Document:

PROMISSORY NOTE

$ 14,300,000.00                                                 Denver, Colorado
                                                                 August 10, 2000

         FOR  VALUE  RECEIVED,   the  undersigned   ASSET  INVESTORS   OPERATING
PARTNERSHIP, L.P., a Delaware limited partnership ("Borrower"),  hereby promises
to  pay to  the  order  of U.  S.  BANK  NATIONAL  ASSOCIATION  ("Bank")  at 918
Seventeenth Street, Fifth Floor, Denver,  Colorado 80202, or at such other place
as Bank may,  from time to time  designate  in  writing,  the  principal  sum of
FOURTEEN MILLION THREE HUNDRED THOUSAND AND NO/100THS DOLLARS  ($14,300,000.00),
or so much of that sum as may be  advanced  under  this Note by the  Bank,  with
principal and interest  thereon  payable as specified in this Note.  Capitalized
terms used but not defined herein shall have the meanings assigned to such terms
in the Loan Agreement (defined below).

          1. Principal and Interest.  Interest  shall accrue on the  outstanding
principal  balance  of  the  Loan  from  and  after  the  date  of  disbursement
("Disbursement  Date") at a variable  annual rate equal to the Reserve  Adjusted
LIBOR Rate (defined in Exhibit A) plus two hundred (200) Basis Points ("Adjusted
LIBOR Rate"),  adjusted in the manner provided in Exhibit A, shall be payable as
set forth below,  and shall be calculated on the actual days  outstanding over a
360 day year.

          2.  Basis  Points.   The  term  "Basis  Points"  means  an  arithmetic
expression  of a percentage  measured in  hundredths of a percent (i.e. 50 Basis
Points  equals  one-half  of one  percent).  The terms used above are defined in
Exhibit A.

          3. Payment and Maturity Dates. Principal and interest shall be payable
as follows:

              (a) in arrears,  on the first (1st) day of the month following the
date hereof, and on the first (1st) day of each month thereafter until this Note
matures, payments of interest only accruing on the outstanding principal balance
plus principal in an amount equal to $24,275.00; and

              (b) on August 10, 2002 (the  "Maturity  Date"),  the entire unpaid
principal  amount and any interest  accrued but  remaining  unpaid and all other
sums due under this Note.

All  installments  of  principal  and  interest of this Note are payable only in
lawful money of the United States of America, at such place as the holder hereof
may designate in writing from time to time.  Any payments  received by Bank will
be applied in the following  order:  (a) any collection  costs the Bank may have
incurred  in  procuring  Borrower's  performance  hereunder;  (b) payment of the
interest then accrued and due on the unpaid principal  balance of this Note; (c)

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any charges  assessed by the Bank or due under the terms of the Loan  Documents,
including without limitation, the Make-Whole Fee (defined in Exhibit A); and (d)
principal.

          4. Prepayment. This Note may be prepaid, either in whole or in part at
any time  without  premium or penalty but  subject to payment of the  Make-Whole
Fee, and without the prior  consent of the Bank hereof,  on the  condition  that
Borrower shall  concurrently pay all accrued interest on the amount of principal
outstanding  at the time of each  prepayment  and any other charges then due and
that Borrower shall provide Bank with five (5) days' prior written notice of the
amount of the prepayment.

          5. Default and Acceleration. Time is of the essence of this Note. Upon
the occurrence of an Event of Default as defined in the Loan  Agreement,  at the
option of the holder hereof, the entire debt then remaining unpaid at once shall
become due and payable  without notice and the liens given to secure the payment
of this Note may be  foreclosed  and Bank may pursue  all  rights  and  remedies
available under this Note or any instrument securing payment of this Note.

          6.  Default Rate of  Interest.  In the Event of Default,  Borrower and
Co-Makers promise to pay interest on the principal balance of this Note together
with  all  sums  due and  owing  under  the  Note  or the  Loan  Documents  then
outstanding at a rate of interest  ("Default  Rate") equal to the greater (a) of
eighteen  percent (18%) per annum,  or (b) five percent (5%) per annum in excess
of the Adjusted LIBOR Rate then applicable, provided that any interest which has
accrued  at the  Default  Rate  shall be paid at the time of and as a  condition
precedent  to the  curing of any  default  under any  statutory  right to cure..
Failure to exercise such option or charge such increased interest shall not be a
waiver of the right to do so at any  future  time or with  respect  to any other
default.

          7.  Late  Charges.  If  Borrower  shall  fail to make any  payment  of
interest or  principal,  including  the final  combined  principal  and interest
installment,  within ten (10) days after the date the same is due and payable, a
late charge by way of damages  shall be  immediately  due and payable.  Borrower
recognizes  that default by Borrower in making the payments  herein agreed to be
paid  when due  will  result  in the  holder  incurring  additional  expense  in
servicing  the  Loan,  in loss to the  holder of the use of the money due and in
frustration to the holder in meeting its other  financial and loan  commitments.
Borrower  agrees that, if for any reason  Borrower  fails to pay the amounts due
under this Note within ten (10) days after the date the same is due and payable,
the holder hereof shall be entitled to damages for the detriment caused thereby,
and that it is extremely  difficult and  impractical  to ascertain the extent of
such damages. Borrower therefore agrees that a sum equal to four percent (4%) of
each payment which becomes  delinquent is a reasonable  estimate of said damages
to the holder of this Note, which sum Borrower agrees to pay on demand.

