<PAGE>

                                                                    EXHIBIT 10.1


                        PURCHASE AND SALE AGREEMENT AND
                        ===============================
                           JOINT ESCROW INSTRUCTIONS
                           =========================


     THIS PURCHASE AND SALE AGREEMENT AND JOINT ESCROW INSTRUCTIONS

("Agreement") is made and entered into as of the 19th day of October, 1999, by
  ---------
and among KAISER VENTURES INC., a Delaware corporation and KAISER STEEL LAND
DEVELOPMENT INC., a Delaware corporation, (KAISER VENTURES INC. and KAISER STEEL
LAND DEVELOPMENT INC. are hereafter collectively referred to as "Seller"), and
                                                                 ------
ONTARIO VENTURES I, LLC, a Delaware limited liability company or its designee
approved as set forth in Section 15.8 hereof ("Buyer").
                                               -----

                                    Recitals

     A.  WHEREAS, Seller is the owner of certain real property commonly known as
the KVI properties located in the County of San Bernardino, State of California,
consisting of approximately 592.1 gross acres and more particularly shown on the
map attached hereto as Exhibit A (the "Land," and collectively with the
                       ---------       ----
Improvements (defined below), the "Real Property") and which is more fully
                                   -------------
described in Section 1.39 below, and certain tangible and intangible personal
property located on, or associated with the use and operation of, the Real
Property.  Notwithstanding any other provision in this Agreement, the Land and
the Real Property do not include the real property owned by Kaiser Ventures Inc.
and commonly referred to as the Napa Lots, the Rancho Cucamonga Property, the
Tar Pits Property and the Household Waste Property; and

     B.  WHEREAS, the Real Property and adjoining property was used as a fully
integrated steel mill, which included such items as coke ovens, blast furnaces,
byproducts facilities, power generation facilities, scrap yards, slag dumps,
soaking and waste facilities, a landfill, waste water and sewer treatment
facilities,  fabrication facilities and other uses ancillary to a steel and
fabrication mill (collectively "Steel Mill Operations") and was occupied by a
                                ---------------------
number of tenants and others subsequent to active Steel Mill Operations; and

     C.  WHEREAS, in consideration for Buyer's agreement to (i) assume certain
contractual indemnification and other obligations of Seller which are
specifically agreed to by Buyer; (ii) remediate existing Hazardous Substances
contamination at, under, above, adjacent to and/or emanating to or from the Real
Property and/or the Tar Pits Property; (iii) assume any third-party liability
associated with the Real Property and/or the Tar Pits Property, except as
expressly excluded; and (iv) other good and valuable consideration,  Seller
desires to sell the Real Property and Other Assets to Buyer on the terms and
conditions set forth herein; and

     D.  WHEREAS, Buyer desires to purchase the Real Property and Other Assets
from Seller and to undertake an obligation to (i) assume certain contractual
indemnification and other obligations of Seller which are specifically agreed to
by Buyer; (ii) remediate existing Hazardous Substances contamination at, under,
above, adjacent to and/or emanating to or from the Real Property and/or, subject
to the provisions of Section 10.7 hereof, the Tar Pits Property; and (iii)
assume any third-party liability associated with the Real Property and/or the
Tar Pits Property, except as expressly excluded, on the terms and conditions set
forth herein.

                                       1
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     NOW, THEREFORE, Buyer and Seller (each herein sometimes called a "Party"
                                                                       ------
and jointly the "Parties") hereby agree as follows:
                 --------

                                   Agreement

     1.  Definitions.  In addition to the terms defined in the foregoing
         -----------
Recitals and capitalized terms hereinafter defined in this Agreement, for
purposes of this Agreement the terms set forth below shall have the following
meanings:

         1.1  "Adjacent Property" means, collectively, the California Speedway
               -----------------
Property, the MRF Property, the Household Waste Property, Tar Pits Property, the
Budway Property, the Rancho Cucamonga Property and the remaining NAPA Lots, all
as more particularly described in Exhibit B attached hereto, which properties
are deemed for purposes of this Agreement only to be located adjacent to the
Real Property.

         1.2  "Agencies" means, collectively, DTSC, RWQCB, the CIWMB and any
               --------
other federal, state or local governmental or regulatory agency, body, board,
commission or other political entity with environmental jurisdiction over the
Property. Any one of these political entities may sometimes be referred to as an
"Agency".
 ------

         1.3  "Approved Title Conditions" shall have the meaning set forth in
               -------------------------
Section 4.1 hereof.

         1.4  "Bill of Sale" means a bill of sale in the form of Exhibit C
               ------------
attached hereto duly conveying all of the Other Assets to Buyer.

         1.5  "Case" means any case or cases opened by DTSC , RWQCB or CIWMB
               ----
with respect to Hazardous Substances contamination at the Real Property,
including, without limitation, the cases listed on Exhibit D hereto.
                                                   ---------

         1.6  "Cash Equivalent" means a wire transfer of funds or other good and
               ---------------
immediately available funds.

         1.7  "CIWMB" means the California Integrated Waste Management Board.
               -----
         1.8  "Close of Escrow" means the date on which the Deed is recorded in
               ---------------
the Official Records.

         1.9  "Closing Date" means a date which is no more than thirty (30) days
               ------------
after the Contingency Date, unless the Closing Date is extended pursuant to the
provisions of this Agreement.  The date scheduled for the Close of Escrow is the
"Closing Date" and the actual date of closing is the "Close of Escrow."
 ------------                                         ---------------

         1.10 "Consent Order" means the California Department of Health Services
               --------------
(now known as the California Environmental Protection Agency Department of Toxic
Substances Control) Consent Order with Kaiser Steel Resources, Inc. (now known
as Kaiser Ventures, Inc.) dated as of August 22, 1988, as amended by an
Amendment to Consent Order dated November 13, 1997, and an Amendment to Consent
Order dated January 11, 1999.

                                       2
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         1.11 "Contingency Date" means the date which is seventy-five (75) days
               -----------------
after the Execution Date, unless extended pursuant to Section 3.1.3 below.

         1.12 "Contingent Transportation Insurance Policy" means a Contingent
               ------------------------------------------
Transportation Insurance Policy as described in Article 10 hereof, in the form
of Exhibit E to be attached hereto.
   ---------

         1.13 "Corrective Action" means a Corrective Action as defined in
               -----------------
Section 10.3.3.1 hereof.

         1.14 "Deed" means a grant deed in the form of Exhibit F attached
               ----                                    ---------
hereto, duly conveying fee title to the Real Property from Seller to Buyer.

         1.15 "Deposit" means the sum of Two Hundred Fifty Thousand Dollars
               --------
($250,000).

         1.16 "DTSC" means the California Environmental Protection Agency
               ----
Department of Toxic Substances Control and any divisions or officers thereof and
all successors thereto.

         1.17 "Environmental Law" means the Comprehensive Environmental
               -----------------
Response, Compensation, and Liability Act of 1980, 42 U.S.C. Sections 9601, et
seq., the Resource Conservation and Recovery Act of 1976, 42 U.S.C. Sections
6901 et seq., the Toxic Substances Control Act, 15 U.S.C. Sections 2601 et seq.,
the Hazardous Materials Transportation Act, 49 U.S.C. 1801 et seq., the Federal
Water Pollution Prevention and Control Act, 33 U.S.C. Sections 1251 et seq., the
Oil Pollution Act of 1990, Pub. L. 101-380, August 18, 1990, the Safe Drinking
Water and Toxic Enforcement Act of 1986 (Cal. Health & Safety Code Sections
25249.5-25249.13), the Carpenter-Presley-Tanner Hazardous Substances Account Act
(Cal. Health & Safety Code Sections 25300 et seq.), the California Hazardous
Water Control Act (Cal. Health & Safety Code Sections 25100 et seq.) and the
California Water Code Sections 13000 et seq., as said Laws have been
supplemented or amended from time to time, the regulations now or hereafter
promulgated pursuant to said Laws and any other federal, state, county or local
law, statute, rule, regulation or ordinance currently in effect or subsequently
enacted, promulgated or adopted which regulates or proscribes the use, storage,
disposal, presence, cleanup, transportation or release or threatened release
into the environment of any Hazardous Substances or pertains to health,
industrial hygiene and/or the environment.

         1.18 "Escrow" means an escrow to be opened with Escrow Holder within
               ------
three (3) business days after the Execution Date.

         1.19 "Escrow Holder" shall be and mean Chicago Title Company, 560 East
               ------------
Hospitality Lane, San Bernardino, California 92408.

         1.20 "Execution Date" means the date on which the last of Buyer and
               --------------
Seller provides notice to the other Party that (i) this Agreement has been duly
executed, and (ii) all internal approvals to such execution have been obtained;
provided, however, that if the Execution Date does not occur on or before
--------  -------
October 22, 1999, then the Agreement shall be deemed to be null and void.

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         1.21 "Full Occurrence CGL Policy" means a Full Occurrence Commercial
               --------------------------
General Liability with Pollution Policy, in the form of Exhibit G to be attached
                                                        ---------
hereto.

         1.22 "Hazardous Substances" means (i) any element, compound, mixture,
               --------------------
solution, chemical, material or substance at any time defined as or included in
the definition of "hazardous substances," "hazardous wastes," "hazardous
materials," "extremely hazardous waste," "acutely hazardous waste," "radioactive
waste," "biohazardous waste," "pollutant," "toxic pollutant," "contaminant,"
"restricted hazardous waste," "infectious waste," "toxic substances," or any
other term or expression intended to define, list or classify substances by
reason of properties harmful to health, safety or the indoor or outdoor
environment (including harmful properties such as ignitability, corrosivity,
reactivity, carcinogenicity, toxicity, reproductive toxicity, "TCLP toxicity" or
"EP toxicity" or words of similar import under any applicable Environmental
Laws); (ii) any oil, petroleum, petroleum fraction, petroleum additive or
petroleum derived substance; (iii) any drilling fluids, produced waters and
other wastes associated with the exploration, development or production of crude
oil, natural gas or geothermal resources; (iv) any flammable substances or
explosives; (v) any radioactive materials; (vi) any asbestos-containing
materials; (vii) urea formaldehyde foam insulation; (viii) electrical equipment
which contains any oil or dielectric fluid containing polychlorinated biphenyls;
(ix) pesticides; (x) lead-based paint; and (xi) any other chemical, material or
substance, exposure to which is now or in the future prohibited, limited or
regulated by any governmental authority or which may or could pose a hazard to
the health and safety of the owners, occupants or any persons in the vicinity of
the Property or to the indoor or outdoor environment.

         1.23 "Improvements" means any and all buildings, structures, systems,
               ------------
facilities, fixtures, fences and parking areas located on the Land as of the
Execution Date, including, without limitation, the sewage treatment facility
located on the Land, but not including two trailers currently located on the
Real Property which are owned by a former tenant of Seller and will be removed
from the Real Property prior to the Close of Escrow.

         1.24 "Inspections" shall have the meaning set forth in Section 4.2
               -----------
hereof.

         1.25 "Insurance Policies" means, collectively, the Contingent
              -------------------
Transportation Insurance Policy, the Full Occurrence CGL Policy, the Real Estate
Pollution Policy and the Remediation Project Policy, as described in Section
10.5 hereof.

         1.26  "ITG" means The IT Group, Inc. or any of its wholly-owned
                ---
subsidiaries or affiliates.

         1.27  "Knowlton" means The Knowlton Group, a sole proprietorship.
                --------

         1.28  "LandBank" means LandBank, Inc., a Delaware corporation.
                --------

         1.29  "Laws" means all federal, state and local laws, ordinances,
                ----
rules, regulations and orders, including, without limitation, all Environmental
Laws.

         1.30  "No Further Action Letter" or "NFA" means a letter (or its
substantial equivalent) to be issued by the DTSC or another Agency with respect
to the Real Property and

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<PAGE>

the Tar Pits Property, stating that no regulatory action or no further
regulatory action need be taken by any party to meet the clean-up requirements
established by the DTSC, other responsible Agency or applicable Laws for a
particular portion of the Real Property or the Tar Pits Property, subject to
certain terms and conditions within such letter (such as continuing operations
and maintenance obligations) which terms and conditions are consistent with the
types of terms and conditions which are customarily contained in such a letter.
The Parties acknowledge that the West End Parcels and the Valley Boulevard
Parcel as generally depicted on the map attached as Exhibit A hereto are not the
                                                    ---------
subject of the Consent Order but are subject to regulatory jurisdiction.

         1.31  "Official Records" means the Official Records of San Bernardino
                ----------------
County, California.

         1.32  "Opening of Escrow" means the date on which a fully executed copy
                -----------------
of this Agreement and the Deposit are deposited with Escrow Holder; provided,
                                                                    --------
however, that if the Opening of Escrow fails to occur within ten (10) business
-------
days after the Execution Date, this Agreement shall become null and void.

         1.33  "Other Assets" means all tangible and intangible assets located
                ------------
on the Real Property at the Close of Escrow or used in the operation of the Real
Property, including but not limited to, (a) two diesel locomotives, together
with any and all equipment used to maintain said locomotives; (b) any and all
switching equipment used in the operation of the diesel locomotive switching and
stacking operations which Seller contracts with Western Railroad; (c) copies of
any reports relating to the Real Property which are in the possession or
reasonable control of Seller and can reasonably be retrieved by Seller, which
are not subject to any attorney-client privilege, attorney-work product
privilege or any other privilege (subject to any limitations that may be
applicable to Buyer's ability to rely on any such reports), (d) summaries of all
reports or documents which are the subject of any attorney-client privilege,
attorney-work product privilege or any other privilege subject to establishment
of a mutually acceptable procedure for preserving such privileges, (e) the
Permits (as hereinafter defined) to the extent they can be transferred and/or
assigned, (f) all other items of personal property, subject to any limitation
that may be applicable to Buyer's ability to rely on any such personal property,
(g) a license in the form attached as Exhibit I hereto to use the name "Kaiser
                                      ---------                         ------
Commerce Center," and (h) any rights Seller may have against any former tenants
---------------
or other third parties for costs of future environmental remediation (and Seller
shall provide to Buyer a list of such parties and a copy of the documents which
give rise to any such claims).  Buyer acknowledges that certain pre-October 4,
1988 documents are contained in boxes which are not well-indexed and which Buyer
will have to review at its expense.

         1.34  "Permits" means the Permits listed on Exhibit J attached hereto.
                -------                              ---------

         1.35  "Property" means, collectively, the Real Property and the Other
                --------
Assets.

         1.36  "PTR" means the preliminary title report prepared by Title
                ---
Company pursuant to Section 4.1 hereof.

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<PAGE>

         1.37  "Purchase Price" means the sum of Sixteen Million Dollars
                --------------
($16,000,000).

