Document:

LINE OF CREDIT AGREEMENT

         THIS LINE OF CREDIT AGREEMENT  ("Agreement"),  is made and entered into
as of  the 7 day of  April,  2000,  by and  between  ASSET  INVESTORS  OPERATING
PARTNERSHIP,  L.P., a Delaware limited  partnership  ("Borrower"),  AIOP FLORIDA
PROPERTIES  I,  L.L.C.,  a Delaware  limited  liability  company,  AIOP  FLORIDA
PROPERTIES II, L.L.C., a Delaware limited liability  company,  COMMUNITY SAVANNA
CLUB JOINT  VENTURE,  a Delaware  general  partnership,  and AIOP LOST  DUTCHMAN
NOTES,  L.L.C., a Delaware  limited  liability  company,  and U.S. BANK NATIONAL
ASSOCIATION (the "Bank").

                                    RECITALS

         .  Borrower  applied to the Bank for the extension of a line of credit
for general business purposes.

         B. The Bank is willing  to extend  credit  for such  purposes  upon the
terms and conditions set forth in this Agreement.

         NOW,  THEREFORE,  in  consideration  of the foregoing  premises and the
mutual covenants herein contained and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties hereto
hereby agree as follows:

                                   ARTICLE 1.
                                   DEFINITIONS

         The following terms when used in this Agreement shall, except where the
context otherwise required,  have the following meanings (such definitions to be
equally applicable to the singular and the plural forms thereof):

         1.1 "Act of Bankruptcy" shall mean (i) if Borrower or any member of the
Affiliate  Group  shall fail to pay its debts as they  become due, or (ii) shall
make an  assignment  for the benefit of its  creditors,  or (iii) shall admit in
writing its  inability to pay its debts as they become due, or (iv) shall file a
petition under any chapter of the Federal  Bankruptcy Code or similar law, state
or federal,  now or hereafter existing,  or (v) shall become "insolvent" as that
term is generally  defined under the Federal  Bankruptcy  Code, or (vi) shall in
any involuntary  bankruptcy case commenced  against it file an answer  admitting
insolvency or inability to pay its debts as they become due, or (vii) shall fail
to  obtain  a  dismissal  of  such  case  within  ninety  (90)  days  after  its
commencement or convert the case from one chapter of the Federal Bankruptcy Code
to  another  chapter,  or (viii) be the  subject  of an order for relief in such
bankruptcy case, or (ix) be adjudged a bankrupt or insolvent,  or (x) shall have
a  custodian,  trustee  or  receiver  appointed  for,  or have  any  court  take
jurisdiction of its property,  or any part thereof, in any voluntary  proceeding
for the purpose of reorganization,  arrangement,  dissolution or liquidation and
such custodian trustee or receiver shall not be discharged, or such jurisdiction

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shall  not  be  relinquished,   vacated  or  stayed  within  (90)  days  of  the
appointment.

         1.2 "Advance" shall mean a disbursement under the Loan.

         1.3 "Advance  Request" shall mean the written request for Advances made
by Borrower and more particularly described in Section 2.4 below.

         1.4  "Affiliate"  shall mean any of the Affiliate  Group and any Person
that directly or indirectly  through one or more  intermediaries  controls or is
controlled by or is under common control with such entities.

         1.5 "Affiliate Group" shall mean Borrower; Asset Investors Corporation,
a Delaware corporation,  Commercial Assets, Inc., a Delaware  corporation,  AIOP
FLORIDA PROPERTIES I, L.L.C., a Delaware limited liability company, AIOP FLORIDA
PROPERTIES II, L.L.C., a Delaware limited liability  company,  COMMUNITY SAVANNA
CLUB JOINT  VENTURE,  a Delaware  general  partnership,  and AIOP LOST  DUTCHMAN
NOTES, L.L.C., a Delaware limited liability company.

         1.6 "Agreement"  shall mean this Agreement as originally  executed,  as
amended, modified or supplemented from time to time.

         1.7 "Appraisal" shall mean current  appraisals of the Property prepared
by an  appraiser,  licensed  by the state in which  each  Property  is  located,
engaged by and acceptable to Bank,  which  appraisal  shall determine the market
value of the Property in its current  as-is  condition and shall comply with (1)
Title XI of the Federal Financial  Institution Reform,  Recovery and Enforcement
Act of 1989  (FIRREA);  (2) the OCC Appraisal  Standards of 12 CFR, part 34; and
(3) the Code of Professional  Ethics and Standards of  Professional  Practice of
the American  Institute of Real Estate  Appraisers  and the  Guidelines for Real
Estate Appraisal  Policies and Review Procedures adopted by the bank supervision
offices  of the  Federal  Deposit  Insurance  Corporation,  the Office of Thrift
Supervision  (OTS),  Board of  Governors of the Federal  Reserve  System and the
Office of the  Comptroller  of the Currency as of December 14, 1987 and shall be
in form and substance satisfactory to the Bank.

         1.8  "Appraised  Value" shall mean the value for a Property  arrived at
under an Appraisal and accepted by the Bank.

         1.9   "Approvals   and   Permits"   means   each  and  all   approvals,
authorizations,  bonds, consents,  certificates,  franchises, licenses, permits,
registrations,  qualifications,  and other  actions  and  rights  granted  by or
filings with any Persons necessary, appropriate, or desirable in connection with
the Property, or for the conduct of the business and operations of Borrower.

         1.10  "Authorized  Officer" shall mean any one of the following  Senior
Officers  of Asset  Investors  Corporation,  the  sole  general  partner  of the
Borrower, Chief Executive Officer, Vice Chairman,  President, or Chief Financial
Officer or any other authorized  agent of Borrower  certified by Borrower to the
Bank for the purpose of making  certifications  under this  Agreement  or making

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Advance Requests.  Until otherwise certified by Borrower to the Bank in writing,
the  Authorized  Officers  of the  general  partner  of the  Borrower  are Terry
Considine, Thomas L. Rhodes, Bruce E. Moore and David M. Becker.

         1.11 "Business  Day" shall mean every day except a Saturday,  Sunday or
public holiday on which the Bank is required or permitted to be closed.

         1.12 "Code"  shall mean the Internal  Revenue Code of 1986,  as amended
from time to time.

         1.13  "Closing  Date" shall mean the date of  recording  of the Deed of
Trust on the Property.

         1.14  "Collateral"  shall mean any real  property or personal  property
(tangible or  intangible),  together with all  improvements  and  appurtenances,
granted,  pledged or  encumbered to or for the benefit of the Bank in connection
with the Loan.

         1.15   "Commitment   Amount"   shall  mean  Fifteen   Million   Dollars
($15,000,000.00),  subject to the  automatic  reduction  provisions of ARTICLE 9
below.

         1.16 "Deed of Trust" shall mean a first lien deed or trust or mortgage,
security  agreement,  financing  statement and assignment of rents and revenues,
creating  a first  lien on a  Property,  the  improvements,  and all  rights and
easements appurtenant thereto, and assigning to the Bank all leases,  contracts,
rents and revenues  from the  Property,  if any,  associated  with the Property,
securing the Loan, all in form and substance customary for commercial loans made
by the Bank and  satisfactory  in all  respects to the Bank,  and intended to be
recorded  in the real  property  records of the county in which the  Property is
located, if required by the Bank.

         1.17 "Default"  shall mean any event which if continued  uncured would,
with the passage of time or notice or both, constitute an Event of Default.

         1.18 "Environmental  Indemnity" shall mean the Environmental  Indemnity
Agreement,  executed by Borrower and each Property Subsidiary for the benefit of
Bank in  connection  with each  Property,  pursuant to which  Borrower  and each
Property Subsidiary agrees to indemnify,  defend and hold harmless Bank from and
against environmental liabilities that Bank may incur relating to the Project.

         1.19 "ERISA" shall mean the Employee  Retirement Income Security Act of
1974,  as the  same  may  from  time to  time be  amended,  and  the  rules  and
regulations  promulgated thereunder by any governmental agency or authority,  as
from time to time in effect.

         1.20 "ERISA Affiliate" shall mean any trade or business (whether or not
incorporated)  that is a member of a group of trades or  business  under  common
control of which Borrower is a member and which is treated as a single  employer
under Section 414 of the Code.

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         1.21 "Event of Default"  shall mean any Event of Default  described  in
Section 7.1 below.

         1.22  "Financing  Statements"  shall  mean any and all UCC-1  Financing
Statements  necessary  to be filed or  recorded  in the  official  records  of a
Governmental  Entity to perfect the security interests of the Bank in Personalty
associated with a Property.

         1.23 "GAAP" shall mean  generally  accepted  accounting  principles set
forth in the opinions and  pronouncements of the Accounting  Principles Board of
the American  Institute of  Certified  Public  Accountants  and  statements  and
pronouncements  of the  Financial  Accounting  Standards  Board or in any  other
statements  by any other entity as may be approved by a  significant  segment of
the accounting  profession,  which are applicable to the circumstances as of any
date of determination.  Whenever any accounting term is used herein which is not
otherwise defined, it shall be interpreted in accordance with GAAP.

         1.24  "Governmental  Entity"  shall mean any federal,  state,  or local
governmental  or  quasi-governmental   entity,  agency,  board,   commission  or
organization  having jurisdiction over any Collateral or Person relevant to this
Agreement.

         1.25 "Governmental Requirement" shall mean all laws, ordinances, rules,
regulations, codes, orders, writs, legal requirements, injunctions or decrees of
any  Governmental  Entities  applicable  to the  Borrower  or any  member of the
Affiliate Group or a Property.

         1.26 "Indebtedness" shall mean all principal and interest and all other
sums payable under the Note and all other Loan Documents.

         1.27 "Lien"  shall mean any  mortgage or deed of trust  (including  any
mortgage,  pledge,  hypothecation,  assignment,  deposit  arrangement,  lien  or
charge),  including the lien of the Loan  Documents  that becomes a lien on real
property,  claim,  security  interest,  easement or encumbrance,  or preference,
priority  or  other  security   agreement  of  any  kind  or  nature  whatsoever
(including,  without  limitation,  any lease or title retention  agreement,  any
financing  lease having  substantially  the same  economic  effect as any of the
foregoing,  and the filing of, or agreement  to give,  any  financing  statement
perfecting  a  security  interest  under  the  code  or  comparable  law  of any
jurisdiction),  and any option,  right of first  refusal,  or other  interest or
right.

         1.28 "Loan" shall mean the revolving  line of credit  commitment in the
maximum principal amount of $15,000,000.00 made available to the Borrower by the
Bank under the terms of this Agreement and the Loan Documents.

         1.29 "Loan Documents"  shall mean any and all documents  evidencing and
securing the Loan and shall include the Note, this Agreement, any Deed of Trust,
any Financing  Statement,  any Security Agreement,  any Environmental  Indemnity
Agreement and any other documents or instruments  now or hereafter  executed and
delivered to the Bank to further evidence or secure the Loan.

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         1.30 "Loan Party" shall mean Borrower,  each  Subsidiary and each other
Person that from time to time is or becomes  obligated  to the Bank with respect
to the Loan.

         1.31  "Material  Adverse  Occurrence"  shall  mean  any  occurrence  of
whatsoever nature (including,  without limitation,  any adverse determination in
any litigation,  arbitration or governmental  investigation or proceeding) which
in Bank's reasonable  judgment  materially  adversely affects (i) the present or
prospective financial condition or operations of a Loan Party or a member of the
Affiliate Group or (ii) the ability of a Loan Party or a member of the Affiliate
Group to perform its  obligations  under the Loan Documents,  including  without
limitation,  the  occurrence of any event of  dissolution  or termination of any
Loan Party or a member of the Affiliate  Group, or (iii) the operations or value
of the  Property,  and remains  unsatisfied  or is not  discharged or eliminated
after thirty (30) days following written notice from the Bank.

         1.32 "Maturity Date" shall mean the earlier of (i) May 31, 2001, unless
extended in accordance with Section 2.2 below or (ii) the date on which the Loan
is accelerated as a consequence of an Event of Default.

         1.33 "Multiemployer Plan" shall mean a multiemployer plan, as that term
is defined in Section  4001(a)(3) of ERISA,  which is maintained (on the Closing
Date, within the five years preceding the Closing Date, or at any time after the
Closing Date) for employees of any Borrower and/or any ERISA Affiliate.

         1.34  "Note"  shall  mean the  Revolving  Promissory  Note of even date
herewith in the stated  amount of  $15,000,000.00  made by Borrower and Property
Subsidiaries  to the order of the Bank,  as the same may be  modified,  amended,
extended, replaced or restated.

         1.35   "Obligations"   shall  mean  the   Indebtedness  and  all  other
obligations  of the  Borrower  in  connection  with  the  Loan  made by the Bank
pursuant to this Agreement.

         1.36  "Opinions of Counsel" shall have the meaning set forth in Section
3.3(c) below.

         1.37  "PBGC"  shall  mean the  Pension  Benefit  Guaranty  Corporation,
established  pursuant  to  Subtitle  A of Title IV of ERISA,  and any  successor
thereto or to the functions thereof.

         1.38  "Person"  shall mean any  natural  person,  corporation,  limited
liability  company,   limited   partnership,   limited  liability   partnership,
association, trust, joint venture, government,  governmental agency or any other
entity, whether acting in an individual, fiduciary or other capacity.

         1.39  "Personalty"  shall  mean all  personal  property,  tangible  and
intangible,  contained within improvements or used in connection with a Property
financed by this Loan (excluding  personal  property owned by any tenant under a
lease) now owned or hereafter acquired by the Borrower, except personal property

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owned  by  Borrower  and  used in the  maintenance  and  operation  of  multiple
properties.

         1.40 "Plan" shall mean each employee benefit plan (whether in existence
on the  Closing  Date or  thereafter  instituted),  as that term is  defined  in
Section 3 of  ERISA,  maintained  for the  benefit  of  employees,  officers  or
directors of Borrower and/or of any ERISA Affiliate.

         1.41  "Prohibited  Transaction"  shall  mean  the  respective  meanings
assigned to that term in Section 4975 of the Code and Section 406 of ERISA.

         1.42 "Property" shall mean any real property and appurtenances securing
this Loan, as more particularly described on Exhibit A.

         1.43  "Property  Subsidiary"  shall  mean  either or both of  Community
Savanna Club Joint Venture and AIOP Lost Dutchman Notes,  L.L.C., as the context
requires.

         1.44 "Reference Rate" shall mean the rate of interest  announced by the
Bank from time to time as its Reference Rate. The Bank may lend to its customers
at rates which are at, above or below the Reference Rate.

         1.45  "Reportable  Event" shall mean a  reportable  event as defined in
Section  4043 of ERISA and the  regulations  issued  under  such  Section,  with
respect  to a Plan,  excluding,  however,  the  events  as to which  the PBGC by
regulation  has waived the  requirement  of Section  4043(a) of ERISA that it be
notified within 30 days of the occurrence of such event, provided that a failure
to meet the minimum funding  standards of Section 412 of the Code and of Section
302 of ERISA  shall be a  Reportable  Event  regardless  of the  issuance of any
waivers in accordance with Section 412(d) of the Code.

         1.46 "Security  Agreement" shall mean any security  agreement  executed
and  delivered  by the  Borrower  and the  Property  Subsidiaries  to the  Bank,
granting  to the  Bank a  security  interest  in  Personalty  associated  with a
Property.

         1.47 "Subsidiary"  shall mean any or all of AIOP Florida  Properties I,
L.L.C.;  AIOP  Florida  Properties  II,  L.L.C.;  Community  Savanna  Club Joint
Venture; and AIOP Lost Dutchman Notes, L.L.C., as the context requires,  each of
which is 100% wholly owned, directly or through other Subsidiaries by Borrower.

         1.48 "Title  Company"  shall mean the title  insurance  company,  which
company  shall be  satisfactory  to Bank in its  absolute  and sole  discretion,
insuring a Deed of Trust associated with a Property.

         1.49  "Title  Policy"  shall  mean,  respectively,  each and all  title
insurance  policies and  endorsements  thereto and  reinsurance  or  coinsurance
agreements  and  endorsements  as reasonably  required by the Bank in connection
with a Deed of Trust.

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         Other terms  defined  herein  shall have the  meaning  ascribed to them
herein.

                                   ARTICLE 2.
                                 CREDIT FACILITY

         2.1  Commitment.  Subject to and in accordance  with the  provisions of
this  Agreement,  the Bank agrees to make Advances of the Loan, and Borrower may
draw upon and borrow, in the manner and upon the terms and conditions  expressed
in this  Agreement,  amounts that shall not exceed in the aggregate,  at any one
time  outstanding,  the Commitment  Amount.  All amounts  hereafter  advanced or
accruing,  including,  without  limitation,  any  amounts  (including  principal
amounts) advanced or outstanding  hereunder in excess of the Commitment  Amount,
shall be  outstanding  under the Loan and shall be evidenced  and secured by the
Loan  Documents.  Borrower  shall,  within two (2) Business  Days after  written
notice from the Bank,  make  principal and other  payments  required so that the
outstanding principal balance of the Loan does not exceed the Commitment Amount.
The Loan shall be a revolving  credit,  against  which  Advances  may be made to
Borrower,  repaid by Borrower and additional Advances made to Borrower,  subject
to the limitations contained in this Agreement, provided that Bank shall have no
obligation  to make any  Advance  that  would  cause the  outstanding  principal
balance of the Loan to exceed the Commitment Amount.

         2.2  Annual  Review;  Extension.  The Bank shall be  committed  to make
Advances under this Loan prior to the Maturity Date. Upon written request by the
Borrower to the Bank delivered not more than ninety (90) days or less than sixty
(60) days prior to the  then-effective  Maturity  Date, the Bank shall conduct a
credit  review  of  the  Loan.   Following  the  first  annual  credit   review,
approximately  eleven (11) months after the date of this  Agreement  and on each
twelve-month anniversary thereafter,  if the Borrower has requested an extension
of the Maturity Date in the manner set forth above and if the Bank determines to
extend the Maturity Date of the Loan, in its sole and absolute  discretion,  the
Maturity  Date shall be  extended  by a period of twelve  (12)  months  from the
then-effective  Maturity Date. If, in the course of any annual review,  the Bank
determines that it shall not extend the Maturity Date beyond its  then-effective
date,  the Bank shall give notice of such  decision  to Borrower  not later than
thirty (30) days prior to the  then-effective  Maturity Date and, in such event,
the Bank shall continue to make Advances under the Loan until the Maturity Date.

         2.3 The Loan.

            (a) The Note. The Borrower's  obligation to pay the principal of and
interest  on the Loan shall be  evidenced  by the Note  which  shall (i) be duly
executed and delivered by Borrower and each Property  Subsidiary,  as co-makers,
(ii) be dated as of the date hereof,  (iii) be in the stated principal amount of
the Loan,  (iv) mature on the Maturity Date unless extended under the provisions
of Section 2.2, (v) bear interest as provided in the Note,  and (vi) be entitled
to the benefits of this Agreement and the Loan Documents.

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            (b) Term. The Loan shall have a term which  commences as of the date
hereof and expires on the Maturity Date,  unless extended in accordance with the
terms of Section 2.2 above.

            (c)  Interest  and  Payment.  The Loan  shall bear  interest  on the
outstanding  principal balance at the Bank's floating  Reference Rate,  adjusted
daily.  Interest  shall be payable  monthly on or before the first  (1st) day of
each month.  If not sooner paid, all outstanding  principal,  accrued but unpaid
interest and other charges due and owing under the Loan Documents  shall be paid
in full on the Maturity Date.

            (d) Default  Rate;  Late Charges.  Upon the  occurrence of a Default
under  the  Loan,  the Bank  shall  have the right to  collect  interest  on the
outstanding  indebtedness  under  the  Loan at a rate of  interest  equal to the
greater of (i)  eighteen  percent  (18%) per annum or (ii) five percent (5%) per
annum in  excess of the  Reference  Rate  ("Default  Rate");  provided  that any
interest at the Default Rate which has accrued  shall be paid at the time of and
as a condition  precedent  to the curing of any Default  under the Loan.  In the
event any payment of principal,  interest,  or other sum due in connection  with
the Loan is not made within  five (5) days after the due date,  the Bank may, at
its option,  require the payment of a late charge in the amount of four  percent
(4%) of the delinquent sum ("Late Charge").

            (e) Prepayment. Borrower shall have the right to prepay the Loan, in
whole or in part,  at any time and from time to time.  All sums  received by the
Bank under this Loan from  whatever  source shall be applied (i) when no Default
or Event of Default has occurred and is continuing, for the specific purpose for
which it was remitted  under the Loan and otherwise to the principal  balance of
the Loan,  and (ii) after the  occurrence of a Default or Event of Default,  and
while such Default or Event of Default continues, to fees, charges,  interest or
principal  under the Loan,  in such manner and order as the Bank may direct,  in
its sole and absolute discretion.

            (f)  Payments  Due on Days Other than  Business  Days.  Whenever any
payment to be made under this  Agreement or under the Note shall be stated to be
due on a day which is not a Business Day, the due date thereof shall be extended
to the next  succeeding  Business  Day,  and  interest  shall be  payable at the
applicable rate during such extension.

         2.4 Advances.  Advances will be made by Bank daily upon receipt by Bank
of at least one (1) Business Day's advance  written notice received on or before
10:00 a.m., Denver local time, accompanied by the items set forth below:

                  (a)  an Advance Request in the form of Exhibit B.

                  (b) the  certification  by an Authorized  Officer on behalf of
Borrower:  (i) that neither a Default,  except as specifically disclosed to Bank
in the Advance Request, or otherwise in writing, nor an Event of Default exists,
and (ii) that the outstanding  principal balance of the Loan after the requested
Advance will not exceed the Commitment Amount.

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                                   ARTICLE 3.
                         CONDITIONS PRECEDENT TO CLOSING

         The Bank's  obligation  to make the Loan and to enter into and  perform
its agreements  under this  Agreement  shall be subject to the full and complete
satisfaction  of the  following  conditions  precedent,  including  receipt  and
approval by the Bank of the following  agreements,  documents  and  instruments,
each in form and substance  satisfactory to the Bank, in each case as determined
by the  Bank in its  sole  and  absolute  discretion,  on the  Closing  Date and
subsequently:

         3.1  Representations and Warranties  Accurate.  The representations and
warranties by each Loan Party in the Loan  Documents  shall be correct on and as
of the Closing Date.

         3.2 Documents. The Loan Documents described below shall be executed and
delivered to the Bank:

            (a)  this  Agreement,  duly  executed  by  Bank,  Borrower  and each
Subsidiary;

            (b) two  Deeds of  Trust,  each  duly  executed  by the  appropriate
Property Subsidiary, encumbering each Property described on Exhibit A;

            (c)  the  Note,   duly   executed  by  Borrower  and  each  Property
Subsidiary, as co-maker;

            (d) two Environmental  Indemnity  Agreements,  each duly executed by
Borrower and the appropriate Property Subsidiary;

            (e) the Security Agreement, duly executed by Borrower;

            (f) UCC-1  financing  statement(s)  required  to perfect  the Bank's
security interest in the Personalty (the "Financing Statements"); and

            (g) such other Collateral  documents as Bank may reasonably  require
to further evidence or perfect the Bank's security interests in the Collateral.

         3.3 Review  Items.  The Bank  shall  have  received  and  approved  the
following:

            (a)  Resolutions.   Resolutions  of  Borrower  and  each  Subsidiary
authorizing  the execution,  delivery and  performance of this Agreement and any
and all other documents related hereto or required hereby.

