<PAGE>   1
                                                                    EXHIBIT 10.1




               IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE
                          IN AND FOR NEW CASTLE COUNTY


----------------------------------------x
In Re Commercial Assets, Inc.           )    C.A. No. 17402
Shareholders Litigation                 )
----------------------------------------x


                          MEMORANDUM OF UNDERSTANDING



         WHEREAS, plaintiffs in the above-referenced stockholder class actions
(the "Actions") have challenged the proposed merger (the "Merger") of Asset
Investors Corporation ("AIC") and Commercial Assets, Inc. ("CAX") pursuant to an
Agreement and Plan of Merger, dated as of August 31, 1999 (the "Merger
Agreement"); and

         WHEREAS, pursuant to the agreed modifications to the Merger Agreement
set forth below, CAX common stockholders will receive the benefit of receiving
the option to elect to receive $5.75 in cash for each share, for up to 3,549,868
shares of their CAX common stock.

         IT IS HEREBY AGREED, between and among the parties hereto, that the
following sets forth the terms of their agreement to settle this matter:

         1.       The Merger Agreement shall be modified as follows:

                  a.       In addition to the vote of CAX stockholders required
                           under Delaware law to approve the Merger Agreement,
                           the Merger Agreement will be amended to require for
                           its approval the affirmative vote of two-thirds of
                           the outstanding shares of CAX common stock.

                  b.       The structure of the Merger will be changed to add a
                           cash-election feature in which holders of CAX's
                           outstanding common stock shall be entitled to elect
                           to receive for any or all of their shares of CAX
                           common stock $5.75 per share (the "Cash Amount") in
                           lieu of the basic per share merger consideration of
                           .4075
<PAGE>   2



                           shares of AIC common stock for each share of CAX
                           common stock (the "Stock Amount"); provided that (i)
                           the cash election shall not be available to (a) AIC
                           or its subsidiaries, or (b) directors or executive
                           officers of AIC or CAX, members of their immediate
                           families (i.e. spouses and children) and any entities
                           controlled by such officers or directors, and (ii)
                           the aggregate number of shares permitted to elect the
                           Cash Amount shall be limited to 3,549,868 shares. In
                           the event that holders of in excess of 3,549,868
                           shares of CAX common stock elect to receive the Cash
                           Amount, the aggregate cash consideration shall be pro
                           rated to all holders of CAX common stock that elected
                           to receive the Cash Amount (so that an aggregate of
                           3,549,868 shares receive the Cash Amount), and such
                           holders will receive the Stock Amount with respect to
                           the remainder of their holdings. No stockholder shall
                           be required to elect or accept anything other than
                           AIC common stock, and the cash election will be
                           available to CAX stockholders regardless of how they
                           vote on the merger.

                  c.       Notwithstanding the foregoing, in the event that at
                           the effective time of the Merger, the aggregate cash
                           consideration to be paid to CAX common stockholders
                           is greater than 57.5% of the aggregate merger
                           consideration (by value based upon the average of the
                           high and low trading price of AIC's common stock on a
                           day on which the shares trade on the Effective Date
                           and including the value of any cash paid in lieu of
                           fractional shares and legal fees and expenses in the
                           amounts set forth in paragraph 4 hereof), the
                           aggregate amount of cash consideration will be
                           reduced to 57.5% of the aggregate merger
                           consideration, and such amount will be pro rated
                           among CAX common stockholders that elected to receive
                           the Cash Amount, with all shares not receiving cash
                           to receive AIC common stock.





                                        2
<PAGE>   3
                  d.       It is noted that, under Delaware law, no statutory
                           appraisal rights shall exist in connection with the
                           proposed merger.

                  e.       Plaintiffs' counsel will review and comment upon the
                           disclosure in the draft proxy statement, including
                           any amendments and supplements thereto.

                  f.       As a condition to the consummation of the Merger, the
                           Delaware Court of Chancery shall have approved a full
                           release of all defendants in the Litigation and shall
                           have approved a stipulation of settlement with terms
                           no less favorable to AIC than those contained in this
                           Memorandum of Understanding, and such order shall
                           have become final and nonappealable.

         2.       The Proxy Statement on Form 14A relating to the Merger shall
                  be amended to reflect the changes provided in this Agreement
                  after consultation with plaintiffs' counsel.

         3.       Plaintiffs may conduct such reasonable additional discovery as
                  the parties agree is appropriate and necessary to confirm the
                  fairness and reasonableness of the terms of this settlement.

         4.       Upon final approval of the settlement of the Actions
                  (including any appeals), CAX shall pay plaintiffs' counsel
                  $600,000 in fees, inclusive of expenses, subject to approval
                  of the Court of Chancery.

