SECURED PROMISSORY NOTE


$ 537,500.00                                                    Denver, Colorado
                                                              September 13, 1999


                  FOR VALUE RECEIVED,  Robert G. Blatz (the "Borrower"),  hereby
promises to pay to the order of Asset Investors Operating  Partnership,  L.P., a
Delaware limited  partnership (the "Lender"),  the principal sum of FIVE HUNDRED
THIRTY-SEVEN  THOUSAND  FIVE HUNDRED AND 00/100  DOLLARS  ($537,500),  in lawful
money of the United  States of America,  on September  12, 2009 (the  "Repayment
Date"), together with accrued and unpaid interest thereon from the date hereof.

                  1. Interest Rate.  The  outstanding  principal  amount of this
Note, together with all accrued and unpaid interest thereon, shall bear interest
at a rate per annum equal to 7.50%.

                  2. Interest  Payments.  Interest payments on the Note shall be
payable  quarterly  on March 1, June 1,  September 1 and December 1 of each year
through the Repayment Date.  Interest shall be calculated on the basis of a year
comprised of twelve (12) thirty (30) day months. Each payment on this Note shall
be credited  first to interest on past due interest,  then to past due interest,
then to accrued interest and then to principal.

                  3. Method of Payment.  All payments hereunder shall be made by
check at 3410 S. Galena Street,  Suite 210,  Denver,  Colorado 80231, or at such
other place as the Lender shall  designate  to the  Borrower in writing.  If any
payment of  principal  or  interest  on this Note is due on a day which is not a
Business Day, such payment shall be due on the next succeeding Business Day, and
such extension of time shall be taken into account in calculating  the amount of
interest  payable  under  this Note.  "Business  Day" means any day other than a
Saturday, Sunday or legal holiday in the State of Colorado.

                  4. Prepayment. The Borrower shall have the right to prepay the
principal  amount hereof in full or in part,  together with all accrued interest
on the  amount  prepaid  to the date of such  prepayment,  at any  time  without
penalty.




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                  5.  Termination  of  Employment.  Upon the  occurrence  of the
termination  for any reason of the Borrower's  employment with the Lender or its
affiliates (a  "Termination  Event"),  the Lender shall, by notice in writing to
the  Borrower,  declare this Note and the  principal of and accrued  interest on
this Note and all other  charges  owing to the  Lender to be, and the same shall
upon  such  notice  forthwith  become,  due and  payable  on the  thirtieth  day
following such Termination Event;  provided,  however, that, if such Termination
Event occurs on or after a Change in Control (as defined  herein),  such amounts
shall not be due and  payable  prior to the last day of the  twelve  (12)  month
period following such Termination Event.

                  6.  Security.  Pursuant to the Security and Pledge  Agreement,
dated as of the date  hereof  (the  "Security  Agreement"),  by and  between the
Lender and the Borrower,  the obligations of the Borrower  hereunder are secured
by the Collateral (as defined in the Security Agreement), and the holder of this
Note is entitled to the benefits of the Collateral.

                  7.  Limited   Recourse.   Except  for  recourse   against  the
Collateral  as provided in the Security and Pledge  Agreement,  recourse for the
payment of the  principal  of or  interest  on this Note or for any claim  based
hereon (including costs of collection)  against the Borrower shall be limited to
an amount equal to (a) 25% of the original  principal  amount of this Note, less
(b) any  prepayments  of the  principal  amount of this Note,  all  liability in
excess  of  such  amount  being,  by the  acceptance  hereof  and as part of the
consideration for the issue hereof, expressly waived and released.

                  8.  Events of  Default.  Each of the  following  events  shall
constitute  an "Event of Default"  hereunder  (whether it shall be  voluntary or
involuntary or occur or be effected by operation of law or  otherwise):  (a) the
Borrower's  failure to pay,  within 15 days after the date when such  payment is
due,  any payment of  principal  or interest  on this Note;  (b) the  Borrower's
failure to observe or perform any covenant or  agreement  contained in this Note
(other than that set forth in clause (a) above) or the Security  Agreement;  (c)
if any  representa  tion,  warranty,  certification  or  statement  made  by the
Borrower in this Note,  the Security  Agreement or in any  certificate  or other
document  delivered  pursuant to this Note or the Security Agreement shall prove
to have been incorrect in any material respect when made or deemed made; (d) the
insolvency of the Borrower;  (e) the  appointment  of a receiver or a trustee of
all or part of the Borrower's property; (f) an assignment for the benefit of the
Borrower's creditors; (g) the

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filing of a petition in bankruptcy by or against the Borrower;  (h) the commence
ment of any  proceeding  by or against  the  Borrower  under any  bankruptcy  or
insolvency law or any law relating to the relief of debtors or  readjustment  of
indebtedness;   (i)  the  appointment  of  a  receiver,  custodian,  trustee  or
liquidator  for any part of the  assets or  property  of the  Borrower;  (j) the
failure of the  Borrower  generally  to pay his or her debts as they become due;
and (k) the failure of the Lender to have a first priority  security interest in
the Collateral.

