PURCHASE AND SALE AGREEMENT

         THIS  PURCHASE  AND  SALE  AGREEMENT   ("Agreement")  is  entered  into
effective  May ____,  2000 (the  "effective  date"),  by and between  MONTGOMERY
REALTY  GROUP,  INC.,  a Nevada  corporation  doing  business in  California  as
Nevada-Montgomery  Realty  Group,  Inc.  ("Seller"),  and MR.  PETER  PAU  doing
business as SAND HILL PROPERTY COMPANY  ("Buyer"),  or assignee,  (with right of
assignment) and is based upon the following facts and representations:

         A. Seller owns a parcel of undeveloped land consisting of approximately
         7.43  acres in the City of  South  San  Francisco,  San  Mateo  County,
         California, more particularly described herein (the "Land").

         B. The Land is suitable for development as an office  building  complex
         consisting of  approximately  200,000  square feet of office space with
         associated  parking.  Development of the Land into an income  producing
         office  project  will  require  approvals  from the  City of South  San
         Francisco as well as appropriate construction and leasing.

         C. Buyer  desires to develop the Land into an income  producing  office
         project and, to the extent Buyer  elects,  will  undertake the building
         permit, construction and leasing phases of the development. As provided
         herein  Seller  and Buyer will  cooperatively  undertake  the  planning
         department approval process.

         D.  Seller  agrees to sell and Buyer  agrees to buy the Land,  together
         with  Planning  Department  approvals  for an income  producing  office
         project, on the terms set forth herein.

         NOW THEREFORE in consideration of the mutual promises contained herein,
Seller and Buyer agree as follows:

1. PROPERTY  INCLUDED IN SALE. Seller hereby agrees to sell and convey to Buyer,
and Buyer hereby agrees to purchase from Seller, the following:

         (a) that  certain  real  property  commonly  known  as the Gull  Avenue
Project,  consisting of approximately 7.43 acres of undeveloped land,  described
as  Assessor's  Parcel  No.  015-082-210,  located  in the  City  of  South  San
Francisco,  San Mateo County,  California,  and more  particularly  described in
Exhibit "A" attached hereto (the "Real Property");

         (b) any and all rights,  privileges  and easements  appurtenant  to the
Real Property,  including,  without limitation, all minerals, oil, gas and other
hydrocarbon  substances  on  and  under  the  Real  Property,  as  well  as  all
development rights and credits, air rights,  solar rights,  water, water rights,
and water stocks relating to the Real Property and any easements,  rights-of-way
or other  appurtenances used in connection with the beneficial use and enjoyment
of the Real Property (collectively the "Appurtenances");

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         (c) any and all improvements and fixtures located on the Real Property,
if any, (all of which are collectively called the "Improvements");

         (d) any and all  personal  property  set forth on Exhibit "B"  attached
hereto, if any (the Personal Property"); and

         (e)  any and  all of the  interest  of  Seller,  if any,  in and to all
development rights and other intangibles  relating to or effecting the Property,
to the  extent  the  same may be owned or  controlled  by  Seller  ("Development
Rights").

         All of the items  described in  subsections  (a), (b), (c), (d) and (e)
above are hereinafter collectively called the "Property."

2.  ENTITLEMENTS.

         (a)  Entitlement Definitions

         "Assister" means the party who is not the Entitler.

         "Development  Costs"  shall mean  those  expenses,  assessments,  fees,
charges and  similar  monetary  exactions  which may be imposed by reason of the
development of Real Property into the Gull Project.  "Development Costs" include
overpass fees and other charges payable to the City of South San Francisco,  the
County of San Mateo or the State of  California  other than  Ordinary  Procedure
Expenses,  Extraordinary Procedure expenses, and de minimis application fees and
other  associated  costs.  Neither Buyer nor Seller shall permit any Development
Costs to be incurred  nor any such  assessments  to be made against the Property
prior to the Closing.

         "DIMC" shall mean Diversified Investment & Management Corporation. Fees
paid to DIMC hereunder shall include all third party  Entitlement  fees and fees
for direct services performed as part of the Entitlement  process. No fees shall
be paid to DIMC for general or administrative costs (i.e. overhead) not directly
connected with the Entitlement process. Other than reimbursement for third party
fees and  costs,  not more than  $20,000  shall be paid to DIMC for  Entitlement
expenses relating to services provided by DIMC hereunder.

         "Entitlements" shall mean those approvals customarily obtained from the
City of South  San  Francisco  as  conditions  to the  development  of an office
building  project of approximately  Two Hundred Thousand  (200,000) Square Feet,
together  with legally  required  parking  therefor,  as required by  ordinance.
Entitlement approval typically involves review and approval of proposed building
plans,  use,  FAR,  parking  requirements  and similar  matters.  As part of the
Entitlements  process Seller shall  determine what  Development  Costs, or other
exactions,  if any, will be required to be paid by Buyer in order to develop the
Gull Project . The term  "Entitlements"  shall not include any building  permits
nor any other approvals  required to actually commence  construction after final
Planning Commission approval. The term "Entitlements" shall also not include the
approval  of any  governmental  authority  other  than  the  City of  South  San
Francisco.

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         "Entitler" means the party in charge of obtaining the Entitlements.

         "Extraordinary   Procedures"  means  all  Environmental  Impact  Report
("EIR"),  traffic  studies or other  studies that may be required by the City of
South San Francisco Planning Department and Planning Commission as conditions to
granting the Entitlements which conditions are imposed by reason of the proposed
development requiring a variance, conditional use permit or similar exception to
the existing Master Plan, "East of 101 Plan", or other current allowed use.

         "Extraordinary  Procedure  Expense"  means  all  direct,  out of pocket
expenses paid to parties  unaffiliated with Seller for plans,  studies,  reports
and fees required by the Extraordinary Procedures.

         "FAR" means floor area ratio.

         "Gull Project" means the Property,  as enhanced by the Entitlements and
proposed office development project.

         "Ordinary Procedures" means preparation of and reasonable modifications
to all  conceptual  designs  and  architectural  plans;  attendance  at planning
department  meetings and planning  commission  hearings;  zoning approvals,  and
similar matters necessary and customary to obtain  Entitlements from the City of
South San Francisco Planning  Department and Planning Commission with respect to
development projects which do not involve variances or other deviations from the
existing Master Plan, zoning,  "East of 101 Plan" or City of South San Francisco
Planning Department guidelines. Ordinary Procedures do not include Extraordinary
Procedures.

         "Ordinary  Procedure  Expense" means all direct, out of pocket expenses
paid to parties  unaffiliated  with  Seller,  or to DIMC,  for  plans,  studies,
reports and fees required by the Ordinary Procedures.

         "Square Feet" means gross square  footage of rentable  office  building
improvements as computed using BOMA standards for  multi-floor and  multi-tenant
office  buildings,  and  specifically  excluding:  (i) any exterior or uncovered
areas such as loading docks,  trash enclosures,  balconies and patios,  (ii) any
interior or exterior parking areas.

         (b) Entitler.  Initially,  Seller shall be the Entitler; however, Buyer
shall have the right upon written notice in connection  with the exercise of its
option under Section 3(c) to become the Entitler.

         (c)  Square  Feet  of  Entitlements.   The  parties   acknowledge  that
Entitlements for exactly Two Hundred  Thousand  (200,000) Square Feet may not be
forthcoming;  and  therefore,  as little as One Hundred  Seventy  Five  Thousand
(175,000)  Square Feet (the "Minimum  Entitlement  Size") will be acceptable for
purposes of satisfying the Entitlement Contingency set forth in Section 7 below.
The parking  associated  with the Gull Project  shall be of  sufficient  size to
comply with applicable zoning ordinance,  however,  should Seller obtain greater
parking rights, said increase is permitted, but not required.

