Deed Of Trust

Deed of Trust

by Rockies Fund Inc
September 19th, 1997

                                 DEED OF TRUST


     THIS DEED OF TRUST IS DATED September 15, 1997, among The Rockies Fund,
Inc., whose address is 4465 Northpark Drive, Colorado Springs, CO 80907
(referred to below as "Grantor"); State Bank and Trust of Colorado Springs,
whose address is 111 South Tejon, P.O. Box 2077, Colorado Springs, Colorado
80901 (referred to below sometimes as "Lender" and sometimes as
"Beneficiary"); and the Public Trustee of El Paso County, Colorado (referred
to below as "Trustee").

     CONVEYANCE AND GRANT.  For valuable consideration, Grantor hereby
irrevocably grants, transfers and assigns to Trustee for the benefit of Lender
as Beneficiary all of Grantor's right, title and interest in and to the
following described real property, together with all existing or subsequently
erected or affixed buildings, improvements and fixtures; all easements, rights
of way, and appurtenances; all water, water rights and ditch rights (including
stock in utilities with ditch or irrigation rights); and all other rights,
royalties, and profits relating to the real property, including without
limitation all minerals, oil, gas, geothermal and similar matters, located in
El Paso County, State of Colorado (the "Real Property"):

LOT 1 CO. WEST SUBDIVISION, IN THE CITY OF COLORADO SPRINGS, 
COUNTY OF EL PASO, STATE OF COLORADO.

     The Real Property or Ha address is commonly known as 3515 North Chestnut
Street, Colorado Springs, CO 80907.

     Grantor presently assigns to Lender (also known as Beneficiary in this
Deed of Trust) all of Grantor's right, title and interest in and to all
present and future leases of the Property and all Rents from the Property. In
addition, Grantor grants Lender a Uniform Commercial Code security interest in
the Rents and the Personal Property defined below.

     DEFINITIONS.  The following words shall have the following meanings when
used in this Deed of Trust. Terms not otherwise defined in this Deed of Trust
shall have the meanings attributed to such terms in the Uniform Commercial
Code. All references to dollar amounts shall mean amounts in lawful money of
the United States of America.

          Beneficiary. The word "Beneficiary" means State Bank and Trust of
Colorado Springs, its successors and assigns. State Bank and Trust of Colorado
Springs also is referred to as "Lender" in this Deed of Trust.

          Deed of Trust.  The words "Deed of Trust mean this Deed of Trust
among Grantor, Lender, and Trustee, and includes without limitation all
assignment and security interest provisions relating to the Personal Property
and Rents.

          Grantor.  The word "Grantor means any and all persons and entities
executing this Deed of Trust, including without limitation The Rockies Fund,
Inc..

          Guarantor.  The word "Guarantor" means and includes without
limitation any and all guarantors, sureties, and accommodation parties in
connection with the Indebtedness.

          Improvements.  The word "Improvements" means and includes without
limitation all existing and future improvements, buildings, structures, mobile
homes affixed on the Real Property, facilities, additions, replacements and
other construction on the Real Property.

          Indebtedness.  The word "Indebtedness" means all principal and
interest payable under the Note and any amounts expended or advanced by Lender
to discharge obligations of Grantor or expenses incurred by Trustee or Lender

to enforce obligations of Grantor under this Deed of Trust, together with
interest on such amounts as provided in this Deed of Trust.

          Lender.  The word "Lender means State Bank and Trust of Colorado
Springs, its successors and assigns.

          Note.  The word "Note" means the Note dated September 16, 1997, in
the principal amount of $500,000.00 from Grantor and any cosigners to Lender,
together with all renewals, extensions, modifications, refinancings,, and
substitutions for the Note. NOTICE TO GRANTOR: THE NOTE CONTAINS A VARIABLE
INTEREST RATE.

          Personal Property.  The words "Personal Property" mean all
equipment, fixtures, and other articles of personal property now or hereafter
owned by Grantor, and now or hereafter attached or affixed to the Real
Property; together with all accessions, parts, and additions to, all
replacements of, and all substitutions for, any of such property; and together
with all proceeds (including without limitation all insurance proceeds and
refunds of premiums) from any sale or other disposition of the Property.

          Property.  The word "Property" means collectively the Real Property
and the Personal Property.

          Real Property.  The words "Real Property" mean the property,
interests and rights described above in the "Conveyance and Grant" section.

          Related Documents.  The words "Related Documents" mean and include
without limitation all promissory notes, credit agreements, loan agreements,
environmental agreements, guaranties, security agreements, mortgages, deeds of
trust, and all other instruments, agreements and documents, whether now or
hereafter existing, executed in connection with the Indebtedness.

          Rents.  The word "Rents" means all present and future rents,
revenues, income, issues, royalties, profits, and other benefits derived from
the Property.

          Trustee.  The word "Trustee" means the Public Trustee of El Paso
County, Colorado.

 
     This Deed of Trust, including the assignment of rents and the security
interest in the rents and Personal Property, is given to secure (1) payment of
the indebtedness and (2) performance of any and all obligations of Grantor
under the note, the related documents, and this Deed of Trust. This Deed of
Trust is given and accepted on the following terms:

     PAYMENT AND PERFORMANCE.  Except as otherwise provided in this Deed of
Trust, Grantor shall pay to Lender all amounts secured by this Deed of Trust
as they become due, and shall strictly and in a timely manner perform all of
Grantor's obligations under the Note, this Deed of Trust, and the Related
Documents.

