PURCHASE AND SALE AGREEMENT

                          AND JOINT ESCROW INSTRUCTIONS

                                February 3, 1998

                                 BY AND BETWEEN

                      ALEXANDRIA REAL ESTATE EQUITIES, INC.

                                      Buyer

                                       AND

                          MATRIX PHARMACEUTICALS, INC.

                                     Seller



<PAGE>


                           PURCHASE AND SALE AGREEMENT
                          AND JOINT ESCROW INSTRUCTIONS

         THIS PURCHASE AND SALE  AGREEMENT AND JOINT ESCROW  INSTRUCTIONS  (this
"Agreement")  is made and entered  into as of  February 3, 1998,  by and between
ALEXANDRIA REAL ESTATE EQUITIES,  INC., a Maryland  corporation  ("Buyer"),  and
MATRIX  PHARMACEUTICALS,  INC.,  a  Delaware  corporation  ("Seller"),  for  the
purposes  of setting  forth the  agreement  of the  parties  and of  instructing
CHICAGO  TITLE  INSURANCE  COMPANY  ("Escrow   Agent"),   with  respect  to  the
transactions contemplated by this Agreement.


                                    RECITALS

         Upon  and  subject  to the  terms  and  conditions  set  forth  in this
Agreement,  Seller  desires to sell and Buyer  desires to purchase the following
(collectively, the "Property"): (i) the fee interest in those certain parcels of
real property  located in the City of San Diego,  County of San Diego,  State of
California,  as legally  described on Exhibit "A-1" and Exhibit  "A-2"  attached
hereto,  together with all rights,  privileges and easements appurtenant thereto
or used in connection therewith,  including,  without limitation,  all minerals,
oil, gas and other hydrocarbon  substances thereon,  all development rights, air
rights,  water,  water rights and water stock relating  thereto,  all strips and
gores,  and all of Seller's  right,  title and  interest in and to any  streets,
alleys,  easements,  rights-of-way,  public ways,  or other rights  appurtenant,
adjacent or connected thereto or used in connection therewith (collectively, the
"Land");  (ii) all  buildings,  improvements,  structures  and  fixtures  now or
hereafter included or located on or in the Land (collectively, but excluding the
improvements  and fixtures  designated in Exhibit  "A-3"  attached  hereto,  the
"Improvements"),  including,  without limitation, that certain building commonly
known as 4757 Nexus Center Drive (the "Building"), and all apparatus, equipment,
appliances and other fixtures used in connection with the operation or occupancy
of the  Land  and  the  Improvements,  such  as  heating,  air  conditioning  or
mechanical  systems  and  facilities  used  to  provide  any  utility  services,
refrigeration,  ventilation,  waste  disposal or other services now or hereafter
located on or in the Land or the  Improvements,  but specifically  excluding the
improvements and fixtures designated in Exhibit "A-3" attached hereto; (iii) all
tangible  personal  property,  equipment and supplies now or hereafter  owned by
Seller and located on or about the Land or the  Improvements or attached thereto
or used in connection  with the use,  operation,  maintenance or repair thereof,
including, without limitation, the personal property designated in Exhibit "B-1"
attached hereto, but excluding the personal property designated in Exhibit "B-2"
attached hereto (collectively, but excluding the personal property designated in
said Exhibit "B-2", the "Personal  Property");  and (iv) all intangible property
(collectively,  the "Intangible  Property") now or hereafter owned by Seller and
used in connection  with the Land, the  Improvements  or the Personal  Property,

                                       1

<PAGE>


including, without limitation, the Tenant Leases and the Service Contracts (each
as  hereinafter  defined),  building  trademarks  and trade names,  transferable
business   licenses,   architectural,   site,   landscaping  or  other  permits,
applications,  approvals,  authorizations and other  entitlements,  transferable
guarantees and warranties  covering the Land and/or  Improvements,  all contract
rights,  books,  records,  reports,  test  results,  environmental  assessments,
as-built  plans,  specifications  and  other  similar  documents  and  materials
relating to the use or operation,  maintenance  or repair of the Property or the
construction or fabrication thereof, and all transferable utility contracts, but
specifically  excluding  any  intangible  property  exclusively  related  to the
operation of Seller's business.


                                    AGREEMENT

         In consideration  of the mutual  covenants  contained in this Agreement
and for other good and valuable  consideration,  the receipt and  sufficiency of
which are hereby  acknowledged,  Buyer and Seller  hereby  agree,  and  instruct
Escrow Agent, as follows:

1.    AGREEMENT TO PURCHASE AND SELL.

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

2.    PURCHASE PRICE.

         The purchase price for the Property (the "Purchase Price") shall be the
sum of Eighteen Million Six Hundred Thousand Dollars  ($18,600,000),  payable as
follows:

         2.1 Deposit.  Within five (5) Business  Days (as  hereinafter  defined)
following  the date (the  "Execution  Date") which is the later of the dates set
forth next to Buyer's and Seller's  signatures  to this  Agreement,  Buyer shall
deposit  into Escrow (as  hereinafter  defined)  the sum of Five  Hundred  Fifty
Thousand Dollars  ($550,000)  (which amount,  together with any and all interest
and dividends earned thereon, shall hereinafter be referred to as the "Deposit")
by wire transfer,  or by certified or bank check, payable to the order of Escrow
Agent.

         Escrow Agent shall invest the Deposit in insured money market accounts,
certificates of deposit,  United States Treasury Bills or such other instruments
as Buyer may instruct from time to time. In the event of the consummation of the
purchase and sale of the Property as contemplated  hereunder,  the Deposit shall
be paid to Seller at the Closing  (as  defined in Section 6 below) and  credited
against  the  Purchase

                                       2

<PAGE>


Price. In the event the sale of the Property is not  consummated  because of the
termination  of this  Agreement  by Buyer  in  accordance  with any  right to so
terminate  provided herein, or the failure of any condition except for a default
of Buyer under this  Agreement  caused  solely by Buyer,  the  Deposit  shall be
returned to Buyer.

         2.2 Balance. On the Closing Date (as defined in Section 6 below), Buyer
shall pay to Seller the balance of the Purchase Price over and above the Deposit
paid by Buyer under  Section  2.1 above,  by wire  transfer of federal  funds to
Escrow Agent, net of all prorations and adjustments as provided herein.

         2.3  Allocation  of  Purchase  Price.  Subject  to the  prorations  and
adjustments  hereinafter  provided,  the Purchase Price shall be allocated among
the Land parcels, the Improvements, the Personal Property and the other Property
as Buyer and Seller shall mutually  determine in good faith using, to the extent
required,  the method set forth in section 1060 of the Internal  Revenue Code of
1986 (as  amended)  and the  Treasury  Regulations  promulgated  thereunder  for
purposes  of filing  Form  8594 with the  Internal  Revenue  Service;  provided,
however,  that the parties agree  that$16,000,000 shall be allocated to the Land
parcel  described on Exhibit A-1 attached  hereto and the other  portions of the
Property  located  thereon or  associated  therewith,  and  $2,600,000  shall be
allocated to the Land parcel  described  on Exhibit A-2 attached  hereto and the
other  portions  of  the  Property  located  thereon  or  associated  therewith.
Notwithstanding  such allocation of the Purchase Price, the sale of the Property
shall be on an all or nothing  basis,  the sale of each item of  Property  to be
conditioned  upon the  simultaneous  sale of all other  items of  Property  on a
concurrent  basis,  and Buyer shall have no right to purchase,  and Seller shall
have no right to cause Buyer to  purchase,  less than all of the  Property as an
entirety in accordance  with the  provisions of this  Agreement.  Both Buyer and
Seller  agree  that  in all  public  filings  and  reports,  including,  without
limitation,  any documentary or other transfer tax declarations and any federal,
state, or local income,  sales, or use tax returns or declarations,  the various
items of Property shall be valued as determined by Buyer.

3.    OPENING OF ESCROW.

         Promptly  following the Execution Date,  Buyer and Seller shall cause a
purchase and sale escrow  ("Escrow")  to be opened with Escrow Agent by delivery
to Escrow Agent of a fully  executed  copy of this  Agreement  (the  "Opening of
Escrow").  This Agreement  shall  constitute  escrow  instructions to the Escrow
Agent as well as the agreement of the parties.  Escrow Agent is hereby appointed
and designated to act as the Escrow Agent and instructed to deliver, pursuant to
the terms of this Agreement, the documents and funds to be deposited into Escrow
as herein  provided.  The parties  hereto shall execute such  additional  escrow
instructions,  not inconsistent with this Agreement as determined by counsel for
Buyer and  Seller,  as Escrow  Agent  shall deem  reasonably  necessary  for its
protection,  including  Escrow  Agent's  general  provisions,  if

                                       3

<PAGE>


any (as may be modified by Buyer,  Seller and Escrow Agent). In the event of any
inconsistency  between this Agreement and such additional  escrow  instructions,
the provisions of this Agreement shall govern.

4.    ACTIONS PENDING CLOSING.

         4.1 Due Diligence Period.

                  4.1.1 Due Diligence.

                           4.1.1.1 Property Documents.  Within five (5) Business
Days after the Execution  Date,  Seller shall deliver or make available to Buyer
copies of all contracts,  documents,  leases,  reports, books, records and other
materials  relating to the Property,  including,  without  limitation,  as-built
plans and specifications, operating statements, income and expense records, rent
rolls, engineering tests, soil tests, a Phase One  environmental/asbestos  audit
of the  Property,  a Phase  Two  environmental  audit of the  Property,  service
contracts,   structural  and  mechanical  reports,   maps,  plans,   agreements,
governmental  permits  and  approvals,   appraisals,  title  policies,  surveys,
construction   warranties,   and  land  studies  (collectively,   the  "Property
Documents") to the extent in Seller's possession or control or in the possession
of its agents,  auditors or independent  contractors,  all at Seller's sole cost
and expense.

                           4.1.1.2 Diligence Tests. At all reasonable times from
the Execution Date until the Closing or earlier  termination of this  Agreement,
Buyer, its agents and representatives shall be entitled at Buyer's sole cost and
expense to (i) enter onto the Property  during  normal  business  hours and upon
reasonable advance notice to Seller, to perform any inspections, investigations,
studies and tests of the  Property,  including,  without  limitation,  physical,
structural,  mechanical,  architectural,  engineering,  soils,  geotechnical and
environmental/asbestos  tests that Buyer deems reasonable;  (ii) upon reasonable
notice to  Seller,  cause an  environmental  assessment  of the  Property  to be
performed;  and (iii) review all Property  Documents  and Seller  Documents  and
examine  and copy any and all  books  and  records  maintained  by Seller or its
agents relating to the Property  (including,  without limitation,  all documents
relating to utilities,  zoning, and the access, subdivision and appraisal of the
Property).

                           4.1.1.3  Tenants.  Within  ten (10)  days  after  the
Execution Date,  Seller shall arrange for an introduction of Buyer to any tenant
of the Property and shall otherwise assist and cooperate with Buyer in providing
Buyer access to such tenants,  subject to Seller's  rights under any leases with
such  tenants.  Buyer and its agents,  assigns and  employees  shall observe and
comply  with all  reasonable  requests  on the part of tenants  at the  Property
regarding  entry into tenant  facilities  for purpose of  inspection.  Buyer may
conduct such inquiries and investigations of any and all tenants (or prospective
tenants) as Buyer, in its sole discretion, deems advisable or necessary.

                                       4

<PAGE>


                           4.1.1.4  Insurance.  Buyer agrees that during the Due
Diligence Period (as hereinafter  defined) it shall carry, or cause its agent to
carry,  workers'  compensation and general liability  insurance in the amount of
$1,000,000 per  occurrence,  which  insurance shall name Seller as an additional
insured,  and shall  otherwise be issued by carriers  and be in form  reasonably
satisfactory to Seller.  Buyer shall provide Seller with proof of such insurance
prior to commencing Buyer's physical inspections of the Property.

                           4.1.1.5   Indemnity  and  Repair.   Buyer  agrees  to
indemnify,  defend  (with  counsel  reasonably  acceptable  to Seller)  and hold
harmless Seller from any losses  resulting from any final judgment by a court of
competent  jurisdiction  arising  from any actual  damage to the Property or any
injury to  persons  caused  by any act of Buyer as a result of the  inspections,
investigations or tests performed by Buyer, its agents or representatives or any
entry by Buyer or its agents or  representatives  onto the Property  pursuant to
this Section  4.1.1,  which  indemnity  shall  survive the  termination  of this
Agreement or the Closing and delivery of the Deed (as hereinafter defined) for a
period of ninety (90) days; provided,  however, that Buyer's indemnity hereunder
shall not include any losses,  cost,  damage or expenses  resulting from (x) the
acts of  Seller,  its agents or  representatives,  or (y) the  discovery  of any
pre-existing  condition  of the  Property.  In  addition,  if this  Agreement is
terminated, Buyer shall repair any material damage to the Property caused by its
entry thereon and shall restore the Property  substantially  to the condition in
which it existed prior to such entry;  provided,  however, that Buyer shall have
no  obligation  to repair any damage  caused by Seller's  negligence  or willful
misconduct  or  to  remediate,   contain,  abate  or  control  any  Material  of
Environmental  Concern (as  hereinafter  defined) or any  hazardous  defect that
existed at the Property prior to Buyer's entry thereon.

                  4.1.2  Termination  Right.  Buyer  shall have the right at any
time during the period (the "Due Diligence Period") beginning upon the Execution
Date and ending on the date which is thirty (30)  calendar  days  following  the
Execution  Date  (the  "Due  Diligence  Termination  Date")  to  terminate  this
Agreement if, during the course of Buyer's due diligence  investigations  of the
Property, Buyer determines in its sole and absolute discretion that the Property
is not  acceptable  to  Buyer.  Buyer may  exercise  such  termination  right by
delivering written notice of termination to Seller and Escrow Agent on or before
the Due Diligence  Termination  Date.  Upon such  termination,  (i) Escrow Agent
shall  return the Deposit to Buyer,  (ii) the parties  shall  equally  share the
cancellation charges of Escrow Agent and Title Company (as hereinafter defined),
and (iii) this  Agreement  shall  automatically  terminate  and be of no further
force or effect and neither party shall have any further  rights or  obligations
hereunder,  other than pursuant to any provision hereof which expressly survives
the termination of this Agreement.  Upon the written request of Seller following
such  termination,  Buyer shall return to Seller all of the  Property  Documents
provided to Buyer and,  provided  that no dispute  between Buyer and Seller then
exists, deliver to Seller copies of all non-

                                       5

<PAGE>


confidential,  non-privileged  reports  prepared  by third  parties for Buyer in
connection with its  investigations of the Property.  If Buyer does not exercise
such  termination in writing prior to the Due Diligence  Termination  Date, then
Buyer's right to terminate this  Agreement  pursuant to this Section 4.1.2 shall
automatically lapse.

