AGREEMENT

        This  Agreement  is  made  and  entered  into  as  of  the  ___  day  of
___________, 1998, by and between LOS RIOS FARMS, INC., a California corporation
("Los Rios"),  and M & R INVESTMENT  COMPANY,  INC., a Nevada  corporation ("M &
R").

                                           RECITALS

        WHEREAS,  Los Rios granted an option to purchase  certain real  property
located in Solano  County,  California  (the "Option  Property"),  to Baby Grand
Corp., a Nevada  corporation  ("Baby  Grand"),  pursuant to an Option  Agreement
dated April 30, 1993 (the "Option  Agreement"),  in consideration for the sum of
One Million Dollars ($1,000,000.00) (the "Option"); and

        WHEREAS, a Memorandum Option was recorded August 10, 1993, in the
Official Records of Solano County, California as Instrument No. 1993 - 00072641;
 and

        WHEREAS,  Baby Grand  sold,  assigned  and  conveyed  to M & R, with the
consent of Los Rios,  all of its right,  title and interest in and to the Option
Agreement,  including but not limited to its right, title and interest in and to
the Option  Property,  pursuant to a Purchase  Agreement dated as of February 9,
1995; and

        WHEREAS,  a Memorandum of Purchase and Assignment of Option was recorded
March 20, 1995 in such Official Records as Instrument No.  1995-00016318,  and a
Quitclaim  Deed  from  Baby  Grand  to M & R was  recorded  March  20,  1995  as
Instrument No. 1995 - 00016319; and

        WHEREAS,  the Option has not been  exercised,  and Los Rios still  holds
good and marketable title to the Option Property; and

        WHEREAS,  Los Rios now  desires to buy the Option  back from M & R, thus
effecting a termination of the Option; and

        WHEREAS,  M & R is willing to sell and assign the Option to Los Rios, on
the terms and conditions,  and based upon the representations and covenants, set
forth in this Agreement.

        NOW,  THEREFORE,  for and in  consideration  of the covenants  contained
herein  and  for  other  good  and  valuable  consideration,   the  receipt  and
sufficiency of which are hereby acknowledged,  and intending to be legally bound
hereby, the parties hereby agree as follows:

        1. Sale and Buy-Back of the Option.  Subject to the terms and conditions
set forth in this  Agreement,  M & R shall sell,  assign and convey to Los Rios,
all of its right, title and interest in, to

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and under the Option Agreement, including but not limited to any right, title or
interest it may have in the Option Property (the "Option Rights"),  and Los Rios
shall purchase, assume and acquire the Option Rights.

        2.  Termination  of the Option.  The Option and the Option  Rights shall
automatically  terminate  without  any  further  action  or  documentation  upon
completion of all acts necessary to be performed at and conditions  precedent to
the Closing (as defined  below),  and Los Rios shall  thereafter  own the Option
Property free and clear of the Option.

        3.  Consideration.  The consideration  for M & R's sale,  assignment and
conveyance of the Option Rights shall be (i) Los Rios'  covenant with respect to
sale of the Option Property  specified at Section 8. B. below,  and (ii) the sum
of Five Hundred  Thirty-Three  Thousand,  Three Hundred Thirty-Three Dollars and
33/100 Cents ($533,333.33) (the "Consideration"), payable as follows:

               A. At the Closing (as defined below), Los Rios shall pay to M & R
the sum of Five Hundred Thousand Dollars ($500,000.00) in cash (the "Cash 
Consideration"); and

               B. At the Closing (as defined below), Los Rios shall deliver to M
& R a Promissory Note, payable to M & R, in the amount of Thirty-Three Thousand,
Three Hundred  Thirty-Three  Dollars and Thirty-Three Cents  ($33,333.33),  plus
interest  at the rate of Eight  Percent  (8%) per annum (the  "Note").  The Note
shall  be in  form of and  include  the  terms  and  conditions  set  forth  the
promissory note attached hereto as Exhibit A.

        4. Closing.  The Closing shall,  unless extended by written agreement of
the parties, occur on or before one hundred twenty (120) days from the execution
of this Agreement (the "Closing"),  at such place and time as shall be agreed to
by the parties.

        5.  Escrow;   Title  Insurance  Policy.  Upon  full  execution  of  this
Agreement,  Los Rios may open an escrow with Placer Title Co.  having an address
of  Davis,   California   (the  "Escrow  Agent")  to  complete  the  transaction
contemplated  by this  Agreement.  If Los Rios elects to open the escrow,  M & R
will  cooperate  with Los Rios in the  preparation  and  submission  of mutually
acceptable escrow instructions and other documents as may be requested by Escrow
Agent,  but Los Rios shall pay any and all escrow fees.  In  addition,  Los Rios
shall take any and all action  necessary to obtain a policy of title  insurance,
as described  in Section  6(B)(5) of this  Agreement,  and shall pay any and all
fees and costs associated therewith.