         1.38  "Real Estate Pollution Policy" means a Real Estate Pollution
                ----------------------------
Policy, in the form to be attached hereto as Exhibit K.
                                             ---------

         1.39  "Real Property" means the Land shown on Exhibit A, together with
                -------------                          ---------
all right, title and interest of Seller, if any, in and to the Improvements and
all privileges, entitlements, easements, rights and appurtenances thereto
including, without limitation, (a) all development rights and air rights
relating to such Real Property, (b) all water rights which are appurtenant to
the Land, (c) all right, title and interest of Seller in and to any streets,
alleys, passages, watercourses, other easements, and other rights-of-way or
appurtenances included in such Real Property as of the Close of Escrow, (d) the
reversions and remainders owned by the Seller which are part of the real
property shown on Exhibit A, and (e) all the estate, right, title, interest,
                  ---------
property, possession, claim and demand whatsoever, in law and in equity, owned
by Seller, in and to the foregoing and any part thereof. The Parties acknowledge
and agree that the shares of Fontana Union Water Company, a mutual water
company, which are owned by Kaiser Ventures, Inc. and/or its subsidiary, Fontana
Water Resources, Inc., are not included within the definitions of Land, Real
Property, Property or Other Assets and are also not included within the subject
matter of this Agreement. Provided, however, that in the event that The
California Speedway Corporation exercises its right of first refusal on the
sewer treatment facility or exercises its right not to permit the transfer of
the sewer treatment facility, then the sewer treatment facility and the land
reasonably allocable thereto shall not be part of the Real Property.

         1.40  "Remediation Project Policy" means a Remediation Project
                --------------------------
Insurance Policy, in the form of Exhibit L to be attached hereto.
                                 ---------
         1.41  "RWQCB" means the California Regional Water Quality Control Board
                -----
Santa Ana Region.

         1.42  "Survey" means the survey prepared pursuant to Section 4.1
                ------
hereof, which survey shall comply with the minimum standard detail requirements
for ALTA/ACSM land title surveys jointly adopted by ALTA and ACSM and including
Items 2-5 and 10 from Table A thereof.

         1.43  "Tar Pits Property" means that approximately four (4) acre parcel
                -----------------
of Real Property more particularly described in the applicable portion of
Exhibit B hereto.
---------

         1.44  "Title Company" means Chicago Title Company, 560 East Hospitality
                --------------
Lane, San Bernardino, California  92408.

         1.45  "Title Documents" means all of the documents referenced in the
                ---------------
PTR, including, without limitation, any document referenced in the documents
referenced in the PTR.

         1.46  "Title Policy" means an ALTA extended coverage owner's policy of
                ------------
title insurance together with endorsements requested by Buyer, issued by the
Title Company, dated as of the Close of Escrow, insuring Buyer as owner of the
Real Property, with liability limits in an

                                       6
<PAGE>

amount equal to Thirty Million Dollars ($30,000,000), and showing that title to
the Real Property is vested in Buyer subject only to the Approved Title
Conditions.

     2.  Purchase and Sale.  Seller agrees to sell or cause to be sold to Buyer,
         -----------------
and Buyer agrees to purchase, the Property, upon the terms and conditions set
forth in this Agreement, for the Purchase Price, subject to the prorations,
reductions and credits hereinafter set forth.  Buyer and Seller shall, after
completion of the Survey, agree on the allocation of the Purchase Price for the
Property.  In the event The California Speedway Corporation exercises its right
of first refusal on the sewer treatment facility or exercises its right not to
permit the transfer of the sewer treatment facility, then the Purchase Price
shall be reduced by the undiscounted amount of the Purchase Price which is
identified in the notice from Seller to The California Speedway Corporation.

     3.  Consideration.
         -------------

         3.1  Deposit.
              -------

              3.1.1  Delivery by Seller.  On the date of the Opening of Escrow,
                     ------------------
Buyer shall deliver the Deposit to Escrow Holder, by Cash Equivalent. Escrow
Holder shall hold the Deposit in an interest-bearing account with interest
accruing for the benefit of Buyer.

              3.1.2  Disposition of Deposit.  In the event this Agreement is
                     ----------------------
terminated for any reason prior to the Contingency Date or pursuant to Section
6.1 or 13 hereof, the Deposit (including all interest thereon) shall be fully
refunded to Buyer by Escrow Holder. Following the Contingency Date, in the event
this Agreement is terminated or the Close of Escrow fails to occur by reason of
Buyer's default hereunder, the entire Deposit (including all interest thereon)
shall be held by Escrow Holder for the benefit of Seller and paid to Seller
pursuant to Section 6.2 hereof, unless a portion of the Deposit has been
released to Seller pursuant to Section 3.1.3, in which event the remainder of
the Deposit shall be released to Seller pursuant to Section 6.2 hereof. In the
event this Agreement is terminated or the Close of Escrow fails to occur by
reason of Seller's default hereunder, then the Deposit (including all interest
thereon and including any portion of the Deposit which was released to Seller)
shall be returned to Buyer. Upon the Close of Escrow, the entire Deposit
(including all interest thereon) shall be paid to Seller and shall be credited
towards the payment of the Purchase Price.

              3.1.3  Extension of Contingency Date.  Notwithstanding any
                     -----------------------------
provision of this Agreement to the contrary, Buyer shall have the right, to be
exercised in Buyer's sole and absolute discretion, to extend the Contingency
Date one (1) time only for an additional thirty (30) days, by delivering written
notice of Buyer's exercise of such extension to Seller and Escrow Holder no
later than one (1) business day before the originally scheduled Contingency Date
together with (i) commercially reasonable evidence satisfactory to Seller that
Buyer has the financial ability to purchase the Property and to timely perform
Buyer's obligations under this Agreement, and (ii) a letter addressed to Escrow
Holder and Seller authorizing Escrow Holder to release One Hundred Fifty
Thousand Dollars ($150,000) of the Deposit to Seller, which portion of the
Deposit shall thereupon be released to Seller and be nonrefundable to Buyer but
shall be applicable to the Purchase Price.

                                       7
<PAGE>

              3.1.4  Purchase Price.  At least one (1) business day prior to the
                     --------------
Closing Date, Buyer shall deliver the Purchase Price to Escrow Holder, by Cash
Equivalent (less the amount of the Deposit (and interest accrued thereon while
held in Escrow) already held by Escrow Holder). Such sum shall be payable to
Seller by Cash Equivalent through Escrow at the Close of Escrow.

     4.  Investigations by Buyer.  Beginning on the Execution Date and ending on
         -----------------------
the Contingency Date, Buyer may conduct investigations as to the Property and
the Adjacent Property. Buyer shall have until the Contingency Date either to
approve or to waive, in Buyer's sole and absolute discretion, the contingencies
set forth in this Article 4. The Parties acknowledge that Seller does not
control all of the Adjacent Property and that Seller shall be required only to
use commercially reasonable efforts to obtain access for Buyer and its agents,
over those portions of the Adjacent Property which Seller does not control.

         4.1  Conditions of Title; Survey.  Within ten (10) business days after
              ---------------------------
the Execution Date, Seller shall (a) cause the Title Company to deliver to
Seller and Buyer a preliminary title report (the "PTR") for the Real Property,
                                                  ---
prepared by Title Company, together with copies of all of the Title Documents;
and (b) engage a surveyor at Seller's expense to prepare an ALTA survey of the
Real Property (the "Survey"), for delivery to Buyer and Seller and certification
                    ------
to Buyer and the Title Company in time for the Title Company to deliver the
Title Policy at the Close of Escrow. The Survey shall plot each easement and
other plottable exception shown on the PTR. Buyer shall have until the later of
the Contingency Date or thirty (30) days after receipt of the Survey to give
Seller and Escrow Holder written notice of Buyer's disapproval of any matters
listed on the PTR or shown on the Survey. Buyer hereby approves the granting of
a road easement shown on Exhibit M attached hereto, which may be granted
                         ---------
subsequent to the Execution Date or delivery of the PTR. In addition, Buyer
hereby approves of Seller's application to create a new separate legal parcel of
a size reasonably acceptable to Buyer for the sewer treatment facility and the
recording of a covenant against the new parcel which would restrict the use of
such parcel to the uses set forth on Exhibit M-1 hereof.  If Buyer disapproves
                                     -----------
any matters listed on the PTR or shown on the Survey, Seller may, but shall not
be obligated to, cure or cause to be cured such objections or agree that it
shall cure such objections prior to the Close of Escrow and, in such event, the
cure of such objections shall be both a covenant of Seller and a condition
precedent to Buyer's obligation to close Escrow.  In the event Seller fails
either to cure such objections, or to agree to cure such objections prior to the
Close of Escrow, within ten (10) days after receipt of Buyer's notice to Seller
of said objections, Buyer shall have the right to terminate this Agreement and
to cancel Escrow by delivering written notice to Seller and Escrow Holder before
5:00 p.m. P.S.T. on the second business day immediately succeeding the
expiration of such ten (10) day period, in which case the Parties' rights shall
be as set forth in Section 4.7 below.

     If Buyer disapproves any matters listed on the PTR or shown on the Survey
prior to the Contingency Date as set forth above, but otherwise extends the
Contingency Date as set forth in Section 3.1.3 above, then Escrow Holder shall
delay releasing the Deposit to Seller pursuant to Section 3.1.3 above until the
date that Seller either cures such objections or agrees to cure such objections
prior to the Close of Escrow (i.e., within ten (10) days after receipt of
Buyer's notice to Seller of said objections).  Notwithstanding anything to the
contrary, Seller shall be obligated to remove any monetary encumbrances which
encumber the Real Property

                                       8
<PAGE>

other than liens for real property taxes or assessments which are not delinquent
and other than monetary encumbrances, if any, to be recorded at the Close of
Escrow and which are arranged by Buyer. All matters not objected to by Buyer or
waived by Buyer pursuant hereto, and all financing arranged by Buyer, shall
collectively be the "Approved Title Conditions."
                     -------------------------

     Notwithstanding anything to the contrary contained herein, if any new
covenant, condition, restriction, reservation, easement or right of way
affecting the use and occupancy of the Real Property (other than the
aforementioned road easement shown on Exhibit M and the aforementioned separate
                                      ---------
legal parcel for the sewer treatment facility) (each, a "New Exception") becomes
                                                         -------------
of record after the Execution Date (other than an exception caused by Buyer or
its members or ultimate members or consented to by Buyer or its members or
ultimate members), (i) if such New Exception was caused directly or indirectly
by or with the consent of Seller and without the consent of Buyer, then Seller
shall cause such New Exception to be removed prior to the Close of Escrow;
(ii)if such New Exception was not caused directly or indirectly by either Buyer
or Seller, then Seller may, but shall not be obligated to, remove such new title
exception within five (5) calendar days after receipt of notice of such new
title exception, and, if necessary, the Closing Date shall be extended for five
(5) calendar days to permit any such removal.  In the event Seller elects not to
remove such new title exception within such period, Buyer shall have the right,
by written notice to the Seller and Escrow Holder within five (5) calendar days
after receipt of written notice from Seller that Seller has elected not to
remove such new title exception, to accept such new title exception or terminate
this Agreement, in which case the Parties' rights shall be as set forth in
Section 4.7, below.  If such New Exception was caused by or consented to by
Buyer or its members or ultimate members, then either Buyer shall take title to
the Real Property subject to such New Exception or the Close of Escrow shall be
extended for up to thirty (30) days while Buyer tries to remove such New
Exception and Buyer shall be obligated to close at the end of such thirty (30)
days whether or not such New Exception is removed; provided, however, that the
road easement referenced in Exhibit M shall not be removed or permit the
                            ---------
extension of the Close of Escrow.

         4.2  Inspections.  Subject to the limitations set forth in this Section
              -----------
4.2, Buyer shall, at Buyer's sole cost and expense, have the right to make, or
cause to be made, such inspections (including, without limitation, surveys,
studies, inspections and investigations) (collectively, "Inspections") of the
                                                         -----------
Real Property as shall be deemed necessary, desirable or appropriate by Buyer,
subject to Buyer's execution and delivery of an Entry Permit substantially in
the form of Exhibit N attached hereto, and subject to Seller and Buyer agreeing
            ---------
on a protocol for all such Inspections prior to conducting any Inspection.
Subject to the terms and conditions of the aforementioned protocol, such
Inspections may include drilling, ground penetration or any other invasive
physical testing or sampling of the soils deemed necessary or desirable by
Seller and Buyer.  At Seller's option and expense, a representative of Seller
may be present during all sampling and other physically invasive soils testing
of the Real Property.  At the option of any such representative of Seller, each
sample taken by Buyer and/or its agents shall be split, with the split sample
being sent to a laboratory of Seller's selection.  Seller shall be entitled to
receive the results of all testing performed by Buyer and/or its agents and
shall also be entitled to receive copies of all draft reports and final reports
prepared by or at the request of Buyer.  Seller shall have the right to approve
or disapprove in its sole discretion any proposed inspections or testing of
groundwater which Buyer and/or its agents wants to perform on the Real Property
and the Adjacent Property.  If Seller disapproves any such testing, then Buyer
shall have the right to

                                       9
<PAGE>

terminate this Agreement within fourteen (14) calendar days after Seller
notifies Buyer of such disapproval but in any event no later than the
Contingency Date. Upon such termination of this Agreement by Buyer, the Parties'
rights shall be as set forth in Section 4.7 hereof.

         4.3  Documents, Files and Records.  Seller shall make available to
              ----------------------------
Buyer for Buyer's review and copying at: (i) Seller's offices at 3633 Inland
Empire Boulevard, Suite 850, Ontario, California 91764; (ii) that certain office
maintained by Seller and which is commonly known as the Mill Site Office, and
(iii) the warehouse located in San Bernardino, California at which Seller
maintains records, all of the following reports, documents and files relating to
the Property which are in Seller's possession, can be reasonably retrieved by
Seller and which are not otherwise subject to any attorney-client, attorney-work
product privilege or other privilege:

              4.3.1  Permits.  The permits listed on Exhibit J.
                     -------                         ---------

              4.3.2  Reports.  Any and all structural, mechanical, physical,
                     -------
environmental or geological reports concerning the Real Property which have been
prepared at Seller's request or are within Seller's possession or reasonable
control.

              4.3.3  Case Documents.  Any and all records, files, documents,
                     --------------
correspondence and other information relating to the Case(s), the Consent Order,
the Real Property or the use, development or condition thereof.

              4.3.4  Indemnification and Other Agreements.  Any and all
                     ------------------------------------
indemnification agreements or other agreements or contracts currently in effect
or which will be in effect at any time after the Close of Escrow, entered into
between or among Seller or its predecessors-in-interest and the owners, tenants
and lenders for any other real property in the vicinity of the Real Property
and/or the DTSC (collectively, the "Adjacent Property Indemnification and Other
                                   --------------------------------------------
Agreements"), each of which is set forth on Exhibit H hereto.
-----------                                 ---------

              4.3.5  Litigation Files.  Subject to the provisions of Section
                     ----------------
4.3.8 hereof, any and all pleadings, records, files, documents, correspondence
and other information relating to the Ontario Litigation, the Mushegain
Litigation and any other pending or threatened suits or proceedings related to
the Real Property and/or the Tar Pits Property listed in Exhibit O attached
                                                         ---------
hereto.

              4.3.6  Operational Documents.  Any and all service and maintenance
                     ---------------------
agreements, tax bills, utility statements, leases, licenses and agreements
relating to the Real Property.

              4.3.7  Other Documents.  In addition to the documents otherwise
                     ---------------
made available to Buyer pursuant to this Section 4.3, Buyer and its
representatives shall have the right of access during reasonable business hours
to all files, books and records and correspondence maintained by Seller and
Seller's environmental consultants relating to the physical and environmental
condition and the development, ownership, use, management, maintenance and
operation of the Real Property and the Adjacent Property, other than files,
books and records and correspondence which are subject to any attorney-client
privilege, attorney-work product privilege or any other privilege or which
relate to the Excluded Liabilities. Seller shall also make available to Buyer
all documents, studies and final or near final financial analyses (and an

                                       10
<PAGE>

explanation of the assumptions used in such analyses) relating to the approved
uses of the Property.

