EXHIBIT 10.39

















                                            PURCHASE AND SALE AGREEMENT

                                           AND JOINT ESCROW INSTRUCTIONS

                                                   MAY 24, 1999

                                                   BY AND AMONG

                                      ALEXANDRIA REAL ESTATE EQUITIES, INC.,
                                              a Maryland corporation

                                                      "Buyer"

                                                        AND

                                             BIO-SHORE HOLDINGS, LTD.,
                                         a CALIFORNIA LIMITED PARTNERSHIP

                                                        AND

                                                    SCIOS INC.,
                                              a Delaware corporation

                                                   COLLECTIVELY,
                                                     "Seller"





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                                            PURCHASE AND SALE AGREEMENT
                                           AND JOINT ESCROW INSTRUCTIONS


         THIS PURCHASE AND SALE  AGREEMENT AND JOINT ESCROW  INSTRUCTIONS  (this
"Agreement")  is made and  entered  into as of May 24,  1999,  by and  among (i)
ALEXANDRIA  REAL  ESTATE  EQUITIES,  INC.,  a  Maryland  corporation,  as  buyer
("Buyer"),   and  (ii)(A)  BIO-SHORE   HOLDINGS,   LTD.,  a  California  limited
partnership ("Bio-Shore"), and (B) SCIOS INC., a Delaware corporation ("Scios"),
as seller  (collectively,  "Seller"),  for the  purposes  of  setting  forth the
agreement  of the parties and of  instructing  CHICAGO  TITLE  COMPANY  ("Escrow
Agent"), with respect to the transactions contemplated by this Agreement.


                                  RECITALS

A.  Bio-Shore  is the current  holder of the ground  lessee's  interest  under a
certain  Lease  (Relating To Parcel III) dated  October 1, 1981,  by and between
Juana  Salado,  as Trustee of The Salado  Living  Trust,  dated June 7, 1976, as
lessor (together with any successor or assign,  "Ground Lessor"), and Charleston
Properties,  a general  partnership,  as lessee  ("Charleston") (as the same may
have been amended,  modified,  supplemented,  restated,  renewed,  assigned,  or
extended,  the "Ground Lease").  A Short Form of Ground Lease was recorded March
11, 1982, as Instrument No.  7298629,  in Book G645, at Page 429 of the Official
Records  of  Santa  Clara  County  (the  "County"),  California  (the  "Official
Records").  Charleston  assigned  its rights as ground  lessee  under the Ground
Lease to Bio-Shore  pursuant to a certain Ground Lease Assignment and Assumption
and Reservation of Easements dated December 30, 1986, and recorded  December 30,
1986,  as  Instrument  No.  9090415,  in Book J981, at Page 1245 of the Official
Records.

B. The Ground Lease covers  approximately  7.34 acres of real property
located  in the City of  Mountain  View,  California,  as legally  described  on
Exhibit  A  attached  hereto  (the  "Land").  The  Land  currently  contains  an
approximately  98,964 square foot office,  laboratory,  and pilot  manufacturing
facility  (the  "Facility")  comprised  of three  buildings  (collectively,  the
"Buildings")  commonly  known as 2450  Bayshore  Parkway (or  Building 1) ("2450
Bayshore   Building"),   2425  Garcia  Avenue  (or  Building  2)  ("2425  Garcia
Building"),   and  2400  Bayshore   Parkway  (or  Building  3)  ("2400  Bayshore
Building").  The 2450 Bayshore Building contains, among other things, laboratory
space and corporate  headquarters for Scios. The 2425 Garcia Building  contains,
among other things, manufacturing facilities,  bioreactor rooms (the "Bioreactor
Rooms") and a vivarium (the "Vivarium").  The 2400 Bayshore  Building  primarily
contains office space.

C. Scios currently  occupies 100% of the rentable square
footage of the Facility  pursuant to a certain  Temporary Lease dated January 1,
1987,  between  Bio-Shore  and Scios  (then  California  Biotechnology  Inc.,  a
California  corporation),  as amended by a certain  Amendment To Temporary Lease
dated  January  1,  1989,   between   Bio-Shore   and  Scios  (then   California
Biotechnology  Inc.,  a Delaware  corporation),  a certain  Second  Amendment To
Temporary  Lease  dated  January 15,  1989,  between  Bio-Shore  and Scios (then
California  Biotechnology  Inc., a Delaware  corporation),  and a certain  Third
Amendment To Temporary

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Lease dated January 1, 1993,  between Bio-Shore and Scios (then known as Scios
Nova Inc., the successor name for California  Biotechnology
Inc.)  (collectively,  the "Temporary  Lease").

D. Bio-Shore is wholly-owned by
Bio-Shore Management Corp., a California corporation  ("Bio-Shore  Management"),
as sole  general  partner,  and Scios,  as sole  limited  partner.  In addition,
Bio-Shore  Management is wholly-owned by Scios.  Bio-Shore's only assets are the
"Ground  Lease  Interest"  and the  "Improvements"  (as such  terms are  defined
below).  Scios  owns  and  operates  the  business  currently  conducted  in the
Facility,  and  owns  all of  the  "Tenant  Leases",  "Personal  Property",  and
"Intangible  Property" (as such terms are defined below).

E. Upon and subject to the terms and conditions set forth in this Agreement,
Seller desires to sell and Buyer desires to purchase the following
(collectively, the "Property"):

                  (i) the ground  lessee's  interest in the Land,  together with
         all rights,  privileges,  and easements  appurtenant thereto or used in
         connection therewith,  including, without limitation, all mineral, oil,
         gas, and other hydrocarbon  substance rights,  all development  rights,
         air rights,  water, water rights and water stock relating thereto,  all
         strips and gores,  and all right,  title,  and  interest  in and to any
         streets, alleys, easements, rights-of-way, public ways, or other rights
         appurtenant,  adjacent,  or  connected  thereto  or used in  connection
         therewith (collectively, the "Ground Lease Interest");

                  (ii) all of Seller's right,  title, and interest in and to all
         buildings,  improvements,  structures,  and  fixtures  now or hereafter
         included   or   located   on  or  in  the   Land   (collectively,   the
         "Improvements")  and all apparatus,  equipment,  appliances,  and other
         fixtures used in connection with the operation or occupancy of the Land
         and the Improvements,  such as heating,  air conditioning or mechanical
         systems  and   facilities   used  to  provide  any  utility   services,
         refrigeration,  ventilation,  waste disposal,  or other services now or
         hereafter  located on or in the Land or the  Improvements  (the  Ground
         Lease  Interest  and  the   Improvements   are  sometimes   hereinafter
         collectively referred to as the "Real Property");

                  (iii)  Seller's  interest in all leases,  licenses,  and other
         occupancy agreements covering the Land and Improvements,  if any (these
         leases,  together with all amendments,  modifications,  extensions,  or
         supplements thereto or guarantees thereof, are collectively referred to
         in this  Agreement  as the "Tenant  Leases" and are  identified  in the
         "Rent  Roll" (as  defined in  Section  4.6  below)  attached  hereto as
         Exhibit B-2);

                  (iv) all tangible personal property,  equipment,  and supplies
         (collectively,  the  "Personal  Property")  now or  hereafter  owned by
         Seller and located on or about the Land or the Improvements or attached
         thereto or used in connection with the use, operation,  maintenance, or
         repair thereof,  including,  without limitation,  the personal property
         designated  in Exhibit C-1 attached  hereto but  excluding the personal
         property (if any) designated in Exhibit C-2 attached hereto (Seller and
         Buyer  shall  prepare a detailed  inventory  of the  Personal  Property
         within 15 days after the Execution  Date,  and thereafter the inventory
         of the Personal Property shall serve as Exhibit C-1 hereto); and

                  (v) all intangible  property  (collectively,  the  "Intangible
         Property") now or hereafter owned by Seller and used in connection with
         the  Real  Property  or  the  Personal  Property,   including,  without
         limitation,  Facility-specific trademarks and trade names, transferable
         licenses,   architectural,   site,   landscaping,   or  other  permits,
         applications,

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         approvals,   authorizations,  and  other  entitlements,
         transferable  guarantees  and  warranties  covering  the Real  Property
         and/or the Personal  Property,  all contract rights  (including  rights
         under the  "Service  Contracts"  (as defined in Section  4.13  below)),
         books,  records,  reports,  test  results,  environmental  assessments,
         as-built  plans,  specifications,   and  other  similar  documents  and
         materials relating to the use or operation,  maintenance,  or repair of
         the Real Property and/or the Personal  Property or the  construction or
         fabrication  of  any  part  thereof,   and  all  transferable   utility
         contracts.

         NOW, THEREFORE,  in consideration of the foregoing Recitals,  which are
incorporated  herein by this reference,  the mutual covenants  contained in this
Agreement,  and for other  good and  valuable  consideration,  the  receipt  and
sufficiency of which are hereby acknowledged, Buyer and Seller hereby agree, and
instruct Escrow Agent, as follows:

1. AGREEMENT TO PURCHASE AND SELL.

         Subject  to all of the terms and  conditions  of this  Agreement,
Seller  agrees to sell,  transfer,  and convey to Buyer,  and Buyer agrees to
acquire and purchase from Seller,  the Property upon the terms and conditions
set forth herein.

2.       PURCHASE PRICE.

         The purchase price for the Property (the "Purchase Price") shall be the
sum of $22,165,000.00,  subject to adjustments pursuant to Section 2.3 below and
subject to prorations and adjustments provided for in this Agreement, including,
without limitation, Section 10. The Purchase Price shall be payable as follows:

2.1.     Deposit.

2.1.1.  Initial  Deposit.
Not later than the date that is 3 "Business Days" (as
defined in Section  17.18  below)  after the  "Execution  Date" (as  hereinafter
defined),  Buyer shall deposit into Escrow the sum of $250,000.00  (the "Initial
Deposit").  For purposes of this Agreement,  the "Execution Date" shall mean May
28, 1999.  Within 3 Business  Days after the  Execution  Date,  Seller and Buyer
shall confirm in writing the specific  dates for deadlines  under this Agreement
based upon the  Execution  Date  determined  as provided  above and shall notify
Escrow Agent of such dates.

2.1.2.  Additional  Deposit.
If Buyer elects not to
terminate this Agreement in accordance  with either Section 3.1.3 or Section 3.7
hereof,  Buyer  shall  deposit  into  Escrow,  not later than the date that is 1
Business Day after the "Due Diligence  Termination  Date" (as defined in Section
3.7 below), the sum of $500,000.00 (the "Additional  Deposit").

2.1.3. Handling of Deposit.
Escrow Agent shall deposit the Initial  Deposit and the  Additional
Deposit  (collectively,  the "Deposit") in a  non-commingled  federally  insured
interest  bearing  trust  account and shall invest the Deposit in insured  money
market accounts,  certificates of deposit, United States Treasury Bills, or such
other  instruments as Buyer may instruct from time to time. Upon Buyer's deposit
of the  Additional  Deposit,  the entire  Deposit  shall become  non-refundable,
except as may be expressly  provided  otherwise herein. If the sale and purchase

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of the Property is  consummated  as  contemplated  hereunder,  the amount of the
Deposit,  plus any  interest  or  dividends  earned  thereon,  shall be credited
against the Purchase  Price at the  "Closing" (as defined in Section 8.1 below).
If the sale and  purchase


of the  Property  is not  consummated  because of the
termination  of this  Agreement  by Buyer  in  accordance  with any  right to so
terminate  provided  herein,  or the  failure of any  "Buyer's  Conditions"  (as
defined in Section  7.1  below),  or for any other  reason  except for a default
under this  Agreement  solely on the part of Buyer,  Buyer shall give Seller and
Escrow Agent Notice of the same, and the Deposit, plus any interest or dividends
earned  thereon,  shall be immediately  returned to Buyer by Escrow Agent.

2.2. Leaseback To Scios.
Scios currently occupies 100% of the rentable square footage
of the Facility  pursuant to the Temporary Lease.  Upon the sale and purchase of
the Property as contemplated  hereunder,  Bio-Shore and Scios will terminate the
Temporary  Lease (with no cost or  liability  to Buyer) and Scios will lease the
Facility from Buyer pursuant to a lease agreement in form and substance mutually
agreed upon by Buyer and Scios in accordance  with the procedure set forth below
(the "Leaseback"). The Leaseback shall be for a fixed term expiring (i) 6 months
after the "Closing  Date" (as defined in Section 8.1 below),  as to all portions
of the Facility other than the Bioreactor  Rooms (the "Primary  Facility"),  and
(ii) 7 months after the Closing Date, as to the  Bioreactor  Rooms.  Among other
things, the Leaseback shall provide for:

(a)      monthly base rent of [***] per rentable square foot ("Base Rent");

(b)     the  payment  by Scios  of  additional monthly  rent equal to all
reasonable operating costs and expenses of any kind or description  ("Operating
Costs") incurred or accrued by Buyer with respect to the Facility (including,
without limitation, maintenance and repair costs, insurance premiums, real and
personal property taxes, and utilities) for the period (1) through and including
December 31, 1999, as to the Primary  Facility and (2) through and including
January 31, 2000, as to the Bioreactor Rooms;

c)      the right of Buyer to terminate the Leaseback, at any time, for any
portion of the  Primary  Facility  for which  Buyer has entered into binding
leases with persons or entities other than Scios; and

d)      the payment by Scios of a fee upon the termination of the Leaseback as
to any portion of the Primary Facility (the "Termination  Fee"),  which
Termination Fee shall be (1) [***], and (2) payable in 2 installments, with
60.00% of the Termination Fee payable upon the effective date of the termination
in question and the balance of the Termination Fee payable on the 90th day after
such effective date.

Seller hereby acknowledges and agrees that the Purchase Price has been agreed to
by Buyer in reliance on Scios  entering into the Leaseback and either paying the
aggregate  monthly rent that would be due thereunder  through the entire term of
the Leaseback or, in lieu of thereof, the Termination Fee.

Not  later  than the date  that is 2  Business  Days  after  the  "Ground  Lease
Termination  Date" (as defined in Section 3.1.2 below),  Buyer shall prepare and
deliver to Scios a draft of the proposed Leaseback. Within 5 Business Days after
Scios'  receipt of the draft of the proposed  Leaseback,  Scios shall give Buyer
Notice of any reasonable  objections,  questions,  and/or  comments  (generally,
"Comments")  that Scios may have  regarding  such draft.  Within 5 Business Days
after Buyer's  receipt of any such Comments,  Buyer shall cause the draft of the
proposed

                              ***A CONFIDENTIAL PORTION OF THE MATERIAL HAS BEEN
                              OMITTED AND FILED SEPARATELY WITH THE SECURITIES
                              AND EXCHANGE COMMISSION.

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Leaseback to be revised to address such  Comments in a reasonable  manner and to
be resubmitted to Scios for further  review and/or  approval.  Within 5 Business
Days after Scios' receipt of the revised draft of the proposed Leaseback,  Scios
shall  deliver to Buyer any final  Comments that Scios may have  regarding  such
revised  draft.  Within 5 Business Days after Buyer's  receipt of any such final
Comments,  Buyer shall cause the revised  draft of the proposed  Leaseback to be
revised further to address such final Comments in a reasonable  manner and to be
resubmitted to Scios for execution.

2.3.  Adjustments To Purchase Price.

2.3.1.  Modification of Ground Lease Percentage Rent.
If Ground Lessor fails or refuses
to deliver to Buyer at the  Closing the "Ground  Lease  Consent"  (as defined in
Section 3.1.2 below) with a provision  modifying the current  "percentage  rent"
calculation  under the Ground  Lease in the manner set forth in Section  2(a) of
the form of Ground  Lease  Consent  attached  hereto as Exhibit T, the  Purchase
Price  shall be reduced by the sum of  $292,500.00.