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         (d)  Entitlement   Efforts.   Entitler   covenants  to  use  reasonable
commercial  efforts  to obtain  the  Entitlements  on or  before  the end of the
Entitlement Period.  Such reasonable efforts shall include,  without limitation,
Ordinary Procedures and Extraordinary  Procedures.  Entitler shall keep Assister
informed at all times  regarding the proposed  efforts,  plans,  and timeline to
obtain  the  Entitlements  and  shall  duly  consider  Assister's  comments  and
proposals.  Assister shall cooperate with and lend reasonable aid and assistance
to Entitler as to the planning of the Gull Project.  Entitler and Assister shall
confer on a regular basis,  but not less than once per week,  during the term of
this Agreement as to the Gull Project (See Section 17(p) below).

         (e) Anticipated  Extraordinary  Procedures. It is understood and agreed
that the Gull Project will require a non-standard FAR and may require additional
variances for design and similar matters, such that Extraordinary Procedures are
likely to be involved in obtaining the Entitlements.

         (f) Plan and Budget. While Seller is the Entitler, Seller shall prepare
(and  amend from time to time as such  proposed  procedures  or prior  estimates
change) a budget of Ordinary  Procedure  Expenses  and  Extraordinary  Procedure
Expenses for Buyer's reasonable approval.  If Buyer disapproves any expense item
that Seller, as Entitler deems necessary to the Entitlement process,  Seller may
terminate  this  Agreement as provided  herein  below.  To the extent  feasible,
Seller and Buyer shall attempt to budget all anticipated Extraordinary Procedure
Expenses prior to the expiration of the Due Diligence Period; provided, however,
that any proper  Extraordinary  Procedure  Expenses  that arise or are  incurred
after the Due Diligence Period shall not be conditions precedent to consummation
of this Agreement and shall be paid for by Buyer as provided herein.

         (g) Payment of Ordinary  Procedures  Expenses.  Entitler  shall pay all
Ordinary Procedure Expenses as incurred,  provided that those incurred by Seller
are subject to reimbursement at Closing pursuant to Section 3(b).

         (h) Payment of Extraordinary  Procedures  Expenses.  Entitler shall pay
all  Extraordinary   Procedure  Expenses  as  incurred.   With  respect  to  all
Extraordinary  Procedure  Expenses  incurred  by  Seller  while  Seller  is  the
Entitler:  (A) Buyer shall reimburse Seller directly therefor to the extent such
Extraordinary  Procedure and Expense was within the approved  budget pursuant to
subsection (f) above; (B) Seller shall invoice Buyer, with a copy of the invoice
from the consultant,  engineer or other  professional;  (C) Buyer shall pay said
sum to Seller  within ten (10) days of the  receipt of such  invoice and billing
from Seller;  (D) it is agreed upon by the parties hereto that Seller is relying
upon such  reimbursement by Buyer for actual payment of Extraordinary  Procedure
expenses;  and (E) in the event that Buyer fails to reimburse such Extraordinary
Procedure Expenses after notice of such failure and a 10 day cure period, Seller
shall have the right to either:  (a)  terminate  this  Agreement  and treat said
failure to pay by Buyer as a material  breach of this  Agreement  (and  Seller's
right to recover such sums is not part of the  liquidated  damages  provision of
this  Agreement),  or (b) pay said costs  directly  and  increase  the  Contract
Purchase Price by the amount so paid.

         (i)  Soils  Report.  Seller  shall  within  twenty  (20)  days from the
effective date of this

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Agreement commence a Phase I geotechnical  investigation of the Property, with a
reputable  geotechnical engineer to ascertain the general soil conditions of the
Property for purposes of assisting the Entitlement process. Seller has delivered
to Buyer a  topographical  map as of the  effective  date  hereof.  Said Phase I
geotechnical  report and  topographical  survey expenses shall be deemed part of
the Ordinary Procedures Expenses.

         (j) Use of  Reports.  The  results of the Phase I  geotechnical  report
shall be used by Seller for Entitlement purposes, and copies of the report shall
be delivered to Buyer to assist Buyer with Buyer's due diligence.

         (k) Delivery of Reports. Other than (i) the Phase I geotechnical report
and, the  topographical  survey,  (ii) reports generated as part of the Ordinary
Procedures, (iii) the Section 6 Inspection Documents; and (iv) reports generated
as part of  Extraordinary  Procedures;  Seller shall be under no  obligation  to
provide Buyer with copies of any other reports,  plans,  designs,  studies, maps
and other matters related to either the Property or the Entitlement process, but
may do so without  negating  Seller's rights under this Agreement.  In the event
this transaction does not close as contemplated herein,  Seller shall retain all
ownership  rights to all documents  discussed in this  subsection,  or which are
related to the Real Property or the Entitlements.

         (l) Architect. Buyer and Seller acknowledge and agree that while Seller
is the Entitler,  it shall employ Avanessian Associates  Architects,  as well as
such engineers and technical  consultants  as Seller deems  reasonable to obtain
the Entitlements.

         (m) Cooperation.  Unless Buyer and Seller agree  otherwise,  Avenessian
Associates  shall be the  primary  contact  person  with  the City of South  San
Francisco  and shall  with  Entitler,  make all  submittals  and  presentations.
Seller, Buyer and Buyer's architects,  contractors,  designers,  consultants and
others  shall  cooperate  with  Avenessian  Associates  and submit  such  plans,
specifications,  and other matters as Entitler and  Avenessian  Associates  deem
necessary or appropriate to the Entitlement process.

3.       PURCHASE PRICE.

         (a)  Amount.  The  "Purchase  Price" for the  Property  shall equal the
product of Seventy Two Dollars and 50 Cents ($72.50)  multiplied by every Square
Foot of  Entitlements;  provided  however:  (i) such amount  shall never  exceed
Eighteen Million One Hundred Twenty Five Thousand Dollars ($18,125,000); (ii) if
the  Entitlement  Condition  is not  timely  satisfied,  but Buyer  waives  said
condition,  the Purchase  Price shall be such amount as is mutually  agreed upon
between Buyer and Seller based on the estimated  Entitlement Square Feet, but in
no event less than Fourteen Million Five Hundred Thousand Dollars ($14,500,000);
and (iii)  notwithstanding  the above,  the  Purchase  Price  shall be  Fourteen
Million Five Hundred Thousand Dollars ($14,500,000) if Buyer exercises the Fixed
Price Option, as set forth in Section 3(c) below.

         (b) Additional  Closing  Payments.  In addition to the Purchase  Price,
Buyer  shall pay Seller  (i) at the  Closing  all  Ordinary  Procedure  Expenses
properly  incurred  by Seller,  provided  that such  payment to Seller  shall be
limited  to a maximum of  $75,000;  and (ii) if not  already  paid  pursuant  to
Section 2(h) all  Extraordinary  Procedure  Expenses properly incurred by Seller
prior to closing.

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         Buyer shall also pay Buyer's share of  prorations  and closing costs as
provided in Section 8(h) and (i).

         (c) Fixed Price Option.  At any time during the Due Diligence Period as
set  forth  in  Section  6  below,  Buyer  shall  have  the  right,  but not the
obligation,  to purchase the Property for a Purchase  Price of Fourteen  Million
Five Hundred Thousand  Dollars  ($14,500,000),  plus payment of the amounts,  if
any, set forth in Section  3(b).  Buyer may exercise  such right  ("Fixed  Price
Option") by:

         (i) delivering  written notice of its intent to exercise this option to
         Seller; and

         (ii)  concurrently  increasing  Buyer's deposit amount to the amount of
         the Final  Deposit (i.e. $1,000,000  all  cash) as set forth in Section
         4(c) below

Upon exercise of the Fixed Purchase Right, the Section 7 Entitlement Contingency
shall be deemed  waived and Buyer shall  become the  Entitler  and take over the
Entitlement process, so as to supercede Section 2(n) above.