            (b)  Organizational  Documents.  Copies  (certified  to  the  Bank's
satisfaction)  of  the  organizational   documents  of  the  Borrower  and  each
Subsidiary and current  certificates  of good standing issued by the appropriate
Governmental Entities.

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<PAGE>

            (c) Opinion of Counsel.  Legal  opinions  ("Opinions of Counsel") of
independent  counsel  for  Borrower  and each  Subsidiary  with  respect to this
Agreement and the Loan Documents, in form and substance satisfactory to the Bank
(i) that the Loan Party is duly  organized  and in good standing in the state of
its formation and in such other jurisdictions as may be necessary, (ii) that the
transaction  described  in the opinion  and the  execution  and  delivery of the
documentation  evidencing  such  transaction  and the performance of obligations
thereunder  have been duly  authorized by all necessary  parties,  (ii) that the
transaction documents are legal, valid and binding and enforceable in accordance
with their terms, subject to customary  exceptions,  (iii) concerning such other
legal matters as the Bank may require regarding the specific transaction and the
absence of  conflicts  with the  governing  documents of the entity or any other
agreement,  instrument  or  governmental  order or rule to which  the  entity is
subject  and the absence of any  material  litigation  against the entity  which
would  materially  adversely  affect the  entity's  ability to perform its legal
obligations  under  the  transaction  documents,  and (iv) such  other  opinions
specific to the entity or the transaction as the Bank may reasonably require.

            (d)  Financial   Statements.   Certified  financial   statements  of
Borrower, as specified in Section 5.1 below;

            (e) Appraisal. A current Appraisal of the Property.

            (f) Title  Policy.  The Bank shall  have  received a fully paid ALTA
mortgagee's  Title Policy issued by a Title  Company  acceptable to the Bank, in
form and substance  satisfactory to the Bank, naming the Bank as the insured and
insuring the Deed of Trust to be a valid first lien on a good and marketable fee
simple title to the Property,  in an amount not less than the Commitment Amount,
subject only to such liens and  encumbrances and such exceptions as are approved
in writing by the Bank, and,  without  limiting the generality of the foregoing,
specifically insuring against mechanics' liens, matters which would be disclosed
by a  comprehensive  survey,  and the  rights  of  parties  in  possession,  and
containing   judgment,   tax  lien,   assessment  and  bankruptcy   searches,  a
comprehensive  endorsement (if the Property is subject to prior  restrictions of
record and in the  judgment of the Bank,  such an  endorsement  is  necessary to
protect the Bank's interest),  and such other  endorsements as may reasonably be
requested by the Bank.

            (g)  Taxes.   All  delinquent  taxes  and  all  levied  and  pending
assessments  relating to the Property  shall have been paid in full (or, in lieu
thereof, payment in escrow of an amount determined by the Bank).

            (h) Survey.  Borrower  shall have  furnished to Bank,  at Borrower's
expense,  a current  improvement  survey plat ("survey"),  in form and substance
satisfactory to the Bank and the Title Company, indicating,  without limitation,
the  legal  description  of the  Property  as it will be  insured  by the  Title
Company,  the courses and distances of the Property lot lines,  all  appurtenant
and servient easements, all dominant easements, location of nearest public roads
affording  ingress and egress to and from the Property,  location and dimensions
of all encroachments,  buildings and other improvements  (excluding manufactured
homes), locating all easements and rights-of-way appurtenant to or burdening the

                                       10
<PAGE>

Property and showing any other matters of record, visible upon inspection of the
Property or otherwise  known to the surveyor which affect title to or use of the
Property.  The  surveyor  shall also  certify  whether or not any portion of the
Property is located  within a Federal  Emergency  Management  Agency  identified
flood-prone area and if located thereon, state the map number and whether or not
the Property appears in the "Flood Hazard Area." The survey must be certified as
accurate by a licensed  surveyor in the state in which each  Property is located
and contain a certificate imprinted thereon in the form approved by the American
Land Title  Association  stating  that the survey is made for the benefit of the
Bank and the Title  Company and shall be  sufficient to induce the Title Company
to deleted the standard  exceptions from the Title Policy regarding matters that
would be shown by an ALTA survey. The survey for the Property located in Florida
shall meet the criteria set forth above or shall be  otherwise  satisfactory  to
the Bank and  sufficient  to induce the Title  Company  to delete  the  standard
exceptions  from the Title  Policy  regarding  matters that would be shown by an
ALTA Survey.

            (i)  Hazardous  Waste.   The  Bank  shall  have  received   evidence
(including,  without  limitation,  a preliminary  hazardous waste  assessment or
report)  acceptable to it in its sole discretion as to the presence of hazardous
waste  or  substances  on,  under  or  in  the  Property,   together  with  such
documentation as may be necessary to permit the Bank to rely thereon,  a copy of
which shall be provided to Borrower.

            (j) Compliance with Governmental  Requirements.  The Bank shall have
received  written  evidence  satisfactory  to it that the  Property  and the use
thereof  are  permitted  by and  comply  with all  applicable  restrictions  and
requirements in prior conveyances,  zoning ordinances,  subdivision and platting
requirements and other laws and regulations,  and have been duly approved by the
municipal or other  governmental  authorities  having  jurisdiction and that the
required  building,  zoning,  environmental  and other  permits,  approvals  and
licenses have been duly obtained as required by law.

            (k) Approvals.  The Bank shall have received evidence  acceptable to
it that the  Borrower  or  appropriate  Property  Subsidiary  has  received  all
necessary  Approvals and Permits from,  and given all necessary  notices to, and
made all necessary filings with, any and all Governmental  Entities with respect
to the Property, and the contemplated use and operation thereof.

            (l)  Insurance.  The Bank  shall  have  received  the  evidences  of
insurance coverage required under Section 5.8 below.

            (m) Soil Reports.  If required by Bank, a soils report  addressed to
Bank and prepared by a licensed  soils  engineer  acceptable to Bank showing the
locations of, and containing boring logs for, all borings.

            (n)  Expenses.  The Bank shall have been  reimbursed by the Borrower
for all  out-of-pocket  costs and  expenses  incurred by the Bank to the date of
this Agreement in connection  with the loan  transactions  contemplated  herein,
including,  without limitation,  reasonable  attorneys' fees,  architect's fees,

                                       11
<PAGE>

appraisal fees, survey fees,  inspection fees,  hazardous waste audits,  closing
charges,  documentary  or tax stamps,  recording  and filing  fees,  and service
charges of the Bank. (This condition shall in no way limit the obligation of the
Borrower to reimburse  the Bank for such costs and expenses  paid or incurred by
the Bank during the term of the Loan.

                                   ARTICLE 4.
                    REPRESENTATIONS, WARRANTIES AND COVENANTS

         In order to induce Bank to make the Loan, Borrower,  and, to the extent
applicable,  each  other  Loan  Party,  for  itself,  represents,  warrants  and
covenants as follows, which  representations,  warranties and covenants shall be
true and correct as of the execution  hereof and shall survive the execution and
delivery of the Loan Documents:

         4.1  Organization  of Loan Party;  Authority  to Enter into  Agreement.
Borrower is a limited  partnership,  duly formed and validly in existence and in
good standing  under the laws of the State of Delaware.  Each Loan Party is duly
qualified to do business and is in good standing in each jurisdiction  where the
nature of its business makes such qualification  necessary and where the failure
to so qualify permanently precludes the Loan Party from enforcing its contracts.
Each Loan Party has full power and  authority to enter into this  Agreement,  to
borrow money as contemplated  herein and to execute and carry out the provisions
of the Loan  Documents.  The  execution,  delivery and  performance  of the Loan
Documents have been duly authorized by all necessary  action of each Loan Party,
and no other  action of the Loan Party is required for the  execution,  delivery
and  performance  of the Loan  Documents.  The Loan  Documents  which  have been
executed and delivered  pursuant to this  Agreement  constitute,  or, if not yet
executed or delivered, will when so executed and delivered, constitute valid and
binding  obligations of the Loan Party,  each enforceable in accordance with its
respective terms. Each Loan Party holds all certificates of authority,  licenses
and permits  necessary to carry on its  business as presently  conducted in each
jurisdiction in which it is carrying on such business.

         4.2 No  Violation  of Other  Agreements;  No  Default.  The  execution,
delivery and  performance  by the Loan Party of the Loan  Documents will not (a)
violate  any  provision  of any  Governmental  Regulation  or any  order,  writ,
judgment,  injunction, decree, determination or award of any court, governmental
agency or arbitrator presently in effect having applicability to the Loan Party,
(b) violate or contravene any provision of the constituent documents of the Loan
Party,  or (c) result in a breach of or constitute an event of default under any
indenture, deed of trust, mortgage, loan or credit agreement, note or, except as
specifically  identified to the Bank in writing,  any other agreement,  lease or
instrument  to  which  the  Loan  Party  is a party or by which it or any of its
properties  may be bound  or  result  in the  creation  of any lien or  security
interest  thereunder.  The Loan Party is not in default under or in violation of
any such Governmental Requirement,  order, writ, judgment,  injunction,  decree,
determination or award or any such indenture,  loan or credit agreement or other
agreement,  lease or  instrument in any case in which the  consequences  of such

                                       12
<PAGE>

default  or  violation  could have a material  adverse  effect on the  business,
operations, properties, assets or condition (financial or otherwise) of the Loan
Party.

         4.3  Economic  Benefit.  The  execution  and  delivery  by Bank of this
Agreement  and the  extension  of credit by the Bank  hereunder  constitutes  an
economic  benefit to each Loan Party at least equal to the amount of each of its
obligations  hereunder and each Loan Party has received fair equivalent value by
the extension of the credit facility described in this Agreement in exchange for
the liens and security  interest granted by the Loan Party to the Bank under the
Loan Documents.

         4.4  Government  Consents.  No  order,  consent,   approval,   license,
authorization  or validation of, or filing,  recording or registration  with, or
exemption by, any Governmental  Entity is required on the part of any Loan Party
to authorize,  or is required in  connection  with the  execution,  delivery and
performance of, or the legality,  validity, binding effect or enforceability of,
the Loan  Documents,  except for any necessary  filing or recordation of or with
respect to any of the Loan Documents.

         4.5 Good Faith;  Bankruptcy.  This Agreement and the Loan Documents are
executed  in good  faith by each  Loan  Party and is not  given or  intended  to
hinder,  delay or defraud any creditor or to  contravene  any of the  bankruptcy
laws of the Federal  Bankruptcy Code,  United States (11 U.S.C.  Section 101, et
seq.),  or any other  applicable  laws.  As of the date of the execution of this
Agreement,  no Loan Party is the subject of a pending  bankruptcy  case. No Loan
Party  is  aware  of any  threatened  bankruptcy  case,  nor is any  Loan  Party
presently intending to file such a case.

         4.6 Affiliate Bankruptcy;  Insolvency. No member of the Affiliate Group
is  insolvent  (as such  term is  defined  in  Section  101(29)  of the  Federal
Bankruptcy  Code of 1978,  as  amended)  and will not be rendered  insolvent  by
execution  of  this  Agreement  or any  Loan  Document  or  consummation  of the
transactions  contemplated  thereby.  No  member of the  Affiliate  Group is the
subject of a case or proceeding  under the Federal  Bankruptcy Code or any state
insolvency statutes.

         4.7 Solvency.

            (a) The fair  salable  value of the  assets  of the  Borrower  will,
immediately  following  the  closing  of this  Loan and  after  the  transaction
contemplated under the Loan Documents exceed the amount that will be required to
be paid by or in respect of the  existing  debts and other  liabilities  of such
Borrower (including contingent liabilities) as they mature.

            (b)  The  Borrower  does  not  have or will  not  have,  immediately
following the closing of the Loan,  unreasonably  small capital to carry out its
business as conducted or as proposed to be conducted.

            (c) The Borrower does not intend to, or believe that it will,  incur
debts beyond its ability to pay such debts as they mature.

                                       13
<PAGE>

         4.8 Financial Statements. Any loan applications,  financial statements,
supporting schedules,  and financial reports heretofore delivered to the Bank in
connection  with the Loan  Documents by or on behalf of each Loan Party are true
and correct in all  material  respects,  and,  as to each Loan Party,  have been
prepared in accordance with GAAP, consistently applied, and fairly represent the
respective  financial conditions of the subjects thereof as of the dates thereof
and for the periods  covered  thereby,  and no Material  Adverse  Occurrence has
occurred in the financial  conditions  presented  therein  since the  respective
dates thereof.  Each Loan Party agrees to promptly notify Bank in the event that
any such  documentation  or information is later discovered by the Loan Party to
be materially inaccurate.

         4.9 No Litigation.  There are no material actions, suits or proceedings
pending,  or to the knowledge of the Loan Party threatened  against or affecting
the Loan Party, or any of the property or assets of the Loan Party, in any court
at law or in equity,  or before or by any  governmental  or municipal  authority
which might materially adversely affect the ability of the Loan Party to perform
its respective obligations hereunder or under any of the Loan Documents to which
the Loan Party is a party.

         4.10 Marketable Title. Each Loan Party has good and marketable title to
all of its assets  which  secure  repayment  of the Note,  free and clear of all
liens securing or evidencing a monetary  obligation or containing  provisions by
which title could be divested by an event of default or the passage of time.

         4.11 Secondary Financing. There shall be no additional financing by the
Borrower or a Subsidiary  which is secured by a lien on the Property without the
prior  written  consent  of the Bank,  which  may be  withheld  in  Bank's  sole
discretion.

         4.12 Compliance  With Documents.  As of the date hereof and for so long
as the Loan  Documents  remain in effect,  each Loan Party is and will remain in
full  compliance  with all of the terms and conditions of this Agreement and the
Loan Documents, and no Default has or shall have occurred or shall have occurred
and be  continuing,  which,  with the lapse of time or the giving of notice,  or
both, would constitute an Event of Default under the foregoing.

         4.13 Responsible Parties.  Each Loan Party acknowledges and agrees that
the acts of the Authorized  Officer are the acts of each Loan Party and that the
representations, warranties, covenants and agreements of each Loan Party in this
Agreement and the Loan  Documents  shall be deemed to be those of the other Loan
Parties.

         4.14 Use of Proceeds.  Each Advance will be used by the Borrower solely
for the general business purposes permitted under this Agreement.

         4.15 Margin Stock. No part of the Advances shall be used at any time by
Borrower to purchase or carry margin stock  (within the meaning of  Regulation U
promulgated  by the Board of  Governors  of the  Federal  Reserve  System) or to
extend  credit to others for the purpose of  purchasing  or carrying  any margin
stock.  The  Borrower is not  engaged  principally,  or as one of its  important
activities, in the business of extending credit for the purpose of purchasing or
carrying any such margin stock. No part of the Advances will be used by Borrower

                                       14
<PAGE>

for any purpose which violates,  or which is inconsistent  with, any regulations
promulgated by the Board of Governors of the Federal Reserve System.

         4.16 Taxes. Each Loan Party has filed all federal,  state and local tax
returns  required  to be filed and has paid or made  provision  (as  required by
GAAP) for the payment of all taxes due and payable  pursuant to such returns and
pursuant to any assessments made against it or any of its property and all other
taxes,  fees and  other  charges  imposed  on it or any of its  property  by any
Governmental Entity (other than taxes, fees or charges the applicability, amount
or validity of which is currently  being  contested in good faith by appropriate
proceedings and with respect to which reserves in accordance with GAAP have been
provided on the books of each Loan  Party).  No tax liens have been filed and no
material  claims are being  asserted  with  respect to any such  taxes,  fees or
charges.  The charges,  accruals and reserves on the books of each Loan Party in
respect of taxes and other  governmental  charges  are  adequate,  and each Loan
Party  knows of no  proposed  material  tax  assessment  against it or any basis
therefor.

         4.17 Trademarks,  Patents.  Borrower  possesses or has the right to use
all of the patents,  trademarks,  trade names, service marks and copyrights, and
applications  therefor,  and all technology,  know-how,  processes,  methods and
designs  used in or necessary  for the conduct of its  business,  without  known
conflict with the rights of others.

         4.18 Covenants, Zoning and Codes. Each Loan Party has complied and will
continue to comply with all applicable  statutes and  regulations to be complied
with in  connection  with  the  Property,  including,  without  limitation,  all
statutes and  regulations  regarding  environmental  issues,  the Americans with
Disabilities Act, and historical preservation acts and regulations. All permits,
consents,  approvals  or  authorizations  by,  or  registrations,  declarations,
withholding  of  objections  or filings  with any  governmental  body or private
entity  necessary  in  connection  with  the  valid   execution,   delivery  and
performance  of this  Agreement,  the  Loan  Documents,  and  any and all  other
documents  executed in connection with any of the foregoing,  have been obtained
and are valid,  adequate  and in full force and  effect.  The  Property  and the
intended use thereof will in all  material  respects  conform to and comply with
all covenants, conditions, restrictions and reservations affecting the Property,
with  all  applicable  zoning,  including  parking  requirements,   subdivision,
environmental  protection,   use  and  building  codes,  laws,  regulations  and
ordinances, including without limitation any covenants and restrictions recorded
in the official records of the applicable Governmental Entity (collectively, the
"Covenants").

         4.19 Accuracy of  Information.  All factual  information  heretofore or
herewith  furnished  by or on behalf of each Loan Party to the Bank for purposes
of or in connection with this Agreement or any transaction  contemplated  hereby
is, and all other such factual  information  hereafter furnished by or on behalf
of each Loan  Party to the Bank will be,  true and  accurate  in every  material
respect on the date as of which such  information  is dated or certified  and no
such  information  contains any  misstatement of fact or omits to state any fact
necessary to make the statements contained therein not misleading.

                                       15
<PAGE>

         4.20   Representations   and  Warranties  Upon  Delivery  of  Financial
Statements,  Documents and Other  Information.  Each delivery by a Loan Party to
Bank of financial statements,  other documents, or information after the date of
this  Agreement  shall be a  representation  and  warranty  that such  financial
statements,  other  documents,  or  information  is correct and  complete in all
material  respects,  that there are no omissions  therefrom  that result in such
financial  statements,   other  documents,   or  information  being  incomplete,
incorrect, or misleading in any material respect as of the date thereof.

         4.21 Survival of Representations.  All representations,  warranties and
covenants  contained  in this  ARTICLE  4 shall  survive  the  delivery  of this
Agreement and the making of the Loan and each Advance contemplated hereunder and
any  investigation  at any  time  made by or on  behalf  of the Bank  shall  not
diminish its rights to rely on all of such representations and warranties.

         4.22 Year 2000  Compliance.  Borrower  has  reviewed  and  assessed its
business  operations and computer  systems and applications to address the "year
2000  problem"  (that is,  that  computer  applications  and  equipment  used by
Borrower,  directly or indirectly through third parties, may have been or may be
unable to properly perform  date-sensitive  functions  before,  during and after
January 1, 2000).  Borrower  represents  and warrants that the year 2000 problem
has not  resulted  in and  will not  result  in a  material  adverse  change  in
Borrower's business condition (financial or otherwise),  operations,  properties
or prospects or ability to repay Bank.  Borrower agrees that this representation
and warranty will be true and correct on and shall be deemed made by Borrower on
each date  Borrower  requests  any Advance  under this  Agreement or the Note or
delivers any  information to Bank.  Borrower will promptly  deliver to Bank such
information  relating to this  representation and warranty as Bank requests from
time to time.

                                   ARTICLE 5.
                                GENERAL COVENANTS

         Each Loan Party agrees with the Bank that, so long as the Loan shall be
outstanding, unless the Bank shall otherwise consent in writing, each Loan Party
covenants and agrees as follows:

         5.1  Financial  Information.  The Loan Parties will furnish to the Bank
copies of such of its financial  statements,  reports and  information as may be
requested by the Bank,  including,  without limitation,  the following financial
statements,  reports  and  information,  each of which  shall be  prepared  on a
consolidated and  consolidating  basis for which no additional  request shall be
required:

            (a) As soon as available, and in any event within one hundred twenty
(120) calendar days after the end of each fiscal year of Borrower, a copy of its
audited annual financial reports,  and, in any event within ninety (90) calendar
days  after  the end of each  fiscal  year of Asset  Investors  Corporation  and
Commercial  Assets,  Inc.,  respectively,  the Form  10K  filing  of both  Asset

                                       16
<PAGE>

Investors  Corporation  and  Commercial  Assets,  Inc. with the  Securities  and
Exchange  Commission;

            (b) As soon as available,  and in any event within seventy-five (75)
calendar  days after the end of each fiscal  quarter of Borrower,  a copy of its
unaudited  financial  statement and, within  forty-five (45) calendar days after
the end of each fiscal  quarter of Asset  Investors  Corporation  and Commercial
Assets,  Inc.,  respectively,  the  Form 10Q  filings  of both  Asset  Investors
Corporation 10Q report and Commercial Assets, Inc. filed with the Securities and
Exchange Commission;

            (c)  Within  ten  (10)  days  after  filing,  a copy  of any  filing
available  to the  public  made by Asset  Investors  Corporation  or  Commercial
Assets, Inc. with the Securities and Exchange Commission.

            (d) As soon as available,  and in any event within  forty-five  (45)
days after the end of each fiscal quarter, a compliance certificate ("Compliance
Certificate") signed by an Authorized Officer. Each Compliance Certificate shall
be in the form and substance  satisfactory to the Bank,  shall contain  detailed
calculations  of the  financial  covenants  referred  to in ARTICLE 6, and shall
contain  statements  by the  Authorized  Officer to the effect  that,  except as
explained in reasonable detail in such Compliance Certificate,  (i) the attached
financial statements are complete and correct in all material respects (subject,
in the case of financial  statements other than annual, to normal year-end audit
adjustments)  and have  been  prepared  in  accordance  with  GAAP  and  applied
consistently  throughout  the periods  covered  thereby  and with prior  periods
(except as disclosed therein), (ii) all of the representations and warranties of
the Loan Parties  contained in this  Agreement and other Loan Documents are true
and  correct  as of the date of such  certification  is given as if made on such
date,  and (iii)  there is no Default  or Event of  Default.  If any  Compliance
Certificate delivered to the Bank discloses that a representation or warranty is
not true and  correct,  or that  there is a Default  or Event of  Default,  such
Compliance Certificate shall state what action Borrower has taken or proposes to
take with respect thereto.

         5.2 Accounting System.  Borrower and its Affiliate Group shall maintain
a system of accounting established and administered in accordance with GAAP.

         5.3  Security  Interests.  Neither  Borrower nor any  Subsidiary  shall
create,  incur,  assume or allow to exist any Liens  upon all or any part of the
Collateral, now owned or hereafter acquired, except the following:

            (a) Liens for taxes not delinquent or being diligently  contested in
good faith and by appropriate  proceedings  and for which  adequate  reserves in
accordance with GAAP are maintained on Borrower's books.

            (b)  Liens  imposed  by  any  law,  such  as  mechanics',  workers',
materialmen's,  landlords',  carriers',  or  other  like  Liens  arising  in the
ordinary  course of business which secure  payment of obligations  which are not
past due or which are being  contested in good faith by appropriate  proceedings

                                       17
<PAGE>

and for which  adequate  reserves  in  accordance  with GAAP are  maintained  on
Borrower's books.

            (c) Liens securing the Obligations in favor of the Bank.