2.3.2.  Cost Savings.
The Purchase Price shall be reduced by the amount that the total of (i) the cost
of the Survey, (ii) Seller's share of the cost of the "Phase I Study" and "Phase
I Report" (as such terms are defined in Section  3.3  below), and (iii) Seller's
share of the cost of the "Phase II Study"  and "Phase II Report"  (as such terms
are defined in Section 4.20.4 below), is less than $40,000.00.

2.4. Balance.
On the Closing Date,  Buyer shall cause the Deposit (plus any interest or
dividends earned thereon) to be disbursed to Seller and shall pay to Seller the
balance of the Purchase  Price over and above the amount of the Deposit
(plus any interest or dividends  earned thereon) by wire transfer of federal
funds to Escrow Agent, net of all  prorations  and  adjustments  provided
herein.

2.5.  Allocation of Purchase Price.
Buyer and Seller hereby agree to allocate the Purchase Price for
all tax and non-tax  purposes among the components of the Property  described in
Exhibit D attached hereto (the "Allocation  Schedule").  Buyer and Seller hereby
agree that the Allocation Schedule shall be prepared in a manner consistent with
the rules prescribed under Section 1060 of the Internal Revenue Code of 1986, as
amended  (the  "Code") and shall be completed by Buyer and Seller not later than
the date that is 1 Business Day after the Due Diligence  Termination Date. Buyer
and Seller  hereby each (a) agree to use the amounts  allocated  pursuant to the
Allocation  Schedule  in filing  all tax  returns  (including  any  amended  tax
returns)  and (b) agree not to take any  position on or in  connection  with any
such tax return or otherwise that is inconsistent  with such allocation.

3. DUE DILIGENCE

3.1. Ground Lease.

3.1.1.  Deliveries By Seller.
Seller has delivered
to Buyer a true, correct,  and complete copy of the Ground Lease,  including any
amendments,  modifications,  supplements, and restatements thereto (except for a
certain Recognition Agreement dated May ___, 1985 (the "Recognition Agreement"),
among Ground  Lessor,  Charleston,  and Union Mutual Life  Insurance  Company (a
Memorandum of Recognition  Agreement was recorded May 9, 1985, as Instrument No.
8403810 in Book J341, Page 988, of the Official  Records)),  and any short forms
or memoranda thereof.  Seller, at Seller's sole cost and expense,  shall deliver

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or make  available  to  Buyer  before  5:00  p.m.  (California  time) on the 2nd
Business Day after the Execution  Date, to the extent such items are in Seller's
possession  or control or in the  possession  or  control  of  Seller's  agents,
auditors,  independent contractors,  or representatives ("Seller's Possession"),
(a) true,  correct,  and complete copies of any  correspondence  with authorized
representatives  of the  Ground  Lessor  or any  other  material  correspondence
related to the Ground Lease,  and (b) Bio-Shore's  existing title policy for the
Ground Lease Interest, if available.  Further, Seller, at Seller's sole cost and
expense,  shall promptly deliver or make available to Buyer a true, correct, and
complete copy of the Recognition  Agreement if and when Seller obtains the same.

3.1.2.  Buyer's Review of Ground Lease Matters.
At Buyer's request,  Seller has
submitted to Ground  Lessor,  for Ground  Lessor's  review and  approval,  (a) a
consent to assignment and  modification  of ground lease,  substantially  in the
form of Exhibit T attached hereto (the "Ground Lease Consent"), and (b) a ground
lease  estoppel  certificate,  substantially  in the form of  Exhibit U attached
hereto  (the  "Ground  Lease   Estoppel").   Seller  has  contacted   authorized
representatives  of the Ground Lessor and offered to arrange for an introduction
of Buyer, and shall assist and cooperate with Buyer in providing Buyer access to
such authorized  representatives,  it being understood and agreed that Buyer may
negotiate  such  changes to the Ground  Lease  Consent  and/or the Ground  Lease
Estoppel and conduct such inquiries and  investigations  of the Ground Lessor as
Buyer, in its sole discretion,  deems advisable or necessary.  In addition,  not
later than the date that is 3 Business Days before the "Ground  Lease  Objection
Date" (as  hereinafter  defined),  Buyer shall have  received  the Ground  Lease
Estoppel  executed  and  acknowledged  on behalf of Ground  Lessor and a written
agreement from Ground Lessor pursuant to which Ground Lessor  irrevocably agrees
to deliver the Ground Lease Consent at the Closing.  Buyer shall have until 5:00
p.m.  (California time) on June 16, 1999 (the "Ground Lease Objection Date"), to
give  Seller  Notice of any  objection  that Buyer may have to any aspect of the
Ground Lease (including,  without  limitation,  the Recognition  Agreement,  any
deviations  from the requested  form of the Ground Lease  Estoppel or the Ground
Lease Consent that may be required by Ground Lessor, any additional documents or
instruments that Ground Lessor contends  constitute part of the Ground Lease, or
any amendment or update to the Ground Lease Estoppel or the Ground Lease Consent
received by Buyer before the Ground Lease  Objection  Date  (provided,  however,
that if any such  amendment or update is received by Buyer,  Buyer shall have an
additional 3 Business Days, regardless of the Ground Lease Objection Date or the
"Scheduled  Closing  Date" (as  defined in Section  8.1 below)  (but  subject to
Section 8.1 below),  following  Buyer's  receipt of such amendment or update and
legible  copies of all documents  referenced  therein,  to give Seller Notice of
objections to any aspect of such amendment or update)). Any aspect of the Ground
Lease (or any amendment or update  thereof) not objected to by Buyer as provided
above shall be deemed to be "Permitted Ground Lease Matters". If, however, Buyer
objects  to  any  aspect  of  the  Ground  Lease  ("Objectionable  Ground  Lease
Matters"),  Seller  shall  have  until  5:00 p.m.  (California  time) on the 2nd
Business  Day after  receiving  Buyer's  Notice of  Objectionable  Ground  Lease
Matters  to give Buyer  Notice  that (i) Seller  will  correct or cure  specific
Objectionable  Ground Lease  Matters  ("Voluntary  Ground Lease Cure  Matters"),
and/or  (ii)  Seller  will  not  take  any  action  with   respect  to  specific
Objectionable Ground Lease Matters. If Seller elects not to take any action with
respect to any specific  Objectionable  Ground Lease  Matters and Buyer does not
terminate  this  Agreement on or before 5:00 p.m.  (California  time) on the 2nd
Business Day after receiving Seller's Notice of such election (the "Ground Lease
Termination  Date"),  Buyer shall be deemed to have  elected to proceed with the
purchase and to accept the Ground Lease Interest  subject to such  Objectionable
Ground Lease Matters.

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3.1.3.  Ground Lease Termination  Right.
Buyer shall have
the right to terminate  this Agreement at any time on or before the Ground Lease
Termination  Date if, during the course of Buyer's due diligence  investigations
of the Ground Lease, Buyer determines,  in Buyer's sole and absolute discretion,
that  Buyer does not want to accept the  Ground  Lease  Interest  subject to any
Objectionable Ground Lease Matters. Buyer may exercise such termination right by
delivering a Notice of  termination  to Seller and Escrow Agent (a "Ground Lease
Termination  Notice") on or before the Ground Lease  Termination  Date. Upon the
timely delivery of such Ground Lease Termination  Notice, (i) Escrow Agent shall
immediately  return to Buyer the Initial Deposit (plus any interest or dividends
earned thereon),  (ii) the parties shall equally share the cancellation  charges
of Escrow Agent and "Title  Company" (as defined in Section 3.10.1  below),  and
(iii) this Agreement shall automatically terminate and be of no further force or
effect and neither party shall have any further rights or obligations hereunder,
other  than  pursuant  to any  provision  hereof  that  expressly  survives  the
termination of this Agreement.  If Buyer has timely  delivered to Escrow Agent a
Ground Lease Termination  Notice, no notice to Escrow Agent from Seller shall be
required  for the return to Buyer of the Initial  Deposit  (plus any interest or
dividends  earned  thereon).  If Buyer does not  exercise  such  termination  by
delivery of the Ground  Lease  Termination  Notice on or before the Ground Lease
Termination  Date,  then Buyer's right to terminate this  Agreement  pursuant to
this Section shall automatically lapse.

3.1.4.  Seller's  Obligations  Regarding Ground  Lease  Matters.
If Buyer  does not elect to  terminate  this  Agreement
pursuant to Section 3.1.3 above,  Seller, as a condition to Closing,  shall take
all action  necessary to correct or cure Voluntary  Removal Ground Lease Matters
and the following  matters:  (a) all amendments or  modifications  to the Ground
Lease created by Seller on or after the Execution Date without the prior written
consent of Buyer  (which  consent may be withheld in Buyer's  sole and  absolute
discretion);  and (b) any and all  defaults by Seller under the Ground Lease for
any period prior to the Closing (collectively, the "Obligatory Ground Lease Cure
Matters").  If, prior to the Closing, Seller is unable to correct or cure any of
the  Voluntary  Ground  Lease Cure Matters or the  Obligatory  Ground Lease Cure
Matters  (collectively,  the "Ground Lease Cure Matters"),  then, in addition to
any and all other rights and remedies that Buyer may have hereunder,  Buyer may:
(i) terminate this Agreement by Notice to Seller and Escrow Agent (in which case
Escrow Agent shall  return to Buyer the Deposit  (plus any interest or dividends
earned thereon), and the parties shall equally share the cancellation charges of
Escrow  Agent and Title  Company),  and Seller shall  reimburse  Buyer for up to
$150,000.00  of Buyer's  actual  out-of-pocket  costs and  expenses  incurred in
connection with the transaction  contemplated by this Agreement,  and thereafter
neither party shall have any rights or obligations to the other hereunder, other
than pursuant to any provision hereof that expressly survives the termination of
this  Agreement;  or (ii) if Buyer does not elect to terminate  this  Agreement,
pursue an action for specific  performance  to compel  Seller to correct or cure
the Ground Lease Cure Matters or waive  Buyer's  objections to such Ground Lease
Cure Matters and proceed to a timely  Closing,  whereupon such Ground Lease Cure
Matters  shall  be  deemed  "Permitted  Ground  Lease  Matters".

3.2.  Property Documents.
Not later than the date that is 3 Business  Days after the Execution
Date, Seller, at Seller's sole cost and expense, shall deliver or make available
to Buyer, to the extent such items are in Seller's  Possession,  true,  correct,
and complete copies of all agreements, contracts, documents, information, Tenant
Leases (if any), reports,  books,  records, and other materials pertinent to the
ownership,  operation, occupancy, use, or management of the Property (including,
without   limitation,   the  items  described  in  Exhibit  E  attached  hereto)
(collectively,  the "Property Documents"). Seller shall give Buyer Notice of the
date that Seller  determines that Seller has delivered copies of, or given Buyer
satisfactory  access to, all of the Property Documents (which date, for purposes
of this

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Agreement, may not be before the Execution Date); provided,  however, if
Seller  delivers  copies  of, or gives  Buyer  access  to,  additional  Property
Documents after the Ground Lease Termination Date, the Due Diligence Termination
Date  shall  be  extended  by the  period,  not to  exceed  7 days,  that  Buyer
reasonably  determines is necessary  for Buyer to  incorporate  such  additional
Property  Documents  into Buyer's due diligence  investigations  of the Property
(Buyer  shall give  Seller  prompt  Notice of the period  determined  by Buyer).
Seller  and  Buyer  hereby  acknowledge  and  agree  that  Buyer  shall  have no
obligation  to  review,  examine,  or  otherwise  analyze  any of  the  Property
Documents unless and until Buyer elects not to terminate this Agreement pursuant
to Section 3.1.3 above.

3.3.  Investigations.
At all reasonable times from the
Execution  Date until the Closing or earlier  termination  of this Agreement and
upon reasonable prior notice to Seller, Buyer and its agents and representatives
shall be  entitled,  at  Buyer's  sole cost and  expense,  to (i) enter onto the
Property   during   normal   business   hours  to   perform   any   inspections,
investigations,   studies,  and  tests  of  the  Property,   including,  without
limitation, physical, structural, mechanical, architectural, engineering, soils,
geotechnical  and  environmental/asbestos  tests  that  Buyer  deems  reasonable
(provided  that no invasive  testing shall be performed  without  Seller's prior
written  approval  (which  approval  shall  not  be  unreasonably   withheld  or
delayed));  (ii)  cause  an  environmental  assessment  of  the  Property  to be
performed;  (iii) review all Property Documents and examine and copy any and all
other  books  and  records  in  Seller's  Possession  relating  to the  Property
(including, without limitation, all documents relating to utilities, zoning, and
the access,  subdivision  and  appraisal of the  Property);  and (iv)  interview
Seller's property manager, if any ("Manager"),  and any of its employees who are
responsible  for the  operation,  management,  or maintenance of any part of the
Property.  For purposes of this Section,  it shall be deemed  "reasonable  prior
notice" if Buyer  complies  with the notice  provisions of Section 17.4 or gives
Scott Korney (Director of Facilities for Scios) or David Gryska (Chief Financial
Officer of Scios) telephonic notice of Buyer's intent to do any of the foregoing
at least 18 hours before  commencing any such activity.  Seller and Buyer hereby
acknowledge  and agree  that  Buyer  shall have no  obligation  to  perform  any
inspection, investigation, study, or test of the Property unless and until Buyer
elects  not to  terminate  this  Agreement  pursuant  to  Section  3.1.3  above;
provided,  however,  that (x) Buyer,  not later than the date that is 3 Business
Days after the  Execution  Date,  shall cause its  environmental  consultant  to
commence  performing a "phase I"  environmental  site  assessment  plus asbestos
survey and lead in  drinking  water  survey of the  "Property  Environment"  (as
defined in Section  4.20.1(a)  below)  (the  "Phase I Study"),  (y) Buyer  shall
require its  environmental  consultant to prepare a written report regarding the
Phase I Study  (the  "Phase  I  Report")  and  shall  cause  such  environmental
consultant  to deliver to Seller an accurate and  complete  copy of such Phase I
Report, including all schedules, graphs, photographs, and any other supplemental
materials,  and (z) the actual  cost of the Phase I Study and the Phase I Report
shall be borne  equally  by Seller and Buyer,  provided  that in no event  shall
Seller's share of such cost exceed $5,000.00.

3.4. Tenants.
Not later than the
date that is 5 days after the Execution  Date,  Seller shall contact  authorized
representatives  of such tenants of the Property as Buyer may request to arrange
for an  introduction  of Buyer,  and shall  otherwise  assist and cooperate with
Buyer in providing Buyer access to such tenants. Buyer and its agents,  assigns,
and employees shall observe and comply with all reasonable  requests on the part
of tenants of the Property  regarding entry into tenant  facilities for purposes
of inspection.  Buyer may conduct such inquiries and  investigations  of any and
all tenants (or  prospective  tenants) as Buyer, in its sole  discretion,  deems
advisable or  necessary.  Seller shall use  commercially  reasonable  efforts to
deliver  to  Buyer  estoppel  certificates,  each  substantially  in the form of
Exhibit F attached

<PAGE>

hereto,  executed by each tenant under the Tenant Leases (if
any)  (collectively,  the  "Tenant  Estoppels"),  no later than 5 Business  Days
before the Due Diligence  Termination Date. Seller and Buyer hereby  acknowledge
and agree that Buyer shall have no obligation to review,  examine,  or otherwise
analyze any aspect of any Tenant  Lease (if any)  unless and until Buyer  elects
not to terminate this  Agreement  pursuant to Section 3.1.3 above.