          8. Remedies Cumulative. The rights or remedies of the Bank as provided
in  this  Note  and any  instrument  securing  payment  of this  Note  shall  be
cumulative and concurrent and may be pursued singly,  successively,  or together
against the Borrower, the real property described in the Loan Documents, and any

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other  funds,  property  or  security  held by Bank for the  payment  hereof  or
otherwise at the sole  discretion of the Bank.  The failure to exercise any such
right or remedy  shall in no event be  construed  as a waiver or release of such
rights or remedies or the right to exercise them at any later time.

          9.  Forbearance.  Any  forbearance  of Bank in exercising any right or
remedy  hereunder  or  under  the  Loan  Documents,  or  otherwise  afforded  by
applicable  law,  shall not be a waiver of or preclude the exercise of any right
or remedy.  The acceptance by Bank of payment of any sum payable hereunder after
the due date of such  payment  shall not be a waiver  of Bank's  right to either
require  prompt  payment  when due of all other  sums  payable  hereunder  or to
declare a default for failure to make  prompt  payment.  Bank shall at all times
have the right to proceed  against any portion of the  security  held herefor in
such order and in such manner as Bank may deem fit,  without  waiving any rights
with respect to any other security.  No delay or omission on the part of Bank in
exercising any right hereunder shall operate as a waiver of such right or of any
other right under this Note.

          10. Right of Setoff.  In addition to all liens upon, and the rights of
setoff against,  the monies,  securities and other property of Borrower given to
the Bank,  the Bank shall have a lien upon, and a right of setoff  against,  all
monies,  securities  and other  property of  Borrower,  now or  hereafter in the
possession of the Bank, whether for safekeeping or otherwise.  In the event of a
default under this Note,  the Bank shall have the right to take amounts due from
any deposit balances Borrower has with the Bank,  regardless of any penalty that
may apply when the Bank  exercises  such right,  and apply such  amounts for the
outstanding balance of amounts due under this Note.

          11.  Application of Payments.  All payments made on this Note shall be
applied  first to any  collection  costs the Bank may have incurred by procuring
Borrower's performance  hereunder,  then to payment of the interest then accrued
and due on the unpaid principal balance of this Note, then to any other sums due
to the Bank  under  the  Loan  Documents,  then to the  Prepayment  Premium,  if
applicable,  and the  remainder  of all such  payments  shall be  applied to the
reduction of the unpaid principal.

          12.  Waivers.  Borrower and any  sureties,  guarantors  and  endorsers
(severally each called a "Surety") waive presentment, protest and demand, notice
of protest,  demand and of dishonor and  non-payment of this Note, and expressly
agree that this Note,  or any payment  hereunder,  may be extended  from time to
time without in any way  affecting the liability of the Borrower and each Surety
hereof.  Borrower and any Surety further agree that at any time and from time to
time without  notice the terms of payment herein may be modified or the security
described  in the Loan  Documents  released in whole or in part,  or  increased,
changed or exchanged by agreement between the Bank and any owner of the property
affected by said Loan  Documents  without in anywise  affecting the liability of
any party to this  instrument  or any  person  liable or to become  liable  with
respect to any indebtedness evidenced hereby.

         In addition,  Borrower and each Surety waives and agrees not to assert:
(a) any right to require holder to proceed against Borrower or any other Surety,
to proceed  against or exhaust any  security  for the Note,  to pursue any other
remedy  available to Bank,  or to pursue any remedy in any  particular  order or

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manner;  (b) the benefit of any statute of  limitations  affecting its liability
hereunder or the enforcement  hereof; (c) the benefits of any legal or equitable
doctrine or principle of marshalling;  (d) notice of the existence,  creation or
incurring  of new or  additional  indebtedness  of  Borrower  to  Bank;  (e) the
benefits of any statutory  provision  limiting the liability of a surety, to the
extent applicable;  (f) any defense arising by reason of any disability or other
defense of  Borrower  or by reason of the  cessation  from any cause  whatsoever
(other than  payment in full) of the  liability  of Borrower  for payment of the
Note; and (g) the benefits of any statutory provision limiting the right of Bank
to recover a deficiency judgment,  or to otherwise proceed against any person or
entity  obligated for payment of the Note,  after any  foreclosure  or trustee's
sale of any security for the Note.  Until payment in full of the Note, no Surety
shall have any right of subrogation  and each hereby waives any right to enforce
any remedy which Bank now has, or may hereafter  have,  against  Borrower or any
other Surety,  and waives any benefit of, and any right to  participate  in, any
security now or hereafter held by Bank.

          13.  Usury.  In  the  event  the  interest  provisions  hereof  or any
exactions  provided for herein or in the Loan Documents or any other  instrument
securing this Note shall result,  because of any reduction of principal,  or for
any reason at any time during the life of this Loan,  in any  effective  rate of
interest  which,  for any month,  transcends the limit of the usury or any other
law applicable to the Loan, all sums in excess of those lawfully  collectible as
interest for the period in question shall,  without further  agreement or notice
between or by any party  hereto,  be applied  upon  principal  immediately  upon
receipt  of such  moneys by Bank,  with the same  force and effect as though the
payor had specifically  designated such extra sums to be so applied to principal
and Bank had agreed to accept such extra payment as a  premium-free  prepayment.
In no event  shall any agreed to or actual  exaction as  consideration  for this
Loan  transcend  the limits  imposed or provided by the laws  applicable to this
transaction or the Borrower hereof in the  jurisdiction in which the Property is
located  for the use or  detention  of money or for  forbearance  in seeking its
collection.