     POSSESSION AND MAINTENANCE OF THE PROPERTY.  By the following provisions:

          Possession and Use.  Until the occurrence of an Event of Default, or
until Lender exercises its right to collect Rents as provided for in the
Assignment of Rents form executed by Grantor in connection with the Property,
Grantor may (a) remain in possession and control of the Property, (b) use,
operate or manage the Property, and (c) collect any Rents from the Property.

          Duty to Maintain.  Grantor shall maintain the Property in tenantable
condition and promptly perform all repairs, replacements, and maintenance
necessary to preserve its value.

     Grantor agrees that Grantor's possession and use of the Property shall be
governed

          Hazardous Substances.  The terms "hazardous waste", "hazardous
substance", "disposal", "release", and "threatened release", as used in this
Deed of Trust, shall have the same meanings as set forth in the Comprehensive
Environmental Response, Compensation, and Liability Act of 1980, as amended,
42 U.S.C. Section 9601, et seq. ("CERCLA"), the Superfund Amendments and
Reauthorization Act of 1986, Pub. L. No. 99-499 ("SARA"), the Hazardous
Materials Transportation Act, 49 U.S.C. Section 1801, et seq., the Resource
Conservation and Recovery Act, 42 U.S.C. Section 6901, et seq., or other
applicable state or Federal laws, rules, or regulations adopted pursuant to
any of the foregoing. The terms "hazardous waste" and "hazardous substance
shall also include, without limitation, petroleum and petroleum by-products or
any fraction thereof and asbestos. Grantor represents and warrants to Lender
that: (a) During the period of Grantor's ownership of the Property, there has
been no use, generation, manufacture, storage, treatment, disposal, release or
threatened release of any hazardous waste or substance by any person on,
under, about or from the Property; (b) Grantor has no knowledge of, or reason
to believe that there has been, except as previously disclosed to and
acknowledged by Lender in writing, (i) any use, generation, manufacture,
storage, treatment, disposal, release, or threatened release of any hazardous
waste or substance on, under, about or from the Property by any prior owners
or occupants of the Property o r (ii) any actual or threatened litigation or
claims of any kind by any person relating to such matters; and (c) Except as
previously disclosed to and acknowledged by Lender in writing, (i) neither
Grantor nor any tenant, contractor, agent or other authorized user of the
Property shall use, generate, manufacture, store, treat, dispose of, or
release any hazardous waste or substance on, under, about or from the Property
and (ii) any such activity shall be conducted in compliance with all
applicable federal, state, and local laws, regulations and ordinances,
including without limitation those laws, regulations, and ordinances described
above. Grantor authorizes Lender and its agents to enter upon the Property to
make such inspections and tests, at Grantor's expense, as Lender may deem
appropriate to determine compliance of the Property with this section of the
Deed of Trust. Any inspections or tests made by Lender shall be for Lender's
purposes only and shall not be construed to create any responsibility or
liability on the part of Lender to Grantor or to any other person. The
representations and warranties contained herein are based on Grantor's due
diligence in investigating the Property for hazardous waste and hazardous
substances. Grantor hereby (a) releases and waives any future claims against

Lender for indemnity or contribution in the event Grantor becomes liable for
cleanup or other costs under any such laws, and (b) agrees to indemnify and
hold harmless Lender against any and all claims, losses, liabilities, damages,
penalties, and expenses which Lender may directly or indirectly sustain or
suffer resulting from a breach of this section of the Deed of Trust or as a
consequence of any use, generation manufacture, storage, disposal, release or
threatened release occurring prior to Grantor's ownership or interest in the
Property, whether or; not the same was or should have been known to Grantor.
The provisions of this section of the Deed of Trust, including the obligation
to indemnify, shall survive the payment of the Indebtedness and the
satisfaction and reconveyance of the lien of this Deed of Trust and shall not
be affected by Lender's acquisition of any interest in the Property, whether
by foreclosure or otherwise.

          Nuisance Waste.  Grantor shall not cause, conduct or permit any
nuisance nor commit, permit, or suffer any stripping of or waste on or to the
Property or any portion of the Property. Without limiting the generality of
the foregoing, Grantor will not remove, or grant to any other party the right
to remove, any timber, minerals (including oil and gas), soil, gravel or rock
products without the prior written consent of Lender.

          Removal of Improvements.  Grantor shall not demolish or remove any
improvements from the Real Property without the prior written consent of
Lender. As a condition to the removal of any improvements, Lender may require
Grantor to make arrangements satisfactory to Lender to replace such
Improvements with Improvements of at least equal value.

          Lender's Right to Enter.  Lender and its agents and representatives
may enter upon the Real Property at all reasonable times to attend to Lender's
interests and to inspect the Property for purposes of Grantor's compliance
with the terms and conditions of this Deed of Trust.

          Compliance with Governmental Requirements.  Grantor shall promptly
comply with all laws, ordinances, and regulations, now or hereafter in effect,
of all governmental authorities applicable to the use or occupancy of the
Property, including without limitation the Americans With Disabilities Act.
Grantor may contest in good faith any such law, ordinance, or regulation and
withhold compliance during any proceeding, including appropriate appeals, so
long as Grantor has notified Lender in writing prior to doing so and so long
as, in Lender's sole opinion, Lender's interests in the Property are not
jeopardized. Lender may require Grantor to post adequate security or a surety
bond, reasonably satisfactory to Lender, to protect Lender's interest.

