<PAGE>

                                                                 EXHIBIT 10.12



                       PURCHASE AND SALE AGREEMENT

                                 BETWEEN

                   WHLW REAL ESTATE LIMITED PARTNERSHIP

                                AS SELLER,

                        NATROL REAL ESTATE, INC.

                              AS PURCHASER

                                   AND

                              NATROL, INC.

                                AS TENANT



                        DATED: DECEMBER 22, 1998
<PAGE>

                           TABLE OF CONTENTS

                                                                     Page

Section 1.   AGREEMENT OF PURCHASE AND SALE . . . . . . . . . . . .     1

Section 2.   THE PURCHASE PRICE . . . . . . . . . . . . . . . . . .     2

Section 3.   INSPECTION PERIOD; CERTAIN TERMINATION PROVISIONS  . .     3

Section 4.   TITLE  . . . . . . . . . . . . . . . . . . . . . . . .     4

Section 5.   CLOSING DATE . . . . . . . . . . . . . . . . . . . . .     6

Section 6.   "AS IS, WHERE IS AND WITH ALL FAULTS"  . . . . . . . .     7

Section 7.   SATISFACTION OF LIENS  . . . . . . . . . . . . . . . .    10

Section 8.   VIOLATIONS . . . . . . . . . . . . . . . . . . . . . .    10

Section 9.   REPRESENTATIONS, WARRANTIES AND COVENANTS  . . . . . .    10

Section 10.  OPERATION OF PROPERTY TO CLOSING . . . . . . . . . . .    13

Section 11.  CLOSING DOCUMENTS  . . . . . . . . . . . . . . . . . .    14

Section 12.  PRORATIONS AND COSTS . . . . . . . . . . . . . . . . .    15

Section 13.  BROKERAGE  . . . . . . . . . . . . . . . . . . . . . .    18

Section 14.  NOTICES  . . . . . . . . . . . . . . . . . . . . . . .    18

Section 15.  DAMAGE OR DESTRUCTION PRIOR TO CLOSING AND 
             CONDEMNATION . . . . . . . . . . . . . . . . . . . . .    19

Section 16.  REPORTING REQUIREMENTS . . . . . . . . . . . . . . . .    19

Section 17.  MISCELLANEOUS  . . . . . . . . . . . . . . . . . . . .    20

Section 18.  CONFIDENTIALITY  . . . . . . . . . . . . . . . . . . .    22


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<PAGE>

EXHIBITS
                                                                     Page

EXHIBIT A - Description of Land . . . . . . . . . . . . . . . . . .   A-1

EXHIBIT B - Assignment and Assumption of Leases . . . . . . . . . .   B-1

EXHIBIT C - Bill of Sale  . . . . . . . . . . . . . . . . . . . . .   C-1

EXHIBIT D - Assignment of Warranties, Permits, Contracts and
            General Intangibles . . . . . . . . . . . . . . . . . .   D-1

EXHIBIT E - Purchaser's AS-IS Certificate . . . . . . . . . . . . .   E-1

EXHIBIT F - Natural Hazard Disclosure Statement . . . . . . . . . .   F-1

EXHIBIT G - Grant Deed  . . . . . . . . . . . . . . . . . . . . . .   G-1


SCHEDULES


SCHEDULE 1 -   Disclosure Items . . . . . . . . . . . . . . . . . .     1

SCHEDULE 1.3 - Personal Property  . . . . . . . . . . . . . . . . .     1

SCHEDULE 1.5 - Leases and Related Matters . . . . . . . . . . . . .     1

SCHEDULE 1.7 - Property Contracts . . . . . . . . . . . . . . . . .     1


                                      ii
<PAGE>

                           PURCHASE AND SALE AGREEMENT

          PURCHASE AND SALE AGREEMENT ("Agreement") made this 22nd day of 
December, 1998 between the Seller identified as such on the execution page 
hereof ("Seller"), the Purchaser identified as such on the execution page 
hereof ("Purchaser") and, for the specific purposes specified herein, Natrol, 
Inc., a California corporation (the "Tenant").

                              W I T N E S S E T H :

          WHEREAS, Purchaser desires to acquire and Seller desires to sell 
all of Seller's right, title and interest in and to the office building more 
particularly described on Exhibit A attached hereto.

          NOW, THEREFORE, in consideration of Ten and no/100 ($10.00) Dollars 
and other good and valuable consideration, the receipt and adequacy of which 
are hereby acknowledged, and the mutual covenants and undertakings of the 
parties set forth herein, the Seller and Purchaser agree as follows:

     Section 1.  AGREEMENT OF PURCHASE AND SALE.  Seller hereby agrees to 
sell and convey and Purchaser agrees to purchase on the terms and conditions 
herein set forth, all of Seller's right, title and interest in and to the 
following:

           1.1   The fee simple estate in and to the land described in 
EXHIBIT A attached hereto (the "Land") together with the office building and 
all other improvements located thereon ("Improvements"), together with all 
air rights, water rights, mineral rights, rights of way, easements, 
appurtenances and hereditaments appertaining thereto. The Land and 
Improvements are herein referred to as the "Property";

           1.2   All machinery, apparatus, equipment, fittings and fixtures 
in or on the Property or which are attached thereto but excluding any such 
items to the extent owned by the Tenant or other third parties ("Fixtures");

           1.3   All of the personal property located in or on the Property 
including, without limitation, the property listed on SCHEDULE 1.3 attached 
hereto but specifically excluding the personal property in Seller's 
management office on the Property and the personal property owned by Tenant 
("Personal Property");

           1.4   All rights, if any, to general intangibles relating to the 
Property (including, without limitation, any name or trade name used in 
connection with the Improvements), but excluding the names or tradenames 
Lincoln Property Company, Legacy Partners, Whitehall Street Real Estate 
Limited Partnership, Lincoln-Whitehall, Lincoln-
<PAGE>

Whitehall Pacific, WHLW Real Estate Limited Partnership ("WHLW") or any 
abbreviations or derivations of any of the foregoing and related names and 
proprietary computer equipment, software and systems);

           1.5   The interest of Seller, as landlord, in the occupancy 
leasehold estate created by the certain lease, tenancy and rental agreement 
and all amendments thereto or assignments thereof that are described in the 
Schedule of Leases attached hereto as Schedule 1.5 (hereto collectively 
referred to as the "Lease");

           1.6   All assignable warranties and guaranties, if any, issued in 
connection with the Property (collectively, the "Assignable Warranties");

           1.7   Any transferable consents, authorizations, variances or 
waivers, licenses, permits and approvals from any governmental or 
quasi-governmental agency, department, board, commission, bureau or other 
entity or instrumentality relating to the Property (collectively, the 
"Permits"); and

           1.8   All written agreements (other than the Lease and the 
Permitted Exceptions as hereinbelow defined and the management and leasing 
agreement with Legacy Partners Commercial, Inc. (formerly known as Lincoln 
Property Company N.C., Inc. and LPC MS, Inc.) which shall be cancelled at 
Closing at no cost to Purchaser), to which Seller is a party and which affect 
the Property ("Contracts"), a schedule of which is attached hereto as 
SCHEDULE 1.7.

           Except as herein otherwise specifically provided, it is intended 
that Seller shall transfer to Purchaser all of Seller's right, title and 
interest of every kind or nature in the Property, the Fixtures, the Lease, 
the Personal Property, the Assignable Warranties, the Permits, Contracts and 
all other interests of Seller in and to the Property (collectively, the 
"Project").

     Section 2.  THE PURCHASE PRICE.  The purchase price (the "Purchase 
Price") for the Project is Five Million Two Hundred-Fifty Thousand Dollars 
($5,250,000) to be paid as follows:

           2.1   One Hundred Thousand Dollars ($100,000) (the "Deposit") 
shall be paid by Purchaser on the same day as the executive hereof, which 
amount shall, subject to collection, be held in escrow by Fidelity National 
Title Insurance Company (hereinafter referred to as "Escrow Agent" or "Title 
Insurer"). The Deposit shall be held in an interest bearing account 
reasonably acceptable to the parties and all interest on the Deposit shall 
become part of the Deposit. If the purchase and sale of the Project is 
consummated in accordance with the terms and provisions of this Agreement, 
then the Deposit shall be paid to Seller at Closing and credited against the 
Purchase Price. In all other events, the Deposit shall be disposed of by the 
Escrow Agent as provided herein.


                                      2
<PAGE>

          2.2      The balance of the Purchase Price shall be paid on 
Closing, plus or minus prorations and adjustments to be made pursuant to this 
Agreement, in good immediately available United States funds. The balance of 
the Purchase Price shall be wire transferred into escrow and Escrow Agent 
shall receive confirmation of receipt thereof no later than 9:00 a.m. 
(Pacific Time) on the date of Closing.

     Section 3.    INSPECTION PERIOD: CERTAIN TERMINATION PROVISIONS

          3.1      Purchaser acknowledges that it has had, prior to the date 
hereof, the opportunity to perform its due diligence investigations with 
respect to the Project, which due diligence has included, without limitation 
(a) all investigations relating to the physical characteristics of the 
Property including, without limitation, all engineering, structural and 
environmental inspections and assessments, and (b) reviews of all of the 
files relating to the Project, the books and records of Seller relating to 
the operation of the Project and all other documents, instruments and written 
information in Seller's possession relating to the Project (collectively, the 
"Due Diligence Materials") except, however, appraisals, internal memos 
dealing with the economies of the Project, and other information which is 
privileged, which privileged information would not adversely affect 
Purchaser's operation or ownership of the Property subsequent to Closing. The 
Purchaser acknowledges that prior to or simultaneously with execution hereof, 
Seller has arranged to deliver to Purchaser the Due Diligence Materials, the 
Contracts, a preliminary title report and certain other documents relating to 
the Project.