          14. Loan  Documents.  This Note is executed by Borrower in  connection
with that certain Term Loan Agreement  between Borrower and Bank dated as of the
date hereof  (the "Loan  Agreement"),  and this Note is secured by,  among other
things,  a  Mortgage,  Security  Agreement,  Financing  Statement  and  Absolute
Assignment  of Rents and Revenues  dated as of the date  hereof,  on real estate
situated in the County of Pinellas, Florida, and other documents and instruments
evidencing  and  securing  repayment  of  the  Loan  (collectively,   the  "Loan
Documents").  The Loan Agreement and the Loan Documents  contain  provisions for
the  acceleration  of the  maturity of this Note.  In the event of any  conflict
between any provision of the Loan Agreement and any provisions of this Note, the
provision of the Loan Agreement shall control.

          15. Preferential  Payment.  Borrower agree that to the extent Borrower
or any Surety  makes any  payment to Bank in  connection  with the  indebtedness
evidenced  by this Note,  and all or any part of such  payment  is  subsequently
invalidated, declared to be fraudulent or preferential, set aside or required to
be repaid  by Bank or paid  over to a  trustee,  receiver  or any other  entity,
whether under any  bankruptcy  act or otherwise (any such payment is hereinafter

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referred to as a  "Preferential  Payment"),  then the  indebtedness  of Borrower
under this Note shall continue or shall be reinstated,  as the case may be, and,
to the extent of such payment or repayment by Bank, the  indebtedness  evidenced
by this Note or part  thereof  intended  to be  satisfied  by such  Preferential
Payment  shall be  revived  and  continued  in full  force and effect as if said
Preferential Payment had not been made.

          16. Governing Law; Jurisdiction. This Note is to be governed according
to the laws of  Colorado,  without  giving  effect to  principles  of  conflict.
Without limiting the right of the Bank to bring any action or proceeding against
Borrower  or any Surety or against  any  property  of Borrower or any Surety (an
"Action") arising out of or relating to this Note or any indebtedness  evidenced
hereby in the courts of other  jurisdictions,  Borrower  and each Surety  hereby
irrevocably submit to the jurisdiction,  process and venue of any Colorado State
or Federal court sitting in Denver,  Colorado, and hereby irrevocably agree that
any Action may be heard and  determined in such Colorado  State court or in such
Federal court.  Borrower and all Sureties each hereby irrevocably waives, to the
fullest extent it may  effectively  do so, the defenses of lack of  jurisdiction
over any person, inconvenient forum or improper venue, to the maintenance of any
Action in any jurisdiction.

          17.  Joint and  Several  Obligations.  If there shall be more than one
maker of this Note, the  obligations of each maker under this Note are joint and
several.  The  obligations of each maker are  independent of the  obligations of
each of the other  makers or any  guarantor  who has  executed  and  delivered a
guarantee. Release of one or more of the makers shall not impair or diminish the
liability  of any  remaining  maker,  except to the  extent  of monies  actually
received by Bank from the released maker as a consequence of such release.  Each
maker waives any rights the maker might  otherwise  have under  C.R.S.  Sections
13-50-102 or 13-50-103 (or under any corresponding future statute or rule of law
in any  jurisdiction)  by reason of any release of fewer than all of the makers,
all in such manner and upon such terms as the Bank may deem proper,  and without
notice to or further  assent from the  makers,  and all  without  affecting  the
obligations of the makers hereunder.  In the event of any default thereunder,  a
separate  action or actions  may be brought  and  prosecuted  against any of the
makers, whether or not a maker is joined therein or a separate action or actions
are  brought  against  any of the other  makers.  Bank may  maintain  successive
actions for other defaults.  The Bank's rights  hereunder shall not be exhausted
by its  exercise  of any of its rights and  remedies or by any such action or by
any number of successive actions until and unless the Obligations have been paid
and fully performed.

          18. Binding  Effect.  This Note shall be binding upon Borrower and its
successors  and  assigns  and  shall  inure  to the  benefit  of  Bank,  and any
subsequent holders of this Note, and their successors and assigns.

          19. Notice.  All notices required or permitted in connection with this
Note  shall  be  given  at the  place  and in the  manner  provided  in the Loan
Agreement for the giving of notices.

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          20.  Attorneys'  Fees.  Borrower further promise to pay all reasonable
attorneys'  fees incurred by the Bank in connection  with any Default  hereunder
and in any proceeding brought to enforce any of the provisions of this Note.

          21.  Interpretation and Incorporation.  As used in this Note, the term
"Bank,"  shall  include each  subsequent  transferee  and/or owner of this Note,
whether  taking by  endorsement  or  otherwise.  As used in this Note,  the word
"include(s)"  means "include(s),  without  limitation," and the word "including"
means "including, but not limited to".

          22.  Waiver of Jury Trial.  Borrower,  and by acceptance of this Note,
Bank hereby  irrevocably  waive, to the fullest extent permitted by law, any and
all right to trial by jury in any legal proceeding arising out of or relating to
this Note,  the Loan  Agreement,  the other Loan  Documents or the  transactions
contemplated thereby.

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         IN WITNESS WHEREOF,  has duly executed this Note as of the day and year
first above written.

