Trustor holds good and marketable
title of record to the Property in fee simple, free and clear of all liens and
encumbrances other than those set forth in the Real Property description or
in any title insurance policy, title report, or final title opinion issued in
favor of, and accepted by, Lender in connection with this Deed of Trust,
and (b) Trustor has the full right, power, and authority to execute and
deliver this Deed of Trust to Lender.

Defense of Title. Subject to the exception in the paragraph above,
Trustor warrants and will forever defend the title to the Property against
the lawful claims of all persons. In the event any action or proceeding is
commenced that questions Trustor's title or the interest of Trustee or
Lender under this Deed of Trust, Trustor shall defend the action at
Trustor's expense. Trustor may be the nominal party in such proceeding,
but Lender shall be entitled to participate in the proceeding and to be
represented in the proceeding by counsel of Lender's own choice, and
Trustor will deliver, or cause to be delivered, to Lender such instruments
as Lender may request from time to time to permit such participation.

Compliance With Law. Trustor warrants that the Property and
Trustor's use of the Property complies with all existing applicable laws,
ordinances, and regulations of governmental authorities.

CONDEMNATION. The following provisions relating to condemnation
proceedings are a part of this Deed of Trust.

Application of Net Proceeds. If all or any part of the Property is
condemned by eminent domain proceedings or by any proceeding or
purchase in lieu of condemnation, Lender may at its election require that all
or any portion of the net proceeds of the award be applied to the
Indebtedness or the repair or restoration of the Property. The net proceeds
of the award shall mean the award after payment of all reasonable costs,
expenses, and attorneys' fees incurred by Trustee or Lender in connection
with the condemnation.

Proceedings. If any proceeding in condemnation is filed, trustor
shall promptly notify Lender in writing, and trustor shall promptly take
such steps as may be necessary to defend the action and obtain the award.
Trustor may be the nominal party in such proceeding, but Lender shall be
entitled to participate in the proceeding and to be represented in the
proceeding by counsel of its own choice, and Trustor will deliver or cause
to be delivered to Lender such instruments as may be requested by it from
time to time to permit such participation. Further in connection with the
above referenced right, Trustor may be a party to the action or proceeding
involved, and if so, Lender may be represented by counsel also
representing Trustor and mutually acceptable to Trustor and Lender, except
that in the case of (a) conflict of interest by said counsel in representing
both Trustor and Lender, (b) the existence of adverse interests between
Trustor and Lender, (c) said counsel not being reasonably satisfactory to
Lender or not defending Lender in a reasonably satisfactory manner, then
Lender shall have the right to be represented by counsel of its choice
without affecting or otherwise impairing any of its rights hereunder,
including without limitation the aforesaid right to charge Trustor with its
attorneys' fees and expenses.

IMPOSITION OF TAXES, FEES AND CHARGES BY GOVERNMENTAL AUTHORITIES. 
The following provisions relating to governmental taxes, fees and charges are 
a part of this Deed of Trust.

Current Taxes, Fees and Charges. Upon request by Lender, Trustor
shall execute such documents in addition to this Deed of Trust and take
whatever other action is requested by Lender to perfect and continue
Lender's lien on the Real Property. Trustor shall reimburse Lender for all
taxes, as described below, together with all expenses incurred in recording,
perfecting or continuing this Deed of Trust, including without limitation all
taxes, fees, documentary stamps, and other charges for recording or
registering this Deed of Trust.

Taxes. The following shall constitute taxes to which this section
applies: (a) a specific tax upon this type of Deed of Trust or upon all or any
part of the Indebtedness secured by this Deed of Trust; (b) a specific tax on
Trustor which Trustor is authorized or required to deduct from payments
on the Indebtedness secured by this type of Deed of Trust; (c) a tax on this
type of Deed of Trust chargeable against the Lender or the holder of the
Note; and (d) a specific tax on all or any portion of the Indebtedness or on
payments of principal and interest made by Trustor.

Subsequent Taxes. If any tax to which this section applies is enacted
subsequent to the date of this Deed of Trust, this event shall have the same
effect as an Event of Default (as defined below), and Lender may exercise any 
or all of its available remedies for an Event of Default as provided below 
unless Trustor either (a) pays the tax before it becomes delinquent, 
or (b) contests the tax as provided above in the Taxes and Liens section and 
deposits with Lender cash or a sufficient corporate surety bond or other 
security satisfactory to Lender.

SECURITY AGREEMENT; FINANCING STATEMENTS. The following provisions relating 
to this Deed of Trust as a security agreement are a part of this Deed of Trust.

Security Agreement. This instrument shall constitute a security
agreement to the extent any of the Property constitutes fixtures or other
personal property, and Lender shall have all of the rights of a secured party
under the Uniform Commercial Code as amended from time to time.

Security Interest. Upon request by Lender, Trustor shall execute
financing statements and take whatever other action is requested by Lender
to perfect and continue Lender's security interest in the Rents and Personal
Property. Trustor shall reimburse Lender for all expenses incurred in
perfecting or continuing this security interest. Upon default, Trustor shall
assemble the Personal Property in a manner and at a place reasonably
convenient to Trustor and Lender and make it available to Lender within
three (3) days after receipt of written demand from Lender.

Addresses. The mailing addresses of Trustor (debtor) and Lender
(secured party), from which information concerning the security interest
granted by this Deed of Trust may be obtained (each as required by the
Uniform Commercial Code), are as stated on the first page of this Deed of
Trust.

FURTHER ASSURANCES; ATTORNEY-IN-FACT. The following provisions relating to 
farther assurances and attorney-in-fact are a part of this Deed of Trust.

Further Assurances. At any time, and from time to time, upon
request of Lender, Trustor will make, execute and deliver, or will cause to
be made, executed or delivered, to Lender or to Lender's designee, and
when requested by Lender, cause to be filed, recorded, re-filed, or re-
recorded, as the case may be, at such time and in such offices and places as
Lender may deem appropriate, any and all such mortgages, deeds of trust,
security deeds, security agreements, financing statements, continuation
statements, instruments of further assurance, certificates, and other
documents as may, in the sole opinion of Lender, be necessary or desirable
in order to effectuate, complete, perfect, continue, or preserve (a) the
obligations of Trustor under the Note, this Deed of Trust, and the Related
Documents, and (b) the liens and security interests created by this Deed of
Trust as first and prior liens on the Property, whether now owned or
hereafter acquired by Trustor. Unless prohibited by law or agreed to the
contrary by Lender in writing, Trustor shall reimburse Lender for all costs
and expenses incurred in connection with the matters referred to in this
paragraph.

Attorney-In-Fact. If Trustor fails to do any of the things referred to
in the preceding paragraph, Lender may do so for and in the name of
Trustor and at Trustor's expense. For such purposes, Trustor hereby
irrevocably appoints Lender as Trustor's attorney-in-fact for the purpose of
making executing, delivering, filing, recording, and doing all other things
as may be necessary or desirable, in Lender's sole opinion, to accomplish
the matters referred to in the preceding paragraph.
FULL PERFORMANCE. If Trustor pays all the Indebtedness when due,
terminates the line of credit, and otherwise performs all the obligations
imposed upon Trustor under this Deed of Trust, Lender shall execute and
deliver to Trustee a request for full reconveyance and shall execute and
deliver to Trustor suitable statements of termination of any financing
statement on file evidencing Lender's security interest in the Rents and the
Personal Property. Lender may charge Trustor a reasonable reconveyance
fee at the time of reconveyance.

DEFAULT. Each of the following, at the option of Lender, shall constitute
an event of default ("Event of Default") under this Deed of Trust:

Default on Indebtedness. Failure of Trustor to make any payment
when due on the Indebtedness.

Default on Other Payments. Failure of Trustor within the time
required by this Deed of Trust to make any payment for taxes or insurance,
or any other payment necessary to prevent filing of or to effect discharge of
any lien.

Compliance Default. Failure to comply with any other term,
obligation, covenant or condition contained in this Deed of Trust, the Note
or in any of the Related Documents.

Breaches. Any warranty, representation or statement made or
furnished to Lender by or on behalf of Trustor under this Deed of Trust,
the Note or the Related Documents is, or at the time made or furnished
was, false in any material respect.

Insolvency. The insolvency of Trustor, appointment of a receiver
for any part of Trustor's property, any assignment for the benefit of
creditors, the commencement of any proceeding under any bankruptcy or
insolvency laws by or against Trustor, or the dissolution or termination of
Trustor's existence as a going business (if Trustor is a business). Except to
the extent prohibited by federal law or California law, the death of Trustor
(if Trustor is an individual) also shall constitute an Event of Default under
this Deed of Trust.

Foreclosure, Forfeiture, etc. Commencement of foreclosure or
forfeiture proceedings, whether by judicial proceeding, self-help,
repossession or any other method, by any creditor of Trustor or by any
governmental agency against any of the Property. However, this subsection
shall not apply in the event of a good faith dispute by Trustor as to the
validity or reasonableness of the claim which is the basis of the foreclosure
or forfeiture proceeding, provided that Trustor gives Lender written notice
of such claim and furnishes reserves or a surety bond for the claim
satisfactory to Lender.

Breach of Other Agreement. Any breach by Trustor under the terms
of any other agreement between Trustor and Lender that is not remedied
within any grace period provided therein, including without limitation any
agreement concerning any indebtedness or other obligation of Trustor to
Lender, whether existing now or later.

Events Affecting Guarantor. Any of the preceding events occurs
with respect to any Guarantor of any of the Indebtedness or such Guarantor
dies or becomes incompetent or any Guarantor revokes any guaranty of the
Indebtedness.

