30 EAST FOURTH AVENUE * SAN MATEO, CA 94401 * (650) 344-1500
                           SAND HILL PROPERTY COMPANY

July 3, 2000


VIA FAX 650-266-8089

Mr. Dinesh Maniar
President, Montgomery Realty Group, Inc.
400 Oyster Blvd., Suite 415
South San Francisco, CA  94080

Re:      Gull Drive, South San Francisco

Dear Mr. Maniar:

         In accordance with that Purchase and Sale Agreement between  Montgomery
Realty Group,  Inc.,  ("Seller"),  and Peter Pau dba Sand Hill Property  Company
("Buyer") dated May 2, 2000 ("Agreement"), the "Due Diligence Period" defined in
Agreement Section 6 shall expire July 3, 2000.

         Buyer hereby waives the conditions,  and Buyer's right to terminate the
Agreement  prior to the expiration of the Due Diligence  Period on the condition
that Seller  execute the First  Amendment in the form  attached  hereto.  Should
Seller not agree to execute the First  Amendment,  then this letter  constitutes
Buyer's  notice  pursuant  to  Agreement  Section  6 that  the  Property  is not
satisfactory.

         Please  let me  know  how  you  wish  to  proceed.  We are  anxious  to
consummate  this  transaction.  If you have any questions or comments  regarding
this letter or the proposed First Amendment, please do not hesitate to call.

                                   Sincerely,

                                   /s/ Peter Pau
                                   Peter Pau

<PAGE>

                 First Amendment to Purchase and Sale Agreement

         This First Amendment  ("Amendment")  is executed as of July __, 2000 by
and between  Montgomery Realty Group,  Inc., a Nevada corporation doing business
in California as  Nevada-Montgomery  Realty Group, Inc. ("Seller") and Peter Pau
dba Sand  Hill  Property  Company  ("Buyer"),  and is made with  respect  to the
Agreement  dated  as of May 2,  2000  by  and  between  Seller  and  Buyer.  All
capitalized  terms not otherwise defined herein shall have the meaning specified
in  the  Agreement.  For  good  and  valuable  consideration,  the  receipt  and
sufficiency of which is hereby acknowledged, Buyer and Seller amend the Original
Agreement as follows:

1. Buyer waives the conditions specified in Original Agreement Section 6.

2. Buyer exercises the Fixed Price Option in Original  Agreement  Section 3 (c).
However, the increased deposit of Five Hundred Thousand Dollars ($500,000) shall
not be due until three (3) business days after the  recordation  of a quit claim
from Sanrio relinquishing its entire right in the truck loading access easements
located on the Land.  Furthermore,  the increased deposit may be posted by Buyer
in form of a letter of credit or a bond.

3. The  Seller's  right to  accelerate  Closing  pursuant  to  Section 8 (a) and
Section 8 (b) of the Original Agreement is deleted,  and the Closing shall occur
one  hundred  twenty  (120)  days from the date of this  Amendment,  subject  to
Seller's right to extend in Section 8 (c) of the Original Agreement.

4. Except as amended hereby,  the Original  Contract shall remain unmodified and
in full force and effect.

In Witness Whereof, Buyer and Seller have executed this Amendment as of the
above date.

                                    Seller

                                    Montgomery Realty Group, Inc.,
                                    a Nevada corporation

                                    By: /s/ Dinesh Maniar
                                        ---------------------------
                                        Dinesh Maniar, President

                                    Buyer

                                    By: /s/ Peter Pau
                                        ---------------------------
                                        Peter Pau