              4.3.8  Summaries of Privileged Documents.  Seller shall provide to
                     ---------------------------------
Buyer summaries of all reports, documents, files, correspondence, etc. which are
in the possession or reasonable control of Seller and can reasonably be
retrieved by Seller (including those described in Section 4.6 hereof) but which
are not made available to Buyer hereunder because they were deemed by Seller to
be subject to any attorney-client privilege, attorney-work product privilege or
any other privilege, which summaries shall be prepared in such a manner as not
to waive any such privilege.

         4.4  Development Rights.  Commencing on the Execution Date, Buyer
              ------------------
shall, at Buyer's sole expense, have the right to determine whether the Real
Property is suitable for Buyer's (or Buyer's prospective tenants' or
purchasers') intended use. Without limiting the foregoing, Buyer shall have the
right to review all applicable land use, subdivision, zoning, building and
access regulations, covenants, conditions and restrictions, entitlements and
development rights applicable to the Real Property, including, but not limited
to (i) the CALTRANS Etiwanda interchange design, and (ii) the Kaiser Commerce
Center Specific Plan and Truck Stop Conditional Use Permit adopted by the San
Bernardino County Board of Supervisors. Buyer and its representatives shall have
the right to independently contact governmental agencies to discuss Buyer's
development plans for the Real Property; provided, however, that Buyer shall
                                         --------  -------
give Seller forty-eight (48) hours' written notice of any proposed meetings or
any proposed telephone conferences. Seller shall have the right to be present at
any such meetings or on any such telephone conferences.

         4.5  Remediation Requirements.  Commencing on the Execution Date, Buyer
              ------------------------
shall, at Buyer's sole expense, use diligent efforts to determine the
remediation requirements applicable to the Real Property and the Adjacent
Property. Without limiting the foregoing, Buyer shall review all Environmental
Laws applicable to the Real Property and the Adjacent Property. Buyer and its
consultants/representatives shall be permitted to independently contact
governmental agencies to discuss Buyer's remediation plans for the Real
Property. Buyer shall give Seller forty-eight (48) hours' written notice of any
proposed meetings or any proposed telephone conferences and Seller shall have
the right to be present at any such meetings or on any such telephone
conferences.

         4.6  Adjacent Property.  Seller acknowledges that Buyer desires to
              -----------------
review any and all available reports, files, documents and other information
regarding the environmental and physical condition of the Adjacent Property, in
order for Buyer to fully evaluate the potential remediation methods that will or
may be required to remediate the Real Property and the Tar Pits Property
pursuant to Article 10 below and to assume Seller's obligations under the
Adjacent Property Indemnification and Other Agreements pursuant to Section
10.3.3, below. In addition to making available to Buyer copies of all reports,
files, documents and other information in Seller's possession or reasonable
control and which Seller can reasonably retrieve regarding the Adjacent Property
and which are not subject to the attorney-client privilege, attorney-work
product privilege, or any other privilege (subject to the requirements of
Section 4.3.8 hereof), Seller shall use commercially reasonable efforts to
obtain any information reasonably requested by Buyer regarding the environmental
or physical condition of the Adjacent Property. In

                                       11
<PAGE>

addition, Seller agrees to use commercially reasonable efforts to obtain the
permission of the owners of the Adjacent Property to any proposed inspections or
investigations of such Adjacent Property by Buyer or its consultants, including
any invasive drilling, sampling or other inspections deemed reasonably necessary
by Buyer. Buyer acknowledges that Seller may be unable to obtain access for
Buyer or its consultants to the Adjacent Property or to obtain permission for
Buyer or its consultants to investigate the Adjacent Property.

         4.7  Termination by Buyer Prior to Contingency Date.  Buyer shall have
              ----------------------------------------------
the right, exercisable in Buyer's sole and absolute discretion at any time on or
prior to the Contingency Date, to terminate this Agreement for any reason or no
reason whatsoever. If Buyer shall, on or prior to the Contingency Date, deliver
written notice of termination of this Agreement to Seller and Escrow Holder,
then this Agreement shall terminate, Escrow shall be canceled, Seller and Buyer
shall each pay one-half ( 1/2) of all Title Company and Escrow cancellation
fees, Buyer shall be entitled to the return of all of the Deposit, and Buyer and
Seller shall have no further obligations to each other hereunder, except as
otherwise expressly set forth herein. In that event, Buyer shall return to
Seller all documents delivered to Buyer at the request of Seller. Buyer's
failure to deliver written notice of Buyer's election to terminate this
Agreement in accordance with this Section 4.7 shall constitute a waiver of
Buyer's right to disapprove any matters set forth in this Article 4, except as
expressly provided in Section 4.1, above.

         4.8  Termination by Seller.  If Buyer disapproves any of (i) the
              ---------------------
Adjacent Property Indemnification and Other Agreements or (ii) the Permits or
(iii) any of the Other Assumed Obligations and Liabilities, then Seller shall
have the right, within fourteen (14) days after Buyer gives notice of such
disapproval, to terminate this Agreement, in which event the Parties' rights
shall be as set forth in Section 4.7 hereof.

         4.9  Other Approvals.  Within fourteen (14) days after the Execution
              ---------------
Date, Buyer shall deliver to Seller copies of the IT Contract and bond and
drafts of each of the Insurance Policies. The Parties shall work together in
good faith to revise such documents as needed so they are acceptable to Seller.
If such documents are not finalized by forty-five (45) days after delivery, then
either Party may terminate this Agreement, in which event the Parties' rights
shall be as set forth in Section 4.7 hereof.

         4.10 Approval of Financial Condition.  Within fourteen (14) days from
              -------------------------------
the Execution Date, Buyer shall provide to Seller the following information: (i)
a Balance Sheet and Income Statement and schedule of off-book liabilities for
LandBank; (ii) a Balance Sheet for Knowlton; (iii) publicly available financial
information for ITG; (iv) the name of the bonding company for the bond referred
to in Section 4.9 hereof; and (v) the name of the insurance company which will
issue the Insurance Policies. Within fourteen (14) days after receipt of such
information, Seller, in its sole and absolute discretion, shall approve or
disapprove such information. If Seller disapproves such information, Buyer shall
have fourteen (14) days within which to provide additional information or
substitute companies for Seller's further consideration. If Seller has not
approved all of such information by the end of such second fourteen (14) day
period, then this Agreement shall be terminated in which event the Parties'
rights shall be as set forth in Section 4.7 hereof. Buyer shall give Seller
prompt notice of any material change in the information provided pursuant to
this Section 4.10.

                                       12
<PAGE>

     5.  Escrow.  The last Party to give notice that the conditions to the
         ------
Execution Date for this Agreement have been met shall immediately deliver to
Escrow Holder and the other Party a fully executed copy of this Agreement.  The
Parties shall execute such additional instructions as may be reasonably
requested by Escrow Holder; provided, however, that any such additional
                            --------  -------
instructions shall not supersede this Agreement and in any event this Agreement
shall control unless otherwise provided in a writing executed by both Parties
hereto.

         5.1  Closing. The Closing shall be conducted through Escrow on the
              -------
Closing Date, unless otherwise agreed in writing by Buyer and Seller.

         5.2  Conditions Precedent to Buyer's Obligations. Buyer's obligations
              -------------------------------------------
to close Escrow shall be conditioned on the fulfillment of each of the following
conditions on the date herein specified and in any event prior to the Closing
Date. Upon the Close of Escrow, all conditions set forth herein shall be deemed
to have been either satisfied or waived. Seller shall cause the conditions set
forth in this Section 5.2 which are within its control to be satisfied and shall
use commercially reasonable efforts to cause the conditions set forth in this
Section 5.2 which are not within its control to be satisfied.

              5.2.1  This Agreement has not been terminated pursuant to any
provision hereof.

              5.2.2  Seller has deposited or caused to be deposited, into Escrow
the Deed, duly executed and acknowledged by Seller, conveying the Real Property
to Buyer subject only to (i) the Approved Title Conditions, (ii) real property
taxes and assessments affecting the Real Property not delinquent as of the
Closing Date, including, but not limited to, the lien of any supplemental taxes
levied after the Close of Escrow, (iii) any New Exceptions approved by Buyer or
caused by Buyer, and (iv) such other exceptions to title as Buyer may expressly
and specifically approve in writing between the date hereof and the Closing
Date.

              5.2.3  Title Company is committed to deliver to Buyer the Title
Policy as of the Close of Escrow. Seller shall deliver to Title Company such
instruments, documents, releases and instructions as Title Company may
customarily require in order to issue the Title Policy.

              5.2.4  Except as disclosed in Exhibit U, Seller has terminated any
                                            ---------
leases or other contracts affecting the use or occupancy of any portion of the
Real Property, pursuant to arrangements whereby the occupants are to be off the
Real Property on or before January 1, 2000, except for that certain agreement
with Heckett-Multiserve, for slag mining and processing, which shall have been
revised by Seller and Heckett-Multiserve as provided in Exhibit Z hereto.
                                                        ---------

              5.2.5  There has been no material adverse change in the physical
condition of the Real Property since the Contingency Date.

              5.2.6  Seller has delivered to Escrow Holder a Bill of Sale and
the License Agreement, each duly executed by Seller.

              5.2.7  Seller has delivered to Escrow Holder a certificate of non-
foreign status, duly executed by Seller.

                                       13
<PAGE>

              5.2.8  Seller has delivered to Escrow Holder an "Omnibus
                                                               -------
Assignment and Assumption Agreement" in the form of Exhibit P attached hereto,
-----------------------------------                 ---------
duly executed by Seller, pursuant to which (i) Seller assigns to Buyer all of
Seller's Permits (to the extent such Permits can be assigned to Buyer) and
Adjacent Property Indemnification and Other Agreements and the Other Assumed
Liabilities and Obligations not disapproved by Buyer prior to the Contingency
Date, (ii) Seller delegates to Buyer all of Seller's obligations under each such
Permit and Adjacent Property Indemnification and Other Agreement and the Other
Assumed Liabilities and Obligations, and (iii) Buyer assumes each delegated
liability and obligation.

              5.2.9  Seller has delivered to Escrow Holder a certificate, duly
executed by Seller, certifying that Seller is authorized to enter into this
Agreement, consummate the transactions contemplated hereby, perform its
obligations hereunder and execute and deliver any and all documents necessary or
appropriate to accomplish the foregoing.

              5.2.10 Seller has delivered to Escrow Holder certified resolutions
of the Boards of Directors of each Seller authorizing all of the transactions
contemplated by this Agreement.

              5.2.11 Seller has delivered to Escrow Holder an incumbency
certificate with respect to those officers of Seller executing any documents or
instruments in connection with the transactions contemplated herein.

              5.2.12 The conveyance of the Real Property shall not violate the
California Subdivision Map Act.

              5.2.13 Seller's representations and warranties set forth in
Article 7 of this Agreement are true and correct in all material respects: (i)
as of the time made, (ii) on the Closing Date, and (iii) as of the Close of
Escrow, as if made on each of the dates thereof, and Seller has duly performed
each and every undertaking and agreement to be performed by it pursuant to the
terms of this Agreement as of the Close of Escrow; provided, however, that if
                                                   --------  -------
there has been a change in circumstances so that a representation or warranty is
no longer correct, then Seller may, at its election, provide an indemnification
in form and substance acceptable to Buyer against such changed circumstance, in
which case this condition of Closing shall be deemed satisfied. Provided,
further, that in the event that an event occurs which would cause Seller's
representations and warranties set forth in Sections 7.2 or 7.11 to be untrue,
and such event does not involve a lawsuit against Seller which Seller could have
reasonably avoided such as by taking a reasonable action or making a payment,
and Seller has no control over such event, then Buyer shall have the right to
terminate this Agreement within fourteen (14) days after learning the specifics
of such event, in which case Seller shall cause the Deposit to be refunded to
Buyer and Seller shall reimburse Buyer for all of its out-of-pocket expenses
incurred to the date of termination in connection with the within transaction,
but Seller shall not be deemed to be in breach of this Agreement.

              5.2.14 Seller shall have terminated any rights of first refusal of
The California Speedway Corporation at a discounted price and/or rights to
approve or disapprove sales of the sewer treatment facility or reached such
other agreement with respect to the sewer

                                       14
<PAGE>

treatment facility as may be acceptable to Buyer, or the sewer treatment
facility shall have been deleted from the Real Property in accordance with the
terms hereof.

         5.3  Conditions Precedent to Seller's Obligations.  Seller's
              --------------------------------------------
obligations to close Escrow shall be conditioned on the fulfillment of each of
the following conditions on the date herein specified and in any event prior to
the Closing Date. Buyer shall cause the conditions set forth in this Section 5.3
which are within its control to be satisfied, and shall use commercially
reasonable efforts to cause the conditions set forth in this Section 5.3 which
are not within Buyer's control to be satisfied.

              5.3.1  This Agreement has not been terminated pursuant to any
provision hereof.

              5.3.2  Buyer has deposited into Escrow the Purchase Price in Cash
Equivalent, together with such additional sums as may be required to pay Buyer's
share of Escrow and closing costs and expenses as adjusted by the net prorations
and credits hereunder for disbursement as provided herein.

              5.3.3  Buyer has delivered to Escrow Holder original counterparts
of the Bill of Sale, the License, the Omnibus Assignment and Assumption
Agreement, the Deed of Trust (as hereinafter defined) and the Deed, duly
executed by Buyer and acknowledged, where appropriate.

              5.3.4  Buyer has delivered to Escrow Holder the binders for the
Insurance Policies, to be effective as of the Close of Escrow.

              5.3.5  Buyer has delivered to Escrow Holder: (a) a duplicate
original of the IT Contract in the form of Exhibit Q attached hereto, duly
                                           ---------
executed by ITG and Buyer; and (b) a performance and completion bond for the
work to be performed by ITG on which Seller is a named obligee with Buyer to
have the primary right to enforce the bond and Seller to have enforcement rights
if (i) Buyer fails to exercise its enforcement rights at least fifteen (15) days
prior to the expiration of the bond, or (ii) within sixty (60) days after Seller
has given notice to Buyer to exercise its rights under the bond if Buyer has
failed to exercise such rights within such sixty (60) days, or (iii) if Buyer is
in Default (as hereinafter defined).

              5.3.6  Buyer has delivered to Escrow Holder a certificate
certifying that Buyer is authorized to enter into this Agreement, consummate the
transactions contemplated hereby, perform its obligations hereunder and execute
and deliver any and all documents necessary or appropriate to accomplish the
foregoing.

              5.3.7  Buyer has delivered to Escrow Holder certified resolutions
of the Members of Buyer authorizing all of the transactions contemplated by this
Agreement.

              5.3.8  Buyer has delivered to Escrow Holder an incumbency
certificate with respect to those officers of Buyer executing any documents or
instruments in connection with the transactions contemplated herein.