          Duty to Protect.  Grantor agrees neither to abandon nor leave
unattended the Property. Grantor shall do all other acts, in addition to those
acts set forth above in this section, which from the character and use of the
Property are reasonably necessary to protect and preserve the Property.

     DUE ON SALE - CONSENT BY LENDER.  Lender may, at its option, declare
immediately due and payable all sums secured by this Deed of Trust upon the
sale or transfer, without the Lender's prior written consent, of all or any
part of the Real Property, or any interest in the Real Property. A "sale or
transfer" means the conveyance of Real Property or any right, title or
interest therein; whether legal, beneficial or equitable; whether voluntary or
involuntary; whether by outright sale, deed, installment sale contract, land
contract, contract for deed, leasehold interest with a term greater than three
(3) years, lease-option contract, or by sale, assignment, or transfer of any
beneficial interest in or to any land trust holding title to the Real
Property, or by any other method of conveyance of Real Property interest. If
any Grantor is a corporation, partnership or limited liability company,
transfer also includes any change in ownership of more than twenty-five
percent (25%) of the voting stock, partnership interests or limited liability
company interests, as the case may be, of Grantor. However, this option shall
not be exercised by Lender if such exercise is prohibited by federal law or by
Colorado law.


     TAXES AND LIENS.  The following provisions relating to the taxes and
liens on the Property are a part of this Deed of Trust.

          Payment.  Grantor shall pay when due (and in all events prior to
delinquency) all taxes, special taxes, assessments, charges (including water
and sewer), fines and impositions levied against or on account of the
Property, and shall pay when due all claims for work done on or for services
rendered or material furnished to the Property. Grantor shall maintain the
Property free of all liens having priority over or equal to the interest of
Lender under this Deed of Trust, except for the lien of taxes and assessments
not due and except as otherwise provided in this Deed of Trust.

          Right To Contest.  Grantor may withhold payment of any tax,
assessment, or claim in connection with a good faith dispute over the
obligation to pay, so long as Lender's interest in the Property is not
jeopardized. If a lien arises or is filed as a result of nonpayment, Grantor
shall within fifteen (15) days after the lien arises or, if a lien is filed,
within fifteen (15) days after Grantor has notice of the filing, secure the
discharge of the lien, or if requested by Lender, deposit with Lender cash or
a sufficient corporate surety bond or other security satisfactory to Lender in
an amount sufficient to discharge the lien plus any costs and attorneys'' fees
or other charges that could accrue as a result of a foreclosure or sale under
the lien. In any contest, Grantor shall defend itself and Lender and shall
satisfy any adverse judgment before enforcement against the Property. Grantor
shall name Lender as an additional obligee under any surety bond furnished in
the contest proceedings.

          Evidence of Payment.  Grantor shall upon demand furnish to Lender
satisfactory evidence of payment of the taxes or assessments and shall
authorize the appropriate governmental official to deliver to Lender at any
time a written statement of the taxes and assessments against the Property.

          Notice of Construction.  Grantor shall notify Lender at least
fifteen (15) days before any work is commenced, any services are furnished, or
any materials are supplied to the Property, if any mechanic's lien,
materialmen lien, or other lien could be asserted on account of the work,
services, or materials. Grantor will upon request of Lender furnish to Lender
advance assurances satisfactory to Lender that Grantor can and will pay the
cost of such improvements.

     PROPERTY DAMAGE INSURANCE.  The following provisions relating to insuring
the Property are a part of this Deed of Trust.

          Maintenance of Insurance.  Grantor shall procure and maintain
policies of fire insurance with standard extended coverage endorsements on a
replacement basis for the full insurable value covering all Improvements on
the Real Property in an amount sufficient to avoid application of any
coinsurance clause, and with a standard mortgagee clause in favor of Lender.
Grantor shall also procure and maintain comprehensive general liability
insurance in such coverage amounts as Lender may request with trustee and
Lender being named as additional insureds in such liability insurance
policies. Additionally, Grantor-shall maintain such other insurance, including
but not limited to hazard, business interruption, and boiler insurance, as
Lender may reasonably require. Policies shall be written in form, amounts,
coverages and basis reasonably acceptable to Lender and issued by a company or
companies reasonably acceptable to Lender. Grantor, upon request of Lender,
will deliver to Lender from time to time the policies or certificates of
insurance in form satisfactory to Lender, including stipulations that
coverages will not be canceled or diminished without at least ten (10) days'
prior written notice to Lender. Each insurance policy also shall include an
endorsement providing that coverage in favor of Lender will not be impaired in
any way by any act, omission or default of Grantor or any other person. Should
the Real Property at any time become located in an area designated by the
Director of the Federal Emergency Management Agency as a special flood hazard
area, Grantor agrees to obtain and maintain Federal Flood Insurance for the

full unpaid principal balance of the loan, up to the maximum policy limits set
under the National Flood Insurance Program, or as otherwise required by
Lender, and to maintain such insurance for the term of the loan.