          3.2      Any due diligence conducted by Purchaser, whether prior to 
or after the execution and delivery of this Agreement, shall be at the sole 
cost and expense of the Purchaser. Purchaser shall be fully responsible to 
Seller for all of the acts and/or omissions of Purchaser, its employees, 
agents and representatives on or affecting the Project in the course of any 
such inspections or assessments. In connection with any such due diligence 
activities, whether conducted prior to or after the date of this Agreement, 
Purchaser (i) shall indemnify, defend and hold Seller harmless from and 
against all costs, expenses, losses, claims, damages and/or liabilities 
relating to any physical damage or personal injury or death resulting from 
Purchaser's inspection of the Property, provided Purchaser shall not be 
liable to Seller solely as a result of the discovery by Purchaser of a 
preexisting condition on the Property; (ii) shall promptly repair any damage 
resulting from any such inspections; (iii) shall fully comply with all laws, 
ordinances, rules and regulations in connection with such inspections; (iv) 
shall conduct its activities in a manner to minimize any disturbance to 
Seller, its employees and others; (v) shall not contact any governmental 
agencies without the prior written consent of Seller (which consent shall not 
be unreasonably withheld or delayed) and shall permit a representative of 
Seller to accompany Purchaser on any interviews with governmental agencies; 
(vi) shall not permit any inspections, investigations or other due diligence 
activities to result in any liens, judgements or other encumbrances being 
filed against the Property and shall, at its sole cost and expense, promptly 
discharge of record any such liens or encumbrances that are so filed or 
recorded; (vii) shall not permit any borings,

                                      3
<PAGE>

drillings or samplings to be done on or at the Property without the prior 
written consent of Seller; (viii) shall promptly following the termination of 
this Agreement, provide Seller with copies of inspection reports and studies 
prepared by third parties in connection with Purchaser's inspection and due 
diligence, provided Purchaser makes no warranty or representation as to the 
accuracy or thoroughness of the reports or studies and Seller shall not be 
entitled to rely thereon; (ix) shall maintain, with insurance companies 
satisfactory to Seller, a policy of comprehensive general public liability 
insurance, with a broad form contractual liability endorsement covering 
Purchaser's indemnification obligations hereunder, and with a combined single 
limit of not less than $1,000,000 per occurrence for bodily injury and 
property damage, automobile liability coverage including owned and hired 
vehicles with a combined single limit of $1,000,000 per occurrence for bodily 
injury and property damage, and an excess umbrella liability policy for 
bodily injury and property damage in the amount of $5,000,000 insuring Seller 
and its affiliates as additional insureds (certificates of which shall be 
given to Seller prior to the first entry by Purchaser on the Property), all 
of which insurance shall be written on an "occurrence form"; and (x) shall 
return to Seller all materials with respect to the Property provided to 
Purchaser by Seller if Purchaser fails to acquire the Property for any 
reason. The provisions of this paragraph shall survive the termination of 
this Agreement.

          3.3      In the event that this Agreement terminates pursuant to 
any other Section of this Agreement which refers to this Section 3.3, (a) 
Purchaser shall receive a full refund of the Deposit, together with all 
interests actually earned thereon and (b) except for obligations that this 
Agreement expressly states survive termination, neither party shall have any 
further rights or claims or liabilities towards the other.

     Section 4.    TITLE

          4.1      Purchaser shall accept title to the Property if Title 
Insurer (as hereinafter defined) will insure the Property subject only to the 
Permitted Exceptions (as hereinafter defined).

          4.1.1    Seller has ordered a preliminary title report ("Title 
Report") to be issued by the Title Insurer and Seller has delivered to 
Purchaser the Title Report. Purchaser has ordered a survey or a survey update 
of the Property from a survey or licensed in California (such survey or 
survey update being herein referred to as the "Survey") and shall use its 
best efforts to deliver a copy thereof which shall be certified to the Title 
Insurer, to Purchaser and to Seller on or prior to the second Business Day 
following the execution and delivery of this Agreement. All exceptions to 
title and other matters appearing on the Title Report or the Survey (other 
than any such exceptions described in the second sentence of section 4.1.2 
hereof) shall constitute "Permitted Exceptions" for purposes of this 
Agreement. The Purchaser shall pay the entire cost of the Survey. In the 
event the Title Insurer amends or updates the Title Report ("Title Report 
Update") after the date on which the Purchaser posts the Deposit, Purchaser 
shall furnish Seller with a statement of objections, if any, to the title

                                      4
<PAGE>

to the Property to any matter first raised in the Title Report Update 
("Objections") within three (3) business days after its receipt of the Title 
Report Update ("Title Update Review Period"). Should Purchaser fail so to 
timely notify Seller of any such Objections to title to the Property which 
are first disclosed in a Title Report Update, Purchaser shall be deemed to 
have agreed to accept title subject to all matters of record and all matters 
shown on the Survey. All title matters and exceptions (i) arising out of the 
Lease including, without limitation, new Leases or amendments to Leases 
entered into pursuant to the terms hereof, or (ii) set forth in the Title 
Report, in any Title Report Update and on the Survey which are not Objections 
that Seller agrees to satisfy pursuant to Sections 4.1.2 and 4.2 hereof, and 
all title matters and exceptions which are waived or deemed to be waived are 
hereafter referred to as the "Permitted Exceptions". In no event shall the 
provisions of this Section be deemed to extend the Closing Date (it being 
understood and agreed that the posting of the Deposit by the Purchaser shall 
be deemed to be a waiver of all Objections that the Seller has not agreed to 
cure prior to the posting of the Deposit or that the Seller is not obligated 
to cure pursuant to the second sentence of Section 4.1.2 and that, in the 
event Purchaser posts the Deposit all such Objections shall be deemed to be 
"Permitted Exceptions" for all purposes of this Agreement).

          4.1.2    If Purchaser notifies Seller within the Title Update 
Review Period, if applicable, of any Objections first raised in the Title 
Report Update, then within five (5) days after Seller's receipt of 
Purchaser's notice ("Seller Response Period"), Seller shall notify Purchaser 
("Seller's Title Notice") of the Objections which Seller agrees to satisfy on 
or prior to the Closing, at Seller's sole cost and expense, and of the 
Objections that Seller cannot or will not satisfy. Notwithstanding the 
foregoing sentence, Seller shall, in any event, be obligated to cure those 
Objections (i) that are monetary liens or security interests against the 
Project other than taxes and assessments not yet delinquent or (ii) that have 
been voluntarily placed against the Property by Seller after the date hereof 
and that are not otherwise permitted pursuant to the provisions hereof. If 
Seller (a) delivers Seller's Title Notice stating that Seller cannot or will 
not satisfy any such Objections first raised in the Title Report Update or 
(b) fails to send the Seller's Title Notice within the Seller Response 
Period, then Purchaser has the option on or prior to the date that is two (2) 
days after the delivery by the Seller of the Seller's Title Notice of either 
(i) terminating this Agreement by delivering written notice thereof to Seller 
in which event it shall be deemed that Purchaser terminated this Agreement 
pursuant to Section 3.3 hereof and the rights of the parties shall be as set 
forth therein or (ii) it shall be deemed to have waived such Objections, in 
which event those Objections shall become "Permitted Exceptions".

          4.1.3    It is a condition to Purchaser's obligations to close that 
provided Purchaser shall meet the requirements of the Title Insurer and 
comply with its obligations under this Agreement including, without 
limitation, to pay the Purchase Price, the Title Insurer shall issue a 
standard American Land Title Association Owners Title Policy (on their 
current form but deleting the creditors' rights exception) (the "Title 
Policy") to Purchaser in the amount of the Purchase Price, insuring that 
Purchaser has good and indefeasible fee

                                      5
<PAGE>

simple title to the Property, subject only to the Permitted Exceptions. 
Purchaser will pay for the Title Policy which shall include (a) limiting the 
standard parties in possession exception to the rights of other parties in 
possession under the Lease shown on Schedule 1.5 as same may be revised 
pursuant to the terms hereof, as tenants only. (b) deleting any general 
mechanic's lien exception and (c) deleting any general survey exception 
and the standard exception for easements, or claims of easements, not shown by 
the public records and replacing same with all matters disclosed by the 
Survey (unless Seller, in Seller's sole discretion, agrees to remedy any such 
matter disclosed by the Survey). The Title Policy shall contain such 
endorsements as reasonably required by Purchaser, provided that Seller shall 
have no obligation to take any action or provide any indemnity or agreement 
to Title Insurer to support the issuance of such endorsements, and Purchaser 
shall pay the costs for all such endorsements.