                                    BORROWER:

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

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

                                         By:____________________________________
                                                  David M. Becker
                                                  Chief Financial Officer

                                       7TERM LOAN AGREEMENT

         THIS TERM LOAN AGREEMENT ("Agreement"),  is made and entered into as of
the  10th  day  of  August,  2000,  by and  between  ASSET  INVESTORS  OPERATING
PARTNERSHIP,  L.P., a Delaware  limited  partnership  ("Borrower") and U.S. BANK
NATIONAL ASSOCIATION (the "Bank").

                                    RECITALS

         This  Agreement is entered into upon the basis of the  following  facts
and circumstances:

         A.  Borrower  has  applied  to the  Bank  for a loan in the  amount  of
FOURTEEN MILLION THREE HUNDRED THOUSAND AND NO/100THS  DOLLARS  ($14,300,000.00)
(the "Loan") to be secured by four manufactured  housing  communities located in
Florida,  as more particularly  described in this Agreement,  for the purpose of
refinancing existing debt secured by the manufactured housing communities and to
finance the acquisition, ownership and management of a modular home community in
the Chicago,  Illinois area or to repurchase  Borrower's  issued and outstanding
stock or other general corporate purposes.

         B. The Bank is  willing  to make  the loan 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  general
partner of  Borrower  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

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

         1.2 "ADA" shall mean the American  with  Disabilities  Act of 1990,  47
U.S.C.  Section 12101 et seq., as amended from time to time, or any  regulations
promulgated thereunder.

         1.3 "Adjusted LIBOR Rate shall have the meaning set forth in the Note.

         1.4  "Affiliate"  shall mean any Person  that  directly  or  indirectly
through  one or more  intermediaries  controls or is  controlled  by or is under
common  control  with  Borrower,   Asset  Investors   Corporation,   a  Delaware
corporation, or Commercial Assets, Inc., a Delaware corporation.

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

         1.6 "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.

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

         1.8   "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.

         1.9  "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.  Until
otherwise certified by Borrower to the Bank in writing,  the Authorized Officers

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of the general  partner of the Borrower are Terry  Considine,  Thomas L. Rhodes,
Bruce E. Moore and David M. Becker.

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

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

         1.12 "Closing Date" with respect to an Individual Parcel shall mean the
date of recording  the  Mortgage on that  particular  Individual  Parcel or with
respect  to the  entire  Property  shall  mean the first  date the  Mortgage  is
recorded against all or any portion of the Property.

         1.13  "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.

         1.14  "Commitment  Amount"  shall mean  Fourteen  Million Three Hundred
Thousand and no/100ths Dollars ($14,300,000.00),  which is non-revolving and may
only be advanced one time during the term of the Loan.

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

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

         1.17 "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.

         1.18 "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.

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

         1.20  "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.

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         1.21 "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.

         1.22  "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.

         1.23 "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 the Property.

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

         1.25 "Individual Parcel" shall mean any one of the parcels described on
Exhibit A attached hereto and incorporated by this reference,  which parcels are
commonly  referred to herein as Park Royale  (Parcel  A),  Pinewood  (Parcel B),
Westwind I (Parcel C), and Westwind II (Parcel D).

         1.26 "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.

         1.27 "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.

         1.28 "Loan Documents"  shall mean any and all documents  evidencing and
securing the Loan and shall include the Note, this Agreement,  any Mortgage, 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.

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

                                       4
<PAGE>

         1.30 "Mandatory  Principal  Reduction"  shall mean the amount per annum
required to pay the monthly  principal  payments as set forth in the Note, which
monthly  principal  payments  are  calculated  based on an  amortization  of the
outstanding principal balance over 20 years.

         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 (ii) the
ability of a Loan Party 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 (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)August 10, 2002, or
(ii) the date on which the Loan is  accelerated  as a consequence of an Event of
Default.

         1.33  "Mortgage"  shall  mean a first  lien deed of trust or  mortgage,
security  agreement,  financing  statement and assignment of rents and revenues,
creating a first lien on each of the Individual Parcels comprising the Property,
the  related  improvements  thereon,  if any and if owned by  Borrower,  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.

         1.34 "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 of the Property,  within the five years  preceding such Closing Date, or at
any time after such Closing Date) for employees of any Borrower and/or any ERISA
Affiliate.

         1.35 "Note" shall mean the Promissory Note of even date herewith in the
stated  amount of  $14,300,000.00  made by Borrower to the order of the Bank, as
the same may be modified, amended, extended, replaced or restated.

         1.36   "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.

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

         1.38  "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.

                                       5
<PAGE>

         1.39  "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.

         1.40  "Personalty"  shall  mean all  personal  property,  tangible  and
intangible,  contained within improvements or used in connection with all or any
portion of the 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  owned by Borrower  and used in the  maintenance  and
operation of multiple properties.

         1.41 "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.

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

         1.43  "Property" shall mean any and all of the following:

               (a) Fee  Parcel:  The real  property  situate  in the  County  of
Pinellas  County,  State of Florida,  and more  specifically  described  as Park
Royale  (Parcel A) and Pinewood  (Parcel B) in Exhibit A attached  hereto and by
this reference incorporated herein.

               (b) Leased  Parcel:  The leasehold  interest in the real property
situate in the County of Pinellas,  State of Florida more specifically described
as Westwind I (Parcel C) and Westwind II (Parcel D) in Exhibit A attached hereto
and by this reference incorporated herein, arising under the following:

                    (i) that certain Lease dated as of December 28, 1970, by and
between  Earl A. Jones and Iva Mae Jones,  as lessor,  and  Daniels  and Hardin,
Inc., predecessor to Mortgagor, as lessee (the "Westwind I Lease"); and

                    (ii) that certain  Lease dated as of September  13, 1974, by
and between Earl A. Jones and Iva Mae Jones, as lessor,  and Daniels and Hardin,
Inc., predecessor to Mortgagor, as lessee (the "Westwind II Lease").