RIGHTS AND REMEDIES ON DEFAULT. Upon the occurrence of any
Event of Default and at any time thereafter, Trustee or Lender, at its
option, may exercise any one or more of the following rights and remedies,
in addition to any other rights or remedies provided by law:

Foreclosure by Sale. Upon an Event of Default under this Deed of
Trust, Beneficiary may declare the entire Indebtedness secured by this
Deed of Trust immediately due and payable by delivery to Trustee of
written declaration of default and demand for sale and of written notice of
default and of election to cause to be sold the Property, which notice
Trustee shall cause to be filed for record. Beneficiary also shall deposit
with Trustee this Deed of Trust, the Note, other documents requested by
Trustee, and all documents evidencing expenditures secured hereby. After
the lapse of such time as may then be required by law following the
recordation of the notice of default, and notice of sale having been given
as then required by law, Trustee, without demand on Trustor, shall sell the
Property at the time and place fixed by it in the notice of sale, either as a
whole or in separate parcels, and in such order as it may determine, at
public auction to the highest bidder for cash in lawful money of the United
States, payable at time of sale. Trustee may postpone sale of all or any
portion of the Property by public announcement at such time and place of
sale, and from time to time thereafter may postpone such sale by public
announcement at the time fixed by the preceding postponement in
accordance with applicable law. Trustee shall deliver to such purchaser its
deed conveying the Property so sold, but without any covenant or
warranty, express or implied. The recitals in such deed of any matters or
facts shall be conclusive proof of the truthfulness thereof. Any person,
including Trustor, Trustee or Beneficiary may purchase at such sale. After
deducting all costs, fees and expenses of Trustee and of this Trust,
including cost of evidence of title in connection with sale, Trustee shall
apply the proceeds of sale to payment of: all sums expended under the
terms hereof, not then repaid, with accrued interest at the amount allowed
by law in effect at the date hereof, all other sums then secured hereby; and
the remainder, if any, to the person or persons legally entitled thereto.

Judicial Foreclosure. With respect to all or any part of the Real
Property, Lender shall have the right in lieu of foreclosure by power of
sale to foreclosure by judicial foreclosure in accordance with and to the full
extent provided by California Law.

UCC Remedies. With respect to all or any part of the Personal
Property, Lender shall have all the rights and remedies of a secured party
under the Uniform Commercial Code, including without limitation the right
to recover any deficiency in the manner and to the full extent provided by
California law.

Collect Rents. Lender shall have the right, without notice to
Trustor, to take possession of and manage the Property and collect the
Rents, including amounts past due and unpaid, and apply the net proceeds,
over and above Lender's costs, against the Indebtedness. In furtherance of
this right, Lender may require any tenant or other user of the Property to
make payments of rent or use fees directly to Lender. If the Rents are
collected by Lender, then Trustor irrevocably designates Lender as
Trustor's attorney-in-fact to endorse instruments received in payment
thereof in the name of Trustor and to negotiate the same and collect the
proceeds. Payments by tenants or other users to Lender in response to
Lender's demand shall satisfy the obligations for which the payments are
made, whether or not any proper grounds for the demand existed. Lender
may exercise its rights under this subparagraph either in person, by agent,
or through a receiver.

Appoint Receiver. Lender shall have the right to have a receiver
appointed to take possession of all or any part of the Property, with the
power to protect and preserve the Property, to operate the Property
preceding foreclosure or sale, and to collect the Rents from the Property
and apply the proceeds, over and above the cost of the receivership, against
the indebtedness. The receiver may serve without bond if permitted by law.
Lender's right to the appointment of a receiver shall exist whether or not
the apparent value of the Property exceeds the indebtedness by a substantial
amount. Employment by Lender shall not disqualify a person from serving
as a receiver.

Tenancy at Sufferance. If Trustor remains in possession of the
Property after the Property is sold as provided above or Lender otherwise
becomes entitled to possession of the Property upon default of Trustor,
Trustor shall become a tenant at sufferance of Lender or the purchaser of
the Property and shall, at Lender's option, either (a) pay a reasonable rental
for the use of the Property, or (b) vacate the Property immediately upon the
demand of the Lender.

Other Remedies. Trustee or Lender shall have any other right or
remedy provided in this Deed of Trust or the Note or by law.

Notice of Sale. Lender shall give Trustor reasonable notice of the
time and place of any public sale of the Personal Property or of the time
after which any private sale or other intended disposition of the Personal
Property is to be made. Reasonable notice shall mean notice given at least
five (5) days before the time of the sale or disposition. Any sale of Personal
Property may be made in conjunction with any sale of the Real Property.

Sale of the Property. To the extent permitted by applicable law,
Trustor hereby waives any and all rights to have the Property marshaled. In
exercising its rights and remedies, the Trustee or Lender shall be free to
sell all or any part of the Property together or separately, in one sale or by
separate sales. Lender shall be entitled to bid at any public sale on all or
any portion of the Property.

Waiver; Election of Remedies. A waiver by any party of a breach of
a provision of this Deed of Trust shall not constitute a waiver or prejudice
the party's rights otherwise to demand strict compliance with that provision
or any other provision. Election by Lender to pursue any remedy provided
in this Deed of Trust, the Note, in any Related Document, or provided by
law shall not exclude pursuit of any other remedy, and an election to make
expenditures or to take action to perform an obligation of Trustor under
this Deed of Trust after failure of Trustor to perform shall not affect
Lender's right to declare a default and to exercise any of its remedies.
Attorneys' Fees; Expenses. If Lender institutes any suit or action to
enforce any of the terms of this Deed of Trust, Lender shall be entitled to
recover such sum as the court may adjudge reasonable as attorneys' fees at
trial and on any appeal. Whether or not any court action is involved, all
reasonable expenses incurred by Lender which in Lender's opinion are
necessary at any time for the protection of its interest or the enforcement of
its rights shall become a part of the indebtedness payable on demand and
shall bear interest at the Note rate from the date of expenditure until repaid.
Expenses covered by this paragraph include, without limitation, however
subject to any limits under applicable law, Lender's attorneys' fees whether
or not there is a lawsuit, including attorneys' fees for bankruptcy
proceedings (including efforts to modify or vacate any automatic stay or
injunction), appeals and any anticipated post-judgment collection services,
the cost of searching records obtaining title reports (including foreclosure
reports), surveyors' reports, appraisal fees, title insurance, and fees for the
Trustee, to the extent permitted by applicable law. Trustor also will pay
any court costs, in addition to all other sums provided by law.

Rights of Trustee. Trustee shall have all of the rights and duties of
Lender as set forth in this section.

POWERS AND OBLIGATIONS OF TRUSTEE. The following provisions relating to the 
powers and obligations of Trustee are part of this Deed of Trust.

Powers of Trustee. In addition to all powers of Trustee arising as a
matter of law, Trustee shall have the power to take the following actions
with respect to the Property upon the written request of Lender and
Trustor: (a) join in preparing and filing a map or plat of the Real Property,
including the dedication of streets or other rights to the public; (b) join in
granting any easement or creating any restriction on the Real Property; and
(c) join in any subordination or other agreement affecting this Deed of
Trust or the interest of Lender under this Deed of Trust.

Obligations to Notify. Trustee shall not be obligated to notify any
other party of a pending sale under any other trust deed or lien, or of any
action or proceeding in which Trustor, Lender, or Trustee shall be a party,
unless the action or proceeding is brought by Trustee.

Trustee. Trustee shall meet all qualifications required for Trustee
under applicable law. In addition to the rights and remedies set forth above,
with respect to all or any part of the Property, the Trustee shall have the
right to foreclose by notice and sale, and Lender shall have the right to
foreclose by judicial foreclosure, in either case in accordance with and to
the full extent provided by applicable law.

Successor Trustee. Lender, at Lender's option, may from time to
time appoint a successor Trustee to any Trustee appointed hereunder by an
instrument executed and acknowledged by Lender and recorded in the
office of the recorder of Alameda County, California. The instrument shall
contain, in addition to all other matters required by state law, the names of
the original Lender, Trustee, and Trustor, the book and page where this
Deed of Trust is recorded, and the name and address of the successor
trustee, and the instrument shall be executed and acknowledged by Lender
or its successors in interest. The successor trustee, without conveyance of
the Property, shall succeed to all the title, power, and duties conferred
upon the Trustee in this Deed of Trust and by applicable law. This
procedure for substitution of trustee shall govern to the exclusion of all
other provisions for substitution.

NOTICES TO TRUSTOR AND OTHER PARTIES. Any notice under this
Deed of Trust shall be in writing and shall be effective when actually
delivered or, if mailed, shall be deemed effective when deposited in the
United States mail first class, registered mail, postage prepaid, directed to
the addresses shown near the beginning of this Deed of Trust. Any party
may change its address for notices under this Deed of Trust by giving
formal written notice to the other parties, specifying that the purpose of the
notice is to change the party's address. All copies of notices of foreclosure
from the holder of any lien which has priority over this Deed of Trust shall
be sent to Lender's address, as shown near the beginning of this Deed of
Trust. For notice purposes, Trustor agrees to keep Lender and Trustee
informed at all time of Trustor's current address. Each Trustor requests
that copies of any notices of default and sale be directed to Trustor's
address shown near the beginning of this Deed of Trust.

STATEMENT OF OBLIGATION. Lender may collect a fee, in an amount
not to exceed the statutory maximum, for furnishing the statement of
obligation as provided by Section 2943 of the Civil Code of California.

MISCELLANEOUS PROVISIONS. The following miscellaneous provisions are a part 
of this Deed of Trust:

Amendments. This Deed of Trust, together with any Related Documents, 
constitutes the entire understanding and agreement of the
parties as to the matters set forth in this Deed of Trust. No alteration of or
amendment to this Deed of Trust shall be effective unless given in writing
and signed by the party or parties sought to be charged or bound by the
alteration or amendment.