4.  BUYER'S DEPOSITS WITH ESCROW.

         (a)  Amount.  Deposits shall be made by Buyer as follows:

         Within  three  (3)  business  days  after  the  effective  date of this
Agreement,  Buyer shall deposit in escrow with First  American  Title  Insurance
Company  ("Title  Company") at its office in Redwood City, a deposit in the form
of cash  in the  amount  of ONE  HUNDRED  THOUSAND  DOLLARS  ($100,000,00)  (the
"Initial Deposit").  All sums comprising the Initial Deposit shall be held in an
interest  bearing  account and interest  accruing  thereon shall be held for the
account  of  Buyer.  In the  event  the  sale of the  Property  as  contemplated
hereunder is  consummated,  the Initial  Deposit plus interest  accrued  therein
shall be credited against the Purchase Price.

         Within  three (3)  business  days  after the  removal  of  Buyer's  due
diligence  contingencies  as set forth in Section 6 below,  Buyer shall increase
its deposit with Title Company by making an additional  deposit in the amount of
FOUR HUNDRED  THOUSAND DOLLARS  ($400,000) (the "Additional  Deposit") such that
the total  deposit  by Buyer  with  Title  Company  shall  then be FIVE  HUNDRED
THOUSAND DOLLARS ($500,000) (the "Increased  Deposit").  All sums comprising the
Increased  Deposit  shall be held in an interest  bearing  account and  interest
accruing  thereon shall be held for the account of Buyer.  In the event the sale
of the Property as contemplated hereunder is consummated,  the Increased Deposit
plus interest accrued thereon shall be credited against the Purchase Price.

         The Increased  Deposit may, at Buyer's option, be partially in cash and
partially in the form of a bond with the Seller as  beneficiary  under the bond.
In no event is the amount of the bond to exceed Three Hundred  Thousand  Dollars
($300,000). Any bond posted by Buyer pursuant to this subparagraph shall be from
a bonding  company  approved  of in  writing  by Seller  and said bond  shall be
payable in full to Seller  upon  presentment  by Seller to bonding  company of a
writing indicating that Buyer is in breach of this Agreement. To the extent that
Buyer elects to post a

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bond,  the amount of the  Additional  Deposit  in cash shall be  correspondingly
decreased, such that the Increased Deposit may take the form of part bond (up to
$300,000)  and part cash (not less  than  $200,000)  until  such time as a Final
Deposit is required hereunder.

         Within three (3) business days after Buyer  receives  notice of removal
of the Entitlement  Contingency as set forth in Section 7 below, or concurrently
with  Buyer's  exercise of its option  under  Section  3(c)  above,  Buyer shall
increase its deposit by an additional FIVE HUNDRED THOUSAND DOLLARS  ($500,000),
(and replacing any bond with cash) (the "Second  Additional  Deposit") such that
the total  amount of the cash deposit  with Title  Company  shall be ONE MILLION
DOLLARS  ($1,000,000)  (the  "Final  Deposit").  The entire  amount of the Final
Deposit shall be in cash. All sums comprising the Final Deposit shall be held in
an interest bearing account and interest  accruing thereon shall be held for the
account of Buyer.  At the closing as contemplated  hereunder,  the Final Deposit
plus interest  accrued thereon shall be credited  against the Contract  Purchase
Price.

         (b)  Application  of  Deposit.  The  Deposit  shall be  applied  to the
Purchase  Price.  If Seller  terminates the Agreement due to a default by Buyer,
then the Deposit, or such portion thereof as is then due shall be paid to Seller
as  liquidated  damages  pursuant  to  Section  4(c).  If Buyer  terminates  the
Agreement  due to:  (i) a  default  by  Seller,  (ii) the  failure  of a closing
condition  for  Buyer's  benefit as set forth in Section 8, (iii) the failure of
any Section 6 condition  provided Buyer delivers timely notice thereof,  or (iv)
the failure of the Entitlement Contingency of Section 7; then the Deposit (or so
much thereof as has been delivered)  together with all interest thereon shall be
returned  to the Buyer and  neither  Buyer nor  Seller  shall  have any  further
obligations under this Agreement. Upon any termination other than as a result of
a default, then neither party shall have any further rights or obligations under
this Agreement,  other than Buyer's  obligation to pay  Extraordinary  Procedure
Expenses pursuant to Section 2(h).

         (c) Liquidated Damages. The parties agree that in the event of a breach
of this Agreement by Buyer it would be difficult to measure Seller's damages and
that Seller's  retention of the Increased Deposit or Final Deposit,  as the case
may be, shall constitute Seller's measure of damages,  said sum being liquidated
damages,  and said sum being  agreed upon by the parties  hereto after review by
their respective attorneys.

         THE PARTIES HAVE AGREED THAT SELLER'S ACTUAL DAMAGES, IN THE EVENT OF A
         DEFAULT BY BUYER,  WOULD BE  EXTREMELY  DIFFICULT OR  IMPRACTICABLE  TO
         DETERMINE.  THEREFORE,  BY PLACING THEIR  INITIALS  BELOW,  THE PARTIES
         ACKNOWLEDGE  THAT THE  DEPOSIT  AMOUNTS  HAVE BEEN AGREED  UPON,  AFTER
         NEGOTIATION,  AS THE PARTIES'  REASONABLE  ESTIMATE OF SELLER'S DAMAGES
         AND AS SELLER'S EXCLUSIVE REMEDY AGAINST BUYER, AT LAW OR IN EQUITY, IN
         THE  EVENT OF A  DEFAULT  UNDER  THIS  AGREEMENT  SOLELY ON THE PART OF
         BUYER.

         Seller: _______     Buyer: ________

5.       TITLE TO THE PROPERTY.

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         (a) Title Policy.  At the Closing,  Seller  covenants to: (i) convey to
Buyer (or  assignee)  marketable  and  insurable  fee  simple  title to the Real
Property and the Appurtenances,  by duly executed and acknowledged grant deed in
a form acceptable to Buyer;  and (ii) to cause to be delivered to Buyer by Title
Company an ALTA extended coverage Owner's Policy of Title Insurance, in the full
amount of the Purchase  Price insuring fee simple title to the Real Property and
the  Appurtenances  in Buyer,  subject only to those  exceptions  as Buyer shall
approve pursuant to section 6(a) below.  Said policy shall provide full coverage
against  mechanics' or materialmen's  liens arising out of Seller's  Entitlement
process and shall  contain such  special  endorsements  as Buyer may  reasonably
require.  The Title  Company shall  obtain,  if requested by Buyer,  reinsurance
agreements from such companies and in such amounts as Buyer may request.

         (b) Personal Property.  At the Closing,  Seller shall transfer title to
the personal  property by a bill of sale in the form attached  hereto as Exhibit
"C", such title to be free of any liens and encumbrances.

         (c) Entitlements. At the Closing, Seller shall transfer all Entitlement
permits  together  with other  development  rights by means of the form attached
hereto as Exhibit "D" and shall transfer all original  Entitlement  documents to
Buyer as provided in Section 9 below.

6. DUE  DILIGENCE  CONDITIONS.  Buyer shall conduct its due diligence and either
terminate  this  Agreement or remove  Buyer's due  diligence  contingencies  and
proceed with this Agreement  within the period ("Due  Diligence  Period") ending
sixty (60) days after the mutual  execution  of this  Agreement . All of Buyer's
due  diligence  period  contingencies  are  set  forth  in  this  Section  6. To
facilitate  Buyer's due  diligence  and to the extent  reasonably  available  to
Seller, Seller shall provide Buyer with the documents set forth below.