         4.2 Title.

                  4.2.1 Deliveries. Buyer has obtained an ALTA extended coverage
preliminary  title report (the "PTR") issued by Chicago Title Insurance  Company
(in such  capacity,  "Title  Company"),  together  with  legible  copies  of all
documents  referenced  as  exceptions  therein.  Not later than twenty (20) days
after the Execution Date, Seller shall deliver or cause to be delivered to Buyer
(a) a current or currently  updated  As-Built  American  Land Title  Association
survey of the Property (the "Survey"),  in form reasonably satisfactory to Buyer
and Title  Company,  prepared by a surveyor  reasonably  acceptable to Buyer and
licensed  in  the  State  of  California  and  certified   (using  a  surveyor's
certificate in substantially the same form as the certificate attached hereto as
Exhibit  "C") to Buyer,  Title  Company,  and such other  persons or entities as
Buyer may,  in its  discretion,  request,  which  Survey  shall show any and all
matters which Buyer may reasonably require,  including,  without limitation, all
Improvements,  all easements,  all roads,  all utilities,  the number of parking
spaces,  access to and from the Land,  and  drainage  ditches,  set-back  lines,
protrusions,  encroachments,  and encumbrances affecting the same; and (b) a UCC
Search with regard to the Personal Property (the "UCC Search").

                  4.2.2 Buyer's Review of Title.  Buyer shall have until the Due
Diligence  Termination  Date to notify Seller in writing of any objection  which
Buyer  may have to any  exception  reported  in the PTR or  matter  shown on the
Survey or the UCC Search (or any updates thereof; provided, however, that if any
such  updates are  received by Buyer,  Buyer shall have an  additional  five (5)
Business  Days,  regardless of the Due  Diligence  Termination  Date,  following
Buyer's  receipt of such update and legible  copies of all documents  referenced
therein  to notify  Seller of  objections  to items  shown on any such  update).
Exceptions reported in the PTR and matters shown on the Survey or the UCC Search
(or any updates  thereof)  not  objected to by Buyer as provided  above shall be
deemed to be  "Permitted  Exceptions."  As a condition to Closing,  Seller shall
take all action  necessary to remove from title to the  Property any  exceptions
and matters so objected to by Buyer, or in the alternative,  Seller shall obtain
for Buyer  title  insurance  insuring  over such  exceptions  or  matters,  such
insurance to be in form and substance  satisfactory  to Buyer.  If, prior to the
Closing, Seller is unable to remove or satisfactorily insure over any exceptions
or matters  objected to by Buyer and Buyer is  unwilling  to take title  subject
thereto,  then, in addition to any and all other rights and remedies which Buyer
may have  hereunder,  Buyer may terminate  this  Agreement (in which case Escrow
Agent shall return the Deposit to Buyer,  the parties  shall  equally  share the
cancellation  charges of Escrow Agent and Title Company, and

                                       6

<PAGE>


neither  party  shall  thereafter  have any rights or  obligations  to the other
hereunder);  provided,  however,  that if such objected to exceptions or matters
are not removed by the Closing Date, Buyer may elect,  upon written notice on or
prior to such date,  to (a) extend the Closing Date to allow Seller a reasonable
period of time to remove such  objected to  exceptions or matters or (b) proceed
to a timely  Closing  whereupon  such objected to exceptions or matters shall be
deemed Permitted Exceptions.  Seller shall in any event be required to discharge
and remove  any and all liens and  encumbrances  affecting  the  Property  which
secure an obligation to pay money (other than  installments of real estate taxes
and  assessments  not  delinquent as of the Closing) and, even though Buyer does
not expressly  disapprove such liens,  such liens and encumbrances  shall not be
Permitted Exceptions.

                  4.2.3 Condition of Title at Closing. Upon the Closing,  Seller
shall sell,  transfer and convey to Buyer  indefeasible  fee simple title to the
Land and the Improvements thereon by a duly executed and acknowledged grant deed
in the form of Exhibit "D"  attached  hereto (the  "Deed"),  subject only to the
Permitted  Exceptions.  Prior to  Closing,  Seller  shall not take any action or
commit or suffer any acts which  would give rise to a variance  from the current
legal  description  of the  Land,  or cause the  creation  of any  exception  or
encumbrance  against or respecting the Land without the prior written consent of
Buyer, which consent Buyer may withhold in its sole discretion.  Nothing in this
Section 4.2.3 shall preclude Buyer from disapproving title matters in accordance
with the provisions of Section 4.2.2 above.

                  4.2.4 Within ten (10) days of the Execution Date, Seller shall
deliver to Buyer property  questionnaires in the form attached hereto as Exhibit
"E" (the "Property  Questionnaires")completed  to the reasonable satisfaction of
Buyer.

5.    CONDITIONS PRECEDENT TO CLOSING.

         5.1 Buyer's  Conditions.  The obligation of Buyer to render performance
under this  Agreement  is subject to the  following  conditions  precedent  (and
conditions  concurrent,  with respect to deliveries to be made by the parties at
Closing) ("Buyer's Conditions"), which conditions may be waived, or the time for
satisfaction  thereof  extended,  by Buyer only in a writing  executed  by Buyer
(provided,  however,  that any such waiver shall not affect  Buyer's  ability to
pursue any remedy it may have with respect to any breach hereunder by Seller):

                  5.1.1 Title.  Title Company shall be prepared and  irrevocably
committed to issue to Buyer an American Land Title Association extended coverage
owner's  policy of title  insurance in favor of Buyer in an amount not less than
the Purchase Price showing  indefeasible fee simple title to the Property vested
in Buyer, with those endorsements reasonably requested by Buyer, subject only to
the Permitted Exceptions (collectively, the "Owner's Title Policy").

                                       7

<PAGE>


                  5.1.2 Seller's Due Performance. All of the representations and
warranties  of  Seller  set forth  herein  shall be true and  correct  as of the
Closing Date, and Seller,  on or prior to the Closing Date,  shall have complied
with and/or performed all of the obligations,  covenants and agreements required
on the part of Seller to be complied with or performed  pursuant to the terms of
this Agreement. On the Closing Date, Seller shall deliver a certificate,  in the
form of Exhibit "F"  attached  hereto  (the  "Seller's  Certificate"),  to Buyer
certifying  that (i) all of the  representations,  covenants  and  warranties of
Seller made in or pursuant to this  Agreement  are true,  accurate,  correct and
complete as of the Closing,  (ii) all  conditions to the Closing that Seller was
to  satisfy  or  perform  have  been  satisfied  and  performed,  and  (iii) all
conditions  to the Closing  that Buyer was to perform  have been  satisfied  and
performed.

                  5.1.3   Physical   Condition  of  Property.   Subject  to  the
provisions of Section 10 below, the physical  condition of the Property shall be
substantially  the same on the Closing Date as on the Execution Date, except for
reasonable  wear  and tear and any  damages  due to any act of Buyer or  Buyer's
representatives.

                  5.1.4  Bankruptcy.  No action or  proceeding  shall  have been
commenced by or against  Seller under the federal  bankruptcy  code or any state
law for the relief of debtors or for the  enforcement of the rights of creditors
and no attachment, execution, lien or levy shall have attached to or been issued
with respect to the Property or any portion thereof.

                  5.1.5 Tenant Leases.  At the Closing,  Seller shall assign all
of Seller's  rights and remedies under the Tenant Leases which Buyer has elected
in writing prior to the Closing to assume (collectively,  the "Assumed Leases"),
including,  without  limitation,  the right to any security deposits and prepaid
rent under the Assumed Leases, to Buyer pursuant to an assignment and assumption
of leases and  security  deposits  (the  "Assignment  of Leases") in the form of
Exhibit "G" attached hereto, and Seller shall retain,  pursuant to the Lease (as
hereinafter defined),  all of the rights and obligations of the lessor under all
Tenant Leases other than the Assumed  Leases (such Tenant Leases being  referred
to herein as the "Retained Leases");  provided,  however, that the parties agree
that that certain  Industrial  Multi-Tenant Lease between Seller, as "Landlord,"
and Advanced Tissue  Sciences,  Inc., as "Tenant," dated July 15, 1996, and that
certain  Building Lease  Agreement,  dated August 9, 1996,  between  Seller,  as
"Lessor," and Cox California  PCS, Inc., as "Lessee," for rooftop  communication
facilities,  shall remain and constitute Retained Leases and Buyer shall have no
right to elect to assume the same.

                  5.1.6 Bill of Sale.  At the Closing,  Seller shall  deliver to
Buyer a bill of sale and  assignment  (the  "Bill of Sale and  Assignment"),  by
which  Seller  shall  transfer  to  Buyer  all  the  Personal  Property  and the
Intangible Property,  including, without limitation, the Property Documents, but
excluding the Tenant Leases and any

                                       8

<PAGE>


Service Contracts which Buyer has elected in writing prior to the Closing not to
assume, in each case free of all liens and encumbrances,  in the form of Exhibit
"H" attached hereto.

                  5.1.7  Estoppel  Certificates.  Seller shall use  commercially
reasonable efforts to deliver to Buyer,  within fifteen (15) Business Days after
the Execution Date,  estoppel  certificates,  each  substantially in the form of
Exhibit "I" attached  hereto,  executed by each tenant  under the Tenant  Leases
(collectively,  the  "Estoppel  Certificates"),  and as a condition  to Closing,
Seller shall deliver Estoppel Certificates from each tenant on or before the Due
Diligence  Termination Date. Within the Due Diligence Period (or within five (5)
days after delivery with respect to each Estoppel Certificate which is delivered
after the  expiration  of the Due  Diligence  Period),  Buyer  shall  review and
approve or disapprove the Estoppel  Certificates,  in their sole discretion.  In
addition,  not more than five (5) days prior to the Closing  Date,  Seller shall
deliver to Buyer an update for each of the  Estoppel  Certificates  executed  by
each tenant under the Tenant  Leases  (collectively,  the  "Estoppel  Updates"),
which  Estoppel  Updates shall reflect that there have been no material  adverse
changes  since  the date of the  Estoppel  Certificate  and that any of  Buyer's
objections to the Estoppel  Certificates have been corrected or cured to Buyer's
satisfaction. Buyer shall review and approve or disapprove the Estoppel Updates,
in its sole discretion, prior to the Closing Date.

                  5.1.8  Nonforeign  Affidavits.  At the  Closing,  Seller shall
deliver to Buyer (i) the Nonforeign  Affidavit (the  "Nonforeign  Affidavit") in
the form of Exhibit "J-1" attached hereto, and (ii) the California Form 590 (the
"Form 590") attached hereto as Exhibit "J-2", each executed by Seller.

                  5.1.9  Property  Questionnaires.  Buyer  shall  have  received
Property   Questionnaires   for  the  Property,   completed  to  the  reasonable
satisfaction  of Buyer,  and no such Property  Questionnaire  shall indicate any
fact or circumstance that Buyer reasonably believes (based on advice of counsel)
would be likely to result in Buyer losing its status as a real estate investment
trust, as defined in Section 856 of the Internal  Revenue Code (as amended),  if
the transactions contemplated hereby are consummated.

                  5.1.10 New Lease.  At the Closing,  Seller  shall  execute and
deliver  to  Buyer a Lease  (the  "Lease"),  in the  form of  Exhibit  "K" to be
attached  hereto,  covering the entire  Property,  which Lease shall include the
terms set forth in Exhibit "K-1" attached  hereto.  Notwithstanding  anything to
the  contrary  set forth  herein,  in the event  that  Seller and Buyer have not
agreed upon the form of Exhibit "K" before the Due Diligence  Termination  Date,
unless  Buyer and  Seller  otherwise  agree in  writing,  this  Agreement  shall
thereupon  terminate  and be of no further  force or effect,  Escrow Agent shall
return the Deposit to Buyer,  Buyer  shall pay the charges of Title  Company and
Escrow  Agent,  and neither  party shall have any further  obligation  hereunder
except

                                       9

<PAGE>


for those obligations which by their terms survive the termination hereof.

                  5.1.11 Loan  Agreement.  At the Closing,  Seller shall execute
and deliver to Buyer a Promissory  Note, a Loan and Security  Agreement and such
other instruments and agreements  (including,  without  limitation,  UCC-1's) as
Buyer may reasonably require (collectively,  the "Loan Documents"),  all in form
and substance  satisfactory to Buyer in its  discretion,  in connection with the
contemplated  loan from Buyer to Seller (the  "Loan"),  the  principal  terms of
which are set forth on Exhibit "L" attached hereto.  Notwithstanding anything to
the  contrary  set forth  herein,  in the event  that  Seller and Buyer have not
agreed upon the form of the Loan Documents before the Due Diligence  Termination
Date,  unless Buyer and Seller otherwise agree in writing,  this Agreement shall
thereupon  terminate  and be of no further  force or effect,  Escrow Agent shall
return the Deposit to Buyer,  Buyer  shall pay the charges of Title  Company and
Escrow  Agent,  and neither  party shall have any further  obligation  hereunder
except  for those  obligations  which by their  terms  survive  the  termination
hereof.

                  5.1.12  Cooperation.  Seller shall  promptly  deliver to Buyer
copies  of  such  10-K's,  10-Q's,  8-K's,  proxy  statements,  annual  reports,
contracts, documents and other materials as may be reasonably requested by Buyer
pertaining to the financial  condition of Seller,  including the latest  monthly
and year-to-date financial statement, and a copy of Seller's Business Plan.

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

                  5.1.14 Parking License. At the Closing, Seller and Buyer shall
execute and deliver a Parking License Agreement (the "Parking  License") in form
and  substance  mutually  acceptable  to Buyer and Seller,  granting  the lessee
pursuant to the Lease a right to use such parking  spaces located on the portion
of the Land described in Exhibit "A-2" attached hereto which, when combined with
the number of spaces available pursuant to the Lease entitles such lessee to use
not less than 201 parking spaces.

         5.2 Failure of Buyer's  Conditions.  Subject and without  limitation to
Buyer's rights hereunder, including, without limitation, Section 11.2 hereof, if
any of the Buyer's Conditions have not been fulfilled within the applicable time
periods, Buyer may:

                  5.2.1 Waive and Close.  Waive the Buyer's  Condition and close
Escrow  in  accordance  with  this  Agreement,  with or  without  adjustment  or
abatement of

                                       10

<PAGE>


the Purchase Price; or

                  5.2.2  Close.  Close  escrow  without  waiving  or curing  the
failure of the Buyer's  Condition  but without  waiving any other  rights  which
Buyer may have against Seller, which rights are expressly reserved hereby; or

                  5.2.3 Terminate. Terminate this Agreement by written notice to
Seller and to Escrow Agent, in which event Escrow Agent shall return the Deposit
to Buyer, Seller shall pay the cancellation  charges of Title Company and Escrow
Agent, and Buyer shall be entitled to pursue any other rights and remedies which
it may have against Seller in connection herewith.