3.5.  CC&Rs.
Buyer may conduct such inquiries and investigations of any and all declarants or
associations created by any covenants,  conditions,  or restrictions encumbering
the Property  ("CC&Rs") as Buyer,  in its sole  discretion,  deems  advisable or
necessary.  Seller shall use commercially reasonable efforts to deliver to Buyer
an estoppel certificate,  each substantially in form and substance acceptable to
Buyer,  executed by each declarant or association under any CC&Rs (collectively,
the "CC&Rs  Estoppels"),  no later than 5 Business Days before the Due Diligence
Termination Date. Seller and Buyer hereby acknowledge and agree that Buyer shall
have no obligation to conduct any inquiry or  investigation  of any declarant or
association  created by any CC&Rs unless and until Buyer elects not to terminate
this Agreement pursuant to Section 3.1.3 above.

3.6. Property Questionnaire.
Not later than thedate that is 5 days after the Execution  Date,  Seller  shall
deliver to Buyer a property questionnaire in the form attached hereto as Exhibit
G (the  "Property  Questionnaire")  completed  by Seller and its  Manager to the
reasonable  satisfaction of Buyer. The Property Questionnaire shall not indicate
any fact or  circumstance  that Buyer  reasonably  believes  (based on advice of
counsel) would be likely to affect  Buyer's  status as a real estate  investment
trust, as defined in Section 856 of the Internal  Revenue Code (as amended),  if
the  transactions  contemplated  hereby  are  consummated.

3.7.  Due  Diligence Termination Right.
Buyer shall have the right to terminate this Agreement at any
time on or before 5:00 p.m.  (California  time) on the date (the "Due  Diligence
Termination  Date") that is 30 calendar days after the Ground Lease  Termination
Date  (subject to Section 3.2 above and Section 8.1 below) if, during the course
of Buyer's due diligence  investigations of the Property,  Buyer determines,  in
Buyer's sole and absolute  discretion,  that Buyer does not want to purchase the
Property.  Buyer may exercise such  termination  right by delivering a Notice of
termination to Seller and Escrow Agent (a "Due Diligence Termination Notice") on
or before the Due Diligence  Termination  Date. Upon the timely delivery of such
Due Diligence  Termination  Notice, (i) Escrow Agent shall immediately return to
Buyer the Initial Deposit (plus any interest or dividends earned thereon),  (ii)
the parties  shall equally  share the  cancellation  charges of Escrow Agent and
Title Company, and (iii) this Agreement shall automatically  terminate and be of
no further  force or effect and neither  party shall have any further  rights or
obligations  hereunder,  other  than  pursuant  to  any  provision  hereof  that
expressly  survives  the  termination  of this  Agreement.  If Buyer has  timely
delivered  to Escrow  Agent a Due  Diligence  Termination  Notice,  no notice to
Escrow  Agent  from  Seller  shall be  required  for the  return to Buyer of the
Initial Deposit (plus any interest or dividends earned  thereon).  If Buyer does
not  exercise  such  termination  by delivery of the Due  Diligence  Termination
Notice on or before the Due Diligence  Termination  Date,  then Buyer's right to
terminate this  Agreement  pursuant to this Section shall  automatically  lapse.

3.8.  Insurance.
Buyer  agrees  that from the  Execution  Date  through the Due
Diligence  Termination  Date,  Buyer  shall  carry,  or  cause  its  agents  and
representatives   that  will  enter  the   Property  in   connection   with  the
investigations pursuant to Section 3.3 above to carry, workers' compensation and
general  liability  insurance in the amount of $1,000,000 per occurrence,  which
insurance shall name Seller as an additional insured; Buyer shall provide

<PAGE>

Seller with proof of such insurance prior to commencing Buyer's physical
inspections of the Property.

3.9.  Indemnity  and Repair.
Buyer agrees to indemnify and hold
harmless Seller from any losses arising from any physical damage to the Property
or any  injury  to  persons  caused  by any  act of  Buyer  as a  result  of the
inspections,  investigations,  or tests performed pursuant to Section 3.3 above,
which  indemnity  shall survive the termination of this Agreement or the Closing
for a period of 1 year;  provided,  however,  that Buyer's  indemnity  hereunder
shall not include any loss, cost, damage, or expense to the extent caused by (a)
the acts of Seller or its agents or representatives, or (b) the discovery of any
pre-existing  condition  of the  Property.  In  addition,  if this  Agreement is
terminated, Buyer shall repair any physical damage to the Property caused by its
entry thereon and shall restore the Property  substantially  to the condition in
which it existed prior to such entry;  provided,  however, that Buyer shall have
no  obligation to repair any damage caused by the acts or omissions of Seller or
its agents or  representatives or to remediate,  contain,  abate, or control any
pre-existing  condition of the  Property  that  existed  prior to Buyer's  entry
thereon.

3.10.  Title.

3.10.1.  Deliveries By Seller.
Seller shall deliver to
Buyer,  before 5:00 p.m.  (California  time) on the 3rd  Business  Day after the
Execution Date, the most recently updated ALTA as-built survey for the Property,
if any.  Buyer shall order,  before 5:00 p.m.  (California  time) on the 7th day
after the Execution Date, (a) an ALTA extended coverage preliminary title report
(the "PTR") issued by Chicago Title Company (in such capacity, "Title Company"),
together with legible copies of all documents  referenced therein, and (b) a UCC
Search with regard to Seller and the Property (the "UCC  Search").  In addition,
Buyer shall order,  before 5:00 p.m.  (California  time) on the 1st Business Day
after the Ground Lease  Termination  Date, a current as-built ALTA survey of the
Property  (the  "Survey"),  in form  reasonably  satisfactory  to  Buyer,  Title
Company,  and such other persons or entities as Buyer,  in its  discretion,  may
request,  prepared by a surveyor  licensed  in the State  where the  Property is
located and certified (using a surveyor's  certificate in substantially the same
form as the certificate  attached hereto as Exhibit H) to Buyer,  Title Company,
and such other  persons or entities as Buyer,  in its  discretion,  may request.

3.10.2.  Buyer's Review of Title.
Buyer shall have until 5:00 p.m.  (California
time) on the 10th day before the Due Diligence  Termination  Date to give Seller
Notice of any  objection  that Buyer may have to any  exception  reported in the
PTR, any matter shown on UCC Search, or any exception or matter contained in any
amendment or update thereof  (provided,  however,  that if any such amendment or
update is received by Buyer,  Buyer shall have an  additional  3 Business  Days,
regardless  of the Due  Diligence  Termination  Date or Scheduled  Closing Date,
following  Buyer's receipt of such amendment or update and legible copies of all
documents referenced therein, to give Seller Notice of objections to items shown
on any such amendment or update). In addition,  Buyer shall have until 5:00 p.m.
(California  time) on the 5th day before the Due Diligence  Termination  Date to
give Seller Notice of any  objection  that Buyer may have to any matter shown on
the  Survey,  or  any  matter  contained  in any  amendment  or  update  thereof
(provided,  however,  that if any such amendment or update is received by Buyer,
Buyer shall have an additional 3 Business Days,  regardless of the Due Diligence
Termination  Date or Scheduled  Closing Date (but subject to Section 8.1 below),
following  Buyer's receipt of such amendment or update and legible copies of all
documents  referenced  therein,  to give Seller  Notice of objections to matters
shown on any such  amendment  or  update).  Exceptions  reported  in the PTR and
matters  shown on the UCC  Search

<PAGE>

or the Survey  (or any  amendments  or updates
thereof)  not  objected  to by Buyer as  provided  above  shall be  deemed to be
"Permitted Exceptions".  If, however, Buyer objects to any exception reported in
the PTR or any matter  shown on the UCC Search or the Survey (or any  amendments
or updates thereof)  ("Objectionable  Title  Matters"),  Seller shall have until
5:00 p.m. (California time) on the 3rd day before the Due Diligence  Termination
Date to give Buyer Notice that (i) Seller will cure specific Objectionable Title
Matters ("Voluntary Title Removal Exceptions"), and/or (ii) Seller will not take
any action  with  respect to specific  Objectionable  Title  Matters.  If Seller
elects not to take any action with respect to any specific  Objectionable  Title
Matters  and Buyer  does not  terminate  this  Agreement  on or  before  the Due
Diligence  Termination  Date,  Buyer shall be deemed to have  elected to proceed
with  the  purchase  and  to  take  title  to  the  Property   subject  to  such
Objectionable Title Matters.

3.10.3. Seller's Obligations Regarding Title.
As a condition to Closing, Seller shall take all action necessary to remove from
title to the  Property  (or in the  alternative,  Seller  shall obtain for Buyer
title insurance  insuring over such exceptions or matters,  such insurance to be
in form  and  substance  satisfactory  to  Buyer  in its  sole  discretion)  all
Voluntary Title Removal Exceptions and the following matters: (a) all exceptions
to title and survey  matters  created by Seller on or after the  Execution  Date
without the prior  written  consent of Buyer  (which  consent may be withheld in
Buyer's sole and absolute  discretion);  (b) any and all liens and  encumbrances
affecting  the  Property  that  secure an  obligation  to pay money  (other than
installments  of real  estate  taxes or  assessments  not  delinquent  as of the
Closing); and (c) all taxes and assessments due and payable for any period prior
to the Closing  (collectively,  the "Obligatory Title Removal Exceptions").  If,
prior to the Closing,  Seller is unable to remove or satisfactorily  insure over
any of the Voluntary  Title Removal  Exceptions or the Obligatory  Title Removal
Exceptions (collectively,  the "Title Removal Exceptions"), then, in addition to
any and all other rights and remedies that Buyer may have hereunder,  Buyer may:
(i) terminate this Agreement by Notice to Seller and Escrow Agent (in which case
Escrow Agent shall  return to Buyer the Deposit  (plus any interest or dividends
earned thereon), and the parties shall equally share the cancellation charges of
Escrow  Agent and Title  Company),  and Seller shall  reimburse  Buyer for up to
$150,000.00  of Buyer's  actual  out-of-pocket  costs and  expenses  incurred in
connection with the transaction  contemplated by this Agreement,  and thereafter
neither party shall have any rights or obligations to the other hereunder, other
than pursuant to any provision hereof that expressly survives the termination of
this  Agreement;  or (ii) if Buyer does not elect to terminate  this  Agreement,
pursue  an  action  for  specific  performance  to  compel  Seller  to remove or
satisfactorily  insure over, as required,  the Title Removal Exceptions or waive
Buyer's  objections  to such Title  Removal  Exceptions  and proceed to a timely
Closing,  whereupon  such Title Removal  Exceptions  shall be deemed  "Permitted
Exceptions".

3.10.4. Condition of Title at Closing.
Upon the Closing, Bio-Shore
shall absolutely and irrevocably sell, transfer, convey, and assign to Buyer all
of Bio-Shore's right,  title, and interest in and to the Real Property by a duly
executed and acknowledged  ground lease assignment and assumption in the form of
Exhibit I attached hereto (the "Ground Lease  Assignment"),  subject only to the
Permitted  Exceptions  and the  Permitted  Ground  Lease  Matters.

4.  SELLER'S REPRESENTATIONS AND WARRANTIES.

         Seller represents and warrants to and agrees with Buyer that, as of the
date hereof and as of the Closing Date:

<PAGE>

4.1.  Authority.
This Agreement and all
other  documents  delivered  prior  to or at the  Closing  (i)  have  been  duly
authorized,  executed,  and delivered by Scios and Bio-Shores;  (ii) are binding
obligations  of Scios and  Bio-Shores;  (iii)  are  collectively  sufficient  to
transfer  all of Seller's  collective  rights to the  Property;  and (iv) do not
violate the formation documents of Scios or Bio-Shore.  Scios and Bio-Shore have
obtained all required  consents,  releases,  and approvals  necessary to execute
this Agreement and consummate the  transaction  contemplated  by this Agreement.
Scios is a corporation  duly  organized and existing in good standing  under the
laws of the State of Delaware, with its principal place of business in the State
of California, Bio-Shore is a limited partnership duly organized and existing in
good  standing  under the laws of the State of  California,  with its  principal
place of business in the State of  California,  and  Bio-Shore  Management  is a
corporation  duly  organized and existing in good standing under the laws of the
State of  California,  with its  principal  place of  business  in the  State of
California.  Bio-Shore Management,  acting alone, has the power and authority to
bind Bio-Shore.

4.2. No Conflicts.
The execution and delivery of this Agreement,
the consummation of the transactions  herein  contemplated,  and compliance with
the terms of this  Agreement  will not conflict with, or, with or without notice
or the  passage  of time or  both,  result  in a breach  of any of the  terms or
provisions  of, or constitute a default  under,  any  indenture,  deed of trust,
mortgage, loan agreement, or other document, or instrument or agreement, oral or
written, to which Scios or Bio-Shore is a party or by which Scios, Bio-Shore, or
the Property is bound, or any applicable  regulation of any governmental agency,
or any judgment,  order, or decree of any court,  having jurisdiction over Scios
or Bio-Shore (or any of the business  conducted by either in connection with the
Property)  or all or any  portion of the  Property.

4.3.  Preferential  Rights.
Neither  Scios nor Bio-Shore has granted any option or right of first refusal or
right of first  offer to third  parties  to  purchase  or  otherwise  acquire an
interest in all or any portion of the Property.

4.4. Property Documents.
There are no commitments or agreements affecting the Property that have not been
disclosed  by Seller to Buyer in  writing.  Seller is not in default of Seller's
obligations or liabilities pertaining to the Property or the Property Documents;
nor, to Seller's  Knowledge,  are there  facts,  circumstances,  conditions,  or
events that,  after notice or lapse of time or both, would constitute a default.
Seller  has not  received  notice  or  information  that any party to any of the
Property Documents  considers a breach or default to have occurred.

4.5. Ground Lease.
The Ground  Lease (as  provided  to Buyer  pursuant  to  Section  3.1.1)
evidences  all of  Seller's  rights  and  obligations  with  respect to the Real
Property,  and there are no other  documents or agreements  that will be binding
upon the Real  Property  or Buyer  after the  Closing  with  respect to Seller's
rights and obligations relating to the Real Property, other than the Recognition
Agreement  and the Permitted  Exceptions.  Except to the extent Seller has given
Buyer  Notice  otherwise,  no rent or other  amount is past due under the Ground
Lease.  The Ground  Lease is in full force and  effect,  Seller has  received no
notice of any default by  Bio-Shore  under the Ground  Lease,  and Seller has no
Knowledge  of any fact or facts  that  would now or with the giving of notice or
the passage of time or both be a default by Bio-Shore  under the terms  thereof,
except to the extent  Seller  has given  Buyer  Notice  otherwise.

4.6.  Tenant Leases.
The Tenant Leases (if any) described in the schedule attached hereto as
Exhibit B-1 (the "Schedule of Leases") comprise all of the documents  evidencing
the rights and  obligations of all third parties to occupy space at the Property
as of the

<PAGE>

Execution  Date, and there are no other  documents or agreements  that
will be binding upon the Property or Buyer after the Closing with respect to the
rights and obligations of such third parties relating to the Property.  The Rent
Roll  attached  hereto as Exhibit B-2 (the "Rent  Roll") is true,  correct,  and
complete. Except as set forth in the Rent Roll, no rent or other amount has been
prepaid under any of the Tenant Leases (if any).  The Tenant Leases (if any) are
in full force and effect.