         (a) Title.  During the time periods set forth below, Buyer shall review
and  approve  title  to the  Real  Property.  As of the  effective  date of this
Agreement Seller has delivered to Buyer:

         (i) a current  extended  coverage title commitment on the Real Property
         issued by Title Company, accompanied by legible copies of all documents
         referred to in the report;

         (ii)  copies  of  all  existing  and  proposed  easements,   covenants,
         restrictions,  agreements  or  other  documents  that  affect  the Real
         Property  and   Appurtenances  and  which  are  not  disclosed  by  the
         preliminary   title  report,   or,  if  no  such  documents   exist,  a
         certification of Seller to that effect; and

         (iii)  copies  of the two (2) most  recent  property  tax bills for the
         property.

Buyer shall advise the Seller  within  twenty (20) days of the  effective  date,
what exceptions to title, if any, will be accepted by Buyer; provided,  however,
that Seller hereby agrees to remove all possessory  interests,  monetary  liens,
monetary  encumbrances and judgments of any nature whatsoever  encumbering title
to the Real Property (other than any Development  Cost  Assessments).  As to all
other matters, Buyer shall be required to specifically disapprove any such

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title  exceptions.  Seller  shall have five (5) business  days after  receipt of
Buyer's  objections  to give  Buyer  notice:  (i) that  Seller  will  remove any
objectionable exceptions from title and provide Buyer with evidence satisfactory
to Buyer of such removal,  or provide Buyer with evidence  satisfactory to Buyer
that said  exceptions  will be removed on or before  the  Closing;  or (ii) that
Seller elects not to cause such exceptions to be removed.  If Seller gives Buyer
notice under clause (ii),  Buyer shall have two (2) additional  business days to
notify  Seller that Buyer intends to proceed with the purchase and take the Real
Property  subject to such exceptions,  or to terminate this Agreement.  If Buyer
shall fail to give Seller notice of its election  within two (2) business  days,
Buyer shall be deemed to have elected to  terminate  this  Agreement.  If Seller
shall give  notice  pursuant  to clause  (i),  and shall fail to remove any such
objectionable  exceptions  from title  prior to the Closing  Date,  and Buyer is
unwilling to take title subject  thereto,  Seller shall be in default  hereunder
and,  without  limiting  Buyer's rights and remedies  against Seller,  Buyer may
elect to terminate  this Agreement and Seller shall be liable for all of Buyer's
damages, including Buyer's costs and expenses incurred hereunder.

         (b) Property  Documents.  Within five (5) days of the effective date of
this  Agreement,  Seller  shall  deliver  to Buyer,  to the  extent the same are
available to Seller and in Sellers  actual  possession,  the documents set forth
below. Buyer shall review and approve all of the following due diligence matters
within Buyer's due diligence period:  any and all seismic  engineering  reports,
property condition reports, service contracts, maintenance contracts, management
contracts,  insurance policies, market studies for the Property generated in the
past two (2) years,  and all other contracts or documents of significance to the
Property.  All such documents  shall be delivered by Seller to Buyer at one time
under  cover of a letter  signed by Seller  specifying  each  such  document  so
delivered by Seller and containing  Seller's  certification  that such documents
are all of the documents actually in Seller's possession.

         (c)  Condition  of the  Property  -  Physical.  Except  for the Phase I
geotechnical report,  Seller shall not delivery any documents to Buyer regarding
the  physical  condition  of the  Property.  Seller  shall  conduct  a  Phase  I
geotechnical  survey  (i.e.  soils  survey)  of the  Property  for  purposes  of
obtaining  Entitlements  as set  forth  in  Section  2(j)  and  shall as soon as
practicable  after  completion of said report,  deliver a copy of said report to
Buyer. Thereafter,  at Buyer's option, Buyer may conduct a Phase II geotechnical
survey,  or have other  studies  conducted  with respect to the condition of the
Property for due diligence purposes.  Other than the Phase I geotechnical survey
performed  by  Seller,  Buyer  shall  conduct  all of  its  own  due  diligence,
inspection and review of the Property within the due diligence  period,  without
relying upon any  representations  or warranties by Seller,  which due diligence
review  shall  include  but  not  be  limited  to:  soils  testing,  geophysical
conditions, physical survey, and other physical characteristics of the Property.
Buyer shall rely upon its own experts, professionals,  consultants and others to
determine the suitability of the Gull Project and the physical  condition of the
Property.

         (d) Condition of the Property - Environmental  As of the effective date
of this Agreement  Seller has provided Buyer with photocopies of the most recent
Phase I Environmental  Survey and any and all other documents in Seller's actual
possession regarding the environmental condition of the Property. Excepting only
the  Section  10  representations  or  warranties  by Seller,  Buyer  shall then
commission and rely upon its own experts, professionals,  consultants and others
to determine  the  environmental  condition of the Property  within  Buyer's Due
Diligence  Period,

                                       9
<PAGE>

including but not limited to any and all  inspections and  examinations  for the
existence of asbestos, asbestos containing materials,  polychlorinated biphenyls
("PCB's"),  underground  storage  tanks,  radioactive  substances,   explosives,
petroleum or  petroleum  by-products,  urea  formaldehyde,  and other  Hazardous
Substances.

         (e) Applicable Laws. Within five (5) days of the effective date of this
Agreement  Seller  shall  deliver  to Buyer any  documents  in  Seller's  actual
possession  relating  to laws,  ordinances  or other  governmental  restrictions
concerning  the  Property,   if  any.  Thereafter,   without  relying  upon  any
representations  or  warranties  of Seller,  Buyer  shall,  within  Buyer's  Due
Diligence  Period,  review  and  approve  all  zoning,  land-use,   subdivision,
environmental,  building and  construction  laws and regulations  restricting or
regulating or otherwise affecting the use,  development,  occupancy or enjoyment
of the Property, both in its "as is" condition and as a development site for the
Gull Project.

         (f) Survey.  As of the  effective  date of this  Agreement,  Seller has
delivered to Buyer a topographical survey of the Property ("Survey").  Until the
end of the Due  Diligence  Period,  Buyer  shall  review  and have the  right to
disapprove  any matters  shown on the Survey.  Buyer  shall  during  Buyer's due
diligence period and at Buyer's sole cost and expense, increase the scope of the
Survey  for  purposes  of having  the  Survey  qualify  as an ALTA land  survey.
Alternatively,  Buyer may, at Buyer's  sole option and at Buyer's  sole  expense
have a  separate  ALTA land  survey  conducted  by a  surveyor  of  Buyer's  own
choosing.  Buyer's ALTA land survey shall be used for purposes of inducing Title
Company  to issue  to  Buyer at the  Closing  an ALTA  Owner's  Policy  of Title
Insurance.

         (g)  Appraisals.  Seller shall deliver to Buyer within five (5) days of
the  effective  date of this  Agreement any  appraisals or other market  studies
relating to the Property in Seller's  actual  possession,  which  appraisals may
have been  conducted  within the past two (2) years.  Without  relying  upon any
representation  or warranty of Seller,  Buyer shall within Buyer's due diligence
period,  review and approve the  feasibility  and market value of the  Property,
shall approve all CC&R's and other restrictions effecting the beneficial use and
enjoyment of the Property,  as well as any other data Buyer deems appropriate to
review in connection  with the  advisability  of purchasing  and  developing the
Property.

         (h)  Governmental  Conditions.  Buyer  shall  obtain  from  appropriate
government agencies and other sources (other than Seller) all documents relating
to permits,  approvals licenses or other  governmental  regulations which effect
the Property. Thereafter, without relying upon any representation or warranty of
Seller,  Buyer shall within Buyer's Due Diligence  Period review and approve all
governmental records, permits, approvals,  licenses, approvals,  certificates of
occupancy,  and associated notices and correspondence affecting the Property and
the proposed Gull Project.

         (i) Development  Costs.  Buyer shall review and approve all Development
Costs prior to the expiration of Buyer's Due Diligence Period.