         5.3 Seller's Conditions. The obligation of Seller to render performance
under this  Agreement  is subject to the  following  conditions  precedent  (and
conditions  concurrent  with respect to  deliveries to be made by the parties at
Closing)  ("Seller's  Conditions"),  which conditions may be waived, or the time
for  satisfaction  thereof  extended,  by Seller  only in a writing  executed by
Seller  (provided,  however,  that any such  waiver  shall not  affect  Seller's
ability to pursue any remedy it may have with respect to any breach hereunder by
Buyer):

                  5.3.1 Buyer's Due Performance.  All of the representations and
warranties  of Buyer set forth in Section 8 hereof  shall be true and correct as
of the Closing  Date,  and Buyer,  on or prior to the Closing  Date,  shall have
complied with and/or performed all of the obligations,  covenants and agreements
required on the part of Buyer to be complied  with or performed  pursuant to the
terms of this Agreement; and

                  5.3.2 Loan.  At the Closing,  Buyer shall  deposit with Escrow
Agent the proceeds of the Loan, and shall instruct Escrow Agent to disburse such
proceeds to Seller as Seller may direct immediately following the Closing.

                  5.3.3  Bankruptcy.  No action or  proceeding  shall  have been
commenced by or against Buyer under the federal bankruptcy code or any state law
for the relief of debtors or for the enforcement of the rights of creditors.

         5.4 Failure of Seller's  Conditions.  Subject to Seller's  rights under
Section  11.1  hereof in the event of a default  by Buyer  which  results in the
failure  of a  Seller's  Condition,  in the event of the  failure  of a Seller's
Condition,  Seller may terminate this Agreement by delivery of written notice to
Buyer and Escrow Agent,  in which event Escrow Agent shall return the Deposit to
Buyer, the parties shall equally share the cancellation charges of Title Company
and  Escrow  Agent,  and  neither  party  shall  thereafter  have any  rights or
obligations to the other hereunder.

6.    CLOSING.

                                       11

<PAGE>


         6.1 Closing  Date.  Subject to the  provisions of this  Agreement,  the
Closing  shall  take  place on the  fifth  (5th)  day  after  the Due  Diligence
Termination Date, or on such other date as the parties hereto may agree. As used
herein,  the "Closing"  shall mean the  recordation  of the Deed in the Official
Records  of  the  County  of San  Diego,  State  of  California  (the  "Official
Records"),  and the  "Closing  Date"  shall mean the date upon which the Closing
actually occurs.

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

                  6.2.1  Deed.  The  original  executed  and  acknowledged  Deed
conveying the Property to Buyer or its nominee;

                  6.2.2   Nonforeign   Affidavit.   Two  (2)  originals  of  the
Nonforeign Affidavit, each executed by Seller;

                  6.2.3 Form 590. Two (2)  duplicate  originals of the Form 590,
each executed by Seller;

                  6.2.4 Lease and Parking License. Four (4) originals of (i) the
Lease,  (ii) a Memorandum  of Lease in  recordable  form,  and (iii) the Parking
License, each executed by Seller;

                  6.2.5 Assignment of Leases. Four (4) original  counterparts of
the Assignment of Leases, each executed by Seller;

                  6.2.6 Loan Documents.  Four (4) original  counterparts of each
of the Loan Documents, each executed by Seller;

                  6.2.7  Bill  of  Sale  and   Assignment.   Four  (4)  original
counterparts of the Bill of Sale and Assignment, each executed by Seller;

                  6.2.8  Seller's   Certificate.   Four  (4)  original  Seller's
Certificates, each executed by Seller;

                  6.2.9  Tenant  Leases.  An original (or  certified  copy if an
original is not  available),  fully executed  counterpart of each of the Assumed
Leases and any amendments, modifications,  supplements and restatements thereto,
and a  certified  copy of  each  of the  Retained  Leases  and  any  amendments,
modifications, supplements and restatements thereto;

                                       12

<PAGE>


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

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

         6.3 Deliveries by Buyer.  On or before the Closing,  Buyer, at its sole
cost and  expense,  shall  deliver  or cause to be  delivered  into  Escrow  the
following:  (i) the balance of the Purchase  Price  pursuant to Section 2 hereof
and Buyer's share of prorations and "Closing Costs" (as hereinafter defined), as
provided in Sections 6.5 and 6.6, respectively;  (ii) four (4) original executed
counterparts  of the  Assignment  of Leases;  (iii) four (4)  original  executed
counterparts of the Lease,  the Memorandum of Lease, the Parking License and the
Loan Documents to which Buyer is a party;  (iv) such proof of Buyer's  authority
and authorization to enter into this Agreement and the transaction  contemplated
hereby, and such proof of the power and authority of the individual(s) executing
or delivering any  instruments,  documents or certificates on behalf of Buyer to
act for and bind Buyer as may be reasonably required by Title Company or Seller;
and (v) such other documents and instruments,  signed and properly  acknowledged
by Buyer,  if  appropriate,  as may  reasonably  be required by Escrow  Agent or
otherwise  in order to  effectuate  the  provisions  of this  Agreement  and the
closing of the transactions contemplated herein.

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

                  6.4.1   Recording  and  Filing.   Following   Title  Company's
acknowledgment  that it is  prepared  and  irrevocably  committed  to issue  the
Owner's  Title  Policy  to Buyer,  first  cause the  Deed,  and  thereafter  the
Memorandum  of Lease  and any  other  documents  which the  parties  hereto  may
mutually  direct,  to be recorded in the Official  Records,  and file such other
documents or instruments with the appropriate  filing offices as the parties may
mutually  direct,  and obtain conformed copies

                                       13

<PAGE>


thereof for distribution to Buyer and Seller.

                  6.4.2 Lease and Promissory  Note.  Date as of the Closing Date
(i) each  counterpart of the Lease,  and (ii) the original  Promissory Note with
respect to the Loan, and deliver one fully-executed and dated counterpart of the
Lease and the original executed and dated Promissory Note to Buyer.

                  6.4.3 Funds.  Upon receipt of  confirmation of the recordation
of the Deed and such other  documents  as were  recorded  or filed  pursuant  to
Section 6.4.1 above, disburse all funds deposited with it by Buyer as follows:

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

                  (b) Disburse to Seller an amount equal to the Purchase  Price,
less or plus the net debit or credit to Seller by reason of the  prorations  and
allocation of Closing Costs provided for in this Section 6. Seller's portion (as
provided in Section 6.6 below) of the escrow fees,  title fees and other Closing
Costs shall be paid pursuant to clause (a) above;

                  (c)  Disburse to Seller an amount equal to the proceeds of the
Loan, less any costs to file or record any of the Loan Documents, which shall be
paid by Seller;

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

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

                  6.4.5 Delivery of Documents.  Deliver to Buyer and Seller each
one original of all documents,  other than the Deed and the Promissory Note with
respect to the Loan, deposited into Escrow.

         6.5 Prorations.  Rentals,  revenues, and other income, if any, from the
Property  (other than income in  connection  with the Retained  Leases),  taxes,
assessments,  improvement bonds,  service or other contract fees, utility costs,
and other expenses  affecting the Property  shall be prorated  between Buyer and
Seller as of the Closing Date.  For purposes of  calculating  prorations,  Buyer
shall be deemed to be in title to the Property,  and  therefore  entitled to the
income  (other  than  income  in  connec-

                                       14

<PAGE>


tion with the Retained  Leases) and  responsible  for the expenses,  after 12:01
a.m. on the Closing  Date.  Delinquent  rentals in  connection  with the Assumed
Leases as of the Closing Date shall not be prorated,  but when paid shall be the
sole property of Buyer and Seller hereby irrevocably  assigns, as of the Closing
Date,  its entire right,  title and interest in and to such  delinquent  rentals
(including  the right to collect to same) to Buyer.  On the Closing Date,  Buyer
shall be fully credited for (i) security  deposits which were paid by tenants to
Seller  under or in  connection  with the  Assumed  Leases,  (ii)  reimbursement
expenses  and other sums owed by Seller to tenants  for work or  disputes  which
occurred  prior to the Closing Date or for work to be performed or allowances to
be granted to any tenants upon or after the Closing Date pursuant to any Assumed
Leases in existence as of the Closing Date,  (iii) any  commissions or brokerage
fees  payable  upon or after the  Closing  Date in  connection  with any Assumed
Leases in existence as of the Closing Date, and (iv) rentals already received by
Seller in connection  with the Assumed Leases  attributable to periods after the
Closing  Date.  All  non-delinquent  real  estate  taxes or  assessments  on the
Property shall be prorated based on the actual current tax bill, but if such tax
bill has not yet been received by Seller by the Closing Date or if  supplemental
taxes are assessed  after the Closing for the period  prior to the Closing,  the
parties shall make any necessary adjustment after the Closing by cash payment to
the party entitled thereto so that Seller shall have borne all taxes,  including
all supplemental  taxes,  allocable to the period prior to the Closing and Buyer
shall bear all taxes,  including all supplemental taxes, allocable to the period
after the Closing. If any expenses attributable to the Property and allocable to
the period prior to the Closing are discovered or billed after the Closing,  the
parties shall make any necessary adjustment after the Closing by cash payment to
the party  entitled  thereto  so that  Seller  shall  have  borne  all  expenses
allocable  to the period  prior to the Closing and Buyer shall bear all expenses
allocable  to the period  from and after the  Closing.  The  provisions  of this
Section 6.5 shall survive the Closing for a period of one (1) year.

         Ten (10) days prior to the Closing,  Escrow Agent shall deliver to each
of the parties for their review and  approval a  preliminary  closing  statement
(the "Preliminary  Closing  Statement") based on an income and expense statement
prepared by Seller,  approved by Buyer,  and  delivered to Escrow Agent prior to
said date,  setting  forth (i) the  proration  amounts  allocable to each of the
parties  pursuant to this  Section 6.5 and (ii) the Closing  Costs  allocable to
each of the parties pursuant to Section 6.6 hereof. Based on each of the party's
comments,  if any,  regarding the Preliminary  Closing  Statement,  Escrow Agent
shall  revise the  Preliminary  Closing  Statement  and deliver a final,  signed
version  of a closing  statement  to each of the  parties  at the  Closing  (the
"Closing Statement").

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

                                       15

<PAGE>


                  (i) Seller shall pay all documentary  transfer,  stamp,  sales
and other taxes  related to the  transfer  of the  Property,  one-half  (1/2) of
Escrow Agent's escrow fees and costs,  and all premiums,  costs and fees related
to the  delivery  of the  Owner's  Title  Policy  (other  than  the  cost of any
endorsements  requested by Buyer), the cost of the Survey (if not already paid),
all  brokerage  commissions  payable  to John  Burnham & Company  in  connection
herewith  and with the Lease,  all  recording  fees  related to the  transfer of
ownership of the Property,  and all recording or filling fees in connection with
the Loan.

                  (ii) Buyer shall pay one-half  (1/2) of Escrow  Agent's escrow
fees and  costs,  the  cost of any  endorsements  to the  Owner's  Title  Policy
requested by Buyer,  and all recording  fees related to the financing of Buyer's
acquisition of the Property.

         6.7 Deliveries  Outside of Escrow.  Seller shall deliver  possession of
the Property,  subject to the Tenant Leases, to Buyer upon the Closing. Further,
Seller  hereby  covenants  and agrees to  deliver  to Buyer,  on or prior to the
Closing, the following items:

                  6.7.1 Approvals.  Originals of the "Approvals" (as hereinafter
defined);

                  6.7.2 Intangible Property. The Intangible Property, including,
without  limitation,  the original  Property  Documents and the original Assumed
Leases; and

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

7.    SELLER'S REPRESENTATIONS AND WARRANTIES.

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

         7.1 Title.

                  7.1.1  Ownership.  Seller is the legal and equitable  owner of
the  Property,  with full right to convey the same.  Seller has not  granted any
options or rights of first  refusal or rights of first offer to third parties to
purchase or otherwise acquire an interest in the Property.

                  7.1.2  Encumbrances.  To Seller's  Knowledge  (as  hereinafter
defined),  the  Property is free and clear of all liens,  encumbrances,  claims,
rights,  de-

                                       16

<PAGE>


mands,  rights  of way,  easements,  leases  (other  than  the  Tenant  Leases),
agreements,  covenants, conditions, and restrictions of any kind, except for (A)
the Permitted Exceptions, and (B) the Tenant Leases.

                  7.1.3 Encroachments.  Except as shown on the Survey, there are
no encroachments on the Property from adjoining property,  and the Property does
not encroach on adjoining property, easements, or streets.

                  7.1.4 Streets. To Seller's  Knowledge,  there are no existing,
proposed,  or  contemplated  plans to widen,  modify,  or realign  any street or
highway which affects the size of, use of, or set-backs on the Property.

         7.2 Property Documents. The Property Documents required to be delivered
by Seller pursuant to the terms hereof constitute all of the material  documents
relating to the Property and each such Property  Document as delivered by Seller
constitutes  a true,  correct and  complete  copy of such  Property  Document in
Seller's possession or control. There are no commitments or agreements affecting
the Property which have not been disclosed by Seller to Buyer in writing.

         7.3 Leases.

                  7.3.1  The  schedule  attached  hereto  as  Exhibit  "M"  (the
"Schedule of Leases") is a true,  correct and complete  statement of all (i) the
leases,  tenancies and  occupancies,  including any  extensions,  modifications,
amendments  or  guarantees  thereof  in  effect  at the  Property  (the  "Tenant
Leases"), (ii) the tenants at the Property, (iii) the dates of the Tenant Leases
(including the commencement and expiration dates thereof),  (iv) the annual base
rents payable, the base year for escalations,  the currently escalated rents and
contributions to common area maintenance, operating expenses and insurance under
the Tenant  Leases,  (v) the security  deposits held by or deposited with Seller
under the Tenant Leases, (vi) any and all options to extend, renew or cancel any
Tenant  Leases or to expand or decrease  the space  covered by any Tenant  Lease
(including  any  rights of first  refusal),  and (vii) any and all  concessions,
allowances,  credits,  rebates, offsets or other cases for relief or adjustment,
including, without limitation, any unpaid reimbursements for tenant improvements
and any "free" or "reduced" rent.

                  7.3.2 There are no security  deposits or arrearages in rent or
additional  rent  under  any of the  Tenant  Leases  except  as set forth on the
Schedule of Leases.  No rent has been  prepaid  under any Tenant Lease except as
set forth on the Schedule of Leases.

                  7.3.3 All of the  services  required  to be  supplied  to each
tenant and  maintained  in  connection  with the  Property are  presently  being
supplied and

                                       17

<PAGE>


maintained  and will continue to be supplied and  maintained up to and as of the
Closing Date.

                  7.3.4  Seller has received no notices of any failure of Seller
to supply any  services  which  Seller is  required  to furnish  pursuant to any
Tenant Lease.

                  7.3.5  Seller  has  received  no notices of any items of work,
repair,  maintenance or  construction  to be completed by Seller pursuant to any
Tenant  Lease for the benefit of any tenant and Seller has no  knowledge  of any
such work to be done.

                  7.3.6 As of the Closing  Date,  no tenant shall be entitled to
any additional work during the term of its Tenant Lease,  except as set forth on
the Schedule of Leases.

                  7.3.7  Except as set forth on the  Schedule of Leases,  Seller
has received no notice from any tenant (i) to cancel any Tenant Lease, (ii) that
such tenant is or may become  unable or  unwilling  to perform any or all of its
obligations under its Tenant Lease,  whether for financial or other reasons,  or
that an action or proceeding, voluntary or involuntary, is pending or threatened
against  such  tenant  under  any  section  or  sections  of any  bankruptcy  or
insolvency  law, or (iii) that such tenant  disputes the base rent or escalation
rents or the computation of escalation rents pursuant to its Tenant Lease.