          Application of Proceeds.  Grantor shall promptly notify Lender of
any loss or damage to the Property if the estimated cost of repair or
replacement exceeds $1,000.00. Lender may make proof of loss if Grantor fails
to do so within fifteen (15) days of the casualty. Whether or not Lender's
security is impaired, Lender may, at its election, receive and retain the
proceeds of any insurance and apply the proceeds to the reduction of the
Indebtedness, payment of any lien affecting the Property, or the restoration
and repair of the Property. If Lender elects to apply the proceeds to
restoration and repair, Grantor shall repair or replace the damaged or
destroyed Improvements in a manner satisfactory to Lender. Lender shall, upon
satisfactory proof of such expenditure, pay or reimburse Grantor from the
proceeds for the reasonable cost of repair or restoration if Grantor is not in
default under this Deed of Trust. Any proceeds which have not been disbursed
within 180 days after their receipt and which Lender has not committed to the
repair or restoration of the Property shall be used first to pay any amount
owing to Lender under this Deed of Trust, then to pay accrued interest, and
the remainder, if any, shall be applied to the principal balance of the
Indebtedness. If Lender holds any proceeds after payment in full of the
Indebtedness, such proceeds shall be paid to Grantor as Grantor's interests
may appear.

          Unexpired Insurance d Sale.  Any unexpired insurance shall inure to
the benefit of, and pass to, the purchaser of the Property covered by this
Deed of Trust at any trustee's sale or other sale held under the provisions of
this Deed of Trust, or at any foreclosure sale of such Property.

          Grantor's Report on Insurance.  Upon request of Lender, however not
more than once a year, Grantor shall furnish to Lender a report on each
existing policy of insurance showing: (a) the name of the insurer; (b) the
risks insured; (c) the amount of the policy; (d) the property insured, the
then current replacement value of such property, and the manner of determining
that value; and (e) the expiration date of the policy. Grantor shall, upon
request of Lender, have an independent appraiser satisfactory to Lender
determine the cash value replacement cost of the Property.

     TAX AND INSURANCE RESERVES.  Subject to any limitations set by applicable
law, Lender may require Grantor to maintain with Lender reserves for payment
of annual taxes, assessments, and insurance premiums, which reserves shall be
created by advance payment or monthly payments of a sum estimated by Lender to
be sufficient to produce amounts at least equal to the taxes, assessments, and
insurance premiums to be paid. The reserve funds shall be held by Lender as a
general deposit from Grantor, which Lender may satisfy by payment of the taxes
assessments, and insurance premiums required to be paid by Grantor as they
become due. Lender shall have the right to draw upon the reserve funds to pay
such items, and Lender shall not be required to determine the validity or
accuracy of any item before paying it. Nothing in the Deed of Trust shall be
construed as requiring Lender to advance other monies for such purposes, and
Lender shall not incur any liability for anything it may do or omit to do with
respect to the reserve account. All amounts in the reserve account are hereby
pledged to further secure the Indebtedness, and Lender is hereby authorized to
withdraw and apply such amounts on the Indebtedness upon the occurrence of an
Event of Default. Lender shall not be required to pay any interest or earnings
on the reserve funds unless required by law or agreed to by Lender in writing.
Lender does not hold the reserve funds in trust for Grantor, and Lender is not
Grantor's agent for payment of the taxes and assessments required to be paid
by Grantor.

     EXPENDITURES BY LENDER.  If Grantor fails to comply with any provision of
this Deed of Trust, or if any action or proceeding is commenced that would
materially affect Lender's interests in the Property, Lender on Grantor's
behalf may, but shall not be required to, take any action that Lender deems

appropriate. Any amount that Lender expends in so doing will bear interest at
the rate provided for in the Note from the date incurred or paid by Lender to
the date of repayment by Grantor. All such expenses, at Lender's option, will
(a) be payable on demand, (b) be added to the balance of the Note and be
apportioned among and be payable with any installment payments to become due
during either (i) the term of any applicable insurance policy or (ii) the
remaining term of the Note, or (c) be treated as a balloon payment which will
be due and payable at the Note's maturity. This Deed of Trust also will secure
payment of these amounts. The rights provided for in this paragraph shall be
in addition to any other rights or any remedies to which Lender may be
entitled on account of the default. Any such action by Lender shall not be
construed as curing the default so as to bar Lender from any remedy that it
otherwise would have had.

     WARRANTY; DEFENSE OF TITLE.  The following provisions relating to
ownership of the Property are a part of this Deed of Trust.

          Title.  Grantor warrants that: (a) Grantor holds good and marketable
title of record to the Property in fee simple free and clear of all liens and
encumbrances other than those set forth in the Real Property description or in
any title insurance policy, title report, or final title opinion issued in
favor of, and accepted by, Lender in connection with this Deed of Trust, and
(b) Grantor has the full right, power, and authority to execute and deliver
this Deed of Trust to Lender.

          Defense of Title.  Subject to the exception in the paragraph above,
Grantor warrants and will forever defend the title to the Property against the
lawful claims of all persons. In the event any action or proceeding is
commenced that questions Grantor's title or the interest of Trustee or Lender
under this Deed of Trust, Grantor shall defend the action at Grantor's
expense. Grantor may be the nominal party in such proceeding, but Lender shall
be entitled to participate in the proceeding and to be represented in the
proceeding by counsel of Lender's own choice, and Grantor will deliver, or
cause to be delivered, to Lender such instruments as Lender may request from
time to time to permit such participation.