         (j) Other Matters. Buyer's review and approval within the Due Diligence
Period of all other matters relating to or effecting the Property.

                                       10
<PAGE>

         (k)  Representations  and  Warranties.  Except for  Section  10,  Buyer
acknowledges that Seller has made no representations or warranties regarding the
Property or the feasibility of the Gull Project to Buyer. Buyer and Seller agree
that  Seller has made no oral  representations  or  warranties  to Buyer.  Buyer
acknowledges  that it is an experienced  developer and is able to assess the due
diligence contingencies without any reliance upon Seller.

         (l) Due Diligence Period Conditions Rules. The foregoing  conditions in
this Section 6 are all of Buyer's due diligence conditions precedent,  and these
conditions  precedent  are  intended  solely  for the  benefit  of  Buyer.  Upon
expiration of the Due Diligence Period, all Section 6 conditions precedent shall
be deemed to be waived,  unless  written  notice to the  contrary is received by
Seller.  If Buyer  indicates in writing that a Section 6 condition  precedent is
not satisfied for any reason, Buyer may terminate this Agreement.

         (m)  Costs.  Buyer  shall pay all costs  associated  with  Buyer's  due
diligence  investigations.  Seller's obligations to provide documents is limited
to those documents actually  available to Seller.  Buyer shall provide Seller at
no charge  with  photocopies  of third party  reports  and  studies  which Buyer
obtains by reason of Buyer's due diligence investigation of the Property.

7.  ENTITLEMENT CONTINGENCY

         (a) It is a  condition  precedent  to  Closing  hereunder  for  Buyer's
benefit that  Entitlements  (as  described in Section 2 above) be granted by the
City of South San Francisco (the "Entitlement  Contingency")  within One Hundred
Fifty  (150) days of the  effective  date of this  Agreement  (the  "Entitlement
Period").

         (b) In the event  that  Seller  obtains  the  Entitlements  within  the
Entitlement  Period such that the Entitlement  Contingency is satisfied,  Seller
shall give written  notice  thereof to Buyer.  As provided in Section 4(a) Buyer
shall increase its deposit to the Final Deposit amount.

         (c)  If  Buyer  waives  the  Entitlement  Contingency  (i)  before  the
expiration of Buyer's Due Diligence Period,  then this transaction shall proceed
pursuant to Section  3(c)  above;  or (ii) after the  expiration  of Buyer's Due
Diligence  Period,  then  Buyer and  Seller  shall in good  faith  estimate  the
Entitlement  Square Feet,  so as to determine  the Purchase  Price  according to
Section  3(a)(ii),  and the  parties  hereto  shall  proceed  to the  closing as
provided in Section 8.

         (d) If the  Entitlements  Contingency  is not waived by Buyer or timely
satisfied, then this Agreement shall terminate, and Section 4(b) shall govern.

                                       11
<PAGE>

8. CLOSING & ESCROW

         (a) Closing Date.  Subject to subsections  (b), (c) and (d) below,  the
Closing  hereunder shall occur One Hundred Eighty (180) days after the effective
date of this Agreement,  (Closing Date);  provided,  however, that Seller may at
any time after the  satisfaction,  removal or waiver of  Buyer's  due  diligence
contingency  and the Entitlement  Contingency,  accelerate the Closing Date to a
date  not  less  than  thirty  (30)  days  from  the  date  of  such  Notice  of
Acceleration.

         (b) Seller  Acceleration.  If Seller obtains the Entitlements  prior to
the expiration of the Entitlement  Contingency  Period or should Buyer waive the
Entitlement  Contingency  at any time,  Seller may  thereafter  at Seller's sole
option accelerate the Closing Date to a date not less than thirty (30) days from
the date of such entitlement satisfaction.  Seller shall retain its rights under
subsection 8(c) even if Seller accelerates the Closing Date.

         (c) Seller's Right to Extend Closing.  It is understood and agreed that
Seller has the right to structure this  transaction  in compliance  with the tax
free  exchange  provisions of Internal  Revenue Code ss.1031.  Seller shall have
three (3) successive options, at Seller's sole option to extend the Closing Date
determined  pursuant to  subsection  (a) for thirty (30) days each.  To exercise
each such option,  Seller shall give Buyer written notice not less than ten (10)
days prior to the then  applicable  Closing  Date.  Any period  during which the
Closing  Date is  extended  pursuant  to this  subsection  (c) is an  "Extension
Period".  If Seller intends to exercise its rights under  subparagraph  8(c) and
extend the Closing,  Buyer and Seller may agree in writing to transfer the Final
Deposit  funds to a  depository  other  than the Title  Company,  with  Buyer to
receive all interest, dividends or other proceeds from investment of said funds.
Seller shall not unreasonably withhold such consent. Subject to Seller's ss.1031
exchange, Seller shall provide Buyer with as much advance Notice of the intended
Closing  Date as  possible  and shall  attempt to close on that  date,  it being
understood that Buyer must marshall its closing funds and that delays in closing
or changes in the Closing Date can adversely effect Buyer.

         (d)  Waiver  If  Buyer  waives  the  Entitlement  Contingency  prior to
issuance  of  Entitlements,  then Buyer and Seller  may  mutually  agree upon an
earlier Closing Date.

         (e) Failure of Closing.  If the Closing does not occur on or before the
Closing Date, the Title Company as escrow holder shall, unless it is notified by
both  parties to the  contrary  within two (2)  business  days after the Closing
Date,  return to the depositor  thereof all items which may have been  deposited
hereunder,  and apply the Deposit as provided  in Section  4(b).  If the parties
dispute the  disbursement  of the Deposit or any other  matters,  Title  Company
shall (i) either pay said sum to Seller; or (ii) interplead said funds; as title
Company may elect.  No return of Deposit  shall,  however,  relieve Buyer of its
obligation to pay for  Extraordinary  Procedure  expenses  properly  incurred by
Seller as of the date of Agreement termination.

         (f)  Escrow  Instructions.  Buyer and Seller  shall each  submit to the
Title  Company,  not less than five (5) days prior to the Closing  Date,  escrow
instructions consistent with the provisions of this Agreement.

                                       12
<PAGE>

         (g) Seller's  Documents.  At least two (2)  business  days prior to the
Closing, Seller shall deliver to Title Company as escrow, the following:

         (i) Grant Deed. A duly executed and  acknowledged  grant deed conveying
         to the  Buyer  the Real  Property  and  Appurtenances  and all  rights,
         privileges and easements appurtenant thereto;

         (ii) a duly executed bill of sale  covering the Personal  Property,  in
         the form attached hereto as Exhibit "C";

         (iii) a  Certificate  from the  California  Secretary  of  State  (or a
         commercial reporting service satisfactory to Buyer) that indicates that
         as of the  Closing  Date  there are no  filings  against  Seller in the
         office of the Secretary of State under the California  Commercial  Code
         that would be a lien on any of the items  specified in the Bill of Sale
         referred to in Section 8(e)(ii) above (other than such filings, if any,
         as are being released at the time of the Closing);

         (iv)  originals  of  all  documents,  letters,  plans,  specifications,
         reports and similar matters as the same relate to the Entitlements, and
         Seller shall transfer  ownership and possession of the  Entitlements by
         way of physical deliver of Entitlement  documents through escrow and by
         executing the  "Entitlement  Transfer" form attached  hereto as Exhibit
         "D" and incorporated herein;

         (v) a billing in reasonable  detail showing the amount of funds, not to
         exceed Seventy Five Thousand Dollars  ($75,000)  necessary for Buyer to
         reimburse Seller for Seller's Ordinary  Procedure  expenses incurred in
         connection  with the  Entitlement  process as provided in Section 2 and
         Section 3(b) above;

         (vi)  originals  or  copies  of  all  service  contracts,   maintenance
         contracts  and  management  contracts,  if any,  affecting the Property
         (collectively,  the "Service Contracts") to be continued by Buyer after
         the Closing,  and any warranties or guaranties  received by Seller from
         any contractors,  subcontractors,  suppliers, materialmen, consultants,
         architects,  engineers  and  others  who  have  performed  work  on the
         Property or in connection with obtaining the Entitlements;

         (vii) to the extent available to Seller originals of all  architectural
         plans,  designs,  permits,  studies,  reports,  agreements  or  similar
         matters  generated  in the  Entitlement  process  and  relating  to the
         Property;

         (viii) an  affidavit  of Seller that  Seller is not a "foreign  person"
         within the meaning of Section 1445 of the Internal Revenue Code of 1986
         (the "Code")  duly  executed by Seller in the form  attached  hereto as
         Exhibit "E", and a California Form 590 RE;

         (ix) closing  statement in form and content  satisfactory  to Buyer and
         Seller; and

         (x) any other documents, instruments or agreements called for hereunder
         which have

                                       13
<PAGE>

         not previously been delivered.