        6.     Conditions Precedent.

               A. M & R's obligation to sell and convey the Option Rights to Los
Rios shall be expressly  conditioned upon the following  conditions precedent to
Closing:

                                   
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     (1) Los Rios' payment of the Cash Consideration at Closing;

     (2) Los Rios' delivery of the Note at Closing;

     (3) Los  Rios'  compliance  with all of the terms  and  provisions  of this
Agreement which must be complied with at or prior to Closing;

     (4) Los Rios'  delivery to M & R, at or before the Closing,  of evidence of
capacity and other authority and such other documents  reasonably requested by M
& R; and

     (5) Issuance by Placer  Title  Company,  at the Closing,  of a CLTA owners'
policy of title insurance to Los Rios, in the amount of $533,000,  insuring that
title to the Option Property is free and clear of the Option.

     B. Los Rios'  obligation  to pay the  Consideration  to M & R is  expressly
conditioned on the following conditions precedent to the Closing

                      (1) M & R's  delivery  to  Los  Rios,  at  Closing,  of an
               Assignment  of  Option  Rights,  in the form  attached  hereto as
               Exhibit B; and

                      (2) M & R's  delivery  of a  Quitclaim  Deed  in the  form
               attached hereto as Exhibit C;

                      (3) M & R's  delivery  to  Los  Rios,  at  or  before  the
               Closing,  of evidence of capacity  and other  authority  and such
               other documents reasonably requested by Los Rios; and

                      (4)  M  &  R's  compliance  with  all  of  the  terms  and
               conditions of this Agreement which must be complied with prior to
               the Closing.

        7. Los Rios' Representations and Warranties.  Los Rios hereby represents
and warrants to M & R as follows,  which representations and warranties shall be
deemed  made as of the date of this  Agreement  and as of the  Closing,  and the
effectiveness  of such  representations  and  warranties as of the Closing shall
survive the Closing:

     A. Los Rios is a corporation  organized and in good standing under the laws
of the State of California.

     B. The person  executing  this  Agreement for and on behalf of Los Rios has
been duly  authorized and empowered by Los Rios to execute this Agreement on its
behalf and upon such execution the terms and provisions of this Agreement  shall
be valid and binding obligations of Los Rios.


<PAGE>



               C. Los Rios is not now offering  the Option  Property for sale or
negotiating a sale of the Option Property, and has no plans to do so.

        8.     Los Rios' Covenants.

               A. As of and after the Closing, Los Rios shall indemnify, defend,
and  hold  harmless  M & R,  its  assigns  and  transferees,  and  each of their
respective representatives,  employees, trustees, officers, directors and agents
(collectively,  the "Indemnified Parties"), from and against any and all claims,
judgments,  damages,  penalties,  fines, costs, expenses,  liabilities or losses
(including,  without limitation,  sums paid in settlement of claims,  attorneys'
fees,  consultant  fees and expert  fees)  which M & R or any other  Indemnified
Party may incur or suffer as a result of (i) any  misrepresentation  made herein
by Los Rios or any of its  members,  officers,  directors,  employees or agents,
(ii) any  breach of any  provision  set  forth  herein by Los Rios or any of its
members, officers, directors,  employees or agents, or (iii) M & R's sale of, or
Los Rios' buy-back of the Option.

               B. Los Rios expressly acknowledges that M & R paid $1,000,000 for
the Option, and that M & R has only agreed to accept the Consideration  based on
representations  made by Los Rios' principal(s) that Los Rios could not pay more
than $533,333.33 for the Option, and that Los Rios had no plans to and would not
sell the Option  Property to a third person after the  Closing.  Therefore,  Los
Rios  expressly  covenants and agrees that neither it, nor any of its successors
or assigns,  shall,  prior to the Closing and for a period of nine months  after
the  Closing,  offer the Option  Property for sale,  negotiate  with anyone with
respect to the sale of the Option Property,  enter into any contract for sale of
the Option Property,  sell or convey the Option Property,  or grant an option in
the Option Property.

               C. At and after the Closing,  Los Rios shall  execute any and all
other  documents  which  the  parties  determine  are  reasonably  necessary  to
consummate the transactions contemplated by this Agreement.

        9. M & R's Representations  and Warranties.  M & R hereby represents and
warrants to Los Rios as follows,  which  representations and warranties shall be
deemed made by M & R as of the date of this Agreement and as of the Closing, and
such representations and warranties shall survive the Closing:

               A.     M & R is a corporation formed and in good standing under 
the laws of the State of Nevada;

               B. The  person  executing  this  Agreement  on behalf of M & R is
authorized  to execute  this  Agreement  and upon such  execution  the terms and
provisions of this Agreement shall be valid and binding obligations of M & R.