                                       15
<PAGE>

              5.3.9  Buyer's representations and warranties in this Agreement
are true and correct in all material respects: (i) as of the time made, (ii) on
the Closing Date, and (iii) as of the Close of Escrow, as if made on each of the
dates thereof, and Buyer has duly performed each and every undertaking and
agreement to be performed by it as of the Closing Date hereunder, and there has
been no material change in the financial condition of any of the parties
approved in Section 4.10 hereof.

         5.4  Actions by Escrow Holder.  When Escrow Holder has received all
              ------------------------
documents and funds identified in this Article 5 and has received written
notification from Buyer and Seller that all conditions to closing to be
satisfied outside of Escrow have been satisfied or waived, then, and only then,
Escrow Holder shall promptly and concurrently:

              5.4.1  Disburse all funds deposited with Escrow Holder by Buyer
and Seller as follows:

                     5.4.1.1 Deduct all items chargeable to the account of
Seller pursuant hereto;

                     5.4.1.2 Disburse the balance of the Purchase Price to
Seller promptly upon the Close of Escrow;

                     5.4.1.3 Disburse the premiums for the Insurance Policies to
the applicable insurance companies;

                     5.4.1.4 Disburse the premium for the Title Policy to Title
Company; and

                     5.4.1.5 Disburse such other closing costs as may be
required.

              5.4.2  Cause the following documents to be recorded in the
following order: (i) the Deed; (ii) the Deed of Trust; then (iii) any other
documents which the parties hereto may mutually direct in writing to be recorded
in the Official Records; obtain conformed copies of all recorded documents for
distribution to the Parties; and cause applicable documentary or realty transfer
taxes to be paid on the Property.

              5.4.3  Direct the Title Company to issue the Title Policy to
Buyer.

              5.4.4  Deliver to each Party fully executed originals of any
documents (or copies thereof) deposited into Escrow by the other Party pursuant
hereto, and deliver the duplicate IT Contract, the original performance and
completion bond, and the original binders for the Insurance Policies to Seller.

         5.5  Payment of Closing Costs. Seller shall pay the cost of the Survey
              ------------------------
and the premium for a standard CLTA owner's policy of title insurance, one-half
(1/2) of all Escrow and recording and filing fees incurred in connection with
the documents to be delivered or recorded hereunder, and all applicable
documentary and realty transfer taxes. Buyer shall pay the costs of the Title
Policy and any endorsement thereto not paid for by Seller pursuant to the
foregoing sentence and one-half (1/2) of all Escrow and recording and filing
fees incurred in connection with

                                       16
<PAGE>

the documents to be delivered or recorded hereunder. Each Party shall pay its
own attorneys' fees and costs. Seller and Buyer shall each pay one-half (1/2)
of any other closing expenses not expressly set forth above as allocated to one
Party.

         5.6  Prorations.  Subject to the other provisions of this Section 5.6,
              ----------
rents, property taxes, utility charges and service agreements for the Real
Property shall be prorated as of 11:59 p.m. on the day immediately preceding the
Close of Escrow. Not less than five (5) business days prior to the Closing Date,
Escrow Holder shall submit to Buyer and Seller for their approval a tentative
prorations schedule showing the categories and amounts of all prorations
proposed. Prior to the Closing Date, the parties shall approve a final
prorations schedule which shall be prepared by Escrow Holder prior to the
Closing Date and upon approval, the parties shall deliver the same to Escrow
Holder. If, within six (6) months following the Close of Escrow, either Party
discovers that the prorations statement is not accurate for any reason, it shall
notify the other Party of such inaccuracy and the Parties shall promptly make
any adjustment required. Neither Party shall be obligated to adjust any
prorations after such six (6) month period.

              5.6.1  Property Taxes.  All real and personal property and ad
                     --------------
valorem taxes, if any, whether payable in installments or not, including but not
limited to, all supplemental taxes attributable to the period prior to the Close
of Escrow for the tax year in which the Close of Escrow occurs, shall be
prorated to the Close of Escrow, based on the latest available tax rate and
assessed valuation. If the amount of any installment of real property taxes is
not known as of the Close of Escrow, then a proration shall be made by the
Parties based on a reasonable estimate of the real property taxes applicable to
the Real Property and the Parties shall adjust the proration when the actual
amount becomes known upon the written request of either Party made to the other.
All bonds or special assessments against the Real Property which relate to
Mello-Roos or other improvement districts shall be paid by Seller. All other
assessments shall be prorated as of the Close of Escrow.

              5.6.2  Utility Charges.  All utility charges shall be prorated as
                     ---------------
of the Close of Escrow and Seller shall obtain a final billing therefor. All
utility security deposits, if any, shall be retained by Seller.

              5.6.3  Service Contracts.  All amounts payable under service
                     -----------------
contracts which will continue in effect following the Close of Escrow shall be
prorated as of the Close of Escrow.

         5.7  Possession.  Seller shall deliver exclusive possession of the
              ----------
Property to Buyer, free and clear of any tenants or other occupants other than
those identified in Section 5.2.4, as of 6:00 p.m. on the date of the Close of
Escrow. Notwithstanding this provision, Seller shall, upon written request, be
permitted access to, and the right to copy, during normal business hours, the
books and records transferred to Buyer as part of the Property. In the event
that Buyer desires to destroy such books and records, it shall give Seller
fourteen (14) days' notice thereof and Seller, at its sole expense, shall have
the right to retrieve or copy such books and records.

     6.  Remedies on Default.
         -------------------

                                       17
<PAGE>

         6.1  Default by Seller.  IN THE EVENT THAT CLOSE OF ESCROW SHALL FAIL
              -----------------
TO OCCUR BY REASON OF A DEFAULT BY SELLER, BUYER SHALL BE ENTITLED TO ELECT ONE
OF THE FOLLOWING REMEDIES: (i) TO IMMEDIATELY TERMINATE THIS AGREEMENT UPON SUCH
DEFAULT AND TO OBTAIN THE PROMPT RETURN OF THE DEPOSIT, AND ALL INTEREST EARNED
THEREON, AND TO BE PAID BY SELLER THE SUM OF ONE MILLION DOLLARS ($1,000,000) AS
LIQUIDATED DAMAGES (THE PARTIES ACKNOWLEDGING THAT IT WOULD BE IMPRACTICAL OR
EXTREMELY DIFFICULT TO FIX ACTUAL DAMAGES); OR (ii) TO OBTAIN EQUITABLE RELIEF,
INCLUDING THE RIGHT TO SEEK SPECIFIC PERFORMANCE OF THIS AGREEMENT.

         BUYER AND SELLER ACKNOWLEDGE THAT THEY HAVE READ AND UNDERSTOOD THE
PROVISION OF THIS SECTION 6.1 AND BY THEIR INITIALS BELOW AGREE TO BE BOUND BY
ITS TERMS.

         /s/ SLM                                /s/ RES
         -------------                          -------------
         Buyer's Initials                       Seller's Initials

         6.2  Default by Buyer. IN THE EVENT THAT BUYER FAILS IN THE PERFORMANCE
              ----------------
OF ANY OF ITS OBLIGATIONS HEREUNDER FOLLOWING THE CONTINGENCY DATE BUT PRIOR TO
THE CLOSE OF ESCROW, OR IN THE EVENT THAT THE CLOSE OF ESCROW SHALL FAIL TO
OCCUR BY REASON OF A DEFAULT IN BUYER'S OBLIGATIONS HEREUNDER, THE PARTIES AGREE
THAT IT WOULD BE IMPRACTICAL OR EXTREMELY DIFFICULT TO FIX, PRIOR TO SIGNING
THIS AGREEMENT, THE ACTUAL DAMAGES WHICH WOULD BE SUFFERED BY SELLER IF BUYER
FAILS TO PERFORM ITS OBLIGATIONS UNDER THIS AGREEMENT. THEREFORE, IN THE EVENT
THAT THE CLOSE OF ESCROW SHALL FAIL TO OCCUR BY REASON OF A DEFAULT IN BUYER'S
OBLIGATIONS HEREUNDER, SELLER SHALL BE ENTITLED, AS ITS SOLE AND EXCLUSIVE
REMEDY FOR SUCH DEFAULT, TO IMMEDIATELY TERMINATE THIS AGREEMENT UPON SUCH
DEFAULT, IN WHICH CASE THE AGGREGATE SUM OF THREE HUNDRED FIFTY THOUSAND DOLLARS
($350,000) SHALL BE DELIVERED TO SELLER (THE DEPOSIT TO BE PROMPTLY DELIVERED BY
ESCROW HOLDER AND THE BALANCE TO BE DELIVERED WITHIN THREE (3) BUSINESS DAYS BY
BUYER) AS LIQUIDATED DAMAGES AND BUYER SHALL NOT BE ENTITLED TO RECOVER ANY OF
ITS DUE DILIGENCE EXPENSES PURSUANT TO ARTICLE 4 ABOVE. THE PARTIES ACKNOWLEDGE
THAT THE PAYMENT OF SUCH LIQUIDATED DAMAGES IS NOT INTENDED AS A FORFEITURE OR
PENALTY WITHIN THE MEANING OF CALIFORNIA CIVIL CODE SECTION 3275 OR 3369, BUT IS
INTENDED TO CONSTITUTE LIQUIDATED DAMAGES TO SELLER PURSUANT TO CALIFORNIA CIVIL
CODE SECTIONS 1671, 1676, AND 1677. THE PARTIES HAVE SET FORTH THEIR INITIALS
BELOW TO INDICATE THEIR AGREEMENT WITH THE LIQUIDATED DAMAGES PROVISION
CONTAINED IN THIS SECTION. SELLER WAIVES ALL OTHER REMEDIES AGAINST BUYER FOR
BUYER'S FAILURE TO CLOSE ESCROW, INCLUDING ANY RIGHT TO SPECIFIC PERFORMANCE
UNDER CALIFORNIA CIVIL CODE SECTION 1680 OR ANY OTHER APPLICABLE LAW. IN THE
EVENT THAT THE ADDITIONAL AMOUNT OWED BY BUYER PURSUANT TO THIS SECTION 6.2 IS
NOT

                                       18
<PAGE>

PAID WHEN DUE, IT SHALL THEREAFTER ACCRUE INTEREST AT THE RATE OF TEN PERCENT
(10%) PER ANNUM UNTIL PAID IN FULL AND SELLER SHALL HAVE THE RIGHT TO COLLECT
FROM BUYER REASONABLE COLLECTION COSTS INCLUDING REASONABLE ATTORNEYS' FEES AND
COSTS.

         BUYER AND SELLER ACKNOWLEDGE THAT THEY HAVE READ AND UNDERSTOOD THE
PROVISIONS OF THIS SECTION 6.2 AND BY THEIR INITIALS BELOW AGREE TO BE BOUND BY
ITS TERMS.



         /s/ SLM                              /s/ RES
         --------------                       ----------------
         Buyer's Initials                     Seller's Initials

     7.  Seller's Representations and Warranties. Seller hereby makes the
         ---------------------------------------
following representations and warranties to Buyer:

         7.1  Due Authorization, Etc.  Each Seller is a duly organized and
              ----------------------
validly existing corporation under the laws of the State of Delaware, is in good
standing therein, with full power and authority to carry on its business as
currently conducted and where conducted. This Agreement and all agreements,
instruments and documents herein provided to be executed or to be caused to be
executed by Seller on or before the Close of Escrow will be duly authorized,
executed and delivered by and binding upon Seller enforceable in accordance with
its terms; and Seller will have authority to enter into this Agreement and
consummate the transactions herein provided. Seller is authorized to do business
in the State of California.

         7.2  Actions, Suits and Proceedings. Other than as set forth on
              ------------------------------
Exhibit R attached hereto, Seller has not (i) received notice of any outstanding
---------
violation of or been charged with the violation of any material legal
requirement, restriction, condition, covenant or agreement affecting the Real
Property or the marketing, construction, development, use, operation,
maintenance or management of the Real Property which has not been cured, and
(ii) been served in any unresolved litigation relating to the Real Property or
the marketing, construction, development, use, operation, maintenance or
management of the Real Property. Other than as set forth in Exhibit R, Seller
                                                            ---------
has no actual knowledge of any actions, suits, claims or proceedings,
governmental or otherwise, pending or threatened against the Real Property or
any portion thereof

         7.3  No Impediments to Performance. Other than as set forth on
              -----------------------------
Exhibit S attached hereto, Seller is not a party to any material certificate,
---------
instrument, contract, deed of trust, mortgage, indenture, agreement, covenant or
other restriction, and there is no provision in Seller's charter, bylaws or
partnership agreement, or any judgment, order, writ, injunction, or decree of
any court, governmental body or arbitrator, which would prohibit or otherwise be
breached or violated by the entering into, execution, delivery or performance by
Seller of this Agreement or the consummation of the transactions contemplated
hereby.

         7.4  No Brokers.  Other than as set forth on Exhibit T hereto, there
              ----------                              ---------
are no claims for brokerage commissions, finder's fees or similar compensation
in connection with the transactions contemplated by this Agreement based on any
arrangement or agreement made by

                                       19
<PAGE>

or on behalf of Seller. Other than as set forth on Exhibit T hereto, as of the
                                                   ---------
Execution Date, Seller covenants, represents and warrants that it has not
entered into any listing agreement(s) or other brokerage agreements with any
real estate broker or salesperson with respect to the Real Property and it shall
not do so without Buyer's prior written consent, which may be withheld in
Buyer's sole and absolute discretion.

         7.5  Disclosures.  Buyer and Seller acknowledge that Seller is required
              -----------
to disclose if the Real Property lies within the following natural hazard areas
or zones: (i) a special flood hazard area designated by the Federal Emergency
Management Agency (California Civil Code Section 1102.17); (ii) an area of
potential flooding (California Government Code Section 8589.4); (iii) a very
high fire hazard severity zone (California Government Code Section 51183.5);
(iv) a wild land area that may contain substantial forest fire risks and hazards
(Public Resources Code Section 4136); (v) an earthquake fault zone (Public
Resources Code Section 2621.9); or (vi) a seismic hazard zone (Public Resources
Code Section 2694). Buyer and Seller acknowledge that Seller has employed the
services of Vista Environmental (which, in such capacity is herein called
"Natural Hazard Expert") to examine the maps and other information specifically
----------------------
made available to the public by government agencies for the purpose of enabling
Seller to fulfill its disclosure obligations with respect to the natural hazards
referred to in California Civil Code Section 1102.6c(a) and to report the result
of its examination to Buyer and Seller in writing.  The written report prepared
by the Natural Hazard Expert regarding the results of its examination fully and
completely discharges Seller from its disclosure obligations referred to herein,
and, for the purpose of this Agreement, the provisions of Civil Code Section
1102.4 regarding the non-liability of each of Seller for errors or omissions not
within its personal knowledge shall be deemed to apply and the Natural Hazard
Expert shall be deemed to be an expert, dealing with matters within the scope of
its expertise with respect to the examination and written report regarding the
natural hazards referred to above.  Seller shall not have any responsibility for
matters not actually known to Seller.  In addition, Seller has disclosed, to the
extent it has actual knowledge, all material issues regarding the Real Property
and the environmental condition of the Adjacent Property, including those
involving environmental conditions and asserted environmental claims, and those
contained in privileged documents.  Buyer acknowledges that certain pre-October
4, 1988 documents are contained in boxes which are not well-indexed and which
Buyer will have to review at its expense.