          4.2      In the event that Seller shall be unable to convey title 
to the Property as herein provided, Purchaser shall, at its election, either 
(a) accept such title as Seller is able to convey without abatement or 
reduction of the Purchase Price or any credit or allowance on account 
thereof; or (b) terminate this Agreement. Upon such termination, the rights 
of the parties shall be as set forth in Section 3.5 hereof, Seller shall have 
no obligation or liability to Purchaser for any damages or other compensation 
which Purchaser may have sustained by reason of Seller's inability to convey 
title in accordance with the terms of this Agreement. Notwithstanding 
anything to the contrary herein contained, Seller shall not be required to 
bring any action or proceeding or take any other steps to remove any defects 
in or objections to tile or to expend any monies therefor, nor shall 
Purchaser have any right of action against Seller therefor at law or in 
equity for damages or specific performance for Seller's inability to convey 
title in accordance with the terms of the Agreement, provided, however, the 
Seller shall satisfy any mortgage or other lien which may be satisfied by 
payment of a sum of money only except for the liens for taxes and assessments 
not yet delinquent, and Seller shall remove at Closing any exceptions to 
title the Property created by the intentional acts of Seller after the date 
hereof which are in breach of this Agreement. In the event the Property is 
encumbered by any mortgage or other liens which may be satisfied by a sum of 
money only except for the liens for taxes and assessments not yet delinquent 
and which is not a Permitted Exception, Purchaser shall have the right, at 
the time of Closing, to apply a portion of the Purchase Price towards the 
payment and satisfaction of such mortgage or other liens and receive a credit 
against the Purchase Price for the amount so applied. Seller shall, however, 
have the right at its option, to remedy any title defects or objections and 
for such purpose shall be entitled to one or more adjournments of the 
Closing, but not for more than fifteen (15) days beyond the date Purchaser 
gives written notice of such defect or objection. Purchaser's obligations 
shall remain in full force and effect in the meantime.

       Section 5.  CLOSING DATE. The sale contemplated by this Agreement shall 
be consummated and closed at 9:00 a.m. (Pacific Time) on December 23, 1998, 
provided, however, that if such day shall not be a business day then on the 
next succeeding business day ("Closing Date") at the offices of the Title 
Insurer (or its agent), or at such earlier time

                                      6
<PAGE>

or other place as the parties shall mutually agree. TIME SHALL BE OF THE 
ESSENCE WITH RESPECT TO PURCHASER'S and SELLER'S OBLIGATION TO CLOSE ON THE 
CLOSING DATE subject, however, to Seller's rights to adjourn the Closing Date 
expressly set forth in this Agreement. The consummation and the closing of 
the purchase and sale of Project as contemplated by this Agreement, 
including, without limitation, the recordation of the grant deed, is herein 
referred to as the "Closing".

          Seller's obligation to sell the Property is conditioned upon the 
satisfaction (or Seller's written waiver) on or prior to the Closing Date of 
the following conditions:

               (i)      There shall exist on the Closing Date no pending 
                        order or decree from any governmental authority or 
                        entity prohibiting, enjoining or restraining 
                        Purchaser from consummating the transactions 
                        contemplated hereby with respect to the Property;

               (ii)     Purchaser shall have paid to Seller in cash the 
                        balance of the Purchase Price;

               (iii)    The Purchaser shall have signed a Natural Hazard 
                        Disclosure Statement, substantially in the form of 
                        Exhibit F, which shall serve to acknowledge 
                        Purchaser's receipt from the Seller of such Natural 
                        Hazard Disclosure Statement and the Purchaser's 
                        understanding thereof, and

               (iv)     Purchaser shall not otherwise be in material default 
                        of its obligations hereunder.

       Section 6.  "AS IS, WHERE IS AND WITH ALL FAULTS"

          6.1      The Purchaser has made, and shall make, such 
investigations and inspections of the Project and the books and records 
relating thereto to satisfy itself as to all matters relating to its purchase 
of the Project and Purchaser shall purchase the Project in "AS IS, WHERE IS 
AND WITH ALL FAULTS" condition, at the date hereof, subject to normal wear 
and tear until Closing (consistent with Seller's obligations in Section 10 
hereof) and subject to casualty damage as herein provided.

          Without limitation of the foregoing or of other provisions hereof, 
each of the Purchaser and Tenant acknowledges that (i) Tenant, an affiliate 
of the Purchaser, is, and at all times since August 27, 1996 has been, the 
sole tenant of the Property and accordingly each of the Tenant and the 
Purchaser is familiar with all aspects of the Property and the condition 
thereof and (ii) that the Purchaser, Tenant, Seller and certain other parties 
have, pursuant to the Settlement Agreement (as defined herein), settled all 
claims and potential claims of either the Purchaser or Tenant (and their 
respective affiliates) against the Seller or

                                      7



<PAGE>

Lincoln-Whitehall Pacific, L.L.C. ("Lincoln-Whitehall"), their affiliates and 
certain other persons or entities arising out of the lease or occupation by 
the Tenant or the Purchaser of the Property.

     This Agreement and the Exhibits and Schedules attached hereto contain 
all the terms of the agreement entered into between the parties, and 
Purchaser acknowledges that niether Seller nor any representatives of Seller 
has made any representations or held out any inducements to Purchaser, other 
than those herein expressed. Without limiting the generality of the 
foregoing, Purchaser has not relied on any representations or warranties and 
neither Seller nor its representatives has made any representations or 
warranties other than as expressly set forth herein, in either case express 
or implied, as to (i) the current or future real estate tax liability, 
assessment or valuation of the Property; (ii) the potential qualification of 
the Property for any and all benefits conferred by federal, state or 
municipal laws, whether for subsidies, special real estate tax treatment, 
insurance, mortgages, or any other benefits, whether similar or dissimilar to 
those enumerated; (iii) the compliance of the Property, in its current or any 
future state, with applicable zoning ordinances and the ability to obtain a 
change in the zoning or a variance in respect to the Property's 
non-compliance, if any, with said zoning ordinances; (iv) the availability of 
any financing for the purchase, alteration, rehabilitation or operation of 
the Property from any source, including but not limited to, state, city, or 
federal government or any institutional lender; (v) the current or future use 
of the Property; (vi) whether any Real Property lies within a special flood 
hazard area, regulated wetlands, an area of potential flooding, a very high 
hazard severity zone, a wildland fire area, an earthquake fault zone or a 
seismic hazard zone; or (vii) the physical condition of the Property 
including, without limitation, any environmental conditions (including, 
without limitation, the presence of asbestos or other hazardous materials) 
which may exist.

     Without limiting the above, and subject to the limitation expressly set 
forth in the third to last paragraph of this Section 6.1, each of the 
Purchaser and Tenant, on behalf of itself and its respective agents, present 
and former officers, directors, shareholders, partners, employees, parent and 
subsidiary affiliates, predecessors, affiliates, related entities, 
successors, subrogees, and assigns, and anyone acting in concert with or 
claiming rights derivative of any of them (collectively, the "Purchase 
Parties"), waives its right to recover from, and forever releases and 
discharges, and covenants not to sue each of Seller and Lincoln-Whitehall, 
and its respective direct and indirect owners, partners, members, property 
management company (including the general partners, officers, directors, 
members, shareholders, employees or agents thereof), principals, officers, 
directors, trustees, beneficiaries, agents, predecessors, servants, 
employees, successors, assigns, heirs, administrators, attorneys, 
subsidiaries, affiliated companies, insurance carriers, representatives and 
adjusters, and all other persons, corporations, or associations related to or 
acting in conjunction with, Seller or Lincoln-Whitehall (each a "Seller 
Party" and collectively, the "Seller Parties") from any and all Claims (as 
hereinafter defined) arising from or relating to the physical condition of 
the Property, the lease or occupation by the Tenant of the Property or any 
law or regulation applicable thereto, including, without

                                       8

<PAGE>

limitation, the future assumption of responsibility for the presence or 
alleged presence of asbestos or harmful, hazardous or toxic substances in, 
on, under or about the Property, including, without limitation, any claims 
under or on account of (i) the Comprehensive Environmental Response, 
Compensation and Liability Act of 1980, as the same may have been or may be 
amended from time to time, and similar state statutes, and any rules and 
regulations promulgated thereunder, (ii) any other federal, state or local 
law, ordinance, rules or regulation, now or hereafter in effect that deals 
with or otherwise in any manner relates to, environmental or health and 
safety matters of any kind, or (iii) this Agreement or the common law.

     In furtherance of the releases set forth in this section, each of 
Purchaser and Tenant (for itself and on behalf of the Purchaser Parties) 
hereby expressly waives to the maximum extent legally permissible any and all 
rights or benefits conferred by any law that is inconsistent with the waiver 
and release contained in this Section 6.1 and expressly consents that each 
such waiver and release shall be given full force and effect according to 
each and all of its express terms and conditions, including, without 
limitation, those relating to unknown and unsuspected Claims (as hereinafter 
defined), if any, as well as those relating to any other Claims set forth 
herein.

     EACH OF THE PURCHASER AND TENANT ACKNOWLEDGES THAT IT MAY 
HEREAFTERDISCOVER CLAIMS OR FACTS IN ADDITION TO OR DIFFERENT FROM THOSE 
WHICH IT NOW KNOWS OR BELIEVES TO EXIST WITH RESPECT TO THE SUBJECT MATTER OF 
THE RELEASES AND WHICH, IF KNOWN OR SUSPECTED AT THE TIME OF EXECUTING THIS 
AGREEMENT, MAY HAVE MATERIALLY AFFECTED THE RELEASES. NEVERTHELESS, EACH OF 
THE PURCHASER AND TENANT (FOR ITSELF AND ON BEHALF OF THE PURCHASER PARTIES) 
HEREBY WIAVES ANY RIGHT, CLAIM OR CAUSE OF ACTION THAT MIGHT ARISE AS A 
RESULT OF SUCH DIFFERENT OR ADDITIONAL CLAIM OF FACTS. EACH OF THE PURCHASER 
AND TENANT ACKNOWLEDGES THAT IT UNDERSTANDS THE SIGNIFICANCE AND CONSEQUENCE 
OF SUCH RELEASES AND THAT IT HAS BEEN ADVISED BY ITS LEGAL COUNSEL IN 
CONNECTION WITH SUCH RELEASES AND SPECIFIC WAIVER.