         Buyer may waive  compliance on Seller's part under any of the foregoing
items by an instrument in writing.

         (h) Buyer's  Documents  and Funds.  Prior to the  Closing,  Buyer shall
deliver to Title Company as escrow, the following:

         (i)  the  Purchase  Price,  less  the  Deposit  (to  be  credited),  in
         immediately available funds;

         (ii)  immediately   available  funds  sufficient  to  pay  the  amounts
         described in Section 3(b);

         (iii)  any  other  documents,  instruments  or  agreements  called  for
         hereunder which have not previously been delivered; and

         (iv) Buyer shall  either pay or take  subject to all  Development  Cost
         assessments  assessed against the Property by reason of the Entitlement
         Process.

         Seller may waive  compliance on Buyer's part under any of the foregoing
items by an instrument in writing.

         (i) Other  Documents.  Seller and Buyer shall each  deposit  such other
instruments as are reasonably  required by the Title Company as escrow holder or
otherwise  required  to close the  escrow and  consummate  the  purchase  of the
Property in accordance with the terms hereof.

         (j)  Prorations.  The Title  Company  shall  prorate all real  property
taxes,  water,  sewer and utility  charges,  amounts  payable  under any Service
Contracts  delivered to Buyer during the Due Diligence Period which Buyer elects
to accept,  and other  expenses  normal to the operation and  maintenance of the
Property  shall be prorated  on the basis of a 365-day  year as of 12:01 a.m. on
the date the grant deed is recorded.

         Seller and Buyer hereby agree that if any of the  aforesaid  prorations
cannot be  calculated  accurately  on the Closing  Date,  then the same shall be
calculated within thirty (30) days after the Closing Date and either party owing
the  other  party a sum of money  based on such  subsequent  proration(s)  shall
promptly pay said sum to the other party,  together with interest thereon at the
rate of twelve  percent  (12%) per annum  from the  Closing  Date to the date of
payment  if payment is not made  within ten (10) days after  delivery  of a bill
therefor.

         (k) Expenses.  Buyer shall pay all title insurance costs.  Seller shall
pay the cost of all city and county  transfer  taxes  applicable  to the sale as
well as the full  amount  of any  assessments  or  bonds  on the Real  Property.
Brokerage  commissions  shall be paid as specified in Section 17(b).  Seller and
Buyer  shall  each pay  fifty  percent  (50%) of all  escrow  charges,  document
processing  fees and other escrow  charges as the same may relate to the closing
of this transaction. Each party shall bear its own attorneys' fees in connection
with the negotiation, performance and closing of this Agreement.

                                       14
<PAGE>

         (l) Closing.  Upon satisfaction and completion of all other matters set
forth in this  Section 8, escrow  shall close and  Seller's  grant deed shall be
delivered to Buyer and recorded and all of Seller's other documents as set forth
above shall be delivered by Title Company to Buyer. At the Closing Buyer's funds
shall be paid to Seller,  or Seller's  exchange  accommodator,  as Seller may so
designate,  and  Buyer's  documents  as set forth above  shall be  delivered  to
Seller.

9. CONDITIONS  PRECEDENT TO CLOSING.  All of the conditions of Section 8 of this
Agreement  shall  constitute all of the  conditions  precedent to the Closing as
described  herein.  After  the  satisfaction  or  waiver  of the  due  diligence
contingencies of Section 6 and the Entitlement Contingency of Section 7, failure
by either Seller or Buyer to satisfy the  conditions  imposed upon said party by
Section 8 of this  Agreement  shall also  constitute  a material  breach by said
party of this Agreement.

10.  REPRESENTATIONS  AND  WARRANTIES OF SELLER.  Seller hereby  represents  and
warrants  to  Buyer  now  and  again  as of the  Closing  Date,  subject  to the
limitations of Section 12 below, as follows:

         (a) Except as  disclosed to Buyer in writing  during the Due  Diligence
Period of Section 6, hereof,  to Seller's actual  knowledge,  there are not now,
and at the time of  Closing  there  will not be, any  material  physical  defect
concerning the Property;

         (b) Except as  disclosed to Buyer in writing  during the Due  Diligence
Period of Section 6 hereof,  to Seller's  actual  knowledge,  the Property is in
compliance with all applicable governmental laws and regulations.

         (c) The architectural plans, consulting reports and all other contracts
or documents delivered to Buyer pursuant to Section 6 of this Agreement are, and
at the time of Closing will be, true and correct originals or copies;

         (d) Except as disclosed to Buyer in writing,  during the Due  Diligence
Period,  Seller has no actual  knowledge  of any  condemnation,  zoning or other
land-use regulation proceedings,  either instituted or planned to be instituted,
which would  adversely  affect the use and  operation  of the  Property  for its
intended purpose or the value of the Property, nor has Seller received notice of
any special assessment proceedings affecting the Property.

         (e) Except as  disclosed to Buyer in writing  during the Due  Diligence
Period of Section 6, hereof, to Seller's actual  knowledge,  Seller has obtained
all  licenses,   permits,  easements  and  rights-of-way,   including  proof  of
dedication,  required from all governmental authorities having jurisdiction over
the  Property or from  private  parties for the normal use and  operation of the
Property,  in its  current  condition.  Nothing in this  subparagraph  (e) shall
impose an  obligation  on Seller to obtain  any  permit or other  matter for the
prospective  development of the Gull Project,  nor shall this  subsection  10(e)
impose a requirement that Seller obtain the Entitlements.

         (f) Seller is not a party to any labor  dispute  that  could  adversely
affect the Property.

                                       15
<PAGE>

         (g) Except as  disclosed to Buyer in writing  during the Due  Diligence
Period of Section 6 hereof,  at the time of Closing there will be no outstanding
contracts made by Seller without the consent of Buyer,  for any  improvements to
the  Property  which have not been fully paid for and Seller  shall  cause to be
discharged  all mortgages or deeds of trust in which Seller is Trustor and which
effect the Property prior to or at the Closing.

         (h) Seller  knows of no facts and has not failed to  disclose  any fact
which would prevent Buyer from using and operating the Property after Closing in
the  manner  planned  by Buyer,  in a manner  similar  to the way other  similar
properties in the area are operated.

         (i) Except as  disclosed to Buyer in writing  during the Due  Diligence
Period of Section 6 hereof,  neither Seller nor, to Seller's  actual  knowledge,
any predecessor owner,  occupant or user of the Property, or any past or current
tenant,  has  spilled,  disposed  of,  released,  or stored on,  under or at the
Property any Hazardous Substances (excepting only minor quantities maintained in
accordance with commercially  reasonable standards and applicable  environmental
laws);

         (j) Except as  disclosed to Buyer in writing  during the due  diligence
period of Section 6 hereof,  Seller has no actual knowledge that the Property or
any adjacent  property has been used as a dump or landfill or that any Hazardous
Substances  have  been  generated,   released,   stored  (excepting  only  minor
quantities  maintained in accordance with commercially  reasonable standards and
applicable  environmental laws) or deposited over, beneath or on the Property or
the adjacent property.