         5.4 Transactions With Affiliates. Neither Borrower nor its Subsidiaries
shall enter into or be a party to any transactions or arrangement, including the
purchase,  sale or  exchange of  property  of any kind or the  rendering  of any
service,  with any  Affiliate,  or make any loans or  advance  to any  Affiliate
except as  permitted  under this  Agreement.  If there is no Default or Event of
Default,  however, Borrower and its Subsidiaries may engage in such transactions
in the ordinary  course of business and pursuant to the reasonable  requirements
of its business and on fair and reasonable  terms  substantially as favorable to
it as those which it could obtain in a comparable arm's-length  transaction with
a non-Affiliate.

         5.5 Notices.  Each Loan Party, each for itself, as soon as practicable,
shall give notice to the Bank of:

            (a) The  commencement  of any  uninsured  litigation  in  excess  of
$100,000.00  relating  to  any  Loan  Party  or  relating  to  the  transactions
contemplated by this Agreement;

            (b) The  commencement  of any material  arbitration or  governmental
investigation  or proceeding not  previously  disclosed by the Loan Party to the
Bank in  writing  which has been  instituted  or, to the  knowledge  of the Loan
Party,  threatened  against any Loan Party or to which its  properties or assets
are subject which, if determined  adversely to the Loan Party would constitute a
Material Adverse Occurrence;

            (c)  Any  adverse   development  which  occurs  in  any  litigation,
arbitration or governmental  investigation or proceeding previously disclosed by
any Loan Party to the Bank  which,  if  determined  adversely  to any Loan Party
would constitute a Material Adverse Occurrence;

            (d) Any Event of Default under this Loan.

            (e) The completion of the proposed  merger  between Asset  Investors
Corporation  and  Commercial  Assets,  Inc.,  and a copy  of  the  documentation
evidencing such merger and specifying the identity of the surviving corporation.

            (f) Any  notice  of  claimed  default  under  any  loans  or  credit
agreements  executed by Borrower or any Loan Party pursuant to which Borrower or
any Loan Party has  direct or  contingent  liability  other than loans or credit
agreements  which are non-recourse to Borrower or the Loan Party and are secured
by collateral other than the Bank's Collateral.

         5.6 Books and Records,  Periodic  Audits.  Borrower and each Subsidiary
shall  maintain  books and records  reflecting  all of its business  affairs and
transactions  in  accordance  with  standard  accounting   practices  reasonably
satisfactory to the Bank and permit the Bank, and its representatives and agents
at reasonable times and intervals and upon reasonable notice to the Borrower, to

                                       18
<PAGE>

visit all of its offices,  discuss its  financial  matters  with the  Authorized
Officers of the Borrower and its  independent  public  accountants  (and by this
provision  the  Borrower   authorizes  its  independent  public  accountants  to
participate  in  such  discussions)  and  examine  any of its  books  and  other
corporate records.

         5.7 Legal  Existence.  Borrower and each Subsidiary  shall maintain its
legal  existence  in  good  standing  under  the  laws  of its  jurisdiction  of
organization  and its  qualification to transact  business in each  jurisdiction
where  failure  to  qualify  would  permanently  preclude  the  Borrower  or the
Subsidiary from enforcing its rights with respect to any material asset or would
expose Borrower or the Subsidiary to any material liability.

         5.8  Insurance.  Borrower  shall  obtain  and  maintain  the  following
insurance and pay all related premiums as they become due:

            (a) Casualty.  Borrower  shall  maintain  insurance on each Property
consisting  of  real or  personal  property  against  damage  or  loss by  fire,
lightning,  and other perils,  on an all-risks basis,  extended  coverage basis,
without co-insurance, if applicable, without contribution from the insured, such
coverage to be in an amount  reasonably  satisfactory  to the Bank.  Such policy
shall or certificates  for such insurance to be furnished  hereunder shall be in
forms,  companies  and amounts  satisfactory  to Bank,  with  mortgagee  clauses
attached to all policies or certificates in favor of and in form satisfactory to
Bank,  including a provision requiring that the coverage evidenced thereby shall
not be cancelled,  terminated or materially  modified  without thirty (30) days'
prior written notice to the Bank.

            (b) Commercial General Liability. Borrower shall maintain commercial
general liability insurance  protecting Borrower and Bank against loss or losses
from  liability  imposed  by  law or  assumed  in any  agreement,  document,  or
instrument  and arising from bodily  injury,  death,  or property  damage with a
limit of liability satisfactory to the Bank per occurrence and general aggregate
and "umbrella" excess liability  insurance in an amount reasonably  satisfactory
to the Bank.  Such  policies  must be  written on an  occurrence  basis so as to
provide blanket contractual liability,  broad form property damage coverage, and
coverage for  products and  completed  operations.  In addition,  there shall be
obtained and maintained  business motor vehicle liability  insurance  protecting
each Borrower and Bank against loss or losses from  liability  relating to motor
vehicles owned, non-owned,  or hired used by each Borrower, any contractor,  any
subcontractor,  or any other Person in any manner related to the business of the
Borrower with a limit of liability  satisfactory  to the Bank  (combined  single
limit for  personal  injury  (including  bodily  injury  and death and  property
damage).

            (c) Worker's  Compensation.  Borrower  shall maintain or cause to be
maintained worker's compensation insurance,  disability benefits insurance,  and
such other forms of insurance as required by law covering  loss  resulting  from
injury,  sickness,  disability,  or death of  employees  of each  Borrower,  any
contractor,  and any subcontractor  located on or assigned to any property owned
or operated by any Loan Party.  Borrower  shall cause each  contractor  and each
subcontractor  having employees  located on or assigned to any business owned or

                                       19
<PAGE>

operated by any Loan Party to obtain and  maintain  this same  coverage  for all
eligible employees.

            (d) Other. All policies for required  insurance shall be in form and
substance satisfactory to Bank in its reasonable discretion.  Required insurance
may be provided under a blanket insurance policy.  All required  insurance shall
be  procured  and  maintained  in  financially  sound and  generally  recognized
responsible  insurance companies selected by Borrower and approved by Bank. Such
companies  must be authorized to write such insurance in the states in which the
Collateral is located. Each company shall be rated "A" or better and a financial
size  category  of VII,  by A.M.  Best Co.,  in Best's Key guide,  or such other
rating  acceptable to Bank in Bank's absolute and sole discretion.  All property
policies  evidencing  required  insurance shall name Bank as first mortgagee and
loss payee. All liability policies evidencing required insurance shall name Bank
as additional  insured.  Coverage under the policies for the benefit of the Bank
may not be limited due to the acts of Borrower.  The policies  shall provide for
at  least  thirty  (30)  days'  prior  written  notice  of the  cancellation  or
modification thereof to Bank.

            (e)  Evidence.  A  certificate  of  insurance  evidencing  that such
insurance  is in full force and effect  with  respect to each  Project  shall be
delivered to Bank,  together with proof of the payment of the premiums  thereof,
or, at Bank's  request,  the  original  or a  certified  copy of each  insurance
policy.  Thirty (30) days prior to the expiration of each such policy,  Borrower
shall furnish Bank evidence that such policy has been renewed or replaced in the
form of a certified copy of the renewal or replacement  policy or, a certificate
reciting  that there is in full force and effect,  with a term covering at least
the next  succeeding  calendar  years,  insurance of the types and in the amount
required in this Section 5.8

         5.9 Inconsistent Agreements.  Neither Borrower nor any Subsidiary shall
enter into any agreement  containing  any  provision  which would be violated or
breached by the Borrower or Subsidiary  in the  performance  of its  obligations
under any Loan Document.

         5.10 Compliance with Laws.  Borrower and each Subsidiary shall carry on
its  business   activities  and  shall  maintain  the  Property  in  substantial
compliance  with  all  Governmental   Regulations  and  all  applicable   rules,
regulations and orders of all Governmental  Entities having power to regulate or
supervise its business activities or the Property.

         5.11 Conduct of Business.  Borrower and each Subsidiary  shall maintain
and keep its assets,  property and  equipment in good repair,  working order and
condition  and from time to time make or cause to be made all  needed  renewals,
replacements and repairs.

         5.12 Maintain Business.  Borrower shall continue to engage primarily in
the business being conducted on the date of this Agreement.

         5.13  Payment of Taxes and Claims.  Borrower  shall file or cause to be
filed all tax returns and  reports  which are  required by law to be filed by it
and  shall  pay  before  they  become  delinquent  all  taxes,  assessments  and
governmental  charges and levies  imposed upon it or its property and all claims
or  demands  of any kind  (including  but not  limited  to  those of  suppliers,

                                       20
<PAGE>

mechanics,  carriers,  warehouses,  landlords and other like Persons)  which, if
unpaid, might result in the creation of a Lien upon its property;  provided that
the foregoing  items need not be paid if they are being  contested in good faith
by  appropriate  proceedings,  and as  long as the  title  of  Borrower  and the
Property  Subsidiaries  to its respective  property is not materially  adversely
affected, its use of such property in the ordinary course of its business is not
materially  interfered with and adequate reserves with respect thereto have been
set aside on its books in accordance with GAAP.

         5.14 Sales,  Mergers, and other Fundamental  Changes.  Except as may be
permitted  by the Bank in its sole and  absolute  discretion,  Borrower  and its
Subsidiaries  shall not cause,  suffer or permit,  voluntarily or involuntarily,
(i)  Borrower  to enter  into or offer or agree to any  change  in the  legal or
beneficial ownership of Borrower,  or (ii) Borrower or its Subsidiaries to enter
into or offer or agree to any  change in the legal or  beneficial  ownership  of
Subsidiary  such  that  Borrower  ceases to own,  directly  or  through  another
Subsidiary,  one hundred percent (100%) of the legal and beneficial interests in
each  Subsidiary.  For  purposes  of this  Agreement,  "change  in the  legal or
beneficial ownership" shall include any transfer, sale, assignment,  conveyance,
exchange,  transfer  in  connection  with  a  pledge  or  hypothecation  or  the
foreclosure of a pledge or hypothecation, transfer in connection with a grant of
rights or  warrants  or  options  or  proxies  with  respect  to such  ownership
interests, merger, consolidation,  reorganization,  dissolution,  liquidation or
winding up of such  entity,  creation of  additional  classes of stock or equity
interests,  change in the rights  associated  with classes of preferred stock to
permit  conversion to common or voting stock or to grant voting  rights,  or any
other act that would have the effect of  altering  or  diminishing  the legal or
beneficial   ownership   or  any  rights  or  duties   with   respect   thereto.
Notwithstanding  the  foregoing,  Borrower  shall be  entitled to changes in its
legal or  beneficial  ownership  provided  that no such changes  shall impair or
diminish the voting and  managerial  control by Asset  Investors  Corporation of
Borrower.

         5.15 Returned  Payments.  Each Loan Party agrees that, in the event any
payment made by or on behalf of any Loan Party  respecting any  Obligations,  or
any portion  any such  payment,  shall at any time be returned by the  recipient
thereof for any reason,  including  pursuant to any order (whether or not final)
by a court  of  competent  jurisdiction,  any  provision  of the  United  States
Bankruptcy Code as now existing or hereafter  amended,  or any other  applicable
federal or state law or  because of acts or  omissions  of any Loan  Party,  the
Obligations  shall not be deemed to have  been  satisfied  to the  extent of the
returned  payment,  and the obligations of each Loan Party shall be deemed to be
reinstated automatically and to continue in full force and effect.

         5.16  Consolidation,  Merger,  Sale or Disposal of Assets. A Loan Party
shall not without the prior written approval from the Bank:

            (a)  acquire,  consolidate  or merge  into or with any other  entity
(other  than  the  proposed  merger  between  Asset  Investors  Corporation  and
Commercial Assets, Inc.); or

                                       21
<PAGE>

            (b) sell,  (other than sales of inventory in the ordinary  course of
business) transfer, lease, or otherwise dispose of all, or substantially all, of
its assets during the term of this Agreement.

         5.17 Indebtedness.  Borrower shall not create,  incur, assume, or allow
to exist any indebtedness of any kind or description, except the following:

            (a) Indebtedness to trade creditors  incurred in the ordinary course
of business,  to the extent that it is not overdue past the original due date by
more than ninety (90) days or being contested in good faith by the Borrower with
the Bank's reasonable consent.

            (b) The Indebtedness under the Loan.

            (c)  Indebtedness  which is non-recourse to the Borrower or any Loan
Party and is  secured by  collateral  other  than the  Bank's  Collateral.

         5.18  Platting.  Bank  acknowledges  that  Borrower  is  engaged in the
designing and platting of Phase V of the Savanna Club  development  which is the
Property  located in Florida.  Upon request by the Bank,  Borrower shall provide
the Bank with copies of design  documents  and plats  proposed  for the Phase V,
prior to final approval by the applicable Governmental Entities.

         5.19 Further Assurances.  Borrower and each Subsidiary will at any time
and from  time to time  upon  request  of the Bank take or cause to be taken any
action, execute, acknowledge,  deliver or record any further documents, opinions
or  other  instruments  or  obtain  such  additional  insurance  as  Bank in its
discretion  deems  necessary  or  appropriate  to carry out the purposes of this
Agreement.

                                   ARTICLE 6.
                               FINANCIAL COVENANTS

         6.1 Special  Definitions.  In this Article,  the following  terms shall
have the following meanings as to Borrower:

            (a) "Free Cash Flow" shall mean Funds From Operations, plus Interest
Expense,  less an annual  capital  replacement  reserve of $50.00 per  developed
homesite.

            (b) "Capital  Lease" shall mean any lease that has been or should be
capitalized under GAAP.

            (c)  "Funds  From  Operations"   shall  mean  Net  Income  or  loss,
calculated  in  accordance  with  GAAP  (excluding  gains and  losses  from debt
restructure and sales of property),  plus real estate related  depreciation  and
amortization  (excluding amortization of financing costs), and after adjustments
for  unconsolidated   partnerships  and  joint  ventures,  and  including  other
adjustments made by Borrower on a consistent basis.

                                       22
<PAGE>

            (d)  "Indebtedness"  shall mean, as to any Person at any  particular
date, any contractual  obligation  enforceable  against such Person (i) to repay
borrowed money; (ii) to pay the deferred purchase price of property or services;
(iii) to make  payments  or  reimbursements  with  respect  to letters of credit
whether or not there have been drawings  thereunder;  (iv) with respect to which
there is any security  interest in any property of such Person;  (v) to make any
payment or  contribution to a  Multi-Employer  Plan; (vi) that is evidenced by a
note,  bond,  debenture or similar  instrument;  and (vii) under any conditional
sale agreement or title retention agreement.

            (e)  "Indirect  Obligation"  shall mean,  as to any Person,  (a) any
guaranty by such Person of any  obligation of another  Person;  (b) any security
interest in any property of such Person that secures any  obligation  of another
person;  (c) any  enforceable  contractual  requirement  that  such  person  (i)
purchase an  obligation  of another  Person or any property that is security for
such  obligation;  (ii) advance or  contribute  funds to another  Person for the
payment  of an  obligation  of such  other  Person or to  maintain  the  working
capital, net worth or solvency of such other Person as required in any documents
evidencing  an  obligation  of  such  other  Person;  (iii)  purchase  property,
securities  or services  from  another  person for the  purpose of assuring  the
beneficiary  of any  obligation  of such other Person that such other Person has
the ability to timely pay or discharge  such  obligation;  (iv) grant a security
interest  in any  property of such  Person to secure any  obligation  of another
Person;  or (v)  otherwise  assure  or  hold  harmless  the  beneficiary  of any
obligation of another Person against loss in respect thereof;  and (d) any other
contractual  requirement  enforceable  against  such  person  that  has the same
substantive effect as any of the foregoing.  The term "Indirect Obligation" does
not, however,  include the endorsement by a Person of instruments for deposit or
collection  in the  ordinary  course of business or the  liability  of a general
partner of a partnership for obligations of such partnership.  The amount of any
Indirect Obligation of a Person shall be deemed to be the stated or determinable
amount of the  obligation in respect to which such  Indirect  Obligation is made
or, if not stated or determinable,  the maximum reasonable anticipated liability
in respect thereof as determined by such Person in good faith.

            (f) "Intangible Assets" means: (a) patents, copyrights,  trademarks,
tradenames,   franchise,   license  agreements,   goodwill,  and  other  similar
intangibles; (b) unamortized debt discount and expenses; and (c) fixed assets to
the  extent  of  any  write-up  in  the  book  value  thereof  resulting  from a
revaluation effective after the date of this Loan Agreement.

            (g) "Interest  Expense" means,  for any period of  calculation,  the
amount  reported  by  Borrower  in  its  financial  statements,   calculated  in
accordance with GAAP.

            (h)  "Liabilities"  shall  have  the  meaning  given  that  term  in
accordance with GAAP.

            (i) "Mandatory Debt Retirement and Interest" shall mean, at any date
of  determination,  the sum of all mandatory  payments of principal and interest
(including  payments due in  connection  with any Capital  Lease) due during the
period of twelve (12) months from the date of determination;  provided, however,

                                       23
<PAGE>

that any amounts  outstanding  under the Loan and any "balloon"  repayments  due
within  the  12-month  period  from the date of  determination  with  respect to
Borrower's  indebtedness  which requires a lump-sum  repayment of the balance of
the debt shall be deemed to have  mandatory  payments of principal  and interest
equal to the  principal  and  interest  required to be paid during the  12-month
period if the outstanding  principal  balance of the Loan or the other debt were
fully   amortized  over  a  period  of  twenty  (20)  years  from  the  date  of
determination at an interest rate of eight percent (8%) per annum.

            (j)  "Minority   Interests"  shall  mean  the  legal  or  beneficial
interests in any majority-owned  subsidiaries of Borrower owned by Persons other
than Borrower.

            (k)  "Net  Income"  shall  have  the  meaning  given  that  term  in
accordance with GAAP.

            (l) "Tangible  Net Worth" means as of any date,  total assets of the
Borrower as determined in accordance with GAAP, minus the sum of (i) Liabilities
and (ii) Intangible Assets and (iii) Minority Interests.

         6.2 Financial Covenants.  As of the Closing Date and until the Loan and
all indebtedness  hereunder has been paid in full and all Obligations  hereunder
have been fully  discharged,  Borrower  covenants and agrees as follows (each, a
"Financial Covenant"):

            (a) Minimum Tangible Net Worth. The consolidated  Tangible Net Worth
of Borrower shall not fall below $70,000,000.00, at any time.

            (b) Ratio of Free Cash Flow to Interest  Expense.  The ratio of Free
Cash Flow of Borrower to Interest  Expense of  Borrower,  in each case  measured
over the prior  four  calendar  quarters,  shall not fall below 2.0 to 1, at any
time.

            (c) Free Cash Flow Coverage. The ratio of Free Cash Flow of Borrower
to Mandatory Debt Retirement and Interest  Payments of Borrower  determined over
the  prior  four (4)  quarters  shall  not  fall  below  1.5 to 1, at any  time;
provided, however, that Free Cash Flow shall be adjusted to reflect acquisitions
and disposition of assets over the prior four (4) quarters.

         6.3 Compliance Certificate. Within forty-five (45) days after the close
of each  calendar  quarter the  Authorized  Officer shall execute and deliver to
Bank a Compliance  Certificate,  in the form and substance  satisfactory  to the
Bank,  confirming and certifying  its continuing  compliance  with the financial
covenants set forth in this Section, as further described in Section 5.1 above.

                                   ARTICLE 7.
                              DEFAULT AND REMEDIES

         7.1 Event of Default.  The  occurrence of any of the  following  events
shall constitute an "Event of Default" hereunder:

                                       24
<PAGE>

            (a) Monetary.  The Borrower shall default in the payment when due of
any  Obligations  owing to Bank under the terms of the Note and such  failure to
make payment shall continue for a period of five (5) days or longer,  except for
the payment in full of the Indebtedness on the Maturity Date, for which no grace
period is permitted.

            (b)  Covenant.  A Default  shall  occur in the due  performance  and
observance of any of the covenants and  conditions of this Agreement or the Loan
Documents, other than a monetary obligation, or an Event of Default specifically
set forth in this  Section,  which  breach  is not cured to Bank's  satisfaction
within the applicable cure period for breach of such covenant or condition, and,
if no specific  cure period is  provided,  within  thirty (30) days of notice of
such Default being sent by the Bank to Borrower;  provided, however, that if the
Default  cannot by its nature  reasonably  be cured within  thirty (30) days and
Borrower  commences cure within thirty (30) days,  Borrower shall be entitled to
an additional thirty (30) days to complete such cure.

            (c)  Financial  Covenant.  A breach  by  Borrower  of the  Financial
Covenant  set  forth in  Section  6.2  shall  occur  which  is not  cured to the
satisfaction  of the Bank within thirty (30) days after written  notice from the
Bank of such Default.

            (d)  Representation  and  Warranties.  Any  written  representation,
warranty or  disclosure  made by a Loan Party proves to be  materially  false or
misleading  as of the date when  made,  whether  or not such  representation  or
disclosure appears in this Agreement,  the Loan Documents, or items submitted by
the Loan Party in connection therewith.

            (e) Act of Bankruptcy. An Act of Bankruptcy shall occur.

            (f) Material Adverse  Occurrence.  There occurs any Material Adverse
Occurrence.

         Each Loan Party  acknowledges  and agrees  that any Event of Default is
conclusively deemed to impair the security of the Loan Documents,  and that Bank
shall  be  entitled  to  exercise  any  appropriate  remedy,  including  without
limitation,  foreclosure  of any Deed of Trust or  Security  Agreement  upon the
occurrence of any such Event of Default.

         7.2 Remedies.  Upon the occurrence of an Event of Default, Bank may, in
addition to any other  remedies  which Bank may have hereunder or under the Loan
Documents  or by law, at its option and without  prior demand or notice take any
or all of the following actions:

            (a)   Acceleration.   Declare  the   Obligations   under  this  Loan
immediately due and payable.

            (b)  Realization.  Proceed to  protect  and  enforce  its rights and
remedies  under the Loan Documents and avail itself of any other relief to which
the Bank may be legally or equitably entitled.

                                       25
<PAGE>

            (c)  Compelled  Return of Payments or  Proceeds.  If Bank is for any
reason  compelled  to surrender  any payment or any  proceeds of the  Collateral
because  such  payment or the  application  of such  proceeds  is for any reason
invalidated,  declared  fraudulent,  set  aside,  or  determined  to be  void or
voidable as a  preference,  an  impermissible  setoff,  or a diversion  of trust
funds, then this Agreement, the Loan Documents and the Obligations to which such
payment or proceeds was applied or intended to be applied shall be revived as if
such  application  were never made; and Borrower shall be liable to pay to Bank,
and shall  indemnify  Bank for and hold Bank harmless from any loss with respect
to the amount of such payment or proceeds  surrendered.  This  Section  shall be
effective notwithstanding any contrary action Bank may take in reliance upon its
receipt of any such payment or proceeds.  Any such  contrary  action so taken by
Bank shall be without  prejudice to Bank's right under this  Agreement and shall
be deemed to have been  conditioned  upon the  application  of such  payment  or
proceeds  having become final and  irrevocable.  The  provisions of this Section
shall survive the payment and satisfaction of all the Obligations.

            (d) Right of Set-off.  Upon the  occurrence  of any Event of Default
and at any time and from time to time  thereafter,  Bank is  hereby  authorized,
without  notice to Borrower or any Subsidiary  (any such notice being  expressly
waived  by  Borrower  and each  Subsidiary),  to set off and apply  against  the
Obligations  any  and  all  deposits  (general  or  special,   time  or  demand,
provisional  or final) at any time held, or any other  Indebtedness  at any time
owing by Bank to or for the credit or the account of Borrower or any Subsidiary,
irrespective of whether or not Bank has made any demand under the Loan Documents
and although such Obligations may be unmatured, but subject to the rights of any
Person for whom the Borrower or the Subsidiary is holding funds as escrow agent.
The right of Bank  under  this  Section  are in  addition  to other  rights  and
remedies (including, without limitation, other rights of set-off) which Bank may
otherwise have.