         The  Westwind I Lease and the  Westwind II Lease are  individually  and
collectively referred to as the "Master Lease".

               (c) The Fee Parcel and the Leased  Parcel and any right or option
of Borrower  now or  hereafter  acquired to purchase or obtain the fee estate of
the  Leased  Parcel  (all of which  interests  in the  Leased  Parcel are herein
collectively called the "Leasehold Estate"),  together with all right, title and
interest of Borrower in the  following  with  respect to the real  property  and

                                       6
<PAGE>

appurtenances  securing this Loan, as more particularly  described on Exhibit A,
whether now owned or hereafter acquired by Borrower

         1.44  "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.

         1.45 "Security  Agreement" shall mean any security  agreement  executed
and  delivered  by the  Borrower  to the Bank,  granting  to the Bank a security
interest in Personalty associated with all or any portion of the Property.

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

         1.47  "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 Mortgage.

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

                                   ARTICLE 2.
                                    THE LOAN

         2.1  Commitment.  Subject to and in accordance  with the  provisions of
this  Agreement,  the Bank agrees to loan to  Borrower,  a sum of money,  not to
exceed the  Commitment  Amount upon the terms and  conditions  expressed in this
Agreement.  The  Commitment  Amount may be  advanced  one  single  advance or in
multiple  advances  provided that all terms and conditions  specified in Section
3.4 hereof are satisfied. 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
non-revolving  and all amounts up to the Commitment Amount may not be reborrowed
after being repaid.

         2.2 Purpose of the Loan. This Loan is made to refinance  existing loans
secured by the  Property  and to  finance  Borrower's  equity in a  to-be-formed
single  asset  entity  that will own and  operate a modular  home  community  in
Chicago,  Illinois known as Saddlebrook or to repurchase  Borrower's  issued and
outstanding stock or other general corporate purposes.

                                       7
<PAGE>

         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,  (ii) be dated as of the date hereof,  (iii)
be in the stated principal amount of the Loan, (iv) mature on the Maturity Date,
(v) bear interest as provided in the Note,  and (vi) be entitled to the benefits
of this Agreement and the Loan Documents.

               (b) Term.  The Loan shall have a term which  commences  as of the
date hereof and expires on the Maturity Date.

               (c) Interest and  Payments.  The Loan shall bear  interest on the
outstanding  principal  balance at the Adjusted  LIBOR Rate.  Interest  shall be
payable  monthly,  in  arrears,  on or before the first  (1st) day of each month
together with all Mandatory Principal  Reduction  payments.  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 Adjusted LIBOR 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 subject to the payment of
the  additional  amounts  described in the Note.  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 Evidence of Obligations Under Loan.  Amounts  outstanding under the
Loan shall be evidenced by the Note and this Agreement,  and shall be secured by
the Loan Documents.  In the event of any inconsistency between the Note and this
Agreement, the provisions of this Agreement shall prevail.

                                       8
<PAGE>

         2.5 Professional Fees.

               (a) Attorneys' Costs,  Expenses,  and Fees.  Reasonable attorneys
costs,  expenses,  and fees for Bank's counsel shall be payable on or before the
date hereof with respect to the Closing.

               (b) Appraisal  Fees,  Title Insurance  Premium,  and Other Costs,
Expenses,  and Fees.  Appraisal fees,  environmental and engineering  consultant
fees,  title  insurance  premiums,  recording or filing fees,  closing costs and
other  costs,  expenses,  and fees in the amounts  specified  by Bank,  shall be
payable  on or  before  the date  hereof  with  respect  to the  Closing.  Title
insurance  premiums,  recording  or filing  fees,  and other costs and  expenses
associated with recording a modification of the Loan Documents or filing a UCC-1
Financing Statement in connection with personal property  subsequently  acquired
by the Borrower shall be payable concurrently with the modification or release.

               (c) Consultant Fees. Borrower shall, on or before the first (1st)
Business Day after any bill rendered by Bank to Borrower  with respect  thereto,
pay directly or reimburse to Bank, at Bank's option,  for the aggregate costs of
any appraisals of any portion of the Collateral,  environmental,  engineering or
architectural  studies or consultants' fees, attorneys' fees and costs, or other
costs and expenses  reasonably incurred by the Bank in connection with review or
approval of Collateral,  enforcing  payment and performance of the  Obligations,
exercising  the rights and  remedies of the Bank under the Loan  Documents or in
negotiation or  documentation  of any further  amendment or  modification of the
Loan Documents.

         2.6 Advances  Secured by Loan Documents.  All payments made by the Bank
under this Agreement and the Loan Documents and any amounts advanced or expended
by the Bank to cure  Defaults by Borrower or to exercise the rights and remedies
of the Bank under the terms of this  Agreement  and the Loan  Documents  and all
amounts  expended by Bank  pursuant to the terms of this  Agreement and the Loan
Documents  shall, as and when advanced or incurred,  be secured by the Mortgage,
shall constitute  additional  Indebtedness  evidenced by the Note and secured by
the Mortgage and the other Loan  Documents,  whether or not the aggregate of all
Indebtedness shall then or thereafter exceed the Commitment Amount of the Note.