     IN CONNECTION WITH THE RELEASES CONTAINED HEREIN, EACH OF THE PURCHASER 
AND TENANT (FOR ITSELF AND ON BEHALF OF THE PURCHASER PARTIES) EXPRESSLY 
WAIVES THE BENEFITS OF SECTION 1542 OF THE CALIFORNIA CIVIL CODE, WHICH 
PROVIDES AS FOLLOWS: "A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE 
CREDITOR DOES NOT KNOW OR EXPECT TO EXIST IN HIS FAVOR AT THE TIME OF

                                      9

<PAGE>

EXECUTING THE RELEASE, WHICH IF KNOWN TO HIM MUST HAVE MATERIALLY AFFECTED 
THE SETTLEMENT WITH THE DEBTOR.''


_________________INITIALS OF SELLERS    _________________INITIALS OF PURCHASER
                                           _________________INITIALS OF TENANT

     As used in this Agreement, "Claims" mean any claim, demand, lien, 
agreement, contract, covenant, action, suit, cause of action (whether based 
on statutory or common law theories), obligation, loss, cost, expense 
(including, without limitation, reasonable attorney's fees (whether or not 
litigation is commenced), penalty, damages, order or other liability, of any 
kind whatsoever, whether at law or in equity, fixed or contingent, known or 
unknown, and whether accruing prior to the date hereof, now or in the future.

     The provisions of this Section 6 shall survive the Closing and 
converyance of title to the Property.

     Section 7.  SATISFACTION OF LIENS. If on the Closing there are any 
monetary liens or encumbrances on the Property which Seller is obligated to 
pay and discharge, Seller may use or instruct the Title Insurer to use any 
cash portion of the Purchase Price for the Property to satisfy the same, 
provided that Seller shall have delivered to Purchaser or the Title Insurer 
on or before the Closing, instruments in recordable form sufficient to 
satisfy such liens and encumbrances of record, together with the cost of 
recording or filing such instruments. The existence of any such liens or 
encumbrances shall not be deemed objections to title if Seller shall comply 
with the foregoing requirements and shall cause each of such liens and 
encumbrances to be discharged at or prior to Closing or cause the Title 
Insurer to insure against collection of the same out of the Property, which 
insurance against collections shall be subject to Purchaser's consent not 
to be unreasonably withheld. Nothing herein shall be deemed to modify the 
provisions of Section 4.1 of this Agreement.

     Section 8.  VIOLATIONS. Seller shall have no obligation or liability 
with respect to any violations of any laws, ordinances, statutes, codes, 
rules or regulations relating to the Property ("Violations").

     Section 9.  REPRESENTATIONS, WARRANTIES AND COVENANTS.

            9.1   Subject to the information disclosed or contained in the 
Disclosure Items (as defined herein), in the Due Diligence Materials, or in 
any third party or other reports or similar documents received or prepared by 
Purchaser in connection with its investigation of the Properties, Seller 
hereby represents and warrants for the exclusive benefit of Purchaser as of 
the date hereof as follows:

                                      10

<PAGE>

               9.1.1  Seller is duly organized, validly existing and in good 
standing under the laws of the State of its organization and is entitled to 
and has all requisite power and authority to own and operate its assets as 
they are presently owned and operated.

               9.1.2  The execution of this Agreement by Seller, the 
consummation of the transactions herein contemplated, and the execution and 
delivery of all documents to be executed and delivered by Seller pursuant 
hereto, have been duly authorized by all requisite action on the part of the 
Seller and this Agreement has been, and all documents to be delivered by 
Seller pursuant hereto will be, duly executed and delivered by Seller and is 
or will be, as the case may be, binding upon and enforceable against it in 
accordance with their respective terms.

               9.1.3  Neither the execution of this Agreement nor the 
carrying out of the transactions contemplated herein will result in any 
violations of or be in conflict with the instruments pursuant to which Seller 
was organized and/or operates or any applicable law, rule or regulation of 
any public, governmental or quasi-governmental agency or authority, or of any 
instrument or agreement to which Seller is a party, nor will it result in the 
creation or imposition of any lien on the Property nor will it result in the 
termination or the right to terminate any agreements to which Seller is a 
party or which affects the Property and no consent or approval of any third 
party is required for the execution of this Agreement or the carrying out of 
the transactions contemplated herein.

               9.1.4  Attached hereto as SCHEDULE 9.1.4 is a list of all 
material agreements, instruments and understandings (excluding the Leases and 
Permitted Exceptions) to which Seller is a party and which affect the 
Property. The property management agreement with Legacy Partners Commercial, 
Inc. (formerly known as Lincoln Property Company N.C., Inc. and LPC MS Inc.) 
shall be terminated by Seller on the Closing.

               9.1.5  Seller is not a foreign person (as defined in Section 
1445 of the Internal Revenue Code of 1986, as amended, and the Regulations 
promulgated thereunder).

            Except for any material changes made in compliance with Section 
10 hereof, if any of the foregoing representations and warranties shall 
change in any way which would have a material adverse affect on the Property, 
the income derived therefrom, the expenses relating thereto, or the operation 
thereof, Purchaser shall have the right to terminate this Agreement within 
the shorter of five (5) days of Purchaser's obtaining accrual knowledge of 
any such change or the time then remaining to Closing. If Purchaser timely 
exercises its right to terminate this Agreement it shall be deemed that 
Purchaser terminated this Agreements pursuant to Section 3.3 hereof and the 
rights of the parties shall be as set forth therein. If Purchaser fails to 
timely exercise its right to terminate this Agreement as provided above, this 
Agreement shall remain in full force and effect. The provisions of this 
Paragraph shall not survive the Closing. For purposes hereof, "material 
adverse affect" shall mean a change that in the aggregate would have an 
adverse effect on the Property, the income

                                      11

<PAGE>

derived therefrom and/or the expenses related thereto in excess of Fifty 
Thousand Dollas ($50,000).

            Notwithstanding anything to the contrary contained herein, Seller 
makes no representations or warranties with respect to the matters (the 
"Disclosure Item") set forth in SCHEDULE 1 attached hereto and made a part 
hereof. Notwithstanding anything to the contrary contained herein or in any 
document delivered in connection herewith, Seller shall have no liability 
with respect to the Disclosure Items.

            9.2  Purchaser and/or Tenant, as applicable, hereby warrants and 
represents for the sole and exclusive benefit of Seller as follows:

            (a)  Each of Purchaser and Tenant is, and will continue to be at 
all times until the Closing, a California corporation, duly organized and 
validly existing in the state of its formation and will at Closing be in good 
standing under the laws of the State in which the Project is located. 
Purchaser is and shall continue to be entitled to and has and shall continue 
to have all requisite power and authority to own and operate its assets as 
they are presently owned and operated.

            (b)  The execution of this Agreement by each of the Purchaser and 
Tenant has been duly authorized by all requisite action on the part of each 
of the Purchaser and Tenant and this Agreement is binding upon and 
enforceable against each of the Purchaser and Tenant in accordance with its 
terms. The consummation of the transactions contemplated herein and the 
execution and delivery of all documents to be executed and delivered by each 
of the Purchaser, and Tenant pursuant hereto have or will (if Purchaser 
elects to proceed with the transaction in accordance with this Agreement), 
prior to the Closing Date, be duly authorized by all requisite action on the 
part of the Purchaser and Tenant and all such documents to be executed and 
delivered by each of the Purchaser and Tenant pursuant hereto will be duly 
executed and delivered by it and will be binding upon and enforceable against 
each of the Purchaser and Tenant in accordance with their respective terms.

            (c)  Neither the execution of this Agreement nor the carrying out 
by each of the Purchaser and Tenant of the transactions contemplated herein 
will result in any violation of or be in conflict with the Articles of 
Organization or By-Laws of each of the Purchaser and Tenant, of any 
applicable law, rule or regulation of any public, governmental or 
quasi-governmental agency or authority, or of any instrument or agreement to 
which each of the Purchaser and Tenant is a party and no conesnt or approval 
of any governmental authority or third party is required for the execution of 
this Agreement or the carrying out by Purchaser of the transactions 
contemplated herein.

            (d)  Purchaser has not (i) made a general assignment for the 
benefit of creditors, (ii) filed any voluntary petition in bankruptcy or 
suffered the filing, of any involuntar petition by Purchaser's creditors, 
(iii) suffered the appointment of a receiver to

                                      12
<PAGE>

take possession of all, or substantially all, of Purchaser's assets, (iv) 
suffered the attachment or other judicial seizure of all, or substantially 
all, of Purchaser's assets, (v) admitted in writing its inability to pay its 
debts as they come due, or (vi) made an offer of settlement, extension or 
composition to its creditors generally. Purchaser has, and as of the Closing 
Date will have, sufficient funds to pay the Purchase Price and consummate the 
transactions contemplated by the Agreement.

                 (c)  Purchaser (i) is a sophisticated investor, (ii) is 
represented by competent counsel, (iii) understands the assumptions of risk 
and liability set forth in this Agreement and that, prior to Closing, 
Purchaser and its agents will have inspected the Property, fully observed the 
physical characteristics and condition of the Property, including without 
limitation, the suitability of the topography, the availability of water 
rights or utilities, the present and future zoning, subdivision and any and 
all other land use matters, the condition of the soil, subsoil or groundwater 
of the Property and any and all other environmental matters, the purpose(s) 
to which the Property is suited, drainage, flooding, access to public roads, 
and proposed routes or roads or extensions relative to the Property, (iv) 
acknowledges that its posting of the Deposit shall be deemed to be an 
acknowledgement by the Purchaser that, as of the date of the posting of such 
Deposit, it has received and has approved its due diligence investigation and 
the Due Diligence Materials and (v) understands that it will have no recourse 
whatsoever against the Seller or its Affiliates.