            (e)  Entry  Upon  Premises  and  Access  to  Information.  Upon  the
occurrence  of an  Event of  Default  and  acceleration  of the  Obligations  as
provided herein, and at any time and from time to time thereafter,  the Bank may
(i) enter any  premises  leased or owned by Borrower or a  Subsidiary  where any
Collateral is located (or believed to be located)  without any obligation to pay
rent to  Borrower  or the  Subsidiary,  or any other  place or places  where any
Collateral is believed to be located, (ii) render Collateral usable or saleable,
(iii) move  movable  Collateral  to the premises of the Bank or any agent of the
Bank for such time as the Bank may  desire in order  effectively  to  collect or
liquidate  such  Collateral;  (iv)  take  possession  of,  and make  copies  and
abstracts of, the original  books and records of Borrower and the  Subsidiaries,
obtain access to the data processing  equipment,  computer hardware and software
relating to any of the  Collateral  and,  subject to any  proprietary  rights of
third parties, use all of the foregoing and the information contained therein in
any manner the Bank deems  appropriate  in  connection  with the exercise of the
Bank's rights.

         All remedies of Bank provided for herein and in any other Loan Document
are  cumulative  and shall be in  addition  to all  other  rights  and  remedies
provided by law. The exercise of any right or remedy by Bank hereunder shall not
in any way  constitute a cure or waiver of default  hereunder or under any other
Loan Document or invalidate  any act done pursuant to any notice of default,  or

                                       26
<PAGE>

prejudice Bank in the exercise of any of its rights hereunder or under any other
Loan Documents unless, in the exercise of its rights,  Bank realizes all amounts
owed to it under such Loan Documents.

         7.3 Recertified Appraisal. If at any time (a) an Event of Default under
the  Loan  Documents  has  occurred,  or (b) the  Bank  determines,  in its sole
judgment,  that the  collateral  position  of the Bank in relation to the credit
extended for the benefit of the Borrower has adversely  changed as a consequence
of material,  physical or economic impairment of the Collateral, or (c) the Bank
is required by law or regulation to obtain a new Appraisal of the Properties, or
either of them, the Bank may require a new Appraisal of the Property in form and
content acceptable to the Bank to be prepared at Borrower's expense.

         7.4 Limitation;  Insolvency Laws. As used in this Section: (a) the term
"Applicable  Insolvency  Laws" means the laws of the United States of America or
of any state or other governmental unit relating to bankruptcy,  reorganization,
arrangement,  adjustment of debts, relief of debtors,  dissolution,  insolvency,
fraudulent  transfers or conveyances or other similar laws  (including,  without
limitation, 11 U.S.C. ss. 548, ss. 550 and other "avoidance" provisions of Title
11 of the United  States  Code) as  applicable  in any  proceeding  in which the
validity and/or enforceability of the Loan Documents or any Specified Lien is in
issue; and (b) "Specified Lien" means any security interest,  mortgage,  lien or
encumbrance securing the Obligations,  in whole or in part.  Notwithstanding any
other provision of this Agreement, if, in any proceeding against Borrower and/or
a Subsidiary,  a court of competent jurisdiction determines that the Obligations
or any Specified Lien would,  but for the operation of this Section,  be subject
to  avoidance  and/or  recovery  or be  unenforceable  against  Borrower  or the
Subsidiary by reason of Applicable  Insolvency  Laws, the  Obligations  and each
such  Specified Lien shall be valid and  enforceable  only to the maximum extent
that would not cause the  Obligations  and such  Specified Lien to be subject to
avoidance,  recovery or unenforceability.  To the extent that any payment to, or
realization  by, the Bank on the  Obligations  exceeds the  limitations  of this
Section  and is  otherwise  subject  to  avoidance  and  recovery  in  any  such
proceeding,  the amount  subject to avoidance  shall in all events be limited to
the amount by which such actual payment or realization  exceeds such limitation,
and the  Obligations  as limited  shall in all  events  remain in full force and
effect and be fully enforceable  against the Borrower and each Subsidiary.  This
Section is intended  solely to reserve the rights of the Bank hereunder  against
Borrower and each Subsidiary in such proceedings to the maximum extent permitted
by Applicable  Insolvency  Laws and none of the Borrower nor any  Subsidiary nor
any Person shall have any right,  claim or defense under this Section that would
not otherwise be available under Applicable Insolvency Laws in such proceedings.
If the  Obligations  or any Specified Lien are subject to avoidance or recovery,
or are  unenforceable,  with respect to Borrower or any  Subsidiary by reason of
Applicable  Insolvency  Laws,  or if  the  validity  and  enforceability  of the
Obligations  or any  Specified  Lien are limited with respect to Borrower or any
Subsidiary   pursuant  to  this   Section   7.3,   such   avoidance,   recovery,
unenforceability  or limitation shall not affect the validity or  enforceability
of the Obligations or any Specified Lien with respect to any other Subsidiary.

                                       27
<PAGE>

                                   ARTICLE 8.
                         RELATIONSHIP AMONG LOAN PARTIES

         8.1 Joint and Several  Liability.  BY SIGNING THIS AGREEMENT,  BORROWER
AND EACH OF THE SUBSIDIARIES AGREE THAT IT IS LIABLE, JOINTLY AND SEVERALLY WITH
EACH OTHER LOAN PARTY, FOR THE PAYMENT OF THE NOTE AND ALL OTHER  OBLIGATIONS OF
THE BORROWER UNDER THIS  AGREEMENT,  AND THAT BANK CAN ENFORCE SUCH  OBLIGATIONS
AGAINST  ANY OF  BORROWER  OR EACH  SUBSIDIARY,  IN  BANK'S  SOLE AND  UNLIMITED
DISCRETION.

         8.2 Bank's Right to  Administer  Credit.  Bank may at any time and from
time to time,  without  the consent  of, or notice to,  Borrower or  Subsidiary,
without  incurring  responsibility  to  Borrower  or  Subsidiary,   and  without
affecting, impairing or releasing any of the obligations of Borrower hereunder:

            (a) pursuant to the  exercise of its rights and  remedies  under the
terms of the Loan Documents,  sell, exchange,  surrender,  realize upon, release
(with or without  consideration) or otherwise deal with in any manner and in any
order  any  property  of any  person or entity  mortgaged  to Bank or  otherwise
securing  the  Borrower's  and  Subsidiaries'  joint and several  liability,  or
otherwise providing recourse to Bank with respect thereto;

            (b) exercise or refrain from exercising any rights against  Borrower
or any  Subsidiary  or others with respect to the  Borrower's  or  Subsidiaries'
joint and several liability, or otherwise act or refrain from acting;

            (c) settle or  compromise  any of the  Borrower's  or  Subsidiaries'
joint and  several  liability,  any  security  therefor or other  recourse  with
respect  thereto,  or subordinate  the payment or performance of all or any part
thereof to the payment of any liability  (whether due or not) of Borrower or any
Subsidiary  to any  creditor  of  Borrower  or any  Subsidiary,  as  applicable,
including without limitation, Bank and Borrower or any Subsidiary;

            (d) apply any sums  received  by Bank from any  source in respect of
any  liabilities  of  Borrower  or  any  Subsidiary  to  Bank  to  any  of  such
liabilities, regardless of whether the Note remains unpaid;

            (e) fail to set off and/or release, in whole or in part, any balance
of  any  account  or any  credit  on its  books  in  favor  of  Borrower  or any
Subsidiary,  or of any other person,  and extend credit in any manner whatsoever
to  Borrower  or  any  Subsidiary,  and  generally  deal  with  Borrower  or any
Subsidiary  and any  security  for the  Borrower's  or  Subsidiaries'  joint and
several  liability  of any recourse  with  respect  thereto as Bank may see fit;
and/or

            (f)  consent  to or waive any  breach  of, or any act,  omission  or
default under,  this Agreement or any other Loan  Document,  including,  without
limitation,  any agreement providing  collateral security for the payment of the

                                       28
<PAGE>

Borrower's  and   Subsidiaries'   joint  and  several  liability  or  any  other
indebtedness of any Borrower to Bank.

         8.3 Primary Obligation. No invalidity, irregularity or unenforceability
of all or any part of Borrower's or Subsidiaries' joint and several liability or
of any security  therefor or other  recourse with respect  thereto shall affect,
impair or be a defense to any other Loan  Party's  joint and several  liability,
and all obligations under the Note and this Agreement are primary obligations of
Borrower and each Subsidiary.

         8.4 Payments  Recovered  From Bank.  Notwithstanding  any other term or
provision  hereof,  if claim is ever made upon Bank for repayment or recovery of
any amount or amounts  received by Bank from  Borrower,  Subsidiary or any other
person  or  entity  and  applied  in  payment  of or on  account  of  any of the
Borrower's or Subsidiaries'  joint and several liability and Bank is required to
repay all or any part of said  amount  or  amounts  by  reason of (i)  judgment,
decree or order of any court of  administrative  body having  jurisdiction  over
Bank or any of its  property,  or (ii) any  settlement or compromise of any such
claim  effected  by  Bank  with  any  such  claimant   (including   Borrower  or
Subsidiary),  then and in such event such judgment, decree, order, settlement or
compromise  shall be binding upon Borrower and each  Subsidiary and Borrower and
each  Subsidiary  shall be and remain liable to Bank hereunder for the amount so
repaid or recovered to the same extent as if such amount had never been received
by Bank.

         8.5 No  Release.  Until the Note and all other  obligations  under this
Agreement  have been paid in full and each and  every one of the  covenants  and
agreements of this Agreement are fully  performed,  the  obligations of Borrower
and each Subsidiary hereunder shall not be released, in whole or in part, by any
action or thing which might, but for this provision of this Agreement, be deemed
a legal or equitable  discharge of a surety or  Subsidiary,  or by reason of any
waiver, extension,  modification,  forbearance or delay or other act or omission
of Bank or its  failure to proceed  promptly or  otherwise,  or by reason of any
action  taken or  omitted by Bank  whether or not such  action or failure to act
varies or  increases  the risk of, or affects the rights or remedies of Borrower
or Subsidiary,  nor shall any  modification of any of the Note or this Agreement
or release of any  security  therefor by  operation  law or by the action of any
third  party  affect  in any way  the  obligations  of  Borrower  or  Subsidiary
hereunder,   and  Borrower  or  each  Subsidiary  hereby  expressly  waives  and
surrenders  any  defense  to  its  liability  hereunder  based  upon  any of the
foregoing  acts,  omissions,  things,  agreements  or waivers of any of them, it
being the  purpose  and intent of the  parties  hereto  that the  Borrower's  or
Subsidiaries'  joint and  several  liability  constitute  the direct and primary
obligations of Borrower and each  Subsidiary and that the covenants,  agreements
and all  obligations  of Borrower  and each  Subsidiary  hereunder  be absolute,
unconditional and irrevocable.

         8.6 No Marshalling.  Borrower and each Subsidiary hereby waives any and
all right to cause a marshalling  of any other Loan Party's  assets or any other
action by any court or other  governmental  body with respect thereto insofar as

                                       29
<PAGE>

the rights of Bank  hereunder are concerned or to cause Bank to proceed  against
any  security  for the Loan  Party's  joint and several  liability  or any other
recourse  which Bank may have with respect  thereto,  and further waives any and
all  requirements  that Bank  institute  any action or  proceeding  at law or in
equity  against  any other Loan Party or anyone  else,  or with  respect to this
Agreement,  the Loan Documents, or any collateral security for the Borrower's or
Subsidiaries' joint and several liability,  as a condition precedent to making a
demand  on, or  bringing  an action or  obtaining  and/or  enforcing  a judgment
against Borrower or any Subsidiary.  Borrower and each Subsidiary further waives
any requirement  that Bank seek performance by any other Loan Party or any other
person,  of any  obligation  under this  Agreement,  the Loan  Documents  or any
collateral  security  for the  Borrower's  or  Subsidiaries'  joint and  several
liability as a condition precedent to making a demand on, or bringing any action
or obtaining  and/or enforcing a judgment  against,  Borrower or any Subsidiary.
Neither  Borrower nor any Subsidiary shall have any right of setoff against Bank
with  respect to any of its  obligations  hereunder.  Any remedy or right hereby
granted which shall be found to be  unenforceable  as to any person or under any
circumstance,  for any reason,  shall in no way limit or prevent the enforcement
of such  remedy  or right as to any  person  or  circumstance,  nor  shall  such
unenforceability  limit or  prevent  enforcement  of any  other  remedy or right
hereby granted.

         8.7 Deficiencies. Borrower and each Subsidiary specifically agrees that
in the event of a  foreclosure  under any security  agreement  or other  similar
agreement  held by Bank  which  secures  any part or all of the  Borrower's  and
Subsidiaries'  joint and  several  liability  and in the  event of a  deficiency
resulting  therefrom,  Borrower  and each  Subsidiary  shall be,  and  hereby is
expressly  made,  liable  to  Bank  for  the  full  amount  of  such  deficiency
notwithstanding  any other  provision  of this  Agreement  or  provision of such
agreement, any document or documents evidencing the indebtedness secured by such
agreement or any other  document or any provision of applicable  law which might
otherwise  prevent  Bank  from  enforcing  and/or  collecting  such  deficiency.
Borrower and each Subsidiary  hereby waives any right to notice of a foreclosure
under any security  agreement or other  similar  agreement  given to Bank by any
other Loan Party which  secures any part or all of the Loan  Parties'  joint and
several liability.

         8.8 Bankruptcy.  Borrower and each Subsidiary expressly agrees that its
liability and obligations under the Note and this Agreement shall not in any way
be affected by the  institution  by or against any other Loan Party or any other
person or entity of any bankruptcy,  reorganization,  arrangement, insolvency or
liquidation  proceedings,  or any other similar proceedings for relief under any
bankruptcy law or similar law for the relief of debtors,  or any action taken or
not taken by Bank in connection therewith,  and that any discharge of Borrower's
or Subsidiaries'  joint and several liability pursuant to any such bankruptcy or
similar law or other law shall not discharge or otherwise  affect in any way the
obligations  of any other  Loan Party  under the Note,  the  Guarantee  and this
Agreement,  and that  upon or at any time  after the  institution  of any of the
above actions, at Bank's sole discretion, the Borrower's and Subsidiaries' joint
and several  obligations shall be enforceable against Borrower or any Subsidiary
that is not itself the subject of such proceedings. Borrower and each Subsidiary
expressly  waives any right to argue that  Bank's  enforcement  of any  remedies
against  Borrower or that  Subsidiary is stayed by reason of the pendency of any
such proceeding against any other Loan Party.

                                       30
<PAGE>

                                   ARTICLE 9.
                           RELEASES AND SUBSTITUTIONS

         Borrower may sell either of the Property  located in Florida  ("Florida
Property") or the Property located in Arizona ("Arizona Property") pursuant to a
purchase  contract  and  releases  under the  applicable  Deed of Trust shall be
executed and delivered by the Bank for the Property so sold,  upon the terms and
conditions set forth in this Article.  In connection with such a sale,  Borrower
may  propose  substitute  collateral  for the  Florida  Property  or the Arizona
Property so sold, upon the terms and conditions set forth in this Article.

         9.1 Release  Procedure.  The Bank's obligation to permit the release of
the lien of the Deed of Trust  encumbering  either the  Florida  Property or the
Arizona Property (either, a "Release  Property") shall be contingent upon all of
the  following:  (i) no Event of Default shall have occurred and be  continuing,
(ii) payment to the Bank of the release Price (defined below),  (iii) payment of
any and all expenses,  including  reasonable  attorneys' fees in respect of such
release  incurred  by the Bank,  costs of  recording  releases,  and  incidental
release fees charged by the Bank,  in  connection  with such  release,  (iv) the
Release  Property  shall be the entire  Florida  Property or the entire  Arizona
Property,  and (v) the Commitment  Amount shall  automatically  be reduced to an
amount equal to the portion of the Commitment  Amount allocated to the remaining
Property  after release of the Release  Property,  except and to the extent that
the Borrower and the Bank agree to a  substitution  of  Collateral  on the terms
provided herein

         9.2 Release Price.  For the release of the Release  Property,  Borrower
shall pay to the Bank an amount (the "Release Price"), calculated as follows: an
amount equal to the quotient of the Allocated Amount for the Release Property as
described on Exhibit C ("Allocated  Amount")  divided by the Commitment  Amount,
multiplied by the Advances  outstanding under the Loan as of the date of release
of the  Release  Property  (e.g.:  $10,800,000  (Allocated  Amount  for  Arizona
Property) divided by $15,000,000 (Commitment Amount) = .72 x $9,200,000 (assumed
amount of Advances) = $6,624,000 Release Price).

         9.3 General Provisions Regarding Releases. With respect to each request
for release and payment of the Release Price:

            (a) Not later  than five (5)  Business  Days prior to closing of the
sale  of  a  Release   Property,   Borrower   shall  provide  to  the  Bank  the
fully-prepared request for partial release, together with the items described in
this Article 9 which are conditions  precedent to the Bank's obligation to grant
such  release  (other  than  payment of the  Release  Price and other  costs and
expenses).

            (b) Every payment of Release Price shall be credited  first to costs
then due and unpaid with  respect to the Loan,  second to accrued  interest  due
under the Loan with respect to the Release Price,  and,  third, to the principal
balance of the Loan.

                                       31
<PAGE>

            (c) The  Commitment  Amount  shall  automatically  be  reduced by an
amount equal to the Allocated Amount for the Release Property, except and to the
extent  the  Borrower  and the Bank  agree  to a  simultaneous  substitution  of
Collateral.

            (d) Any payment of Release Price shall not release Borrower from the
payment of the Note according to its terms and  conditions,  and no such payment
shall in any way impair or affect the validity, priority or standing of the Deed
of Trust as to the remainder of the Property encumbered by a Deed of Trust.

         9.4  Substitution  of  Collateral.  In connection  with the request for
release of a Release  Property,  the  Borrower  may also  request  that the Bank
accept  substitute  collateral  for the  Release  Property in order to avoid the
reduction of the Commitment  Amount by the Allocated Amount  attributable to the
Release  Parcel.  The Bank  shall  have no  obligation  to  accept  the  offered
substitute  collateral and any  acceptance by the Bank of substitute  collateral
shall be in the  Bank's  sole and  absolute  discretion  and upon such terms and
conditions  satisfactory to the Bank, including without limitation the Allocated
Amount attributable to such substitute  collateral.  In order to permit the Bank
to review and evaluate such substitute collateral,  the Borrower shall, not less
than sixty (60) days prior to  Borrower's  request  for  release of the  Release
Property, provide to the Bank such due diligence items and information as may be
requested  by the Bank.  In the event the Bank shall  determine  to accept  such
substitute  collateral,  Borrower  shall  execute  and  deliver to the Bank such
amendments to this Agreement and the Loan Documents and additional documents and
instruments  and due diligence items in the nature of items described in Article
3 as the Bank may request.

                                  ARTICLE 10.
                                  MISCELLANEOUS

         10.1 No  Waiver.  No waiver of any  default  or breach by a Loan  Party
hereunder shall be implied from any failure by Bank to take action on account of
such default if such  default  persists or is  repeated,  and an express  waiver
shall not affect any default other than the default  specified in the waiver and
shall be operative only for the time and to the extent therein  stated.  Waivers
of any covenant,  term or condition contained herein shall not be construed as a
waiver of any  subsequent  breach of the same covenant,  term or condition.  The
consent or approval by Bank to, or of, any act by a Loan Party requiring further
consent  or  approval  shall not be deemed  to waive or render  unnecessary  the
consent or approval to, or of, any subsequent similar act.

         10.2  Successors  and Assigns.  This Agreement is made and entered into
for the  sole  protection  and  benefit  of Bank  and the  Loan  Parties,  their
successors  and assigns,  and no other person or persons shall have any right of
action hereunder.  The terms hereof shall be binding upon and shall inure to the
benefit of the  parties  hereto  and the  personal  representatives,  executors,
successors  and  assigns of the  parties  hereto;  provided,  however,  that the
interests of a Loan Party hereunder cannot be assigned or otherwise  transferred
without the prior consent of Bank.

                                       32
<PAGE>

         10.3  Subrogation of Bank.  Bank shall be subrogated to the lien of any
previous  encumbrance  discharged  with  funds  advanced  by Bank under the Loan
Documents,  regardless of whether such previous encumbrance has been released of
record.

         10.4 Notices.  Any notice required or permitted to be given by Borrower
or Bank under this  Agreement  shall be in writing and will be deemed  given (a)
upon personal  delivery or upon confirmed  transmission by telecopier or similar
facsimile  transmission  device,  (b) on the first business day after  receipted
delivery to a courier service which guarantees  next-business-day  delivery,  or
(c) on the third business day after mailing,  by registered or certified  United
States  mail,  postage  prepaid,  in any  case to the  appropriate  party at its
address set forth below:

         If to Borrower or a Subsidiary:

                           Asset Investors Operating Partnership, L.P.
                           c/o Asset Investors Corporation
                           3410 S. Galena Street, Suite 210
                           Denver, CO 80231
                           Attn:  Chief Financial Officer
                           Telecopy No.:  303-614-9401

         With Copy to:

                           Joseph Gaynor, Esq.
                           Brandywine Real Estate Management Services
                           Corporation
                           2637 McCormick Drive
                           Clearwater, Florida  33759-1041
                           Telecopy No.:  727-791-7920

         If to Bank:

                           U. S Bank National Association
                           918 17th Street, Fifth Floor
                           Denver, Colorado  80202
                           Attention:  Cyd D. Petre, Vice President
                           Telecopy #:  (303) 585-4198

                                       33
<PAGE>

         With a copy to:

                           Gorsuch Kirgis LLP
                           Tower I, Suite 1000
                           1515 Arapahoe Street
                           Denver, Colorado  80202
                           Attention:  Connie B. Hyde, Esq.
                           Telecopy #:  (303) 376-5001

         10.5   Authority  to  File  Notices.   Borrower  and  each   Subsidiary
irrevocably  appoint,  designate  and  authorize  Bank as its agent (said agency
being  coupled  with an interest) to send to any third party any other notice or
documents  or take any other  action that Bank deems  necessary  or desirable to
protect  its  interest  hereunder,  or under the Loan  Documents,  and will upon
request  by Bank,  execute  such  additional  documents  as Bank may  require to
further evidence the grant of the aforesaid right to Bank.

         10.6 Time. Time is of the essence hereof.

         10.7 Amendments, etc. No amendment, modification, termination or waiver
of any  provisions of this Agreement or of any of the Loan Documents nor consent
to any  departure  by Borrower or a Subsidiary  therefrom  shall in any event be
effective  unless the same shall be in writing and signed by Bank, and then such
waiver or consent shall be effective  only in the specific  instance and for the
specific purpose for which given.

         10.8  Headings.  The  article  and  section  headings in no way define,
limit,  extend or interpret  the scope of this  Agreement  or of any  particular
article or section.

         10.9 Number and Gender. When the context in which the words are used in
this Agreement  indicate that such is the intent,  words in the singular  number
shall include the plural and vice-versa. References to any one gender shall also
include the other gender if applicable under the circumstances.