                  7.3.8 The  Tenant  Leases  are in full  force and  effect  and
Seller has received no notice of any default by the landlord  thereunder and has
no  knowledge  of any fact or facts which would now or with the giving of notice
or the passage of time or both be a default under the terms  thereof,  except as
otherwise set forth on the Schedule of Leases.

                  7.3.9 As of the Closing  Date,  there will be no  brokerage or
other leasing  commissions  payable in connection with any of the tenants or the
Tenant Leases or any new leases or amendments of existing Tenant Leases.

                  7.3.10 All of the Tenant  Leases  are  assignable  to Buyer in
connection  with its  purchase of the  Property  without the  necessity  for any
approval, consent or additional payment.

         7.4 Condition of Property.  To Seller's  Knowledge,  the Property is in
good  condition  and  repair  and free  from  any  defects,  including,  without
limitation,   environmental,  erosion,  drainage  or  soil  problems,  physical,
structural,  mechanical,  construction  or  electrical  defects,  defects in the
parking lot pavement,  or defects in utility systems.  There is no material fact
which has not been  disclosed to Buyer in writing which has or could  reasonably
be expected to have a material  adverse effect

                                       18

<PAGE>


upon the Property, or the use or value thereof.

         7.5 Special Assessments or Condemnation.  To Seller's Knowledge,  there
are not  presently  pending (i) any special  assessments,  except those shown as
exceptions on the PTR, or (ii) condemnation  actions against the Property or any
part. Seller has not received notice of any contemplated  special assessments or
eminent domain proceedings that would affect the Property.

         7.6 Utilities. To Seller's Knowledge,  all water, sewer, electric, gas,
telephone,  and drainage facilities,  and all other utilities required by law or
for the  normal  operation  of the  Property  are (or will be prior to  Closing)
installed to the property lines of the Property,  have been (or will be prior to
Closing) connected to the Improvements  pursuant to valid permits,  are (or will
be  prior  to  Closing)  in good  working  order,  and are (or  will be prior to
Closing) adequate to service the Property.

         7.7 Permits.  Seller has obtained all  appropriate  licenses,  permits,
easements, and rights of way, including proofs of dedication, which are required
to use and operate the Property.

         7.8  Service  Contracts.  There are no  service,  maintenance,  repair,
management,  leasing, or supply contracts or other contracts (including, without
limitation,  janitorial,  elevator and  landscaping  agreements)  affecting  the
Property,  oral or written,  except as set forth on the schedule attached hereto
as Exhibit "N" (the "Service Contracts").

         7.9  Employees.  Attached  hereto  as  Exhibit  "O"  is a  schedule  of
employees  who are  employed  by Seller or the  manager of the  Property  in the
operation,  management or maintenance of the Property and the wages and benefits
that are paid to such  employees,  all of which are true and  correct  as of the
date hereof;  there are no contracts  covering such employees  other than as set
forth on such schedule and the employment of each may be terminated without cost
at the  option of Seller or the then  owner of the  Property  upon not more than
thirty (30) days prior written notice.

         7.10  Defaults.  Seller is not in default of  Seller's  obligations  or
liabilities  pertaining  to the  Property  or the  Property  Documents;  nor, to
Seller's Knowledge, are there facts, circumstances, conditions, or events which,
after  notice or lapse of time,  would  constitute  a  default.  Seller  has not
received notice or information  that any party to any of the Property  Documents
considers  a breach or  default to have  occurred;  nor has Seller any reason to
believe that there is likely to be a default under any of the documents.

                                       19

<PAGE>


         7.11 Consents and Releases.  Seller has obtained all required consents,
releases,  and permissions to convey good,  marketable and indefeasible title to
Buyer.

         7.12 Authority.  This Agreement and all other documents delivered prior
to or at the Closing (i) have been duly authorized,  executed,  and delivered by
Seller;  (ii)  are  binding  obligations  of  Seller;   (iii)  are  collectively
sufficient to transfer all of Seller's  rights to the Property;  and (iv) do not
violate the formation documents of Seller.  Seller further represents that it is
a  corporation,  duly  organized and existing in good standing under the laws of
the State of Delaware, with its principal place of business in California.

         7.13  Bankruptcy.  No  filing  or  petition  under  the  United  States
Bankruptcy  Law  or  any  insolvency  laws,  or  any  laws  for  composition  of
indebtedness or for the  reorganization of debtors has been filed with regard to
Seller.

         7.14  Certificates  of  Occupancy.  Seller  has (or will have  prior to
Closing)  all  necessary,   valid,  final  and  unconditional   certificates  of
occupancy,  or the equivalent  permitting  required by the applicable  licensing
agency, for the current use and occupancy of the Property.

         7.15  Foreign  Investment  In Real  Property  Tax Act.  Seller is not a
foreign person within the meaning of 42 USCS ss. 1445(f)(3).

         7.16  Existing  Approvals.  The  documents  set  forth on  Exhibit  "P"
attached hereto  (collectively,  the  "Approvals")  are in full force and effect
and,  to  Seller's   Knowledge,   constitute   all   necessary  or   appropriate
certifications,  approvals,  consents,  authorizations,  licenses,  and  permits
required  by any  governmental  authority  in  connection  with  the  ownership,
development,  use and  maintenance of the Property  (other than those related to
the  manufacturing  operations  of  Seller's  business  conducted  therein).  To
Seller's  Knowledge,  all of the Approvals are transferable to Buyer without the
necessity of any approval or consent or additional  payment and no such transfer
will affect the validity thereof.

         7.17 Insurance. There are currently in effect such casualty and general
liability  insurance  policies as are  customarily  maintained  with  respect to
similar  properties.  All premiums due on such insurance policies have been paid
by Seller and Seller will maintain such insurance  policies from the date hereof
through the Closing Date or earlier  termination of this  Agreement.  Seller has
not received  and has no  knowledge of any notice or request from any  insurance
company requesting the performance of any work or alteration with respect to the
Property.  Seller has received no notice from any insurance company  concerning,
nor is Seller aware of, any defects or  inadequacies  in the Property  which, if
not corrected, would result in the termination of insurance coverage or increase
its cost.

                                       20

<PAGE>


         7.18 Litigation.  There are no actions, suits or proceedings before any
judicial or  quasi-judicial  body, by any governmental  authority or other third
party, pending, or to Seller's Knowledge,  threatened,  against or affecting all
or any portion of the Property and to Seller's Knowledge,  there is no basis for
any  such  action.   There  are  no  actions,   suits  or  proceedings  pending,
contemplated  or threatened  by Seller in connection  with all or any portion of
the Property or Seller's  ownership,  rights,  use,  development  or maintenance
thereof, including,  without limitation, tax reduction proceedings; and from and
after the date hereof, Seller shall not commence or allow to be commenced on its
behalf any action,  suit or proceeding with respect to all or any portion of the
Property  without the prior written consent of Buyer. No attachments,  execution
proceedings,  assignments for the benefit of creditors, insolvency,  bankruptcy,
reorganization or other proceedings are pending, or, to Seller's best knowledge,
threatened,  against  Seller.  In the  event  any  proceeding  of the  character
described in this Section 7.18 is initiated  prior to the Closing,  Seller shall
promptly advise Buyer in writing.

         7.19  Compliance with Laws. To Seller's  Knowledge,  the Property is in
full  compliance  with all existing  laws,  rules,  regulations,  ordinances and
orders of all applicable federal, state, city and other governmental authorities
in effect as of the date of this Agreement  (collectively,  "Laws"),  including,
without limitation,  all Laws with respect to zoning,  building, fire and health
codes, environmental protection and sanitation and pollution control. Seller has
received  no notice of, and has no  knowledge  of, any  condition  currently  or
previously  existing on the Property or any portion  thereof which may give rise
to any  violation  of any  existing  Law  applicable  to the Property if it were
disclosed to the authorities having jurisdiction over the Property.

         7.20 Toxic or Hazardous Materials.

                  7.20.1 Definitions.

                  (a) "Environmental  Claim" means any claim,  action,  cause of
action,  investigation  or  notice  (written  or oral) by any  person  or entity
alleging potential liability (including, without limitation, potential liability
for investigatory  costs,  cleanup costs,  governmental  response costs, natural
resources damages,  property damages,  personal injuries,  or penalties) arising
out of, based on or resulting from (i) the manufacture,  treatment,  processing,
distribution,  use, transport,  handling, deposit, storage, disposal, leaking or
other   presence,   or  release  into  the   environment  of  any  "Material  of
Environmental  Concern" (as hereinafter  defined) in, at, on, under or about any
location,  whether  or not owned or  operated  by  Seller or (ii)  circumstances
forming the basis of any violation,  or alleged violation, of any "Environmental
Law" (as defined below).

                  (b)  "Environmental  Laws" means all federal,  state and local
laws and regulations  relating to pollution or protection of human health or the
environment

                                       21

<PAGE>


(including,  without  limitation,  laws and  regulations  relating to emissions,
discharges,  releases or  threatened  releases  of  Materials  of  Environmental
Concern,  or otherwise  relating to the manufacture,  processing,  distribution,
use,  treatment,  storage,  disposal,  transport  or  handling of  Materials  of
Environmental Concern.

                  (c)  "Material  of  Environmental  Concern"  means  chemicals,
pollutants,  contaminants,  wastes,  toxic  substances,  petroleum and petroleum
products.

                  7.20.2  Representations and Warranties.  Seller represents and
warrants  to and agrees with Buyer that,  as of the date  hereof,  and as of the
Closing Date: (i) each of the Property and Seller is in full compliance with all
applicable  Environmental  Laws  relating  to  the  Property,  which  compliance
includes,  but is not  limited to, the  possession  by Seller of all permits and
other governmental authorities required under applicable Environmental Laws, and
compliance with the terms and conditions  thereof;  (ii) Seller has not received
any  communication  (written or oral),  whether from a  governmental  authority,
citizens group,  employee or other third party,  that alleges that Seller is not
in such full  compliance  and there are no  circumstances  that may  prevent  or
interfere with such full compliance in the future;  (iii) Seller has received no
written or oral notice or other  communication  that any Environmental  Claim is
pending or threatened with regard to the Property; (iv) there are no present or,
to Seller's  Knowledge,  past actions,  activities,  circumstances,  conditions,
events or incidents relating to the Property, including, without limitation, the
manufacture,  treatment,  processing,  distribution,  use, transport,  handling,
deposit,  storage,  disposal,  leaking,  or other  presence  or  release  of any
Material  of   Environmental   Concern,   that  could  form  the  basis  of  any
Environmental  Claim against Seller or against any person or entity,  including,
without   limitation,   persons  or  entities  whose   liability  for  any  such
Environmental   Claim  Seller  has  or  may  have  retained  or  assumed  either
contractually  or by  operation  of law; and (v) without in any way limiting the
generality of the foregoing, (a) Seller has not stored, disposed or arranged for
the disposal of Materials of  Environmental  Concern on the Property,  (b) there
are no  underground  storage  tanks  located  on the  Property,  (c) there is no
asbestos  contained in or forming part of any  Improvement,  including,  without
limitation, any building,  building component,  structure or office space on the
Property, and (d) no polychlorinated  biphenyls (PCBs) are used or stored at the
Property.

                  7.20.3 Indemnification. Seller agrees to indemnify, reimburse,
defend,  and hold Buyer  harmless  from,  for and against all  demands,  claims,
actions or causes of action, assessments,  losses, damages,  liabilities,  costs
and expenses,  including, without limitation,  interest,  penalties,  reasonable
attorneys'   fees,   charges,   disbursements   and  expenses,   and  reasonable
consultants'  fees,  charges,  disbursements  and  expenses,  asserted  against,
resulting  to,  imposed  on, or incurred by Buyer,  directly or  indirectly,  in
connection  with (i) the breach of any  representation  or warranty set forth in
Section 7.20.2 of this  Agreement or (ii) any event or condition,  whether known
or

                                       22

<PAGE>


unknown to Seller or disclosed in any report  provided to Buyer,  which results,
directly or indirectly,  in an Environmental  Claim, to the extent such event or
condition  occurred,  existed,  or arose  out of  conditions  that  occurred  or
existed, or were caused, in whole or in part, on or before the Closing.

         7.21 No Restriction  on Access.  Seller has no knowledge of any pending
or threatened  restriction  or denial,  governmental  or otherwise,  which would
prohibit or adversely affect the right of access to or from the Property from or
to the  existing  highways  and roads (all of such  existing  highways and roads
being  duly  opened  and  dedicated  to  the  municipality  having  jurisdiction
thereof).

         7.22 Storm  Drainage.  To Seller's  Knowledge,  all storm water flowing
from the  Property  drains  either  into a  public  system  or onto a  permitted
location and through easements for the benefit of the Property.

         7.23 Soils.  Seller has no knowledge of any soil  conditions  adversely
affecting  the  Property  or any  part  thereof  or  Buyer's  intended  use  and
development thereof.

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

         7.25 Survival. All of the representations, warranties and agreements of
Seller  set forth in this  Agreement  shall be true upon the  execution  of this
Agreement,  shall be deemed to be repeated at and as of the Closing Date without
the necessity of a separate  certificate  with respect thereto and shall survive
the  delivery of the Deed and other  Closing  instruments  and  documents  for a
period  of 12  months.  As used in  this  Agreement,  the  phrase  "to  Seller's
Knowledge" and words of similar import shall mean the best knowledge of Seller's
Chief  Executive  Officer,  Seller's  President and Seller's  Vice  President of
Operations,  after  reasonable  inquiry  and  investigation  of  the  files  and
materials readily available to such persons. Seller represents and warrants that
the foregoing  persons are those persons  affiliated with Seller  possessing the
greatest experience and familiarity with the Property,  and that no other person
presently or previously  affiliated  with Seller  possesses any equal or greater
familiarity and experience with the Property.

                                       23

<PAGE>


         7.26 As-Is.  Except as expressly set forth herein,  including,  without
limitation  elsewhere in this Article 7, and except for those warranties implied
by law in the Deed,  Seller  shall  convey the  Property to Buyer in its present
"AS-IS" condition, without any warranties, expressed or implied.

8.       BUYER'S REPRESENTATIONS AND WARRANTIES.

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

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

         8.2 Due Organization;  Consents.  Buyer is a corporation duly organized
and existing in good  standing  under the laws of the State of Maryland with its
principal place of business in the State of California.  All requisite corporate
action has been taken by Buyer in connection  with entering into this Agreement,
and will be taken  prior to the Closing in  connection  with the  execution  and
delivery  of the  instruments  referenced  herein  and the  consummation  of the
transactions  contemplated  hereby.  No  consent  of any  partner,  shareholder,
beneficiary,  creditor,  investor, judicial or administrative body, governmental
authority or other party is required in connection  herewith  which has not been
obtained.

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

         8.4  Bankruptcy.   No  filing  or  petition  under  the  United  States
Bankruptcy  Law  or  any  insolvency  laws,  or  any  laws  for  composition  of
indebtedness or for the  reorganization of debtors has been filed with regard to
Buyer.