4.7.  Notices.
Except as set forth on the Rent Roll,
(a) Seller has  received  no notice of any  default  by the  landlord  under the
Tenant  Leases (if any) and Seller  has no  Knowledge  of any fact or facts that
would  now or with the  giving of  notice  or the  passage  of time or both be a
default under the terms thereof, except as otherwise set forth on the Rent Roll;
(b) Seller has received no notice from any tenant (i) to cancel any Tenant Lease
(if any),  (ii) that such tenant is or may become unable or unwilling to perform
any or all of its obligations  under its Tenant Lease,  whether for financial or
other reasons, or (iii) that an action or proceeding,  voluntary or involuntary,
is pending or, or to Seller's  knowledge,  threatened  against such tenant under
any section or sections of any  bankruptcy or insolvency  law, or (iv) that such
tenant  disputes  the  base  rent or  escalation  rents  or the  computation  of
escalation rents pursuant to its Tenant Lease.

4.8. Uncompleted Work.
Seller has
received no notices of any items of work, repair,  maintenance,  or construction
to be completed by Seller  pursuant to any Tenant Lease (if any) for the benefit
of any tenant and, to Seller's  Knowledge,  there is no such work to be done. As
of the Closing Date, no tenant shall be entitled to any  additional  work during
the term of its Tenant  Lease (if any),  except as may be provided  otherwise on
the updated Rent Roll.

4.9. Unpaid  Commissions.
As of the Closing Date,  there
will be no brokerage or other leasing  commissions due or payable on an absolute
or contingent  basis to any person in connection  with any of the tenants or any
of the  Tenant  Leases  (if any) (or any  amendments,  extensions,  or  renewals
thereof or exercise of any options thereunder).

4.10. Access To Information.
To Seller's Knowledge, (a) Seller  has  delivered  to  Buyer,  or  given  Buyer
satisfactory access to, all Property Documents in Seller's  Possession,  and (b)
this Agreement,  together with the Property Documents and any matters heretofore
disclosed to Buyer in writing by Seller,  do not contain any untrue statement of
a material fact or omit or fail to state a material  fact  necessary to make the
statements contained herein or therein not materially misleading.

4.11. Special Assessments or Condemnation.
To Seller's  Knowledge,  there are no  existing,
proposed,  or  contemplated  (i)  special  assessments,  except  those  shown as
exceptions  on the PTR,  or (ii)  condemnation  actions  against any part of the
Property,  and  Seller  has not  received  notice  of any  contemplated  special
assessments or eminent domain proceedings that would affect the Property.

4.12. Utilities.
To Seller's Knowledge,  all water, sewer, electric,  gas, telephone,
and  drainage  facilities,  and all other  utilities  required by law or for the
normal  operation  of the Property  are  installed to the property  lines of the
Property,  have been  connected to the  Improvements  and Seller has received no
notices that service will be disconnected or reduced.

<PAGE>

4.13.  Service Contracts.
There  are no  service,  maintenance,  repair,  management,  leasing,  or supply
contracts  or  other  contracts  (including,  without  limitation,   janitorial,
elevator and landscaping  agreements)  affecting the Property,  oral or written,
except as set forth on the schedule  attached  hereto as Exhibit J (the "Service
Contracts") and, except as set forth on such schedule, all Service Contracts are
cancelable  without  cost at the  option  of  Seller  or the  then  owner of the
Property  upon not more than 30 days' prior  written  notice.

4.14.  Employees.
There  are  no  employees  who  are  employed  by  Scios,  Bio-Shore,  Bio-Shore
Management,  or Manager in the  operation,  management,  or  maintenance  of the
Property and whose employment will continue after the Closing.  On and after the
Closing,  there will be no obligations  concerning any pre-Closing  employees of
Scios,  Bio-Shore,  Bio-Shore  Management,  or Manager that will be binding upon
Buyer or the Property.

4.15. Bankruptcy.
No attachments,  execution proceedings,
assignments   for   the   benefit   of   creditors,   insolvency,    bankruptcy,
reorganization,  or other  proceedings are pending,  or, to Seller's  Knowledge,
threatened,  against  Seller,  any  tenant of the Real  Property,  or the Ground
Lessor.

4.16.  Existing Vivarium Approvals.
The schedule  attached hereto as
Exhibit O contains a list of all of the permits, licenses, approvals,  consents,
authorizations,  and  other  certifications  currently  maintained  by Seller in
connection with the Vivarium  (collectively,  the "Vivarium  Approvals").

4.17. Existing Insurance.
The schedule attached hereto as Exhibit P contains a list of
the policies, insureds,  additional insureds,  loss-payees,  coverages, coverage
amounts, and deductible amounts of all of the insurance currently in effect with
respect to the Property.  To Seller's  Knowledge,  Seller has received no notice
from any  insurance  company  concerning  any  defects  or  inadequacies  in the
Property  that, if not corrected,  would result in the  termination of insurance
coverage or materially increase its cost.

4.18. Litigation.
Except as may be set
forth on the schedule attached hereto as Exhibit Q, there are no actions, suits,
or proceedings against Scios or Bio-Shore or affecting all or any portion of the
Property currently being prosecuted,  litigated,  or otherwise  contested before
any judicial or  quasi-judicial  body,  Seller has not  received  service of any
document,  pleading,  or claim  instituting  any other  such  action,  suit,  or
proceeding,  and,  to  Seller's  Knowledge,  no  other  such  action,  suit,  or
proceeding has been  instituted,  filed,  or threatened.

4.19.  Compliance with Laws.
Except as may be set forth on the schedule  attached hereto as Exhibit R,
Seller  has  received  no notice  of, and has no  Knowledge  of,  any  condition
currently  existing on any portion of the Property that is a potential  material
violation of any currently effective laws, rules,  regulations,  ordinances,  or
orders of any federal,  state,  city,  or other  governmental  authority  having
jurisdiction over Scios or Bio-Shore (or any of the business conducted by either
in  connection  with  the  Property)  or  all  or any  portion  of the  Property
(including,  without limitation,  all zoning,  building, fire, and health codes,
environmental  protection  and  sanitation  and pollution  regulations,  and the
Americans  with  Disabilities  Act, as amended)  (collectively,  "Laws").

<PAGE>

4.20.  Environmental Materials.

4.20.1. Definitions.

(a)     "Environmental  Claim"  means any and all actions  (including,  without
limitation, investigations or response, cleanup, remedial, removal, restoration,
abatement,  or  enforcement  actions  of any kind,  administrative  or  judicial
proceedings,  and orders or judgments  arising out of or  resulting  therefrom),
costs,  claims,  damages  (including,  without  limitation,  punitive  damages),
expenses (including, without limitation, attorneys',  consultants', and experts'
fees,  court costs,  and amounts paid in  settlement  of any claims or actions),
fines,  forfeitures,  or other  civil,  administrative,  or criminal  penalties,
injunctive or other relief (whether or not based upon personal injury,  property
damage,  or contamination  of, or adverse effects upon, the  environment,  water
tables, or natural resources),  liabilities,  or losses arising from or relating
to the presence or suspected presence of any Environmental Materials in the air,
soil, or ground water above, in, on, under, or about the Property (the "Property
Environment") or properties adjacent thereto.

b)     "Environmental  Materials" means chemicals,  pollutants,  contaminants,
wastes,  toxic  substances,  petroleum  and  petroleum  products,  or any  other
chemical,  material, or substance that, because of its quantity,  concentration,
or  physical  or  chemical  characteristics,  exposure  to which is  limited  or
regulated for health and safety reasons by any governmental  authority,  or that
poses a significant present or potential hazard to human health and safety or to
the environment if released into the workplace or the environment,  and include,
without  limitation,   asbestos,   polychlorinated   biphenyls  ("PCBs"),   urea
formaldehyde,  solvents,  lead and lead based  substances,  cyanide,  pesticides
(including DDT),  printing inks, acids,  ammonia  compounds,  chemicals known to
cause cancer or reproductive  toxicity, and any other material or substance that
is (i)  designated  as a  "hazardous  substance"  pursuant to Section 311 of the
Federal Water Pollution Control Act (33 U.S.C.  Section 1317), (ii) defined as a
"hazardous waste" pursuant to Section 1004 of the Federal Resource  Conservation
and Recovery  Act, 42 U.S.C.  Section 6901,  et seq. (42 U.S.C.  Section  6903),
(iii)  defined  as a  "hazardous  substance"  pursuant  to  Section  101  of the
Comprehensive Environmental Response, Compensation, and Liability Act, 42 U.S.C.
Section 9601 et seq. (42 U.S.C. Section 9601), (iv) defined as "hazardous waste,
"extremely hazardous waste" or "restricted hazardous waste" under any applicable
state law, or (v) defined as a  "hazardous  material" or  "hazardous  substance"
under any applicable state law.

4.20.2.  Representations and Warranties.
Seller
represents and warrants to and agrees with Buyer that, as of the date hereof and
as of the  Closing  Date,  except as may be set forth on the  schedule  attached
hereto as Exhibit S: (i) Seller and, to Seller's Knowledge,  the Property are in
full compliance with all Laws relating to  Environmental  Materials  (generally,
"Environmental  Laws"),  which compliance  includes,  but is not limited to, the
possession by Seller of all permits and other  governmental  approvals  required
under applicable Environmental Laws and compliance with the terms and conditions
thereof;  (ii) Seller has not received any communication  (written or oral) that
alleges  that Seller or the Property  currently  is not in such full  compliance
and, to Seller's Knowledge,  there are no currently existing  circumstances that
may prevent or interfere  with such full  compliance in the future;  (iii) there
are  no  Environmental   Claims  against  Seller  currently  being   prosecuted,
litigated,  or otherwise contested before any governmental or quasi-governmental
authority,  Seller has not received service of any document,  pleading, or claim
instituting any other such Environmental  Claim, and, to Seller's Knowledge,  no
other such Environmental Claim has been instituted,  filed, or threatened;  (iv)
Seller has received no notice of, and has no  Knowledge  of, any past or present

<PAGE>

actions, activities, circumstances, conditions, events, or incidents relating to
Environmental  Materials  that could form the basis of any  Environmental  Claim
against  Seller or against any other  person or entity whose  liability  for any
such  Environmental  Claim  Seller has or may have  retained or assumed,  either
contractually  or by  operation  of law; and (v) without in any way limiting the
generality  of the  foregoing,  (a)  Seller  has not  used,  stored,  generated,
released,  disposed, or arranged for the disposal of Environmental  Materials on
the Property  except in full  compliance  with all  Environmental  Laws,  (b) to
Seller's Knowledge,  there are no underground storage tanks located on the Land,
(c) to Seller's Knowledge,  there is no asbestos contained in or forming part of
any Improvement,  and (d) to Seller's  Knowledge,  no PCBs are used or stored at
the Facility  except in full  compliance with all  Environmental  Laws.

4.20.3. Indemnification.
Seller hereby indemnifies and agrees to reimburse, defend, and
hold Buyer  harmless  from,  for, and against all  Environmental  Claims arising
from,  asserted  against,   imposed  on,  or  incurred  by  Buyer,  directly  or
indirectly,  in connection with the breach of any representation or warranty set
forth in Section 4.20.2 above.

4.20.4.  Additional  Environmental  Assessments.
Notwithstanding anything to the contrary that may be set forth in this Agreement
and  regardless of whether Buyer  otherwise  would elect to do so as part of its
due diligence  investigations  pursuant to Section 3.3 hereof, Buyer shall cause
its  environmental  consultant  to  perform  a  "phase  II"  environmental  site
assessment  of the  Property  Environment  (the  "Phase II  Study")  in order to
determine if actionable levels of any  Environmental  Materials are then present
in the Property  Environment and, if so, the precise quantities  thereof.  Buyer
shall require its environmental consultant to prepare a written report regarding
the Phase II Study (the  "Phase II Report")  and shall cause such  environmental
consultant  to deliver to Seller an accurate and complete  copy of such Phase II
Report, including all schedules, graphs, photographs, and any other supplemental
materials.  The actual cost of the Phase II Study and the Phase II Report  shall
be borne  equally by Seller and Buyer.

4.20.5.  No Effect on Statutory  Rights.
Seller and Buyer hereby expressly  acknowledge and agree that nothing  contained
in this  Agreement  in  general  or in this  Section  4.20 in  particular  shall
diminish,  impair,  decrease,  reduce,  lessen,  supersede,  override,  replace,
invalidate,  nullify,  negate,  or otherwise affect in any manner whatsoever any
right of any party to this Agreement under any applicable  Environmental  Law to
claim or demand contribution,  reimbursement, restitution, or other repayment or
compensation  (generally  "Contribution") from any other party to this Agreement
for any  Environmental  Claim arising  from,  asserted  against,  imposed on, or
incurred  by the  claiming  or  demanding  party,  directly  or  indirectly,  in
connection with any event or condition now or hereafter existing with respect to
the Property Environment;  provided,  however, that each party to this Agreement
hereby  agrees that no party may collect from any other party to this  Agreement
(i) any Contribution in excess of [***] (except in the case of fraud or material
misrepresentation   regarding  Environmental  Materials  or  Environmental  Laws
committed by the party from which  Contribution  is being sought,  in which case
there shall be no limit on the amount of the Contribution recoverable), (ii) any
portion of any  Contribution  that directly arises from an  Environmental  Claim
that is covered by any insurance policy  maintained by the claiming or demanding
party  (provided  that the insurance  coverage is not affected by this potential
impairment of the  insurer's  subrogation  rights),  or (iii) any portion of any
Contribution   that  directly  arises  from  an  Environmental   Claim  for  any
Environmental  Material  as to which the Phase II  Report  indicates  actionable
levels were present in the Property  Environment as of the date of such Phase II
Report. No party to this Agreement is assuming,  undertaking,  or agreeing to be
responsible for any other party's  obligations or liabilities in connection with
any  Environmental  Claim,  and  under  no


                              ***A CONFIDENTIAL PORTION OF THE MATERIAL HAS BEEN
                              OMITTED AND FILED SEPARATELY WITH THE SECURITIES
                              AND EXCHANGE COMMISSION.

<PAGE>

circumstances  shall  the  foregoing
agreements regarding the Contribution rights of the parties to this Agreement be
deemed, construed, or interpreted as an assumption, undertaking, or agreement to
be  responsible  for any other party's  obligations or liabilities in connection
with any  Environmental  Claim.  Further,  Seller and Buyer do not intend by any
term or condition of this Section to confer any right,  remedy,  or benefit upon
any third party,  and no third party shall be entitled to enforce,  or otherwise
shall acquire any right,  remedy, or benefit by reason of, any term or condition
of this Section.  All of the  agreements  contained in this Section 4.20.5 shall
survive  the  delivery  of  the  Ground  Lease   Assignment  and  other  Closing
instruments indefinitely,  and shall not be subject to the terms of Section 4.21
below.

4.21. Survival.
All of the representations, warranties, and agreements of
Seller  set forth in this  Agreement  shall be true upon the  execution  of this
Agreement,  shall be deemed to be repeated at and as of the Closing Date without
the necessity of a separate  certificate  with respect thereto and shall survive
the delivery of the Ground Lease  Assignment and other Closing  instruments  and
documents for a period of [***] days.

4.22. Seller's Knowledge.
As used in this
Agreement,  the phrase "to Seller's Knowledge" and words of similar import shall
mean the current actual  knowledge of David Gryska (Chief  Financial  Officer of
Scios),  John H. Newman  (Senior Vice President and Chief Legal Counsel of Scios
and Vice President of Bio-Shore Management),  Jack Cohen (Director of Regulatory
Affairs  and  Quality  Assurance  for  Scios),  and Scott  Korney  (Director  of
Facilities  for  Scios)  (collectively,   "Seller's  Representatives").   Seller
represents and warrants that Seller's  Representatives are the persons currently
affiliated  with Seller who,  together,  possess the most  familiarity  with the
Property.