         10.10 No Joint Venture;  No Third Party  Beneficiary.  The Bank, on the
one hand, and the Loan Parties, on the other, each have separate and independent
rights and obligations  under this Agreement.  Nothing contained herein shall be
construed as creating,  forming or constituting any partnership,  joint venture,
merger or  consolidation  of the Loan Parties and the Bank for any purpose or in
any  respect.  Nothing in this  Agreement,  express or  implied,  is intended to
confer  upon any Person  other  than the  parties  hereto  and their  respective
successors  and  assigns  any  rights  and  remedies  under or by reason of this
Agreement.

         10.11 Governing Law;  Venue.  THIS AGREEMENT AND THE LOAN DOCUMENTS AND
THE RIGHTS AND OBLIGATIONS OF THE PARTIES  HEREUNDER AND THEREUNDER SHALL IN ALL
RESPECTS BE GOVERNED BY, AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS
OF THE STATE OF COLORADO  (WITHOUT  GIVING  EFFECT TO  COLORADO'S  PRINCIPLES OF

                                       34
<PAGE>

CONFLICTS  OF LAW),  EXCEPT TO THE  EXTENT  (A) OF  PROCEDURAL  AND  SUBSTANTIVE
MATTERS RELATING ONLY TO THE CREATION,  PERFECTION,  FORECLOSURE AND ENFORCEMENT
OF RIGHTS AND REMEDIES  AGAINST  SPECIFIC  COLLATERAL,  WHICH  MATTERS  SHALL BE
GOVERNED  BY THE LAWS OF THE  STATE IN WHICH  THE  COLLATERAL  IS  LOCATED  (THE
"COLLATERAL  STATE"),  AND (B) THAT THE LAWS OF THE UNITED STATES OF AMERICA AND
ANY RULES REGULATIONS, OR ORDERS ISSUED OR PROMULGATED THEREUNDER, APPLICABLE TO
THE  AFFAIRS  AND  TRANSACTIONS  ENTERED  INTO BY THE  BANK,  OTHERWISE  PREEMPT
COLLATERAL  STATE LAW OR COLORADO  LAW;  IN WHICH  EVENT SUCH  FEDERAL LAW SHALL
CONTROL.   BORROWER,   EACH  SUBSIDIARY,   HEREBY  IRREVOCABLY  SUBMITS  TO  THE
NON-EXCLUSIVE  JURISDICTION  OF ANY COLORADO OR FEDERAL COURT SITTING IN DENVER,
COLORADO (OR ANY STATE IN WHICH THE PROPERTY IS LOCATED)  OVER ANY SUIT,  ACTION
OR  PROCEEDING  ARISING OUT OF OR RELATING TO THIS  AGREEMENT OR ANY OF THE LOAN
DOCUMENTS.

         10.12  Survival of  Warranties.  All  agreements,  representations  and
warranties  made  herein  shall  survive  the  execution  and  delivery  of this
Agreement and of the Loan  Documents and the extension of the Loan hereunder and
continue in full force and effect until the  Obligations  of Borrower  hereunder
evidenced by the Note have been fully paid and satisfied.

         10.13  Automatic  Acceleration.  Should there occur an Event of Default
which would, with the giving of notice, the passage of time, or both, constitute
an  Event of  Default  hereunder  and if a  petition  under  the  United  States
Bankruptcy  Code  thereafter is filed by or against  Borrower or any  Subsidiary
while  such  event  remains   uncured,   all  obligations   hereunder  shall  be
automatically  accelerated  and due and payable and the Default Rate of interest
provided for in the Note shall  automatically  apply as of the date of the first
occurrence of the event which would,  with the giving of notice,  the passage of
time,  or both,  constitute an Event of Default,  without any notice,  demand or
action of any type on the part of Bank  (including  any  action  evidencing  the
acceleration  or imposition of the default rate of interest).  The fact that the
Bank has, prior to the filing of the voluntary  petition under the United States
Bankruptcy Code,  acted in a manner which is inconsistent  with the acceleration
and imposition of the default rate of interest  provided for in the Note,  shall
not  constitute a waiver of this  Section  9.13 or estop Bank from  asserting or
enforcing Bank's rights hereunder.

         10.14 Costs and Expenses. The Loan Parties shall reimburse Bank for all
reasonable  attorneys'  fees and expenses  incurred by Bank in  connection  with
negotiation,  preparation, approval, review, execution, delivery, amendment, and
modification  of the  Loan and the  enforcement  of  Bank's  rights  under  this
Agreement and each of the other Loan Documents,  including,  without limitation,
reasonable attorneys' fees and reimbursements for trial,  appellate proceedings,
out-of-court  workouts and  settlements  and for enforcement of rights under any
state or federal statute, including,  without limitation,  reasonable attorneys'
fees incurred in bankruptcy  and  insolvency  proceedings  such as in connection
with seeking  relief from stay in a bankruptcy  proceeding  or  negotiating  and
documenting any amendment or  modification  of the Loan or reviewing  subsequent
submission  items  pertaining to the Loan.  The Loan Parties shall pay all costs

                                       35
<PAGE>

incurred by the Bank in negotiation,  preparation,  approval, review, execution,
delivery,  amendment, and modification of the Loan and the enforcing payment and
performance of the Loan,  exercising  rights and remedies of Bank under the Loan
Documents,  or  reviewing  submission  items  pertaining  to the Loan.  The Loan
Parties' reimbursement obligation shall be part of the indebtedness evidenced by
the Loan Documents.

         10.15  Severability;  Titles.  If any provision of this Agreement or of
any other Loan Document  executed in connection  with this Agreement is, for any
reason and to any extent,  invalid or unenforceable,  then neither the remainder
of the Loan Document in which such provision is contained, or the application of
the  provision  to other  persons,  entities  or  circumstances,  nor any  other
document referred to in this Agreement,  shall be affected by such invalidity or
unenforceability,  and there  shall be deemed  substituted  for the  invalid  or
unenforceable  provision  the most  similar  provision  which would be valid and
enforceable under applicable law.

         10.16  Counterparts.  This  Agreement may be executed in  counterparts,
each of which shall be deemed an original, but all of which shall constitute the
same document.

         10.17 Participations.  Bank, at any time, shall have the right to sell,
assign, transfer,  negotiate or grant participation interests in the Loan and in
any documents and instruments executed in connection therewith.  Each Loan Party
acknowledges  and agrees that any such  disposition  shall give rise to a direct
obligation  of Borrower  to each such  participant,  so long as any  enforcement
action shall be taken  jointly  among such  participants.  Bank is authorized to
furnish  to any  participant  or  prospective  participant  any  information  or
document that Bank may have or obtain regarding the Loan or the Loan Parties.

         10.18  Waiver  of  Rights.  In order to  avoid  delays  in time and any
prejudice that may arise from trial by jury and in light of the  complexities of
this transaction,  in the event of litigation arising out of or relating to this
Loan  Agreement,  the Note  and/or the other Loan  Documents,  and/or in any way
connected with or related or incidental to the dealings of the parties hereto or
any of them with respect to this Loan Agreement, the other Loan Documents and/or
any other instrument,  document or agreement executed or delivered in connection
herewith,  or the transaction  related hereto or thereto,  in each case, whether
sounding in contract,  tort or otherwise,  Bank,  Borrower and each  Subsidiary,
with the prior advice of counsel,  knowingly,  intelligently  and as a bargained
for  matter,  waives its right to trial by jury and agree and  consent  that any
claim, demand,  action or cause of action in respect to such litigation shall be
decided by a trial to the court without a jury.

THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK.

                                       36
<PAGE>

         IN WITNESS WHEREOF,  the parties hereto have made and entered into this
Agreement as of the day and year first above written.

                                BANK:

                                U.S. BANK NATIONAL ASSOCIATION

                                By:  /s/Cyd Petre
                                    -----------------------
                                    Cyd Petre, Vice President

                                BORROWER:

                                ASSET INVESTORS OPERATING PARTNERSHIP,
                                L.P., a Delaware limited partnership

                                By:  ASSET INVESTORS CORPORATION,
                                     a Delaware corporation,
                                     General Partner

                                     By: /s/David M. Becker
                                         ----------------------
                                          David M. Becker
                                          Chief Financial Officer

                                SUBSIDIARIES:

                                AIOP FLORIDA PROPERTIES I, L.L.C., a
                                Delaware  limited  liability
                                company

                                By:  ASSET INVESTORS OPERATING PARTNERSHIP,
                                     L.P., a Delaware limited partnership,
                                     Sole Member and Manager

                                     By:  ASSET INVESTORS CORPORATION,
                                          a Delaware corporation, General
                                          Partner

                                          By:  /s/David M. Becker
                                             -------------------------
                                              David M. Becker
                                              Chief Financial Officer

                                       37
<PAGE>

                                AIOP FLORIDA PROPERTIES II, L.L.C., a
                                Delaware limited liability company

                                By:  ASSET INVESTORS OPERATING PARTNERSHIP,
                                     L.P., a Delaware limited partnership,
                                     Sole Member and Manager

                                     By:  ASSET INVESTORS CORPORATION,
                                          a Delaware corporation, General
                                          Partner

                                          By:      /s/David M. Becker
                                              -------------------------
                                              David M. Becker
                                              Chief Financial Officer

                                COMMUNITY SAVANNA CLUB JOINT VENTURE, a
                                Delaware general partnership

                                By:  AIOP FLORIDA PROPERTIES I, L.L.C.,
                                     a Delaware limited liability company,
                                     Managing General Partner

                                     By:  ASSET INVESTORS OPERATING PARTNERSHIP,
                                          L.P., a Delaware limited partnership,
                                          Sole Member and Manager

                                          By:  ASSET INVESTORS CORPORATION,
                                               a Delaware corporation, General
                                               Partner

                                               By:      /s/David M. Becker
                                                   -------------------------
                                                   David M. Becker
                                                   Chief Financial Officer

                                       38
<PAGE>

                                AIOP LOST DUTCHMAN NOTES, L.L.C., a
                                Delaware limited liability company

                                     By:  ASSET INVESTORS OPERATING PARTNERSHIP,
                                          L.P., a Delaware limited partnership,
                                          Sole Member and Manager

                                          By:  ASSET INVESTORS CORPORATION,
                                               a Delaware corporation, General
                                               Partner

                                               By:      /s/David M. Becker
                                                  -------------------------
                                                   David M. Becker
                                                   Chief Financial Officer

                                       39
<PAGE>

STATE OF COLORADO                           )
                                            )        ss.
CITY AND COUNTY OF DENVER                   )

     The foregoing  instrument was  acknowledged  before me this 7 day of April,
2000, by Cyd Petre as Vice President of U. S. BANK NATIONAL ASSOCIATION.

         Witness my hand and official seal.

         My Commission Expires:  12/7/2000

                                                              /s/Pam J. Finch
                                                      -------------------------
                                                              Notary Public

[ S E A L ]

STATE OF COLORADO                           )
                                            )        ss.
COUNTY OF DENVER                            )

         The  foregoing  instrument  was  acknowledged  before  me this 7 day of
April,  2000, by David M. Becker as Chief  Financial  Officer of Asset Investors
Corporation,  a  Delaware  corporation,  as general  partner of Asset  Investors
Operating Partnership, L.P., a Delaware limited partnership.

         Witness my hand and official seal.

         My commission expires:  12/7/3000

                                                              /s/Pam J. Finch
                                                      -------------------------
                                                              Notary Public
( S E A L )

                                       40
<PAGE>

STATE OF COLORADO                           )
                                            )        ss.
COUNTY OF DENVER                            )

         The  foregoing  instrument  was  acknowledged  before  me this 7 day of
April,  2000, by David M. Becker as Chief  Financial  Officer of Asset Investors
Corporation,  a  Delaware  corporation,  as general  partner of Asset  Investors
Operating Partnership,  L.P., a Delaware limited partnership, as Sole Member and
Manager of AIOP Florida  Properties  I,  L.L.C.,  a Delaware  limited  liability
company.

         Witness my hand and official seal.

         My commission expires:  12/7/2000

                                                              /s/Pam J. Finch
                                                      -------------------------
                                                              Notary Public
( S E A L )

STATE OF COLORADO                           )
                                            )        ss.
COUNTY OF DENVER                            )

         The  foregoing  instrument  was  acknowledged  before  me this 7 day of
April,  2000, by David M. Becker as Chief  Financial  Officer of Asset Investors
Corporation,  a  Delaware  corporation,  as general  partner of Asset  Investors
Operating Partnership,  L.P., a Delaware limited partnership, as Sole Member and
Manager of AIOP Florida  Properties II,  L.L.C.,  a Delaware  limited  liability
company.

         Witness my hand and official seal.

         My commission expires:  12/7/2000

                                                              /s/Pam J. Finch
                                                      -------------------------
                                                              Notary Public
( S E A L )

                                       41
<PAGE>

STATE OF COLORADO                           )
                                            )        ss.
COUNTY OF DENVER                            )

         The  foregoing  instrument  was  acknowledged  before  me this 7 day of
April,  2000, by David M. Becker as Chief  Financial  Officer of Asset Investors
Corporation,  a  Delaware  corporation,  as general  partner of Asset  Investors
Operating Partnership,  L.P., a Delaware limited partnership, as Sole Member and
Manager of AIOP Florida  Properties I, L.L.C.,  as Managing  General  Partner of
Community Savanna Club Joint Venture, a Delaware general partnership.

         Witness my hand and official seal.

         My commission expires:  12/7/2000

                                                              /s/Pam J. Finch
                                                      -------------------------
                                                              Notary Public
( S E A L )

STATE OF COLORADO                                    )
                                                     )    ss.
COUNTY OF DENVER                                     )

         The  foregoing  instrument  was  acknowledged  before  me this 7 day of
April,  2000, by David M. Becker as Chief  Financial  Officer of Asset Investors
Corporation,  a  Delaware  corporation,  as general  partner of Asset  Investors
Operating Partnership,  L.P., a Delaware limited partnership, as Sole Member and
Manager  of AIOP Lost  Dutchman  Notes,  L.L.C.,  a Delaware  limited  liability
company.

         Witness my hand and official seal.

         My commission expires:     12/7/2000

                                                              /s/Pam J. Finch
                                                      -------------------------
                                                              Notary Public
( S E A L )

                                       42After Recording Return to:
GORSUCH KIRGIS LLP
Tower I, Suite 1000
1515 Arapahoe Street
Denver, Colorado 80202
Attention:  Connie B. Hyde, Esq.

                       DEED OF TRUST, SECURITY AGREEMENT,
                             FINANCING STATEMENT AND
                        ASSIGNMENT OF RENTS AND REVENUES
                                    [Arizona]

         THIS  DEED OF  TRUST,  SECURITY  AGREEMENT,  FINANCING  STATEMENT,  AND
ASSIGNMENT  OF RENTS AND REVENUES  (this "Deed of Trust") is given as of the 7th
day of April,  2000 by the Trustor named below to the Trustee  named below,  for
the use and benefit of the Beneficiary named below.

                                   ARTICLE 1
                       PARTIES, PROPERTY, AND DEFINITIONS

         The following terms and references shall have the meanings indicated:

         1.1 Trustor:  AIOP Lost  Dutchman  Notes,  L.L.C.,  a Delaware  limited
liability company, whose mailing address is 3410 South Galena Street, Suite 210,
Denver,  Colorado  80231,  together with any future owner of the Property or any
part thereof or interest therein.

         1.2 Beneficiary: U.S. BANK NATIONAL ASSOCIATION,  whose mailing address
is 918 Seventeenth Street,  Fifth Floor, Denver,  Colorado 80202,  together with
any legal holder of the Note.

         1.3  Trustee:  Stewart  Title & Trust  of  Phoenix,  Inc.,  a  Delaware
corporation,  whose mailing  address is 244 West Osborn Road,  Phoenix,  Arizona
85013.

         1.4 Note: The Revolving Promissory Note of even date herewith, executed
by Trustor,  Asset Investors  Operating  Partnership,  L.P., a Delaware  limited
partnership  ("Operating  Partnership") and Community Savanna Club Joint Venture
("Joint  Venture")  payable to the order of  Beneficiary  in the principal  face
amount  of  $15,000,000.00,   together  with  all  renewals,   extensions,   and

                                       1
<PAGE>

modifications of the Note. All terms and provisions of the Note are incorporated
by this reference in this Deed of Trust.

         1.5 Loan Agreement:  The Line of Credit Agreement of even date herewith
executed  by  Trustor,  Operating  Partnership,   Joint  Venture,  AIOP  Florida
Properties  I,  L.L.C.,  a Delaware  limited  liability  company,  AIOP  Florida
Properties  II,  L.L.C.,  a  Delaware  limited   liability   company,   and  the
Beneficiary, and all renewals, extensions, modifications and amendments thereof.
All capitalized  terms not otherwise defined herein shall bear the meaning given
to them in the Loan Agreement.

         1.6 Real Property:  The real property  described in Exhibit A, attached
hereto and by this reference incorporated herein, together with all right, title
and  interest of Trustor in the  following  with  respect to the real  property,
whether now owned or hereafter acquired by Trustor:

             (a) All improvements now or hereafter located on such real property
(excluding  manufactured  homes  and  setup  owned  by  third  parties)  and all
easements and appurtenances thereto;

             (b) The land lying within any street or roadway  adjoining the real
property;  any vacated or hereafter  vacated street or alley  adjoining the real
property; and any strips and gores adjoining the real property;

             (c) All and singular the passages,  waters,  water rights  (whether
tributary  or  non-tributary  or not  non-tributary),  water  courses,  riparian
rights, wells, well permits, water stock, other rights, liberties and privileges
thereof  or in any way  now or  hereafter  appertaining  to the  real  property,
including  homestead  and any other  claim at law or in  equity,  as well as any
after-acquired title, franchise or license, and the reversion and reversions and
remainder and remainders thereof;

             (d)  All  machinery,   apparatus,   equipment,  fittings,  fixtures
(whether actually or constructively attached or incorporated,  and including all
trade,  domestic,  and ornamental fixtures, but excluding manufactured homes and
setups owned by third parties) now or hereafter  located in, upon, or under such
real property or improvements  and used or usable in connection with any present
or future operation thereof, including but not limited to all lighting, utility,
and power equipment;  engines;  pipes; pumps; tanks; motors;  conduits;  utility
systems,  plumbing,  lifting,  cleaning,  fire prevention,  fire  extinguishing,
signage,  heating,  air-conditioning;  communication  apparatus;  water heaters;
ranges; furnaces; appliances,  refrigerators,  stoves; shades, awnings, screens,
storm doors and windows;  attached cabinets; rugs, carpets and draperies and all
additions thereto and replacements therefor;

                                       2
<PAGE>

         1.7 Tangible Personalty: All right, titles and interests of the Trustor
in and to the following, with respect to the Real Property:

             (a) All goods, trade fixtures,  fixtures,  inventory,  furnishings,
fittings,  machinery,  apparatus,  equipment,  building  and other  construction
materials,  supplies,  and other tangible  personal property of every nature now
owned or hereafter acquired by Trustor and used, intended for use, or reasonably
required in the development, construction,  reconstruction,  alteration, repair,
or  operation of the Property and any  improvements  or  infrastructure  located
thereon,  together with all accessions  thereto,  replacements and substitutions
therefor, and proceeds thereof, including, without limitation, to the extent not
deemed to be real property under this Deed of Trust,  all apparatus,  machinery,
motors, elevators,  fittings, equipment, and other furnishings and all plumbing,
heating, lighting, cooking, laundry, ventilating,  refrigerating,  incinerating,
air-conditioning  and  sprinkler  equipment  and  fixtures,  all  clubhouse  and
swimming pool  equipment,  lockers,  lifeguard  equipment,  lawn or deck chairs,
towels,  swimming  pool cleaning and  maintenance  equipment,  recreational  and
fitness  equipment,  including  but not limited to rowing  machines,  stationery
bikes, nautilus equipment and appurtenances thereto.

         1.8 Intangible Personalty: All right, title and interest of the Trustor
in and to the following, with respect to the Real Property:

             (a)  all  of  the  rents,  royalties,  income  (including,  without
limitation,  operating income),  receipts,  revenues, issues, and profits of and
from the use,  operation,  or enjoyment of such real  property and  improvements
(collectively, the "Income"), whether such Income is attributable to the period,
or is collected, prior to or subsequent to any default by Trustor and all causes
of action associated with the collection of such Income;

             (b) all plans and  specifications  for the improvements on the real
property;  soil,  environmental,  engineering,  land planning maps,  surveys and
other  studies  and reports  concerning  the real  property or prepared  for the
orderly  planning and  development  of the real  property,  including all plans,
drawings and studies concerning the platting or replatting of the real property;
all  contracts  and  subcontracts  relating  to the  improvements  on  the  real
property, or any thereof;

             (c) all of Trustor's rights and prerogatives  arising in connection
with or by virtue of Trustor's ownership of lots in the real property including,
without limitation, the right to vote as a member of any lot owners' association
and all rights  arising under any  declaration  described in Exhibit B and under
the articles of incorporation and bylaws of such association;

                                       3
<PAGE>

             (d) all awards and payments,  including interest thereon, resulting
from the exercise of any right of eminent  domain or any other public or private
taking of,  casualty or injury to, or decrease in the value of, any of such real
property, including without limitation all property insurance payments, proceeds
and policies related to such real property;

             (e)  all  of  the   licenses,   permits,   franchises,   and  other
entitlements  to use and all rights  thereto  which have been issued by or which
are pending  before any  governmental  or  quasi-governmental  agency  which are
necessary or appropriate for the Property;

             (f) all accounts,  accounts  receivable,  deposit accounts,  escrow
accounts, monies, claims, causes of action, rights to payment, prepaid insurance
an d other  prepaid  items,  contracts,  contract  rights,  refunds and rebates,
maintenance  contracts,  maintenance  warranties,  continuing  agreements,  down
payment deposits, general intangibles associated with the Property and insurance
proceeds;

             (g) all water taps, sewer taps, building permits, curb cut permits,
storm water discharge permits, refunds, rebates or deposits due or to become due
from any utility companies or Governmental Entity;

             (h) the absolute right to Trustor's interest in any trade name used
by Trustor in connection with the Property and all of Trustor's rights in and to
contract rights, leases,  concessions,  trade names, trademarks,  service marks,
logos, operating systems,  trade secrets,  technology and technical information,
copyrights,  warranties, licenses, plans, drawings and other items of intangible
personal property relating to the ownership or operation of the Property; and

             (i) all other and greater  rights and  interests of every nature in
such property and in the possession or use thereof and income therefrom, whether
now owned or subsequently acquired by Trustor.

         1.9  Property:  The Real  Property,  the  Tangible  Personalty  and the
Intangible  Personalty are sometimes  collectively  called the "Property." It is
specifically  understood  that the  enumeration of any specific  articles of the
Property,  including Tangible  Personalty and Intangible  Personalty shall in no
way  exclude  or be held to  exclude  any  items of  property  not  specifically
mentioned.  All  of  the  Real  Property,  Tangible  Personalty  and  Intangible
Personalty,  whether  affixed or annexed or not, and all rights hereby  conveyed
and mortgaged are intended to be as a unit and are hereby  understood and agreed
and declared to be appropriated to the use of the real estate, and shall for the
purposes  of this Deed of Trust be deemed to be real  estate  and  conveyed  and
mortgaged hereby.