            9.3   The representations and warranties set forth in Section 9.1 
and Section 9.2 hereof shall not survive the Closing, PROVIDED that the 
representation contained in Section 9.2(e) shall survive the Closing. 
Notwithstanding anything to the contrary contained herein, if prior to the 
Closing, Purchaser has actual knowledge that any representation or warranty 
of Seller set forth in this Agreement (including, without limitation, any of 
the representations and warranties in Section 9.1) is not true, and 
nevertheless Purchaser proceeds to close the transaction, then Purchaser 
shall be deemed to have irrevocably and unconditionally waived its rights to 
assert any claim against Seller after the Closing with respect to any 
misrepresentation of which it had actual knowledge prior to the Closing. For 
purposes of this Section 9.3, Purchaser shall be deemed to have actual 
knowledge of the contents of the Due Diligence Materials, the Disclosure 
Items and all information specifically delivered to Purchaser or made 
available to Purchaser. The provisions of the preceding sentence shall 
survive the Closing.

     Section 10.  OPERATION OF PROPERTY TO CLOSING.

            10.1  From the date hereof until the Closing, or the termination 
of this Agreement, whichever shall first occur, (a) Seller shall continue to 
operate the Property in the manner in which it presently operates the 
Project; (b) Seller will maintain the existing insurance covering the 
Property or if any of such policies is expiring such policies shall be 
replaced with new policies containing similar coverage provided the same is 
available; (c) Seller shall not place any mortgage or any other encumbrance 
on the Property and Seller will not remove any of the Fixtures unless it 
replaces the same with Fixtures of similar quality


                                     13
<PAGE>

and (d) Seller will continue to do routine repairs to the Property in the 
same manner in which such repairs are presently made. If required to comply 
with its obligations contained in subdivisions (a) and (d) of the preceding 
sentence, Seller, to the extent required by the terms of the Lease, spend up 
to an aggregate sum of Ten Thousand Dollars ($10,000) for capital repairs and 
replacements to the Property. Notwithstanding anything to the contrary 
contained herein, Seller shall not be obligated to make any capital repairs 
and replacements to the Property exceeding the aggregate sum of Ten Thousand 
Dollars ($10,000) in order to comply with its obligations herein. In the 
event Seller would need to make such an expenditure in excess of Ten Thousand 
Dollars ($10,000) to comply with the foregoing provisions of subdivision 
10.1(a) and (d) of the first sentence of this Section 10.1 and the terms of 
the Lease and it shall be unwilling to do so, then Purchaser shall have the 
right either (a) to terminate this Agreement as provided in Section 3.3 
hereof as its sole and exclusive remedy or (b) to close on the acquisition of 
title to Property and receive a credit towards the Purchase Price in the 
amount of Ten Thousand Dollars ($10,000).

           10.2  Between the date hereof and the Closing, the Seller shall 
not enter into any new Contract without the prior written approval of the 
Purchaser nor shall it amend, modify, extend or terminate any Contract 
without the prior written approval of the Purchaser, unless such amendment, 
modification, extension or termination is expressly provided for in the 
applicable Contract or unless with respect to the extension or replacement of 
a Contract it is on terms generally similar to the existing arrangement and 
may be terminated by Purchaser on not more than thirty (30) days' notice 
without any penalty.

     Section 11.  CLOSING DOCUMENTS.

            11.1  At the Closing, Seller shall execute where appropriate and 
deliver the following documents to the Title Insurer:

                  11.1.1  a grant deed in the proper form for recording and 
meeting the requirements of the Title Insurer;

                  11.1.2  assignments of Seller's interest in all the Leases 
in the form of EXHIBIT B attached hereto and made a part hereof together with 
the original copies or photocopies of the same (to the extent they are in 
writing);

                  11.1.3  a bill of sale in the form of EXHIBIT C attached 
hereto ("Bill of Sale") and made a part hereof duly executed by Seller and an 
assignment of assignable warranties, permits, contracts, general intangibles 
(including, without limitation, trade names, to the extent provided herein) 
and other items transferring Seller's rights, title and interest in and to 
Assignable Warranties, Permits, Contracts and General Intangibles (including, 
without limitation, trade names, to the extent provided herein) if any, in 
the form of Exhibit D attached hereto and made a part hereof duly executed by 
Seller;


                                      14
<PAGE>

                  11.1.4  a FIRPTA Affidavit of Seller stating that Seller is 
not a foreign person (as defined in Section 1445 of the Internal Revenue Code 
of 1986, as amended, and the Regulations promulgated thereunder) and a 
California 590 Certificate;

                  11.1.5  a Natural Hazard Disclosure Statement, 
substantially in the form of Exhibit F, in respect of the Properties listed 
on Exhibit A, which the Purchaser shall sign to acknowledge Purchaser's 
receipt from the Seller of such Natural Hazard Disclosure Statement and the 
Purchaser's understanding thereof; and

                  11.1.6  copies of any "As-Built" surveys commissioned by 
Seller and in Seller's possession on the Closing Date;

                  11.1.7  such other instruments and documents which shall be 
useful and necessary in connection with the transaction herein contemplated 
and which do not impose any liability not agreed to in this Agreement.

            11.2  At the Closing, each of the Purchaser and Tenant, as 
applicable, shall execute (where appropriate) and deliver the following 
documents in addition to payment of the balance of the Purchase Price;

                  11.2.1  reasonable evidence of each of the Purchaser's and 
Tenant's authority to execute and deliver this Agreement and the documents to 
be delivered by it pursuant thereto.

                  11.2.2  an instrument of assumption of all of Seller's 
obligations under the Leases in the form of EXHIBIT B.

                  11.2.3  an instrument acknowledging the assignment of the 
Assignable Warranties, Permits, Contracts and General Intangibles in the form 
of EXHIBIT D.

                  11.2.4  a Bill of Sale in the form of EXHIBIT C.

                  11.2.5  a Purchaser's "AS-IS" Certificate in the form of 
EXHIBIT E.

                  11.2.6  a countersigned copy of the Natural Hazard 
Disclosure Statement.

                  11.2.7  such other instruments or documents which shall be 
useful and necessary in connection with the transaction herein contemplated.

     Section 12.  PRORATIONS AND COSTS.

            12.1  PRORATIONS.  Purchaser and Seller shall apportion (based on 
the actual number of days in a calendar month) as of 12:01 a.m. on the day of 
the Closing (except as


                                      15
<PAGE>

may otherwise be herein provided), the items hereinafter set forth. Any 
errors or omissions in computing apportionments at Closing shall be promptly 
corrected after Closing. The obligations set forth in this Section 12 shall 
survive the Closing. The items to be adjusted are:

                  12.1.1  City, state, county, school, real property taxes 
and other assessments for the fiscal year of sale (such apportionment shall 
be based upon the latest assessment available); should such proration be 
inaccurate based on the actual tax bills, if the same has not been received 
by the date of Closing, either party may demand after the date of Closing, 
and shall be entitled to receive upon demand, a payment correcting any 
inaccurate apportionment favoring the other party.

                  12.1.2  All rent and other Tenant charges to the extent 
that any rent or other Tenant charges have been collected at Closing, 
provided that if any delinquent rent or other Tenant charges exist at 
Closing, such amounts shall be paid to Seller at the Closing and the Purchase 
Price shall be increased by an amount equal to the amount of such delinquent 
rent or Tenant charges. From and after the Closing Date, Seller shall have 
and hereby reserves the right to pursue any remedy against Tenant in the 
event it owes rent or other charges with respect to the period prior to the 
Closing. The provisions of this Paragraph shall survive the Closing.

                  12.1.3  All other income and ordinary operating expenses of 
the Project including, without limitation, maintenance and other service 
charges and all other normal operating charges with respect to the Project 
shall be prorated at the Closing effective as of the Closing Date, and 
appropriate cash adjustments shall be made by Purchaser.

                  12.1.4  At the Closing, Purchaser shall receive a credit 
against the Purchase Price equal to the amount of all Tenant security 
deposits and the Seller shall be entitled to retain such security deposits. 
At the Closing, the Purchaser shall assume all bonds and assessments relating 
to the Properties.

                  12.1.5  If, at the time of the delivery of the deed, the 
Property or any part thereof shall have been affected by an assessment or 
assessments, which are or may become payable in annual installments, of which 
the first installment is then a charge or lien, the for the purposes of this 
Agreement, all the unpaid installments of any such assessment due and payable 
in calendar years prior to the year in which the Closing occurs shall be paid 
by the Seller and all installments becoming due and payable after the 
delivery of the deed shall be assumed and paid by the Purchaser, except, 
however, that any installments which are due and payable in the calendar year 
in which the Closing occurs shall be adjusted pro rata.

                  12.1.6  At the Closing, Purchaser shall reimburse Seller 
for the amount of any transferable utility or other deposits (other than 
security deposits which are covered by Section 12.1.4) assigned to Purchaser.


                                     16
<PAGE>

                  12.1.7  The parties acknowledge that the proration and 
similar provisions of this Agreement shall not operate as a termination or 
limitation of any obligation of the Tenant under the Lease to make payments 
or reimbursements under the terms of the Lease.

