AMERICAN RETIREMENT VILLAS PROPERTIES II
EXHIBIT 10.101
<DOCUMENT>
<TYPE>EX-10.101
<SEQUENCE>9
<FILENAME>a72807ex10-101.txt
<DESCRIPTION>EXHIBIT 10.101
<TEXT>

<PAGE>   1

                                                                  EXHIBIT 10.101



                                  DEED OF TRUST

                            With Assignment of Rents


         THIS DEED OF TRUST, made into as of the 1st day of February, 2001, by
and between ARV FREMONT, L.P., a California limited partnership, with offices at
245 Fischer Avenue, Suite D-1, Costa Mesa, California 92626, herein called
Trustor, and FIDELITY NATIONAL TITLE INSURANCE COMPANY, a California
corporation, Trustee(s), and RED MORTGAGE CAPITAL, INC., an Ohio corporation,
with offices at 150 East Gay Street, 22nd Floor, Columbus, Ohio 53215, herein
called Beneficiary.

         WITNESSETH: That Trustor grants, transfers, and assigns to Trustee in
trust, upon the trusts, covenants, conditions and agreements and for the uses
and purposes hereinafter contained, with power of sale, all that real property
situate, lying and being in Alameda County, State of California, described as
follows:


                         SEE EXHIBIT "A" ATTACHED HERETO
                             AND MADE A PART HEREOF.



         Together with the rents, issues, and profits thereof, SUBJECT, HOWEVER,
to the right, power, and authority hereinafter given to and conferred upon
Beneficiary to collect and apply such rents, issues, and profits; and together
with all buildings and improvements of every kind and description now or
hereafter erected or placed thereon, and all fixtures, including but not limited
to all gas and electric fixtures, engines and machinery, radiators, heaters,
furnaces, heating equipment, laundry equipment, steam and hot-water boilers,
stoves, ranges, elevators and motors, bath tubs, sinks, water closets, basins,
pipes, faucets and other plumbing and heating fixtures, mantels, cabinets,
refrigerating plant and refrigerators, whether mechanical or otherwise, cooking
apparatus and appurtenances, and all shades, awnings, screens, blinds and other
furnishings, it being hereby agreed that all such fixtures and furnishings shall
to the extent permitted by law be deemed to be permanently affixed to and a part
of the realty; and

         Together with all building materials and equipment now or hereafter
delivered to said premises and intended to be installed therein; and

         Together with all articles of personal property now or hereafter
attached to or used in and about the building or buildings now erected or
hereafter to be erected on the lands described which are necessary to the
complete and comfortable use and occupancy of such building or buildings for the
purposes for which they were or are to be erected, including all other goods and
chattels and personal property as are ever used or furnished in operating a
building, or the activities conducted therein, similar to the one herein
described and referred to, and all renewals
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or replacements thereof or articles in substitution therefor, whether or not the
same are, or shall be attached to said building or buildings in any manner, and
said Trustor agrees to execute a Security Agreement covering the aforesaid
fixtures and articles of personal property, at the time of placing such personal
property or any part thereof in the building or buildings to be erected on the
lands herein described in the manner and form required by law, at its expense
and satisfactory to the Beneficiary.

         To have and to hold the property hereinbefore described together with
appurtenances to the Trustee, its or his successors and assigns forever.

         FOR THE PURPOSE of securing performance of each agreement of Trustor
herein and payment of a just indebtedness of the Trustor to the Beneficiary in
the principal sum of TWO MILLION NINE HUNDRED EIGHTY-FIVE THOUSAND EIGHT HUNDRED
AND NO/100THS DOLLARS ($2,985,800.00), evidenced by its Note of even date
herewith, bearing interest from date on outstanding balances at Seven and
three-quarters percent (7.75%) per annum, said principal and interest being
payable in monthly installments as provided in said Note with a final maturity
of March 1, 2036, which Note is identified as being secured hereby by a
certificate thereon. Said Note and all of its terms are incorporated herein by
reference and this conveyance shall secure any and all extensions thereof,
however evidenced.