                  9.       Remedies.

                  (a) Upon the occurrence of any Event of Default, the holder of
this Note may, by notice in writing to the  Borrower,  declare this Note and the
principal of and accrued  interest on this Note and all other  charges  owing to
the Lender to be, and the same shall upon such notice forthwith become,  due and
payable.  Upon the  occurrence  of an Event of Default,  the holder of this Note
may, in addition to all rights and remedies available to it at law, exercise any
or all of its rights under the Security Agreement.

                  (b) No  failure  or  delay  by the  holder  of  this  Note  in
exercising any remedy, right, power or privilege under this Note or the Security
Agreement shall operate as a waiver of such remedy,  right,  power or privilege,
nor shall  any  single or  partial  exercise  of such  remedy,  right,  power or
privilege preclude any other or further exercise of such remedy, right, power or
privilege.  No remedy,  right, power or privilege  conferred upon or reserved to
the holder of this Note by this Note or the Security Agreement is intended to be
exclusive of any other remedy,  right,  power or privilege provided or permitted
by this Note, the Security Agreement or by law, but each shall be cumulative and
in addition to every other  remedy,  right,  power or  privilege  so provided or
permitted and each may be exer cised  concurrently or independently from time to
time and as often as may be deemed  expedient  by the holder of this  Note.  Any
provision of this Note which is prohibited or unenforceable shall be ineffective
to the extent of such prohibition or unenforceability  without  invalidating the
remaining provisions of this Note.

                  (c) The  holder  of this Note  shall  have the  right,  at its
option,   to  declare  the  entire  unpaid  principal   balance  of  this  Note,
irrespective  of the maturity  date of this Note,  immediately  due and payable,
together  with  accrued  interest,  if the  Borrower  (or any  affiliate  of the
Borrower)  sells,  transfers  or  disposes  of any  portion  of  the  Collateral
identified in the Security Agreement.



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                  Notwithstanding the above, if an Event of Default first occurs
on or prior to the end of the twelve  (12) month  period  following  a Change in
Control,  the holder of this Note may not cause the Note or the  principal of or
the accrued  interest on this Note to become due and payable prior to the second
anniversary of such Change in Control or the Repayment Date, if earlier.

                  10. Costs of  Collection.  Upon the failure of the Borrower to
pay any amount due  hereunder as and when due, the Borrower  shall pay on demand
any and all costs and expenses (including,  without limitation,  all court costs
and  attorneys'  fees)  incurred  by the holder  hereof in  connection  with the
collection of any outstanding  principal  balance and interest accrued hereunder
(whether or not suit is filed to enforce the terms  hereof),  and in  connection
with the  enforcement  of any rights or remedies  provided  for pursuant to this
Note and the  Security  Agree  ment.  If not paid on demand,  all such costs and
expenses  automatically  shall  be  added  to the  remaining  principal  balance
hereunder as of the date immediately following the date of such demand.

                  11. Change In Control.  For purposes of this Note,  "Change in
Control" shall mean the occurrence of any of the following events:

                  (a) an  acquisition  (other than  directly from the Lender) of
any voting securities of the Lender (the "Voting Securities) by any "person" (as
the term  "person" is used for purposes of Section 13(d) or Section 14(d) of the
Securities  Exchange Act of 1934, as amended (the "Exchange  Act"))  immediately
after which such person has "beneficial  ownership"  (within the meaning of Rule
13d-3  promulgated  under the Exchange Act)  ("Beneficial  Ownership") of 20% or
more of the  combined  voting  power of the  Lender's  then  outstanding  Voting
Securities; provided, however, in determining whether a Change in Control has oc
curred,  Voting  Securities  that are acquired in a Non-Control  Acquisition (as
hereinafter  defined)  shall not  constitute an  acquisition  that would cause a
Change in Control. "Non-Control Acquisition" shall mean an acquisition by (A) an
employee benefit plan (or a trust forming a part thereof)  maintained by (1) the
Lender or (2) any  corporation,  partnership or other person of which a majority
of its  voting  power or its  equity  securities  or  equity  interest  is owned
directly or  indirectly by the Lender or in which the Lender serves as a general
partner or manager (a  "Subsidiary"),  (B) the Lender or any Subsidiary,  or (C)
any  person  in  connection  with  a  Non-Control  Transaction  (as  hereinafter
defined);

                  (b) the  individuals  who constitute the Board of Directors of
the Lender as of the date hereof (the "Incumbent Board") cease for any reason to
constitute  at least  two-thirds  (2/3) of the  Board  of  Directors;  provided,
however,  that if the  election,  or  nomination  for  election by the  Lender's
stockholders,  of any new director was approved by a vote of at least two-thirds
(2/3) of the Incumbent



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Board, such new director shall be considered as a member of the Incumbent Board;
provided,  further, that no individual shall be considered a member of the Incum
bent Board if such individual  initially assumed office as a result of either an
actual or threatened "election contest" (as described in Rule 14a-11 promulgated
under the Exchange  Act) (an  "Election  Contest") or other actual or threatened
solicitation  of proxies or consents by or on behalf of a person  other than the
Board of Direc tors (a "Proxy  Contest")  including  by reason of any  agreement
intended to avoid or settle any Election Contest or Proxy Contest; or