         7.6  Contracts.  Other than as set forth on Exhibit U attached hereto,
              ---------                              ---------
there are no service, maintenance, employment, supply, management or other
agreements affecting the Property, either oral or written, which will remain in
effect after the Close of Escrow. Notwithstanding the foregoing, it shall not be
a default hereunder if Seller has in good faith failed to disclose one or more
of such agreements so long as no one such agreement has a post Close of Escrow
obligation of more than Five Thousand Dollars ($5,000) and all of such foregoing
agreements in the aggregate do not have a post Close of Escrow obligation of
more than Twenty-Five Thousand Dollars ($25,000).

         7.7  Leases.  Other than as set forth on Exhibit V attached hereto, to
              ------                              ---------
Seller's actual knowledge, there are no leases, licenses or other agreements
permitting the use or occupancy of the Real Property, which will remain in
effect after the Close of Escrow.  Other than as set forth on Exhibit V attached
                                                              ---------
hereto, to Seller's actual knowledge there are no persons

                                       20
<PAGE>

entitled to use or occupy the Real Property or any portion thereof by reason of
any easements by prescription or necessity.

         7.8  Bankruptcy.  Subject to the last sentence in this Section 7.8,
              ----------
Seller has not: (a) made a general assignment for the benefit of creditors; (b)
filed any voluntary petition in bankruptcy or suffered the filing of an
involuntary petition by its creditors; (c) suffered the appointment of a
receiver to take possession of all or substantially all of its assets; or (d)
suffered the attachment or judicial seizure of all, or substantially all, of its
assets. Buyer acknowledges that, in 1987, Seller (which was then known as Kaiser
Steel Corporation) filed a voluntary Petition for Reorganization under Chapter
11 of the United Bankruptcy Code and the Order of the United States Bankruptcy
Court approving Seller's Plan of Reorganization was entered on the docket on
October 4, 1988.

         7.9  No Other Agreements to Convey. Except as set forth on Exhibit W
              -----------------------------                         ---------
hereof, Seller has not granted any person any right to acquire all or any
portion of the Property, including, without limitation, any development, mineral
or air rights relating to the Property.

         7.10 Tax Bills.  The copies of the real property tax bills listed on
              ---------
Exhibit X attached hereto, are true, accurate and complete copies of all tax
---------
bills received by Seller within the past three (3) years for the Real Property.

         7.11 No Actions.  Except as disclosed in Exhibit R attached hereto,
              ----------                          ---------
Seller has no actual knowledge of: (a) any condemnation, pending or threatened,
of the Real Property or any portion thereof, including any right of access to
the Real Property; (b) any government plans for public improvements that might
result in a special assessment against the Real Property; (c) any underground or
above-ground storage tanks on the Real Property not previously disclosed to
Buyer in writing or referenced in the records previously made available to
Buyer; or (d) any pending or threatened change in the zoning of the Real
Property.

         7.12 No Approvals Needed.  Except for approval by the respective Boards
              -------------------
of Directors of each of Seller and Buyer and the approval of The California
Speedway Corporation with respect to the sewer treatment facility, the sale of
the Real Property and the performance of Seller's obligations hereunder are not
subject to any requirement to obtain any approval of any governmental agency or
third party.

         7.13 Documents, Files and Records.  The files, records and other
              ----------------------------
documents delivered or made available to Buyer pursuant to Section 4.3 above
are, to Seller's actual knowledge, complete and accurate in all material
respects as of the date prepared and have not been modified or amended by any
confidential or proprietary document or information which was not provided or
made available by Seller.

         7.14 Truck Stop Approvals.  The approximately 75.6 acre portion of the
              --------------------
Real Property referred to by Seller as the "Truck Stop Sales and Service" parcel
has been entitled by San Bernardino County pursuant to a CUP issued by San
Bernardino County permitting use as a 1,300 stall truck stop.

         7.15 CALTRANS Approval.  All documents necessary for consideration of
              -----------------
the Etiwanda interchange project on I-10 have been submitted to CALTRANS and
other

                                       21
<PAGE>

applicable agencies, and the preliminary design of the interchange improvements
will be approved by CALTRANS prior to the Contingency Date.

     8.  Buyer's Representations and Warranties.
         --------------------------------------

         8.1  Due Authorization, Etc.  Buyer is a duly organized and validly
              ----------------------
existing limited liability company under the laws of the State of Delaware, in
good standing therein, and has full power and authority to carry on its business
as currently conducted and where conducted. Buyer is authorized to do business
in the State of California. This Agreement and all agreements, instruments and
documents herein provided to be executed by Buyer on or before the Close of
Escrow will be duly authorized, executed and delivered by and binding upon Buyer
enforceable in accordance with its terms; and Buyer will have authority to enter
into this Agreement and consummate the transactions herein provided.

         8.2  No Impediments To Performance.  Buyer is not a party to any
              -----------------------------
material certificate, instrument, contract, deed of trust, mortgage, indenture,
agreement, covenant or other restriction, and there is no provision in Buyer's
formation documents or regulations, or any judgment, order, writ, injunction, or
decree of any court, governmental body or arbitrator, which would prohibit or
otherwise be breached or violated by the entering into, execution, delivery or
performance by Buyer of this Agreement or the consummation of the transactions
contemplated hereby.

         8.3  Broker.  There are no claims for brokerage commissions, finder's
              ------
fees or similar compensation in connection with the transactions contemplated by
this Agreement based on any arrangement or agreement made by or on behalf of
Buyer, including, without limitation, any arrangement or agreement between Buyer
and Jeffrey Tamkin, Tamkin Investments Inc. or any entity owned or related to
either of them.

         8.4  Bankruptcy.  Buyer has not:  (a) made a general assignment for the
              ----------
benefit of creditors; (b) filed any voluntary petition in bankruptcy or suffered
the filing of an involuntary petition by its creditors; (c) suffered the
appointment of a receiver to take possession of all or substantially all of its
assets; or (d) suffered the attachment or judicial seizure of all, or
substantially all, of its assets.

         8.5  Financial Abilities of Buyer.  Buyer has evaluated and is familiar
              ----------------------------
with the potential magnitude of remediation of Hazardous Substances
contamination at, under, above, adjacent and/or emanating to or from the Real
Property and the Tar Pits Property and has access to the financial resources
necessary to purchase the Property pursuant to this Agreement and to carry out
such remediation of Hazardous Substances according to all applicable Laws and to
timely perform all other obligations assumed by Buyer under this Agreement.

         8.6  Health & Safety Code.  Buyer acknowledges that Seller's
              --------------------
disclosures hereunder satisfy Seller's disclosure obligations under Section
25359.7 of the California Health & Safety Code.

     9.  Survival of Warranties; Notice.  The representations, warranties and
         ------------------------------
covenants made by Seller and Buyer in Articles 7 and 8 of this Agreement shall
survive the Close of Escrow and the recordation of the Deed for a period of
thirty-six (36) months, and any action for

                                       22
<PAGE>

a breach of any representation, warranty or covenant must be filed and served
within thirty-nine (39) months from the date of recordation of the Deed. If
either Party learns that a representation or warranty made by the other Party is
not true or correct in any material respect, it shall give prompt notice thereof
to the other Party and such other party shall have a reasonable opportunity to
cure; provided, however, that either the giving of such notice or the failure to
      --------  -------
do so shall not excuse the Party which made the untrue or incorrect
representation or warranty. If Buyer learns prior to the Close of Escrow that
any representation, warranty or covenant of Seller is incorrect, in any material
respect and does not give notice of such fact to Seller in accordance with this
Article 9, then Buyer shall be deemed to have waived any and all claims or
remedies for such breach or inaccuracy.

     10. Environmental Covenants; Insurance.  This Article 10 shall survive the
         ----------------------------------
Close of Escrow and the recordation of the Deed.

         10.1  Property Condition.  Buyer acknowledges that: (a) the Real
               ------------------
Property and the Adjacent Property were formerly used for Steel Mill Operations
and, subsequent to active Steel Mill Operations, by a number of tenants and
other occupants; and (b) Hazardous Substances were placed, may have spilled,
leaked, seeped or entered onto or under the ground, air, water or groundwater
and Hazardous Substances may still be present at, under, above or adjacent to
and/or emanating to or from the Real Property and/or other real property in the
vicinity of the Real Property (including, without limitation, the Adjacent
Property). Buyer acknowledges that, following the Close of Escrow, Buyer shall
have the obligation to investigate, remove, remediate, monitor and clean up such
Hazardous Substances as provided more specifically in this Article 10. Seller
may have the right to cause Apollo Wood Recycling ("Apollo") to remove,
                                                    ------
remediate and clean up certain Hazardous Substances located on a portion of the
Real Property. If Seller elects to pursue Apollo, Seller agrees to use
reasonable efforts to cause Apollo to perform such activities. If Seller does
not elect to pursue Apollo, Seller shall assign to Buyer the right to pursue
Apollo. Any recovery from Apollo shall incur to the benefit of Buyer (provided,
however, that Seller shall first recover its reasonable attorneys' fees and
costs incurred in connection with such recovery). If such testing occurs prior
to the Close of Escrow, Seller and Buyer shall each pay one-half (1/2) of the
costs of any testing required to pursue Apollo. Nothing herein shall be deemed
to excuse Apollo from any obligations it may have with respect to the Real
Property.

         10.2 Pre-Closing Activities.
              ----------------------

              10.2.1 Agency Specific Approval/Agreement.  Seller and Buyer shall
                     ----------------------------------
use commercially reasonable efforts (which shall continue, if necessary, after
the Close of Escrow) to induce the DTSC to join Buyer as a party to the Consent
Order, and, if possible, to release Seller from the Consent Order. Buyer shall
post its own financial assurances with the DTSC and shall join with Seller in
requesting that DTSC substitute Buyer's financial assurances for those given to
DTSC by Seller.

              10.2.2 Remediation Activities.  Following the Execution Date and
                     ----------------------
prior to the Close of Escrow, Seller shall continue to operate any soil and/or
groundwater treatment systems operating at the Real Property and the Adjacent
Property, if applicable. Prior to the Close of Escrow, Seller shall remove from
the Real Property, transport and dispose of or

                                       23
<PAGE>

otherwise lawfully manage all Hazardous Substances stored in containers on the
Real Property. Seller shall also continue to perform such remediation at the
Real Property as may be required by applicable Agencies.

              10.2.3 Meetings with Governmental Agencies.  Following the
                     -----------------------------------
Execution Date and prior to the Close of Escrow, Buyer shall have the right to
contact Agencies regarding Buyer's proposed cleanup activities and development
plans for the Real Property. Buyer shall provide Seller with forty-eight (48)
hours' written notice prior to any proposed meeting or proposed telephone
conference with such Agencies. However, at Buyer's request, Seller shall arrange
all such meetings or telephone conferences as Buyer shall reasonably require for
such purpose. Seller shall have the right to be present at any such meetings or
on any such telephone conferences.

              10.2.4 Correspondence with Governmental Agencies. From and after
                     -----------------------------------------
the Execution Date and so long as this Agreement remains in effect, and so long
as there is no Default as defined in Section 10.9 hereof, Seller and its
affiliates and subsidiaries and each of their employees, agents and
representatives (collectively, the "Seller Parties") shall refrain from any
                                    --------------
communications or discussions with any Agency or any third party, and from
taking any other action, which could result in any Agency requesting or
requiring Buyer or the owner of the Real Property or the Adjacent Property to
take, perform or cease any activity on or with respect to the Real Property or
the Adjacent Property, except for any activities which may be ongoing or
required as of the Execution Date (including, but not limited to, reasonable
activities associated with draft remediation action plans on file with the
Agencies as of the Execution Date), which activities shall be terminated as of
the Close of Escrow. The Seller Parties shall deliver a copy of any and all
notices and correspondence received from any Agency to Buyer within two (2)
business days after receipt thereof. Seller acknowledges that, as an inducement
to providing the indemnities in Section 10.3.3, below, Buyer is relying on
Seller's covenant and agreement to permit Buyer to complete all aspects of the
Corrective Action, including any communications with applicable Agencies.

         10.3 Post-Closing Activities.
              -----------------------

              10.3.1 Environmental Liabilities and Obligations.  Upon the Close
                     -----------------------------------------
of Escrow, Buyer shall assume and indemnify and defend Seller and its past,
current and future officers, directors, employees and affiliates ("Seller
                                                                   ------
Parties") as provided in Section 10.3.4 from all Environmental Liabilities and
-------
Obligations as set forth herein. As used herein, the term "Environmental
                                                           -------------
Liabilities and Obligations" shall mean any known or unknown liability,
---------------------------
obligation (including, without limitation, any obligation to investigate,
monitor, test, report to an Agency, remediate or clean up or any obligation
under a permit, order or agreement), claim, action, proceeding, expense, cost
(including, without limitation, any expense and cost incurred or associated with
the investigation, handling, containment, characterization, disposal, treatment,
stabilization and/or neutralization of Hazardous Substances, as well as the cost
and expense of site management, preparing and finalizing remedial action plans
and scopes of work, worker safety costs, security costs, attorneys fees and
costs, consulting fees and costs, engineering fees and costs, contractor fees
and costs, laboratory costs, financial assurance costs, and licensing,
permitting and other similar costs and expenses), fee, tax, assessment, fine, or
penalty, agency oversight damage, loss, financial assurance, whether incurred by
a Party or claimed by any third

                                       24
<PAGE>

party (including, without limitation, any Agency), arising out of or relating to
any actual, alleged or threatened placement, presence, existence, discharge,
release, emission, spill or past, present or future migration of Hazardous
Substances at, under, above and/or emanating from the Real Property and/or the
Tar Pits Property or any such placement, discharge, release, emission, spill or
migration from a source other than the Real Property onto the Real Property
and/or the Tar Pits Property, of any Hazardous Substances, except for the
                                                           ------ ---
Excluded Liabilities (as hereinafter defined). In addition, without limiting the
foregoing, the Environmental Liabilities and Obligations shall also expressly
include the assumption of Seller's obligations pursuant to the Consent Order and
applicable Laws and the Adjacent Property Indemnifications and Other Agreements
except to the extent disapproved by Buyer prior to the Contingency Date.

              10.3.2 As used herein, the term "Excluded Liabilities" shall
                                               --------------------
mean: (a) any such liabilities and obligations arising from or related to
environmental conditions at the Real Property or the Adjacent Property (during
the time it was owned by Seller) which were intentionally concealed from Buyer
by Seller and of which Buyer had no knowledge prior to the Close of Escrow; (b)
any liabilities and obligations for remediation of Hazardous Substances which
were removed from the Real Property or the Adjacent Property and were disposed
of off-site, including, without limitation, at landfills or other recycling or
disposal facilities, prior to the Close of Escrow; (c) fines or penalties
assessed against Seller for acts and omissions occurring prior to the Close of
Escrow (provided, however, that Buyer does not act so as to induce the
        --------  -------
imposition of such fines and penalties unless Buyer's acts were compelled by
law and except to the extent such fines or penalties may be covered by the
Insurance Policies); (d) damages and liabilities caused by Seller's breach of
this Agreement; (e) liabilities for personal injury, including death and
disability, occurring prior to the Close of Escrow caused to employees,
contractors, invitees or guests or any other persons at or from the Real
Property or the Adjacent Property, other than those for which the Buyer is
responsible under the Entry Permit, to the extent that such liabilities arise as
a result of a failure of any contractor of Seller to maintain the insurance
which such contractor was obligated to maintain pursuant to such contractor
contract with Seller or to the extent that such liabilities are alleged by an
employee or former employee of Seller; (f) any liabilities or obligations
arising solely from the SAWPA Plume, the Ontario Litigation or the Mushegain
Litigation, as those matters are described more fully in Exhibit L attached
                                                         ---------
hereto; and (g) any contractual liabilities of Seller other than those
specifically assumed by Buyer in this Agreement.  Seller and Buyer shall, if
commercially reasonable, seek to obtain insurance policies which cover some or
all of the Excluded Liabilities.