4.23. As-Is.
Except as may be expressly  provided  otherwise in this
Agreement,  and except for those  warranties  expressly  set forth herein or set
forth,  or implied by law, in the Ground Lease  Assignment,  Seller shall convey
the Property to Buyer in its present "AS-IS" condition,  without any warranties,
expressed or implied.

5. BUYER'S REPRESENTATIONS AND WARRANTIES.

         Buyer represents and warrants to and agrees with Seller that, as of the
date hereof,  and as of the Closing Date:

5.1. No Conflicts.
The execution and
delivery  of  this  Agreement,  the  consummation  of  the  transactions  herein
contemplated,  and compliance with the terms of this Agreement will not conflict
with,  or, with or without  notice or the  passage of time or both,  result in a
breach of any of the terms or provisions of, or constitute a default under,  any
indenture,  deed of  trust,  mortgage,  loan  agreement,  or other  document  or
instrument  to  which  Buyer  is a party or by  which  Buyer  is  bound,  or any
applicable  regulation of any governmental  agency,  or any judgment,  order, or
decree of any court, having jurisdiction over Buyer or all or any portion of the
Property.

5.2. Due Organization; Consents.
Buyer is a corporation duly organized
and existing in good  standing  under the laws of the State of Maryland with its
principal place of business in the State of California.  All requisite corporate
action has been taken by Buyer in connection  with entering into this Agreement,
and will be taken  prior to the Closing in  connection  with the  execution  and
delivery  of the  instruments  referenced  herein  and the  consummation  of the
transactions  contemplated  hereby.  No  consent  of any  partner,  shareholder,
beneficiary,

                              ***A CONFIDENTIAL PORTION OF THE MATERIAL HAS BEEN
                              OMITTED AND FILED SEPARATELY WITH THE SECURITIES
                              AND EXCHANGE COMMISSION.

<PAGE>

creditor,  investor, judicial or administrative body, governmental
authority,  or other party is required in connection  herewith that has not been
obtained.

5.3. Buyer's Authority;  Validity of Agreements.
Buyer has full right,
power,  and  authority to purchase the Property  from Seller as provided in this
Agreement  and  to  carry  out  its  obligations  hereunder.  The  individual(s)
executing  this  Agreement and the  instruments  referenced  herein on behalf of
Buyer have the legal  power,  right,  and actual  authority to bind Buyer to the
terms  hereof  and  thereof.  This  Agreement  is and all  other  documents  and
instruments  to be  executed  and  delivered  by Buyer in  connection  with this
Agreement shall be duly authorized,  executed,  and delivered by Buyer and shall
be valid,  binding, and enforceable  obligations of Buyer.

5.4. As-Is.
Except as may be  expressly  provided  otherwise in this  Agreement, and except
for those warranties expressly set forth herein or set forth, or implied by law,
in the Ground Lease  Assignment, Buyer shall  purchase the Property from Seller
in its present "AS-IS" condition, without any warranties,  expressed or implied.

6. COVENANTS OF SELLER.

         In  addition  to the  covenants  and  agreements  of  Seller  set forth
elsewhere in this Agreement,  Seller  covenants and agrees that between the date
hereof and the  Closing  Date:

6.1.  Title.
Seller  shall not (a)  directly or
indirectly sell, assign, or create any right,  title, or interest  whatsoever in
or to the Property,  (b) take any action,  create,  commit,  permit to exist, or
suffer any acts that would (i) give rise to a variance  from the  current  legal
description  of the Land,  or (ii) cause the  creation of any lien,  charge,  or
encumbrance other than the Permitted Exceptions, or (c) enter into any agreement
to do any of the foregoing  without Buyer's prior written consent (which consent
may be withheld in Buyer's sole and absolute discretion).

6.2. Notice of Change in  Circumstances.
Seller  shall  promptly  notify  Buyer of any  change in any
condition  with respect to all or any portion of the Property or of any event or
circumstance  of  which  Seller  has  Knowledge  subsequent  to the date of this
Agreement  that (a)  materially,  adversely  affects the Property or any portion
thereof or the use or  operation  of the  Property or any portion  thereof,  (b)
makes any  representation  or warranty  of Seller to Buyer under this  Agreement
untrue or  misleading,  or (c) makes any  covenant or  agreement of Seller under
this Agreement  incapable or less likely of being performed,  it being expressly
understood that Seller's  obligation to provide  information to Buyer under this
Section  shall in no way relieve  Seller of any liability for a breach by Seller
of any of its  representations,  warranties,  covenants or agreements under this
Agreement.

6.3. No Defaults;  Maintenance of Property.
Seller shall not default
with respect to the  performance  of any  obligation  relating to the  Property,
including,   without  limitation,  the  payment  of  all  amounts  due  and  the
performance of all  obligations  with respect to the Tenant Leases (if any), the
Service  Contracts  and any  existing  indebtedness  relating  to the  Property.
Subject to Section 12,  Seller  shall  operate and  maintain the Property in its
current  condition,  reasonable  wear and tear excepted,  in accordance with all
applicable  Laws.

6.4.  Exclusive  Negotiations.
Seller  (i) shall  remove the
Property from the market,  (ii) shall not solicit or accept any offers,  whether
or not binding,  to buy all or any part of the  Property,  (iii) shall cease and
refrain from any and all negotiations  with any other

<PAGE>

prospective  optionees or
purchasers of the Property,  whether begun before or after any negotiations with
Buyer, and (iv) shall advise Buyer of any negotiations with current or potential
tenants at the Property.

6.5. Development Activities.
Seller shall not take any
actions with respect to the  development  of the  Property,  including,  without
limitation,   applying  for,  pursuing,  accepting  or  obtaining  any  permits,
approvals,  or other  development  entitlements  from any  governmental or other
regulatory  entities or  finalizing  or entering  into any  agreements  relating
thereto  without Buyer's prior written consent (which consent may be withheld in
Buyer's  sole and  absolute  discretion).  Seller  hereby  agrees to  reasonably
cooperate with Buyer in Buyer's efforts to obtain such governmental approvals as
Buyer deems  necessary to permit Buyer to operate the Property as Buyer  wishes.

6.6. Service, Management, and Employment Contracts.
Seller shall not enter into,
extend,  renew,  or  replace  any  existing  service,  property  management,  or
employment  contracts in respect of the Property  without  Buyer's prior written
consent (which consent may be withheld in Buyer's sole and absolute discretion),
unless the same shall be cancelable  without  penalty or premium,  upon not more
than 30 days' notice from the owner of the Property and Seller shall immediately
notify Buyer of any such new,  extended,  renewed,  or replaced  contract.

6.7.
Leases.
Seller  shall not (i) enter  into any new lease for any  portion of the
Real Property,  or (ii) enter into any amendment,  modification,  extension,  or
renewal of any Tenant Lease (if any),  without  Buyer's  prior  written  consent
(which consent may be withheld in Buyer's sole and absolute discretion).  Seller
shall not accept any rent from any  tenant  under any Tenant  Lease (if any) for
more than 1 month in advance of the payment date without  Buyer's  prior written
consent (which consent may be withheld in Buyer's sole and absolute discretion).

6.8.  Insurance.
Seller will maintain the  insurance  described on the schedule
attached  hereto as Exhibit P from the date hereof  through the Closing  Date or
earlier termination of this Agreement.

6.9. Litigation.
Seller shall not allow
to be commenced on its behalf any action, suit or proceeding with respect to all
or any portion of the Property  without  Buyer's  prior written  consent  (which
consent may be withheld in Buyer's reasonable  discretion).  In the event Seller
receives any notice of any  proceeding  of the  character  described in Sections
4.15 or 4.18  that  has not been  previously  disclosed  to  Buyer  prior to the
Closing,   Seller  shall  promptly  advise  Buyer  in  writing.

6.10.  Seller's Representatives.
Seller shall cause Seller's  Representatives  to be reasonably
available to Buyer and its agents and  representatives  at all reasonable  times
from the  Execution  Date  until the  Closing  or  earlier  termination  of this
Agreement  for purposes of responding  to any  reasonable  inquiries or requests
that  Buyer may have as part of  Buyer's  due  diligence  investigations  of the
Property.

7. CONDITIONS  PRECEDENT TO CLOSING.

7.1.  Buyer's Conditions.
The obligation  of Buyer to  purchase  the  Property  is  subject  to the
following conditions precedent (and conditions  concurrent,  with respect to
deliveries to be made by the parties at Closing) ("Buyer's Conditions"),  which
conditions may be waived, or the time for satisfaction thereof extended, by
Buyer only in a writing executed by

<PAGE>

Buyer;  provided,  however,  that any such waiver shall not
affect  Buyer's  ability to pursue any remedy Buyer may have with respect to any
breach hereunder by Seller (except as set forth in Section 7.2.1):

7.1.1. Title.
Title Company shall be prepared and  irrevocably  committed to issue to Buyer an
ALTA extended coverage owner's policy of title insurance (Form B-1970 (expressly
deleting any creditor's rights  exclusion)) in favor of Buyer in an amount equal
to the Purchase  Price showing the Ground Lease Interest  vested in Buyer,  with
those endorsements and reinsurance  reasonably  requested by Buyer, subject only
to the Permitted Exceptions  (collectively,  the "Owner's Title Policy").

7.1.2.  Seller's Due Performance.
All of the  representations  and warranties of Seller
set forth in Section 4 shall be true and  correct as of the  Closing  Date,  and
Seller,  on or prior to the  Closing  Date,  shall  have  complied  with  and/or
performed all of the obligations, covenants, and agreements required on the part
of  Seller  to be  complied  with or  performed  pursuant  to the  terms of this
Agreement,  including, without limitation, the deliveries required to be made by
Seller  pursuant to Sections 9.1 and 9.3 hereof.

7.1.3.  Condition of Property.
Subject to the  provisions  of Section 12 below,  the  condition of the Property
shall be  substantially  the same on the Closing Date as on the Execution  Date,
except for  reasonable  wear and tear and any physical  damage due to any act of
Buyer or Buyer's  representatives.

7.1.4.  Bankruptcy.
No action or proceeding shall have been commenced by or against Scios,
Bio-Shore, or Ground Lessor under the  federal  bankruptcy code or any state law
for the relief of debtors or for the enforcement of the rights of creditors and
no attachment, execution, lien, or levy shall have  attached to or been issued
with  respect to the  Property or any portion thereof or interest therein.

7.1.5.  No Moratoria.
No moratorium, statute, regulation, ordinance, or federal, state, county, or
local legislation, or order, judgment, ruling, or decree of any governmental
agency or of any court shall  have been  enacted,  adopted,  issued,  entered,
or pending that would adversely affect Buyer's intended use of the Property.

7.1.6.  Ground Lease Matters.
Not less than 2 Business  Days prior to the  Scheduled  Closing  Date,
Buyer shall have received (a) a counterpart of the Ground Lease Consent executed
and acknowledged on behalf of Ground Lessor,  with written authority from Ground
Lessor that the Ground Lease Consent may be executed and  acknowledged on behalf
of  Bio-Shore  and Buyer's  nominee,  designee,  or assignee and recorded at the
Closing,  and (b) an update for the Ground Lease  Estoppel  (the  "Ground  Lease
Estoppel Update"), which Ground Lease Estoppel Update shall be dated not earlier
than 7 days prior to the Closing  Date,  shall  reflect  that there have been no
material  adverse  changes since the date of the original Ground Lease Estoppel,
and may be executed solely by the trustee of The Salado Living Trust, dated June
7, 1976. Further,  Buyer shall have received evidence  satisfactory to Buyer, in
Buyer's sole discretion,  that any Ground Lease Cure Matters have been corrected
or cured.

7.2. Failure of Buyer's Conditions.
Subject and without limitation to
Buyer's rights hereunder, including, without limitation, Section 13.2 hereof, if
any of Buyer's  Conditions  have not been fulfilled  within the applicable  time
periods, Buyer shall have the right to do either of the following:

<PAGE>
7.2.1. Waive and Close.
Waive the Buyer's Condition and close Escrow in accordance with this
Agreement,  without  adjustment  or abatement of the  Purchase  Price.  If Buyer
intends to waive the Buyer's  Condition,  close Escrow,  and retain the right to
pursue any other  rights and  remedies  that  Buyer may have  against  Seller in
connection  herewith,  Buyer shall give Notice to Seller of such  intention  and
Seller shall have 2 Business Days to terminate this Agreement by Notice to Buyer
and to Escrow  Agent,  in which event  Escrow  Agent  shall  return to Buyer the
Deposit (plus any interest or dividends  earned  thereon),  Seller shall pay the
cancellation  charges of Title Company and Escrow Agent,  Seller shall reimburse
Buyer for up to $150,000.00 of Buyer's actual  out-of-pocket  costs and expenses
incurred in connection with the transaction  contemplated by this Agreement, and
thereafter  neither  party  shall  have any rights or  obligations  to the other
hereunder,  other than pursuant to any provision hereof that expressly  survives
the termination of this Agreement.  If Seller does not timely elect to terminate
this Agreement,  Buyer may proceed to close Escrow and shall retain the right to
pursue any other  rights and  remedies  that  Buyer may have  against  Seller in
connection  herewith.

7.2.2.  Terminate.
Terminate this Agreement by Notice to Seller and to Escrow  Agent,  in which
event  Escrow Agent shall return to Buyer the Deposit (plus any interest or
dividends  earned  thereon), Seller shall pay the cancellation charges of Title
Company and Escrow Agent, and Buyer shall be entitled to pursue any other rights
and remedies that Buyer may have against Seller in connection  herewith.

7.3.  Seller's Conditions.
The  obligation of Seller to render performance under this Agreement is subject
to the following conditions precedent (and conditions concurrent with respect to
deliveries to be made by the parties at Closing) ("Seller's Conditions"), which
conditions may be waived, or the time for satisfaction thereof extended, by
Seller only in a writing executed by Seller:

7.3.1.  Buyer's Due Performance.
All  of  the representations  and  warranties of Buyer set forth in Section 5
hereof shall be true and correct as of the Closing Date, and Buyer, on or prior
to the Closing Date, shall have complied with and/or performed all of the
obligations, covenants, and agreements required on the part of Buyer to be
complied with or performed pursuant to the terms of this Agreement.

7.4.  Failure of Seller's Conditions.
Subject to  Seller's  rights in the event of a default by Buyer (as
set forth in  Section  13.1  below),  in the event of the  failure of a Seller's
Condition,  Seller may terminate  this  Agreement by delivery of Notice to Buyer
and Escrow Agent,  in which event Escrow Agent shall return to Buyer the Deposit
(plus any interest or dividends earned thereon), the parties shall equally share
the  cancellation  charges of Title  Company and Escrow  Agent,  and  thereafter
neither party shall have any rights or  obligations to the other  hereunder.