AND TO PROTECT THE SECURITY OF THIS DEED OF TRUST, TRUSTOR COVENANTS AND AGREES:

         1. That it will pay the Note at the times and in the manner provided
therein;

         2. That it will not permit or suffer the use of any of the property for
any purpose other than the use for which the same was intended at the time this
Deed of Trust was executed;

         3. That the Regulatory Agreement, if any, executed by the Trustor and
the Secretary of Housing and Urban Development, acting by and through the
Federal Housing Commissioner, which is being recorded simultaneously herewith,
is incorporated in and made a part of this Deed of Trust. Upon default under the
Regulatory Agreement and upon the request of the Secretary of Housing and Urban
Development, acting by and through the Federal Housing Commissioner, the
Beneficiary, at its option, may declare the whole of the indebtedness secured
hereby to be due and payable;

         4. That all rents, profits and income from the property covered by this
Deed of Trust are hereby assigned to the Beneficiary for the purpose of
discharging the debt hereby secured. Permission is hereby given to Trustor so
long as no default exists hereunder, to collect such rents, profits and income
for use in accordance with the provisions of the Regulatory Agreement;

                  That the Trustor grants to the holder or holders of the Note
secured hereby the right and power to appoint a substitute Trustee or Trustees
hereunder for any reason whatsoever by instrument of appointment duly executed
and acknowledged by the holder or holders of the Note and to be filed for record
in the office wherein this Deed of Trust is recorded. Such power of appointment
may be exercised as often as deemed necessary by the holder or holders of the
Note. Upon such appointment, the substitute Trustee or Trustees shall be vested
with all the rights, powers, authority and duties vested in the Trustee
hereunder;

         5. That upon default hereunder or under the aforementioned Regulatory
Agreement, Beneficiary shall be entitled to the Appointment of a receiver by any
court having jurisdiction,

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without notice, to take possession and protect the property described herein and
operate same and collect the rents, profits and income therefrom;

         6. That at the option of the Trustor the principal balance secured
hereby may be reamortized on terms acceptable to the Secretary of Housing and
Urban Development, acting by and through the Federal Housing Commissioner if a
partial prepayment results from an award in condemnation in accordance with
provisions of Paragraph 21 herein, or from an insurance payment made in
accordance with provisions of Paragraph 7 herein, where there is a resulting
loss of project income;

         7. That the Trustor will keep the improvements now existing or
hereafter erected on the deeded property insured against loss by fire and such
other hazards, casualties, and contingencies, as may be stipulated by the
Secretary of Housing and Urban Development, acting by and through the Federal
Housing Commissioner upon the insurance of the Deed of Trust and other hazards
as may be required from time to time by the Beneficiary, and all such insurance
shall be evidenced by standard fire and extended coverage insurance policy or
policies, in amounts not less than necessary to comply with the applicable
Coinsurance Clause percentage, but in no event shall the amounts of coverage be
less than 80 percent of the Insurable Values or not less than the unpaid balance
of the insured Deed of Trust, whichever is the lesser, and in default thereof
the Beneficiary shall have the right to effect insurance. Such policies shall be
endorsed with standard Mortgagee clause with loss payable to the Beneficiary and
the Secretary of Housing and Urban Development as their interests may appear,
and shall be deposited with the Beneficiary; The insurance carrier providing the
insurance shall be chosen by Trustor, subject to approval by Beneficiary,
provided that such approval shall not be unreasonably withheld.

                  That if the premises covered hereby, or any part thereof,
shall be damaged by fire or other hazard against which insurance is held as
hereinabove provided, the amounts paid by any insurance company in pursuance of
the contract of insurance to the extent of the indebtedness then remaining
unpaid, shall be paid to the Beneficiary, and, at its option, may be applied to
the debt or released for the repairing or rebuilding of the premises. Any
unexpired insurance shall inure to the benefit of, and pass to, the purchaser of
the property covered thereby at any Trustee's sale held hereunder;

         8. Together with and in addition to the monthly payments of interest or
of principal and interest payable under the terms of said Note, to pay to
Beneficiary monthly until said Note is fully paid, beginning on the first day of
the first month after the date hereof, the following sums:

                  (a) An amount sufficient to provide the Beneficiary with funds
                  to pay the next mortgage insurance premium if this instrument
                  and the Note secured hereby are insured, or a monthly service
                  charge, if they are held by the Secretary of Housing and Urban
                  Development, as follows:

                                (I) If and so long as said Note of even date and
                              this instrument are insured or are reinsured under
                              the provisions of the National Housing Act, an
                              amount sufficient to accumulate in the hands of
                              the Beneficiary one month prior to its due date
                              the annual mortgage insurance premium, in order to
                              provide such Beneficiary with funds to pay such
                              premium to the Secretary of Housing and Urban
                              Development, pursuant to the National Housing Act,
                              as amended, and applicable Regulations thereunder,
                              or


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                              (II) Beginning with the first day of the month
                              following an assignment of this instrument and the
                              Note secured hereby to the Secretary of Housing
                              and Urban Development, a monthly service charge
                              which shall be an amount equal to one-twelfth of
                              one-half percent (1/12 of 1/2%) of the average
                              outstanding principal balance due on the Note
                              computed for each successive year beginning with
                              the first of the month following such assignment,
                              without taking into account delinquencies or
                              prepayments.

                  (b) A sum equal to the ground rents, if any, next due, plus
                  the premiums that will next become due and payable on policies
                  of fire and other property insurance covering the premises
                  covered hereby, plus water rates, taxes and assessments next
                  due on the premises covered hereby (all as estimated by the
                  Beneficiary) less all sums already paid therefor divided by
                  the number of months to elapse before one month prior to the
                  date when such ground rents, premiums, water rates, taxes and
                  assessments will become delinquent, such sums to be held by
                  Beneficiary in trust to pay said ground rents, premiums, water
                  rates, taxes, and special assessments.

                  (c) All payments mentioned in the two preceding subsections of
                  this paragraph and all payments to be made under the Note
                  secured hereby shall be added together and the aggregate
                  amount thereof shall be paid each month in a single payment to
                  be applied by Beneficiary to the following items in the order
                  set forth:

                              (I) premium charges under the Contract of
                              Insurance with the Secretary of Housing and Urban
                              Development, acting by and through the Federal
                              Housing Commissioner or service charge;

                              (II) ground rents, taxes, special assessments,
                              water rates, fire and other property insurance
                              premiums;

                              (III) interest on the Note secured hereby;

                              (IV) amortization of the principal of said Note.

         9. Any excess funds accumulated under paragraph (b) above remaining
after payment of the items therein mentioned, shall be credited to subsequent
monthly payments of the same nature required thereunder; but if any such item
shall exceed the estimate therefor, the Trustor shall without demand forthwith
make good the deficiency. Failure to do so before the due date of such item
shall be a default hereunder. In case of termination of the Contract of Mortgage
Insurance by prepayment of the mortgage in full, or otherwise (except as
hereinafter provided), accumulations under paragraph (a) above not required to
meet payments due under the Contract of Mortgage Insurance, shall be credited to
the Trustor. If the property is sold under foreclosure or is otherwise acquired
by the Beneficiary after default, any remaining balance of the accumulations
under paragraph (b) above shall be credited to the principal of the debt as of
the date of commencement of foreclosure proceedings or as of the date the
property is otherwise acquired; and accumulations under paragraph (a) above
shall be similarly applied unless required to pay sums due to the Secretary of
Housing and Urban Development, acting by and through the Federal Housing
Commissioner under the Contract of Mortgage Insurance;


<PAGE>   5
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         10. To keep said property in good condition and repair, not to remove
or demolish any buildings thereon; to complete or restore promptly and in good
and workmanlike manner any building which may be constructed, damaged, or
destroyed thereon and to pay when due all claims for labor performed and
materials furnished therefor; to comply with all laws affecting said property or
requiring any alterations or improvements to be made thereon; not to commit or
permit waste thereof; not to commit, suffer or permit any act upon said property
in violation of law and/or covenants, conditions and/or restrictions affecting
said property; not to permit or suffer any alterations of or addition to the
buildings or improvements hereafter constructed in or upon said property without
the consent of the Beneficiary;