         5.       A Stipulation of Settlement of those Actions (the
                  "Stipulation") will be prepared, executed and submitted to the
                  Court of Chancery for approval at the earliest practicable
                  time. The Stipulation will expressly provide, among other
                  things that: (a) the defendants have denied, and continue to
                  deny, that they have committed any violation of law or engaged
                  in any of the wrongful acts alleged in the complaints; (b) the
                  defendants are entering into the Stipulation solely because
                  the proposed settlement would eliminate the burden and expense
                  of further litigation; and (c) plaintiffs' counsel, having
                  made a thorough



                                       3
<PAGE>   4
                  investigation of the facts, believe that the proposed
                  settlement is fair, reasonable and adequate and in the best
                  interests of plaintiffs and the proposed class. The
                  Stipulation will further provide for, among other things, (a)
                  appropriate certification of the class described in the
                  complaint; (b) the entry of a judgment in appropriate form,
                  dismissing the actions with prejudice and barring any claims
                  known or unknown that have been, could have been, or in the
                  future can or might be asserted in the complaint, or in any
                  court, tribunal or proceeding, (including but not limited to
                  any claims arising under the federal, state or common law,
                  including federal securities law and any state disclosure law,
                  by or on behalf of any member of the class, whether
                  individual, class, derivative, representative, legal,
                  equitable, or any other type or in any other capacity against
                  defendants or any of their families, parent entities,
                  associates, affiliates or subsidiaries and each and all of
                  their respective past, present or future officers, directors,
                  stockholders, principals, representatives, employees,
                  attorneys, financial or investment advisors, consultants,
                  accountants, investment bankers, commercial bankers, advisors
                  or agents, heirs, executors, trustees, general or limited
                  partners or partnerships, personal representatives, estates,
                  administrators, predecessors, successors and assigns
                  (collectively, the "Released Persons") which have arisen,
                  arise now or hereafter may arise out of or relate in any
                  manner to the allegations, facts or any other matter
                  whatsoever set forth in or otherwise related, directly or
                  indirectly to the complaint or the proposed merger; (c) the
                  delivery of releases in an appropriate form releasing any
                  claims for violation of federal, state or common law.

                  It is the intention of the parties to extinguish all such
                  settled claims and consistent with such settled claims and
                  consistent with such intentions, the releasing parties waive
                  their rights to the extent permitted by law, to any benefits
                  of the provisions of section 1542 of the California Civil Code
                  or any other similar state law, federal law or principle of
                  common law, which may have the effect of limiting the release
                  set forth above.





                                       4
<PAGE>   5
         6.       This Memorandum of Understanding and the proposed settlement
                  described herein shall not be legally binding upon any party
                  unless and until the Stipulation is executed. The settlement
                  described herein shall be subject to the approval of the Court
                  of Chancery. Should a Stipulation not be executed or not be
                  consummated in accordance with the terms described herein, the
                  proposed settlement shall be null and void and of no force and
                  effect, and shall not be deemed to prejudice in any way the
                  position of any party with respect to this litigation except
                  as set forth in paragraph 5 above. In such event, neither the
                  existence of this Memorandum of Understanding nor its contents
                  shall be admissible in evidence or shall be referred to for
                  any purpose in this litigation or in any other litigation or
                  proceeding.

         7.       The Merger is conditioned on consummation of the settlement.

         8.       This Memorandum of Understanding may be signed in
                  counterparts.

DATED: March 6, 2000

                                       /s/ ANDREW J. TUREZYN
                                       -----------------------------------------
                                       Edward P. Welch
                                       Andrew J. Turezyn
                                       Julie A. Tostrup
                                       SKADDEN, ARPS, SLATE,
                                        MEAGHER & FLOM LLP
                                       One Rodney Square
                                       P.O. Box 636
                                       Wilmington, Delaware 19899-0636
                                       (302)651-3000
                                       Attorneys for Defendants
                                       Asset Investors Corporation,
                                       Commercial Assets, Inc. and
                                       certain Individual Defendants


                                       5
<PAGE>   6
                                       /s/ SRINIVAS M. RAJU
                                       -----------------------------------------
                                       Charles F. Richards, Jr., Esquire
                                       Srinivas M. Raju, Esquire
                                       RICHARDS, LAYTON & FINGER
                                       One Rodney Square
                                       P.O. Box 551
                                       Wilmington, Delaware 19899
                                       (302)651-7738
                                       Attorneys for Raymond Baker,
                                       Thomas Fries, Donald Kortz, and
                                       Robert Malone


                                       /s/ NORMAN M. MONHAIT
                                       -----------------------------------------
                                       Norman M. Monhait, Esquire
                                       Rosenthal, Monhait, Gross
                                        & Goddess, P.A.
                                       Mellon Bank Center
                                       Suite 1401
                                       Wilmington, DE 19801
                                       (302) 656-4433
                                       Attorneys for Plaintiffs and the Class




                                       6