<PAGE>



               C. M & R is now,  and  immediately  prior to close of escrow will
be, the owner of the Option and the Option Rights.

               D.  M  &  R  has  not  sold,  transferred,   assigned,   pledged,
encumbered,  or  hypothecated  its interest in the Option  Property,  and has no
plans to do so except as stated herein.

        10. M & R's Covenants.

               A. As of and after the Closing, M & R shall indemnify, defend and
hold  harmless Los Rios and its officers,  directors,  employees and agents from
and against any and all claims,  judgments,  damages,  penalties,  fines, costs,
expenses,  liabilities,  or losses (including,  without limitation, sums paid in
settlement of claims,  attorneys'  fees,  consultant fees and expert fees) which
Los Rios or any of its  officers,  directors,  employees  or agents may incur or
suffer as a result of (i) any  misrepresentation  made herein by M & R or any of
its  officers,  directors,  employees  or  agents,  or (ii)  any  breach  of any
provision set forth herein by M & R or any of its officers, directors, employees
or agents.

               B. At and  after the  Closing,  M & R shall  execute  any and all
documents which the parties determine are reasonably necessary to consummate the
transactions contemplated by this Agreement.

        11.  Default.  If Los Rios defaults in its  performance of or under this
Agreement or the Note, M & R shall have all rights and remedies  available to it
under California law or in equity.

        12.  Notices.  Any and all notices or other  communications  required or
permitted  by this  Agreement or by law to be served on or given to either party
by the other  party or by Escrow  Agent  shall be in writing and shall be deemed
duly served and given when personally delivered to the party to whom such notice
or communication  is directed,  or in lieu of personal service when deposited in
the United States mail,  first-class  postage prepaid,  or by overnight courier,
addressed as follows:

        If to Los Rios:     Los Rios Farms, Inc.
                            P. O. Box 1395
                            Davis, CA 95617
                            Attn: Gregory Schmid, President
                             Fax No. (530) 757-1754

        If to M & R:       M & R Investment Company, Inc.
                           c/o Edward Pasquale, President
                           4600 Northgate Blvd., Ste. 130
                           Sacramento, CA 95834
                           Fax No. (916) 929-2178


<PAGE>



Each party may change its  address  for the  purposes  of this  Paragraph  12 by
giving  written  notice of the change to the other party in the manner  provided
for in this paragraph.

        13.  Attorneys'  Fees. Each party shall bear its own attorneys' fees and
costs  incurred  in  connection  with  the  negotiating  and  drafting  of  this
Agreement.  If any litigation or  arbitration  action is commenced by one of the
parties against the other concerning this Agreement, or the rights and duties of
either  in  relation  thereto,  the  party  prevailing  in  such  litigation  or
arbitration  shall be  entitled,  in  addition  to such  other  relief as may be
granted, to a reasonable sum as and for attorneys' fees and expenses incurred in
connection with such litigation or arbitration, which amount shall be determined
by the court in such  litigation  or  arbitrator  in such  arbitration,  or in a
separate action brought for that purpose.

        14.  Governing  Law.  This  Agreement  shall be  construed  under and in
accordance with the laws of the State of California, without regard to choice of
law principles.

        15. Binding  Effect.  This Agreement  shall be binding upon and inure to
the  benefit  of the  parties  hereto  and their  respective  heirs,  executors,
administrators, legal representatives, successors, and permitted assigns.

        16. Severability. In case any one or more of the provisions contained in
this  Agreement  shall  for  any  reason  be  held to be  invalid,  illegal  and
unenforceable in any respect, such invalidity,  illegality,  or unenforceability
shall not  affect  any  other  provision  hereof,  and this  Agreement  shall be
construed as if such invalid, illegal, or unenforceable provision had never been
contained herein.

        17. Entire Agreement;  Modification.  This Agreement,  the Assignment of
Option Rights,  the Note,  and the Quitclaim  Deed  constitute the sole and only
agreement  of the parties  hereto and  supersedes  any prior  understandings  or
written or oral  agreements  between the parties  respecting  the within subject
matter  and  cannot be  modified,  amended  or any way  changed  except by their
written consent.

        18.  Assignment;  Nomination of Another  Party for Title.  Neither party
shall have the right to assign its rights and obligations.

        19.  Counterparts;  Fax Transmission.  This Agreement may be executed in
counterparts, each of which shall be deemed an original, and all of which, taken
together,  shall constitute one and the same  instrument.  This Agreement may be
executed and delivered by exchange of facsimile copies, and the facsimile copies
will  constitute  originally  signed copies of this Agreement until such time as
applicable pages bearing non-facsimile signatures are obtained from the relevant
party or parties.


<PAGE>



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

        "Los Rios"

LOS RIOS FARMS, INC.,
a California corporation



By:                                                          
        Gregory Schmid, President
        "M & R"

M & R INVESTMENT COMPANY, INC.,
a Nevada corporation



By:                                                                  
        Edward Pasquale, President