9.       ADDITIONAL COVENANTS OF SELLER.

                                       24

<PAGE>


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

         9.1 Title.  Seller shall not  directly or  indirectly  sell,  assign or
create any right, title or interest whatsoever in or to the Property,  or create
or permit to exist  thereon  any lien,  charge  or  encumbrance  other  than the
Permitted  Exceptions,  or enter into any agreement to do any of the  foregoing,
including, without limitation, any new Tenant Leases (or renewals, modifications
or  extensions  of any Tenant  Leases) or Service  Contracts,  without the prior
written consent of Buyer.

         9.2 Notice of Change in  Circumstances.  Seller shall  promptly  notify
Buyer of any change in any condition with respect to the Property or any portion
thereof or of any event or circumstance of which Seller becomes aware subsequent
to the date of this  Agreement  which  (a)  materially,  adversely  affects  the
Property or any portion  thereof or the use or  operation of the Property or any
portion  thereof,  (b) makes any  representation  or warranty of Seller to Buyer
under  this  Agreement  untrue  or  misleading,  or (c) makes  any  covenant  or
agreement  of Seller  under this  Agreement  incapable  or less  likely of being
performed,  it being expressly  understood  that Seller's  obligation to provide
information  to Buyer under this  Section 9.2 shall in no way relieve  Seller of
any liability for a breach by Seller of any of its representations,  warranties,
covenants or agreements under this Agreement.

         9.3 No Defaults; Maintenance of Property. Seller shall not default with
respect  to  the  performance  of  any  obligation  relating  to  the  Property,
including,   without  limitation,  the  payment  of  all  amounts  due  and  the
performance of all  obligations  with respect to the Tenant Leases,  the Service
Contracts and any existing indebtedness  relating to the Property.  Seller shall
operate and maintain the Property in accordance  with Seller's past practice and
all applicable Laws affecting the Property or any portion thereof.

         9.4 Exclusive  Negotiations.  Seller shall (i) remove the Property from
the market,  (ii) cease and refrain from any and all negotiations with any other
prospective  optionees or purchasers of the Property,  and (iii) advise Buyer of
any material negotiations with current or potential tenants at the Property.

         9.5  Development  Activities.  Seller  shall not take any actions  with
respect to the  development  of the  Property,  including,  without  limitation,
applying for, pursuing,  accepting or obtaining any permits,  approvals or other
development  entitlements from any governmental or other regulatory  entities or
finalizing or entering into any agreements  relating  thereto  without the prior
written  consent of Buyer  (which  consent may be granted or withheld in Buyer's
sole and absolute discretion, except with

                                       25

<PAGE>


respect to the construction of improvements to the processing and  manufacturing
facility  located on the first floor of the  Building,  in which  event  Buyer's
consent may not be  unreasonably  withheld).  Seller hereby agrees to reasonably
cooperate with Buyer in Buyer's efforts to obtain such governmental approvals as
Buyer deems necessary to permit Buyer to operate the Property as Buyer wishes.

         9.6 No Pre-Paid Rent.  Seller shall not accept any rent from any Tenant
(or any new tenant  under any new lease to which Buyer has  consented)  for more
than one (1) month in advance of the payment date.

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

         9.8 New Leases.  At Buyer's  request,  Seller shall advise Buyer of any
and all material negotiations with current or potential tenants of the Property.
Seller  shall not enter into any new lease or extend any Lease  without  Buyer's
prior  written  consent,  which  consent  may be  withheld  in Buyer's  sole and
absolute discretion.

10.      RISK OF LOSS.

         10.1  Condemnation.  If, prior to the Closing Date, all or any material
portion of the Property is taken by  condemnation  or eminent  domain (or is the
subject of a pending or  contemplated  taking  which has not been  consummated),
Seller shall immediately  notify Buyer of such fact. In such event,  Buyer shall
have the option to terminate  this Agreement upon written notice to Seller given
not later than thirty (30) days after  receipt of such notice from Seller.  Upon
such  termination,  Escrow Agent shall return the Deposit to Buyer,  the parties
shall equally share the cancellation  charges of Escrow Agent and Title Company,
and neither party shall have any further rights or obligations hereunder,  other
than pursuant to any provision  hereof which expressly  survives the termination
of this Agreement. If any condemnation or eminent domain action is not material,
or if Buyer does not elect to terminate this Agreement,  Seller shall assign and
turn over to Buyer,  and,  subject  to the terms of the  Lease,  Buyer  shall be
entitled to receive and keep, all awards for the taking by condemnation or Buyer
shall be deemed to have  accepted  the  Property  subject to the taking  without
reduction in the  Purchase  Price.  For purposes of this Section  10.1, a taking
action  shall be deemed to be  material  if the value of the  property  which is
subject to such action equals or exceeds  $100,000,  or if such action otherwise
has an adverse affect upon Buyer's intended use, operation or development of the
Property.

                                       26

<PAGE>


         10.2 Casualty. Prior to the Closing and notwithstanding the pendency of
this  Agreement,  the  entire  risk of  loss or  damage  by  earthquake,  flood,
landslide, fire, hurricane, tornado or other casualty shall be borne and assumed
by Seller. If, prior to Closing any part of the Property is damaged or destroyed
by earthquake,  flood,  landslide,  fire, hurricane,  tornado or other casualty,
Seller shall  immediately  notify Buyer of such fact. In the event of a material
casualty,  Buyer  and,  so long  as such  casualty  was  not the  result  of the
negligence  or wilful  misconduct  of Seller,  Seller,  shall have the option to
terminate this Agreement in accordance  with the preceding  section upon written
notice to the other party given not later than thirty (30) days after receipt of
any such notice from Seller.  If the casualty is not  material,  or if Buyer and
Seller do not elect to terminate  this  Agreement,  Seller shall assign and turn
over,  and Buyer shall be entitled to receive and keep,  all insurance  proceeds
payable with respect to such destruction (which shall then be repaired or not at
Buyer's option and cost), plus Seller shall pay over to Buyer an amount equal to
the deductible  amount with respect to the insurance and any uninsured loss, and
the  parties  shall  proceed to Closing  pursuant  to the terms  hereof  without
modification  of the terms of this  Agreement  and without any  reduction in the
Purchase  Price.  If this Agreement is not terminated by reason of any casualty,
Buyer shall have the right to  participate  in any  adjustment  of the insurance
claim.  For purposes of this Section,  a casualty shall be deemed to be material
if the estimated cost to repair the same equals or exceeds $250,000.

11.      LIQUIDATED DAMAGES; SPECIFIC PERFORMANCE.

         11.1  Liquidated  Damages.  IN THE  EVENT  THAT  THE  ESCROW  AND  THIS
TRANSACTION  FAIL TO CLOSE  SOLELY  AS A RESULT OF THE  DEFAULT  OF BUYER IN THE
PERFORMANCE OF ITS OBLIGATIONS UNDER THIS AGREEMENT, BUYER AND SELLER AGREE THAT
SELLER'S ACTUAL DAMAGES WOULD BE  IMPRACTICABLE  OR EXTREMELY  DIFFICULT TO FIX.
THE PARTIES  THEREFORE AGREE THAT IN THE EVENT THAT ESCROW AND THIS  TRANSACTION
FAIL TO CLOSE SOLELY AS A RESULT OF THE DEFAULT OF BUYER IN THE  PERFORMANCE  OF
ITS OBLIGATIONS  HEREUNDER AND SELLER IS READY,  WILLING AND ABLE TO PERFORM ITS
OBLIGATIONS  HEREUNDER,  SELLER,  AS  SELLER'S  SOLE AND  EXCLUSIVE  REMEDY,  IS
ENTITLED  TO  LIQUIDATED  DAMAGES IN THE  AMOUNT OF THE  DEPOSIT  (INCLUSIVE  OF
INTEREST AND DIVIDENDS  EARNED  THEREON) THEN HELD BY ESCROW AGENT. IN THE EVENT
ESCROW FAILS TO CLOSE SOLELY AS A RESULT OF BUYER'S DEFAULT AND SELLER IS READY,
WILLING AND ABLE TO PERFORM ITS OBLIGATIONS  HEREUNDER,  THEN (1) THIS AGREEMENT
AND THE RIGHTS AND  OBLIGATIONS  OF BUYER AND  SELLER  HEREUNDER  AND THE ESCROW
CREATED HEREBY SHALL TERMINATE, (2) ESCROW AGENT SHALL, AND IS HEREBY AUTHORIZED
AND INSTRUCTED TO, RETURN PROMPTLY TO BUYER AND

                                       27

<PAGE>


SELLER ALL DOCUMENTS AND  INSTRUMENTS TO THE PARTIES WHO DEPOSITED THE SAME, AND
(3) ESCROW AGENT SHALL DELIVER THE DEPOSIT  (INCLUSIVE OF INTEREST AND DIVIDENDS
EARNED  THEREON)  THEN  HELD BY  ESCROW  AGENT TO SELLER  PURSUANT  TO  SELLER'S
INSTRUCTIONS,  AND THE SAME SHALL BE THE FULL,  AGREED AND  LIQUIDATED  DAMAGES.
SELLER AND BUYER  ACKNOWLEDGE  THAT THEY HAVE READ AND UNDERSTAND THE PROVISIONS
OF THIS SECTION 11.1, AND BY THEIR INITIALS  IMMEDIATELY BELOW AGREE TO BE BOUND
BY ITS TERMS.


    /s/ JRG                                                          /s/ AG
-----------------                                               ----------------
Seller's Initials                                               Buyer's Initials


         11.2  Default  by  Seller.  In  the  event  that  the  Closing  of  the
transaction  contemplated  in this  Agreement  does not  occur by  reason of any
default by Seller,  then (i) Escrow  Agent shall return the Deposit to Buyer and
(ii) Buyer shall be entitled to pursue any remedy available to it hereunder,  at
law or in  equity,  other  than  the  specific  performance  of this  Agreement;
provided,  however,  that in the event that Seller's default hereunder is wilful
and Buyer and Seller have agreed upon the form of Lease and the Loan  Documents,
Buyer  shall  also be  entitled  to  pursue  the  specific  performance  of this
Agreement.

12.      BROKERS.

Seller   and Buyer each hereby  represent,  warrant to and agree with each other
         that  there  are no broker or finder  fees or  commissions  payable  in
         connection with the transaction contemplated hereby (including, without
         limitation,  the  Lease),  other than those  payable to John  Burnham &
         Company  which  shall be paid by Seller in  accordance  with a separate
         agreement.  Seller  shall  indemnify,  protect,  defend  and hold Buyer
         harmless from and against any and all claims,  losses,  damages,  costs
         and expenses  (including  attorneys' fees,  charges and  disbursements)
         incurred  by  Buyer  by  reason  of any  breach  or  inaccuracy  of the
         representation,  warranty  and  agreement  of Seller  contained in this
         Section 12.  Buyer  shall  indemnify,  protect,  defend and hold Seller
         harmless from and against any and all claims,  losses,  damages,  costs
         and expenses  (including  attorneys' fees,  charges and  disbursements)
         incurred  by  Seller  by reason  of any  breach  or  inaccuracy  of the
         representation,  warranty  and  agreement  of Buyer  contained  in this
         Section 12. The provisions of this Section 12 shall survive the Closing
         or earlier termination of this Agreement.

13.      CONFIDENTIALITY.

         13.1 Buyer.  Buyer agrees that until the  Closing,  except as otherwise

                                       28

<PAGE>


provided  herein or required by law and except for the  exercise by Buyer of any
remedy  hereunder,  Buyer  shall  (a) keep  confidential  the  pendency  of this
transaction and the documents and information  supplied by Seller to Buyer,  (b)
disclose  such  information  only to  Buyer's  agents,  employees,  contractors,
consultants  or  attorneys,  as well as lenders  (if any),  investment  bankers,
venture capital groups,  investors,  title company personnel and Tenants, with a
need to  know  in  connection  with  Buyer's  review  and  consideration  of the
Property,   provided  that  Buyer  shall  inform  all  persons   receiving  such
information  from Buyer of the  confidentiality  requirement  and (to the extent
within Buyer's control) cause such confidence to be maintained, and (c) upon the
termination of this Agreement  prior to the Closing,  return to Seller  promptly
upon  request  all  copies  of  documents  and  materials  supplied  by  Seller.
Disclosure of information by Buyer shall not be prohibited if that disclosure is
of information  that is or becomes a matter of public record or public knowledge
as a result of the Closing of this  transaction or from sources other than Buyer
or its agents, employees, contractors, consultants or attorneys.

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

14.      INDEMNIFICATION.

         Buyer hereby agrees to indemnify,  defend and hold Seller harmless from
and  against  any  claims,   demands,   obligations,   losses,  costs,  damages,
liabilities,  judgments  or  expenses  (including  reasonable  attorneys'  fees,
charges and  disbursements)  arising out of or in connection with the ownership,
operation or maintenance of the Property after the Closing. Seller hereby agrees
to  indemnify,  defend and hold Buyer  harmless  from and  against  any  claims,
demands, obligations, losses, costs, damages, liabilities, judgments or expenses
(including reasonable attorneys' fees, charges and disbursements) arising out of
or in connection  with the  ownership,  opera-

                                       29

<PAGE>


tion or maintenance  of the Property prior to the Closing.  Each party shall do,
execute and deliver, or shall cause to be done, executed and delivered, all such
further acts and  instruments  which the other party may  reasonably  request in
order  to  more  fully  effectuate  the  indemnifications  provided  for in this
Agreement. The provisions of this Section 14 shall survive the Closing.

15.      MISCELLANEOUS PROVISIONS.

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

         15.2 Entire Agreement; Modifications; Waiver.

                  15.2.1  Entire  Agreement.   This  Agreement,   including  the
exhibits and schedules attached hereto, constitutes the entire agreement between
Buyer and Seller  pertaining  to the subject  matter hereof and  supersedes  all
prior   agreements,   understandings,   letters  of  intent,   negotiations  and
discussions,  whether  oral  or  written,  of  the  parties,  and  there  are no
warranties,  representations  or other agreements,  express or implied,  made to
either party by the other party in  connection  with the subject  matter  hereof
except as specifically set forth herein or in the documents  delivered  pursuant
hereto or in  connection  herewith.  Without  limiting the  foregoing,  upon the
execution of this  Agreement,  that certain Letter of Intent,  dated November 6,
1997,  between Buyer and Seller,  shall  terminate and be of no further force or
effect.

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

         15.3 Notices.  All notices,  consents,  requests,  reports,  demands or
other communications hereunder (collectively, "Notices") shall be in writing and
may be given personally, by registered or certified mail, by Federal Express (or
other reputable overnight delivery service) by telex or telegram or by facsimile
transmission.