8. CLOSING.

8.1. Closing; Closing Date.
As used herein,  the "Closing" shall mean
the  recordation of the Ground Lease  Assignment in the Official  Records of the
County (the "Official Records"), and the "Closing Date" shall mean the date upon
which the Closing actually occurs.  Subject to the provisions of this Agreement,
the Closing  shall take place on or before the date that is 5 days after the Due
Diligence  Termination  Date,  or on such other date as the  parties  hereto may
agree (as the case may be, the  "Scheduled  Closing  Date").  Each party to this
Agreement  intends  for the Closing to occur by 5:00 p.m.  (California  time) on
July 16,  1999 (the  "Target  Closing  Date").  Accordingly,  each party to this
Agreement shall use its good faith best

<PAGE>
efforts to cause the Closing to occur by
the  Target  Closing  Date;  provided,  however,  that no party  shall  have any
liability to any other party if, despite the use of such party's good faith best
efforts,  the  Closing  cannot or does not  occur by the  Target  Closing  Date.
Notwithstanding  the  foregoing,  if (a) Buyer receives  material  amendments or
updates of the Ground  Lease  Consent  and/or  Ground Lease  Estoppel  after the
Ground Lease  Objection  Date, or (b) Buyer does not receive the Phase II Report
by 5:00 p.m.  (California  time) on July 13,  1999,  the  Closing  Date shall be
subject to a reasonable extension to a time not later than 5:00 p.m. (California
time) on July 30, 1999. The Closing Date shall not be extended  beyond 5:00 p.m.
(California time) on July 30, 1999; provided,  however, that Buyer may request a
reasonable  further  extension  of the  Closing  Date for either of the  matters
described in clauses (a) and (b) above by giving  Seller Notice of such request,
including  the date and time to which  Buyer  would like to extend  the  Closing
Date.  Seller may, but shall not be obligated  to, agree to such  extension.  If
Seller does not agree to such  extension and Buyer does not withdraw its request
for an extension (or, in the alternative,  does not make the deliveries required
to be made by Buyer  pursuant  to Section  9.2  below) by 5:00 p.m.  (California
time) on July 30,  1999,  Seller may  terminate  this  Agreement  by delivery of
Notice to Buyer and Escrow  Agent,  in which event  Escrow Agent shall return to
Buyer the Deposit (plus any interest or dividends earned  thereon),  the parties
shall equally share the cancellation  charges of Title Company and Escrow Agent,
and  thereafter  neither party shall have any rights or obligations to the other
hereunder,  other than pursuant to any provision hereof that expressly  survives
the termination of this Agreement.

8.2. Closing Costs.
Each party shall pay its own costs and expenses arising in connection with the
Closing  (including, without limitation, its own attorneys' and advisors' fees),
except the following costs (the  "Closing  Costs"), which shall be allocated
between the parties as follows:

8.2.1.  Seller's Share.
Seller shall pay all  documentary  transfer,
stamp,  sales,  and other taxes related to the transfer of the Property,  1/2 of
Escrow Agent's escrow fees and costs, and all premiums,  fees, and costs related
to the delivery of the Owner's  Title Policy  (including  all  endorsements  and
reinsurance  reasonably  requested by Buyer),  all fees and costs related to the
Survey, all fees and costs related to the UCC Search, and all recording fees and
costs  related to the  transfer of  ownership of the  Property.

8.2.2.  Buyer's Share.
Buyer shall pay 1/2 of Escrow  Agent's  escrow  fees and
costs,  and any recording fees and costs related to any financing Buyer may
obtain in connection with Buyer's acquisition of the Property.

9. CLOSING DELIVERIES.

9.1. Deliveries by Seller to Escrow.
Not less than 2  Business  Days  prior to the  Scheduled
Closing Date, Seller, at its sole cost and expense, shall deliver or cause to be
delivered into Escrow the following documents and instruments, each effective as
of the Closing  Date,  in addition to the other items and  payments  required by
this  Agreement to be delivered by Seller:

9.1.1.  Ground Lease Assignment.
1 original  Ground  Lease  Assignment, executed and acknowledged on behalf of
Bio-Shore;

9.1.2.  Non-Foreign Affidavit.
2  original  counterparts  of  the Non-Foreign Affidavit in the form of Exhibit
L attached hereto, each executed on behalf of Bio-Shore;

<PAGE>

9.1.3. California FTB Form 590-RE.
2 original counterparts of a California  FTB Form 590-RE, each executed on
behalf of Bio-Shore;

9.1.4. Termination of Temporary Lease.
2 original counterparts of a termination of the Temporary  Lease,  in form and
substance reasonably  satisfactory  to Buyer and Title Company, each executed
on behalf of Bio-Shore, as landlord, and Scios, as tenant;

9.1.5.  Assignment of Leases.
If there then exist any Tenant Leases, 2 original counterparts of the Assignment
of Leases  in the form of Exhibit M attached hereto (the "Assignment of
Leases"), each executed on behalf of Scios, pursuant to which Scios shall assign
to Buyer all of Scios' rights and remedies under the Tenant Leases, including,
without  limitation, the right to any security  deposits and prepaid rent;

9.1.6.  Bill of Sale and  Assignment.
2 original counterparts of the Bill of Sale and Assignment in the form of
Exhibit N attached  hereto,  each  executed on behalf of Scios,  pursuant to
which Scios shall transfer to Buyer all the Personal  Property and the
Intangible Property, including, without limitation, the Property Documents,
but excluding the Tenant Leases  (if  any), in each case free of all liens and
encumbrances;

9.1.7. Seller's Certificate.
2 original counterparts of a certificate,  in the form of
Exhibit K attached hereto (the "Seller's Certificate"),  each executed on behalf
of Scios and Bio-Shore;

9.1.8. Updated Rent Roll.
An updated Rent Roll, if there are any Tenant Leases, accurate as of the Closing
Date,  executed on behalf of Scios;

9.1.9.  Proof of Authority.
Such  proof  of  Seller's  authority  and
authorization  to enter into this  Agreement  and the  transaction  contemplated
hereby, and such proof of the power and authority of the individual(s) executing
or delivering any instruments, documents, or certificates on behalf of Seller to
act for and bind Seller as may be reasonably required by Title Company or Buyer;
and

9.1.10.  Other.
Such other documents and instruments, executed and properly acknowledged on
behalf of Seller, if appropriate,  as may be reasonably required by Buyer, Title
Company, Escrow Agent, or otherwise in order to effectuate the provisions of
this  Agreement and the Closing of the transactions contemplated herein,
including, without limitation,  reasonable or customary title affidavits
and indemnities.

9.2. Deliveries by Buyer.
On or before the Closing,  Buyer, at its sole cost and expense,  shall  deliver
or cause to be delivered  into Escrow the following:

9.2.1.  Balance, Prorations & Closing Costs.
The balance of the
Purchase  Price  pursuant to Section 2.4 hereof and Buyer's  share of prorations
and Closing  Costs,  as provided  in Sections 10 and 8.2,  respectively;

9.2.2.
Ground  Lease Assignment.
1 original  Ground  Lease  Assignment,  executed and acknowledged on behalf of
Buyer or its nominee;

9.2.3. Assignment of Leases.
If there then exist any Tenant Leases, 2 original counterparts of the Assignment
of Leases,  executed and acknowledged on behalf of Buyer or its nominee; and

<PAGE>

9.2.4. Other.
Such other documents and instruments, signed and properly acknowledged by
Buyer,  if  appropriate,  as may  reasonably  be  required  by  Escrow  Agent or
otherwise  in order to  effectuate  the  provisions  of this  Agreement  and the
closing of the transactions  contemplated  herein.

9.3.  Deliveries Outside of Escrow.
Seller  shall  deliver  possession  of the  Property  to Buyer upon the
Closing,  subject to the rights of the  tenants  (as  tenants  only  without any
options or rights of first  refusal or other  preferential  rights to  purchase)
under Tenant Leases (if any).  Further,  Seller hereby covenants and agrees,  at
its sole cost and  expense,  to deliver or cause to be  delivered  to deliver to
Buyer, on or prior to the Closing,  the following items:

9.3.1. Ground Lease.
If in Seller's  Possession, an original, fully executed counterpart of the
Ground Lease and any amendments, modifications, supplements, and restatements
thereto;

9.3.2.  Tenant Leases.
An original,  fully executed  counterpart of each of the
Tenant  Leases  (if any) and any  amendments,  modifications,  supplements,  and
restatements  thereto;

9.3.3.  Service Contracts.
An original,  fully executed
counterpart  of each of the Service  Contracts  being assumed by Buyer,  and any
amendments,   modifications,   supplements  and  restatements  thereto;

9.3.4.
Intangible Property.
If in Seller's  Possession,  the original of each document evidencing  the
Intangible  Property or rights to ownership and use thereof including the
Approvals;

9.3.5. Property Documents.
To the extent not previously delivered, originals of all of the Property
Documents in Seller's  Possession;

9.3.6. Personal Property.
The Personal Property,  including, without limitation, all keys, pass cards,
remote controls,  security codes,  computer  software and other devices relating
to access to the Improvements;  and

9.3.7.  Other.
Keys,
combinations  or card keys to all locks and  security  systems,  and such  other
documents and instruments,  as may be reasonably  required by Buyer or otherwise
in order to effectuate  the  provisions of this Agreement and the Closing of the
transactions  contemplated  herein.

10. PRORATIONS.

10.1.  Prorations.

10.1.1. Income.
Rentals, revenues, and other income, if any, from the Property, shall be
prorated  between Buyer and Seller as of the Closing Date to the extent actually
collected.  Delinquent  rentals as of the Closing  Date shall be prorated if and
when collected by Buyer. With respect to any amounts due under the Tenant Leases
(if any) that are subject to an annual or other periodic reconciliation,  Seller
and Buyer shall cooperate to complete a reconciliation as of the Closing.  Based
upon such  reconciliation,  for any  amounts  owing to tenants  under the Tenant
Leases  (if any),  Buyer  shall  receive a credit  at the  Closing,

<PAGE>

and for any
amounts  payable by tenants  under the Tenant  Leases (if any),  Seller shall be
entitled to a credit at the Closing  unless  such  tenant is  delinquent  in the
payment of rental under its respective Tenant Lease, in which event Seller shall
receive a credit only to the extent such amount owed to such tenant  exceeds the
delinquent  rental owed by such tenant.

10.1.2.  Other Credits.
On the Closing Date, Buyer shall be fully credited for:

10.1.2.1.  Security Deposits.
Security
deposits  that were paid to Seller by  tenants  under  Tenant  Leases  (if any);
provided,  however,  that if any security  deposit is in the form of a letter of
credit,  promissory note, or similar  instrument,  Seller shall use commercially
reasonable  efforts to cause such letter of credit,  promissory  note,  or other
instrument  to be assigned and  transferred  to Buyer at the Closing,  and there
shall be no credit against the Purchase Price at the Closing with respect to any
such security deposit. If Seller is unable to transfer a security deposit in the
form of a letter of  credit,  promissory  note,  or  similar  instrument  at the
Closing,  then at the Closing,  Seller shall  deposit in escrow the originals of
such letter of credit,  promissory note, or other similar  instrument to be held
pursuant to mutually satisfactory instructions providing for the release thereof
to Seller to achieve such  transfer or, as requested by Buyer,  to draw thereon.
In addition thereto, Seller shall instruct Escrow Agent to retain in escrow cash
in the  amount of such  letter of  credit,  promissory  note,  or other  similar
instrument,  which  cash  shall be  disbursed  to Buyer if  Seller  is unable to
achieve  such  transfer  within 30 days  after the  Closing,  at which  time the
originals of such letter of credit, promissory note, or other similar instrument
shall  be  returned  to  Seller.

10.1.2.2.   Unpaid  Obligations  To  Tenants.
Reimbursement  of expenses  and other sums owed by Seller to tenants for work or
disputes that occurred prior to the Closing Date, or for work to be performed or
allowances to be granted to any tenants upon or after the Closing Date, pursuant
to any Tenant  Leases (if any) that will be binding  upon the Real  Property  or
Buyer after the  Closing;

10.1.2.3.  Unpaid  Leasing  Commissions.
Any leasing
commissions or brokerage fees payable before, upon, or after the Closing Date in
connection  with any Tenant Leases (if any);  10.1.2.4.  Prepaid Rents and Other
Impounds.  Prepaid  rentals  already  received  by  Seller  and  other  impounds
attributable  to  periods  after the  Closing  Date.  10.1.3.  Expenses.  Taxes,
assessments,  improvement bonds,  service or other contract fees, utility costs,
and other expenses  affecting the Property  shall be prorated  between Buyer and
Seller as of the Closing Date to the extent due and payable for any period prior
to the  Closing.  All  non-delinquent  real estate taxes or  assessments  on the
Property shall be prorated based on the actual current tax bill, but if such tax
bill has not yet been received by Seller by the Closing Date or if  supplemental
taxes are assessed  after the Closing for the period  prior to the Closing,  the
parties shall make any necessary adjustment after the Closing by cash payment to
the party entitled thereto so that Seller shall have borne all taxes,  including
all supplemental  taxes,  allocable to the period prior to the Closing and Buyer
shall bear all taxes,  including all supplemental taxes, allocable to the period
after the Closing.

10.1.4.  Adjustments.
If any expenses  attributable  to the Property  and  allocable to the period
prior to the Closing are  discovered  or billed after the Closing, the parties

<PAGE>

shall make any necessary adjustment after the Closing by cash payment to the
party  entitled  thereto so that Seller shall have borne all expenses allocable
to the period prior to the Closing and Buyer shall bear all expenses allocable
to the period from and after the Closing.

10.1.5.  Tax Appeals.
With respect to any property tax appeals or reassessments
filed by Seller  for tax years  prior to the year in which the  Closing  occurs,
Seller  shall be entitled  to the full amount of any refund or rebate  resulting
therefrom (subject to any requirement under the Tenant Leases (if any) to pay to
the tenants thereunder a share of any such refund or rebate,  which Seller shall
promptly pay to Buyer for  refunding to such  tenants),  and with respect to any
property tax appeals or reassessments  filed by Seller for the tax year in which
the  Closing  occurs,  Seller and Buyer  shall share the amount of any rebate or
refund resulting  therefrom (after first paying to Seller all costs and expenses
incurred by Seller in pursuing  such appeal or  reassessment)  in  proportion to
their respective periods of ownership of the Property for such tax year (subject
to any  requirement  under  the  Tenant  Leases  (if any) to pay to the  tenants
thereunder a share of any such refund or rebate, which Seller shall promptly pay
to Buyer for  refunding to such  tenants);

10.1.6.  Generally.
For purposes of
calculating  prorations,  Buyer shall be deemed to be in title to the  Property,
and therefore  entitled to the income and  responsible  for the expenses,  after
12:01 a.m.  (California  time) on the Closing Date. All such prorations shall be
made on the basis of the  actual  number of days of the month  which  shall have
elapsed as of the day of the Closing and based upon the actual number of days in
the month and a 365 day year.  The  provisions  of this Section 10 shall survive
the Closing for a period of 1 year.

10.2.  Preliminary Closing Statement.
3 days
prior to the  Closing,  Escrow  Agent  shall  deliver to each of the parties for
their review and approval a  preliminary  closing  statement  (the  "Preliminary
Closing  Statement")  based on an income expense  statement  prepared by Seller,
approved by Buyer,  and  delivered to Escrow  Agent prior to said date,  setting
forth (i) the  proration  amounts  allocable to each of the parties  pursuant to
this  Section 10 and (ii) the  Closing  Costs  allocable  to each of the parties
pursuant to Section 8.2 hereof.  Based on each of the party's comments,  if any,
regarding  the  Preliminary  Closing  Statement,  Escrow  Agent shall revise the
Preliminary  Closing Statement and deliver a final,  signed version of a closing
statement to each of the parties at the Closing (the "Closing  Statement").

11. ESCROW.

11.1.  Opening of Escrow.
Promptly following the Execution Date, Buyer
and Seller shall each cause a purchase and sale escrow  ("Escrow")  to be opened
with Escrow Agent by delivery to Escrow Agent of 3 duplicate  partially executed
originals of this Agreement  executed by Seller and Buyer.  Upon receipt of such
partially  executed  originals  of this  Agreement,  Escrow  Agent  shall form 3
duplicate original counterparts of this Agreement and telephonically  confirm to
Buyer and Seller the date upon which Escrow is opened (the "Opening of Escrow").
On or  immediately  after the Opening of Escrow,  Escrow Agent shall (a) confirm
the same by executing and dating the 3 duplicate  original  counterparts of this
Agreement  in the space  provided  for  Escrow  Agent,  and (b)  deliver a fully
executed  original of this Agreement to each of Seller and Buyer.