         (k) Except as  disclosed to Buyer in writing  during the due  diligence
period of Section 6 hereof,  Seller has not been  notified of any  proceeding or
inquiry by any governmental  authority with respect to the production,  storage,
disposal or use of any hazardous waste or other toxic or hazardous  substance on
or under the Real Property.

         (l)  Subject  only to the  limitation  of  Section  12  nothing in this
Agreement shall be deemed (a) a release of Seller from its liability, if any, to
any governmental  entity or third party (including without limitation Buyer) for
any violation of applicable environmental laws; or (b) a waiver of any rights of
Buyer to seek contribution from Seller in any action under the provisions of the
Comprehensive Environmental Response,  Compensation and Liability Act, 42 U.S.C.
Section 9601 et seq,, or any other toxic or hazardous materials cleanup statute,
law or regulation;  or (c) any statutory or common law  indemnification by Buyer
in favor of Seller (or any other person or entity)  respecting  environmental or
related matters.

         (m) As used in this  Agreement the term  "Hazardous  Substances"  shall
have the  meaning  set forth in U.S.C.  Section  9601 (14),  expanded to include
petroleum;   any   hazardous   or  toxic   materials,   pollutants,   effluents,
contaminants,  radioactive materials,  flammable explosives,  chemicals known to
cause  cancer  or  reproductive  toxicity,  emissions  or  wastes  and any other
chemical, material or substance, the handling, storage, release, transportation,
or  disposal  of which is or becomes  prohibited,  limited or  regulated  by any
federal,  state,  county,  regional or local authority or which,  even if not so
regulated,  is or  becomes  known to pose a hazard to the  health  and safety of
occupants  including,  without  limitation,  (i)  asbestos,  (ii)  petroleum and
petroleum   by-products,   (iii)  urea   formaldehyde   foam  insulation,   (iv)
polychlorinated  biphenyl,  (v) all  substances

                                       16
<PAGE>

now or hereafter designated as "hazardous  substances," "hazardous materials" or
"toxic substances"  pursuant to any environmental  laws; (vi) all substances now
or hereafter designated as "hazardous wastes" in Section 25117 of the California
Health  & Safety  Code or as  "hazardous  substances"  in  Section  25316 of the
California  Health  &  Safety  Code;  (vii)  all  substances  now  or  hereafter
designated  by the  Governor  of the State of  California  pursuant  to the Safe
Drinking Water and Toxic  Enforcement Act of 1986 as being known to cause cancer
or reproductive  toxicity,  or (viii) all substances now or hereafter designated
as "hazardous substances," "hazardous materials" or "toxic substances" under any
other  federal,   state  or  local  laws  or  in  any  regulations  adopted  and
publications promulgated pursuant to said laws.

         (n) There is no litigation  pending or threatened against Seller or any
basis  therefor  that arises out of the  ownership of the Property or that might
detrimentally affect the proposed use or operation of the Property, or the value
of the  Property  or  adversely  affect the  ability  of Seller to  perform  its
obligations under this Agreement.

         (o) Seller is not a  "foreign  person"  within  the  meaning of Section
1445(f)(3) of the Code.

         (p) This Agreement and all documents executed by Seller which are to be
delivered  to Buyer at the time of Closing  are, or at the time of Closing  will
be, duly executed and  delivered by Seller,  are, or at the time of Closing will
be, legal,  valid,  and binding  obligations  of Seller,  are and at the time of
Closing  will be  sufficient  to convey title (if they purport to do so), and do
not and at the time of Closing will not violate any  provisions of any agreement
or judicial  order to which Seller is a party or to which Seller or the Property
is subject.

11.  REPRESENTATIONS  AND WARRANTIES OF BUYER.  All documents  executed by Buyer
which are to be  delivered  to Seller  at the  Closing  are to or at the time of
Closing will be duly executed and delivered by Buyer (or  assignee),  and are or
at the Closing will be legal, valid and binding obligations of Buyer, and do not
and at the time of Closing  will not violate any  provisions  of any  agreement,
mortgage,  deed,  note or other document or instrument to which Buyer is a party
or to any court order to which Buyer is subject.

12.  WAIVER AND SUNSET.

         (a)  Notwithstanding  any  other  provision  of this  Agreement  to the
contrary,  Buyer  agrees to buy the Property "AS IS" and shall not rely upon any
representations  or  warranties  of Seller  other  than in  Section 10 as to the
condition of the  Property,  its  suitability  for  development,  its  financial
suitability  or any  other  matter.  Buyer  agrees to rely  solely  upon its own
experts,  consultants  and  professionals  in  determining  the condition of the
Property, including specifically any environmental condition.

         (b) The Section 10  representations  and warranties shall terminate one
(1) year after  recordation  of the grant deed unless  Buyer has then  delivered
written notice of a claim thereunder,  and that this one (1) year "sunset" shall
act as a contractual  statute of  limitations  as to all claims by Buyer against
Seller.

         (c) Buyer and Seller agree that there are no oral  representations from
either party.

                                       17
<PAGE>

         (d)   Buyer   represents   that  it  does   not  rely   upon   Seller's
representations  and that Buyer's damages,  if any, are limited to those matters
which Seller knew but concealed (or falsely disclosed) and which Buyer could not
discover through its own experts and due diligence.

13. LOSS BY CASUALTY;  CONDEMNATION.  In the event that,  prior to Closing,  the
Property,  or any part thereof,  is rendered totally incapable of development by
an Act of God (i.e.  "total  destruction")  or if  condemnation  proceedings are
threatened or commenced  against the Property,  which  condemnation  proceedings
would  take more than  25,000  Square  feet of the Real  Property  (i.e.  "major
condemnation"),  then and only then shall Buyer have the right,  exercisable  by
giving notice of such  decision to Seller within three (3) days after  receiving
written  notice  from  Seller of such total  destruction  by Act of God or major
condemnation  proceedings,  to terminate this Agreement,  in which case, neither
party shall have any further rights or obligations hereunder and the full amount
of any Deposit shall be returned to Buyer.  If Buyer  either:  (a) elects not to
terminate this Agreement following a total destruction or major condemnation; or
(b) the  destruction  or  condemnation  is not total or major,  then Buyer shall
accept the Real Property in its then  condition and all proceeds of insurance or
condemnation  awards  payable  to  Seller  by  reason  of  such  destruction  or
condemnation, if any, shall be paid or assigned to Buyer. If Buyer fails to give
notice Buyer shall be deemed to have elected to continue this Agreement.

14.  POSSESSION.  Possession of the Property  shall be delivered to Buyer on the
Closing Date;  provided that Seller shall afford authorized  representatives  of
Buyer  reasonable  access to the Property for the purposes of  satisfying  Buyer
with respect to Buyer's due diligence  inspections and the representations,  and
warranties of Seller herein,  and with respect to satisfaction of any conditions
precedent  to the Closing  herein.  Buyer shall also have access to the Property
for the purpose of conducting  environmental  surveys,  soils tests,  surveys or
other  physical  inspections  of the  Property;  provided that the Real Property
shall be  restored  to its  pre-inspection  condition  at  Buyer's  sole cost at
Seller's  request.  Seller shall cooperate with Buyer in providing access to the
Property and satisfying the conditions contained herein. Buyer shall give Seller
at least 24 hours notice of its intent to conduct an inspection.