         11. To appear in and defend any action or proceeding purporting to
affect the security hereof or the rights or powers of Beneficiary or Trustee,
and to pay all costs and expenses, including cost of evidence of title and
attorney's fees in a reasonable sum, in any such action or proceeding in which
Beneficiary or Trustee may appear;

         12. Should Trustor fail to make any payment or do any act as herein
provided, then Beneficiary or Trustee, but without obligation so to do and
without notice to or demand upon Trustor and without releasing Trustor from any
obligation hereof, may make or do the same in such manner and to such extent as
either may deem necessary to protect the security hereof, Beneficiary or Trustee
being authorized to enter upon said property for such purposes; may commence,
appear in and/or defend any action or proceeding purporting to affect the
security hereof or the rights or powers of Beneficiary or Trustee; may pay,
purchase, contest, or compromise any encumbrance, charge, or lien which in the
judgment of either appears to be prior or superior hereto; and, in exercising
any such powers, may pay necessary expenses, employ counsel, and pay his
reasonable fees;

         13. The Beneficiary shall have the right to pay mortgage insurance
premiums or fire and other property insurance premiums when due to the extent
that monthly payments made hereunder for the purpose of meeting same are
insufficient. All such payments made by the Beneficiary shall be added to the
principal sum secured hereby;

         14. To pay immediately and without demand all sums so expended by
Beneficiary or Trustee, under permission given under this Deed of Trust, with
interest from date of expenditure at the rate specified in said Note;

N/A

         16. The Trustor further covenants that it will not voluntarily create,
suffer, or permit to be created against the property subject to this Deed of
Trust any lien or liens inferior or superior to the lien of this Deed of Trust
and further that it will keep and maintain the same free

<PAGE>   6
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from the claim of all persons supplying labor or materials which will enter into
the construction of any and all buildings now being erected or to be erected on
said premises;

         17. That the improvements upon the premises, covered by the Deed of
Trust, and all plans and specifications comply with all municipal ordinances and
regulations and all of other regulations made or promulgated, now or hereafter,
by lawful authority, and that the same will comply with all such municipal
ordinances and regulations and with the rules of the applicable fire rating or
inspection organization, bureau, association or office;

         18. That so long as this Deed of Trust and the said Note secured hereby
are insured under the provisions of the National Housing Act, or held by the
Secretary of Housing and Urban Development, it will not execute or file for
record any instrument which imposes a restriction upon the sale or occupancy of
the mortgaged property on the basis of race, color, creed or national origin.

ABOVE IT IS MUTUALLY AGREED THAT:

         19. Trustor herein agrees to pay to Beneficiary or to the authorized
loan servicing representative of the Beneficiary a charge not to exceed $15 for
providing a statement regarding the obligation secured by this Deed of Trust as
provided by Section 2954, Article 2, chapter 2, Title 14, Part 4, Division 3, of
the Civil Code of the State of California.

N/A

         21. Should the property or any part thereof be taken or damaged by
reason of any public improvement or condemnation preceding, or damaged by fire,
or earthquake, or in any other manner, the Beneficiary shall be entitled to all
compensation, awards, and other payments or relief therefor, and shall be
entitled at its option to commence, appear in and prosecute in its own name any
action to proceedings, or to make any compromise or settlement in connection
with such taking or damage. All awards of compensation in connection with
condemnation for public use of or a taking of any of that property, shall be
paid to the Beneficiary to be applied to the amount due under this Note secured
hereby in (1) amounts equal to the next maturing installment or installments or
principal and (2) with any balance to be credited to the next payment due under
the Note. All awards of damages in connection with any condemnation for public
use of or injury to any residue of that property shall be paid to the
Beneficiary to be applied to a fund held for and on behalf of the Trustor which
fund shall, at the option of the