Annual Reports. If the Property is used for purposes other than
Trustor's residence, Trustor shall furnish to Lender, upon request, a
certified statement of net operating income received from the Property
during Trustor's previous fiscal year in such form and detail as Lender
shall require. "Net operating income" shall mean all cash receipts from the
Property less all cash expenditures made in connection with the operation
of the Property.

Acceptance by Trustee. Trustee accepts this Trust when this Deed
of Trust, duly executed and acknowledged, is made a public record as
provided by law.

Applicable Law. This Deed of Trust has been delivered to Lender
and accepted by Lender in the State of California. This Deed of Trust shall
be governed by and construed in accordance with the laws of the State of
California.

Caption Headings. Caption headings in this Deed of Trust are for
convenience purposes only and are not to be used to interpret or define the
provisions of this Deed of Trust.

Merger. There shall be no merger of the interest or estate created
by this Deed of Trust with any other interest or estate in the Property at
any time held by or for the benefit of Lender in any capacity, without the
written consent of Lender.

Multiple Parties; Corporate Authority. All obligations of Trustor
under this Deed of Trust shall be joint and several, and all references to
Trustor shall mean each and every Trustor. This means that each of the
persons signing below is responsible for all obligations in this Deed of
Trust.

Severability. If a court of competent jurisdiction finds any provision
of this Deed of Trust to be invalid or unenforceable as to any person or
circumstance, such finding shall not render that provision invalid or
unenforceable as to any other persons or circumstances. If feasible, any
such offending provision shall be deemed to be modified to be within the
limits of enforce ability or validity; however, if the offending provision
cannot be so modified, it shall be stricken and all other provisions of the
Deed of Trust in all other respects shall remain valid and enforceable.

Successors and Assigns. Subject to the limitations stated in this
Deed of Trust on transfer of Trustor's interest, this Deed of Trust shall be
binding upon and inure to the benefit of the parties, their successors and
assigns. If ownership of the Property becomes vested in a person other than
Trustor, Lender, without notice to Trustor, may deal with Trustor's
successors with reference to this Deed of Trust and the indebtedness by
way of forbearance or extension without releasing Trustor from the
obligations of the Deed of Trust or liability under the indebtedness.

Time is of the Essence. Time is of the essence in the performance of this
Deed of Trust.

Waivers and Consents. Lender shall not be deemed to have waived
any rights under this Deed of Trust (or under the Related Documents)
unless such waiver is in writing and signed by Lender. No delay or
omission on the part of Lender in exercising any right shall operate as a
waiver of such right or any other right. A waiver by any party of a
provision of this Deed of Trust shall not constitute a waiver of or prejudice
the party's right otherwise to demand strict compliance with that provision
or any other provision. No prior waiver by Lender, nor any course of
dealing between Lender and Trustor, shall constitute a waiver of any of
Lender's rights or any of Trustor's obligations as to any future
transactions. Whenever consent by Lender is required in this Deed of
Trust, the granting of such consent by Lender in any instance shall not
constitute continuing consent to subsequent instances where such consent is
required.

EACH TRUSTOR ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS DEED OF 
TRUST, AND EACH TRUSTOR AGREES TO ITS TERMS.

TRUSTOR:

Westco Community Builders, Inc., a California Corporation

                                By:  /s/ Jerry Finch             
                                     Jerry Finch , President
                                By:  /s/  Britt Evans                     
                                     Britt Evans, Executive Vice President




                    CONSTRUCTION LOAN AGREEMENT

BORROWER:           Westco Community Builders, Inc., a California
                    Corporation

LENDER:             Dover Investments Corporation
                    100 Spear St., #520
                    SAN FRANCISCO, CA 94105

THIS CONSTRUCTION LOAN GENERAL AGREEMENT between
Westco Community Builders, Inc., a California Corporation ("Borrower")
and Dover Investments Corporation a Delaware corporation ("Lender") is
made and executed on the following terms and conditions. Borrower has
applied to Lender for a loan up to the sum of U.S. $ 3,350,000.00 in order to
construct the improvements on the Real Property described below. Lender is
willing to lend the loan amount to Borrower solely under the terms and
conditions specified in this Agreement and in the Related Documents, to each
of which Borrower agrees. Borrower understands and agrees that: (a) in
granting, renewing, or extending any Loan, Lender is relying upon
Borrower's representations, warranties, and agreements as set forth in this
Agreement, and (b) all such Loans shall be and remain subject to the
following terms and conditions of this Agreement.

TERM. This Agreement shall be effective as of the date set forth on the
signature page hereof and shall continue thereafter until all indebtedness has
been paid in full and all other obligations of Borrower hereunder have been
performed in full and the parties terminate this Agreement in writing.

DEFINITIONS. The following words shall have the following meanings
when used in this Agreement. Terms not otherwise defined in this Agreement
shall have the meanings attributed to such terms in the Uniform Commercial
Code or as specifically defined in the Related Documents. All references to
dollar amounts shall mean amounts in lawful money of the United States of
America.

Agreement. The word "Agreement" means this Construction Loan
Agreement, as this Construction Loan Agreement may be amended or
modified from time to time, together with all exhibits and schedules attached
to this Construction Loan Agreement from time to time.

Architecture Contract. The words "Architecture Contract" mean the
architect's contract relating to the Project, if any.

Borrower. The word "Borrower" means each and every person or entity
signing the Note, including without limitation Westco Community Builders,
Inc., a California Corporation

Collateral. The word "Collateral" means and includes without limitation all
property and assets granted as collateral security for the Loan, whether real or
personal property, whether granted directly or indirectly, whether granted
now or in the future, whether granted in the form of a security interest,
mortgage, deed of trust, assignment, pledge, chattel mortgage, chattel trust,
factor's lien, equipment trust, conditional sale, trust receipt, lien, charge, 
lien or title retention contract, lease or consignment intended as a
security device, or any other security or lien interest whatsoever, whether
created by law, contract, or otherwise.

Construction Contract. The words "Construction Contract" mean and include
the contract between Borrower and the general contractor for the Project, if
any, and any subcontracts with subcontractors, materialmen, laborers, or any
other person or entity for performance of work on the Project or the delivery
of materials to the Project.

Event of Default. The words "Event of Default" mean and include any of
the Events of Default set forth below in the section titled "Events of
Default."

Grantor. The word "Grantor" means and includes each and all of the
persons or entities granting a Security Interest in any Collateral for the
Indebtedness, including without limitation all Borrowers granting such a
Security Interest.

Guarantor. The word "Guarantor" means and includes without limitation all
guarantors, sureties, and accommodation parties.

Improvements. The word "Improvements" means and includes without
limitation all existing and future buildings, structures, facilities, fixtures,
additions, and similar construction on the Property.

Indebtedness. The word "Indebtedness" means and includes without
limitation all Loans relating to this Project and Property, together with all
other obligations, debts and liabilities of Borrower to Lender, or any one or
more of them relating to this Project and Property, as well as all claims by
Lender against Borrower, or any one or more of them relating to this Project
and Property; whether now or hereafter existing, voluntary or involuntary,
due or not due absolute or contingent, liquidated or unliquidated; whether
Borrower may be liable individually or jointly with others; whether Borrower
may be obligated as a guarantor, surety, or otherwise; whether recovery upon
such Indebtedness may be or hereafter may become barred by any statute of
limitations; and whether such Indebtedness may be or hereafter may become
otherwise unenforceable.

Lender. The word "Lender" means Dover Investments Corporation, its
successors and assigns.

Loan. The word "Loan" means the loan made to Borrower under this
Agreement and the Related Documents as described below.

Loan Fund. The words "Loan Fund" mean the undisbursed proceeds of the
Loan under this Agreement together with any equity funds or other deposits
required from Borrower under this Agreement.

Note. The word "Note" means the secured promissory note dated October 15,
1998 in the original principal amount of $3,350,000 from Borrower to
Lender, together with all renewals of, extensions of, modifications of,
refinances of, consolidations of, and substitutions for the secured promissory
note. Plans and Specifications. The words "Plans and Specifications" mean the
plans and specifications for the Project which have been approved and
initialed by Lender, together with such changes and additions as may be
approved by Lender in writing.

Project. The word "Project" means the construction and completion of all
Improvements contemplated by this Agreement including without limitation
the erection of the building or structure, installation of equipment and
fixtures, landscaping, and all other work necessary to make the Property
usable and complete for the intended purposes.

Project Documents. The words "Project Documents" mean the Plans and
Specifications, all studies, data and drawings relating to the Project, whether
prepared by or for Borrower, the Construction Contract, the Architecture
Contract, and all other contracts and agreements relating to the Project or the
construction of the Improvements.

Property. The word "Property" means the Real Property together with all
Improvements, all equipment, fixtures, and other articles of personal property
now or subsequently attached or affixed to the real property, together with all
accessions, parts, and additions to, all replacements of, and all substitutions
for any of such property, and all proceeds (including insurance proceeds and
refunds of premiums) from any sale or other disposition of such property.

Real Property. The words "Real Property" mean the real property located in
the County of Alameda State of California, and legally described as:

                          LEGAL DESCRIPTION

REAL PROPERTY in the City of San Leandro, County of Alameda, State of
California, described as follows:

PARCEL ONE:

Beginning at a point on the Northeastern line of San Leandro Boulevard,
formerly Estudillo Street, distant thereon Northwesterly 110. 00 feet from the
point of intersection thereof with the Northwestern line of Williams Street, as
said streets are shown on the Map hereinafter referred to; running thence
Northeasterly alone the said line of San Leandro Boulevard 40.00 feet; thence
at right angles Northeasterly 150.00 feet; thence at right angles Southeasterly
40.00 feet; thence at right angles Southwesterly 150.00 feet to the point of
beginning.