         To Buyer:                      Alexandria Real Estate Equities, Inc.
                                        135 N. Los Robles Avenue, Suite 250
                                        Pasadena, California 91101
                                        Attention:  Corporate Secretary
                                        Telephone:  (818) 578-0777
                                        Facsimile:  (818) 578-0770

                                       30

<PAGE>


         With A Copy to:                Alexandria Real Estate Equities, Inc.
                                        11440 West Bernardo Court, Suite 170
                                        San Diego, California  92127
                                        Attention:  Gary A. Kreitzer, Esq.
                                        Telephone:  (619) 592-6801
                                        Facsimile:    (619) 592-6814

         With A Copy To:                Skadden, Arps, Slate, Meagher & Flom LLP
                                        300 South Grand Avenue, Suite 3400
                                        Los Angeles, California  90071
                                        Attention:  George M. Eshaghian, Esq.
                                        Telephone:  (213) 687-5215
                                        Facsimile:  (213) 687-5600

         To Seller:                     Matrix Pharmaceuticals, Inc.
                                        4757 Nexus Centre Drive
                                        San Diego, California 92121
                                        Attention:  Mr. Ron Lucas
                                        Telephone:  (619) 824-5121
                                        Facsimile:  (619) 643-5699

         With A Copy To:                Brobeck, Phlegar & Harrison LLP
                                        550 W. "C" Street, Suite 1300
                                        San Diego, California 92101
                                        Attention: Scott Biel, Esq.
                                        Telephone:  (619) 234-1966
                                        Facsimile:  (619) 234-3848

         To Escrow Agent:               Chicago Title Company
                                        925 "B" Street
                                        San Diego, California  92101
                                        Attention:  Ms. Lori Brandt
                                        Telephone:  (619) 544-6254
                                        Facsimile:  (619) 544-6229

or to such other address or such other person as the addressee  party shall have
last  designated  by notice to the other party.  Notices given by telex shall be
deemed  to  be  received  when  answered   back;   notices  given  by  facsimile
transmission  shall be  deemed  to be  received  when  confirmed;  and all other
Notices shall have been deemed to have been given when received.

         15.4  Expenses.  Subject to the allocation of Closing Costs provided in
Section  6.6  hereof,  whether  or not  the  transactions  contemplated  by this
Agreement

                                       31

<PAGE>


shall be  consummated,  all fees and  expenses  incurred by any party  hereto in
connection with this Agreement shall be borne by such party.

         15.5 Assignment.

                  15.5.1  Seller's  Right to Assign.  Seller  shall not have the
right,  power, or authority to assign,  pledge or mortgage this Agreement or any
portion of this  Agreement,  or to delegate  any duties or  obligations  arising
under  this  Agreement,  voluntarily,  involuntarily,  or by  operation  of law,
without Buyer's prior written consent.

                  15.5.2 Buyer's Right to Assign.  Except as otherwise  provided
in this Agreement,  Buyer shall have the right,  power,  and authority to assign
this  Agreement  (including,  without  limitation,  an  assignment  for security
purposes)  or any  portion  of this  Agreement  or to  delegate  any  duties  or
obligations  arising  under this  Agreement,  voluntarily,  involuntarily  or by
operation of law, without Seller's consent, to any entity or person controlling,
controlled  by or under common  control with Buyer.  Upon an  assignment,  Buyer
shall be relieved of all obligations under this Agreement and the Escrow, except
for its obligations under Section 4.1.1.5 hereof.

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

         15.7  Successors  and Assigns;  Third  Parties.  Subject to and without
waiver of the  provisions  of Section  15.5 hereof,  all of the rights,  duties,
benefits,  liabilities and obligations of the parties shall inure to the benefit
of, and be binding upon,  their  respective  successors  and assigns.  Except as
specifically  set forth or  referred  to herein,  nothing  herein  expressed  or
implied is intended or shall be  construed  to confer upon or give to any person
or entity,  other than the parties hereto and their  successors or assigns,  any
rights or remedies under or by reason of this Agreement.

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

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

         15.10 Time of the Essence. Time shall be of the essence with respect to

                                       32

<PAGE>


all matters contemplated by this Agreement.

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

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

         15.13 Construction. This Agreement shall not be construed more strictly
against one party hereto than against any other party hereto merely by virtue of
the fact that it may have been prepared by counsel for one of the parties.

         15.14 Post-Closing Access to Records. Upon receipt by Seller of Buyer's
reasonable  written  request at anytime and from time to time within a period of
one (1) year  after the  Closing,  Seller  shall  make  available  (or cause its
property  manager or asset manager,  as applicable,  to make available) to Buyer
and its  accountants  and  designees,  for  inspection and copying during normal
business hours and at Buyer's sole cost and expense,  (i) all accounting records
relating to the Property for the calendar  year period ended  December 31, 1997,
and for the period(s) from January 1, 1998, through the Closing Date, including,
without  limitation,  all general ledgers,  cash receipts,  cancelled checks and
other  accounting  documents or  information  reasonably  requested by Buyer and
related to the Property,  and (ii) all other records related to the Property, in
either case whether in the possession or control of Seller or Seller's  property
manager,  asset manager or other agent. In addition, in connection with any such
accounting information,  Seller shall provide Buyer and Buyer's accountants with
a representation  letter in form and substance customarily provided to certified
public  accountants  when  performing  an audit  in  accordance  with  generally
accepted auditing standards.

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

         15.16  Attorneys' Fees. In the event that either party hereto brings an
action or proceeding  against the other party to enforce or interpret any of the
covenants,   conditions,   agreements  or  provisions  of  this  Agreement,  the
prevailing  party in such action or proceeding  shall be entitled to recover all
costs and expenses of such action or proceeding,  including, without limitation,
attorneys'  fees,  charges and  disbursements,  and the fees and costs of expert
witnesses.

                                       33

<PAGE>


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

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

                                         BUYER:

                                         ALEXANDRIA REAL ESTATE EQUITIES,
                                         INC., a Maryland corporation


Execution Date: February 5, 1998         By: /s/ Alan D. Gold
                                             -----------------------------------
                                              Name: Alan Gold
                                                    ----------------------------
                                              Its: President
                                                   -----------------------------


                                         SELLER:

                                         MATRIX PHARMACEUTICALS, INC.,
                                         a Delaware corporation


Execution Date: February 3, 1998         By: /s/ James R. Glynn
                                             -----------------------------------
                                              Name:    James R. Glynn
                                                    ----------------------------
                                              Its: Senior Vice President and CFO
                                                   -----------------------------


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

CHICAGO TITLE INSURANCE COMPANY     Date: February 6, 1998


By: /s/ Lori Brandt
   -----------------------------
         Name:  Lori Brandt
              ------------------
         Its: Escrow Officer
              ------------------

                                       34

<PAGE>


                                LIST OF EXHIBITS


EXHIBIT "A-1"     LEGAL DESCRIPTION OF IMPROVED PARCEL
EXHIBIT "A-2"     LEGAL DESCRIPTION OF UNIMPROVED PARCEL
EXHIBIT "A-3"     EXCLUDED IMPROVEMENTS AND FIXTURES

EXHIBIT "B-1"     PERSONAL PROPERTY INVENTORY
EXHIBIT "B-2"     EXCLUDED PERSONAL PROPERTY

EXHIBIT "C"       SURVEYOR'S CERTIFICATE

EXHIBIT "D"       DEED

EXHIBIT "E"       PROPERTY QUESTIONNAIRE

EXHIBIT "F"       SELLER'S CERTIFICATE

EXHIBIT "G"       ASSIGNMENT OF LEASES

EXHIBIT "H"       BILL OF SALE AND ASSIGNMENT

EXHIBIT "I"       ESTOPPEL CERTIFICATE

EXHIBIT "J-1"     NONFOREIGN AFFIDAVIT
EXHIBIT "J-2"     FORM 590

EXHIBIT "K"       LEASE
EXHIBIT "K-1"     LEASE TERM SHEET

EXHIBIT "L"       LOAN TERM SHEET

EXHIBIT "M"       TENANT LEASES

EXHIBIT "N"       SERVICE CONTRACTS

EXHIBIT "O"       EMPLOYEES

EXHIBIT "P"       APPROVALS

                                       35

<PAGE>


                                  Exhibit "A-1"

                      LEGAL DESCRIPTION OF IMPROVED PARCEL


         Parcel 1 of Parcel Map 17892,  in the City of San Diego,  County of San
Diego,  State of California,  according to Map filed in the Office of the County
Recorder of San Diego County on August 6, 1997.

                                       36

<PAGE>


                                  Exhibit "A-2"

                     LEGAL DESCRIPTION OF UNIMPROVED PARCEL


         Parcel 2 of Parcel Map 17892,  in the City of San Diego,  County of San
Diego,  State of California,  according to Map filed in the Office of the County
Recorder of San Diego County on August 6, 1997.

                                       37

<PAGE>


                                  Exhibit "A-3"

                DESCRIPTION OF EXCLUDED IMPROVEMENTS AND FIXTURES

To be agreed  upon by Buyer and  Seller on or before the  expiration  of the Due
Diligence Period.

                                       38

<PAGE>


                                  Exhibit "B-1"

                           PERSONAL PROPERTY INVENTORY


To be agreed  upon by Buyer and  Seller on or before the  expiration  of the Due
Diligence Period.

                                       39

<PAGE>


                                  Exhibit "B-2"

                           EXCLUDED PERSONAL PROPERTY


To be agreed  upon by Buyer and  Seller on or before the  expiration  of the Due
Diligence Period.

                                       40

<PAGE>


                                   Exhibit "C"

                             SURVEYOR'S CERTIFICATE


         The undersigned  hereby certifies to:  Alexandria Real Estate Equities,
Inc.; and [TITLE COMPANY]; as of _______________as follows: that this survey was
actually  made upon the  ground  and was  completed  on_____________;  that this
survey and the other  information,  courses  and  distances  shown  thereon  are
accurate; that the title lines and lines of actual possession are the same; that
the property  description  "closes" by mathematical  calculation;  that the land
depicted on the survey forms one contiguous parcel, uninterrupted by any strips,
gaps or gores;  that this survey correctly shows the size,  location and type of
all  buildings,  structures and other  improvements  on the property and all are
within the boundary lines and applicable  setback lines (whether  established by
subdivision plat, recorded  restrictions or applicable zoning or building codes)
affecting  the  property;  that there are no  easements,  rights-of-way  or uses
affecting  the  property  known to the  undersigned  or appeared  from a careful
physical inspection of the same, other than those shown on the survey,  together
with the applicable recording references;  that municipal water, sanitary sewer,
telephone,  electric  and gas  services  for the  operation  of the property are
present on the  property or within  adjacent  public  rights-of-way  or recorded
easements in the  locations  shown on the survey;  that there are no party walls
with or encroachments upon adjoining  premises,  streets or alleys by any of the
buildings,  structures or other  improvements on the property,  or encroachments
upon or party  walls  with the  property  by any  building,  structure  or other
improvements situated upon any adjoining premises;  that the buildings and other
improvements  on the property do not overhang or encroach  upon any easements or
rights-of-way  of others;  that all public  streets  necessary for access to the
property have been  completed  and dedicated and there is direct access  between
such streets and the property;  that the property contains  _____________ square
feet  (__________acres)  and is located in a zoning district  classification  of
_____;  that the  property  contains  _____  ordinary  parking  spaces  and ____
handicapped  parking  spaces,  totaling _____ ordinary and  handicapped  parking
spaces;  that the property  lies within a flood hazard area  designated as Flood
Zone ____, shown on special flood hazard map published by the Federal  Emergency
Management Agency;  that the street address of the property is  _______________;
that the  property  shown on this survey is the same  property  described in the
following  revised title  insurance  commitment:____________,  Commitment  Date:
______________;  that the location of each easement,  right-of-way over the land
of others are  required for (i) access to and egress from the parcel over a duly
dedicated and accepted  all-weather  public street or highway,  (ii) drainage of
surface or other water off the parcel, (iii) any utilities which currently serve
the parcel and the current improvements,  or (iv) storm water and sanitary sewer
facilities which serve the parcel and the current improvements; unless otherwise
shown or  detailed  on the  survey,  the  subject  property  does not  serve any
adjoining  property for drainage  utilities,  parking,  ingress or egress.  This
survey was made on the ground in accordance  with the "Minimum  Stan-

                                       41

<PAGE>


dard Detail  Requirements  and  Classification  for Land Title Surveys"  jointly
established  by ALTA and ACSM in 1992,  and includes Items 1-4, 6-11 and 13, and
meets the accuracy  requirements of an Urban Survey,  as defined  therein.  This
survey  also  was  made in  accordance  with the  State  of  California  Minimum
Standards of Practice for Land Surveyors.

                                       42

<PAGE>


                                    Exhibit D

                                      DEED

RECORDING REQUESTED BY
AND WHEN RECORDED RETURN TO:

Skadden, Arps, Slate, Meagher & Flom LLP
300 South Grand Avenue, Suite 3400
Los Angeles, California  90071
Attention:  George M. Eshaghian, Esq.

MAIL TAX STATEMENTS TO:
Alexandria Real Estate Equities, Inc.
11440 West Bernardo Court, Suite 170
San Diego, California 92127
Attention:  Property Manager

      ---------------------------------------------------------------------
                  Space above this line for Recorder's use only

                                   GRANT DEED

                                                         A.P.N. _______________
The undersigned Grantor declares:
Documentary transfer tax is not shown pursuant to R&T ss. 11932
         ( )    computed on full value of property conveyed, or
         ( )    computed  on full  value  less  value of liens and  encumbrances
                remaining at time of sale.
         ( )    Unincorporated area                   (x) City of San Diego, and

         FOR VALUABLE  CONSIDERATION,  the receipt and  sufficiency  of which is
hereby  acknowledged,  MATRIX  PHARMACEUTICALS,  INC.,  a  Delaware  corporation
("Grantor"),  has granted, sold and conveyed,  and by these presents does hereby
grant, sell and convey, unto [ALEXANDRIA REAL ESTATE EQUITIES,  INC., a Maryland
corporation]  ("Grantee"),  that certain property located in the City and County
of San Diego, State of California and more particularly described on Exhibit "A"
attached hereto and incorporated herein by reference (the "Property").

         TO HAVE AND TO HOLD the  Property,  together  with all and singular the
rights and  appurtenances  thereto in anywise  belonging unto the said Property,
subject only to  non-delinquent  taxes and assessments and the matters described
on Exhibit "B" attached hereto and incorporated herein by this reference.

                                       43

<PAGE>


         IN WITNESS  WHEREOF,  Grantor has caused this Grant Deed to be executed
this ___ day of _________________, 1998.

                                            MATRIX PHARMACEUTICALS, INC.
                                            a Delaware corporation


                                            By:  _______________________________
                                                 Name:
                                                 Its:

                                       44

<PAGE>


STATE OF ___________________          )
                                      : ss.
COUNTY OF _________________           )


         On the  __ day of  _____________,  199__,  before  me,  _______________
___________________________________________________________, personally appeared
__________________________________________________________________________,  [ ]
personally  known to me or o proved to me on the basis of satisfactory  evidence
to be the person(s) whose name(s) is/are subscribed to the within instrument and
acknowledged  to  me  that  he/she/they   executed  the  same  in  his/her/their
authorized  capacity(ies),   and  that  by  his/her/their  signature(s)  on  the
instrument  the  person(s),  or the entity  upon  behalf of which the  person(s)
acted, executed the instrument.

WITNESS my hand and official seal.