          Compliance With Law.  Grantor warrants that the Property and
Grantor's use of the Property complies with all existing applicable laws,
ordinances, and regulations of governmental authorities.

     CONDEMNATION.  The following provisions relating to condemnation
proceedings are a part of this Deed of Trust.

          Application of Net Proceeds.  If all or any part of the Property is
condemned by eminent domain proceedings or by any proceeding or purchase in
lieu of condemnation, Lender may at its election require that all or any
portion of the net proceeds of the award be applied to the Indebtedness or the
repair or restoration of the Property. The net proceeds of the award shall
mean the award after payment of all reasonable costs, expenses, and attorneys'
fees incurred by Trustee or Lender in connection with the condemnation.

          Proceedings.  If any proceeding in condemnation is filed, Grantor
shall promptly notify Lender in writing, and Grantor shall promptly take such
steps as may be necessary to defend the action and obtain the award. Grantor
may be the nominal party in such proceeding, but Lender shall be entitled to
participate in the proceeding and to be represented in the proceeding by
counsel of its own choice, and Grantor will deliver or cause to be delivered
to Lender such instruments as may be requested by it from time to time to
permit such participation.

     IMPOSITION OF TAXES, FEES AND CHARGES BY GOVERNMENTAL AUTHORITIES.  The
following provisions relating to governmental taxes, fees and charges are a
part of this Deed of Trust:

          Current Taxes, Fees and Charges.  Upon request by Lender, Grantor

shall execute such documents in addition to this Deed of Trust and take
whatever other action is requested by Lender to perfect and continue Lender's
lien on the Real Property. Grantor shall reimburse Lender for all taxes, as
described below, together with all expenses incurred in recording, perfecting
or continuing this Deed of Trust, including without limitation all taxes,
fees, documentary stamps, and other charges for recording or registering this
Deed of Trust.

          Taxes.  The following shall constitute taxes to which this section
applies: (a) a specific tax upon this type of Deed of Trust or upon all or any
part of the Indebtedness secured by this Deed of Trust; (b) a specific tax on
Grantor which Grantor is authorized or required to deduct from payments on the
Indebtedness secured by this type of Deed of Trust; (c) a tax on this type of
Deed of Trust chargeable against the Lender or the holder of the Note; and (d)
a specific tax on all or any portion of the Indebtedness or on payments of
principal and interest made by Grantor.

          Subsequent Taxes.  If any tax to which this section applies is
enacted subsequent to the date of this Deed of Trust, this event shall have
the same effect as an Event of Default (as defined below), and Lender may
exercise any or all of its available remedies for an Event of Default as
provided below unless Grantor either (a) pays the tax before it becomes
delinquent, or (b) contests the tax as provided above in the Taxes and Liens
section and deposits with Lender cash or a sufficient corporate surety bond or
other security satisfactory to Lender.

     SECURITY AGREEMENT; FINANCING STATEMENTS.  The following provisions
relating to this Deed of Trust as a security agreement are a part of this Deed
of Trust.

          Security Agreement.  This instrument shall constitute a security
agreement to the extent any of the Property constitutes fixtures or other
personal property, and Lender shall have all of the rights of a secured party
under the Uniform Commercial Code as amended from time to time.

          Security Interest.  Upon request by Lender, Grantor shall execute
financing statements and take whatever other action is requested by Lender to
perfect and continue Lender's security interest in the Rents and Personal
Property. In addition to recording this Deed of Trust in the real property
records, Lender may, at any time and without further authorization from
Grantor, file executed counterparts, copies or reproductions of this Deed of
Trust as a financing statement. Grantor shall reimburse Lender for all
expenses incurred in perfecting or continuing this security interest. Upon
default, Grantor shall assemble the Personal Property in a manner and at a
place reasonably convenient to Grantor and Lender and make it available to
Lender within three (3) days after receipt of written demand from Lender.

          Addresses.  The mailing addresses of Grantor (debtor) and Lender
(secured party), from which information concerning the security interest
granted by this Deed of Trust may be obtained (each as required by the Uniform
Commercial Code), are as stated on the first page of this Deed of Trust.

     FURTHER ASSURANCES; ATTORNEY-IN-FACT.  The following provisions relating
to further assurances and attorney-in-fact are a part of this Deed of Trust.

          Further Assurances.  At any time, and from time to time, upon
request of Lender, Grantor will make, execute and deliver, or will cause to be
made, executed or delivered, to Lender or to Lender's designee, and when
requested by Lender, cause to be filed, recorded, re-filed, or re-recorded, as
the case may be, at such times and in such offices and places as Lender may
deem appropriate, any and all such mortgages, deeds of trust, security deeds,
security agreements, financing statements, continuation statements,
instruments of further assurance, certificates, and other documents as may, in
the sole opinion of Lender, be necessary or desirable in order to effectuate,
complete, perfect, continue, or preserve (a) the obligations of Grantor under

the Note, this Deed of Trust and the Related Documents, and (b) the liens and
security interests created by this Deed of Trust as first and prior liens on
the Property whether now owned or hereafter acquired by Grantor. Unless
prohibited by law or agreed to the contrary by Lender in writing, Grantor
shall reimburse Lender for all costs and expenses incurred in connection with
the matters referred to in this paragraph.