11.2.  Escrow Instructions.
This Agreement  shall  constitute  escrow  instructions to Escrow
Agent as well as the agreement of the parties.  Escrow Agent is hereby appointed
and designated to act as Escrow Agent and instructed to deliver, pursuant to the
terms of this Agreement,  the documents and funds to be deposited into Escrow as
herein

<PAGE>

provided.  The parties  hereto  shall  execute  such  additional  escrow
instructions,  not inconsistent with this Agreement as determined by counsel for
Buyer and  Seller,  as Escrow  Agent  shall deem  reasonably  necessary  for its
protection,  if any (as may be modified  by and  mutually  acceptable  to Buyer,
Seller  and  Escrow  Agent).  In the  event of any  inconsistency  between  this
Agreement  and such  additional  escrow  instructions,  the  provisions  of this
Agreement  shall govern.

11.3.  Actions by Escrow  Agent.
Provided that Escrow
Agent shall not have received  Notice from Buyer or Seller of the failure of any
condition to the Closing or of the termination of the Escrow and this Agreement,
when  Buyer and Seller  have  deposited  into  Escrow  the  documents  and funds
required by this Agreement, and Title Company is unconditionally and irrevocably
committed  to issue the Owner's  Title  Policy  concurrently  with the  Closing,
Escrow Agent shall take the  following  actions,  in the order and manner herein
below indicated:

11.3.1.  Recording.
Following Title Company's  acknowledgment
that it is prepared and irrevocably  committed to issue the Owner's Title Policy
to Buyer,  cause the Ground Lease  Assignment and any other  documents which the
parties  hereto may mutually  direct to be recorded in the Official  Records and
obtain conformed  copies thereof for  distribution to Buyer and Seller.

11.3.2. Funds.
Upon  receipt of  confirmation  of the  recordation  of the Ground Lease
Assignment and such other documents as were recorded  pursuant to Section 11.3.1
above, disburse all funds deposited with it by Buyer as follows:

(a)     Pursuant  to the  Closing  Statement,  retain  for Escrow  Agent's  own
account  all  escrow  fees and costs,  disburse  to Title  Company  the fees and
expenses  incurred in connection  with the issuance of the Owner's Title Policy,
and disburse to any other persons or entities entitled thereto the amount of any
other Closing Costs;

(b)     Disburse  to Seller  an amount  equal to the  Purchase  Price,  less or
plus  the net  debit or  credit  to  Seller  by  reason  of the  prorations  and
allocation  of Closing  Costs  provided  for in  Sections  10 and 8.2.  Seller's
portion (as provided in Section  8.2) of the escrow  fees,  title fees and other
Closing Costs shall be paid pursuant to clause (a) above; and

(c)     Disburse  to Buyer  any  remaining  funds in the  possession  of Escrow
Agent after payments  pursuant to clauses (a) and (b) above have been completed.

11.3.3.  Owner's Title Policy.
Cause Title Company to issue the Owner's Title Policy to Buyer.

11.3.4. Delivery of Documents.
Deliver to Buyer and Seller one
original of each of all documents  deposited into Escrow,  other than the Ground
Lease Assignment and any other recorded documents.

11.4.  Conflicting Demands.
Upon receipt of a written demand for the Deposit (a "Deposit  Demand") by Seller
or Buyer (the  "demanding  party"),  Escrow Agent shall  promptly send a copy of
such Deposit Demand to the other party (the  "non-demanding  party").  Except in
connection  with the delivery of a Due  Diligence  Termination  Notice (in which
event the Deposit  (plus any  interest or  dividends  earned  thereon)  shall be
immediately  returned  to Buyer),  Escrow Agent  shall hold the  Deposit  for 5
Business Days from the date of delivery by Escrow

<PAGE>
Agent of the Deposit Demand to
the non-demanding  party  ("Objection  Period") or until Escrow Agent receives a
confirming   instruction  from  the  non-demanding   party.  In  the  event  the
non-demanding party delivers to Escrow Agent written objection to the release of
the Deposit to the demanding party (an "Objection  Notice") within the Objection
Period (which  Objection  Notice shall set forth the basis under this  Agreement
for objecting to the release of the Deposit), Escrow Agent shall promptly send a
copy of the Objection Notice to the demanding party. In the event of any dispute
between the parties  regarding the release of the Deposit,  Escrow Agent, in its
good faith  business  judgment,  may  disregard  all  inconsistent  instructions
received from either party and may either (a) hold the Deposit until the dispute
is mutually  resolved and Escrow Agent is advised of such mutual  resolution  in
writing by both Seller and Buyer,  or Escrow Agent is otherwise  instructed by a
final  non-appealable  judgment  of a court of  competent  jurisdiction,  or (b)
deposit the Deposit (plus any interest or dividends earned thereon) with a court
of competent  jurisdiction by an action of interpleader  (whereupon Escrow Agent
shall be released and relieved of any further liability or obligations hereunder
from and after the date of such  deposit).  In the event  Escrow  Agent shall in
good faith be  uncertain  as to its  duties or  obligations  hereunder  or shall
receive  conflicting  instructions,  claims or demands  from the parties  hereto
(expressly  excluding  however a conflicting  demand given by Seller after Buyer
has  delivered  a Due  Diligence  Termination  Notice and demand for the Deposit
(plus any interest or dividends  earned  thereon)),  Escrow Agent shall promptly
notify both  parties in writing and  thereafter  Escrow  Agent shall be entitled
(but not  obligated) to refrain from taking any action other than to keep safely
the Deposit (plus any interest or dividends  earned  thereon) until Escrow Agent
shall receive a joint  instruction from both parties  clarifying  Escrow Agent's
uncertainty or resolving such conflicting  instructions,  claims, or demands, or
until a final  non-appealable  judgment  of a court  of  competent  jurisdiction
instructs Escrow Agent to act.

11.5. Real Estate Reporting Person.
Escrow Agent is designated the "real estate reporting person" for purposes of
section 6045 of title 26 of the United  States Code and  Treasury  Regulation
1.6045-4  and any instructions or settlement  statement prepared by Escrow Agent
shall so provide. Upon the consummation of the transaction contemplated by this
Agreement,  Escrow Agent shall file Form 1099  information  return and send the
statement to Seller as required under the aforementioned statute and regulation.

11.6. Destruction of Documents; Survival.
Escrow  Agent is  hereby  authorized  to  destroy  or
otherwise  dispose of any and all  documents,  papers,  instructions,  and other
material  concerning  the Escrow at the  expiration of 6 years from the later of
(a) the Closing,  (b) the final  disbursement of any funds  maintained in Escrow
after the Closing, or (c) the final release of the Deposit and any related funds
following the termination of this  Agreement.  The provisions of this Section 11
shall survive the Closing or earlier  termination of this Agreement until Escrow
Agent's duties and obligations  hereunder are fully and finally discharged.

12. RISK OF LOSS.

12.1.  Condemnation.
If, prior to the Closing  Date,  all or any
portion of the Property is taken by  condemnation  or eminent  domain (or is the
subject  of a pending or  contemplated  taking  that has not been  consummated),
Seller shall immediately  notify Buyer of such fact. In such event,  Buyer shall
have the option to  terminate  this  Agreement  upon Notice to Seller  given not
later  than 30 days  after  receipt  of  such  notice  from  Seller.  Upon  such
termination,  Escrow Agent shall  immediately  return to Buyer the Deposit (plus
any interest or dividends earned  thereon),  the parties shall equally share the
cancellation  charges of Escrow Agent and Title Company, and neither party shall
have any further  rights or  obligations

<PAGE>

hereunder,  other than pursuant to any
provision hereof that expressly  survives the termination of this Agreement.  If
Buyer does not elect to terminate this  Agreement,  Seller shall not compromise,
settle, or adjust any award without Buyer's prior written consent (which consent
may be withheld in Buyer's sole and absolute discretion). At the Closing, Seller
shall assign and turn over to Buyer,  and Buyer shall be entitled to receive and
keep all  awards  for such  taking or  pending  or  contemplated  taking.

12.2. Casualty.
Prior  to the  Closing  and  notwithstanding  the  pendency  of  this
Agreement,  the entire  risk of loss or damage or  destruction  of the  Property
shall be borne and assumed by Seller.  If, prior to Closing any material part of
the Property is damaged or destroyed  and, (i) as to the 2450 Bayshore  Building
or the 2400 Bayshore Building, cannot be repaired for less than $100,000.00,  or
(ii)  as to  the  2425  Garcia  Building,  cannot  be  repaired  for  less  than
$50,000.00,  Seller shall  immediately  give Buyer Notice of such fact.  In such
event,  Buyer shall have the option to terminate  this  Agreement upon Notice to
Seller  given not later  than 15 days  after  receipt  of any such  Notice  from
Seller. If Buyer does not elect to terminate this Agreement, Seller shall assign
and turn over,  and Buyer shall be entitled to receive and keep,  all  insurance
proceeds  payable with respect to such damage or  destruction,  plus Buyer shall
receive a credit against the Purchase Price equal to the amount by which the sum
of any insurance  deductible and the cost to repair any uninsured damage exceeds
$10,000.00,  and the  parties  shall  proceed to Closing  pursuant  to the terms
hereof,  without  modification  and without any reduction in the Purchase Price,
and the damage or  destruction  thereafter  shall be  repaired or not at Buyer's
sole option and cost;  provided,  however,  that Seller shall have the option to
terminate  this  Agreement  upon Notice to Buyer if a peril  covered by Seller's
"difference-in-conditions"  insurance is the cause of the damage or  destruction
and the credit against the Purchase  Price that Buyer would receive  pursuant to
this  sentence  would exceed  $500,000.00.  If Buyer does not elect to terminate
this  Agreement  by  reason  of any  casualty,  Buyer  shall  have the  right to
participate  in any  adjustment  of the  insurance  claim and  Seller  shall not
compromise,  settle,  or adjust any such claim  without  Buyer's  prior  written
consent (which consent may be withheld in Buyer's sole and absolute discretion).

13.  DEFAULT.

13.1.  Default by Buyer.
IN THE EVENT  THAT THE ESCROW AND THIS
TRANSACTION  FAIL TO CLOSE  SOLELY  AS A RESULT OF THE  DEFAULT  OF BUYER IN THE
PERFORMANCE OF ITS OBLIGATIONS UNDER THIS AGREEMENT, BUYER AND SELLER AGREE THAT
SELLER'S ACTUAL DAMAGES WOULD BE IMPRACTICABLE OR EXTREMELY DIFFICULT TO FIX AND
THAT THE AMOUNT OF THE DEPOSIT  REPRESENTS THE PARTIES'  REASONABLE  ESTIMATE OF
SUCH DAMAGES. THE PARTIES THEREFORE AGREE THAT IN THE EVENT THAT ESCROW AND THIS
TRANSACTION  FAIL TO CLOSE  SOLELY  AS A RESULT OF THE  DEFAULT  OF BUYER IN THE
PERFORMANCE OF ITS OBLIGATIONS  HEREUNDER AND SELLER IS READY, WILLING, AND ABLE
TO PERFORM ITS  OBLIGATIONS  HEREUNDER,  SELLER,  AS SELLER'S SOLE AND EXCLUSIVE
REMEDY,  SHALL BE  ENTITLED TO  LIQUIDATED  DAMAGES IN THE AMOUNT OF THE DEPOSIT
(EXCLUSIVE OF INTEREST AND DIVIDENDS EARNED THEREON).  IN THE EVENT ESCROW FAILS
TO CLOSE SOLELY AS A RESULT OF BUYER'S DEFAULT AND SELLER IS READY, WILLING, AND
ABLE TO PERFORM  ITS  OBLIGATIONS  HEREUNDER,  THEN (1) THIS  AGREEMENT  AND THE
RIGHTS AND  OBLIGATIONS  OF BUYER AND SELLER  HEREUNDER  AND THE ESCROW  CREATED
HEREBY SHALL  TERMINATE,  (2) ESCROW AGENT SHALL,  AND IS HEREBY  AUTHORIZED AND
INSTRUCTED TO, RETURN PROMPTLY TO BUYER AND SELLER ALL DOCUMENTS AND INSTRUMENTS
TO THE PARTIES WHO DEPOSITED THE SAME,

<PAGE>
(3) ESCROW AGENT SHALL DELIVER TO SELLER
THE DEPOSIT  (EXCLUSIVE OF INTEREST AND DIVIDENDS  EARNED  THEREON)  PURSUANT TO
SELLER'S  INSTRUCTIONS,  AND THE SAME SHALL BE THE FULL,  AGREED, AND LIQUIDATED
DAMAGES,  AND (4) ESCROW AGENT SHALL DELIVER TO BUYER ALL INTEREST AND DIVIDENDS
EARNED ON THE DEPOSIT.  THE PAYMENT OF SUCH AMOUNT AS LIQUIDATED  DAMAGES IS NOT
INTENDED AS A FORFEITURE OR PENALTY WITHIN THE MEANING OF CALIFORNIA  CIVIL CODE
SECTIONS  3275 OR 3369,  BUT IS INTENDED  TO  CONSTITUTE  LIQUIDATED  DAMAGES TO
SELLER PURSUANT TO CALIFORNIA  CIVIL CODE SECTIONS 1671,  1676 AND 1677.  SELLER
HEREBY WAIVES THE PROVISIONS OF CALIFORNIA  CIVIL CODE SECTION 3389.  SELLER AND
BUYER  ACKNOWLEDGE  THAT THEY HAVE READ AND  UNDERSTAND  THE  PROVISIONS OF THIS
SECTION 13.1, AND BY THEIR INITIALS  IMMEDIATELY  BELOW AGREE TO BE BOUND BY ITS
TERMS.

JHN                                                         LAS

Seller's Initials                                           Buyer's Initials

13.2.  Default by Seller.
In the event of any breach or default by Seller,  then
Buyer shall be entitled to pursue any remedy  available to Buyer  hereunder,  at
law or in equity,  including,  without limitation,  the specific  performance of
this Agreement,  provided that any suit for specific  performance  must be filed
prior to the Scheduled  Closing  Date,  unless there are fewer than 60 days from
the date of the breach or default by Seller until the Scheduled Closing date, in
which event any suit for specific performance must be filed within 60 days after
the date of the breach or default by Seller.

14. BROKERS.

         Seller and Buyer each hereby represent, warrant to and covenant to each
other  that it has not dealt with any third  party  (other  than Cresa  Partners
("Broker"))  in a manner  that  would  obligate  the other to pay any  brokerage
commission,  finder's fee or other  compensation  due or payable with respect to
the transaction contemplated hereby other than a commission to be paid to Broker
pursuant  to a separate  agreement,  which shall be paid by Seller only upon the
Closing of the purchase and sale contemplated hereby.  Seller hereby indemnifies
and agrees to protect,  defend and hold Buyer  harmless from and against any and
all claims,  losses,  damages,  costs and expenses  (including  attorneys' fees,
charges  and  disbursements)  incurred  by  Buyer by  reason  of any  breach  or
inaccuracy of the representation,  warranty and agreement of Seller contained in
this Section.  Buyer hereby  indemnifies and agrees to protect,  defend and hold
Seller harmless from and against any and all claims, losses,  damages, costs and
expenses  (including  attorneys' fees,  charges and  disbursements)  incurred by
Seller by reason of any breach or inaccuracy of the representation, warranty and
agreement of Buyer  contained in this  Section.  The  provisions of this Section
shall survive the Closing or earlier termination of this Agreement.