Being a portion of Lots "G", "U', "M", "N", in Block 27 as said lots
and block are shown on that certain Map entitled, "Map of the Town of San
Leandro, County Seat of Alameda County", filed February 27, 1855, in Book
2 of Maps, Page 43, in the office of the County Recorder of Alameda County

PARCEL TWO:

Beginning at a point on the Northeastern line of San Leandro Boulevard,
formerly Estudillo Street, distant thereon Northwesterly 75.00 feet from the
point of intersection thereof with the Northwestern line of intersection thereof
with the Northwestern line of Williams Street, as said streets are shown on
the Map hereinafter referred to; running thence Northwesterly along the side
line of San Leandro Boulevard 35.00 feet; thence at right angles
Northeasterly 150.00 feet; thence at right angles Southeasterly 35.00 feet;
thence at right angles Southwesterly 150.00 feet to the point of beginning.

Being a portion of Lots "L", "M", and "N", in Block 27, as said lots and
block are shown on that certain Map entitled, "Map of the Town of San
Leandro, County Seat of Alameda County, " filed February 27, 1855 in Book
2 of Maps, Page 43, in the office of the County Recorder of Alameda County.

Excepting from Parcels One and Two the land described as Parcels A & B in
the Final Order of Condemnation, recorded September 12, 1983, Series No.
83-168337, Official Records.

A.P. No. 75-27-7-3

PARCEL THREE:

Lot 1, Tract 4879, filed June 5, 1984, Map Book 145, Pages 1 and 2, Alameda
County Records.

A.P. No. 75-27-8

PARCEL FOUR:

Those portions of lots H, I, J and K, Block 27, Map of Map of the Town of
San Leandro, etc., filed February 27, 1885, Map Book 1, Page 19, Alameda
County Records, described as follows:

Commencing at a point on the Western line of Carpentier Street, distant
thereon 98 feet Northerly from the point of intersection thereof with the
Northern line of Williams Street; running thence Northerly along said line of
Carpentier Street 52 feet; thence Westerly parallel with said line of Williams
Street 150 feet; thence Southerly parallel with said line old Carpentier Street
100 feet; thence Easterly parallel with said line of Williams Street 23 feet;
thence Northerly parallel with said line if Carpentier Street 48 feet; thence
Easterly parallel with said line of Williams Street 127 feet to the point of
beginning.

A.P. No. 75-27-2-1

Related Documents. The words "Related Documents" mean and include
without limitation all Promissory Notes, Credit Agreements, Loan
Agreements, Guaranties, Security Agreements, Mortgages, Deeds of Trust,
Environmental Indemnity Agreement, Assignment of Contracts
(Construction and Architecture), Agreement to Provide Insurance, and all
other instruments, agreements and documents, whether now or hereafter
existing, executed in connection with the Indebtedness or the earlier loan
between the parties relating to site work on the Property and the subdivision.
Security Agreement. The words "Security Agreement" mean and include
without limitation any agreements, promises, covenants, arrangements,
understandings or other agreements, whether created by law, contract, or
otherwise, evidencing, governing, representing, or creating a Security
Interest.

Security Interest. The words "Security Interest" mean and include without
limitation any type of collateral security, whether in the form of a lien,
charge, mortgage, deed of trust, assignment, pledge, chattel mortgage, chattel
trust, factor's lien, equipment trust, conditional sale, trust receipt, lien 
or title retention contract, lease or consignment intended as a security 
device, or any other security or lien interest whatsoever, whether created by 
law, contract, or otherwise.

LOAN. The loan shall be in the principal sum set forth in the Note and shall
bear interest on so much of the principal sum as shall be advanced pursuant
to the terms of this Agreement and the Related Documents. The Loan shall
bear interest on each Advance from the date of the Advance in accordance
with the terms of the Note. Borrower shall use the Loan Funds solely for the
payment of (a) the costs of constructing the Improvements and equipping the
Project in accordance with the Construction Contract; (b) other costs and
expenses incurred or to be incurred in connection with the construction of the
Improvements and related purposes as Lender in its sole discretion shall
approve in accordance with the proformas attached hereto as Exhibit "A";
and (c) if permitted by Lender, interest due under the Note, including all
expenses and all loan and commitment fees described in this Agreement. The
loan is a construction loan to be drawn upon by Borrower only in compliance
with the proformas attached hereto as Exhibit "A" or as changed in writing
by mutual agreement.

FEES AND EXPENSES. Whether or not the Project shall be consummated,
Borrower shall assume and pay upon demand all out-of-pocket expenses
incurred by Lender in connection with the preparation of loan documents and
the making of the Loan, including without limitation the following: (a) all
closing costs, fees, and disbursements; (b) all title examination fees, title
insurance premiums, appraisal fees, survey costs, required fees, and filing
and recording fees. On funding the Loan, Borrower shall pay Lender a loan
origination fee equal to two percent (2%) of the principal amount of the Note.

NO CONSTRUCTION PRIOR TO RECORDING OF SECURITY DOCUMENT. Borrower will not 
permit any work or materials to be furnished in connection with the Project 
until (a) Borrower has signed the Related Documents; (b) Lender's mortgage or 
deed of trust and other Security Interests in the Property have been duly 
recorded and perfected; and (c) Lender has been provided evidence, 
satisfactory to Lender, that Borrower has obtained all insurance required 
under this Agreement or any Related Agreement and that Lender's liens on the 
Property and Improvements are valid perfected first liens, subject only to 
such exceptions, if any, acceptable to Lender.

REPRESENTATIONS AND WARRANTIES. Borrower represents and
warrants to the best of its knowledge to Lender as of the date of this
Agreement and as of the date of each disbursement of Loan proceeds:
Organization. Borrower is a corporation which is duly organized, validly
existing, and in good standing under the laws of the State of California.
Borrower has the full power and authority to own its properties and to
transact the businesses in which it is presently engaged or presently proposes
to engage.

Authorization. The execution, delivery, and performance of this Agreement
by Borrower, to the extent to be executed, delivered or performed by
Borrower, have been duly authorized by all necessary action by Borrower; do
not require the consent or approval of any other person, regulatory authority
or governmental body; and do not conflict with, result in violation of, or
constitute a default under (a) any provision of its partnership agreement, or
any agreement or other instrument binding upon Borrower or (b) any law,
governmental regulation, court decree, or order applicable to Borrower.

Financial Information. Each financial statement of Borrower supplied to
Lender truly and completely disclosed Borrower's financial condition as of
the date of the statement, and there has been no material adverse change in
Borrower's financial condition subsequent to the date of the most recent
financial statement supplied to Lender. Borrower has no material contingent
obligations except as disclosed in such financial statements.

Litigation and Claims. No litigation, claim, investigation, administrative
proceeding or similar action (including those for unpaid taxes) against
Borrower is pending or threatened, and no other event has occurred which
may materially adversely affect Borrower's financial condition or properties,
other than litigation, claims, or other events, if any, that have been disclosed
to and acknowledged by Lender in writing.

Title to Property. Borrower has, or on the date of first disbursement of Loan
proceeds will have, good and marketable title to the Property free and clear of
all defects, liens, and encumbrances, excepting only liens for taxes,
assessments, or governmental charges or levies not yet delinquent or payable
without penalty or interest, and such liens and encumbrances as may be
approved in writing by the Lender.

Hazardous Substances. The terms "hazardous waste," "hazardous substance,"
"disposal," "release," and "threatened release," as used in this Agreement,
shall have the same meanings as set forth in the Comprehensive
Environmental Response, Compensation, and Liability Act of 1980, as
amended, 42 U.S.C. Section 9601, et seq. ("CERCLA"), the Superfund
Amendments and Reauthorization Act of 1986, Pub. L. No. 99-499
("SARA"), the Hazardous Materials Transportation Act, 49 U.S.C. Section
1801, et seq., the Resource Conservation and Recovery Act, 49 U.S.C.
Section 6901, et seq., Chapters 6.5 through 7.7 of Division 20 of the
California Health and Safety Code, Section 25 100, et seq., or other
applicable state or Federal laws, rules, or regulations adopted pursuant to any
of the foregoing. Except as disclosed to and acknowledged by Lender in
writing, Borrower represents and warrants that: (a) During the period of
Borrower's ownership of Borrower's properties, there has been no use,
generation, manufacture, storage, treatment, disposal, release or threatened
release of any hazardous waste or substance by any person on, under, or
about any of the properties. (b) Borrower has no knowledge of, or reason to
believe that there has been (i) any use, generation, manufacture, storage,
treatment, disposal, release, or threatened release of any hazardous waste or
substance by any prior owners or occupants of any of the properties, or (ii)
any actual or threatened litigation or claims of any kind by any person
relating to such matters. (c) Neither Borrower nor any tenant, contractor,
agent or other authorized user of any of the properties shall use, generate,
manufacture, store, treat, dispose of, or release any hazardous waste or
substance on, under, or about any of the properties; and any such activity
shall be conducted in compliance with all applicable federal, state, and local
laws, regulations, and ordinances, including without limitation those laws,
regulations and ordinances described above. Borrower authorizes Lender and
its agents to enter upon the properties to make such inspections and tests as
Lender may deem appropriate to determine compliance of the properties with
this section of the Agreement. Any inspections or tests made by Lender shall
be for Lender's purposes only and shall not be construed to create any
responsibility or liability on the part of Lender to Borrower or to any other
person. The representations and warranties contained herein are based on
Borrower's due diligence in investigating the properties for hazardous waste.
Borrower hereby (a) releases and waives any future claims against Lender for
indemnity or contribution in the event Borrower becomes liable for cleanup
or other costs under any such laws except as may be caused solely by Lender
or its agents, and (b) agrees to indemnify and hold harmless Lender against
any and all claims, losses, liabilities, damages, penalties, and expenses which
Lender may directly or indirectly sustain or suffer resulting from a breach of
this section of the Agreement, except as may be caused solely by Lender or
its agents, or as a consequence of any use, generation, manufacture, storage,
disposal, release or threatened release occurring prior to Borrower's
ownership or interest in the properties, whether or not the same was or should
have been known to Borrower. The provisions of this section of the
Agreement, including the obligation to indemnify, shall survive the payment
of the Indebtedness and the satisfaction of this Agreement and shall not be
affected by Lender's acquisition of any interest in any of the properties,
whether by foreclosure or otherwise.