            12.2  COSTS.  Seller shall pay any City and County transfer tax 
applicable to the sale, one-half (1/2) of the escrow fee and the recording 
charges for recording the Deed. Purchaser shall pay the costs of obtaining 
the ALTA title insurance policy, the cost of any endorsements, and one-half 
(1/2) of the escrow fee. Any other costs and expenses of the sale of the 
Property and the escrow thereafter shall be paid according to local custom.

            12.3  TAX CERTIORARI PROCEEDINGS.  Seller is hereby authorized, 
but not obligated, to (a) commence (prior to the Closing Date) or continue 
(after the Closing Date) any proceeding for the reduction of the assessed 
valuation of the Property for any tax year which, in accordance with the laws 
and regulations applicable to the Property, requires that, to preserve the 
right to bring a tax certiorari proceeding with respect to such tax year, 
such proceeding be commenced prior to the Closing Date and (b) endeavour to 
settle any such proceeding in Seller's discretion; PROVIDED, HOWEVER, that if 
such proceeding is (i) for a tax year in which the Closing Date occurs or 
would affect such tax year or any subsequent tax year, such settlement shall 
not be made without Purchaser's prior consent, which consent shall not be 
unreasonably withheld or delayed, and (ii) for a tax year which commences 
after the Closing Date, the right to continue and settle such proceeding, 
including, without limitation, any contracts or agreements with tax 
certiorari counsel with respect to any such tax year, shall be deemed 
assigned to and assumed by Purchaser at the Closing. After the Closing, (i) 
Seller shall retain all rights (subject to any rights of Tenant under its 
Lease) with respect to any tax year ending prior to the tax year (and all 
refunds related thereto) in which the Closing Date occurs, and shall have the 
sole right to participate in and settle any proceeding related thereto 
(PROVIDED, that such settlement does not affect the assessed tax value for 
any subsequent tax year), and (ii) Purchaser shall have all rights with 
respect to any tax year (and all refunds related thereto) which ends after 
the Closing Date; PROVIDED, HOWEVER, that if the proceeding is for a tax year 
in which the Closing Date occurs, such settlement shall not be made without 
Seller's prior consent, which consent shall not be unreasonably withheld or 
delayed. With respect to any such proceeding for a tax year in which the 
Closing Date occurs (whether commenced by Seller or Purchaser), any refund or 
credit of taxes for such year shall be applied first to the unreimbursed 
out-of-pocket expenses, including reasonable counsel fees, necessarily 
incurred in obtaining such refund or credit, and second, to any Tenant 
entitled to same, and the balance shall be apportioned between Seller and 
Purchaser as of the Closing Date in accordance with the proportion of the 
applicable tax year occurring before and after the Closing Date. In each 
case, the party which commenced the proceeding shall deliver to the other 
copies of receipted tax bills and any decision or settlement agreement 
evidencing the reduction in taxes. If any refund shall be received by Seller 
which is for the account of Purchaser as provided in this Section 12.3, then 
Seller shall hold Purchaser's share thereof in trust for Purchaser and, 
promptly upon receipt thereof, pay such share to Purchaser or any other party 
entitled to same as provided above.


                                     17
<PAGE>

If any refund shall be received by Purchaser which is for the account of 
Seller as provided in this Section 12.3, then Purchaser shall hold Seller's 
share thereof in trust for Seller and, promptly upon receipt thereof, pay 
such share to Seller or any other party entitled to same as provided above. 
Each party shall execute any and all consents or other documents as may be 
reasonably necessary to be executed by such party so as to permit the other 
party to commence or continue any tax certiorari proceeding which such other 
party is authorized to commence or continue pursuant to the terms of this 
Section 12.3, or to collect any refund or credit with respect to any such tax 
proceeding. The provisions of this Section 12.3 shall survive the Closing.

     Section 13.  BROKERAGE. Seller and Purchaser represent and warrant to 
each other that no broker or finder, other than Cushman & Wakefield of 
California, Inc. and Goldman, Sachs & Co., was instrumental in arranging or 
bringing about this transaction and that there are no claims or rights for 
brokerage commissions or finders' fees in connection with the transactions 
contemplated hereby by any person or entity other than Cushman & Wakefield of 
California, Inc. and Goldman, Sachs & Co. whose fees will be the 
responsibility of Seller pursuant to separate agreements between Seller and 
Cushman & Wakefield of California, Inc., and Goldman, Sachs & Co. as 
applicable. If any person brings a claim for a commission or finder's fee 
based upon any contact, dealings or communication with Purchaser or any 
Seller, then the party through whom such person makes its claim shall defend 
the other party (the "INDEMNIFIED PARTY") from such claim, and shall 
indemnify the Indemnified Party and hold the Indemnified Party harmless from 
any and all costs, damages, claims, liabilities or expenses (including 
without limitation, reasonable attorneys' fees and disbursements) incurred by 
the Indemnified Party in defending against the claim. In addition, Purchaser 
hereby agrees to indemnify and hold harmless each Seller Party from any and 
all Claims resulting from any claim made by and Person for a brokerage 
commission, finders' fee or similar fee arising out of or relating to any 
Person for a brokerage commission, finders' fee or similar fee arising out of 
or relating to any action taken (or any communications made) by a Purchaser, 
or any of its agents, employees or contractors, in connection with the 
proposed resale by Purchaser of any Property or the marketing of such 
Property by Purchaser or by any Person on behalf of Purchaser. The provisions 
of this Section 13 shall survive the Closing or, if the Closing does not 
occur, any termination of this Agreement.

     Section 14  NOTICES. All notices or other communications hereunder to 
either party shall be (i) in writing and shall be deemed to be given on the 
third business day after deposit of both the original copy as provided below 
in a regularly maintained receptacle for the United States mail, by 
registered or certified mail, return receipt requested, postage prepaid, 
addressed as provided hereinafter, and (ii) addressed as set forth on the 
signature page of this Agreement.

            Notices may also be given by facsimile to the facsimile numbers 
set forth on the signature page hereto, with the original notice being mailed 
or by overnight courier service or United States Express Mail, in which 
event, the notice shall be deemed delivered on the date of facsimile 
(provided there is confirmation of delivery) or on the next business

                                      18
<PAGE>

day in the event overnight courier service or United States Express Mail (in 
each case with next business day delivery specified) is used.

     Section 15.  DAMAGE OR DESTRUCTION PRIOR TO CLOSING AND CONDEMNATION.

            15.1  If prior to the Closing, the Project is damaged or 
destroyed by fire or other casualty but the Project is not "materially 
damaged or destroyed" by such fire or other casualty, the Purchaser shall be 
required to perform this Agreement and shall be entitled to the insurance 
proceeds received by Seller or payable pursuant to the policies of insurance 
maintained by Seller plus a credit against the Purchase Price in the amount 
of the applicable insurance deductible. If the Project is materially damaged 
or destroyed by fire or other casualty, the Purchaser may terminate this 
Agreement on written notice to the Seller given within ten (10) days after 
Purchaser receives written notice of the occurrence of such fire or casualty. 
If Purchaser shall exercise such option, it shall be deemed that Purchaser 
terminated this Agreement pursuant to Section 3.3 hereof and the rights of 
the parties shall be as set forth therein. If Purchaser does not exercise 
such option to terminate, the Agreement shall remain in full force and effect 
in accordance with its terms and Purchaser shall be entitled to the proceeds 
of insurance as provided in the first sentence of this Section 15.1 and a 
credit against the Purchase Price in the amount of the applicable insurance 
deductible. In no event shall the Purchaser be entitled to any abatement or 
reduction of the Purchase Price by reason of such damage. In the event of any 
damage by fire or other casualty, the determination as to whether such damage 
or destruction is material shall be made by an engineer or contractor 
designated by Seller and approved by Purchaser, provided, however, Purchaser 
shall not unreasonably withhold or delay such approval and if it shall 
disapprove, Purchaser shall give the reasons for such disapproval. For 
purposes hereof, the Project shall be deemed "materially damaged or 
destroyed" if the cost of repair and restoration of such damage or 
destruction is greater than One Million Dollars ($1,000,000).

            15.2  In the event proceedings to condemn the Property or any 
material portion thereof (including, without limitation, the parking, 
structure or any access to the Property) are commenced before the Closing, 
the Purchaser shall have the right to terminate this Agreement in which event 
it shall be deemed that Purchaser terminated this Agreement pursuant to 
Section 3.3 hereof and the rights of the parties shall be as set forth 
herein. In the event Purchaser does not elect to terminate this Agreement, 
Seller shall assign to Purchaser, at the Closing, all of Seller's right, 
title and interest in and to any condemnation proceeds payable with respect 
to the Property.

     Section 16.  REPORTING REQUIREMENTS. Purchaser and Seller shall each 
deposit such other instruments as are reasonably required by the Title 
Insurer or otherwise required to close the escrow and consummate the purchase 
and sale of the Property in accordance with the terms hereof, including, 
without limitation, an agreement designating Title Insurer as the "Reporting 
Person" for the transaction pursuant to Section 6045(e) of the Internal 
Revenue Code and the regulations promulgated thereunder, and executed by 
Seller, Purchaser and

                                      19
<PAGE>

Title Insurer. Such agreements shall comply with the requirements of Section 
6045(e) of the Internal Revenue Code and the regulations promulgated 
thereunder.

     Section 17.  MISCELLANEOUS.