15.  MAINTENANCE OF THE PROPERTY.  Between the date of mutual  execution of this
Agreement  and the  Closing,  Seller  shall:  (i)  maintain the Property in good
order, condition and repair,  reasonable wear and tear excepted;  (ii) otherwise
operate the Property in the same manner as before the making of this  Agreement,
the same as though Seller were retaining the Property;  and (iii) not permit any
new easements, or restrictions or limitations on the beneficial use or enjoyment
of the Real Property.

16. LAND USE  PROCESSING.  Other than the  Entitlements,  which are  governed by
Section 2,  Seller may permit  Buyer to make other  inquiries  and  applications
regarding  development  of the Gull  Project,  such as,  PG&E,  water  and other
services to the Real  Property  (as  examples  only).  Buyer shall  request such
action through application to Seller and Seller's prior written consent shall be
required.  Such  actions by Buyer  shall not be deemed  part of the  Entitlement
process.  Nothing herein shall be deemed to restrict Buyer's rights to carry out
its own studies and related matters.

                                       18
<PAGE>

17.      MISCELLANEOUS.

         (a)  Notices.   Any  notice,   consent,   approval,   waiver  or  other
communication required or permitted to be given under this Agreement shall be in
writing and shall be deemed to have been duly given when delivered personally or
two (2) days after deposited in the United States mail,  certified mail, postage
prepaid, return receipt required, and addressed as follows:

         If to Seller:              Montgomery Realty Group, Inc.
                                    Mr. Dinesh Maniar, President
                                    400 Oyster Point Boulevard
                                    Suite 415
                                    South San Francisco, CA 94080
                                    Telephone: (650) 266-8080
                                    Facsimile: (650) 266-8089

         With a copy to:            James T. Graeb, Esq.
                                    400 Oyster Point Boulevard
                                    Suite 415
                                    South San Francisco, CA 94080
                                    Telephone: (650) 266-8080
                                    Facsimile: (650) 266-8089

         If to Buyer:               Mr. Peter Pau
                                    Sand Hill Property Company
                                    30 East Fourth Avenue
                                    San Mateo, CA 94401
                                    Telephone: (650) 344-1500
                                    Facsimile: (650) 344-0652


         With a copy to:            Milburn A. Matthews, Esq.
                                    Coontz & Matthews LLP
                                    30448 Rancho Viejo Rd., Suite 120
                                    San Juan Capistrano, CA 92675
                                    Telephone: (949) 240 3040
                                    FAX: (949) 240-7540

or such other  address as either  party may from time to time  specify by notice
hereunder  to the  other.  Notice  by fax  shall be  deemed  delivered  during a
business day upon printout of a confirmation slip from sender's fax.

         (b) Brokers and Finders. Seller shall be responsible for the payment of
all fees and  commissions  owing to Mr. Robert  Sullivan in connection  with the
purchase  and sale of the  Property.  If any other  broker or finder  perfects a
claim for a  commission  or  finder's  fee  based on any  contact,  dealings  or
communication with any party hereto, the party through whom the broker

                                       19
<PAGE>

or finder makes such claim shall be responsible  for said  commission or fee and
all costs and expenses  (including  reasonable  attorneys' fees) incurred by the
other party in defending  against the same.  The  provisions  of this  paragraph
shall survive the Closing.

         (c) Successors and Assigns.  This Agreement shall bind and inure to the
benefit  of  the  parties  hereto  and  their  respective   successors,   heirs,
administrators  and assigns.  Without being relieved of any liability under this
Agreement,  Buyer  reserves the right to take title to the Property in a name or
assignee other than Buyer.

         Neither party to this  Agreement  may assign this  Agreement to another
party,  except that Buyer may assign this  Agreement to a  partnership  or other
business  venture in which  Buyer is a  participant,  and Seller may assign this
Agreement to an IRC Section 1031 exchange accommodator.

         (d) Amendments. Except as otherwise provided herein, this Agreement may
be amended or modified by, and only by, a written instrument  executed by Seller
and Buyer.

         (e) Governing  Law. This  Agreement  shall be governed by and construed
and interpreted in accordance with the laws of the State of California.

         (f) Merger of Prior  Agreements.  This  Agreement  contains  the entire
agreement of the parties and supersedes all prior negotiations,  correspondence,
understandings  and  agreements  between  the  parties,  relating to the subject
matter hereof.

         (g)  Enforcement.   If  either  party  fails  to  perform  any  of  its
obligations  under this Agreement or if a dispute arises  concerning the meaning
or  interpretation  of any provision of this Agreement,  the defaulting party or
the party not prevailing in such dispute,  as the case may be, shall pay any and
all costs and expenses  incurred by the other party in enforcing or establishing
its rights hereunder,  including, without limitation, court costs and reasonable
attorneys' fees.

         (h) Time of the Essence. Time is of the essence of this Agreement.

         (i) Exchange Transaction. In the event that Seller elects to consummate
the transaction  contemplated herein by virtue of an exchange  transaction under
Section  1031 of the Code,  Buyer shall  cooperate  with Seller in so  effecting
Seller's consummation of such transaction subject to the following conditions:

         (i)  Except as  provided  in  Section  8(c)  above,  the period for the
         Closing shall not be extended by such exchange transaction;

         (ii)  Buyer  shall not take title to any  property  as part of any such
         exchange transaction; and

         (iii) Buyer shall not be  required to advance any funds  whatsoever  or
         incur any  obligation or liability  whatsoever  in connection  with any
         such exchange transaction.

                                       20
<PAGE>

         (j) Specific  Performance.  Seller  acknowledges that in the event of a
breach or default or threatened breach or default under this Agreement by Seller
prior  to the  Closing,  damages  at  law  will  be an  inadequate  remedy  and,
accordingly,  without in any manner  limiting  any other  remedies  available to
Buyer,  Seller's  obligations  under this  Agreement may be enforced by specific
performance.

         (k) Headings.  The headings of the various  sections of this  Agreement
are  for  the  convenience  of  the  parties  and  shall  not  be  used  in  the
interpretation of this Agreement.

         (l) Interpretation.  This Agreement shall be construed according to the
normal meaning of words and phrases,  and shall not be read against either party
to this Agreement.  In any dispute  regarding  interpretation of this Agreement,
the Court shall seek to base its interpretation on the underlying  business goal
and the language reflected thereby.

         (m) Seller's  Entitlements  It is the  intention of the parties  hereto
that  Seller  shall at all times  control  the  Entitlement  process and own all
results generated from the Entitlement process unless and until this transaction
is closed as contemplated above or until Buyer takes over as provided in Section
3(c) above.

         (n) Days and Business Days. As used in this  Agreement,  the term "day"
shall  refer to a calendar  day and the term  "business  day" shall refer to any
calendar day other than a federal holiday,  Saturday or Sunday. If any specified
date falls on a holiday,  Saturday or Sunday,  then the time for  performance of
any matter on such date shall be extended to the next business day.

         (o) Other  Construction As used herein the term "may" is permissive and
the term  "shall"  is  mandatory.  The term  "will"  means the  statement  of an
intention and not an  obligation.  The singular shall include the plural and the
neuter, shall include the masculine and feminine.

         (p)  Non-Cooperation.  In  the  event  that  Buyer  and  Seller  do not
cooperate as contemplated herein, such failure shall not be a default hereunder.

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

                    Buyer:
                             ---------------------------------------------
                             Mr. Peter Pau, dba Sand Hill Property Company

                    Seller:  Montgomery Realty Group, Inc., a Nevada corporation

                             By:
                                 --------------------------------------------
                                 Dinesh Maniar, President

                             By:
                                 --------------------------------------------
                                 James M. Hanavan, Secretary

                                       21
<PAGE>

                                    Exhibit A

                          Description of Real Property

                                {to be provided}

                                       22
<PAGE>



                                    Exhibit B

                          Schedule of Personal Property

                                {to be provided}

                                       23