                                       4
<PAGE>

Any capitalized  terms not otherwise defined in Sections 1.6 through 1.9 of this
Deed of Trust and not defined in the Loan Agreement shall bear the meaning given
to  them  in  Arizona  Revised  Statutes  ("A.R.S.")  Sections  47-1101  through
47-11107, as amended from time to time (the "Arizona Uniform Commercial Code").

         1.10 The Secured Obligations: The Property is granted and shall be held
for the purpose of securing the following (the "Secured Obligations"):

             (a) The payment of the indebtedness as evidenced in the Note;

             (b)  The  performance  and  observance  of  all  terms,  covenants,
conditions,  and provisions to be performed or observed by the Trustor  pursuant
to the terms of:

                 (i) this Deed of Trust,

                 (ii) the Security  Agreement  executed by Trustor in connection
with the Project,

                 (iii) the Financing Statements on the Project,

                 (iv) the Loan Agreement,

                 (v) any and all  pledge  or  other  security  agreements,  loan
agreements,  disbursement agreements, supplemental agreements, assignments (both
present and collateral),  side letters, as the same may be amended,  modified or
supplemented  from time to time,  being  referred  to  hereinafter  as  "Related
Agreements" associated with the Project.

             (c) The payment of all sums  expended  or  advanced by  Beneficiary
pursuant to the terms hereof.

             (d) The payment and performance of all  Obligations  under the Loan
Agreement and any Loan Documents executed in connection therewith.

             (e) The  payment  of all  future  advances  under the Note and Loan
Agreement, made pursuant to the terms of the Note, Loan Agreement and other Loan
Documents.

The Note,  this Deed of Trust,  the Security  Agreement,  Financing  Statements,
Related  Agreements,   Loan  Agreement  and  any  and  all  other  documents  or
instruments  executed in connection with the foregoing to evidence or secure the
Note,  specifically  excluding,  however, the Environmental Indemnity Agreement,
shall be hereinafter collectively called the "Loan Documents".

                                       5
<PAGE>

                                   ARTICLE 2
                                 GRANTING CLAUSE

         2.1 Grant to Trustee. As security for the Secured Obligations,  Trustor
hereby grants,  bargains,  sells, and conveys the Property to Trustee,  in trust
forever, with power of sale, for the use and benefit of Beneficiary, and subject
to all provisions hereof.

         2.2 Security  Interest to Beneficiary.  As additional  security for the
Secured Obligations, Trustor hereby grants to Beneficiary a security interest in
the Tangible Personalty and in the Intangible Personalty and in such of the Real
Property as may be deemed personalty  (collectively,  the "Collateral").  To the
extent any of the  Collateral may be or has been acquired with funds advanced by
Beneficiary under the Loan Documents, this security interest is a purchase money
security interest. This Deed of Trust constitutes a Security Agreement under the
Arizona  Uniform  Commercial  Code (the  "Code") with respect to any part of the
Property and Collateral that may or might now or hereafter be or be deemed to be
personal  property,  fixtures or  property  other than real  estate;  all of the
terms,  provisions,  conditions and  agreements  contained in this Deed of Trust
pertain  and apply to the  Collateral  as fully and to the same extent as to any
other  property  comprising the Property,  and the following  provisions of this
section shall not limit the generality or  applicability  of any other provision
of this Deed of Trust but shall be in addition thereto:

             (a) The  Collateral is not used or bought for  personal,  family or
household purposes;

             (b) The  Tangible  Personalty  shall  be kept  at the  real  estate
comprising a part of the Property,  and shall not be removed  therefrom  (unless
contemporaneously replaced with similar items of equal or greater value) without
the consent of  Beneficiary  and the Tangible  Personalty may be affixed to such
real estate but shall not be affixed to any other real estate;

             (c) No financing  statement  covering any of the  Collateral or any
proceeds thereof is on file in any public office;  and Trustor will, at its cost
and expense,  upon demand,  furnish to Beneficiary such further  information and
will execute and deliver to  Beneficiary  such  financing  statements  and other
documents in form  reasonably  satisfactory  to Beneficiary and will do all such
acts and things as Beneficiary  may at any time or from time to time  reasonably
request or as may be  reasonably  necessary  or  appropriate  to  establish  and
maintain a perfected  security  interest in the  Collateral  as security for the
Secured  Obligations,  subject to no adverse liens or encumbrances;  and Trustor
will pay the cost of  filing  the same or  filing or  recording  such  financing
statements or other documents and this instrument in all public offices wherever
filing or  recording  is deemed by  Beneficiary  to be  reasonably  necessary or
desirable;

                                       6
<PAGE>

             (d) The terms  and  provisions  contained  in this  section  and in
Section 7.5  (Enforcement  of Security  Interests)  of this Deed of Trust shall,
unless the context  otherwise  requires,  have the  meanings and be construed as
provided in the Code; and

             (e)  This  Deed of  Trust  constitutes  a  security  agreement  and
financing statement under the Code with respect to the Collateral. As such, this
Deed of Trust  covers all items of the  Collateral  that are  personal  property
including  all items which are to become  fixtures.  Trustor is the "Debtor" and
Beneficiary  is the "Secured  Party" (as those terms are defined and used in the
Code) insofar as this Deed of Trust constitutes a financing statement.

             (f) Upon its recording in the real property  records,  this Deed of
Trust shall be effective as a financing  statement filed as a fixture filing. In
addition, a carbon,  photographic or other reproduced copy of this Deed of Trust
and/or any financing  statement  relating  hereto shall be sufficient for filing
and/or  recording as a financing  statement.  The filing of any other  financing
statement  relating to any  personal  property,  rights or  interests  described
herein shall not be construed to diminish any right or priority hereunder.

                                   ARTICLE 3
                          TRUSTOR'S TITLE AND AUTHORITY

         3.1 Warranty of Title.  Trustor  represents and warrants to Beneficiary
that  Trustor  has  good and  marketable  title to the  Property  in fee  simple
absolute,  subject  only to the lien of  general  taxes  for the  current  year,
payable the following year, and those additional  matters,  if any, set forth in
Exhibit B, attached hereto and by this reference incorporated herein ("Permitted
Exceptions").  Trustor  further  represents  and  warrants to  Beneficiary  that
Trustor  is  the  absolute  owner  of  the   Collateral,   free  of  any  liens,
encumbrances, security interests, and other claims whatsoever, except insofar as
the  Collateral  may be  encumbered by the lien of general taxes for the current
year,  payable the following  year.  Trustor,  for itself and its successors and
assigns,  hereby agrees to warrant and forever defend, all and singular,  all of
the  Property and property  interest  granted and conveyed in trust  pursuant to
this Deed of Trust,  against every person whomsoever  lawfully  claiming,  or to
claim, the same or any part thereof,  subject to the Permitted  Exceptions.  The
warranties  contained in this section shall survive  foreclosure of this Deed of
Trust,  and shall inure to the benefit of and be  enforceable  by any person who
may  acquire  title  to the  Property  or the  Collateral  pursuant  to any such
foreclosure.

         3.2 Waiver of Homestead and Other  Exemptions.  To the extent permitted
by law,  Trustor hereby waives all rights to any homestead or other exemption to
which  Trustor  would   otherwise  be  entitled  under  any  present  or  future
constitutional,  statutory,  or other  provision of applicable  state or federal
law.

                                       7
<PAGE>

         3.3 Due Authorization.  If Trustor is other than a natural person, then
each  individual who executes this document on behalf of Trustor  represents and
warrants to  Beneficiary  that such  execution  has been duly  authorized by all
necessary corporate, partnership, or other action on the part of Trustor.

                                   ARTICLE 4
                         TRUSTOR'S AFFIRMATIVE COVENANTS

         4.1 Payment of Note.  Trustor  will pay all  principal,  interest,  and
other sums payable under the Note,  the Loan  Agreement or this Deed of Trust or
the Loan  Documents,  on the date when such payments are due,  without notice or
demand.

         4.2  Performance  of Other  Obligations.  Trustor will, in all material
respects,  perform  and  comply  with  all  other  covenants,   conditions,  and
prohibitions required of Trustor by the terms of the Loan Documents.

         4.3 Other Encumbrances. Trustor will, in all material respects, perform
and comply with all covenants,  conditions, and prohibitions required of Trustor
in  connection  with  any  other  encumbrance  affecting  the  Property  or  the
Collateral, or any part thereof, or any interest therein,  regardless of whether
such other  encumbrance  is superior or  subordinate  to the lien  hereof.  This
paragraph does not authorize any lien or encumbrance against the Property or the
Collateral  except as permitted by Section 3.1 or with the prior written consent
of the Beneficiary as provided in this Deed of Trust.

         4.4 Payment of Taxes.

             (a) Property Taxes. Trustor will pay, before delinquency, all taxes
and assessments, including without limitation, general, special and metropolitan
district  taxes,  water  charges,  sewer  service  charges  (collectively,   the
"Impositions"),  which may be levied or  imposed at any time  against  Trustor's
interest  and estate in the  Property or the  Collateral.  Within ten days after
request by Beneficiary,  Trustor will deliver to Beneficiary an official receipt
for such payment or other evidence that such payment has been made.

             (b) Deposit for Taxes. If required by the Beneficiary, concurrently
with the delivery of this Deed of Trust,  Trustor has deposited with Beneficiary
an amount  equal to 1/12th of the amount  which  Beneficiary  estimates  will be
required  to make the next  annual  payment of  Impositions,  multiplied  by the
number of whole and  partial  months  which have  elapsed  since March 31 of the
current year.  With each monthly  payment  under the Note,  Trustor will deposit
with  Beneficiary  an amount  equal to 1/12th of the  amount  which  Beneficiary
estimates  will be required to pay the next required  installment  or payment of
Impositions.  The purpose of these  provisions  is to provide  Beneficiary  with

                                       8
<PAGE>

sufficient  funds on hand to pay all such Imposition  charges 30 days before the
date on which  they  become  past due.  Provided  no default  exists  hereunder,
Beneficiary  will  apply  the  amounts  so  deposited  to the  payment  of  such
Imposition when due, but in no event will Beneficiary be liable for any interest
on any amount so deposited, and the money so received may be held and commingled
with  Beneficiary's own funds. If the funds so deposited are insufficient to the
Impositions for any year when the same shall become due and payable, the Trustor
shall,  within ten (10) days  after  receipt of demand  therefor,  deposit  such
additional funds as may be necessary to pay such Impositions in full.

             (c)   Intangible   Taxes.   If  by  reason  of  any   statutory  or
constitutional amendment or judicial decision adopted or rendered after the date
hereof,  any tax,  assessment,  or similar  charge is imposed  against the Note,
against  Beneficiary  arising directly from Beneficiary's  interests in the Loan
Documents  (other  than a tax based on  Beneficiary's  income),  or against  any
security  interest of  Beneficiary  in the Property,  Trustor will pay such tax,
assessment,  or other charge before  delinquency and will indemnify  Beneficiary
against all loss, expense, or diminution of income in connection  therewith.  In
the event Trustor is unable to do so, either for economic reasons or because the
legal  provisions or decisions  creating  such tax,  assessment or charge forbid
Trustor from doing so, then the Note will, at Beneficiary's  option,  become due
and payable in full upon 30 days' notice to Trustor.

             (d) Right to Contest.  Notwithstanding  any other provision of this
section,  Trustor  will not be  deemed  to be in  default  solely  by  reason of
Trustor's failure to pay any Impositions so long as, in Beneficiary's reasonable
judgment, each of the following conditions is satisfied:

                 (i) Trustor is engaged in and diligently pursuing in good faith
administrative  or judicial  proceedings  appropriate to contest the validity or
amount of such Impositions; and:

                 (ii) Nonpayment of such Impositions will not result in the loss
or forfeiture of any Property  encumbered  hereby or any interest of Beneficiary
therein.

If Beneficiary  reasonably determines that any one or more of such conditions is
not satisfied or is no longer  satisfied,  Trustor will pay the  Impositions  in
question,  together  with any interest and  penalties  thereon,  within ten days
after Beneficiary gives notice of such determination.

         4.5  Maintenance  of  Insurance.  Trustor  shall  provide and  maintain
policies of insurance on the Property in accordance with the Loan Agreement.

             (a) Deposit for Premiums. If required by Beneficiary,  concurrently
with the delivery of this Deed of Trust,  Trustor has deposited with Beneficiary
an amount  equal to 1/12th of the amount  which  Beneficiary  estimates  will be

                                       9
<PAGE>

required  to make the next annual  payments  of the premium for the  policies of
insurance  referred to in this  section,  multiplied  by the number of whole and
partial months which have elapsed since the most recent policy  anniversary date
for each such policy ("Insurance Premium").  With each monthly payment under the
Note,  Trustor  will  deposit  an amount  equal to 1/12th  of the  amount  which
Beneficiary  estimates will be required to pay the next required  annual premium
for each  insurance  policy  referred to in this  section.  The purpose of these
provisions is to provide  Beneficiary  with sufficient  funds on hand to pay all
such  Insurance  Premiums  thirty (30) days before the date on which they become
past due. Trustor shall,  within ten (10) days after receipt of demand therefor,
deposit such  additional  funds as are necessary to make up any  deficiencies in
amounts  necessary to pay such Insurance  Premiums when due. Provided no default
exists hereunder, Beneficiary will apply the amounts so deposited to the payment
of such Insurance  Premiums when due, but in no event will Beneficiary be liable
for any  interest on any amount so  deposited,  and the money so received may be
held and commingled with Beneficiary's own funds.

             (b) Renewal  Policies.  Not less than thirty (30) days prior to the
expiration  date  of  each  insurance  policy  required  pursuant  to  the  Loan
Agreement,  Trustor will deliver to Beneficiary a copy of an appropriate renewal
policy  certified by Trustor as complete and  accurate,  together  with evidence
reasonably  satisfactory  to Beneficiary  that the  applicable  premium has been
prepaid.

             (c)  Successor's  Rights.  Any  person  who  acquires  title to the
Property or the  Collateral  upon  foreclosure  hereunder will succeed to all of
Trustor's  rights under all policies of  insurance  maintained  pursuant to this
section, including,  without limitation, all rights to all claims under all such
insurance  policies  regardless  of the  nature of such claim or when such claim
arose.

         4.6 Damages; Insurance and Condemnation Proceeds.

             (a) The following  (whether now existing or hereafter  arising) are
all absolutely and  irrevocably  assigned by Trustor to Beneficiary  and, at the
request of Beneficiary, shall be paid directly to Beneficiary: (i) all awards of
damages and all other compensation payable directly or indirectly by reason of a
condemnation or proposed condemnation for public or private use affecting all or
any part of, or any interest in, the Property;  (ii) all other claims and awards
for damages to, or decrease in value of, all or any part of, or any interest in,
the Property;  (iii) all proceeds of any insurance policies payable by reason of
loss  sustained to all or any part of the Property;  and (iv) all interest which
may accrue on any of the  foregoing.  Subject to  applicable  law,  and  without
regard to any  requirement  contained in Section 4.8(d)  Beneficiary  may at its
discretion  apply all or any of the  proceeds  it  receives  to its  expenses in
settling,  prosecuting  or defending  any claim and may apply the balance to the
Secured Obligations in any order, and/or Beneficiary may release all or any part

                                       10
<PAGE>

of  the  proceeds  to  Trustor  upon  any  conditions  Beneficiary  may  impose.
Beneficiary  may commence,  appear in, defend or prosecute any assigned claim or
action and may  adjust,  compromise,  settle and  collect  all claims and awards
assigned to Beneficiary;  provided,  however,  in no event shall  Beneficiary be
responsible  for any failure to collect any claim or award,  unless such failure
is due to the gross negligence of Beneficiary.

             (b) So long as no Default exists and is continuing, Beneficiary may
permit  insurance or  condemnation  proceeds held by  Beneficiary to be used for
repair  or  restoration  but may  condition  such  application  upon  reasonable
conditions,  including,  without limitation: (i) the deposit with Beneficiary of
such additional funds which  Beneficiary  determines are needed to pay all costs
of the repair or restoration,  (including,  without limitation, taxes, financing
charges, insurance and rent during the repair period); (ii) the establishment of
an  arrangement  for lien  releases  and  disbursement  of funds  acceptable  to
Beneficiary;  (iii) the delivery to Beneficiary of plans and  specifications for
the  work,  a  contract  for the  work  signed  by a  contractor  acceptable  to
Beneficiary,  a cost breakdown for the work and a payment and  performance  bond
for the work,  all of which shall be  acceptable  to  Beneficiary;  and (iv) the
delivery to  Beneficiary of evidence  acceptable to Beneficiary  (aa) that after
completion of the work, and sufficient time has elapsed to re-lease the Property
(but in no event  longer  than six months  after  completion  of the work),  the
income from the Property will be sufficient to pay all expenses and debt service
for the Property;  (bb) of the continuation of Leases acceptable to and required
by Beneficiary;  (cc) that upon  completion of the work, the size,  capacity and
total  value of the  Property  will be at least  as great as it was  before  the
damage or condemnation  occurred;  (dd) that there has been no material  adverse
change in the  financial  condition or credit of Trustor  since the date of this
Deed of Trust;  and (ee) of the  satisfaction of any additional  conditions that
Beneficiary  may  reasonably  establish to protect its security.  Trustor hereby
acknowledges  that the conditions  described above are reasonable,  and, if such
conditions  have not been satisfied or progress  satisfactory to the Beneficiary
made by Trustor in achieving  satisfaction of the conditions  within ninety (90)
days of receipt by Beneficiary of such insurance or condemnation proceeds,  then
Beneficiary  may apply  such  insurance  or  condemnation  proceeds  to pay down
principal of the Secured Obligations in such order and amounts as Beneficiary in
its sole discretion may choose.

         4.7  Performance of Lease  Obligations.  Trustor will use  commercially
reasonable  efforts to keep the Property fully leased at rental rates prevailing
in the  market  and to  perform,  in all  material  respects,  all of  Trustor's
obligations  under or in connection with each present and future lease of all or
any part of the Property ("Leases").

         4.8  Liens,   Encumbrances  and  Charges.   Trustor  shall  immediately
discharge any lien not approved by Beneficiary in writing that has or may attain
priority  over  this  Deed of  Trust.  Subject  to the  provisions  of the  Loan
Agreement regarding mechanics' liens, Trustor shall pay when due all obligations

                                       11
<PAGE>

secured by or reducible to liens and  encumbrances  which shall now or hereafter
encumber or appear to encumber  all or any part of the  Property or any interest
therein, whether senior or subordinate hereto.

         4.9  Management.  The  Trustor  will  provide  and  maintain  good  and
efficient management of the Property satisfactory to Beneficiary.  Trustor shall
obtain Beneficiary's advance written approval of any management provided, and of
any contract therefor or assignment thereof, which written approval shall not be
unreasonably withheld, conditioned or delayed.

         4.10 Mechanics' Liens. Trustor will keep the Property free and clear of
all stop  notices,  liens and  claims of liens by  contractors,  subcontractors,
mechanics, laborers,  materialmen, and other such persons in the manner provided
in the Loan Agreement.

         4.11 Defense of Actions. Trustor will defend, at Trustor's expense, any
action,  proceeding or claim which affects any Property encumbered hereby or any
interest of Beneficiary in such Property or in the Secured Obligations, and will
indemnify and hold Beneficiary harmless from all loss, damage, cost, or expense,
including attorneys' fees, which Beneficiary may incur in connection therewith.

         4.12 Inventories;  Assembly of Tangible Personalty.  Trustor will, from
time to time at the request of Beneficiary,  supply  Beneficiary  with a current
inventory of the Tangible Personalty, in such detail as Beneficiary may require.
Upon the  occurrence  of any  Event  of  Default  hereunder,  Trustor  will,  at
Beneficiary's  request  assemble the Tangible  Personalty  and make the Tangible
Personalty available to Beneficiary at any place designated by Beneficiary which
is reasonably convenient to both parties.

         4.13 Further Assurances;  Estoppel  Certificates.  Trustor will execute
and deliver to Beneficiary  upon demand,  and pay the costs of  preparation  and
recording  thereof,  any  further  documents  which  Beneficiary  may request to
confirm or perfect the liens and  security  interests  created or intended to be
created  hereby,   or  to  confirm  or  perfect  any  evidence  of  the  Secured
Obligations.  Trustor  will  also,  within  ten (10) days  after any  request by
Beneficiary,   deliver  to  Beneficiary  a  signed  and  acknowledged  statement
certifying  to  Beneficiary,  or to  any  proposed  transferee  of  the  Secured
Obligations,  (a) the  balance  of  principal,  interest,  and  other  sums then
outstanding  under the Note, and (b) whether  Trustor claims to have any offsets
or defenses  with respect to the Secured  Obligations  and, if so, the nature of
such offsets or defenses.

         4.14  Parking  Requirements.   Trustor  shall  maintain  at  all  times
sufficient parking spaces to comply, in all material respects,  with the parking
requirements of all Leases, zoning and other regulations affecting the Property.

                                       12
<PAGE>

         4.15  Financial  Statements  and  Inspection  of Records.  Trustor,  at
Trustor's expense,  shall furnish to Beneficiary the financial and other reports
required by the Loan Agreement.

         4.16 Security Deposits. Upon the occurrence of a Default and during its
continuance,  required by the Beneficiary,  Trustor shall keep and maintain in a
separate Beneficiary account with Beneficiary,  any security deposits or advance
payments  received  from  tenants  in  lieu  of  security  deposits.   Upon  the
Beneficiary's request, the Beneficiary shall be named on the Beneficiary account
and no funds shall be withdrawn  therefrom  without the prior written consent of
the Beneficiary.

         4.17 Acceptance of Trust; Powers and Duties of Trustee.

             (a) Trustee accepts this trust when this Deed of Trust is delivered
by Trustor to Beneficiary.  Except as may be required by applicable law, Trustee
may from time to time apply to any court of competent  jurisdiction  for aid and
direction in the  execution of the trust  hereunder and the  enforcement  of the
rights  and  remedies  available  hereunder,  and may  obtain  orders or decrees
directing or confirming or approving acts in the execution of said trust and the
enforcement of said remedies.

             (b) Trustee  shall not be  required  to take any action  toward the
execution and  enforcement of the trust hereby  created or to institute,  appear
in, or defend any action,  suit, or other  proceeding  in  connection  therewith
where, in his opinion,  such action would be likely to involve him in expense or
liability,  unless  requested  so  to  do  by a  written  instrument  signed  by
Beneficiary and, if Trustee so requests, unless Trustee is tendered security and
indemnity  satisfactory  to  Trustee  against  any and all  cost,  expense,  and
liability arising therefrom. Trustee shall not be responsible for the execution,
acknowledgment,   or  validity  of  the  Loan  Documents,   or  for  the  proper
authorization  thereof, or for the sufficiency of the lien and security interest
purported to be created hereby,  and Trustee makes no  representation in respect
thereof or in respect of the rights, remedies, and recourses of Beneficiary.