            17.1  This Agreement constitutes the entire Agreement between the 
parties (other than the Lease, dated August 12, 1996 between Purchaser and 
Seller, as amended by the First Amendment to the Lease Agreement, dated 
November 22, 1996 and all amendments thereto or assignments thereof) (and the 
Settlement Agreement and Mutual Release of All Claims Agreement, dated as of 
December __, 1998, among Seller, Purchaser, Tenant and certain other parties 
thereto (the "Settlement Agreement"), which Settlement Agreement shall remain 
in full force and effect). This Agreement cannot be changed, modified, waived 
or terminated orally but only by an agreement in writing signed by the 
parties hereto. This Agreement shall be binding upon the parties hereto and 
their respective heirs, executors, personal representatives and permitted 
successors and assigns.

            17.2  (a) IF THE SALE IS NOT CONSUMMATED DUE TO ANY DEFAULT BY 
PURCHASER HEREUNDER OR THE FAILURE BY PURCHASER TO SATISFY THE CONDITIONS TO 
SELLER'S OBLIGATION REQUIRED TO BE SATISFIED BY PURCHASER PRIOR TO THE 
CLOSING DATE, THEN SELLER SHALL RETAIN THE DEPOSIT, AND ANY INTEREST ACCRUED 
THEREON, AS LIQUIDATION DAMAGES. THE PARTIES HAVE AGREED THAT 
SELLER'S ACTUAL DAMAGES, IN THE EVENT OF A FAILURE TO CONSUMMATE THIS SALE 
DUE TO PURCHASER'S DEFAULT, WOULD BE EXTREMELY DIFFICULT OR IMPRACTICABLE TO 
DETERMINE. AFTER NEGOTIATION, THE PARTIES HAVE AGREED THAT, CONSIDERING ALL 
THE CIRCUMSTANCES EXISTING ON THE DATE OF THIS AGREEMENT, THE AMOUNT OF THE 
DEPOSIT IS A REASONABLE ESTIMATE OF THE DAMAGES THAT SELLER WOULD INCUR IN 
SUCH EVENT. SELLER'S RETENTION OF THE DEPOSIT AS LIQUIDATED DAMAGES IS NOT 
INTENDED TO BE A FORFEITURE OR PENALTY BUT IS INTENDED TO CONSTITUTE 
LIQUIDATED DAMAGES TO SELLER PURSUANT TO CALIFORNIA CIVIL CODE SECTIONS 1671, 
1676 AND 1677. BY PLACING THEIR INITIALS BELOW EACH PARTY SPECIFICALLY 
CONFIRMS THE ACCURACY OF THE STATEMENTS MADE ABOVE AND THE FACT THAT EACH 
PARTY WAS REPRESENTED BY COUNSEL WHO EXPLAINED, AT THE TIME THIS AGREEMENT 
WAS MADE, THE CONSEQUENCES OF THIS LIQUIDATED DAMAGES PROVISION. THE 
FOREGOING IS NOT INTENDED TO LIMIT ANY INDEMNIFICATIONS GIVEN BY PURCHASER IN 
THIS AGREEMENT OR PURCHASER'S OBLIGATIONS TO PAY COSTS SET FORTH IN SECTION 
12.2.

     INITIALS: SELLER                 PURCHASER:
                      ---------------            ---------------

                  (b) In the event Purchaser shall be ready, willing and able 
to close and shall have performed or tendered performance of all of its 
obligations in a timely

                                      20
<PAGE>

manner and Seller shall default in its obligations under this Agreement, the 
parties hereto agree that Purchaser's remedy shall be limited to the 
termination of this Agreement as set forth in Section 3.3 hereof or to 
specific performance of this Agreement. Except for any liability or 
obligation of Seller expressly provided for in Section 9.1 (subject to the 
limitations thereon set forth in Section 9.3 and elsewhere in this Agreement) 
or in Section 13 of this Agreement, Purchaser hereby unconditionally and 
irrevocably waives, to the greatest extent permitted by law, any claim for 
damages against Seller arising out of this Agreement including, without 
limitation, any claim arising out of any default or misrepresentation by 
Seller hereunder.

                  (c) In the event of a default by either party hereto which 
becomes the subject of litigation, the losing party agrees to pay the 
reasonably legal fees of the prevailing party. The provision of this Section 
shall survive the Closing or the termination of this Agreement.

            17.3  Time shall be of the essence of the obligations of the 
parties under this Agreement, provided, however, if the final date of any 
period set forth herein (including, but not limited to, the Closing Date) 
falls on a Saturday, Sunday or legal holiday under the laws of the State in 
which the Project is located, or the United States of America, the final date 
of such period shall be extended to the next day that is not a Saturday, 
Sunday or legal holiday. The term "days" as used herein shall mean calendar 
days, with the exception of "business days", which term shall mean each day 
except for any Saturday, Sunday or legal holiday under the laws of the State 
in which the Project is located or the United States of America.

            17.4  This Agreement may be executed in any number of 
counterparts, all of which taken together shall constitute one and the same 
original, and the execution of separate counterparts by Purchaser and Seller 
shall bind Purchaser and Seller as if they had each executed the same 
counterpart.

            17.5  This Agreement shall be governed, construed and enforced in 
accordance with the laws of the State of California.

            17.6  No agreements or covenants to perform any obligation or 
representations and warranties contained in this Agreement shall survive the 
delivery of the deed except as expressly provided herein. Acceptance of the 
deed is an acceptance of all of the obligations of the Seller hereunder 
except such as may expressly be stated to survive the Closing.

            17.7  The headings used in this Agreement are for convenience 
only and do not constitute substantive matters to be considered in construing 
same.

            17.8  The parties agree that neither this Agreement nor any 
memorandum or notice thereof shall be recorded.

                                      21
<PAGE>

            17.9  This Agreement may not be assigned by the Purchaser, 
without the consent of the Seller; provided, that the Purchaser may assign 
its rights or obligations under this Agreement to a wholly-owned subsidiary 
of Purchaser that is reasonably satisfactory to Seller (which wholly-owned 
subsidiary shall not be permitted to assign its rights or obligations under 
this Agreement) that executes and delivers to Seller an assignment and 
assumption instrument acceptable to Seller pursuant to which the Purchaser 
assigns all of its rights, title and interest in and to this Agreement to the 
assignee (including all rights to the Deposit and all interest earned 
thereon) and the assignee assumes and agrees to be bound by all of the 
obligations of the Purchaser under this Agreement and the Confidentiality 
Agreement. In connection with any assignment pursuant to the terms hereof, 
the assignee shall reconfirm in a written instrument reasonably acceptable to 
Seller and delivered to Seller concurrently with or prior to the assignment 
said representations and warranties as applied to the assignee. No other 
assignment of this Agreement shall be permitted except upon the prior 
written consent of Seller. No assignment of this Agreement shall release the 
Purchaser herein; provided that the assigner shall be released with respect 
to its obligation to consummate the transactions contemplated herein. No 
Assignment shall excuse timely payment by Purchaser or its assignee hereunder.

            17.10 Submission of this form of Agreement for examination shall 
not bind Seller in any manner nor be construed as an offer to sell and no 
contract or obligations of Seller shall arise until this instrument is 
executed by both Seller and Purchaser and delivery is made to each and the 
Deposit has been received by the Escrow Agent.

            17.11 The obligations of Seller are intended to be binding only on 
the Property of Seller and shall not be personally binding upon, nor shall 
any resort be had to, the private properties of any of its trustees, 
officers, beneficiaries, directors, members, or shareholders, or of its 
investment manager, the general partners, officers, directors, members, or 
shareholders thereof, or any employees or agents of Seller or its investment 
manager.

     Section 19.  CONFIDENTIALITY. Each of the Purchaser and Tenant will 
maintain strict confidentiality of all aspects of this Agreement including, 
without limitation, any information obtained through the due diligence 
process (including, without limitation, any papers, documents, data, plans or 
other information or materials provided by Seller or its affiliates or agents 
concerning the Project and any memoranda, reports, summaries, or together 
documents, writings or recordings relating to the Project or to such 
information (the "Evaluation Material"). Each of the Purchaser and Tenant 
agrees that such information and Evaluation Material will be used for no 
purpose other than evaluating a possible transaction involving the Purchaser, 
as a principal, exclusively for its own account, and not as a broker, finder 
or similar agent for any other person, and that, except as may be agreed in 
writing by the Seller, each of the Purchaser and Tenant will not copy or 
duplicate any Evaluation Material. In addition, each of the Purchaser and 
Tenant agreed that the Purchaser and the Related Parties (as defined below) 
of the Purchaser will not, without prior written consent of Seller, disclose 
to any person (other than a person authorized hereunder), the fact that the 
Evaluation Material has been made available to the Purchaser or Tenant, that 
discussions or

                                      22
<PAGE>

negotiations between the Purchaser or Tenant and the Seller are now taking 
place or will take place, or any of the terms, conditions or other facts with 
respect to the possible acquisition of the Project.

          In furtherance of the foregoing, except as may be required by law 
or as may be necessary to evaluate the Property for Purchaser's acquisition 
and financing therefor, Purchaser will not divulge any such information or the 
Evaluation Material to other persons or entities including, without 
limitation, appraisers, real estate brokers, or competitors of Seller. 
Notwithstanding the foregoing, Purchaser shall have the right to disclose 
information with respect to the Property to officers, directors, employees, 
attorneys, accountants, environmental auditors, engineers, permitted 
assignees under this Agreement and other consultants (collectively, "Related 
Parties") to the extent necessary for Purchaser to evaluate its acquisition of 
the Property provided that all Related Parties are told that such information 
is confidential and agree (in writing for any third party engineers, 
environmental auditors or other consultants) to keep such information 
confidential.