              10.3.3 Remediation of Property.  Buyer shall assume, undertake,
                     -----------------------
satisfy, discharge and timely perform all Environmental Liabilities and
Obligations whether existing or first occurring before, on or after the Close of
Escrow and whether or not known or unknown as of the Close of Escrow. Without
limiting the generality of the foregoing, the following rights, covenants and
obligations shall govern the Parties following the Close of Escrow:

                     10.3.3.1 Corrective Action.  Buyer shall, at its sole risk
                              -----------------
and expense (subject to the provisions of Section 10.7 hereof), timely perform
all Corrective Action (as hereinafter defined) for all Hazardous Substances
present on, under or at or emanating from the Real Property and/or on, under or
at or emanating from the Tar Pits Property (including ongoing continuing
operations and maintenance obligations) or at any location to which the
Hazardous Substances may have migrated from the Real Property and/or the Tar
Pits Property.

                                       25
<PAGE>

As used herein, "Corrective Action" means investigation, stabilization,
                 -----------------
response, monitoring, operations, maintenance, active remediation, passive
remediation and risk assessment or any combination thereof in such a manner as
to achieve the remediation standards required by the rules, regulations,
policies, agreements or orders as they may change from time to time
(collectively, "Requirements") of applicable Agencies or applicable Laws.
                ------------
Corrective Action shall be deemed completed when an Agency issues an NFA Letter
with respect to the Real Property and/or Tar Pits Property or otherwise
determines that an NFA Letter is not required for the Real Property or the Tar
Pits Property.  Corrective Action shall expressly exclude any Corrective Action
related to or arising from the Excluded Liabilities.  Buyer's obligations under
this Section 10.3.3.1 shall be limited to the performance of any Corrective
Action necessary to meet the requirements of the Agency having jurisdiction over
the Corrective Action or by applicable Laws; provided, however, that Seller
shall reimburse Buyer for the cost and expense of remediating the Tar Pits
Property as provided in Section 10.7 hereof.

                           10.3.3.2  Seller's Non-Participation.  Following
                                     --------------------------
the Close of Escrow, Seller shall have no right to participate in the
remediation of the Real Property by Buyer except (i) with respect to the Tar
Pits Property if no capping remedial action plan is permitted; or (ii) upon
Buyer's Default (as hereinafter defined); or (iii) in connection with Seller's
enforcement of the performance bond or the IT Contract. Buyer shall keep Seller
reasonably informed of the progress of each Corrective Action being performed or
planned at the Real Property, the Tar Pits Property and any other remediation,
by delivering written status reports to Seller at least once every two (2)
months.

                   10.3.4  Indemnification by Buyer.  Except only for the
                           ------------------------
Excluded Liabilities, Buyer agrees to indemnify, hold harmless and defend the
Seller Parties from and against any and all Environmental Liabilities and
Obligations, Other Assumed Obligations and Liabilities (as defined in Section
10.6 below), and for and against any and all liabilities, penalties, fines,
suits, claims, demands, actions, losses, damages, expenses, investigation and
remediation costs (including, but not limited to, laboratory, handling,
transportation, containment, neutralization, disposal, capping and other similar
costs), operation and maintenance costs, financial assurance costs, Agency costs
(including, but not limited to, permitting, licensing, hazardous waste taxes and
oversight costs), causes of action, proceedings, judgments, executions and
reasonable costs of any kind or nature whatsoever (including reasonable
attorneys', consultants', engineers' and contractors' fees) in connection with,
arising out of or related to: (a) any Corrective Action; (b) compliance or
noncompliance with any Requirements; (c) the existence of any threat to health,
safety or the environment under any Laws, or the presence or alleged presence or
release of any Hazardous Substances on, under, at or from the Real Property or
the Tar Pits Property; (d) Buyer and ITG's compliance or non compliance with any
Law; (e) the breach of this Agreement or any Exhibit attached hereto and
incorporated herein by Buyer (which includes, but is not limited to, the breach
of any liability and/or obligation of Seller assumed by Buyer); and (f) any
breach of the IT Contract or the performance and completion bond, as defined in
Section 10.4 below. Any indemnification and defense to be provided pursuant to
this Section 10.3.4 shall be conducted in accordance with the procedures set
forth in Section 14.1, below.

                   10.3.5  Seller's Responsibility.  Following the Close of
                           -----------------------
Escrow, Seller shall refrain from any communications or discussions with any
Agency or any third party (other

                                       26
<PAGE>

than communications or discussions relating to the Excluded Liabilities) and
from taking any other action which could result in any Agency requesting or
requiring Buyer or the owner of the Real Property to take, perform or cease any
activity on or with respect to the Property except communications (which shall
be made jointly with Buyer) relating to remediation of the Tar Pits Property.
Seller and Buyer shall give notice to DTSC and each other Agency with which
Seller has been in communications within the past twelve (12) months regarding
the Real Property and/or the Tar Pits Property that further communications
should be addressed to Buyer (although Seller may be copied on such notices),
and shall so refer any such communications. Seller shall deliver any and all
notices and correspondence received from any Agency to Buyer within two (2)
business days after receipt thereof. Seller acknowledges that the covenants and
agreements of Seller set forth herein are a material inducement to the
agreements of Buyer set forth herein. The provisions of this Section 10.3.5
shall be suspended during any period in which Buyer is in Default (as
hereinafter defined) or if Seller takes action to enforce the terms of the
performance and completion bond or the IT Contract.

                   10.3.6  Indemnification by Seller.  Seller agrees to
                           -------------------------
indemnify, hold harmless and defend the Buyer Parties from and against any and
all liabilities, penalties, fines, suits, claims, demands, actions, losses,
damages, expenses, investigation and remediation costs (including, but not
limited to, laboratory, handling, transportation, containment, neutralization,
disposal, capping and other similar costs, operation and maintenance costs,
financial assurance costs, Agency costs (including, but not limited to,
permitting, licensing, hazardous waste taxes and oversight costs), causes of
action, proceedings, judgments, executions and reasonable costs of any kind or
nature whatsoever (including reasonable attorneys', consultants', engineers' and
contractors' fees) in connection with arising out of or related to any Excluded
Liabilities. Any indemnification and defense to be provided pursuant to this
Section 10.3.6 shall be conducted in accordance with the procedures set forth in
Section 14.1, below.

          10.4  IT Contract.  As an inducement to execute this Agreement, Seller
                -----------
is relying upon, and hereby approves and consents to, Buyer's retention of ITG
or any one or more of its affiliates or subsidiaries as the "Consultant" for the
                                                             ----------
Corrective Action at or near the Real Property and/or the Tar Pits
Property pursuant to a fixed-priced contract between Buyer and ITG (the
contract, together with the lien and completion bond issued to secure
performance thereof, are collectively, the "IT Contract"), the form of which
                                            -----------
shall be attached hereto as Exhibit Q. Seller shall be an express third party
                            ---------
beneficiary of the IT Contract and an obligee of the performance bond as
provided in Section 5.3.5 hereof. Before the Consultant first commences any
Corrective Action at or near the Real Property and/or the Tar Pits Property, the
Consultant shall be required to maintain the insurance policies required in
Section 15 of the IT Contract (collectively, "Consultants' Insurance") and
                                              ----------------------
shall deliver to Seller copies of certificates evidencing the Consultants'
Insurance and shall add Buyer and Seller as additional insureds to any
automobile liability policy, umbrella insurance policy, or CGL insurance policy
maintained by the Consultant. The Consultant's liability to Buyer and Seller
shall be contractually limited as provided in the IT Contract. The Consultant
may purchase a separate insurance policy for its obligations under the IT
Contract.

                                       27
<PAGE>

          10.5  Required Insurance.
                ------------------

                10.5.1  Upon the Close of Escrow, Buyer shall add Seller as a
named insured under insurance policies providing coverage that is substantively
identical to that provided in the following policies (collectively, the
"Insurance Policies"):
 ------------------

                        10.5.1.1  The Real Estate Pollution Policy in the form
of Exhibit I, with minimum policy limits of Five Million Dollars ($5,000,000)
   ---------
and a fifteen (15) year reporting period;

                        10.5.1.2  The Full Occurrence CGL Policy in the form
of Exhibit G, with minimum policy limits of Fifty Million Dollars ($50,000,000);
   ---------
                        10.5.1.3  The Remediation Project Policy in the form of
Exhibit J, with minimum policy limits in an amount equal to one hundred percent
---------
(100%) of the contract price of the fixed-price contract between Buyer and ITG
pursuant to Section 10.4 above; and

                        10.5.1.4  The Contingent Transportation Insurance Policy
in the form of Exhibit E, within minimum policy limits of Five Million Dollars
               ---------
($5,000,000.00).

                10.5.2  Terms of Insurance.  Buyer shall pay the full policy
                        ------------------
premiums for each of the Insurance Policies and endorsements thereto at or prior
to the Close of Escrow.  Each of the Insurance Policies shall be placed through
Buyer's proprietary insurance program with a carrier rated A.M. Best A+,VIII or
better (which entities shall be approved by Seller as provided in Section 4.10
hereof).  The Insurance shall provide that any post issuance modifications or
terminations of the policies shall require the consent of Seller.

                10.5.3  Deductibles.  Buyer shall be solely responsible for the
                        -----------
payment of any deductibles under the Insurance Policies.

                10.5.4  Additional Coverage.  At its sole cost and expense,
                        -------------------
Seller may increase the liability limits under the Insurance Policies.

          10.6  Other Assumed Obligations and Liabilities.  In addition, to
                -----------------------------------------
Buyer's assumption as of the Close of Escrow of all Environmental Liabilities
and Obligations, except to the extent disapproved by Buyer prior to the
Contingency Date, Buyer shall assume and perform all of Seller's obligations and
liabilities with respect to the Real Property and Other Assets, including, but
not limited to, those associated with the sewer treatment plant and the railroad
as more specifically described in Exhibit U attached hereto (hereinafter
                                  ---------
collectively "Other Assumed Obligations and Liabilities").
              -----------------------------------------

          10.7  Tar Pits Property.  Seller is currently seeking to amend the
                -----------------
current remedial action plan with the DTSC for the Tar Pits Property to a
capping remedial action plan as opposed to the current removal and disposal. In
the event Seller elects, or an Agency requires, a removal and disposal strategy
for the Tar Pits Property instead of a capping strategy, Seller shall pay the
incremental cost of the removal and disposal remediation alternative over the
capping remediation alternative. Seller shall have the right to elect the
removal and disposal

                                       28
<PAGE>

strategy by giving written notice to Buyer at any time prior to the commencement
of the capping of the Tar Pits Property of its desire to cause a removal and
disposal strategy for the Tar Pits Property. Buyer shall join with Seller in
seeking DTSC approval for such a capping remedial action plan. Buyer agrees that
if a capping plan is approved by DTSC, Buyer will use reasonable efforts to
complete such capping within eighteen (18) months after such plan is approved by
DTSC or within such shorter time period as may be required by the DTSC.

          10.8  Deed Restriction. Buyer agrees that Seller's deed to Buyer and
                ----------------
Buyer's deed to future owners of the property shall contain the restriction
set forth in Exhibit Y attached hereto.
             ---------

          10.9  Default by Buyer.  Buyer shall be deemed to have defaulted in
                ----------------
its obligations (a "Default") and agreements set forth in Section 10.3.3.1
                    -------
hereof if all work included in the definition of Corrective Action other than
                                                                   ----- ----
long-term monitoring, maintenance or like tasks has not been completed on the
                                                    ---
Real Property and/or the Tar Pits Property and all of the following events
                                           ---
occur:

               a.  An Agency seeks in a written notice to have Seller perform
                   Corrective Action with respect to the Real Property or the
                   Tar Pits Property; and

               b.  Seller gives Buyer written notice of the Agency's written
                   notice; and

               c.  Buyer fails to respond to the Agency and commence taking the
                   appropriate action within thirty (30) days from the date of
                   receipt of such notice or commences taking such action but
                   thereafter fails to diligently prosecute such action to
                   completion to the satisfaction of the Agency; and

               d.  As a result of Buyer's failure to respond to such Agency
                   notice, Seller is required to expend money to perform
                   Corrective Action;

or, in the alternative, if Buyer is in default under the IT Contract and the
time to cure has expired.

          Only the obligations of Buyer pursuant to Section 10.3.3.1 hereof
shall be secured by a deed of trust (the "Deed of Trust") in the form of Exhibit
                                          -------------                  -------
AA hereto.
--

          If a Default occurs as defined in this Section 10.9, then Seller shall
have the right to either (a) recover from Buyer the costs expended by Seller in
performing such Corrective Action, or (b) exercise its rights under the Deed of
Trust.  The Deed of Trust provides, inter alia, that Seller shall subordinate
the lien thereof to the lien of any financing obtained by Buyer in connection
with the acquisition, remediation, or development of the Property, which
financing shall not exceed a loan to value ratio of seventy percent (70%).  Such
financing shall not provide for a security interest in the escrow account
referred to below nor shall such financing modify the terms of the escrow
instructions referred to below.

          Buyer shall provide Seller with a copy of each draw request submitted
to any construction and/or remediation lender.  Buyer shall obtain a performance
and completion bond

                                       29
<PAGE>

from each contractor performing Corrective Action whose contract or contracts
total is in excess of Five Hundred Thousand Dollars ($500,000).

          Until such date as all work included in the definition of Corrective
Action other than long-term monitoring, maintenance or like tasks has been
       ----------
completed, as Buyer conveys any portion of the Real Property to an unrelated
third party, it shall deposit into an escrow account established at Commerce
Escrow Company, located at 1545 Wilshire Boulevard, Suite 600, Los Angeles,
California  90017, telephone (213) 484-0855, and facsimile (213) 484-0417
pursuant to the escrow instructions attached hereto as Exhibit BB a portion of
                                                       ----------
the net proceeds received upon such conveyance equal to (i) Fourteen Million
Dollars ($14,000,000) minus (ii) all reasonable and reasonably documented
                      -----
amounts expended by Buyer to third parties after the Close of Escrow and prior
to the date of such conveyance for or in connection with Corrective Action;
multiplied by (iii) a fraction, the numerator of which is the number of acres so
conveyed and the denominator of which is 440.  Seller shall have a security
interest in and first lien on the escrow account pursuant to the security
documents attached as Exhibit CC hereto.
                      ----------

          Provided Buyer is not in Default, Buyer may use all of the money in
such escrow for the costs of performing Corrective Action at any time in Buyer's
reasonable discretion, subject to the terms of the Agreements, the Consent Order
and/or applicable Law.