             (c) With the approval of Beneficiary,  Trustee shall have the right
to take any and all of the following actions: (i) to select,  employ, and advise
with counsel  (who may be, but need not be,  counsel for  Beneficiary)  upon any
matters  arising   hereunder,   including  the   preparation,   execution,   and
interpretation of the Loan Documents, and shall be fully protected in relying as
to legal matters on the advice of counsel, (ii) to execute any of the trusts and
powers hereof and to perform any duty hereunder  either  directly or through his
agents or attorneys,  (iii) to select and employ,  in and about the execution of
his duties hereunder, suitable accountants,  engineers and other experts, agents
and  attorneys-in-fact,  either  corporate or  individual,  not regularly in the
employ of Trustee,  and Trustee  shall not be answerable  for any act,  default,

                                       13
<PAGE>

negligence,  or  misconduct  of any such  accountant,  engineer or other expert,
agent or attorney-in-fact, if selected with reasonable care, or for any error of
judgment or act done by Trustee in good faith,  or be otherwise  responsible  or
accountable  under any  circumstances  whatsoever,  except for  Trustee's  gross
negligence or bad faith, and (iv) any and all other lawful action as Beneficiary
may  instruct  Trustee  to take  to  protect  or  enforce  Beneficiary's  rights
hereunder.  Trustee shall not be personally  liable in case of entry by Trustee,
or anyone  entering by virtue of the powers herein granted to Trustee,  upon the
Property  for debts  contracted  for or  liability  or damages  incurred  in the
management or operation of the Property. Trustee shall have the right to rely on
any  instrument,  document,  or signature  authorizing  or supporting any action
taken or proposed to be taken by Trustee hereunder,  believed by Trustee in good
faith to be genuine.  Trustee  shall be entitled to  reimbursement  for expenses
incurred by Trustee in the  performance  of Trustee's  duties  hereunder  and to
reasonable  compensation  for such of Trustee's  services  hereunder as shall be
rendered.  TRUSTOR WILL, FROM TIME TO TIME, PAY THE REASONABLE  COMPENSATION DUE
TO TRUSTEE  HEREUNDER AND REIMBURSE TRUSTEE FOR, AND INDEMNIFY AND HOLD HARMLESS
TRUSTEE  AGAINST,  ANY AND ALL LIABILITY AND  REASONABLE  EXPENSES  WHICH MAY BE
INCURRED BY TRUSTEE IN THE PERFORMANCE OF TRUSTEE'S DUTIES.

             (d) All moneys received by Trustee shall,  until used or applied as
herein provided, be held in trust for the purposes for which they were received,
but need not be  segregated  in any manner from any other moneys  (except to the
extent  required by applicable  law) and Trustee shall be under no liability for
interest on any moneys received by Trustee hereunder.

             (e) Should any deed,  conveyance,  or  instrument  of any nature be
required  from  Trustor by any Trustee or  substitute  Trustee to more fully and
certainly vest in and confirm to the Trustee or substitute Trustee such estates,
rights,  powers,  and duties,  then,  upon request by the Trustee or  substitute
Trustee,  any and all such deeds,  conveyances  and  instruments  shall be made,
executed,  acknowledged, and delivered and shall be caused to be recorded and/or
filed by Trustor.

             (f) By  accepting or  approving  anything  required to be observed,
performed,  or  fulfilled  or to be  given  to  Trustee  pursuant  to  the  Loan
Documents,  including  without  limitation,  any deed,  conveyance,  instrument,
officer's  certificate,  balance  sheet,  statement  of profit and loss or other
financial statement,  survey,  appraisal, or insurance policy, Trustee shall not
be  deemed  to have  warranted,  consented  to,  or  affirmed  the  sufficiency,
legality, effectiveness, or legal effect of the same, or of any term, provision,
or condition  thereof,  and such acceptance or approval  thereof shall not be or
constitute any warranty or affirmation with respect thereto by Trustee.

                                       14
<PAGE>

         4.18 Compensation; Exculpation; Indemnification.

             (a)  Trustor  shall pay  Trustee's  reasonable  fees and  reimburse
Trustee for reasonable  expenses in the administration of this trust,  including
reasonable  attorneys'  fees.  Trustor  shall  pay  to  Beneficiary   reasonable
compensation  for services  rendered  concerning  this Deed of Trust,  including
without  limit any  statement  of amounts  owing under any  Secured  Obligation.
Beneficiary  shall not directly or  indirectly be liable to Trustor or any other
person as a  consequence  of (i) the exercise of the rights,  remedies or powers
granted to  Beneficiary  in this Deed of Trust;  (ii) the  failure or refusal of
Beneficiary to perform or discharge any obligation or liability of Trustor under
any agreement related to the Property or Collateral or under this Deed of Trust;
or (iii) any loss  sustained  by  Trustor  or any  third  party  resulting  from
Beneficiary's failure (whether by malfeasance, nonfeasance or refusal to act) to
lease the Property after a Default  (defined in the Loan  Agreement) or from any
other act or omission  (regardless  of whether same  constitutes  negligence) of
Beneficiary  in managing the Property  after a Default unless the loss is caused
by the  gross  negligence  or  willful  misconduct  of  Beneficiary  and no such
liability shall be asserted  against or imposed upon  Beneficiary,  and all such
liability is hereby expressly waived and released by Trustor.

             (b) TRUSTOR INDEMNIFIES TRUSTEE AND BENEFICIARY  AGAINST, AND HOLDS
TRUSTEE AND BENEFICIARY HARMLESS FROM, ALL LOSSES, DAMAGES, LIABILITIES, CLAIMS,
CAUSES OF  ACTION,  JUDGMENTS,  COURT  COSTS,  ATTORNEYS'  FEES AND OTHER  LEGAL
EXPENSES,  COST OF  EVIDENCE  OF TITLE,  COST OF  EVIDENCE  OF VALUE,  AND OTHER
EXPENSES WHICH EITHER MAY SUFFER OR INCUR:  (i) BY REASON OF THIS DEED OF TRUST;
(ii) BY REASON  OF THE  EXECUTION  OF THIS  TRUST OR IN  PERFORMANCE  OF ANY ACT
REQUIRED OR PERMITTED  HEREUNDER OR BY LAW;  (iii) AS A RESULT OF ANY FAILURE OF
TRUSTOR  TO  PERFORM  TRUSTOR'S  OBLIGATIONS;  OR (iv) BY REASON OF ANY  ALLEGED
OBLIGATION OR UNDERTAKING ON  BENEFICIARY'S  PART TO PERFORM OR DISCHARGE ANY OF
THE  REPRESENTATIONS,  WARRANTIES,  CONDITIONS,  COVENANTS OR OTHER  OBLIGATIONS
CONTAINED IN ANY OTHER DOCUMENT  RELATED TO THE SUBJECT PROPERTY AND COLLATERAL.
THE ABOVE  OBLIGATION  OF TRUSTOR TO  INDEMNIFY  AND HOLD  HARMLESS  TRUSTEE AND
BENEFICIARY   SHALL  SURVIVE  THE  RELEASE  AND   CANCELLATION  OF  THE  SECURED
OBLIGATIONS  AND THE  RELEASE  OR  PARTIAL  RELEASE  OF THE LIEN OF THIS DEED OF
TRUST.

             (c) Trustor  shall pay all amounts and  indebtedness  arising under
this Section 4.18  immediately  upon demand by Trustee or  Beneficiary  together

                                       15
<PAGE>

with  interest  thereon  from the date the  indebtedness  arises  at the rate of
interest  then  applicable  to the  principal  balance of the Note as  specified
therein.

         4.19 Substitution of Trustees. Beneficiary may, from time to time, by a
written instrument  executed and acknowledged by Beneficiary,  mailed to Trustor
and  recorded in the county in which the  Property  is located and by  otherwise
complying  with the  provisions  of  applicable  law,  substitute a successor or
successors  to  any  Trustee  named  herein  or  acting   hereunder,   and  such
successor(s) shall, without conveyance from the Trustee predecessor,  succeed to
all title, estate, rights, powers and duties of such predecessor.

                                   ARTICLE 5
                          TRUSTOR'S NEGATIVE COVENANTS

         5.1 Waste.  Trustor will not commit or permit any waste with respect to
the Property or the Collateral.

         5.2 Zoning and Private  Covenants.  Except as specifically  provided in
the Loan Agreement, if at all, Trustor will not initiate, join in, or consent to
any change in any zoning  ordinance or  classification,  any change in the "zone
lot" or "zone lots" (or similar zoning unit or units)  presently  comprising the
Property,  any change in any private restrictive  covenant, or any change in any
other public or private  restriction  limiting or defining the uses which may be
made of the Property or any part thereof, without the express written consent of
Beneficiary,  which consent shall not be unreasonably  withheld,  conditioned or
delayed. If under applicable zoning provisions the use of all or any part of the
Property is or becomes a nonconforming  use,  Trustor will not cause such use to
be discontinued or abandoned without the express written consent of Beneficiary.

         5.3  Due on  Sale  or  Encumbrance.  Except  as  provided  in the  Loan
Agreement,  if the Property or any interest  therein shall be sold,  transferred
(including,  without  limitation,  through  sale or  transfer  of a majority  or
controlling interest of the corporate stock or general partnership  interests or
limited liability company interests of Trustor),  mortgaged,  assigned,  further
encumbered  or leased,  whether  directly or  indirectly,  whether  voluntarily,
involuntarily  or by  operation  of law,  without the prior  written  consent of
Beneficiary,  then Beneficiary,  in its sole discretion, may declare all Secured
Obligations immediately due and payable.

         5.4 Transfer or Removal of Tangible Personalty.  Trustor will not sell,
transfer or remove from the Property  all or any  material  part of the Tangible
Personalty, unless the items sold, transferred, or removed are contemporaneously
replaced with similar items of equal or greater value.

                                       16
<PAGE>

         5.5  Further  Encumbrance  of  Collateral.  Trustor  will  not make any
purchase or conditional  sale,  lease or agreement under which title is reserved
in the vendor of any  Collateral to be placed in or upon any of the buildings or
improvements  on the said  Property;  nor  create or  permit  any  junior  lien,
security interest or other encumbrance  against the Collateral without the prior
written consent of Beneficiary.

         5.6  Change of Name.  Trustor  will not  change  the name  under  which
Trustor does business,  or adopt or begin doing business under any other name or
assumed  or  trade  name,  without  first  notifying  Beneficiary  of  Trustor's
intention to do so and delivering to Beneficiary such executed  modifications or
supplements of this Deed of Trust (and to any financing  statement  which may be
filed in connection herewith) as Beneficiary may require, except as specifically
permitted in the Loan Agreement.

         5.7  Improper Use of Property or  Collateral.  Trustor will not use the
Property or the Collateral for any purpose or in any manner,  or take any action
with respect to the Property which violates any applicable  law,  ordinance,  or
other governmental requirement,  the requirements or conditions of any insurance
policy, or any private covenant.

         5.8 Right Of Inspection.  Beneficiary,  its agents and  employees,  may
enter the  Property at any  reasonable  time for the purpose of  inspecting  the
Property and ascertaining Trustor's compliance with the terms hereof.

                                   ARTICLE 6
                                EVENTS OF DEFAULT

         Each of the  following  events will  constitute a default (an "Event of
Default") under this Deed of Trust and under each of the other Loan Documents:

         6.1  Failure  to Pay.  Default  shall  be made  in the  payment  of any
installment of principal or interest on the Note or any other sum under the Loan
Documents when due (after giving consideration to (a) any grace period which may
be applicable under such document and (b) any notice which may be required under
such document).

         6.2 Loan  Agreement.  The  occurrence  of an Event of Default under the
Loan Agreement.

         6.3 Cross  Default.  A default  under that certain  Mortgage,  Security
Agreement,  Financing  Statement and Absolute  Assignment of Rents and Revenues,
dated of even date  herewith,  executed  by the  Community  Savanna  Club  Joint
Venture, which secures the Note and encumbers property situated in the County of
St. Lucie, State of Florida, and such default is not cured within the applicable
cure periods, if any.

                                       17
<PAGE>

         6.4 Superior Lien Against the  Property.  The assertion of any claim of
priority  over this Deed of Trust,  by title,  lien,  or otherwise in any legal,
administrative,  or equitable proceeding, unless such assertion be withdrawn, or
effective   action   satisfactory  to  Beneficiary   commenced  (and  thereafter
diligently  prosecuted)  and  Beneficiary is secured  against any loss or damage
therefrom, within 30 days of the assertion of such claim.

         6.5  Abandonment.  The actual or  constructive  abandonment of all or a
substantial  portion  of  the  Property  or  the  Collateral  (such  abandonment
constituting an assignment to Beneficiary, at Beneficiary's option, of Trustor's
interest in any lease or  contract  now or  hereafter  affecting  the  abandoned
property).

         6.6 Valid First Lien.  The failure of Beneficiary to have a valid first
lien against the entire  Property and  Collateral as to all advances made now or
at any time in the future pursuant to the Note, this Deed of Trust, or any other
Loan Documents.

         6.7 Breach of Covenant.  Trustor's failure to keep,  observe,  perform,
carry out,  and execute in all  material  respects  the  covenants,  agreements,
obligations,  and  conditions  (other than those set out in Sections 6.1 through
6.2, above) set out in this Deed of Trust, the Note, the Loan Agreement, and any
other Loan Document  executed by Trustor in  connection  with or as security for
the Note, unless such failure is cured to Beneficiary's  satisfaction  following
written notice by  Beneficiary to Trustor of such failure.  Such notice shall be
titled  "Notice of Default" and shall  specify the default and, if curable,  the
time for cure of such  default set forth in the Loan  Documents,  and if no time
for cure is specified in the Loan Documents, the time for cure shall be 30 days;
provided,  however,  an Event of Default shall not be deemed to have occurred if
the  Default is not  curable  within the  applicable  cure period so long as the
Trustor  promptly  gives  written  notice  to  the  Beneficiary  describing  the
Trustor's  plan of cure and  schedule  to cure and  commences  such cure  within
thirty  (30) days of notice  of  Default,  and  diligently  pursues  the cure to
completion  within  ninety  (90) days of the  notice of  Default.  The Notice of
Default may be sent  simultaneously  with or in lieu of any other default notice
necessary  to  initiate a grace or cure  period  under this Deed of Trust or any
other Loan Document.

                                   ARTICLE 7
                             BENEFICIARY'S REMEDIES

         Immediately  upon or any time  after  the  occurrence  of any  Event of
Default  hereunder,  Beneficiary may exercise any remedy  available at law or in
equity,  including but not limited to those listed below and those listed in the
other Loan  Documents,  in such  sequence  or  combination  as  Beneficiary  may
determine in Beneficiary's sole discretion:

                                       18
<PAGE>

         7.1  Performance  of Defaulted  Obligations.  Beneficiary  may make any
payment or perform any other  obligation  under the Loan Documents which Trustor
has  failed  to  make  or  perform,  and  Trustor  hereby  irrevocably  appoints
Beneficiary as the true and lawful attorney-in-fact for Trustor to make any such
payment  and  perform  any  such  obligation  in  the  name  of  Trustor,  which
appointment  is coupled  with  Beneficiary's  interest in the  Property  and the
Collateral. All payments made and expenses (including reasonable attorneys' fees
and legal assistant's fees) incurred by Beneficiary in this connection, together
with interest  thereon at the Default  Rate, as set forth in the Note,  from the
date paid or incurred until repaid,  will be part of the Secured Obligations and
will be immediately due and payable by Trustor to Beneficiary.

         7.2 Specific  Performance and Injunctive  Relief.  Notwithstanding  the
availability of legal remedies,  Beneficiary will be entitled to obtain specific
performance,  mandatory or prohibitory  injunctive  relief,  or other  equitable
relief requiring Trustor to cure or refrain from repeating any default.

         7.3  Acceleration  of Secured  Obligations.  Beneficiary  may,  without
notice or demand,  declare all of the Secured  Obligations  immediately  due and
payable in full.

         7.4 Possession of Property.  Beneficiary  may enter and take possession
of the Property without seeking or obtaining the appointment of a receiver,  may
employ a managing agent for the Property, with respect to all or any part of the
Property,  either in  Beneficiary's  name or in the name of  Trustor;  provided,
however,  it is not  the  intention  of the  parties  hereto  that an  entry  by
Beneficiary  or a managing  agent upon the Real Property under the terms of this
Deed of Trust shall make  Beneficiary a party in possession in  contemplation of
the law, except at the option of Beneficiary.

         7.5  Enforcement of Security  Interests.  Beneficiary  may exercise all
rights  of a  secured  party  under the Code  with  respect  to the  Collateral,
including  but not limited to taking  possession  of,  holding,  and selling the
Collateral  and enforcing or otherwise  realizing  upon any accounts and general
intangibles.  Any requirement for reasonable notice of the time and place of any
public sale, or of the time after which any private sale or other disposition is
to be made, will be satisfied by Beneficiary's  giving of such notice to Trustor
at least 15 days  prior to the time of any public  sale or the time after  which
any private sale or other intended disposition is to be made. The Collateral may
be  sold by the  Trustee  as part of the  foreclosure  sale of the  Property  as
specifically permitted by A.R.S. Section 47-9501.D.

         7.6 Judicial  Foreclosure.  Commence an action to foreclose the lien of
this Deed of Trust as a mortgage,  appoint a receiver,  or specifically  enforce
any of the covenants hereof;

                                       19
<PAGE>

         7.7 Power of Sale.  Exercise  the power of sale  herein  contained  and
deliver to Trustee a written statement of breach, notice of default and election
to cause Trustor's interest in the Property to be sold; or

         7.8 Other Rights and  Remedies.  Exercise all other rights and remedies
provided  herein,  in any Loan  Document or other  document or agreement  now or
hereafter   securing  or  guaranteeing   all  or  any  portion  of  the  Secured
Obligations,  or by law, including,  without limitation, the rights and remedies
provided in A.R.S. Section 33-702.B.

         7.9 Exercise of Power of Sale.  If  Beneficiary  elects to exercise the
power of sale  herein  contained,  Beneficiary  shall  notify  Trustee and shall
deposit  with  Trustee  this  Deed of Trust and the Note and such  receipts  and
evidence of expenditures made and secured hereby as Trustee may require.

             (a) Upon  receipt of such  statement  and notice from  Beneficiary,
Trustee  shall cause to be  recorded,  published  and  delivered to Trustor such
Notice  of Sale as then  required  by law.  Trustee  shall,  without  demand  on
Trustor,  after  lapse of such  time as may then be  required  by law and  after
recordation  of such  Notice of Sale and  Notice of Sale  having  been  given as
required by law,  sell the Property at the time and place of sale fixed by it in
said Notice of Sale,  either as a whole, or in separate lots or parcels or items
as Trustee  shall deem  expedient,  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 the time of sale.  Trustee shall deliver to such purchaser or
purchasers  thereof its good and sufficient deed or deeds 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,  without  limitation,  Trustor,
Trustee or Beneficiary,  may purchase at such sale and Trustor hereby  covenants
to warrant and defend the title of such purchaser or purchasers.

             (b) After deducting all costs,  fees and expenses of Trustee and of
this Deed of Trust, including, without limitation, Trustee's fees and reasonable
attorneys' fees, and costs of evidence of title in connection with sale, Trustee
shall apply the proceeds of sale in the following  priority,  to payment of: (i)
first, all sums expended under the terms of the Loan Documents, not then repaid,
with accrued interest at the Default Rate (as defined in the Note); (ii) second,
all sums due under the Note, (iii) all other sums, then secured hereby; and (iv)
the remainder,  if any, to the person or persons legally  entitled thereto or as
provided in A.R.S. Section 33-812 or any similar or successor statute.

             (c) Subject to A.R.S. Section 33-810.B.,  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

                                       20
<PAGE>

announcement or subsequently  noticed sale, and without further notice make such
sale at the time fixed by the last postponement,  or may, in it discretion, give
a new notice of sale.

         7.10  Enforcement of Security  Interests.  Beneficiary may exercise all
rights of a secured party under the Uniform  Commercial Code with respect to the
Collateral,  including but not limited to taking  possession  of,  holding,  and
selling the  Collateral  and enforcing or otherwise  realizing upon any accounts
and general  intangibles.  Any requirement for reasonable notice of the time and
place of any public  sale,  or of the time after which any private sale or other
disposition  is to be made,  will be satisfied by  Beneficiary's  giving of such
notice to Trustor  at least 15 days prior to the time of any public  sale or the
time after which any private sale or other  intended  disposition is to be made.
If permitted by statute or court  decision,  the  Collateral  may be sold by the
Beneficiary as part of the foreclosure sale of the Property.

         7.11  Appointment  of Receiver.  Beneficiary  shall be  entitled,  as a
matter of absolute right and without regard to the value of any security for the
Secured  Obligations  or the  solvency  of any person  liable  therefor,  to the
appointment  of a  receiver  for the  Property,  the  Leases  and the  Rents and
Revenues  upon ex parte  application  to any  court of  competent  jurisdiction.
Trustor  waives  any right to any  hearing  or notice  of  hearing  prior to the
appointment of a receiver.

         7.12  Right  to Make  Repairs,  Improvements.  Should  any  part of the
Property come into the possession of  Beneficiary or a receiver,  whether before
or after an Event of Default,  Beneficiary or the receiver and receiver's agents
shall be empowered:

             (a) To take possession of the Property,  Leases, Rents and Revenues
and any  business  conducted  by Trustor  or any other  person  thereon  and any
business  assets  used  in  connection  therewith  and  any  Property  in  which
Beneficiary  has a security  interest  granted by Trustor  and, if the  receiver
deems it appropriate, to operate the same;

             (b)  To  exclude  Trustor  and  Trustor's  agents,   servants,  and
employees from the Property;

             (c) With or without taking  possession of the Property,  to collect
the Rents and Revenues, including those past due and unpaid;

             (d) To rent, lease or let all or any portion of the Property to any
party or parties at such  rental and upon such terms as the  Beneficiary  shall,
and to pay  any  leasing  or  rental  commissions  associated  therewith  in its
discretion, determine;

                                       21
<PAGE>

             (e) To continue the development, marketing and sale of the Property
or any portion thereof;

             (f) To complete any  construction  or  development  which may be in
progress;

             (g) To do such maintenance and make such repairs and alterations as
the receiver deems necessary;

             (h) To use  all  stores  of  materials,  supplies  and  maintenance
equipment on the Property and to replace and replenish such items at the expense
of the receivership estate;

             (i) To pay the operating expenses of the Property,  including costs
of  management  and leasing or  marketing  thereof  (which shall  include  lease
commissions,  sale  commissions),  payments  under  contracts and agreements for
development and construction;

             (j) To pay all taxes and  assessments  against the Property and any
property  which is  collateral  for the Secured  Obligations,  all  premiums for
insurance thereon,  all utility and other operating  expenses,  and all sums due
under any prior or subsequent encumbrance;

             (k) To borrow from the Beneficiary  such funds as may be reasonably
necessary to the effective  exercise of the receiver's  powers, on such terms as
may be agreed upon by the receiver and the Beneficiary, but not in excess of the
Default Rate under the Note; and

             (l) Generally do anything which Trustor could legally do if Trustor
were in possession of the Property.

All reasonable  expenses  incurred by the receiver or the receiver's agent shall
constitute  part of the  Secured  Obligations.  Any  revenues  collected  by the
receiver shall be applied first to the expenses of the  receivership  (including
reasonable  attorneys'  fees  incurred by the receiver and by  Beneficiary),  to
expenses of the  Property,  and to preserve,  protect,  maintain and operate the
Property and any other collateral which is security for the Secured Obligations,
and  the  balance  shall  be  applied  toward  the  Secured  Obligations  or any
deficiency  which may result from any  foreclosure  sale, and then in such other
manner  as the court may  direct.  Unless  sooner  terminated  with the  express
consent  of the  Beneficiary,  any such  receivership  will  continue  until all
amounts  remaining  due under the Note have been  discharged  in full,  or until
title to the  Property  has passed  after  foreclosure  sale and all  applicable
periods of redemption have expired, and in either case, the court has discharged
the receiver.  Trustor covenants to promptly reimburse and pay to Beneficiary or
such receiver, at the place where the Note is payable, or at such other place as
may be designated in writing,  the amount of all reasonable  expenses (including
the cost of any insurance,  taxes, or other charges)  incurred by Beneficiary or

                                       22
<PAGE>

such receiver in connection with its custody,  preservation, use or operation of
the  Property,  together  with  interest  thereon  from  the  date  incurred  by
Beneficiary  or such receiver at the Default Rate, as set forth in the Note, and
all such expenses,  costs, taxes,  interest,  and other charges shall be part of
the Secured Obligations. It is agreed, however, that the risk of accidental loss
or damage to the Property is undertaken by Trustor and, except for Beneficiary's
or such receiver's willful  misconduct or gross negligence,  Beneficiary or such
receiver  shall  have no  liability  whatsoever  for  decline  in  value  of the
Property,  for  failure  to obtain or  maintain  insurance,  or for  failure  to
determine  whether any insurance ever in force is adequate as to amount or as to
the risks insured, or to complete development.