Project Costs. The Project, as described in the proformas contained in Exhibit
"A" attached hereto, costs are true and accurate estimates of the costs
necessary to complete the Improvements in a good and workmanlike manner
according to the Plans and Specifications presented by Borrower to Lender,
and Borrower shall take all steps necessary to prevent the actual cost of the
Improvements from exceeding the Project costs.

Utility Services. All utility services appropriate to the use of the Project 
after completion of construction are available at the boundaries of the 
Property.

Access. The Property is contiguous to publicly dedicated streets, roads, or
highways providing access to the Property.

Assessment of Property. The Property is and will continue to be assessed and
taxed as an independent parcel by all governmental authorities.

Compliance with Governing Authorities. Borrower has examined and is
familiar with all the easements, covenants, conditions, restrictions,
reservations, building laws,
regulations, zoning ordinances, and federal, state, and local requirements
affecting the Project. The project will at all times and in all respects confirm
to and comply with the requirements of such easements, covenants,
conditions, restrictions, reservations, building laws, regulations, zoning
ordinances, and federal, state, and local requirements.

Survival of Representation and Warranties. Borrower understands and agrees
that Lender is relying upon the above representations and warranties in
extending Loan Advances to Borrower. Borrower further agrees that the
foregoing representations and warranties shall be continuing in nature and
shall remain in full force and effect until such time as Borrower's Loan and
Note shall be paid in full, or until this Agreement shall be terminated in the
manner provided above, whichever is the last to occur.

No Violation. The consummation of the transactions covered by this
Agreement and the payment and performance of all of the obligations in this
Agreement, the Note, the Deed of Trust, and the other Loan Documents, will
not result in any breach of, or constitute a default under, any mortgage, deed
of trust, lease, contract, loan or credit agreement, corporate charter, bylaws,
partnership agreement, trust agreement, or other instruments to which the
Borrower or any of its general partners is a party or by which it or they or the
Property may be bound or affected.

Permits. Borrower has, or prior to the commencement of construction of the
improvements will have:

(a)  Received all requisite building permits and approvals from all
applicable Governmental Authorities;

(b)  Filed or recorded all subdivision maps, plats, and other required
instruments; and

(c)  To the best of Borrower's knowledge, comply with all other related
Governmental requirements.

Utilities. All utility services, including without limitation gas, electric, 
water, storm and sanitary sewer, and telephone facilities, necessary for the
construction of the improvements and the operation for their intended
purposes:

(a)  Are available at or within the boundaries of the Property, or

(b)  All necessary steps have been taken by Borrower in all applicable
Governmental Authorities and utility companies to assure the complete
construction, installation, and availability of same on completion of the
improvements.

Roads. All roads necessary for the full use of the improvements for their
intended purposes:

(a)  Have been completed, or

(b)  The necessary rights-of-way have been acquired by or dedicated to
public use and accepted by appropriate Governmental Authorities, and
all other necessary steps have been taken by Borrower and such
Governmental Authorities to assure the complete construction,
installation, and availability of them on completion of the
improvements.

Adequacy of Loan. The aggregate amount of all loan proceeds, and any funds
held by Borrower, are sufficient to pay all costs of construction of the
Improvements in accordance with the Plans and Specifications.

Accuracy. All cash flow projections, pro forma reports, time-line reports,
documents, instruments, information, and forms of evidence delivered to
Lender concerning the loan or required by this Agreement or any of the other
loan documents are accurate, correct, and sufficiently complete to give
Lender true and accurate knowledge of their subject matter, and do not
contain any untrue statement of a material fact or omit any material fact
necessary to make them no misleading.

CONDITIONS PRECEDENT TO EACH ADVANCE. Lender's obligation to
make the initial Advance and each subsequent Advance under this
Agreement shall be subject to the fulfillment to Lender's satisfaction of all of
the conditions set forth in this Agreement.

Approval of Contractors, Subcontractors, and Material men. Lender shall
have approved a list of all contractors employed in connection with the
construction of the Improvements, showing the name, address, and telephone
number of each contractor, a general description of the nature of the work to
be done, the labor and materials to be supplied, the names of material men, if
known, and the approximate dollar value of the labor, work, or materials with
respect to each contractor or material man. Lender shall have the right to
communicate with any person to verify the facts disclosed by the list or by
any application for any Advance, or for any other purpose.

Plans, Specifications, and Permits. Lender shall have received and accepted a
complete set of Plans and Specifications setting forth all Improvements for
the Project, and Borrower shall have furnished to Lender copies of all permits
and requisite approvals of any governmental body necessary for the
construction and use of the Project.

Architecture and Construction Contracts. Borrower shall have furnished in
form and substance satisfactory to Lender an executed copy of the
Architecture Contract and an executed copy of the Construction Contract and
Assignments of same to Lender within 45 days of the first (initial) advance
hereunder.

Budget and Schedule of Estimated Advances. Lender shall have approved
detailed budget and cash flow projections of total Project costs and a
schedule of the estimated amount and time of disbursements of each
Advance.

Borrower's Authorization. Borrower shall have provided in form and
substance satisfactory to Lender properly certified authorization, duly
authorizing the execution and
delivery of the Loan documents, and consummation of the Project, and such
other authorizations and other documents as Lender in its sole discretion may
require.

Bond. If requested by Lender, Borrower shall have furnished a performance
and payment bond in an amount equal to 100% of the amount of the
Construction Contract, as well as a material men's and mechanics' payment
bond, with such riders and supplements as Lender may require, each in form
and substance satisfactory to Lender, naming the general contractor as
principal and Lender as an additional oblige. Any required bonds and the
contracts which they cover must be duly recorded or filed in accordance with
California Civil Code Section 3235, if required by Lender.

Survey. If requested by Lender, Borrower shall have furnished to Lender a
survey of recent date, prepared and certified by a qualified surveyor and
providing that the Improvements, if constructed in accordance with the Plans
and Specifications, shall lie wholly within the boundaries of the Property
without encroachment or violation of any zoning ordinances, building codes
or regulations, or setback requirements, together with such other information
as Lender in its sole discretion may require.

Zoning. Borrower shall have furnished evidence satisfactory to Lender that
the Property is duly and validly zoned for the construction, maintenance, and
operation of the Project.

Title Insurance. Borrower shall have provided to Lender an ALTA Lender's
extended coverage policy of title insurance with such endorsements as
Lender may require, issued by a title insurance company acceptable to
Lender and in a form, amount, and content satisfactory to Lender, insuring or
agreeing to insure that the Mortgage or Deed of Trust on the Property is or
will be upon recordation a valid first lien on the Property free and clear of 
all defects, liens, encumbrances, and exceptions except those as specifically
accepted by Lender in writing. If requested by Lender, Borrower shall
provide to Lender, at Borrower's expense, a foundation endorsement (CLTA
102.5 or its equivalent) to the title policy upon the completion of each
foundation for the Improvements, showing no encroachments, and upon
completion an endorsement which insures the lien-free completion of the
Improvements (CLTA 10 1 series, as required by Lender). Insurance. Unless
waived by Lender in writing, Borrower shall have delivered to Lender the
following insurance policies or evidence thereof. (a) liability coverage in
amounts acceptable to Lender insuring Lender as mortgagee, together with
such other endorsements as may be required by Lender, including
stipulations that coverages will not be canceled or diminished without at least
ten (10) days' prior written notice to Lender; (b) flood insurance if required
by Lender or applicable law, and (c) all other insurance required by this
Agreement or by the Related Documents.

Payment of Fees and Expenses. Borrower shall have paid to Lender all
expenses specified in this Agreement as are then due and payable.

Satisfactory Construction. All work usually done at the stage of construction
for which disbursement is requested shall have been done in a good and
workmanlike manner and all materials and fixtures usually furnished and
installed at that stage of construction shall have been furnished and installed,
all in compliance with the Plans and Specifications.
Borrower shall also have furnished to Lender such proofs as Lender may
require to establish the progress of the work, compliance with applicable
laws, freedom of the Property from liens, and the basis for the requested
disbursement. Borrower shall pay the fees of Lender's inspectors, which fees
are currently charged at the rate of $ 100.00 per inspection.

Certification. Borrower shall have furnished to Lender a certification by an
engineer, architect, or other qualified inspector acceptable to Lender that the
construction of the Improvements has been completed to the extent
required for the disbursement and has complied and will continue to
comply with all applicable statutes, ordinances, codes, regulations, and
similar requirements.

Lien Waivers. Borrower shall have obtained and attached to each application
for an Advance, including the Advance to cover final payment to the general
contractor, executed acknowledgments of payments of all sums due and
releases of mechanics' and material men's liens, satisfactory to Lender, from
any party having lien rights, which acknowledgments of payment and
releases of liens shall cover all work, labor, equipment, materials done,
supplied, performed, or furnished prior to such application for an Advance.

Lack of Default. There shall not exist at the time of any Advance a condition
which would constitute an Event of Default under this Agreement.

DISBURSEMENT OF LOAN PROCEEDS. The following provisions relate
to the disbursement of funds from the Loan Fund.

Disbursement Schedule. The Loan Fund shall be disbursed in various draws
as requested, together with an initial disbursement.