         2.7 Bank's Right to Cure  Defaults.  In the event that  Borrower  shall
fail to cure a Default  (after the expiration of applicable  grace  periods,  if
any), Bank shall have the right, but not the obligation,  to perform any of such
covenants, agreements and obligations, and any amounts expended by Bank in doing
so shall  constitute  obligatory  advances  under this  Agreement and additional
Indebtedness  evidenced  by the Note and secured by the  Mortgage  and the other
Loan Documents.

         2.8 Escrow for Ground Lease Payments.

               (a) Escrow Account. On the Closing Date for Westwind I (Parcel C)
and  Westwind II (Parcel  D),  Bank will  disburse a portion of the Loan into an
escrow account to be held pursuant to the terms of this Section 2.8. Such escrow

                                       9
<PAGE>

account will be kept in an interest bearing, segregated account selected by Bank
in its sole and absolute  discretion.  All funds held in such escrow account, at
any time,  are hereby  assigned to Bank as additional  security for the Loan and
the Indebtedness.

               (b)  Certifications by Borrower  regarding Ground Lease Payments.
Borrower hereby certifies to Bank that the amounts listed in the table below are
the rents anticipated to be due under the Westwind I Lease and Westwind II Lease
on the dates specified:
<TABLE>
<CAPTION>

------------------------------- ---------------------------- ---------------------------- ----------------------------
<S>                                 <C>                            <C>                           <C>
            Lease                        Date Due                  Prepaid Minimum                Additional
                                                                       Rental                       Rental
------------------------------- ---------------------------- ---------------------------- ----------------------------
Westwind I Lease                       Closing Date                  $ 3,000.00                       N/A
------------------------------- ---------------------------- ---------------------------- ----------------------------
                                     February 15, 2001               $ 6,000.00                  $ 141,819.00
------------------------------- ---------------------------- ---------------------------- ----------------------------
                                     February 15, 2002               $ 6,000.00                  $ 151,118.00
------------------------------- ---------------------------- ---------------------------- ----------------------------
Westwind II Lease                      Closing Date                  $ 3,300.00                       N/A
------------------------------- ---------------------------- ---------------------------- ----------------------------
                                     February 15, 2001               $ 6,600.00                  $ 139,977.00
------------------------------- ---------------------------- ---------------------------- ----------------------------
                                     February 15, 2002               $ 6,600.00                  $ 146,247.00
------------------------------- ---------------------------- ---------------------------- ----------------------------
</TABLE>

In the event the  amounts or dates  listed in the table above  change,  Borrower
will give Bank written notice of the revised  information  (at least 20 business
days prior to any  payment  due date),  certified  by an officer of the  general
partner  of  Borrower  together  with the  payment  in good  funds  equal to the
additional amounts due for any payments listed in the revised information.

               (c)  Deposits  into  Escrow  Account.  On the  Closing  Date  for
Westwind I (Parcel C) and Westwind II (Parcel D), 105% of the Additional  Rental
amounts for the February 15, 2001,  listed in  Subsection  2.8(b),  for both the
Westwind I Lease and  Westwind II Lease will be  disbursed  from the proceeds of
the Loan into the escrow  account.  On the Closing  Date,  the  Prepaid  Minimum
Rental amounts specified as due on the Closing Date in Subsection 2.8(b) will be
paid to the lessor at the  address  listed in  Subsection  2.8(d).  On or before
February 15, 2001,  and February 15, 2002,  as  applicable,  Borrower  shall pay
directly  to the lessor  under the  Westwind I Lease and  Westwind  II Lease all
Prepaid  Minimum Rental,  before the due date, and provide  written  evidence of
such payment to the Bank. On or before  January 1, 2002,  105% of the Additional
Rental amounts for the February 15, 2002,  listed in Subsection  2.8(b) for both
the  Westwind I Lease and  Westwind II Lease will be paid by Borrower to Bank to
be deposited into the escrow account.  In the event any Individual  Parcel is to
be released as security  for the Loan,  Borrower  shall  deposit into the escrow
account 105% of all of the Additional Rental amounts listed in Subsection 2.8(b)
for the February 15, 2002 payments which have not previously been deposited into
the escrow account, pursuant to Section 8.2 hereof.

               (d)  Payments  from the  Escrow  Account.  On or before  ten (10)
business days prior to the Date Due listed in Section  2.8(b)  above,  Bank will

                                       10
<PAGE>

remit payment in the amount listed to the following party in accordance with the
following wire transfer instructions:

                  ABA #:            063100277
                  Bank Name:        Bank of America
                  Account #:        001264430104
                  Account Name:     Mrs. Iva Mae M. Jones Trust
                  Attn:             Notify Account Holder Upon Receipt

         Upon  payment of such  amounts,  Bank shall send  written  evidence  of
payment to Borrower.  In the event Borrower does not receive written evidence of
payment at least five (5) business  days prior to the Date Due listed in Section
2.8(b) above, Borrower will contact Bank and advise Bank to make such payment.

                                   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  with  respect  to  the
Individual  Parcel being closed,  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  for  such  Individual  Parcel  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 for each Individual Parcel.

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

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

               (b) the Mortgage, duly executed by the Borrower,  encumbering all
of the Individual Parcels described on Exhibit A;

               (c) the Note, duly executed by Borrower;

               (d) the  Environmental  Indemnity  Agreement,  duly  executed  by
Borrower;

               (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

                                       11
<PAGE>

               (g) such  other  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   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  current
certificates of good standing issued by the appropriate Governmental Entities.