15.      CONFIDENTIALITY.

15.1. Buyer.
Buyer agrees that until the Closing,  except as otherwise provided
herein or  required  by law and except for the  exercise  by Buyer of any remedy
hereunder,  Buyer shall (a) keep  confidential  the pendency of this transaction
and the documents and information supplied by Seller to Buyer, (b) disclose such
information  only to Buyer's  agents,  employees,  contractors,  consultants  or
attorneys,  as well as lenders (if any),  investment  bankers,  venture

<PAGE>
capital
groups,  investors,  title company personnel and tenants, with a need to know in
connection with Buyer's review and consideration of the Property,  provided that
Buyer shall  inform all persons  receiving  such  information  from Buyer of the
confidentiality  requirement  and (to the extent within  Buyer's  control) cause
such confidence to be maintained, and (c) upon the termination of this Agreement
prior to the  Closing,  return to Seller  promptly  upon  request  all copies of
documents, reports, and other information and materials relating to the Property
previously supplied to Buyer by Seller. Disclosure of information by Buyer shall
not be prohibited  if that  disclosure  is of  information  that is or becomes a
matter of public  record or public  knowledge as a result of the Closing of this
transaction  or  from  sources  other  than  Buyer  or  its  agents,  employees,
contractors,  consultants or attorneys.

15.2.  Seller.
Seller agrees that both
prior to and after the Closing,  except as otherwise  provided herein (including
the Tenant  Estoppels) or required by law  (including  any  requirements  of the
Securities  and Exchange  Commission  or any other  requirements  applicable  to
publicly-traded  companies), and except for the exercise by Seller of any remedy
hereunder,  Seller shall (a) keep  confidential the pendency of this transaction
with Buyer, the terms and conditions contained in the Agreement and the identity
of Buyer and the  relationship  between  Buyer and the entity to which Buyer may
assign  this  Agreement  or which Buyer  designates  as the party to whom Seller
shall convey the Property at the Closing, and (b) disclose such information only
to Seller's agents, employees, contractors, consultants or attorneys, as well as
tenants and title company  personnel,  with a need to know such  information  in
connection  with effecting this  transaction,  provided that Seller shall inform
all such persons  receiving  such  confidential  information  from Seller of the
confidentiality  requirement and (to the extent within  Seller's  control) cause
such confidence to be maintained. Disclosure of the pendency of this transaction
by Seller shall not be prohibited if that  disclosure is of information  that is
or  becomes  a matter of public  record or public  knowledge  as a result of the
Closing of this  transaction  or from  sources  other than Seller or its agents,
employees, contractors, consultants or attorneys.

16. INDEMNIFICATION.

         Except as otherwise  set forth  herein,  Buyer hereby  indemnifies  and
agrees to defend and hold Seller harmless from and against any claims,  demands,
obligations,   losses,  costs,  damages,  liabilities,   judgments  or  expenses
(including reasonable attorneys' fees, charges and disbursements) arising out of
or in connection  with the  ownership,  operation or maintenance of the Property
after  the  Closing.  Except  as  otherwise  set  forth  herein,  Seller  hereby
indemnifies  and agrees to defend and hold Buyer  harmless  from and against any
claims, demands, obligations, losses, costs, damages, liabilities,  judgments or
expenses  (including  reasonable  attorneys'  fees,  charges and  disbursements)
arising out of or in connection with the ownership,  operation or maintenance of
the Property prior to the Closing.  Each party shall do, execute and deliver, or
shall  cause to be done,  executed  and  delivered,  all such  further  acts and
instruments which the other party may reasonably  request in order to more fully
effectuate the indemnifications  provided for in this Agreement.  The provisions
of this Section shall survive the Closing.

17. MISCELLANEOUS  PROVISIONS.

17.1. Governing Law.
This Agreement and the legal relations between the parties hereto
shall be governed by and construed  and enforced in accordance  with the laws of
the State of  California,  without regard to its principles of conflicts of law.

<PAGE>

17.2.  Entire Agreement.
This Agreement,  including the exhibits and schedules
attached  hereto,  constitutes  the entire  agreement  between  Buyer and Seller
pertaining to the subject  matter hereof and  supersedes  all prior  agreements,
understandings, letters of intent, negotiations and discussions, whether oral or
written, of the parties,  and there are no warranties,  representations or other
agreements,  express  or  implied,  made to either  party by the other  party in
connection  with the subject  matter  hereof  except as  specifically  set forth
herein or in the documents delivered pursuant hereto or in connection  herewith.
Without  limiting the  foregoing,  upon the  execution of this  Agreement,  that
certain  Letter of Intent dated as of March 5, 1999,  between  Buyer and Seller,
shall  terminate  and be of no  further  force or effect.

17.3.  Modifications; Waiver.
No  supplement,  modification,  waiver or termination of this Agreement
shall be binding unless executed in writing by the party to be bound thereby. No
waiver of any provision of this Agreement shall be deemed or shall  constitute a
waiver of any other provision  hereof  (whether or not similar),  nor shall such
waiver constitute a continuing waiver unless otherwise expressly provided.

17.4. Notices.
All  notices,   consents,   requests,   reports,   demands  or  other
communications hereunder  (collectively,  "Notices") shall be in writing and may
be given  personally,  by reputable  overnight  delivery service or by facsimile
transmission  (with in the case of a  facsimile  transmission,  confirmation  by
reputable  overnight  delivery  service) to each of the parties at the following
addresses:

<PAGE>

If to Buyer:                                    If to Seller:

Alexandria Real Estate Equities, Inc.           Scios Inc.
135 N. Los Robles Ave., Suite 250               820 West Maude Avenue
Pasadena, California  91101                     Sunnyvale, California  94086
Attention:        General Counsel               Attention: Mr. David Gryska
Re:               2425 Garcia;                  Re:        2425 Garcia;
                  2400/2450 Bayshore                       2400/2450 Bayshore
Telephone:        (626) 578-0777                Telephone: (408) 481-9177
Facsimile:        (626) 578-0770                Facsimile: (not yet available)

With a copy to:                                 With a copy to:

McKay, Meyer and Herbert                        Cooley Godward LLP
1801 Century Park East, 25th Floor              One Maritime Plaza, 20th Floor
Los Angeles, California  90067-2327             San Francisco, California  94111
Attention:        David S. Meyer, Esq.          Attention:  Anna B. Pope, Esq.
Re:               2425 Garcia;                  Re:         2425 Garcia;
                  2400/2450 Bayshore                        2400/2450 Bayshore
Telephone:        (310) 772-0836                Telephone:  (415) 693-2000
Facsimile:        (310) 772-0239                Facsimile:  (415) 951-3699

If to Escrow Agent:                             If to Title Company:

Chicago Title Company                           Chicago Title Company
700 South Flower Street, Suite 900              110 West Taylor Street
Los Angeles, California  90017                  San Jose, California  95110
Attention:        Ms. Maggie G. Watson          Attention:  Ms. Laura Miller
Re:               NBU No. 89903910-57           Re:         Order No. 827124
                  2425 Garcia;                              2425 Garcia;
                  2400/2450 Bayshore                        2400/2450 Bayshore
Telephone:        (213) 488-4300 (or 4337)      Telephone:  (408) 292-4212
Facsimile:        (213) 488-4388                Facsimile:  (408) 282-1404


or to such other address or such other person as the addressee  party shall have
last  designated  by notice  to the  other  party.  Notices  given by  facsimile
transmission  shall be deemed  received  when  confirmed,  and all other Notices
shall be  deemed  given on the date of  delivery  or  refusal.

17.5.  Expenses.
Subject to the allocation of Closing Costs provided in Section 8.2 hereof and to
the  specific  allocation  of other  costs  provided  in Section 3.3 and Section
4.20.4 hereof,  whether or not the  transactions  contemplated by this Agreement
shall be  consummated,  all fees and  expenses  incurred by any party  hereto in
connection with this Agreement shall be borne by such party.

17.6.  Assignment.

17.6.1.  Seller's Right to Assign.
Seller shall not have the right,  power,  or authority to assign,  pledge,  or
mortgage this Agreement or any portion of this Agreement,  or

<PAGE>

to  delegate  any  duties  or  obligations  arising  under  this
Agreement,  voluntarily,  involuntarily, or by operation of law.

17.6.2. Buyer's Right to Assign.
Upon Notice to Seller and Escrow  Agent,  Buyer shall have the
right,  power,  and authority to assign this Agreement or to delegate any duties
or obligations  arising under this Agreement,  voluntarily,  involuntarily or by
operation of law, to any person or entity. Upon such assignment,  Buyer shall be
relieved of all obligations  under this Agreement and the Escrow,  provided that
Buyer shall not be relieved of any  liabilities or  indemnification  obligations
arising under this Agreement or the Escrow prior to the date of such  assignment
if such liabilities or indemnification obligations have not been fully satisfied
as of the date of such assignment.

17.7. Severability.
Any provision or part of
this  Agreement  which is  invalid  or  unenforceable  in any  situation  in any
jurisdiction  shall, as to such situation and such jurisdiction,  be ineffective
only to the extent of such invalidity and shall not affect the enforceability of
the remaining  provisions  hereof or the validity or  enforceability of any such
provision in any other situation or in any other jurisdiction.

17.8. Successors and Assigns;  Third Parties.
Subject to and without waiver of the provisions of
Section 17.6  hereof,  all of the rights,  duties,  benefits,  liabilities,  and
obligations  of the parties  shall inure to the benefit of, and be binding upon,
their  respective  successors and assigns.  Except as specifically  set forth or
referred to herein,  nothing herein expressed or implied is intended or shall be
construed to confer upon or give to any person or entity, other than the parties
hereto and their  successors  or  assigns,  any rights or  remedies  under or by
reason of this Agreement.

17.9. Counterparts.
This Agreement may be executed in as many counterparts as may be deemed
necessary and convenient, and by the different parties hereto on separate
counterparts, each of which, when so executed, shall be deemed an  original,
but  all  such  counterparts  shall constitute one and the same instrument.

17.10. Headings.
The section headings of this Agreement are for convenience of reference only and
shall not be deemed to modify, explain,  restrict, alter or affect the meaning
or interpretation of any provision hereof.

17.11. Time of the Essence.
Time shall be of the essence with respect  to  all  matters contemplated  by
this  Agreement.

17.12.  Further Assistance.
In addition to the actions recited herein and contemplated to be
performed,  executed,  and/or  delivered  by Seller and Buyer,  Seller and Buyer
agree to perform,  execute  and/or  deliver or cause to be  performed,  executed
and/or  delivered  at the Closing or after the Closing any and all such  further
acts,  instruments,  deeds  and  assurances  as may be  reasonably  required  to
consummate  the  transactions  contemplated  hereby.

17.13.  Number and Gender.
Whenever the singular number is used, and when required by the context, the same
includes the plural,  and the masculine  gender includes the feminine and neuter
genders.

17.14.  Construction.
This  Agreement  shall  not be  construed  more
strictly  against one party hereto than against any other party hereto merely by
virtue of the fact  that it

<PAGE>

may have been  prepared  by  counsel  for one of the
parties.  Further,  no inferences are to be drawn,  and no conclusions are to be
made, based on the fact that a particular provision contained in a draft of this
Agreement  is not  included in the executed  version of this  Agreement,  and no
differences  between drafts of this  Agreement and the executed  version of this
Agreement may be used as evidence of the parties' intended interpretation of any
of the terms of this Agreement.

17.15.  Post-Closing Access to Records.
Seller shall retain,  for at least [***] after the Closing, (i) all accounting
records relating to the Property  ("Accounting  Records")  for the calendar year
periods for which Buyer may be required by the Securities and Exchange
Commission and/or Buyer's  accountants to have audited financial statements
prepared with respect to the  Property,  including,  without  limitation,  all
general  ledgers,  cash receipts,   canceled  checks  and  other  accounting
documents  or  information reasonably  requested by Buyer and related to the
Property,  and (ii) all other records related to the Property,  in either case
whether in Seller's  Possession or in the possession or control of Seller's
Manager,  asset  manager,  or other agent  (collectively,  the  "Property
Information").  Upon receipt by Seller of Buyer's  reasonable  written  request
at anytime  and from time to time within 1 year  after the  Closing,  Seller
shall  make all of the  Property  Information available  (or  cause its  Manager
or asset  manager,  as  applicable,  to make available)  to Buyer and its
accountants  and  designees,  for  inspection  and copying  during  normal
business  hours and at Buyer's  sole cost and  expense.

17.16.  Exhibits.
All  exhibits  attached  hereto  are hereby  incorporated  by
reference  as though set out in full  herein.

17.17.  Attorneys'  Fees.
If any
action is  brought by either  party  against  the other  party,  relating  to or
arising  out  of  this  Agreement,  the  transaction  described  herein  or  the
enforcement  hereof,  the prevailing party shall be entitled to recover from the
other  party  reasonable   attorneys'  fees,  costs  and  expenses  incurred  in
connection with the prosecution or defense of such action.  For purposes of this
Agreement,  the term "attorneys' fees" or "attorneys' fees and costs" shall mean
the fees and  expenses  of  counsel to the  parties  hereto,  which may  include
printing, photostating, duplicating and other expenses, air freight charges, and
fees billed for law clerks, paralegals and other persons not admitted to the bar
but performing services under the supervision of an attorney,  and the costs and
fees incurred in connection  with the  enforcement or collection of any judgment
obtained in any such  proceeding.  The  provisions of this Section shall survive
the entry of any  judgment,  and shall not merge,  or be deemed to have  merged,
into any judgment.

17.18. Business Days.
As used herein, the term "Business Day"
shall mean a day that is not a Saturday,  Sunday or legal holiday.  In the event
that the date for the  performance  of any  covenant  or  obligation  under this
Agreement shall fall on a Saturday,

                              ***A CONFIDENTIAL PORTION OF THE MATERIAL HAS BEEN
                              OMITTED AND FILED SEPARATELY WITH THE SECURITIES
                              AND EXCHANGE COMMISSION.

<PAGE>

Sunday  or  legal  holiday  under  the  laws of the  State  of California,  the
date for  performance  thereof  shall be  extended  to the next Business Day.

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


                                        BUYER:

                                        ALEXANDRIA REAL ESTATE EQUITIES, INC.,
                                        a Maryland corporation


                                        By:      /s/ Lynn Anne Shapiro
                                        Name:
                                        Its:

                                        Execution Date:  May 28, 1999


                                        SELLER:

                                        BIO-SHORE HOLDINGS, LTD.,
                                        a California Limited Partnership

                                        By:      BIO-SHORE MANAGEMENT CORP.,
                                                 a California corporation,
                                                 Sole General Partner



                                        By:      /s/ John H. Newman
                                        Name:
                                        Its:

                                        Execution Date:  May 28, 1999


                                        SCIOS INC.,
                                        a Delaware corporation



                                        By:      /s/ David W. Gryska
                                        Name:
                                        Its:     CFO

                                        Execution Date: _____, 1999


<PAGE>

                                        ESCROW AGENT


         The  undersigned  Escrow  Agent  accepts  the  foregoing  Agreement  of
Purchase  and Sale and Joint  Escrow  Instructions  and  agrees to act as Escrow
Agent under this Agreement in strict accordance with its terms.


                                        CHICAGO TITLE COMPANY
                                        subject to Escrow Agent's Supplemental
                                        Escrow Instructions



                                        By:      /s/ G. Aguilar
                                        Name:
                                        Its:     Escrow Officer