__________________________________
(SEAL)

                                       45

<PAGE>


                            Exhibit "A" to Grant Deed

                                LEGAL DESCRIPTION

                                       46

<PAGE>


                            Exhibit "B" to Grant Deed

                              PERMITTED EXCEPTIONS

                                       47

<PAGE>


                                   Exhibit "E"

                             PROPERTY QUESTIONNAIRE

                                    Attached.

                                       48

<PAGE>


                                   Exhibit "F"


                              SELLER'S CERTIFICATE

         The undersigned hereby certifies to ___________________("Buyer")  that,
as of the date hereof,

         (i)  all  of  the   representations,   covenants   and   warranties  of
____________________________.  ("Seller")  made in or pursuant  to that  certain
Purchase  and  Sale  Agreement  and  Joint  Escrow  Instructions,  dated  as  of
___________,  1997 (the "Agreement"),  between Seller and Alexandria Real Estate
Equities, Inc. ("ARE") are true, accurate, correct and complete;

         (ii) all  conditions  to the  Closing  (as such term is  defined in the
Agreement)  that  Seller  was to  satisfy or  perform  have been  satisfied  and
performed; and

         (iii) all  conditions  to the Closing  that ARE or Buyer was to perform
have been satisfied and performed.



Dated: _________, 199__                     ___________________________________,
                                            a ____________________________


                                            By:  _______________________________
                                            Name:
                                            Title:

                                       49

<PAGE>


                                   Exhibit "G"


                ASSIGNMENT OF LEASES AND TENANT SECURITY DEPOSITS

         THIS ASSIGNMENT OF LEASES AND TENANT SECURITY  DEPOSITS  ("Assignment")
is made and entered into as of the ___ day of ___________,  19__, by and between
_______________ ("Assignor"), and ______________ ("Assignee").


                                    RECITALS

         WHEREAS,  Assignor, as landlord,  has entered into those certain leases
identified on Exhibit "A" attached hereto and  incorporated  herein by reference
(collectively,  together  with  all  amendments,   modifications,   supplements,
restatements  and  guarantees  thereof which are identified on said Exhibit "A,"
the "Assumed  Leases"),  for certain  property located in the City of _________,
County of _________, State of _________;

         WHEREAS, Assignor and Alexandria Real Estate Equities, Inc., a Maryland
corporation ("ARE"), have entered into that certain Purchase and Sale Agreement,
dated as of _________ (as amended, the "Purchase Agreement");

         WHEREAS,  pursuant to Section ____ of the Purchase  Agreement,  ARE has
assigned its interest in the Purchase Agreement to Assignee; and

         WHEREAS,  the  Purchase  Agreement  requires  Assignor  and Assignee to
execute this Assignment.

         NOW, THEREFORE,  for good and valuable  consideration,  the receipt and
sufficiency of which are hereby acknowledged, Assignor and Assignee hereby agree
as follows:

         1.  Definitions.  All capitalized  terms used but not otherwise defined
herein  shall have the  respective  meanings  provided  therefor in the Purchase
Agreement.

         2.  Assignment and  Assumption.  From and after the date hereof for the
remainder of the term of each of the Assumed Leases, Assignor hereby irrevocably
assigns, sets over, transfers,  grants,  bargains and conveys to Assignee all of
Assignor's  right,  title and interest in and to (i) the Assumed Leases and (ii)
all security  deposits made under the Assumed Leases (the "Security  Deposits").
Subject to the terms and conditions of the Purchase  Agreement,  Assignee hereby
accepts this  Assignment of the Assumed  Leases,  the Security  Deposits and the
rights granted herein.  Assignee hereby  expressly  assumes,  for itself and its
successors, assigns and legal representatives, the Assumed Leases and all of the
obligations and liabilities, fixed and contingent, of

                                       50

<PAGE>


Assignor  thereunder  first  accruing and arising from and after the date hereof
with  respect to the  Assumed  Leases and agrees to (a) be fully bound by all of
the  terms,  covenants,  agreements,  provisions,  conditions,  obligations  and
liability  of Assignor  thereunder,  which first accrue and arise from and after
the date  hereof,  and (b) keep,  perform and observe all of the  covenants  and
conditions  contained therein on the part of Assignor to be kept,  performed and
observed, from and after the date hereof.

         3.  Indemnifications.  Assignor  hereby agrees to  indemnify,  protect,
defend and hold Assignee  harmless from and against any and all claims,  losses,
damages,   costs  and  expenses  (including,   without  limitation,   reasonable
attorneys' fees, charges and disbursements)  incurred or suffered by Assignee in
connection  with the Assumed  Leases and  arising or accruing  prior to the date
hereof.  Assignee hereby agrees to indemnify,  protect, defend and hold Assignor
harmless  from and  against any and all  actions,  suits,  proceedings,  claims,
losses, damages, costs and expenses (including,  without limitation,  reasonable
attorneys' fees, charges and disbursements)  incurred or suffered by Assignor in
connection  with the Assumed  Leases and first  arising and accruing on or after
the date hereof.

         4. General Provisions.

                  4.1.  Successors.  This  Assignment  shall be binding upon and
inure to the benefit of the parties  hereto and their  respective  heirs,  legal
representatives, successors and assigns.

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

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

                  4.4  Construction  with Respect to Principal  Agreement.  This
Assignment  is made  pursuant to and  governed by all of the terms,  conditions,
warranties,  representations,  disclaimers,  indemnities  and limitations of the
Purchase Agreement, which are incorporated herein by this reference.

                  4.5 No Other Leases  Assigned.  Except for the Assumed Leases,
Assignee  has not assumed  any  obligations  under or with  respect to any other
leases heretofore entered into with respect to the Property,  including, without
limitation, the Retained Leases, which obligations are retained by Assignor.

                                       51

<PAGE>


         IN WITNESS  WHEREOF,  this  Assignment  was made and executed as of the
date first above written.

                                            ASSIGNOR:

                                            ____________________________________


                                            By:  _______________________________
                                            Name:
                                            Its:




                                            ASSIGNEE:

                                            ____________________________________


                                            By:  _______________________________
                                            Name:
                                            Its:

                                       52

<PAGE>


                                   Exhibit "H"

                           BILL OF SALE AND ASSIGNMENT

         THIS  BILL  OF SALE  AND  ASSIGNMENT  ("Bill  of  Sale")  is made as of
____________,  1997,  by  _______________,   a  _______________  ("Seller"),  to
_____________________, a ________________________ ("Buyer").


                                    RECITALS

         WHEREAS,  Seller is the owner of that certain real property  located in
the County of ________________,  State of ____________(the "Real Property"),  as
more  particularly  described  on Exhibit "A" attached  hereto and  incorporated
herein by reference;

         WHEREAS,  Buyer and Seller have entered into that certain  Purchase and
Sale Agreement and Joint Escrow Instructions (the "Purchase  Agreement"),  dated
as of ___________, 1998, with respect to, among other things, the acquisition of
the "Personal  Property" and the "Intangible  Property" (each as defined below),
and certain other property; and

         WHEREAS,  the  Purchase  Agreement  requires  Seller to  convey  all of
Seller's  right,  title and interest in, to and under the Personal  Property and
the Intangible Property to Buyer.

         NOW, THEREFORE,  for good and valuable  consideration,  the receipt and
sufficiency of which are hereby acknowledged, Seller hereby agrees as follows:

         1. Unless the context  otherwise  requires,  all capitalized terms used
but not otherwise  defined  herein shall have the respective  meanings  provided
therefor in the Purchase Agreement.

         2. Seller  does hereby  unconditionally,  absolutely,  and  irrevocably
grant, bargain,  sell, transfer,  assign convey, set over and deliver unto Buyer
all of Seller's right, title and interest in and to:

                  a. all tangible  personal  property now or hereafter  owned by
Seller and located on or about the Land or Improvements  or attached  thereto or
used in  connection  with the use,  operation,  maintenance  or  repair  thereof
(collectively,  the "Personal  Property"),  including,  without limitation,  the
personal  property  described  on Exhibit B-1  attached  hereto,  but  expressly
excluding the personal property described on Exhibit B-2 attached hereto; and

                                       53

<PAGE>


                  b. all  intangible  property now or hereafter  owned by Seller
and used in connection with the Land, the Improvements or the Personal Property,
including,  without limitation,  the Service Contracts  identified on Schedule 1
attached hereto (the "Assumed Service Contracts"), building trademarks and trade
names, transferable business licenses, permits, applications, authorizations and
other  entitlements,  transferable  guarantees and warranties  covering the Land
and/or Improvements, all contract rights, books, records, reports, test results,
environmental assessments, and other similar documents and materials relating to
the use or operation,  maintenance or repair of the Property or the construction
or fabrication thereof, and all transferable utility contracts, but specifically
excluding  any  intangible  property  exclusively  related to the  operation  of
Seller's business  (collectively,  the "Intangible  Property" and, together with
the Personal Property, the "Property").

         3. Buyer  hereby  expressly  assumes,  for  itself and its  successors,
assigns and legal representatives,  the Assumed Service Contracts and all of the
obligations and liabilities, fixed and contingent, of Seller thereunder accruing
from and after the date hereof with  respect  thereto and agrees to (a) be fully
bound  by all of  the  terms,  covenants,  agreements,  provisions,  conditions,
obligations  and  liability  of Seller  thereunder,  which  accrue from the date
hereof,  and (b) keep,  perform and observe all of the covenants and  conditions
contained therein on the part of Seller to be kept, performed and observed, from
and after the date hereof.

         4. Seller  represents  and  warrants  that its title to the Property is
free and clear of all  liens,  mortgages,  pledges,  security  interests,  prior
assignments,  encumbrances  and  claims of any nature  other than the  Permitted
Exceptions.

         5. Seller hereby agrees to  indemnify,  protect,  defend and hold Buyer
harmless  from and  against  any and all  claims,  losses,  damages,  costs  and
expenses  (including,   without  limitation,   reasonable  attorney's  fees  and
disbursements) incurred or suffered by Buyer in connection with the Property and
arising prior to the Closing. Buyer hereby agrees to indemnify,  protect, defend
and hold Seller harmless from and against any and all claims,  losses,  damages,
costs and expenses (including,  without limitation,  reasonable  attorney's fees
and  disbursements)  incurred  or  suffered  by  Seller in  connection  with the
Property and arising on or after the Closing.

         6. This Bill of Sale shall be binding  upon and inure to the benefit of
the parties hereto and their respective heirs, legal representatives, successors
and assigns.

         7. This  Bill of Sale and the legal  relations  of the  parties  hereto
shall be governed by and construed  and enforced in accordance  with the laws of
the State of California, without regard to its principles of conflicts of law.

         IN WITNESS  WHEREOF,  this Bill of Sale was made and executed as of the

                                       54

<PAGE>


date first above written.

                                            SELLER:

                                            _________________________________, a
                                            _________________________________

                                            By:______________________________

                                            Its:_____________________________

                                       55

<PAGE>


                                   Exhibit "I"

                              ESTOPPEL CERTIFICATE

         THIS TENANT ESTOPPEL CERTIFICATE ("Certificate"), dated as of ________,
19__, is executed by ("Tenant")  in favor of  Alexandria  Real Estate  Equities,
Inc., a Maryland corporation,  together with its nominees, designees and assigns
(collectively, "Buyer").


                                    RECITALS

         A. Buyer and ____________ ("Landlord"),  have entered into that certain
Purchase  and  Sale  Agreement  and  Joint  Escrow  Instructions,  dated  as  of
_________,  19__  (the  "Purchase  Agreement"),  whereby  Buyer  has  agreed  to
purchase,  among other things, the improved real property located in the City of
_________,  County of _________, State of _________, more particularly described
on Exhibit "A" attached to the Purchase Agreement (the "Property").

         B. Tenant and Landlord have entered into that certain Lease  Agreement,
dated  as  of  ___________   (together  with  all   amendments,   modifications,
supplements, guarantees and restatements thereof, the "Lease"), for a portion of
the Property.

         C.  Pursuant  to the Lease,  Tenant has agreed that upon the request of
Landlord,  Tenant would execute and deliver an estoppel  certificate  certifying
the status of the Lease.

         D. In connection  with the Purchase  Agreement,  Landlord has requested
that Tenant execute this Certificate with an understanding  that Buyer will rely
on the representations and agreements below.

         NOW, THEREFORE, Tenant certifies,  warrants, and represents to Buyer as
follows:

         Section 1.  Lease.

         Attached hereto as Exhibit "1" is a true,  correct and complete copy of
the Lease,  including  the  following  amendments,  modifications,  supplements,
guarantees  and  restatements  thereof,  which  together  represent  all  of the
amendments,  modifications,  supplements,  guarantees and restatements  thereof:
________________________________________________________________________________
________________________________________________________________________________
(If  none, please state "None.")

                                       56

<PAGE>


         Section 2.  Leased Premises.

         Pursuant  to the Lease,  Tenant  leases  those  certain  premises  (the
"Leased  Premises")  consisting  of  approximately   _______________  (________)
rentable square feet within the Property, as more particularly  described in the
Lease.  In  addition,  pursuant  to the  terms  of the  Lease,  Tenant  has  the
[non-exclusive]  right to use [_____ parking spaces/the parking area] located on
the Property during the term of the Lease.  [Cross-out the preceding sentence or
portions thereof if inapplicable.]

         Section 3.  Full Force of Lease.

         The Lease has been duly  authorized,  executed and delivered by Tenant,
is in full force and effect has not been  terminated  and  constitutes a legally
valid instrument,  binding and enforceable against Tenant in accordance with its
terms,  subject  only to  applicable  limitations  imposed by laws  relating  to
bankruptcy and creditor's rights.

                  Section 4.  Complete Agreement.

         The Lease  constitutes  the  complete  agreement  between  Landlord and
Tenant for the Leased Premises and the Property, except as modified by the Lease
amendments noted above (if any), has not been modified, altered or amended.

         Section 5.  Acceptance of Leased Premises.

         Tenant has accepted  possession  and is currently  occupying the Leased
Premises.

         Section 6.  Lease Term.

         The  term  of  the  Lease  commenced  on  ______________  and  ends  on
_______________, subject to the following options to extend: ___________________
_______________________________________________.
(If none, please state "None.")

         Section 7.  Purchase Rights.

         Tenant has no option, right of first refusal,  right of first offer, or
other right to acquire or purchase all or any portion of the Leased  Premises or
all or any portion of, or interest in, the Property, except as follows: ________
________________________________________________________________________________
_____________________.
(If none, please state "None.")

         Section 8.  Rights of Tenant.

                                       57

<PAGE>


         Except as expressly stated in this Certificate, Tenant:

         (a)  has no right to renew or extend the term of the Lease;

         (b) has no option  or other  right to  purchase  all or any part of the
Leased Premises or all or any part of the Property;

         (c) has no right, title, or interest in the Leased Premises, other than
as Tenant under the Lease.

         Section 9.  Rent.

         (a)  The   obligation  to  pay  rent  under  the  Lease   commenced  on
___________.  The rent under the Lease is current,  and Tenant is not in default
in the performance of any of its obligations under the Lease.