               (c) Opinion of Counsel. Legal opinions ("Opinions of Counsel") of
independent  counsel for Borrower  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.   Audited  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  Mortgage  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.

                                       12
<PAGE>

               (g) Taxes.  All taxes,  fees and other charges in connection with
the  execution,  delivery and  recording of the Loan  Documents  shall have been
paid, and all delinquent  taxes,  assessments or other  governmental  charges or
liens  affecting  the Property,  if any,  shall have been paid.  Borrower  shall
provide a treasurer's  tax  certificate  disclosing  that no general and special
taxes  or   assessments   encumbering   the   Property  are   delinquent   ("Tax
Certificate").

               (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
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.

               (i) Hazardous  Waste/Environmental  Audits and Reports.  The Bank
shall  have  received  evidence  (including,   without  limitation,  a  Phase  I
environmental   audit   prepared  by  an   environmental   engineering   company
satisfactory to the Bank, and in substance  satisfactory to the Bank,  regarding
the  environmental  conditions  affecting  all or any  portion of the  Property)
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.  Copies of any environmental  impact statements,  material
safety data sheets  filed or to be filed with OSHA,  the State of Florida or any
local emergency  planning  commission or local fire  department  ("Environmental
Reports"), if any.

               (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.

                                       13
<PAGE>

               (k) Approvals.  The Bank shall have received evidence  acceptable
to it that the Borrower 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) Development Items.  Copies of all engineering  reports,  land
planning maps, or plats, soils tests,  environmental  reports,  surveys prepared
with regard to the Property,  governmental or private  agreements,  indemnities,
waivers,  rights to reimbursements,  abatements or benefits of whatsoever nature
regarding the Property,  to the extent  assignable,  available at Closing,  with
subsequent  submissions  to the Bank of reports and  studies not  required to be
available at Closing, if requested by Bank.

               (o) Development  Documents.  Receipt of copies of any agreements,
existing  or  proposed,   with  Governmental   Entities,  in  the  nature  of  a
subdivider's  agreement,  public improvements agreement, or annexation agreement
affecting  the   development  of  the  Property  or  requiring  cash  equivalent
collateral,  or  imposing  building  restrictions  in lieu of  collateral,  as a
condition to development of the Property.

               (p) Special  Districts.  Identification  of any special  district
affecting  the Property,  together with a boundary map of the special  district,
financial  statements  and outline of the debt  structure,  if  requested by the
Bank.

               (q)  Plats.  Receipt of any  existing  plats,  PUD's or  official
development plans affecting the Property.

               (r) Rent Roll.  A copy of a current  Rent Roll for the  Property,
certified by an authorized representative of the Borrower.

               (s)  Other  Agreements.   Fully-executed   copies  of  any  other
agreements regarding the Property, such as ground leases, management agreements,
service  contracts,  license  agreements,  together with such assignments to the
Bank and third-party consents as the Bank may require, if any .

               (t) The Borrower  shall have  performed such other actions as the
Bank may reasonably require.

         3.4 Multiple  Closings.  Borrower may request that the Closing Date for
Individual Parcels occur on separate days. In the event the Closing Date for any
of the  Individual  Parcels has not  occurred  when a portion of the  Commitment
Amount is being  requested  to be advanced by Borrower,  Bank will  determine in

                                       14
<PAGE>

Bank's sole and absolute  discretion the portion of the Commitment  Amount to be
advanced  for the  closing  that  is  occurring  based  on  satisfaction  of the
Financial  Covenants  contained in Section 6.2 and Bank will not be obligated to
fund the full Commitment  Amount until all conditions  precedent to closing,  as
specified  in this  Article 3 have  been  fully and  completely  satisfied  with
respect to all of the Individual Parcels.

                                   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

                                       15
<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 Leases. Borrower acknowledges and agrees with respect to all leases
or tenancies of any kind at the Property ("Leases"):

               (a) not to collect any of the rents,  issues or profits under the
Leases in advance such that the amount of prepaid rents would cause  Borrower to
be in default with  respect to the  Financial  Covenant  related to the Property
contained in Section 6.2(d) hereof;

               (b) to execute all Leases on a form which has been preapproved by
Bank, in Bank's reasonable discretion;

               (c) not to  execute  any  other  assignments  of the Rents or any
interest therein to any party other than Bank; and

               (d) to perform all of Borrower's  covenants and  agreements  with
respect to the Leases as specified in the Loan Documents.

         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

                                       16
<PAGE>

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.

         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  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.

                                       17
<PAGE>

         4.14 Use of Proceeds. The proceeds of the Loan disbursed hereunder will
be used by the Borrower solely for the general business purposes permitted under
this Agreement.

         4.15  Margin  Stock.  No part of the  proceeds  of the  Loan  disbursed
hereunder  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 proceeds of the Loan disbursed hereunder will be used by Borrower 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

                                       18
<PAGE>

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.

         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 Covenant Regarding Master Lease.  Borrower covenants and agrees to
comply with all terms and conditions contained in Section 4.5 of the Mortgage.

         4.22 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.

                                   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

                                       19
<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 shall maintain a system of accounting
established and administered in accordance with GAAP.

         5.3 Security  Interests.  Borrower shall not 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

                                       20
<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. Borrower shall not 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 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 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 visit all of its

                                       21
<PAGE>

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 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 from enforcing its rights with respect
to any material asset or would expose Borrower 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

                                       22
<PAGE>

subcontractor  having employees  located on or assigned to any business owned or
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.   Borrower  shall  not  enter  into  any
agreement  containing  any provision  which would be violated or breached by the
Borrower in the performance of its obligations under any Loan Document.