          Attorney-in-Fact.  If Grantor fails to do any of the things referred
to in the preceding paragraph, Lender may do so for and in the name of Grantor
and at Grantor's expense. For such purposes, Grantor hereby irrevocably
appoints Lender as Grantor's attorney-in-fact for the purpose of making,
executing, delivering, filing, recording, and doing all other things as may be
necessary or desirable, in Lender's sole opinion, to accomplish the matters
referred to in the preceding paragraph.

     FULL PERFORMANCE.  Trustee may, upon production of the Note duly
canceled, release this Deed of Trust, and such release shall constitute a
release of the lien for all such additional sums and expenditures made
pursuant to this Deed of Trust. Lender agrees to cooperate with Grantor in
obtaining such release and releasing the other collateral securing the
Indebtedness. Any release fees required by law shall be paid by Grantor, if
permitted by applicable law.

     DEFAULT.  Each of the following, at the option of Lender, shall
constitute an event of default ("Event of Default") under this Deed of Trust:

          Default on Indebtedness.  Failure of Grantor to make any payment
when due on the Indebtedness.

          Default on Other Payments.  Failure of Grantor within the time
required by this Deed of Trust to make any payment for taxes or insurance or
any other payment necessary to prevent filing of or to effect discharge of any
lien.

          Compliance Default.  Failure of Grantor to comply with any other
term, obligation, covenant or condition contained in this Deed of Trust, the
Note or in any of the Related Documents.

          False Statements.  Any warranty, representation or statement made or
furnished to Lender by or on behalf of Grantor under this Deed of Trust, the
Note or the Related Documents is false or misleading in any material respect,
either now or at the time made or furnished.

          Defective Collateralization.  This Deed of Trust or any of the
Related Documents ceases to be in full force and effect (including failure of
any collateral documents to create a valid and perfected security interest or
lien) at any time and for any 
reason.

          Insolvency.  The dissolution or termination of Grantor's existence
as a going business, the insolvency of Grantor, the appointment of a receiver
for any part of Grantor's property, any assignment for the benefit of
creditors, any type of creditor workout, or the commencement of any proceeding
under any bankruptcy or insolvency laws by or against Grantor.

          Foreclosure, Forfeiture, etc.  Commencement of foreclosure or
forfeiture proceedings, whether by judicial proceeding, self-help,
repossession or any other method, by any creditor of Grantor or by any
governmental agency against any of the Property. However, this subsection
shall not apply in the event of a good faith dispute by Grantor as to the
validity or reasonableness of the claim which is the basis of the foreclosure
or forfeiture proceeding, provided that Grantor gives Lender written notice of
such claim and furnishes reserves or a surety bond for the claim satisfactory
to Lender.


          Breach of Other Agreement.  Any breach by Grantor under the terms of
any other agreement between Grantor and Lender that is not remedied within any
grace period provided therein, including without limitation any agreement
concerning any indebtedness or other obligation of Grantor to Lender, whether
existing now or later.

          Events Affecting Guarantor.  Any of the preceding events occurs with
respect to any Guarantor of any of the Indebtedness or any Guarantor dies or
becomes incompetent, or revokes or disputes the validity of, or liability
under, any Guaranty of the Indebtedness.

          Adverse Change.  A material adverse change occurs in Grantor's
financial condition, or Lender believes the prospect of payment or performance
of the Indebtedness is impaired.

     RIGHTS AND REMEDIES ON DEFAULT.  Upon the occurrence of any Event of
Default and at any time thereafter, Trustee or Lender, at its option, may
exercise any one or more of the following rights and remedies, in addition to
any other rights or remedies provided by law:

          Accelerate indebtedness. Lender shall have the right at its option
without notice to Grantor to declare the entire Indebtedness immediately due
and payable, including any prepayment penalty which Grantor would be required
to pay.

          Foreclosure.  Lender shall have the right to cause all or any part
of the Real Property, and Personal Property, if Lender decides to proceed
against it as if it were real property, to be sold by the Trustee according to
the laws of the State of Colorado as respects foreclosures against real
property. The Trustee shall give notice in accordance with the laws of
Colorado. The Trustee shall apply the proceeds of the sale in the following
order: (a) to all costs and expenses of the sale, including but not limited to
Trustee's fees, attorneys' fees, and the cost of title evidence; (b) to all
sums secured by this Deed of Trust; and (c) the excess, if any, to the person
or persons legally entitled to the excess.

          UCC Remedies.  With respect to all or any part of the Personal
Property, Lender shall have all the rights and remedies of a secured party
under the Uniform Commercial Code.

          Collect Rents.  Lender shall have the right, without notice to
Grantor, to take possession of and manage the Property and collect the Rents,
including amounts past due and unpaid and apply the net proceeds, over and
above Lender's costs, against the Indebtedness. In furtherance of this right,
Lender may require any tenant or other user of the Property to make payments
of rent or use fees directly to Lender. If the Rents are collected by Lender,
then Grantor irrevocably designates Lender as Grantor's attorney-in-fact to
endorse instruments received in payment thereof in the name of Grantor and to
negotiate the same and collect the proceeds. Payments by tenants or other
users to Lender in response to Lender's demand shall satisfy the obligations
for which the payments are made, whether or not any proper grounds for the
demand existed. Lender may exercise its rights under this subparagraph either
in person, by agent, or through a receiver.