         (b) Tenant is currently  paying base rent under the Lease in the amount
of ___________________  Dollars ($__________) per month. Tenant has not received
and is not, presently,  entitled to any abatement, refunds, rebates, concessions
or forgiveness of rent or other  charges,  free rent,  partial rent, or credits,
offsets or reductions in rent, except as follows: ______________________________
_______________________________________________.
(If none, please state "None.")

         (c)  Tenant's  estimated  share  of  operating  expenses,  common  area
charges,  insurance,  real estate taxes and administrative and overhead expenses
is  __________  percent  ( %)  and is  currently  being  paid  at  the  rate  of
_____________________ Dollars ($__________) per month, payable to: _____________
_______________________________________________.

         (d) There are no existing  defenses or offsets  against  rent due or to
become due under the terms of the Lease,  and there  presently  is no default or
other  wrongful  act or  omission by Landlord  under the Lease or  otherwise  in
connection with Tenant's occupancy of the Leased Premises,  nor is there a state
of facts  which  with the  passage of time or the giving of notice or both could
ripen into a default on the part of Tenant,  or to the best knowledge of Tenant,
could  ripen into a default on the part of Landlord  under the Lease,  except as
follows: _______________________________________________________________________
_______________________________________________.
(If none, please state "None.")

         Section 10.  Security Deposit.

                                       58

<PAGE>


         The amount of Tenant's  security  deposit  held by  Landlord  under the
Lease is _________________ Dollars ($ __________).

         Section 11.  Prepaid Rent.

         The amount of prepaid  rent,  separate  from the security  deposit,  is
__________________________ Dollars ($___________), covering the period from to .

         Section 12.  Insurance.

         All  insurance,  if any,  required to be maintained by Tenant under the
Lease is presently in effect.

         Section 13.  Pending Actions.

         There is not pending or, to the knowledge of Tenant, threatened against
or contemplated by the Tenant, any petition in bankruptcy,  whether voluntary or
otherwise,  any assignment for the benefit of creditors, or any petition seeking
reorganization or arrangement under the federal  bankruptcy laws or those of any
state.

         Section 14.  Tenant Improvements.

         As of the date of this Certificate,  to the best of Tenant's knowledge,
Landlord has  performed  all  obligations  required of Landlord  pursuant to the
Lease;  no offsets,  counterclaims,  or defenses of Tenant under the Lease exist
against Landlord;  and no events have occurred that, with the passage of time or
the giving of notice,  would constitute a basis for offsets,  counterclaims,  or
defenses against Landlord, except as follows:__________________________________
_______________________________________________________________________________.
(If none, please state "None.")

         Section 15.  Assignments by Landlord.

         Tenant  has  received  no notice of any  assignment,  hypothecation  or
pledge of the Lease or rentals under the Lease by Landlord.

         Section 16.  Assignments by Tenant.

         Tenant has not sublet or assigned  the Leased  Premises or the Lease or
any portion  thereof to any sublessee or assignee.  No one except Tenant and its
employees will occupy the Leased Premises. The address for notices to be sent to
Tenant is as set forth in the Lease.

                                       59

<PAGE>


         Section 17.  Environmental Matters.

         The  operation  and use of the Leased  Premises  does not  involve  the
generation,  treatment, storage, disposal or release into the environment of any
hazardous  materials,  regulated materials and/or solid waste, except those used
in the  ordinary  course  of  operating  a  retail  store or  otherwise  used in
accordance with all applicable laws.

         Section 18.  Succession of Interest.

         Tenant agrees that, in the event Buyer succeeds to interest of Landlord
under the Lease:

         (a)  Buyer  shall not be liable  for any act or  omission  of any prior
landlord (including Landlord);

         (b) Buyer shall not be liable for the return of any security deposit;

         (c)  Buyer  shall  not be bound by any rent or  additional  rent  which
Tenant might have prepaid under the Lease for more than the current month;

         (d) Buyer shall not be bound by any amendments or  modifications of the
Lease made without prior consent of Buyer;

         (e) Buyer shall not be subject to any offsets or defenses  which Tenant
might have against any prior landlord (including Landlord); or

         (f)  Buyer  shall not be  liable  under  the  Lease to  Tenant  for the
performance of Landlord's obligations under the Lease beyond Buyer's interest in
the Property.

         Section 19.  Notice of Default.

         Tenant  agrees to give Buyer a copy of any notice of default  under the
Lease  served  upon  Landlord  at the same  time as such  notice is given to the
Landlord. Tenant further agrees that if Landlord shall fail to cure such default
within the applicable grace period,  if any,  provided in the Lease,  then Buyer
shall have an additional  sixty (60) days within which to cure such default,  or
if such default  cannot be cured  within such sixty (60) day period,  such sixty
(60)  day  period  shall  be  extended  so long as Buyer  has  commenced  and is
diligently pursuing the remedies necessary to cure such default (including,  but
not limited to, commencement of foreclosure proceedings,  if necessary to effect
(such  cure),  in which  event the  Lease  shall not be  terminated  while  such
remedies are being pursued.

         Section 20.  Notification by Tenant.

                                       60

<PAGE>


         From the date of this  Certificate and continuing  until  ____________,
Tenant agrees to immediately notify Buyer, in writing by registered or certified
mail, return receipt requested, at the following addresses, on the occurrence of
any  event or the  discovery  of any fact  that  would  make any  representation
contained in this Certificate inaccurate:

         If To Buyer:               Alexandria Real Estate Equities, Inc.
                                    135 N. Los Robles Avenue, Suite 250
                                    Pasadena, California 91101
                                    Attention:  Corporate Secretary

         With A Copy To:            Skadden, Arps, Slate, Meagher & Flom
                                    300 South Grand Avenue, Suite 3400
                                    Los Angeles, California 90071
                                    Attention: George M. Eshaghian

         Tenant makes this Certificate with the knowledge that it will be relied
upon by Buyer in agreeing to purchase the Property.

         Tenant has executed this Certificate as of the date first written above
by the person named below, who is duly authorized to do so.

                                    TENANT

                                     ___________________________________________


                                    By:     _______________________________
                                            Name:
                                            Its:

                                       61

<PAGE>


                                  Exhibit "J-1"

                              NONFOREIGN AFFIDAVIT

                  1.  Section  1445 of the  Internal  Revenue  Code of 1986,  as
amended (the "IRC"), provides that a transferee of a United States real property
interest must withhold tax if the transferor is a foreign person.

                  2. In order to inform Alexandria Real Estate Equities, Inc., a
Maryland corporation, and its nominees, designees and assigns (collectively, the
"Transferee"),  that  withholding of tax is not required upon the disposition by
___________________ (the "Transferor"),  of the United States real property more
particularly described on Exhibit "A" attached hereto and incorporated herein by
reference (the "Property"), the undersigned Transferor certifies and declares by
means of this certification, the following:

                  a.       The  Transferor  is  not a  foreign  person,  foreign
                           corporation,  foreign  partnership,  foreign trust or
                           foreign  estate (as such terms are defined in the IRC
                           and the Income Tax Regulations).

                  b.       Transferor's federal taxpayer  identification  number
                           is:

                           ______________________________.

                  c.       Transferor's address is:

                           _____________________________________________________
                           _____________________________________________________
                           _____________________________________________________

                  3.  Transferor  understands  that  this  certification  may be
disclosed  to the  Internal  Revenue  Service by  Transferee  and that any false
statement contained in this certification may be punished by fine,  imprisonment
or both.

                                       62

<PAGE>


                  Under  penalties of perjury,  Transferor  declares that it has
carefully examined this certification and it is true, correct and complete.

         Executed this __ day of ________, 19__ at .


                                     TRANSFEROR

                                     ___________________________________________


                                    By:     _______________________________
                                            Name:
                                            Its:

                                       63

<PAGE>


                                  Exhibit "J-2"

                                    FORM 590

                                    Attached.

                                       64

<PAGE>


                                   Exhibit "K"

                                      LEASE

                                    Attached

                                       65

<PAGE>


                                  Exhibit "K-1"

                                LEASE TERM SHEET


Lessor:                   Alexandria Real Estate Equities, Inc. or its assignee

Lessee:                   Matrix Pharmaceuticals, Inc.

Rentable Square Footage:  67,050 square feet (approximately)

Initial Base Rent:        $1,920,000  per  year,  payable  in  advance  in equal
                          monthly installments

Escalation of Base Rent:  The  Base  Rent  shall  increase  on the  fifth  (5th)
                          anniversary  of  the  Lease  Commencement  Date  by an
                          amount  equal  to  the  cumulative   increase  in  the
                          Consumer  Price  Index  for  San  Diego   metropolitan
                          statistical  area ("Index") for the previous fifth (5)
                          years  but not less  than 2% and not more  than 4% for
                          any  given  year  during  the  initial  five  (5) year
                          period.  Thereafter,  the Base Rent, including renewal
                          periods,  shall  increase  every three (3) years by an
                          amount equal to the cumulative  increases in the Index
                          for the previous three (3) years, but not less than 2%
                          and not more than 4% for any  given  year  during  the
                          three year period.

Security Deposit:         $2,580,000  to be deposited  with Lessor in cash or an
                          acceptable  letter  of  credit  in a form  and  with a
                          financial  institution  normally  acceptable to Lessee
                          and Lessor ("Letter of Credit").

                          Percentage Reduction Amount       Mileage Event
                          ---------------------------       -------------
                          25%                               Lessee    to    have
                                                            completed  strategic
                                                            alliances  or  joint
                                                            ventures    with   a
                                                            cumulative  value in
                                                            excess     of    $10
                                                            million (value equal
                                                            to up front payments
                                                            plus       milestone
                                                            payments).

                          25%                               Lessee     corporate
                                                            sales from  products
                                                            exceed $10 million.


Initial Lease Term:       13 years

                                       66

<PAGE>


Options to Extend:        Upon at  least  one  year's  prior  notice,  five  (5)
                          consecutive  five (5) year  options to extend the term
                          at a mutually acceptable rent on the commencement date
                          of each such renewal term.

Late Charges:             3% of the amount delinquent, if any amount is not paid
                          within 10 days from the date notice of  delinquency is
                          given to Lessee.

Expenses:                 Absolute  net:  Lessee  shall be  responsible  for the
                          entire cost of maintaining and improving the Property,
                          which   shall   include,   without   limitation,   all
                          maintenance,    upkeep,    cleaning,    repairs,   and
                          replacements  of all  improvements  at  the  Property,
                          structural, and non-structural,  all real and personal
                          property taxes,  assessments  and bonds  pertaining to
                          the   Property,   public   Liability,   environmental,
                          earthquake and property damage insurance premiums, all
                          utilities and related  services  rendered or furnished
                          to the Property  such as  electricity,  water,  sewer,
                          heat, air, telephone,  refuse and gas, and all related
                          charges and deposits, and costs of any tenant or other
                          capital  improvements to the Property,  as well as the
                          cost of property  management  which shall equal $2,000
                          per month.

Subleases:                Lessee shall  execute a present  assignment  of leases
                          and rents to Lessor  whereby  Lessee shall continue as
                          the Lessor ("Master Lessor") under the existing leases
                          to  Advanced  Tissue  Sciences,  Inc.  and  lessees of
                          rooftop space for antenna purposes (collectively,  the
                          "Subleases").  The Subleases  shall be subordinated to
                          Lessor's  interest in the Property and the  sublessees
                          shall  attorn to  Lessor.  Upon any  default by Lessee
                          under the Lease  such  Subleases  shall  make all rent
                          payments directly to Lessor.

Repurchase Rights:        Option (A). Right of First Offer. Provided that Lessee
                          is not then in default  under the Lease,  in the event
                          Lessor   determines   that  it  intends  to  sell  the
                          Property, it shall give Lessee at least 10 days' prior
                          written  notice  of such  intent  ("Lessor's  Notice")
                          prior to  actively  marketing  the  Property  to third
                          parties,  and Lessee may elect, by delivery of written
                          notice to Lessor  ("Lessee's  Notice")  within 10 days
                          after receipt of Lessor's Notice, to negotiate for the
                          acquisition of the Property.  If Lessee so elects, the
                          parties shall meet and negotiate in good faith for the
                          purchase  and sale of the  Property for a period of 30
                          days  following  delivery of Lessor's  Notice.  In the
                          event that  Lessor and Lessee are unable to agree upon
                          the terms of the sale  within said 30 day period or in
                          the  event  that  Lessee  does  not  deliver  Lessee's
                          Notice,  then Lessor  shall be entitled to  thereafter
                          sell  the  Property  to

                                       67

<PAGE>


                          any  third  party  purchaser,  provided  that any such
                          purchaser  shall  acquire  the  Property   subject  to
                          Lessee's right of first offer.

                          (B).  Certain  Terms of Sale.  Any  purchase  and sale
                          pursuant  to  Lessee's  right of first  offer shall be
                          handled  by Holder.  The  transaction  shall  close no
                          sooner  than nine (9) and no later  than  twelve  (12)
                          months after Lessee's written notification of election
                          to  exercise  right of first  offer  unless  otherwise
                          mutually  agreed in writing.  The right of first offer
                          shall  terminate  at the end of the Lease term and any
                          extensions.

Indemnification:          Lessee to provide  Lessor with full  indemnifications,
                          including  without  limitations   indemnification  for
                          damages  suffered  by  reason of  hazardous  materials
                          utilized by Lessee.

                                       68

<PAGE>


                                   Exhibit "L"

                                 LOAN TERM SHEET


Lender:                   Alexandria Real Estate Equities, Inc. or its assigns.

Borrower:                 Matrix Pharmaceuticals, Inc.

Loan Amount:              $6,000,000

Interest Rate:            11%

Payment Terms:            Interest  only  payable in  advance  in equal  monthly
                          installments ($660,000 per annum).

Term:                     4 years

Conversion Event:         The loan shall be reduced in $3,000,000 increments and
                          shall convert into lease payments upon  achievement of
                          the following milestone events.

                          1.   Borrower to have completed strategic alliances or
                               joint ventures with a cumulative  value in excess
                               of $10 million  (value equal to up front payments
                               plus milestone payments);

                          2a.  Borrower corporate sales from products exceed $10
                               million; or

                          2b.  Borrower to have completed strategic alliances or
                               joint ventures with cumulative value in excess of
                               $15 million.
                          ______________________________________________________

Conversion Lease Terms for each $3,000,000 reduction increment:

     Initial Base Rent:   $330,000 per year, payable in advance in equal monthly
                          installments,  subject to escalation on the same terms
                          and time periods as provided in the Lease.

     Other Lease Terms:   All other terms and conditions of Lease apply.

Default:                  A default  under the loan shall be a default under the
                          Lease.

Security:                 Borrower's manufacturing related building improvements
                          and fixtures.

                                       69

<PAGE>


                                   Exhibit "M"

                                  TENANT LEASES

                                    Attached

                                       70

<PAGE>


                                   Exhibit "N"

                                SERVICE CONTRACTS

                                    Attached

                                       71

<PAGE>


                                   Exhibit "O"

                                    EMPLOYEES

                                      None.

                                       72

<PAGE>


                                   Exhibit "P"

                                    APPROVALS

                                    Attached.

                                       73