                  (c) approval by  stockholders  of the Lender of: (A) a merger,
consolidation, share exchange or reorganization involving the Lender, unless (1)
the stockholders of the Lender,  immediately before such merger,  consolidation,
share exchange or reorganization, own, directly or indirectly immediately follow
ing such merger, consolidation,  share exchange or reorganization,  at least 80%
of the  combined  voting  power  of the  outstanding  voting  securities  of the
corporation that is the successor in such merger, consolidation,  share exchange
or  reorganiza  tion  (the  "Surviving   Company")  in  substantially  the  same
proportion as their ownership of the Voting Securities  immediately  before such
merger, consolidation, share exchange or reorganization, (2) the individuals who
were members of the Incumbent  Board  immediately  prior to the execution of the
agreement   providing  for  such  merger,   consolidation,   share  exchange  or
reorganization  constitute at least two-thirds (2/3) of the members of the board
of  directors  of the  Surviving  Com pany,  and (3) no persons  (other than the
Lender or any Subsidiary, any employee benefit plan (or any trust forming a part
thereof)  maintained by the Lender, the Surviving Company or any Subsidiary,  or
any person who, immediately prior to such merger, consolidation,  share exchange
or  reorganization  had  Beneficial  Ownership  of  15%  or  more  of  the  then
outstanding  Voting  Securities has  Beneficial  Ownership of 15% or more of the
combined  voting  power  of the  Surviving  Company's  then  outstanding  voting
securities  (a  transaction  described in clauses (1) through (3) is referred to
herein as "Non-Control Transaction");  (B) a complete liquidation or dissolution
of the Lender;  or (C) an agreement for the sale or other  disposition of all or
substantially  all of the  assets of the  Lender  to any  person  (other  than a
transfer to a Subsidiary).

                  Notwithstanding  the foregoing,  a Change in Control shall not
be deemed to occur  solely  because  any person (a  "Subject  Person")  acquired
Benefi  cial  Ownership  of more than the  permitted  amount of the  outstanding
Voting  Securities as a result of the  acquisition  of Voting  Securities by the
Lender that, by reducing the number of Voting Securities outstanding,  increases
the  proportional  number of shares  Beneficially  Owned by such Subject Person,
provided  that if a Change in Control would occur (but for the operation of this
sentence) as a result of the acquisition of Voting Securities by the Lender, and
after such share  acquisi tion by the Lender,  such Subject  Person  becomes the
Beneficial Owner of any



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additional   Voting  Securities  that  increases  the  percentage  of  the  then
outstanding Voting Securities  Beneficially Owned by such Subject Person, then a
Change in Control shall occur.

                  12.  Waiver.  The  Borrower  hereby  waives any right it might
otherwise have to require notice or acceptance by any other person of its obliga
tions or liabilities  under this Note which are  unconditional  and absolute and
waives  diligence,  presentment,  demand of  payment,  protest  and notice  with
respect  to all of the  obligations  of the  Borrower  under  this Note and with
respect  to any  action  under  this  Note and all  other  notices  and  demands
whatsoever,  except as specif ically provided for in this Note. This Note may be
amended,  and the  observance of any term of this Note may be waived,  with (and
only with) the written consent of the Lender.

                  13.  Governing  Law.  This  Note  shall  be  governed  by  and
construed in accordance with the laws of the State of Colorado.

                  14.  Assignment or Pledge of Note.  The Lender shall  promptly
notify the Borrower of any endorsement,  assignment,  pledge or hypothecation of
this Note to a person not affiliated with the Lender.

                  15. Loss, Mutilation, Etc. Upon notice from the holder of this
Note to the Borrower of the loss, theft, destruction or mutilation of this Note,
and upon receipt of an indemnity  reasonably  satisfactory  to the Borrower from
the holder of this Note or, in the case of mutilation hereof,  upon surrender of
the mutilated  Note, the Borrower will make and deliver a new note of like tenor
in lieu of this Note.

                  16. Notices. All notices and other communications  required or
permitted under this Note shall be in writing and shall be personally  delivered
or sent by certified  first class United States mail,  postage  prepaid,  return
receipt  requested,  and if mailed and shall be deemed to have been  received on
the third business day after deposit in the mail, addressed to the Lender, Asset
Investors Operating Partnership, L.P., 3410 S. Galena Street, Suite 210, Denver,
Colorado 80231,  Attention:  Chief Financial Officer,  or to the Borrower at the
address set forth below the Borrower's signature. Notice of any change of either
party's  ad dress  shall be given by  written  notice in the manner set forth in
this paragraph.

                      (the next page is the signature page)




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                  IN WITNESS WHEREOF, the Borrower has executed this Note on the
date first above written.

                                                     BORROWER:


                                                     /s/Robert G. Blatz
                                                     ------------------
                                                     (Signature of Borrower)

                                                     Robert G. Blatz
                                                     2637 McCormick Drive
                                                     Clearwater, FL 34619-1041
                                                     (727) 669-4791




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