          Appoint Receiver.  Lender shall have the right to have a receiver
appointed to take possession of all or any part of the Property, with the
power to protect and preserve the Property, to operate the Property preceding
foreclosure or sale, and to collect the Rents from the Property and apply the
proceeds, over and above the cost of the receivership, against the
Indebtedness. The receiver may serve without bond if permitted by law.
Lender's right to the appointment of a receiver shall exist whether or not the
apparent value of the Property exceeds the Indebtedness by a substantial
amount. Employment by Lender shall not disqualify a person from serving as a
receiver. Receiver may be appointed by a court of competent jurisdiction upon
ex parse application and without notice, notice being expressly waived.


          Tenancy at Sufferance.  If Grantor remains in possession of the
Property after the Property is sold as provided above or Lender otherwise
becomes entitled to possession of the Property upon default of Grantor,
Grantor shall become a tenant at sufferance of Lender or the purchaser of the
Property and shall, at Lender's option, either (a) pay a reasonable rental for
the use of the Property, or (b) vacate the Property immediately upon the
demand of Lender.

          Other Remedies.  Trustee or Lender shall have any other right or
remedy provided in this Deed of Trust or the Note or by law.

          Sale of the Property.  In exercising its rights and remedies, Lender
shall be free to designate on or before it files a notice of election and
demand with the Trustee, that the Trustee sell all or any part of the Property
together or separately, in one sale or by separate sales. Lender shall be
entitled to bid at any public sale on all or any portion of the Property. Upon
any sale of the Property, whether made under a power of sale granted in this
Deed of Trust or pursuant to judicial proceedings, if the holder of the Note
is a purchaser at such sale, it shall be entitled to use and apply all, or any
portion of, the Indebtedness for or in settlement or payment of all, or any
portion of, the purchase price of the Property purchased, and, in such case,
this Deed of Trust, the Note, and any documents evidencing expenditures
secured by this Deed of Trust shall be presented to the person conducting the
sale in order that the amount of Indebtedness so used or applied may be
credited thereon as having been paid.

          Waiver; Election of Remedies.  A waiver by any party of a breach of
a provision of this Deed of Trust shall not constitute a waiver of or
prejudice the party's rights otherwise to demand strict compliance with that
provision or any other provision. Election by Lender to pursue any remedy
provided in this Deed of Trust, the Note, in any Related Document, or provided
by law shall not exclude pursuit of any other remedy, and an election to make
expenditures or to take action to perform an obligation of Grantor under this
Deed of Trust after failure of Grantor to perform shall not affect Lender's
right to declare a default and to exercise any of its remedies.

          Attorneys' Fees; Expenses.  If Lender forecloses or institutes any
suit or action to enforce any of the terms of this Deed of Trust, Lender shall
be entitled to recover such sum as the court may adjudge reasonable as
attorneys' fees at trial and on any appeal. Whether or not any court action is
involved, all reasonable expenses incurred by Lender which in Lender's opinion
are necessary at any time for the protection of its interest or the
enforcement of its rights shall become a part of the Indebtedness payable on
demand and shall bear interest at the Note rate from the date of expenditure
until repaid. Expenses covered by this paragraph include, without limitation,
however subject to any limits under applicable law, Lender's attorneys' fees
whether or not there is a lawsuit, including attorneys' fees for bankruptcy
proceedings (including efforts to modify or vacate any automatic stay or
injunction), appeals and any anticipated post-judgement collection services,
the cost of searching records, obtaining title reports (including foreclosure
reports), surveyors' reports, appraisal fees, title insurance, and fees for
the Trustee, to the extent permitted by applicable law. Grantor also will pay
any court costs, in addition to all other sums provided by law.

          Rights of Trustee.  Trustee shall have all of the rights and duties
of Lender as set forth in this section.

     POWERS AND OBLIGATIONS OF TRUSTEE.  The following provisions relating to
the powers and obligations of Trustee are part of this Deed of Trust.

          Powers of Trustee.  In addition to all powers of Trustee arising as
a matter of law, Trustee shall have the power to take the following actions
with respect to the Property upon the written request of Lender and Grantor:
(a) join in preparing and filing a map or plat of the Real Property, including
the dedication of streets or other rights to the public; (b) join in granting

any easement or creating any restriction on the Real Property; and (c) join in
any subordination or other agreement affecting this Deed of Trust or the
interest of Lender under this Deed of Trust.

          Obligations to Notify.  Trustee shall not be obligated to notify any
other party of a pending sale under any other trust deed or lien, or of any
action or proceeding in which Grantor, Lender, or Trustee shall be a party,
unless the action or proceeding is brought by Trustee.

          Trustee.  Trustee shall meet all qualifications required for Trustee
under applicable law. In addition to the rights and remedies set forth above,
with respect to all or any part of the Property, the Trustee shall have the
right to foreclose by notice and sale, and Lender shall have the right to
foreclose by judicial foreclosure, in either case in accordance with and to
the full extent provided by applicable law.