          Buyer shall give notice to Seller quarterly of: (i) the existence of
any contracts for the sale of any portion of the Real Property; (ii) any sales
which have closed escrow and the number of acres conveyed; (iii) the amount
deposited into the escrow upon such sale; and (iv) the unspent balance of said
Fourteen Million Dollars ($14,000,000).

          Failure of Buyer to make the deposit in accordance with this Section
10.9 shall constitute a Default under this Section 10.9.

          In the event that Seller is dissolved as a matter of law and has not
assigned its rights as beneficiary under the Deed of Trust to an active entity
in a document recorded in the Official Records of San Bernardino County,
California and given notice of such assignment to Buyer by certified mail, then
           ---
the Deed of Trust shall automatically be null and void and of no force or effect
and the trustee thereunder shall reconvey the lien thereof upon receipt of an
affidavit from Buyer setting forth such facts and stating that Buyer has given
Seller at least fifteen (15) days' notice of the facts set forth in the
affidavit.  Buyer and Seller each hereby waive any claims either of them may
have against the trustee by reason of its reconveyance of the Deed of Trust in
accordance with the provisions of this Section 10.9.  The nullity of the Deed of
Trust shall not be deemed to make the obligations secured by the Deed of Trust
null and void.

     11.  As-Is.  EXCEPT AS EXPRESSLY SET FORTH TO THE CONTRARY HEREIN, THE
          -----
PROPERTY IS SOLD BY SELLER TO BUYER ON AN "AS-IS WHERE-IS" BASIS WITH NO
REPRESENTATIONS OR WARRANTIES OF ANY KIND, EXPRESS OR IMPLIED, EITHER ORAL OR
WRITTEN, MADE BY SELLER OR ANY AGENT OR REPRESENTATIVE OF SELLER WITH RESPECT TO
THE PHYSICAL OR STRUCTURAL CONDITION OF THE PROPERTY OR WITH RESPECT TO THE
EXISTENCE OR ABSENCE OF PETROLEUM, HAZARDOUS SUBSTANCES OR POLLUTION CONDITIONS
AT, UNDER, ADJACENT TO AND/OR EMANATING TO OR FROM THE

                                       30
<PAGE>

PROPERTY OR THE GROUND WATER THEREUNDER OR WITH RESPECT TO THE COMPLIANCE OF THE
PROPERTY OR ITS OPERATION WITH ANY LAWS, ORDINANCES OR REGULATIONS OF ANY
GOVERNMENT OR OTHER BODY, OR CONCERNING THE COST OR TIME NECESSARY TO COMPLETE
THE REMEDIATION OF POLLUTION CONDITIONS ON THE PROPERTY. BUYER ACKNOWLEDGES AND
AGREES THAT, EXCEPT AS EXPLICITLY STATED IN THIS AGREEMENT, SELLER HAS NOT MADE
AND DOES NOT MAKE ANY REPRESENTATIONS, WARRANTIES, OR COVENANTS OF ANY KIND OR
CHARACTER WHATSOEVER, WHETHER EXPRESS OR IMPLIED, WITH RESPECT TO THE
HABITABILITY, TENANTABILITY OR SUITABILITY FOR COMMERCIAL PURPOSES,
MERCHANTABILITY, OR FITNESS OF THE PROPERTY FOR A PARTICULAR PURPOSE, ALL OF
WHICH WARRANTIES SELLER HEREBY EXPRESSLY DISCLAIMS. BUYER EXPRESSLY ASSUMES AT
CLOSING ALL ENVIRONMENTAL LIABILITIES AND OBLIGATIONS (SUBJECT TO THE PROVISIONS
OF SECTION 10.7 HEREOF) WITH RESPECT TO THE PROPERTY AND THE TAR PITS PROPERTY
AND OTHER ASSUMED OBLIGATIONS AND LIABILITIES AND BUYER ON ITS OWN BEHALF AND ON
BEHALF OF ITS DIRECT AND INDIRECT SUCCESSORS, ASSIGNS AND TRANSFEREES OF ALL OR
ANY PORTION OF THE PROPERTY, RELEASES THE SELLER PARTIES FROM THE SAME, WHETHER
SUCH LIABILITY IS IMPOSED BY STATUTE, REGULATION, DERIVED FROM COMMON LAW, OR BY
CONTRACT, INCLUDING, BUT NOT LIMITED TO LIABILITIES ARISING UNDER ANY
ENVIRONMENTAL LAWS.

          WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, THIS RELEASE EXTENDS
TO ANY AND ALL CLAIMS, CAUSES OF ACTION, RIGHTS, LIABILITIES AND REMEDIES UNDER,
BASED UPON OR PURSUANT TO THE COMPREHENSIVE ENVIRONMENTAL RESPONSE, COMPENSATION
AND LIABILITY ACT OF 1980, 42 U.S.C. (S) 9601 et seq. ("CERCLA"), AS AMENDED BY
THE SUPERFUND AMENDMENTS AND REAUTHORIZATION ACT OF 1986 (42 U.S.C. (S) 9613),
AS THE SAME MAY BE FURTHER AMENDED, ENACTED OR REPLACED BY ANY SIMILAR OR
COMPARABLE STATE, FEDERAL OR LOCAL LAW, RULE OR REGULATION.

          BUYER HEREBY ACKNOWLEDGES THAT IT HAS READ AND IS FAMILIAR WITH THE
PROVISIONS OF CALIFORNIA CIVIL CODE SECTION 1542 ("SECTION 1542") WHICH IS SET
                                                   ------------
FORTH BELOW:

     "A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT
     KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE RELEASE,
     WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED HIS SETTLEMENT WITH THE
     DEBTOR."

          BY INITIALING BELOW, BUYER HEREBY WAIVES THE PROVISIONS OF SECTION
1542 SOLELY IN CONNECTION WITH THE MATTERS WHICH ARE THE SUBJECT OF THE
FOREGOING WAIVERS AND RELEASES EXCEPT THAT BUYER DOES NOT WAIVE THE PROVISIONS
                                                      ---
OF SECTION 1542 WITH RESPECT TO ANY MATERIAL ENVIRONMENTAL CONDITION OF THE REAL
PROPERTY OR THE ADJACENT PROPERTY KNOWN TO SELLER AND NOT DISCLOSED TO BUYER OR

                                       31
<PAGE>

ANY MATERIAL BREACH OF ARTICLE 7 HEREOF, OR ANY FAILURE BY SELLER TO DISCLOSE
ANY ADJACENT PROPERTY INDEMNIFICATION AND OTHER AGREEMENTS WHICH IMPACT THE USE
OR DEVELOPMENT OF THE PROPERTY OR FOR WHICH BUYER IS ALLEGED TO HAVE OBLIGATIONS
OR LIABILITY.

          /s/ SLM                                /s/ RES
          ----------------                       -----------------
          Buyer's Initials                       Seller's Initials

     12.  Obligations Retained by Seller.  Without limiting Seller's
          ------------------------------
obligations with respect to the Excluded Liabilities in Article 10 hereof,
Seller shall also retain the following obligations following the Close of
Escrow:

          12.1  Employees of Seller.  Seller shall retain all obligations
                -------------------
relating to its existing or past employee relationships. Buyer shall have no
obligation to offer employment to, employ, or compensate the employees of Seller
who currently perform duties at or concerning the Real Property, and all
notifications to federal, state, or local governments concerning the effects of
the sale of the Real Property upon employees shall be the responsibility of
Seller.

          12.2  Litigation Matters.  Seller shall defend itself and the Real
                ------------------
Property and, if required, Buyer or its successors and assigns, against any
claims or causes of action raised with respect to the SAWPA Plume, the Ontario
Litigation and/or the Mushegian Litigation, as each are more fully described in
Exhibit O attached hereto; provided, however, that in the event that such claims
---------
or causes of action are coupled with unrelated claims or causes of action
against Buyer, then Buyer shall pay a reasonably prorated portion of the defense
costs.

     13.  Casualty and Condemnation.  Casualty and condemnation occurrences
          -------------------------
prior to the Close of Escrow will have the following results:

          13.1  Casualty.  If, prior to the Close of Escrow, all or any portion
                --------
of the Improvements on the Land are damaged or destroyed by an insured event,
Buyer shall purchase the Property without any reduction in the Purchase Price on
account of any diminishment of value resulting from such damage or destruction.
If, prior to the Close of Escrow, all or any portion of the Improvements on the
Land are damaged or destroyed by an uninsured event, Buyer shall have the right
(a) to purchase the Real Property without any reduction in the Purchase Price on
account of any diminishment of value resulting from such damage or destruction,
or (b) to terminate this Agreement. Buyer shall make such election by delivering
written notice to Seller within ten (10) business days after receiving written
notice of such damage or destruction. Buyer's failure to deliver notice of its
election within such ten (10) day period shall constitute Buyer's election of
alternative described in clause (b) hereof. In the event Buyer cannot or does
not terminate the Agreement pursuant to this Section 13.1, Buyer shall be
entitled at the Close of Escrow to an assignment by Seller to Buyer of Seller's
right, title and interest in and to any insurance proceeds arising out of such
damage or destruction.

          13.2  Condemnation.  If, prior to the Close of Escrow, all or any
                ------------
material portion of the Real Property is taken or proposed to be taken by
eminent domain, Buyer shall have the right (a) to purchase the Real Property
which has not been condemned without any

                                       32
<PAGE>

reduction in the Purchase Price on account of any diminishment of value
resulting from such taking, or (b) to terminate this Agreement. For purposes of
this Agreement, a "material" portion of the Real Property shall be deemed to be
taken or proposed to be taken if it would cost in excess of Two Hundred Fifty
Thousand Dollars ($250,000) to repair or replace the remaining portion of the
Real Property. In the event Buyer elects not to terminate this Agreement
pursuant to this Section 13.2, or in the event that a non-material portion of
the Real Property is taken or proposed to be taken by eminent domain, then this
Agreement shall remain in full force and effect and Buyer shall be entitled at
the Close of Escrow to an assignment of any condemnation awards arising out of
such taking. Prior to the Closing Date, Buyer and Seller shall jointly
prosecute, at Buyer's expense, any claim for an award with respect to a taking
of the Real Property, which claim shall not be compromised or settled without
Buyer's consent.

          13.3  Early Termination.  Upon any termination of this Agreement
                -----------------
pursuant to this Article 13, Buyer shall promptly be refunded the entire Deposit
and any interest accrued thereon (less all Title Company and Escrow cancellation
fees), and the Parties shall have no other rights or obligations under this
Agreement, except that Buyer's indemnification obligations under the Entry
Permit shall survive the termination of this Agreement.

     14. Indemnification.  To the extent not otherwise provided for herein, and
         ---------------
not including any matter which is the subject of Article 10 hereof, Buyer and
Seller (each, an "Indemnitor") shall indemnify, defend and hold the other Party
                  -----------
and the other Party's current, past and future affiliates, officers, directors,
shareholders, members, managers, employees, representatives, agents,
consultants, counsel and contractors (each, an "Indemnitee") harmless from and
                                                -----------
against any and all obligations, liabilities, claims, liens, encumbrances,
losses, damages, assessments, interest, costs, expenses and agency actions that
result from any claims made by any person or any entity with respect to the
purchase and sale of the Real Property or any portion thereof based on the
representations, agreements, promises or acts of the Indemnitor or any of its
affiliates, subsidiaries, agents, representatives or employees, including,
without limitation, any claims by Tamkin Capital Partners, Jeffrey H. Tamkin or
any of their affiliated companies, entities or individuals.  Each indemnity
provided for under this Agreement shall cover the costs and expenses of the
Indemnitee, including, without limitation, reasonable attorneys' fees and
expenses, related to any claims, actions, suits, proceedings or judgments
incident to any of the matters covered by such indemnity.  Each Party shall
cooperate fully with the other to make available to each other any books,
records, documents, or other pertinent information within its control which is
necessary or pertinent to the defense of any claims, except for any such books,
records, documents, or other pertinent information, which are protected by any
attorney-client privilege, attorney-work product privilege or other privilege.
Buyer and Seller hereby agree that notwithstanding the reference herein to
Tamkin Capital Partners, Jeffrey H. Tamkin and related parties, neither Buyer
nor Seller believes that any Tamkin party has any valid claims arising out of
its own actions regarding any Tamkin party and the Real Property.

          14.1  Indemnification Procedures.
                --------------------------

                14.1.1  Notice of Claim.  With respect to any request for
                        ---------------
indemnification made under this Agreement (whether under this Article 14 or
Article 10 hereof), the Indemnitee shall give the Indemnitor written notice
thereof (together with a copy of any claim, process or other legal pleading)
promptly after becoming aware of such claim; provided, however, that the
                                             --------  -------

                                       33
<PAGE>

failure of any Indemnitee to give notice as provided in this Section 14.1.1
shall not relieve any Indemnitor of its indemnification obligations except to
the extent that such Indemnitor is actually prejudiced by such failure to give
notice. Such notice shall describe such claim in reasonable detail. Nothing in
this Section 14.1 shall be deemed to prevent a Party from making a claim under
any available insurance policy, in addition to pursuing indemnification as set
forth in this Section 14.1.

                14.1.2  Defense of Claim.  An Indemnitor, at such Indemnitor's
                        ----------------
own expense and through counsel chosen by such Indemnitor (which counsel shall
be reasonably acceptable to the Indemnitee), may, but shall have no obligation
to, elect to defend any claim (whether under this Article 14 or Article 10
hereof). If an Indemnitor elects to defend a claim, then, within ten (10)
business days after receiving notice of such claim (or sooner, if the nature of
such claim so requires), such Indemnitor shall notify the Indemnitee of its
intent to do so, and such Indemnitee shall cooperate in the defense of such
claim (and pending such notice and assumption of defense, an Indemnitee may take
such steps to defend against such claim as, in such Indemnitee's good faith
judgment, are appropriate to protect its interests). Such Indemnitor shall pay
such Indemnitee's reasonable out-of-pocket expenses incurred in connection with
such cooperation. Such Indemnitor shall keep the Indemnitee reasonably informed
as to the status of the defense of such claim. After notice from an Indemnitor
to an Indemnitee of its election to assume the defense of a claim, such
Indemnitor shall not be liable to such Indemnitee under Article 10 and/or
Article 14 for any legal or other expenses subsequently incurred by such
Indemnitee in connection with the defense thereof other than those expenses
referred to in the preceding sentence; provided, however, that such Indemnitee
                                       --------  -------
shall have the right to employ one law firm as counsel, together with a separate
local law firm in each applicable jurisdiction (if necessary) ("Separate
                                                                --------
Counsel"), to represent such Indemnitee in any action or group of related
-------
actions (which firm or firms shall be reasonably acceptable to the Indemnitor)
if, in such Indemnitee's reasonable judgment at any time, either a conflict of
interest between such Indemnitee and such Indemnitor exists in respect of such
claim, or there may be defenses available to such Indemnitee which are different
from or in addition to those available to such Indemnitor and the representation
of both parties by the same counsel would be inappropriate, and in that event:
(a) the reasonable fees and expenses of such Separate Counsel shall be paid by
such Indemnitor (it being understood, however, that the Indemnitor shall not be
liable for the expenses of more than one Separate Counsel (excluding local
counsel) with respect to any claim (even if against multiple Indemnitees)); and
(b) each of such Indemnitor and such Indemnitee shall have the right to conduct
its own defense in respect of such claim. If any Indemnitor elects not to defend
against a claim, or fails to notify an Indemnitee of its election as provided in
this Section 14.1.2 within the period of ten (10) business days described above,
the Indemnitee may defend, compromise and settle such claim and shall be
entitled to indemnification hereunder (to the extent permitted by this
Agreement). Notwithstanding the foregoing, the Indemnitor shall not, without the
prior written consent of the Indemnitee (which consent shall not be unreasonably
withheld, conditioned or delayed), settle or compromise any claim or consent to
the entry of any judgment unless (x) there is no finding or admission of any
violation of law or any violation of the rights of any person and no effect on
any other claims that may be made against the Indemnitee and (y) the sole relief
provided is monetary damages that are paid in full by the Indemnitor.