Application for Advances. Each application for a disbursement of a portion
of the Loan Fund shall be stated on a standard AIA payment request form or
other form approved by Lender, executed by Borrower, and supported by
such evidence as Lender shall reasonably require. Borrower shall apply only
for disbursement with respect to work actually done by the general contractor
and for materials and equipment actually incorporated into the Project. Each
application for an Advance shall be deemed a certification of Borrower that
as of the date of such application, all representations and warranties
contained in the Agreement are true and correct, and that Borrower is in
compliance with all of the provisions of this Agreement.

Payments. At the sole option of Lender, Advances may be paid in the joint
names of Borrower and the general contractor, subcontractor(s), or
supplier(s) in payment of sums due under the Construction Contract. At its
sole option, Lender may directly pay the general contractor and any
subcontractors or other parties the sums due under the Construction Contract.
Borrower appoints Lender as its attorney-in-fact to make such payments.
This power shall be deemed to be coupled with an interest, shall be
irrevocable, and shall survive an Event of Default under this Agreement.
Projected Cost Overruns. If Lender at any time determines in its sole
discretion that the amount in the Loan Fund is insufficient, or will be
insufficient, to complete fully and to pay for the Project, then within ten (10)
days after receipt of a written request and supporting documentation from
Lender, Borrower shall deposit in the Loan Fund an amount equal to the
deficiency as determined by Lender. The judgment and determination of
Lender under this section shall be final and conclusive.

Final Payment to General Contractor. Upon completion of the Project and
fulfillment of the Construction Contract to the satisfaction of Lender and
provided sufficient Loan Funds are available, Lender shall make an Advance
to cover the final payment due to the general contractor upon delivery to
Lender of endorsements to the ALTA title insurance policy following the
posting of the completion notice, as provided under applicable law.
Construction shall not be deemed complete for purposes of final
disbursement unless and until Lender shall have received all of the following:

(a)  Evidence satisfactory to Lender that all work under the Construction
Contract requiring inspection by any governmental authority with
jurisdiction has been duly inspected and approved by such authority,
that a certificate of occupancy has been issued, and that all parties
performing work have been paid, or will be paid, for such work;

(b)  A certification by an engineer, architect, or other qualified inspector
acceptable to Lender that the Improvements have been completed
substantially in accordance with the Plans and Specifications and the
Construction Contract, that direct connection has been made to all
utilities set forth in the Plans and Specifications, and that the Project is
ready for occupancy; and

(c)  Acceptance of the completed Improvements by Lender and Borrower.

Construction Default. If Borrower fails in any respect to comply with the
provisions of this Agreement or if construction ceases before completion
regardless of the reason, Lender, at its option, may refuse to make further
Advances, may accelerate the Indebtedness under the terms of the Note, and
without thereby impairing any of its rights, powers, or privileges, may enter
into possession of the construction site and perform or cause to be performed
any and all work and labor necessary to complete the Improvements,
substantially in accordance with the Plans and Specifications.

Damage or Destruction. If any of the Property or Improvements is damaged
or destroyed by casualty of any nature, within sixty (60) days thereafter
Borrower shall restore the Property and Improvements to the condition in
which they were before such damage or destruction with funds other than
those in the Loan Fund. Lender shall not be obligated to make disbursements
under this Agreement until such restoration has been accomplished.

Right to Advance Funds. When any event occurs that Lender determines may
materially endanger completion of the Project or the fulfillment of any
condition or covenant in this
Agreement, Lender may require Borrower to furnish, within ten (10) days
after delivery of a written request, adequate security to eliminate, reduce, or
indemnify Lender against, such danger. In addition, upon such occurrence,
Lender in its sole discretion may advance funds or agree to undertake to
advance funds to any party to eliminate, reduce or indemnify Lender against,
such danger or to complete the Project. All sums paid by Lender pursuant to
such agreements or undertakings shall be for Borrowers's account and shall
be without prejudice to Borrower's rights, if any, to receive such funds from
the party to whom paid. All sums expended by Lender in the exercise of its
option to complete the Project or protect Lender's interests shall be payable to
Lender on demand together with interest from the date of the Advance at the
rate applicable to the Loan. In addition, any Advance of funds under this
Agreement, including without limitation direct disbursements to the general
contractor or other parties in payment of sums due under the Construction
Contract, shall be deemed to have been expended by or on behalf of
Borrower and to have been secured by the Mortgage or Deed of Trust on the
Property.

LIMITATION OF RESPONSIBILITY. The making of any Advance by
Lender shall not constitute or be interpreted as either (a) an approval or
acceptance by Lender of the work done through the date of the Advance, or
(b) a representation or indemnity by Lender to any party against any
deficiency or defect in the work or against any breach of any contract.
Inspections and approvals of the Plans and Specifications, the Improvements,
the workmanship and materials used in the Improvements, and exercise of
any other right of inspection, approval, or inquiry granted to Lender in this
Agreement are acknowledged to be solely for the protection of Lender's
interests, and under no circumstances shall they be construed to impose any
responsibility or liability of any nature whatsoever on Lender to any party.
Neither Borrower nor any contractor, subcontractor, material man, laborer, or
any other person shall rely, or have any right to rely, upon Lender's
determination of the appropriateness of any Advance. No disbursement or
approval by Lender shall constitute a representation by Lender as to the
nature of the Project, its construction, or its intended use for Borrower or for
any other person, nor shall it constitute an indemnity by Lender to Borrower
or to any other person against any deficiency or defects in the Project or
against any breach of any contract.

AFFIRMATIVE COVENANTS. Borrower covenants and agrees with
Lender that, while this Agreement is in effect, Borrower will:

Litigation. Promptly inform Lender in writing of (a) all material adverse
changes in Borrower's financial condition, and (b) all litigation and claims
and all threatened litigation and claims affecting Borrower or any Guarantor
which could materially affect the financial condition of Borrower or the
financial condition of any Guarantor.

Financial Records. Maintain its books and records in accordance with
generally accepted accounting principles, applied on a consistent basis, and
permit Lender to examine and audit Borrower's books and records at all
reasonable times.

Additional Information. Furnish such additional information and statements,
lists of assets and liabilities, agings of receivables and payables, inventory
schedules, budgets, forecasts, tax returns, and other reports with respect to
Borrower's financial condition and business operations as Lender may
request from time to time.
Construction of the Project. Cause the Improvements to be constructed and
equipped in a diligent and orderly manner and in strict accordance with the
Plans and Specifications approved by Lender, the Construction Contract, and
all applicable laws, ordinances, codes, regulations, and rights of adjoining or
concurrent property owners. Loan Proceeds. Use the Loan Funds solely for
payment of bills and expenses directory related to the Project.

Workers' Compensation Coverage. Provide to Lender proof of the general
contractor's compliance with all applicable workers' compensation laws and
regulations with regard to all work performed on the Project.

Defects. Upon demand of Lender, promptly correct any defect in the
Improvements or any departure from the Plans and Specifications not
approved by Lender before further work shall be done upon the portion of the
Improvements affected.

Project Claims and Litigation. Promptly inform Lender of (a) all material
adverse changes in the financial condition of the general contractor; (b) any
litigation and claims, actual or threatened, affecting the Project or the 
general contractor, which could materially affect the successful completion 
of the Project or the ability of the general contractor to complete the 
Project as agreed; and (c) any condition or event which constitutes a breach 
or default under any of the Related Documents or any contract related to the 
Project.

Payment of Claims and Removal of Liens. (a) Cause all claims for labor done
and materials and services furnished in connection with the Improvements to
be fully paid and discharged in a timely manner, (b) diligently file or procure
the filing of a valid notice of completion of the Improvements, or such
comparable document as may be permitted under applicable lien laws, (c)
diligently file or procure the filing of a notice of cessation, or such
comparable document as may be permitted under applicable lien laws, upon
the happening of cessation of labor on the Improvements for a continuous
period of thirty (30) days or more, and (d) take all reasonable steps necessary
to remove all claims of liens against the Property, the Improvements or any
part of the Property or Improvements, or any rights or interests appurtenant to
the Property or Improvements. Upon Lender's request, Borrower shall make
such demands or claims upon or against laborers, material men,
subcontractors, or other persons who have furnished or claim to have
furnished labor, services, or materials in connection with the Improvements,
which demands or claims shall under the laws of the State of California
require diligent assertions of lien claims upon penalty of loss or waiver
thereof. Borrower shall, within ten (10) days after the filing of any claim of
lien that is disputed or contested by Borrower, record or cause the general
contractor for the construction of the Improvements to record in the Office of
the Alameda County Recorder, a surety bond pursuant to California law
sufficient to release the claim of lien and, within five (5) days of Lender's
demand, make suitable provision by deposit of funds with Lender in an
amount satisfactory to Lender or by bond satisfactory to Lender for the
possibility that the contest will be unsuccessful. If Borrower is unable to
provide bonds utilizing its regular surety, the foregoing ten (10) and five (5)
day periods of limitation shall be increased to thirty
(30) days. If Borrower fails to remove any lien on the Property or
Improvements or provide a bond or deposit pursuant to this provision, Lender
may pay such lien, or may contest the validity of the lien, and Borrower shall
pay all costs and expenses of such contest, including Lender's reasonable
attorneys' fees.

Taxes and Claims. Pay and discharge when due all of Borrower's
indebtedness, obligations, and claims that, if unpaid, might become a lien or
charge upon the Property of Improvements; provided, however, that
Borrower shall not be required to pay and discharge any such indebtedness,
obligation, or claim so long as (a) its legality shall be contested in good 
faith by appropriate proceedings, (b) the indebtedness, obligation, or claim 
does not become a lien or charge upon the Property or Improvements, and (c)
Borrower shall have established on its books adequate reserves with respect
to the amount contested in accordance with generally accepted accounting
practices. If the indebtedness, obligation, or claim does become a lien or
charge upon the Property or Improvements, Borrower shall remove the lien
or charge as provided in the preceding paragraph.