     NOTICES TO GRANTOR AND OTHER PARTIES.  Any notice under this Deed of
Trust shall be in writing, may be sent by telefacsimile (unless otherwise
required by law), and shall be effective when actually delivered, or when
deposited with a nationally recognized overnight courier, or, if mailed, shall
be deemed effective when deposited in the United States mail first class,
certified or registered mail, postage prepaid, directed to the addresses shown
near the beginning of this Deed of Trust. Any party may change its address for
notices under this Deed of Trust by giving formal written notice to the other
parties, specifying that the purpose of the notice is to change the party's
address. All copies of notices of foreclosure from the holder of any lien
which has priority over this Deed of Trust shall be sent to Lender's address,
as shown near the beginning of this Deed of Trust. For notice purposes,
Grantor agrees to keep Lender and Trustee informed at all times of Grantor's
current address.

     MISCELLANEOUS PROVISIONS.  The following miscellaneous provisions are a
part of this Deed of Trust:

          Amendments.  This Deed of Trust, together with any Related
Documents, constitutes the entire understanding and agreement of the parties
as to the matters set forth in this Deed of Trust. No alteration of or
amendment to this Deed of Trust shall be effective unless given in writing and
signed by the party or parties sought to be charged or bound by the alteration
or 
amendment.

          Annual Reports.  If the Property is used for purposes other than
Grantor's residence, Grantor shall furnish to Lender, upon request, a
certified statement of net operating income received from the Property during
Grantor's previous fiscal year in such form and detail as Lender shall
require. "Net operating income" shall mean all cash receipts from the Property
less all cash expenditures made in connection with the operation of the
Property.

          Applicable Law.  This Deed of Trust has been delivered to Lender and
accepted by Lender in the State of Colorado.  This Deed of Trust shall be
governed by and construed in accordance with the laws of the State of
Colorado.

          Caption Headings.  Caption headings in this Deed of Trust are for
convenience purposes only and are not to be used to interpret or define the
provisions of this Deed of Trust.

          Merger.  There shall be no merger of the interest or estate created
by this Deed of Trust with any other interest or estate in the Property at any
time held by or for the benefit of Lender in any capacity, without the written
consent of Lender.

          Multiple Parties; Corporate Authority.  All obligations of Grantor

under this Deed of Trust shall be joint and several, and all references to
Grantor shall mean each and every Grantor. This means that each of the persons
signing below is responsible for all obligations in this Deed of Trust.

          Severability.  If a court of competent jurisdiction finds any
provision of this Deed of Trust to be invalid or unenforceable as to any
person or circumstance, such funding shall not render that provision invalid
or unenforceable as to any other persons or circumstances. If feasible, any
such offending provision shall be deemed to be modified to be within the
limits of enforceability or validity; however, if the offending provision
cannot be so modified, it shalt be stricken and all other provisions of tints
Deed of Trust in all other respects shalt remain valid and enforceable.

          Successors and Assigns.  Subject to the limitations stated in this
Deed of Trust on transfer of Grantor's interest, this Deed of Trust shall be
binding upon and inure to the benefit of the parties, their successors and
assigns. If ownership of the Property becomes vested in a person other than
Grantor, Lender, without notice to Grantor, may deal with Grantor's successors
with reference to this Deed of Trust and the Indebtedness by way of
forbearance or extension without releasing Grantor from the obligations of
this Deed of Trust or liability under the Indebtedness.

          Time Is of the Essence.  Time is of the essence in the performance
of this Deed of Trust.

          Waivers and Consents.  Lender shall not be deemed to have waived any
rights under this Deed of Trust (or under the Related Documents) unless such
waiver is in writing and signed by Lender. No delay or omission on the part of
Lender in exercising any right shall operate as a waiver of such right or any
other right. A waiver by any party of a provision of this Deed of Trust shall
not constitute a waiver of or prejudice the party's right otherwise to demand
strict compliance with that provision or any other provision. No prior waiver
by Lender, nor any course of dealing between Lender and Grantor, shall
constitute a waiver of any of Lender's rights or any of Grantor's obligations
as to any future transactions. Whenever consent by Lender is required in this
Deed of Trust, the granting of such consent by Lender in any instance shall
not constitute continuing consent to subsequent instances where such consent
is required.

          Waiver of Homestead Exemption.  Grantor hereby releases and waives
all rights and benefits of the homestead exemption laws of the State of
Colorado as to all Indebtedness secured by this Deed of Trust.


EACH GRANTOR ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS DEED OF
TRUST, AND EACH GRANTOR AGREES TO ITS 
TERMS.

GRANTOR:

The Rockies Fund, Inc.

__________________________________
Stephen G. Calandrella, President/Director




STATE OF            )
                    ) ss.
COUNTY OF           )



CORPORATE ACKNOWLEDGEMENT

Notary

On this ____ day of September, 1997, before me, the undersigned Notary,
appeared Stephen G. Calandrella, President/Director of The Rockies Fund, Inc.,
and known to me to be an authorized a agent of that executed the Deed of Trust
and acknowledged the Deed of Trust to be the free and voluntary act and deed
of the corporative authority of its Bylaws or by resolution of its board of
directors, for the uses and purposes therein mentioned, and on oath stated
that he or she is authorized to execute this Deed of Trust and in fact
executed the Deed of Trust on behalf of the corporation.

     My commission expires:  

          
(SEAL)
                                                                              
                                   Notary Public