         5.10  Compliance  with  Laws.  Borrower  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 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,

                                       23
<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 to its 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  shall not
cause, suffer or permit, voluntarily or involuntarily, Borrower to enter into or
offer or agree to any change in the legal or  beneficial  ownership of Borrower.
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

               (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:

                                       24
<PAGE>

               (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  Further  Assurances.  Borrower  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.

               (d) "Total Indebtedness of Borrower" 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

                                       25
<PAGE>

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, 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 Total Indebtedness of Borrower 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.

                                       26
<PAGE>

               (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.

               (d) Ratio of Free Cash Flow for Operation of Property.  The ratio
of Free  Cash  Flow  from  the  operation  of the  Property  to  Mandatory  Debt
Retirement and Interest  payments with respect to the Property  determined  over
the prior four (4) quarters shall not fall below 1.25 to 1, at any time.

               (e) Total  Indebtedness of Borrower.  If Borrower uses any of the
proceeds  disbursed  under  this  Loan  for the  repurchase  of the  issued  and
outstanding  stock of the Borrower,  after such  repurchase,  the ratio of Total
Indebtedness  of Borrower to Free Cash Flow  determined  over the prior four (4)
quarters shall not exceed 5.5 to 1, at any time.

         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:

               (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

                                       27
<PAGE>

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.

               (g) Cross  Default.  A default  under that certain Line of Credit
Agreement  dated  as of April  7,  2000,  made by  Borrower,  Bank  and  various
Affiliates or  subsidiaries of Borrower and such default is not cured within the
applicable cure periods, if any.

         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  Mortgage  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.

                                       28
<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 (any such notice being expressly waived by Borrower),
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, 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 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  where any  Collateral  is
located  (or  believed  to be located)  without  any  obligation  to pay rent to
Borrower,  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,  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

                                       29
<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,  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 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.
This  Section is  intended  solely to reserve  the rights of the Bank  hereunder
against  Borrower  in  such  proceedings  to the  maximum  extent  permitted  by
Applicable  Insolvency  Laws and none of the  Borrower 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.

                                   ARTICLE 8.
                           RELEASES AND SUBSTITUTIONS

         Borrower may sell any of the Individual  Parcels pursuant to a purchase
contract  and partial  releases  or partial  satisfaction  of Mortgage  shall be
executed and  delivered by the Bank for such  Individual  Parcel sold,  upon the
terms and conditions set forth in this Article.

         8.1  Release  Procedure.  The Bank's  obligation  to permit the partial
release  or  satisfaction  of the  lien  of the  Mortgage  encumbering  any  one

                                       30
<PAGE>

Individual  Parcel (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 Individual Parcel.

         8.2 Release Price.  For the release of the Release  Property,  Borrower
shall  pay to the Bank an  amount  equal to the  Release  Price  listed  in this
Section 8.2 (the "Release Price"),  which is calculated as follows:  110% of the
Commitment Amount advanced for such Individual Parcel, as follows:

              Individual Parcel                        Release Price
              -----------------                        -------------

              Park Royale (Parcel A)                  $ 5,082,000.00
              Pinewood (Parcel B)                     $ 3,905,000.00
              Westwind I (Parcel C)                   $ 3,355,000.00
              Westwind II (Parcel D)                  $ 3,388,000.00

In addition to the amounts  specified  for the  Release  Price,  Borrower  shall
deposit  amounts due for the  February 15, 2002 lease  payments  into the escrow
account held by Bank, in the amounts  specified in  accordance  with Section 2.8
hereof, if not previously deposited into such escrow account by Borrower.

         8.3 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 or partial satisfaction of mortgage,
together  with the  items  described  in this  ARTICLE  8 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.

               (c) 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 Mortgage as to the remainder of the Property encumbered by a Mortgage.

                                       31
<PAGE>

                                   ARTICLE 9.
                                  MISCELLANEOUS

         9.1 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.

         9.2 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.

         9.3  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.

         9.4 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:

                         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.

                                       32
<PAGE>

                         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

       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

         9.5 Authority to File Notices. Borrower 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.

         9.6 Time. Time is of the essence hereof.

         9.7 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  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.

         9.8 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.

         9.9 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.

                                       33
<PAGE>

         9.10 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.

         9.11  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
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 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.

         9.12  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.

         9.13  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  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

                                       34
<PAGE>

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.

         9.14 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
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.

         9.15 No  Marshalling.  Borrower  waives  any and all  right  to cause a
marshalling  of the  assets  pledged as  Collateral  for the Loan and waives any
other  action  by any court or other  governmental  body  with  respect  thereto
insofar as the rights of Bank hereunder are concerned.

         9.16 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.

         9.17 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.

         9.18  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.

         9.19  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

                                       35
<PAGE>

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 and  Borrower,  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: ________________________________________
                                             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:___________________________________
                                                 David M. Becker
                                                 Chief Financial Officer

                                       37
<PAGE>

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

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

         Witness my hand and official seal.

         My Commission Expires:

                                  Notary Public

[ S E A L ]

STATE OF COLORADO                           )
                                            )        ss.
COUNTY OF DENVER                            )

         The foregoing  instrument was acknowledged before me this ______ day of
_________,  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:

                                  Notary Public

( S E A L )

                                       38

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