                                       34
<PAGE>

    15.  Miscellaneous.
         -------------

         15.1  Entire Agreement; Modification. This Agreement constitutes the
               ------------------------------
entire Agreement between the Parties hereto pertaining to the subject matter
hereof and supersedes all prior negotiations, agreements and understandings of
the Parties with respect to the subject matter hereof. All exhibits referred to
in this Agreement are attached and incorporated by this reference. This
Agreement may not be amended or otherwise changed except by a writing executed
by both Parties.

         15.2  Confidentiality.  From the Execution Date until the Close of
               ---------------
Escrow, Buyer agrees that the terms and conditions of this Agreement and any
information concerning the Property obtained either from Seller or through other
third parties shall be used solely for the purpose of evaluating the Property.
Unless and until Buyer has completed the acquisition of the Real Property, such
information shall be kept confidential by Buyer and its advisors, except as
necessary to develop, sell and finance the Real Property and to perform its
obligations pursuant to this Agreement. Seller understands that Buyer may need
to disclose the such information or portions thereof to those of Buyer's
directors, officers, employees, agents, advisors, attorneys, accountants,
consultants, lenders, investment bankers, investment partners and financial
advisors (collectively, "Representatives") who need to know such information for
                         ---------------
the purpose of evaluating or financing Buyer's acquisition of the Property or in
connection with obtaining the Insurance Policies, and also to developers in
connection with Buyer's evaluation of the feasibility of Buyer's proposed
development of the Real Property. Prior to any such disclosure, however, Buyer
shall inform such Representatives and developers of the confidential nature of
such information, and such Representatives of Buyer and developers shall agree
to be bound by this statement of confidentiality and not to disclose such
information to any other person. Buyer has also agreed to be responsible for any
breach of this statement of confidentiality by Buyer or its Representatives. In
the event that Buyer or any of its Representatives become legally compelled to
disclose any of such information, Buyer and its Representatives shall provide
Seller with prompt prior written notice of such requirements so that Seller may
seek a protective order or other appropriate remedy and/or waive compliance with
the terms of this statement of confidentiality. In the event that Buyer fails to
complete the acquisition of the Property, Buyer and its Representatives will
promptly return to Seller all of such written information which has been
provided to Buyer and its Representatives will destroy all copies of any
analysis, compilations, studies or other documents prepared by Buyer or for its
use containing or reflecting any such information. Buyer acknowledges that
Seller is a publicly traded company and is required to publicly disclose certain
material information.

          15.3  Further Assurances.  Each Party hereto shall from and after the
                ------------------
date hereof execute and acknowledge and deliver such further instruments and
perform such additional acts as any other Party may reasonably request to
effectuate the intent of this Agreement; provided, however, that no such request
                                         --------- --------
may require any Party to make any material expenditure.

          15.4  Notices.  Any notices, demands or other communications required
                -------
or permitted to be given by any provision of this Agreement or which any Party
may desire to give the other shall be given in writing, delivered personally or
sent by certified mail, postage pre-paid, facsimile, or by Federal Express or
similar generally recognized delivery service

                                       35
<PAGE>

regularly providing proof of delivery, addressed to a Party or Escrow Holder, at
the addresses set forth below, or to such other address as said Party or Escrow
Holder may hereafter or from time to time designate by written notice to the
other Party and Escrow Holder.

<TABLE>
<CAPTION>

     To Seller:                                    With a copy to:
     ---------                                     --------------
     <S>                                           <C>
     Kaiser Ventures Inc.                          Kaiser Ventures Inc.
     Kaiser Steel Land Development Inc.            Steel Land Development Inc.
     3633 Inland Empire Blvd.                      3633 Inland Empire Blvd.
     Suite 850                                     Suite 850
     Ontario, CA 91764                             Ontario, CA 91764
     Attn.: Lee R. Redmond III                     Attn.: Terry Cook
     Telephone: (909) 483-8508                     Telephone: (909) 483-8511
     Telecopier: (909) 944-6605                    Telecopier: (909) 944-6605

     To Buyer:                                     With a copy to:
     --------                                      --------------

     Ontario Ventures I, LLC                       Tuttle & Taylor, A Law Corporation
     c/o LandBank Environmental Properties, LLC    355 South Grand Avenue
     141 Union Boulevard                           40th Floor
     Suite 330                                     Los Angeles, CA 90071-3102
     Lakewood, CO  80228                           Attn.: Timi A. Hallem/Thomas I. Dupuis
     Attn.: Stuart L. Miner                        Telephone: (213) 683-0607
     Telephone: (303) 763-8500                     Telecopier: (213) 683-0225
     Telecopier: (303) 763-5700


     and to:
     ------

     The Knowlton Group
     1445 Canterbury Drive
     Salt Lake City, UT 84108
     Attn.: Hooper Knowlton
     Telephone: (801) 582-5347
     Telecopier: (801) 583-8939

     To Escrow Holder:
     ----------------

     Chicago Title Company
     560 East Hospitality Lane
     San Bernardino, CA  92408
     Attn.: _____________________
     Telephone: (909) 884-0448
     Telecopier: (909) ____________
</TABLE>

          A copy of any notice, demand or other communication given to or by
Escrow Holder by or to either Party shall be given to the other Party at the
same time.  Notice by United States Postal Service or delivery service as
provided herein shall be considered given on the

                                       36
<PAGE>

earlier of the date on which said notice is actually received by the Party to
whom such notice is addressed, or as of the date of delivery, whether accepted
or refused, established by the United States Postal service return receipt or
such overnight carrier's proof of delivery, as the case may be. Any such notice
given by facsimile shall be deemed given upon receipt of the same by the Party
to which it is addressed, provided that such facsimile was received between the
hours of 8:00 a.m. and 5:00 p.m. local time of the recipient of the facsimile on
a business day. Receipt of a facsimile at any other time will be deemed received
on the next business day.

          15.5  Computation of Time.  All references to a period of "days" shall
                -------------------
mean calendar days unless otherwise specifically set forth herein. If the last
day for any period or any date pursuant to this Agreement is a weekend or
holiday, such last day or date shall automatically be deemed to be the next
succeeding business day. A day shall be construed to be a business day if banks
are open for business on that day in the county in which the Real Property is
located.

          15.6  Counterparts.  This Agreement may be executed in one or more
                ------------
counterparts, and bear the signature of each Party on a separate counterpart,
each of which when so executed and delivered shall be deemed an original but all
of which taken together shall constitute but one and the same instrument.

          15.7  Time of the Essence.  Seller and Buyer hereby acknowledge and
                -------------------
agree that time is strictly of the essence with respect to each and every term,
condition, obligation and provision hereof and that failure to timely perform
any of the terms, conditions, obligations or provisions hereof by either Party
shall constitute a material breach of and a non-curable (but waivable) default
under this Agreement by the Party so failing to perform.

          15.8  Binding Effect; Assignment.  This Agreement shall be binding
                --------------------------
upon and inure to the benefit of Seller and Buyer and their respective
successors and assigns. Subject to Seller's review and approval of financial
information concerning Buyer, LandBank, Knowlton, IT and the issuer of the
insurance policies and provider of the IT Contract bond (as provided in Section
4.10 hereof) pursuant to Section 5.3.10, Seller expressly consents to the
assignment of Buyer's rights, interest and obligations under this Agreement to a
related entity subject to Seller's approval of such entity (which may not be
unreasonably withheld, delayed or conditioned), provided that Buyer delivers to
Seller, at least ten (10) business days prior to the Closing Date, a written
agreement signed by Buyer and its assignee pursuant to which such assignee
assumes Buyer's rights, interest and obligations hereunder. Upon any such
assignment, Buyer shall be released from any further obligations hereunder.

          15.9  Enforcement Costs.  Should either Party institute any action or
                -----------------
proceeding to enforce any provision of this Agreement, or for damages by reason
of an alleged breach of any provision of this Agreement, or for a declaration of
rights hereunder, the prevailing Party in such action, on trial or appeal, shall
be entitled to receive from the other Party all costs and expenses of such
action or proceeding, including reasonable attorneys', consultants' and
engineers' fees incurred by the prevailing Party in connection with such action
or proceeding.  Such costs and expenses shall include, without limitation,
attorneys', consultants' and engineers' fees, costs and expenses incurred in
trial, on appeal and in post-judgment motions, garnishment, levy and debtor and
third party examinations, discovery, and bankruptcy proceedings.

                                       37
<PAGE>

          15.10  Waivers.  No Party shall be deemed to have waived any right
                 -------
which such Party has under this Agreement, unless this Agreement expressly
provides a period of time within which such right may be exercised and such
period has expired, or unless such Party has expressly waived the same in
writing or unless this Agreement specifies that a waiver shall be deemed to have
occurred. Except as otherwise provided herein, the waiver by either Party of a
right, claim or default by the other Party hereunder shall not be deemed to be a
waiver of any other right, claim or default, or any subsequent default of the
same kind. No waiver of a condition shall limit either Party's liability for a
breach of this Agreement.

          15.11  No Third Party Beneficiary. Except as otherwise expressly set
                 --------------------------
forth herein, no term or provision of this Agreement or the exhibits hereto is
intended to or shall be for the benefit of any person or entity not a party
hereto, and no such other person or entity shall have any right or cause of
action hereunder, nor is anything in this Agreement intended to relieve or
discharge the obligation or liability of any third persons to any Party to this
Agreement, nor shall any provision give any third persons any right of
subrogation or action over and against any Party to this Agreement.

          15.12  Governing Law.  The Parties hereto expressly agree that this
                 -------------
Agreement shall be governed by, interpreted under, and construed and enforced in
accordance with the laws of the State of California without the application of
its choice of law rules.

          15.13  Construction.  Headings at the beginning of each paragraph and
                 ------------
subparagraph are solely for the convenience of the Parties and are not a part of
the Agreement.  Whenever required by the context of this Agreement, the singular
shall include the plural and the masculine shall include the feminine and vice
versa.  This Agreement shall not be construed as if it had been prepared by one
of the Parties, but rather as if both Parties had prepared the same.  Unless
otherwise indicated, all references to paragraphs and subparagraphs are to this
Agreement.  All exhibits referred to in this Agreement are attached and
incorporated by this reference.  In the event the date on which Buyer or Seller
is required to take any action under the terms of this Agreement is not a
business day, the action shall be taken on the next succeeding business day.

          15.14  Partial Invalidity.  If any term or provision of this
                 ------------------
Agreement or the application thereof to any person or circumstance shall, to any
extent, be invalid or unenforceable, the remainder of this Agreement, or the
application of such term or provision to persons or circumstances other than
those as to which it is held invalid or unenforceable, shall not be affected
thereby, and each such term and provision of this Agreement shall be valid and
be enforced to the fullest extent permitted by Law.

                                       38
<PAGE>

          15.15  Cumulative Remedies.  No remedy conferred upon a Party in this
                 -------------------
Agreement is intended to be exclusive of any other remedy herein or by law
provided or permitted, but each shall be cumulative and shall be in addition to
every other remedy given hereunder or now or hereafter existing at law, in
equity or by statute (except as otherwise expressly herein provided).

          15.16  Side Letter.  The side letter attached hereto as Exhibit DD is
                 -----------                                      ----------
incorporated into and made part of this Agreement.

                        [SIGNATURES ON FOLLOWING PAGE]

                                       39
<PAGE>

          IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as
of the dates written below.

SELLER:                                    KAISER VENTURES INC., a Delaware
-------                                    corporation




Date Executed:  October 19, 1999           By:  /s/ Richard E. Stoddard
                ----------------                ----------------------------
                                             Its:  President and CEO
                                                   -------------------------


                                           KAISER STEEL LAND DEVELOPMENT INC., a
                                           Delaware Corporation


Date Executed:  October 19, 1999           By:  /s/ Richard E. Stoddard
                ----------------                --------------------------
                                           Its:  President
                                                --------------------------


Buyer:                                     ONTARIO VENTURES I, LLC, a Delaware
-----                                      limited liability company

                                           By:  LANDBANK ENVIRONMENTAL
                                           PROPERTIES, LLC, a Delaware limited
                                           liability company

                                           By:  LandBank, Inc., a Delaware
                                                corporation, its managing member


Date Executed:  October 19, 1999                By: /s/ Stuart L. Miner
                ----------------                    ----------------------
                                                  Its:  /s/ Principal
                                                        ------------------



RECEIVED AND ACCEPTED THE         DAY OF              , 1999.
                           ------        -------------
CHICAGO TITLE INSURANCE
COMPANY, AS ESCROW HOLDER


By:
    ---------------------------------
  Its:
       ------------------------------

                                       40
<PAGE>

                                LIST OF EXHIBITS
                                ----------------

<TABLE>
<CAPTION>

<S>     <C>                                                      <C>

A       Map of Real Property and Adjacent Property               Recital A
B       Adjacent Property Description                            (S) 1.1
C       Bill of Sale                                             (S) 1.4
D       List of Cases                                            (S) 1.5
E       Contingent Transportation Insurance Policy               (S) 1.12
F       Deed                                                     (S) 1.14
G       Full Occurrence CGL Policy                               (S) 1.21
H       Adjacent Property Indemnification and Other Agreements   (S) 4.3.4
I       License Agreement                                        (S) 1.33
J       List of Permits                                          (S) 1.34
K       Real Estate Pollution Policy                             (S) 1.38
L       Remediation Project Policy                               (S) 1.40
M       Road Easement                                            (S) 4.1
N       Entry Permit                                             (S) 4.2
O       Litigation Files                                         (S) 4.3.5
P       Omnibus Assignment and Assumption Agreement              (S) 5.2.8
Q       IT Contract                                              (S) 5.3.5
R       Actions, Suits and Proceedings                           (S) 7.2
S       Impediments to Seller's Performance                      (S) 7.3
T       Schedule of Brokers                                      (S) 7.4
U       Contracts Affecting the Property                         (S) 7.6
V       Leases Affecting the Property                            (S) 7.7
W       Other Rights in the Property                             (S) 7.9
X       Property Tax Bills                                       (S) 7.10
Y       Deed Restriction                                         (S) 10.8
Z       Heckett-Multiserve Terms                                 (S) 5.2.4
AA      Deed of Trust                                            (S) 10.9
BB      Escrow Instructions                                      (S) 10.9
CC      Security Documents                                       (S) 10.9
DD      Side Letter                                              (S) 15.16
</TABLE>

                                       41
<PAGE>

                        Exhibits Available Upon Request
                        ===============================

                    to the Securities & Exchange Commission
                    =======================================






                                       42