Performance. Perform and comply with all terms, conditions, and provisions
set forth in this Agreement and in all other instruments and agreements
between Borrower and Lender, and in all other loan agreements now or
hereafter existing between Borrower and any other party. Borrower shall
notify Lender immediately in writing of any default in connection with any
agreement.

Additional Assurances. Make, execute, and deliver to Lender such Security
Agreements, instruments, documents, and other agreements reasonably
necessary to document and secure the Loan and to perfect Lender's Security
Interests in the Property and Improvements.

NEGATIVE COVENANTS. Borrower covenants and agrees with Lender
that while this Agreement is in effect, Borrower shall not, without the prior
written consent of the Lender:

Indebtedness and Liens. (a) Except for trade debt incurred in the normal
course of business and indebtedness to Lender contemplated by this
Agreement, create, incur or assume indebtedness for borrowed money,
including capital leases, (b) sell, transfer, mortgage, assign, pledge, lease,
grant a security in, or encumber any of Borrower's assets other than in the
normal course of Borrower's business or (c) sell with recourse any of
Borrower's accounts, except to Lender.

Continuity of Operations. (a) Engage in any business activities substantially
different than those in which Borrower is presently engaged or (b) cease
operation, liquidate, merge, transfer, acquire or consolidate with any other
entity, change ownership, dissolve or transfer or sell Collateral out of the
ordinary course of business.

Loans, Acquisitions and Guaranties. (a) Loan, invest in or advance money or
assets, (b) purchase, create or acquire any interest in any other enterprise or
entity, or (c) incur any obligation as surety or guarantor other than in the
ordinary course of business.
Modification of Contract. Make or permit to be made any modification of the
Construction Contract.

Liens. Create or allow to be created any lien or charge upon the Property or
the Improvements.

GENERAL PROJECT PROVISIONS. The following provisions relate to the
construction and completion of the Project:

Change Orders. All requests for changes in the Plans and Specifications,
other than minor changes involving costs up to $5,000 per lot, must be in
writing, signed by Borrower and the architect, and delivered to Lender for
its approval. Borrower will not permit the performance of any work pursuant
to any change order or modification of the Construction Contract or any
subcontract without the written approval of Lender. Borrower will obtain any
required permits or authorizations from governmental authorities having
jurisdiction before approving or requesting a new change order.

Purchase of Materials; Conditional Sales Contracts. No materials, equipment,
fixtures, or articles of personal property placed in or incorporated into the
Project shall be purchased or installed under any Security Agreement or other
agreement whereby the seller reserves or purports to reserve title or the right
of removal or repossession, or the right to consider such items as personal
property after their incorporation into the Project, unless otherwise authorized
by Lender in writing.

Lender's Right of Entry and Inspection. Lender and its agents shall have at all
times the right of entry and free access to the Property and the right to 
inspect all work done, labor performed, and materials furnished with respect 
to the Project. Lender shall have unrestricted access to and the right to copy 
all records, accounting books, contracts, subcontracts, bills, statements, 
vouchers and supporting documents of Borrower relating in any way to the 
Project.

Lender's Right to Stop Work. If Lender in good faith determines that any
work or materials do not conform to the approved Plans and Specifications or
sound building practices, or otherwise depart from any of the requirements of
this Agreement, Lender may require the work to be stopped and withhold
disbursements until the matter is corrected, provided that the non-conforming
work or materials pose a reasonable threat that the work will not be accepted
by the authorized agency within the County of Stanislaus. In such event,
Borrower will promptly correct the work to Lender's satisfaction. No such
action by Lender will affect Borrower's obligation to complete the
Improvements on or before the Completion Date. Lender is under no duty to
supervise or inspect the construction or examine any books and records. Any
inspection or examination by Lender is for the sole purpose of protecting
Lender's security and preserving Lender's rights under this Agreement. No
default of Borrower will be waived by any inspection by Lender. In no event
will any inspection by Lender be a representation that there has been or will
be compliance with the Plans and Specifications or that the construction is
free from defective materials or workmanship.
Indemnity. Borrower shall indemnify and hold Lender harmless from any and
all claims asserted against Lender or the Property by any person, entity, or
governmental body, or arising out of or in connection with the Property,
Improvements, or Project. Lender shall be entitled to appear in any action or
proceeding to defend itself against such claims, and all costs incurred by
Lender in connection with such defense, including attorneys' fees, shall be
paid by Borrower to Lender. Lender shall, in its sole discretion, be entitled to
settle or compromise any -asserted claims against it upon ten (10) days notice
to Borrower, and such settlement shall be binding upon Borrower for
purposes of this indemnification. All amounts paid by Lender under this
paragraph shall be secured by the Mortgage or Deed of Trust on the Property,
shall be deemed an additional principal Advance under the Loan, payable
upon demand, and shall bear interest at the rate applicable to the Loan.

Publicity. Lender may display a sign at the construction site informing the
public that Lender is the construction lender for the Project. Lender may
obtain other publicity in connection with the Project through press releases
and participation in ground-breaking and opening ceremonies and similar
events.

Actions. Lender shall have the right to commence, appear in, or defend any
action or proceeding purporting to affect the rights, duties, or liabilities 
of the parties to this Agreement, or the disbursement of funds from the Loan 
Fund. In connection with this right, Lender may incur and pay reasonable costs 
and expenses, including, but not limited to, attorneys' fees, for both trial and
appellate proceedings. Borrower covenants to pay to Lender on demand all
such expenses, together with interest from the date Lender incurs the expense
at the rate specified in the Note, and Lender is authorized to disburse funds
from the Loan Fund for such purposes. Further in connection with the above
referenced right, Borrower may be a party to the action or proceeding
involved, and if so, Lender may be represented by counsel also representing
Borrower and mutually acceptable to Borrower and Lender, except that in the
case of (a) conflict of interest by said counsel in representing both Borrower
and Lender, (b) the existence of adverse interests between Borrower and
Lender, (c) said counsel not being reasonably satisfactory to Lender or not
defending Lender in a reasonably satisfactory manner, then Lender shall have
the right to be represented by counsel of its choice without affecting or
otherwise impairing any of its rights hereunder, including without limitation
the aforesaid right to charge Borrower with its attorneys' fees and expenses.

EVENTS OF DEFAULT. Each of the following shall constitute an Event of
Default under this Agreement:

Default on Indebtedness. Failure of Borrower to make any payment when due
on the Loans.

Other Defaults. Failure of Borrower or any Guarantor to comply with or to
perform when due any other term, obligation, covenant or condition
contained in this Agreement or in any of the Related Documents, or failure of
Borrower to comply with or to perform any other term, obligation, covenant
or condition contained in any other agreement between Lender and Borrower
relating only to this Property and subdivision.

False Statements. Any warranty, representation, or statement made or
furnished to Lender by or on behalf of Borrower or any Guarantor under this
Agreement or the Related Documents is false or misleading in any material
respect, either now or at the time made or furnished.

Defective Collateralization. This Agreement or any of the Related
Documents ceases to be in full force and effect (including failure of any
collateral document to create a valid and perfected security interest or lien) 
at any time and for any reason.

Insolvency. The dissolution or termination of Borrower's existence as a
going business, insolvency, appointment of a receiver for any part of
Borrower's property, any assignment for the benefit of creditors, any type of
creditor workout, or the commencement of any proceeding under any
bankruptcy or insolvency laws by or against Borrower.

Creditor or Forfeiture Proceedings. Commencement of foreclosure or
forfeiture proceedings, whether by judicial proceeding, self-help,
repossession or any other method, by any creditor of Borrower, any creditor
of any Grantor against any collateral securing the indebtedness, or by any
governmental agency. This includes a garnishment, attachment, or levy on or
of any of Borrower's deposit accounts with Lender. However, nothing herein
is intended to create cross-collateralization between the Loan herein and any
other loans between Lender and Borrower which exist relating to other
projects or property, but including the loan relating to site work on the
subdivision containing this Property.

Events Affecting Guarantor. Any of the preceding events occurs with respect
to any Guarantor -of any of the Indebtedness or such Guarantor dies or
becomes incompetent, provided that such death or incompetence materially
affects Borrower's ability to complete the Project in the sole discretion of
Lender after giving Borrower thirty (30) days notice.

Change in Ownership. Any change in ownership of twenty-five percent
(25%) or more of the Borrower.

Breach of Construction Contract. The Improvements are not constructed in
accordance with the Plans and Specifications or in accordance with the terms
of the Construction Contract.

Cessation of Construction. Prior to the completion of construction of the
Improvements and equipping of the Project, the construction of the
Improvements or the equipping of the Project is abandoned or work thereon
ceases for a period of more than ten (10) days for any reason other than as
anticipated in the construction schedule, except for cessations beyond the
control of Borrower, its contractors, subcontractors or suppliers (e.g., acts of
any governmental authority, acts of a public enemy, unusually severe
weather, or fire not due to the negligence of Borrower, its contractors,
subcontractors or suppliers), or the Improvements are not completed for
purposes of final payment to the general contractor prior to the completion
date represented by Borrower to Lender, except as may be extended with
Lender's concurrence.

Transfer of Property. Sale, transfer, hypothecation, assignment, or
conveyance of the Property or the Improvements or any portion thereof or
interest therein by Borrower or any Grantor without Lender's prior written
consent other than the sale or individual finished homes to purchases as
contemplated by the release provided in the Deed of Trust.