         7.13 Further  Assurances.  Upon issuance of a deed or deeds pursuant to
foreclosure of this Deed of Trust, all right, title, and interest of the Trustor
in and to the Leases shall, by virtue of this instrument,  thereupon vest in and
become the  absolute  property  of the grantee or grantees in such deed or deeds
without any further act or assignment by the Trustor.  Trustor  hereby agrees to
execute all  instruments  of  assignment  or further  assurance in favor of such
grantee or grantees in such deed or deeds,  as may be  reasonably  necessary  or
desirable  for  such  purpose.   But  nothing  contained  herein  shall  prevent
Beneficiary from terminating any subordinated  Lease or Contract not approved by
the Beneficiary through such foreclosure.

                                   ARTICLE 8
                        ASSIGNMENT OF RENTS AND REVENUES

         8.1  Assignment  of Rents and Revenues.  To further  secure the Secured
Obligations,  Trustor does hereby sell, assign and transfer unto the Beneficiary
all rents, issues, profits,  revenue, and income now due and which may hereafter
become  due  under or by virtue  of any  leases,  tenancies  or  agreements  for
occupancy  "Leases"  (collectively  "Rents and  Revenues"),  whether  written or
verbal,  or any letting of, or of any  agreement for the use or occupancy of the
Property or any part thereof,  and all proceeds from,  evidence of, and benefits
and advantages to be derived therefrom,  now or hereafter  existing,  whether or
not with the Beneficiary's approval. The Trustor does hereby appoint irrevocably
the  Beneficiary  its true and lawful  attorney  in its name and stead  (with or
without  taking   possession  of  the  Property)  to  rent,  lease  or  let  any
improvements  located on the Property,  to perform any obligations  under Leases
upon  such  terms  as said  Beneficiary  shall,  in its  reasonable  discretion,
determine,  and to  collect  all of said  Rents  and  Revenues  arising  from or
accruing at any time hereafter, and all now due or that may hereafter become due
under each and every of the Leases or other  agreements,  written or verbal,  or
which may hereafter  exist on the Property,  on the condition  that  Beneficiary
hereby grants to Trustor a license to collect and retain such Rents and Revenues
prior to the  occurrence  of any  Event of  Default  under  the Loan  Agreement.
Trustor  expressly  covenants  to apply the Rents and  Revenue  received,  after
application  for  operating  expenses  permitted  hereunder,  to  payment of the
Secured  Obligations as and when the same become due and in compliance  with the

                                       23
<PAGE>

Loan Documents. Such license shall be revocable by Beneficiary without notice to
Trustor at any time upon or after an Event of Default under the Loan  Documents,
and  immediately  upon any such  revocation,  Beneficiary  shall be  entitled to
receive,  and  Trustor  shall  deliver  to  Beneficiary,  any and all  Rents and
Revenues  theretofore  collected by Trustor  which remain in the  possession  or
control of Trustor and all Leases and other such agreements. It is the intention
of the Trustor to create and grant,  and it is the intention of  Beneficiary  to
create and  receive,  a present and  absolute  assignment  of all of the Leases,
similar agreements, Rents and Revenue now due or which may hereafter become due,
but it is agreed that the Beneficiary's  right to collect the Rents and Revenues
is  conditioned  upon  the  existence  of an  Event of  Default  under  the Loan
Documents.  Failure of  Beneficiary  at any time or from time to time to enforce
its rights under this ARTICLE 8 shall not in any manner  prevent its  subsequent
enforcement, and Beneficiary is not obligated to collect anything hereunder, but
is  accountable  only for sums  collected.  Nothing  contained  herein  shall be
construed as  constituting  the  Beneficiary  a mortgagee in  possession  in the
absence of the taking of actual  possession  of the Property by the  Beneficiary
pursuant to Section 8.6  (Beneficiary's  Right of Possession In Case of Default)
hereof.  In the exercise of the powers  herein  granted to the  Beneficiary,  no
liability  shall be  asserted  or enforced  against  the  Beneficiary,  all such
liability being expressly waived and released by Trustor.

         8.2 Covenants Regarding Leases. Trustor agrees:

             (a) Not to execute any Leases  affecting  the  Property or any part
thereof except on residential lease forms reasonably approved by the Beneficiary
and upon  rental  terms  prevailing  in the market,  without  the prior  written
consent  of  Beneficiary,  which  consent  shall not be  unreasonably  withheld,
conditioned or delayed;

             (b) Not to  execute  any other  assignments  of said  Leases or any
interest therein or any of the Rents and Revenues thereunder;

             (c) That  notwithstanding any variation of the terms of the Deed of
Trust or any extension of time for payment  thereunder or any release of part or
parts of the Property,  the Leases, Rents and Revenues hereby assigned,  insofar
as they relate to the unreleased Property, shall continue as additional security
in accordance with the terms hereof;

             (d) To hold and  account  for all  security  deposits in the manner
provided  for under  any state or local  laws or  ordinances  applicable  to the
Property or under the Loan Documents; and

                                       24
<PAGE>

             (e) To perform all of the Trustor's  covenants and agreements under
the Leases and not to suffer or permit to occur any release of  liability of the
lessees except in the exercise of its business judgment as a prudent landlord.

         8.3 Representations  Regarding Leases.  Trustor represents and warrants
(a) that, the Leases, if any, are in full force and effect;  (b) that the Leases
and the Rents and Revenues  thereunder have not been heretofore sold,  assigned,
transferred,  or set over by Trustor or by any person or persons whatsoever; (c)
that no material  default exists on the part of the lessees  thereunder,  or the
Trustor  as  lessor;  (d) that the  payment  of none of the rents  have been or,
except to the extent  otherwise  prudent under  customary  commercial  standards
exercised in the ordinary course of business, will be waived, released, reduced,
discounted or otherwise  discharged or  compromised  by the Trustor  directly or
indirectly by assuming any lessee's  obligations with respect to other premises;
(e) Trustor has good right to sell, assign,  transfer, and set over the same and
to grant to and confer upon  Beneficiary  the  rights,  interests,  powers,  and
authorities herein granted and conferred.

         8.4 Further  Assignments.  Trustor shall give  Beneficiary  at any time
upon demand any further or  additional  forms of  assignment of transfer of such
Rents and  Revenues,  leases and  security  as may be  reasonably  requested  by
Beneficiary, and shall deliver to Beneficiary executed copies of all such leases
and security.

         8.5 Authority of  Beneficiary.  Any tenants or occupants of any part of
the  Property  are hereby  authorized  to  recognize  the claims of  Beneficiary
hereunder without  investigating the reason for any action taken by Beneficiary,
or the  validity  or the amount of  indebtedness  owing to  Beneficiary,  or the
existence  of a Default  or Event of  Default  under any Loan  Document,  or the
application to be made by Beneficiary of any amounts to be paid to  Beneficiary.
The sole  signature of  Beneficiary  or a receiver  shall be sufficient  for the
exercise of any rights under this ARTICLE 8 and the sole receipt of  Beneficiary
or a  receiver  for any sums  received  shall be a full  discharge  and  release
therefor  to any such tenant or occupant  of the  Property;  and Trustor  hereby
releases  each such tenant and  occupant or  purchaser  which makes  payments to
Beneficiary  under this ARTICLE 8 from any liability under the applicable  Lease
or  occupancy  agreement.  Checks for all or any part of the  rentals  collected
under this ARTICLE 8 shall be drawn to the  exclusive  order of  Beneficiary  or
such receiver.

         8.6  Indemnification of Beneficiary.  Nothing herein contained shall be
deemed to obligate Beneficiary to perform or discharge any obligation,  duty, or
liability of lessor under any Lease of the Property,  and Trustor shall and does
hereby indemnify and hold Beneficiary harmless from any and all liability, loss,
or damage which  Beneficiary  may or might incur under any Lease of the Property
or by reason of this assignment; and any and all such liability, loss, or damage
incurred  by  Beneficiary,  together  with the  costs  and  expenses,  including

                                       25
<PAGE>

reasonable  attorneys' fees, incurred by Beneficiary in defense of any claims or
demands  therefor  (whether  successful  or not),  shall be  additional  Secured
Obligations, and Trustor shall reimburse Beneficiary therefor on demand.

         8.7 Beneficiary's  Right of Possession in Case of Event of Default.  In
any case in which under the provision of this Deed of Trust, the Beneficiary has
a right to institute foreclosure proceedings,  whether before or after the whole
principal  sum  secured  hereby is declared  to be  immediately  due, or whether
before or after the  institution  of legal  proceedings  to  foreclose  the lien
hereof or before or after sale thereunder,  promptly upon demand of Beneficiary,
Trustor shall surrender to Beneficiary and Beneficiary shall be entitled to take
actual  possession  of the  Property or any part thereof  personally,  or by its
agents or attorneys,  as for condition broken, and Beneficiary in its discretion
may,  with or without force and with or without  process of law,  enter upon and
take and maintain  possession of all or any part of the Property,  together with
all documents, books, records, papers and accounts of the Trustor or then owners
of the Property  relating  thereto,  and may exclude the Trustor,  its agents or
servants, wholly therefrom and may, as attorney-in-fact or agent of the Trustor,
or in its own name as  Beneficiary  and under the powers herein  granted,  hold,
operate,  manage and control the  Property  and  conduct the  business,  if any,
thereof,  either  personally  or by its agents,  and with full power to use such
measures,  legal or equitable,  as in its discretion or in the discretion of its
successors  or assigns may be deemed  proper or necessary to enforce the payment
or security of the rents, issues, revenues and profits of the Property.

         8.8 Severability  and Survival.  The provisions of this ARTICLE 8 shall
survive the  foreclosure  of the lien of this Deed of Trust and the  exercise of
the power of sale granted  under this Deed of Trust until the  expiration of all
periods of redemption following any such foreclosure or sale and thereafter with
respect to all Rents and Revenues arising prior to or attributable to the period
prior to the expiration of all such redemption periods.

                                   ARTICLE 9
                            MISCELLANEOUS PROVISIONS

         9.1 Time of the  Essence.  Time is of the essence  with  respect to all
provisions of this Deed of Trust.

         9.2 Rights and Remedies Cumulative.  Trustee and Beneficiary,  and each
of them,  shall be entitled to enforce payment and performance of any and all of
the Secured  Obligations  and to exercise  all rights and powers  under the Loan
Documents and under the law now or hereafter in effect,  notwithstanding some or
all of the Secured  Obligations  may now or hereafter  be  otherwise  secured or
guaranteed.  Neither the  acceptance of this Deed of Trust nor its  enforcement,
whether by court action or pursuant to the power of sale or other rights  herein

                                       26
<PAGE>

contained,  shall prejudice or in any manner affect  Trustee's or  Beneficiary's
right to realize upon or enforce any other security or guaranty now or hereafter
held by Trustee or  Beneficiary,  it being agreed that Trustee and  Beneficiary,
and each of them shall be entitled  to enforce  this Deed of Trust and any other
security or any guaranty now or hereafter held by Beneficiary or Trustee in such
order and  manner as they or  either  of them may in their  absolute  discretion
determine. No remedy herein conferred upon or reserved to Trustee or Beneficiary
is intended to be  exclusive  of any other  remedy  herein or by law provided or
permitted,  but each shall be cumulative and shall be in addition to every other
remedy given  hereunder or now or hereafter  existing under the law. Every power
or remedy given by any of the Loan Documents or by law to Trustee or Beneficiary
or to  which  either  of  them  may be  otherwise  entitled,  may be  exercised,
concurrently or  independently,  from time to time and as often as may be deemed
expedient by Trustee or Beneficiary  and, to the extent permitted by law, either
of them may pursue inconsistent remedies

         9.3 No Implied Waivers.  Beneficiary shall not be deemed to have waived
any  provision  of this Deed of Trust  unless  such  waiver is in writing and is
signed  by  Beneficiary.  Without  limiting  the  generality  of  the  preceding
sentence,  neither  Beneficiary's  acceptance of any payment with knowledge of a
default by  Trustor,  nor any  failure by  Beneficiary  to  exercise  any remedy
following a default by Trustor shall be deemed a waiver of such default,  and no
waiver by Beneficiary of any particular  default on the part of Trustor shall be
deemed a waiver of any other default or of any similar default in the future.

         9.4 Trustor Waiver of Rights.  Trustor waives,  to the extent permitted
by law,  (a) the  benefit  of all laws now  existing  or that may  hereafter  be
enacted  providing  for  any  appraisement  before  sale of any  portion  of the
Property,  and (b) all rights of redemption,  valuation,  appraisement,  stay of
execution,  notice of election to mature or declare due the Secured  Obligations
and marshaling in the event of foreclosure of the liens hereby created,  and (c)
all rights and remedies  that Trustor may have or be able to assert by reason of
the laws of the State of  Arizona  pertaining  to the  rights  and  remedies  of
sureties including, without limitation, A.R.S. Sections 12-1641 through 12-1646,
and Arizona Rules of Civil Procedure 17(f).

         9.5 No Third Party Rights. No person shall be a third party beneficiary
of any  provision of this Deed of Trust.  All  provisions  of this Deed of Trust
favoring Beneficiary are intended solely for the benefit of Beneficiary,  and no
third party shall be entitled to assume or expect that  Beneficiary will or will
not waive or consent to modification of any such provision in Beneficiary's sole
discretion.

         9.6  Preservation  of Liability  and  Priority.  Without  affecting the
liability of Trustor or of any other person (except a person expressly  released
in writing) for payment and performance of all of the Secured  Obligations,  and

                                       27
<PAGE>

without  affecting  the rights of  Beneficiary  with respect to any security not
expressly released in writing,  and without impairing in any way the priority of
this Deed of Trust over the interests of any person  acquired or first evidenced
by recording subsequent to the recording hereof,  Beneficiary may, either before
or after the maturity of the Note,  and without  notice or consent:  (a) release
any person liable for payment or  performance  of all or any part of the Secured
Obligations; (b) make any agreement altering the terms of payment or performance
of all or  any  of  the  Secured  Obligations;  (c)  exercise  or  refrain  from
exercising,  or waive, any right or remedy which  Beneficiary may have under any
of the Loan Documents; (d) accept additional security of any kind for any of the
Secured Obligations;  or (e) release or otherwise deal with any real or personal
property  securing the Secured  Obligations.  Any person  acquiring or recording
evidence of any interest of any nature in the Property or the  Collateral  shall
be deemed, by acquiring such interest or recording any evidence thereof, to have
agreed and consented to any or all such actions by Beneficiary.

         9.7 Subrogation of Beneficiary.  Beneficiary shall be subrogated to the
lien of any previous  encumbrance  discharged with funds advanced by Beneficiary
under the Loan  Documents,  regardless of whether such previous  encumbrance has
been released of record.

         9.8 Notices. Any notice required or permitted to be given by Trustor or
Beneficiary  under  this Deed of Trust  shall be in  writing  and will be deemed
given (a) upon personal delivery or upon confirmed transmission by telecopier or
similar  facsimile  transmission  device,  (b) on the first  business  day after
receipted  delivery  to a courier  service  which  guarantees  next-business-day
delivery,  or (c) on the third  business day after  mailing,  by  registered  or
certified United States mail,  postage  prepaid,  in any case to the appropriate
party at its address set forth below:

         If to Trustor:

                  Asset Investors Operating Partnership, L.P.
                  c/o Asset Investors Corporation
                  3410 S. Galena Street, Suite 210
                  Denver, CO 80231
                  Attn: Chief Financial Officer
                  Telecopy No.: 303-614-9401

                                       28
<PAGE>

         With a copy to:

                  Joseph Gaynor, Esq.
                  Brandywine Real Estate Management Services Corporation
                  2637 McCormick Drive
                  Clearwater, Florida 33759-1041
                  Telecopy No.:  727-791-7920

         If to Beneficiary:

                  U.S. Bank National Association
                  918 Seventeenth Street, Fifth Floor
                  Denver, CO  80202
                  Attention:  Cyd Petre, Vice President
                  Telecopy No.: 303-585-4198

         With a copy to:

                  Gorsuch Kirgis LLP
                  Tower I, Suite 1000
                  1515 Arapahoe Street
                  Denver, CO   80202
                  Attention:  Connie B. Hyde, Esq.
                  Telecopy No.:  303-376-5001

Any person may change such person's  address for notices or copies of notices by
giving notice to the other party in accordance with this section.

         9.9 Further  Assurances.  Upon issuance of a deed or deeds  pursuant to
foreclosure of this Deed of Trust, all right, title, and interest of the Trustor
in and to the Leases shall, by virtue of this instrument,  thereupon vest in and
become the  absolute  property  of the grantee or grantees in such deed or deeds
without any further act or assignment by the Trustor.  Trustor  hereby agrees to
execute all  instruments  of  assignment  or further  assurance in favor of such
grantee or grantees in such deed or deeds,  as may be necessary or desirable for
such purpose.

         9.10  Defeasance.  Upon  payment  and  performance  in  full of all the
Secured  Obligations and all costs of releasing this Deed of Trust,  Beneficiary
will execute and deliver to Trustor such documents as may be required to release
this Deed of Trust of record.

         9.11  Illegality.  If any provision of this Deed of Trust is held to be
illegal, invalid, or unenforceable under present or future laws effective during
the term of this Deed of Trust, the legality,  validity,  and  enforceability of

                                       29
<PAGE>

the remaining  provisions  of this Deed of Trust shall not be affected  thereby,
and in lieu of each such illegal, invalid or unenforceable provision there shall
be added automatically as a part of this Deed of Trust a provision as similar in
terms to such illegal,  invalid,  or unenforceable  provision as may be possible
and be legal,  valid, and  enforceable.  If the rights and liens created by this
Deed of Trust  shall be invalid or  unenforceable  as to any part of the Secured
Obligations,  then the  unsecured  portion of the Secured  Obligations  shall be
completely paid prior to the payment of the remaining and secured portion of the
Secured  Obligations,  and all payments made on the Secured Obligations shall be
considered to have been paid on and applied first to the complete payment of the
unsecured portion of the Secured Obligations.

         9.12 Obligations Binding Upon Trustor's Successors.  This Deed of Trust
is binding upon Trustor and  Trustor's  successors  and assigns,  including  all
grantees  and remote  grantees of any interest of Trustor in the  Property,  and
shall inure to the benefit of Beneficiary,  and its successors and assigns,  and
the  provisions  hereof shall  likewise be covenants  running with the land. The
duties, covenants,  conditions,  obligations,  and warranties of Trustor in this
Deed of Trust shall be joint and several  obligations  of Trustor and  Trustor's
successors and assigns.

         9.13 Further  Assurances.  Upon issuance of a deed or deeds pursuant to
foreclosure of this Deed of Trust, all right, title, and interest of the Trustor
in and to the Leases shall, by virtue of this instrument,  thereupon vest in and
become the  absolute  property  of the grantee or grantees in such deed or deeds
without any further act or assignment by the Trustor.  Trustor  hereby agrees to
execute all  instruments  of  assignment  or further  assurance in favor of such
grantee or grantees in such deed or deeds,  as may be necessary or desirable for
such purpose.

         9.14  Governing  Law.  THIS  AGREEMENT  AND THE LOAN  DOCUMENTS AND THE
RIGHTS AND  OBLIGATIONS  OF THE PARTIES  HEREUNDER AND  THEREUNDER  SHALL IN ALL
RESPECTS BE GOVERNED BY, AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS
OF THE STATE OF COLORADO  (WITHOUT  GIVING  EFFECT TO  COLORADO'S  PRINCIPLES OF
CONFLICTS  OF LAW),  EXCEPT TO THE  EXTENT  (A) OF  PROCEDURAL  AND  SUBSTANTIVE
MATTERS RELATING ONLY TO THE CREATION,  PERFECTION,  FORECLOSURE AND ENFORCEMENT
OF RIGHTS AND REMEDIES  AGAINST  SPECIFIC  COLLATERAL,  WHICH  MATTERS  SHALL BE
GOVERNED  BY THE LAWS OF THE  STATE IN WHICH  THE  COLLATERAL  IS  LOCATED  (THE
"COLLATERAL  STATE"),  AND (B) THAT THE LAWS OF THE UNITED STATES OF AMERICA AND
ANY RULES REGULATIONS, OR ORDERS ISSUED OR PROMULGATED THEREUNDER, APPLICABLE TO
THE AFFAIRS AND TRANSACTIONS ENTERED INTO BY THE BENEFICIARY,  OTHERWISE PREEMPT
COLLATERAL  STATE LAW OR COLORADO  LAW;  IN WHICH  EVENT SUCH  FEDERAL LAW SHALL

                                       30
<PAGE>

CONTROL. TRUSTOR HEREBY IRREVOCABLY SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF
ANY COLORADO OR FEDERAL COURT SITTING IN DENVER, COLORADO (OR ANY STATE IN WHICH
THE PROPERTY IS LOCATED) OVER ANY SUIT,  ACTION OR PROCEEDING  ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR ANY OF THE LOAN DOCUMENTS.

         9.15  Survival.  This Deed of Trust shall  survive  foreclosure  of the
liens created hereby, to the extent necessary to fulfill its purposes.

         9.16 Captions.  The captions and headings of various paragraphs of this
Deed of Trust are for  convenience  only and are not to be construed as defining
or limiting, in any way, the scope or intent of the provisions hereof.

         Signed and delivered as of the date first mentioned above.

                                            TRUSTOR:

                                            AIOP LOST DUTCHMAN NOTES, L.L.C., a
                                            Delaware limited liability company

                                            By: ASSET INVESTORS OPERATING
                                                PARTNERSHIP, L.P., a Delaware
                                                limited partnership, Sole Member
                                                and Manager

                                                By: ASSET INVESTORS CORPORATION,
                                                    a Delaware corporation,
                                                    General Partner

                                                    By:  /s/David M. Becker
                                                        ------------------------
                                                        David M. Becker
                                                        Chief Financial Officer

                                       31
<PAGE>

STATE OF COLORADO                                    )
                                                     )    ss.
COUNTY OF DENVER                                     )

         The  foregoing  instrument  was  acknowledged  before  me this 7 day of
April,  2000, by David M. Becker as Chief  Financial  Officer of Asset Investors
Corporation,  a  Delaware  corporation,  as general  partner of Asset  Investors
Operating Partnership,  L.P., a Delaware limited partnership, as Sole Member and
Manager  of AIOP Lost  Dutchman  Notes,  L.L.C.,  a Delaware  limited  liability
company.

         Witness my hand and official seal.

         My commission expires:     12/7/2000

                                                       /s/Pam J. Finch
                                                   -----------------------------
                                                     Notary Public
( S E A L )

                                       32

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