<PAGE>   7
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Beneficiary, and with the prior approval of the Secretary of Housing and Urban
Development, either be applied to the amount due under the Note as specified in
the preceding sentence, or be disturbed for the restoration or repair of the
damage to the residue. No amount applied to the reduction of the principal
amount due in accordance with (1) shall be considered an optional prepayment as
the term is used in this Deed of Trust and the Note secured hereby, nor relieve
the Trustor from making regular monthly payments commencing on the first day of
the first month following the date of receipt of the award. The Beneficiary is
hereby authorized in the name of the Trustor to execute and deliver valid
acquittances for such awards and to appeal from such award;

         22. Upon default by Trustor in making any monthly payment provided for
herein or in the Note secured hereby, and if such default is not made good prior
to the due date of the next such installment, or if Trustor shall fail to
perform any covenant or agreement in this Deed of Trust, all sums secured hereby
shall, at the option of the Beneficiary, be deemed to have become immediately
due and payable, and shall thereupon be collectable by foreclosure of this Deed
of Trust. In the event of default, Trustee hereunder shall be, and is authorized
and empowered when given notice to do so by Beneficiary after such default, to
cause the property to be sold, which notice Trustee shall cause to be duly filed
for record.

         23. After the lapse of such time as may then be required by law
following the recordation of said notice of defaults, and notice of sale having
been given as then required by law, Trustee, without demand on Trustor, shall
sell said property at the time and place fixed by it in said notice of sale,
either as a whole or in separate parcels, and in such order as it may determine
at public auction to the highest bidder for cash in lawful money of the United
States, payable at time of sale. Trustee may postpone sale of all or any portion
of said property by public announcement at the time and place of sale, and from
time to time thereafter may postpone the sale by public announcement at the time
fixed by the preceding postponement. Trustee shall deliver to the purchaser its
Deed conveying the property so sold, but without any covenant or warranty,
express or implied. The recitals in the Deed of any matters or facts shall be
conclusive proof of the truthfulness thereof. Any person, including Trustor,
Trustee, or Beneficiary, may purchase at the sale. The Trustee shall apply the
proceeds of sale to payment of (1) the expenses of such sale, together with the
reasonable expenses of this trust including therein reasonable Trustee's fees or
attorney's fees for conducting the sale, and the actual cost of publishing,
recording, mailing and posting notice of the sale; (2) the cost of any search
and/or other evidence of title procured in connection with such sale and revenue
stamps on Trustees' Deed; (3) all sums expended under the terms hereof, not then
repaid, with accrued interest at the rate specified in said Note; (4) all other
sums then secured hereby; and (5) the remainder, if any, to the person or
persons legally entitled thereto;

         24. Beneficiary may from time to time substitute a successor or
successors to any Trustee named herein or acting hereunder to execute this
Trust. Upon such appointment, and without conveyance to the successor trustee,
the latter shall be vested with all title, powers, and duties conferred upon any
Trustee herein named or acting hereunder. Each such appointment and substitution
shall be made by written instrument executed by Beneficiary, containing
reference to this Deed and its place of record which, when duly recorded in the
proper office of the county or counties in which the property is situated, shall
be conclusive proof of proper appointment of the successor trustee. In the event
of default, Trustee hereunder shall be, and is authorized and empowered when
given notice to do so by Beneficiary after such default to cause the property to
be sold, which notice Trustee shall cause to be duly filed for record.


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         25. The pleading of any statute of limitations as a defense to any and
all obligations secured by this Deed is hereby waived to the full extent
permissible by law;

         26. Upon written request of Beneficiary stating that all sums secured
hereby have been paid, and upon surrender of this Deed of Trust and said Note to
Trustee for cancellation and retention and upon payment of its fees, Trustee
shall reconvey, without warranty, the property then held hereunder. The recitals
in such reconveyance of any matters or fact shall be conclusive proof of the
truthfulness thereof. The grantee in such reconveyance may be described as "the
person or persons legally entitled thereto;"