Condemnation. All or any material portion of the Property is condemned,
seized, or appropriated without compensation, and Borrower does not within
thirty (30) days after such condemnation, seizure, or appropriation, initiate
and diligently prosecute appropriate action to contest in good faith the
validity of such condemnation, seizure, or appropriation.

EFFECT OF AN EVENT OF DEFAULT; REMEDIES. Upon the occurrence
of any Event of Default and at any time thereafter, Lender may, at its option,
but without any obligation to do so, and in addition to any other right Lender
may have, do any one or more of the following without notice to Borrower:
(a) Cancel this Agreement; (b) Institute appropriate proceedings to enforce
the performance of this Agreement; (c) Withhold further disbursement of
Loan Funds; (d) Expend funds necessary to remedy the default; (e) Take
possession of the Property and continue construction of the Project; (f)
Accelerate maturity of the Note and/or Indebtedness and demand payment of
all sums due under the Note and/or Indebtedness; (g) Bring an action on the
Note and/or Indebtedness; (h) Foreclose the Mortgage or Deed of Trust on
the Property in any manner available under law; and (i) Exercise any other
right or remedy which it has under the Note or Related Documents, or which
is otherwise available at law or in equity or by statute.

COMPLETION OF IMPROVEMENTS BY LENDER. If Lender takes
possession of the Property, it may take any and all actions necessary in its
judgment to complete construction of the Improvements, including but not
limited to making changes in the Plans and Specifications, work, or materials
and entering into, modifying or terminating any contractual arrangements,
subject to Lender's right at any time to discontinue any work without
liability. If Lender elects to complete the Improvements, it will not assume
any liability to Borrower or any other person for completing the
Improvements or for the manner or quality of construction of the
Improvements, and Borrower expressly waives any such liability. Borrower
irrevocably appoints Lender as its attorney-in-fact, with full power of
substitution, to complete the Improvements, at Lender's option, either in
Borrower's name or in its own name. In any event, all sums expended by
Lender in completing the construction of the Improvements will be
considered to have been disbursed to Borrower and will be secured by the
collateral for the Loan. Any such sums that cause the principal amount of the
Loan to exceed the face amount of the Note will be considered to be an
additional Loan to Borrower, bearing interest at the Note rate and being
secured by the collateral. For these purposes, Borrower assigns to Lender all
of its right, title and interest in and to the Project Documents; however
Lender will not have any obligation under the Project Documents unless
Lender expressly hereafter agrees to assume such obligations in writing.
Lender will have the right to exercise any rights of Borrower under the
Project Documents upon the occurrence of an Event of Default. All rights,
powers, and remedies of Lender under this Agreement are cumulative and
alternative, and are in addition to all rights which Lender may have under
applicable law.

MISCELLANEOUS PROVISIONS. The following miscellaneous provisions
are a part of this Agreement:

Agency. Nothing in this Agreement shall be construed to constitute the
creation of a partnership or joint venture between Lender and Borrower or
any contractor. Lender is not an agent or representative of Borrower. This
Agreement does not create a contractual relationship with and shall not be
construed to benefit or bind Lender in any way with or create any
contractual duties by Lender to any contractor, subcontractor, material man,
laborer, or any other person.

Amendments. This Agreement, together with any Related Documents,
constitutes the entire understanding and agreement of the parties as to the
matters set forth in this Agreement. No alteration of or amendment to this
Agreement shall be effective unless given in writing and signed by the party
or parties sought to be charged or bound by the alteration or amendment.

Applicable Law. This Agreement has been delivered to Lender and accepted
by Lender in the State of California. If there is a lawsuit, Borrower agrees
upon Lender's request to submit to the jurisdiction of the courts of San
Francisco County, the State of California. This Agreement shall be governed
by and construed in accordance with the laws of the State of California.

Authority to File Notices. Borrower appoints and designates Lender as its
attorney-in-fact to file for record any notice that Lender deems necessary to
protect its interest under this Agreement. This power shall be deemed
coupled with an interest and shall be irrevocable while any sum or
performance remains due and owing under any of the Related Documents.

Caption Headings. Caption headings in this Agreement are for convenience
purposes only and are not to be used to interpret or define the provisions of
this Agreement.

Multiple Parties; Corporate Authority. All obligations of Borrower under this
Agreement shall be joint and several, and all references to Borrower shall
mean each and every Borrower. This means that each of the persons signing
below is responsible for all obligations in this Agreement.

Consent to Loan Participation. Borrower agrees and consents to Lender's sale
or transfer, whether now or later, of one or more participation interests in the
Loans to one or more purchasers, only if related to Lender. Lender may
provide, without any limitation whatsoever, to any one or more purchasers, or
potential purchasers, any information or knowledge Lender may have about
Borrower or about any other matter relating to the Loan, and Borrower
hereby waives any rights to privacy it may have with respect to such matters,
Borrower additionally waives any and all notices of sale of participation
interests, as well as all notices of any repurchase of such participation
interests. Borrower also agrees that the purchasers of any such participation
interests will be considered as the absolute owners of such interests in the
Loans and will have all the rights granted under the participation agreement
or agreements governing the sale of such participation interests. Borrower
further waives all rights of offset or counterclaim that it may have now or
later against Lender (except that Borrower preserves its rights directly against
Lender for any breaches of its obligations by Lender) or against any
purchaser of such a participation interest and unconditionally agrees that
either Lender or such purchaser may enforce Borrower's obligation under the
Loans irrespective of the failure or insolvency of any holder of any interest in
the Loans. Borrower further agrees that the purchaser of any such
participation interests may enforce its interests irrespective of any personal
claims or defenses that Borrower may have against Lender.

Costs and Expenses. In the event of any default hereunder or under any of
the Related Documents, Borrower agrees to pay upon demand all of Lender's
out-of-pocket expenses, including attorneys' fees, incurred in connection with
the preparation, execution, enforcement and collection of this Agreement or
in connection with the Loans made pursuant to this Agreement. In the event
of any default hereunder or under any of the Related Documents, Lender may
pay someone else to help collect the Loans and to enforce this Agreement,
and Borrower will pay that amount. This includes, subject to any limits under
applicable law, Lender's attorneys' fees and Lender's legal expenses, whether
or not there is a lawsuit, including attorneys' fees for bankruptcy proceedings
(including efforts to modify or vacate any automatic stay or injunction),
appeals, and any anticipated post-judgment collection services. Borrower also
will pay any court costs, in addition to all other sums provided by law.

Prevailing Party. Should any litigation be commenced between the parties
herein or any other party bound by this Agreement concerning this
Agreement or the rights and duties of any of them in relation thereto, the
party prevailing in such litigation shall be entitled to, in addition to such
other relief as may be granted, a reasonable sum as and for attorneys' fees in
such litigation, which shall be determined by the Court in such litigation or in
a separate action brought for that purpose.

Entire Agreement. This Agreement and the Related Documents constitute all
of the agreements between the parties relating to the Project and supersede all
other prior or concurrent oral or written agreements or understandings
relating to the Project.

Notices. All notices required to be given under this Agreement shall be given
in writing and shall be effective when actually delivered or when deposited in
the United States mail, first class, postage prepaid, addressed to the party to
whom the notice is to be given at the address shown above. Any party may
change its address for notices under this Agreement by giving formal written
notice to the other parties, specifying that the purpose of the notice is to
change the party's address. To the extent permitted by applicable law, if there
is more than one Borrower, notice to any Borrower will constitute notice to
all Borrowers. For notice purposes, Borrower agrees to keep Lender informed
at all times of Borrower's current address(es).

Severability. If a court of competent jurisdiction finds any provision of this
Agreement to be invalid or unenforceable as to any person or circumstance,
such finding shall not <PAGE>
render that provision invalid or unenforceable as to 
any other persons or circumstances. If feasible, any such offending provision 
shall be deemed to be modified to be within the

limits of enforce ability or validity; however, if the offending provision
cannot be so modified, it shall be stricken and all other provisions of this
Agreement in all other respects shall remain valid and enforceable.

Survival. All warranties, representations, and covenants made by Borrower in
this Agreement or in any certificate or other instrument delivered by
Borrower to Lender under this Agreement shall be considered to have been
relied upon by Lender and will survive the making of the Loan and delivery
to Lender of the Related Documents, regardless of any investigation made by
Lender or on Lender's behalf.

Time is of the Essence. Time is of the essence in the performance of this
Agreement.

Waiver. Neither party shall be deemed to have waived any rights under this
Agreement unless such waiver is given in writing and signed by the other. No
delay or omission on the part of a party in exercising any right shall operate
as a waiver of such right or any other right. A waiver by a party of a
provision of this Agreement shall not prejudice or constitute a waiver of such 
party's right otherwise to demand strict compliance with that provision or any 
other provision of this Agreement. No prior waiver by Lender, nor any course 
of dealing between Lender and Borrower, or between Lender and any Guarantor, 
shall constitute a waiver of any of Lender's rights or of any obligations of 
Borrower or of any Guarantor as to any future transactions. Whenever the 
consent of a party is required under this Agreement, the granting of such 
consent by such party in any instance shall not constitute continuing consent 
in subsequent instances where such consent is required and in all cases such 
consent may be granted or withheld in the sole discretion of such party.

BORROWER ACKNOWLEDGES HAVING READ ALL THE
PROVISIONS OF THIS CONSTRUCTION LOAN AGREEMENT, AND
BORROWER AGREES TO ITS TERMS. THIS AGREEMENT IS DATED
AS OF October 15,1998. 

<PAGE>
BORROWER:
Westco Community Builders, Inc., a California Corporation
By:   /s/ Jerry A. Finch
Jerry A. Finch, President
By:  /s/ Britt Evans
Britt Evans, Executive Vice President
LENDER:
DOVER INVESTMENTS CORPORATION
By:   /s/ Lawrence Weissberg
Its:  CEO