         27. The trust created hereby is irrevocable by Trustor;

         28. This Deed of Trust applies to, inures to the benefit of, and binds
all parties hereto, their heirs, legatees, devisees, administrators, executors,
successors, and assigns. The term "Beneficiary" shall include not only the
original Beneficiary hereunder but also any future owner and holder including
pledgees, of the Note secured hereby. In this Deed, whenever the context so
requires, the masculine gender includes the feminine and/or neuter, and the
singular number includes the plural. All obligations of each Trustor hereunder
are joint and several;

         29. Trustee accepts this Trust when this Deed of Trust, duly executed
and acknowledged, is made public record as provided by law. Except as otherwise
provided by law the Trustee is not obligated to notify any party hereto of
pending sale under this Deed of Trust or of any action of proceeding in which
Trustor, Beneficiary, or Trustee shall be a party unless brought by Trustee;

         30. The Undersigned TRUSTOR REQUESTS that a copy of any notice of
default and of any notice of sale hereunder be mailed to him at the mailing
address opposite his name hereto. Failure to insert such address shall be deemed
a waiver of any request hereunder for a copy of such notices.

                           Mailing Address for Notices

                          245 Fischer Avenue, Suite D-1
                          Costa Mesa, California 92626

         31. Notwithstanding any other provision contained herein or in the
Note, hereinabove referred to, it is agreed that the execution of the Note shall
impose no personal liability upon the Trustor for payment of the indebtedness
evidenced thereby and in the event of a default, the Beneficiary, as holder of
the Note, shall look solely to the property subject to this Deed of Trust and to
the rents, issues and profits thereof in satisfaction of the indebtedness
evidenced by the Note and will not seek or obtain any deficiency or personal
judgment against the Trustor except such judgment or decree as may be necessary
to foreclose or bar its interest in the property subject to this Deed of Trust
and all other property mortgaged, pledged, conveyed or assigned to secure
payment of the Note; provided, that nothing in this condition and no action so
taken shall operate to impair any obligation of the Trustor under the Regulatory
Agreement herein referred to and made a part hereof.

         32. Notwithstanding any other provision contained herein or in the
Note, hereinafter referred to, it is agreed that the execution of the Note shall
impose no personal liability upon the Trustor (or any of its present or future
limited and general partners) for payment of the

<PAGE>   9
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indebtedness evidenced thereby and in the event of a default, the Beneficiary,
as holder of the Note, shall look solely to the property subject to this Deed of
Trust and to the rents, issues and profits thereof in satisfaction of the
indebtedness evidenced by the Note and will not seek or obtain any deficiency or
personal judgment against the Trustor (or any of its present or future limited
and general partners) except such judgment or decree as may be necessary to
foreclose or bar its interest in the property subject to this Deed of Trust and
all other property mortgaged, pledged, conveyed or assigned to secure payment of
the Note; provided, that nothing in this condition and no action so taken shall
operate to impair any obligation of the Trustor under the Regulatory Agreement
herein referred to and made a part hereof.

         IN WITNESS WHEREOF the Trustor has caused its name to be hereunto
subscribed by its duly authorized General Partner as of the day and year herein
first above written.


                           ARV FREMONT, L.P.
                           a California limited partnership

                           By:     American Retirement Villas Properties II
                                   a California limited partnership
                                   General Partner

                                   By:      ARV Assisted Living, Inc.
                                            a Delaware corporation
                                            General Partner


                                            By:
                                               ------------------------
                                               Douglas Armstrong
                                               Vice President




<PAGE>   10
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(Notary Acknowledgement)


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                                   CALIFORNIA

================================================================================
                                  DEED OF TRUST
================================================================================

                                     Between

                                ARV FREMONT, L.P.

                                     Trustor

                                       and

                        FIDELITY NATIONAL TITLE INSURANCE
                                     COMPANY

                                    Trustee,

                                       and

                           RED MORTGAGE CAPITAL, INC.

                                  Beneficiary.

================================================================================


Dated:     February _1, 2001

Recorded:  February __, 2001

at              minutes past

in Liber             at page

records of Alameda County, California


RECORDER'S INSTRUCTIONS

Index this document as
a Deed of Trust and as
an Assignment of Rents.

Escrow No.
Order No.
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