          Each of the Purchaser and Tenant agrees that the Seller will have no 
adequate remedy at law if the Purchaser or Tenant were to violate any of the 
terms of this Section 18. Accordingly, in the event of such a breach by the 
Purchaser or Tenant, the Seller and its affiliates have the right, in addition 
to any other right the Seller and its affiliates may have, to seek injunctive 
relief to restrain any breach or threatened breach by us or specific 
enforcement of such terms. Each of the Purchaser and Tenant further agrees 
that it shall be responsible to the Seller and the Seller Parties for any 
breach by the Purchaser, Tenant or any of the Purchaser Related Parties of the 
terms of this Section 18.

          Although the Seller has endeavored to include in the Evaluation 
Material information known to it which it believe to be relevant for the 
purpose of the Purchaser's investigation, each of the Purchaser and Tenant 
understands and acknowledges that neither the Seller nor any of the Seller 
Parties makes any representation or warranty to us as to the accuracy or 
completeness of the Evaluation Material. Each of the Purchaser and Tenant 
further agrees that none of the Seller or any of the Seller Parties shall 
have liability to the Purchaser, Tenant or any of the Purchaser's 
representatives or agents resulting from the use of or reliance on the 
Evaluation Material by the Purchaser, Tenant or the Purchaser's 
representatives and agents. Each of the Purchaser and Tenant acknowledges 
that the Seller is not responsible to either the Purchaser or Tenant to 
determine whether toxic or hazardous wastes or substances or other 
undesirable materials are present at the Project and that it is solely the 
responsibility of the Purchaser to conduct investigations to determine the 
presence of such materials.

          Notwithstanding the foregoing, the Seller or the Tenant may make a 
public announcement concerning the transactions contemplated by this 
Agreement to the extent required to comply with applicable law or regulation 
or the rules of a stock exchange on which the stock of the Tenant is listed or 
quoted; PROVIDED that the Purchaser and the Tenant shall provide the Seller 
with a copy of any such proposed announcement not less than two 

                                      23
<PAGE>

(2) business days prior to the scheduled release of such announcement and 
provide the Seller with the opportunity to approve such proposed release 
(such approval not to be unreasonably withheld).

          The provisions of this Section 18 shall survive the Closing or any 
termination of this Agreement. In the event that this Agreement is 
terminated, the Purchaser agrees to return all Evaluation Materials to the 
Seller immediately upon the request of the Seller and not to retain any 
copies, extracts or other reproductions, in whole or in part, of such 
Evaluation Materials.

                                      24
<PAGE>

          IN WITNESS WHEREOF, this Agreement has been entered into as of the 
day and year first above written.

               SELLER:             WHLW Real Estate Limited Partnership

                                   By: WHLW Gen-Par, Inc.
                                       General Partner



                                   By:  
                                        ---------------------------------------

                                   Its: 
                                        ---------------------------------------


               PURCHASER:          Natrol Real Estate, Inc.,
                                   a California Corporation



                                   By:  /s/ DENNIS R. JOLICOEUR
                                        ---------------------------------------

                                   Its: Executive Vice President and Treasurer
                                        ---------------------------------------

                                   By:  
                                        ---------------------------------------

                                   Its: 
                                        ---------------------------------------


               TENANT:             Natrol, Inc., a California Corporation



                                   By:  /s/ DENNIS R. JOLICOEUR
                                        ---------------------------------------

                                   Its: Executive Vice President and Treasurer
                                        ---------------------------------------

                                   By:  
                                        ---------------------------------------

                                   Its: 
                                        ---------------------------------------


                                      25
<PAGE>

                                   ADDRESS FOR NOTICES TO SELLER:

                                   Legacy Partners Commercial, Inc.
                                   101 Lincoln Centre Drive, 4th Floor
                                   Foster City, CA 94404-1167
                                   Attention: Robert Phipps
                                   Fax No.: (650) 573-8624

               with a copy to:     Sullivan & Cromwell
                                   125 Broad Street
                                   New York, New York 10004
                                   Attention: Gary Israel
                                   Fax No.: (212) 558-4000

                                   and

                                   Real Estate Law Group
                                   2330 Marinship Way, Suite 211
                                   Sausalito, CA 94965
                                   Attention: Bonnie Frank
                                   Fax No.: (415) 331-7272

or to such other address as either party may from time to time specify in 
writing to the other party. Any notice shall be effective only upon delivery 
or refusal of delivery.

                                   ADDRESS FOR NOTICE TO PURCHASER:

                                   Natrol Real Estate, Inc.
                                   21411 Prairie Street
                                   Chatsworth, CA 91311
                                   Attention: Elliott Balbert
                                   Fax No.: (818) 759-6001

               with a copy to:     Arter & Hadden, LLP
                                   5959 Topanga Canyon Blvd.
                                   Suite 244
                                   Woodland Hills, California 91367
                                   Attention: David Laufer
                                   Fax No.: (818) 712-0036

                                      26
<PAGE>

                                   EXHIBIT "A"

                                DESCRIPTION OF LAND

21411 Prairie Street, Chatsworth, California

          [Legal Description]

                                      A-1
<PAGE>

                                   EXHIBIT B

                      ASSIGNMENT AND ASSUMPTION OF LEASES

          ASSIGNMENT AND ASSUMPTION OF LEASES (this "Assignment") made as of 
the day of December ____, 1998 by and between WHLW Real Estate Limited 
Partnership ("Assignor") and Natrol Real Estate, Inc., ("Assignee").

                               W I T N E S S E T H:

          WHEREAS, Assignor and Assignee are parties to that certain Purchase 
and Sale Agreement, dated December ____, 1998 (the "Purchase Agreement") 
covering the Premises set forth on Exhibit A hereto; and

          WHEREAS, Assignor has simultaneously herewith conveyed to the 
Assignee all of Assignor's right, title and interest in and to the Premises 
located at ________________________________, and in connection therewith, 
Assignor has agreed to assign to Assignee all of Assignor's right, title and 
interest in and to the lease described on the Schedule of Leases attached as 
Exhibit "B" hereto and the guaranties, security deposits and other documents 
related thereto, if any (collectively, the "Lease").

          NOW, THEREFORE, in consideration of the sum of Ten Dollars ($10.00) 
and other good and valuable consideration, the receipt and sufficiency of 
which are hereby acknowledged, the parties hereto hereby agree as follows:

          1.       Assignor hereby assigns unto Assignee, all of the right, 
title and interest of Assignor in and to the Lease.

          TO HAVE AND TO HOLD the same unto Assignee, its successors and 
assigns from and after the date hereof, subject to the terms, covenants and 
conditions of the Lease.

          2.       This Assignment is made without representation or warranty 
by Assignor except as provided in that certain Certificate delivered by 
Assignor to Assignee on the date hereof.

          3.       Assignee assumes the performance of all of the obligations 
of Assignor under the Lease to be first performed from and after the date 
hereof and does not assume any obligations or liabilities under the Lease 
accruing prior to the date hereof.

          4.       Effective as of the date hereof, Assignee hereby agrees to 
indemnify, defend (with counsel reasonably acceptable to Assignor), and hold 
Assignor and each other

                                      B-1


<PAGE>

Seller Party (as defined in the Purchase Agreement) harmless from any and all 
Claims (as defined in the Purchase Agreement), originating on or subsequent 
to the data hereof, under, relating to or arising out of the Lease.

          5.   Any rental and other payments under the Lease shall be 
prorated between the parties as provided in the Purchase Agreement.

          6.   In the event of any dispute between Assignor and Assignee 
arising out of the obligations of Assignor under this Assignment or 
concerning the meaning or interpretation of any provision contained herein, 
the losing party shall pay the prevailing party's costs and expenses of such 
dispute, including, without limitation, reasonable attorneys' fees and costs. 
Any such attorneys' fees and other expenses incurred by either party in 
enforcing a judgment in its favor under this Assignment shall be recoverable 
separately from and in addition to any other amount included in such 
judgment, and such attorneys' fees obligation is intended to be severable 
from the other provisions of this Assignment and to survive and not be 
merged into any such judgment.

          7.   This Agreement shall be governed by and construed in 
accordance with the laws of the State of California.

          8.   This Assignment is made without recourse and without any 
express or implied representation or warranty of any kind. Assignee on behalf 
of itself and its agents, employees, representatives, successors and assigns 
hereby agrees that in no event or circumstances shall Assignor or any Seller 
Party have any personal liability under this Assignment, or to any of 
Assignee's creditors, or to any other party in connection with the Property. 
This Assignment may be executed in counterparts, each of which shall be 
deemed an original, and all of which shall taken together be deemed one 
document.

          9.   This Assignment is delivered pursuant to the Purchase 
Agreement and Assignee expressly acknowledges the affirms the provisions 
thereof.

          10.  This Assignment shall be binding on and inure to the benefit 
of the parties hereto, their heirs, executers, administrators, successors in 
interest and assigns.

          11.  This Assignment may be executed in separate counterparts, 
which together, shall constitute one and the same fully executed Assignment.

          12.  The obligations of Assignor are intended to be binding only on 
the property of Assignor and shall not be personally binding upon, nor shall 
any resort be had to, the private properties of any Seller Party.

          Capitalized terms used herein and not defined herein shall be the 
meanings given to them in the Purchase Agreement.

                                      B-2


<PAGE>

          IN WITNESS WHEREOF, this Assignment has been duly executed as of 
the date first above written.

                                 ASSIGNOR: WHLW Real Estate Limited Partnership

                                 By:  WHLW Gen-Par, Inc.
                                      General Partner


                                 Name: 
                                       ----------------------------------------

                                 Title:
                                       ----------------------------------------



                                 ASSIGNEE: Natrol Real Estate, Inc.


                                 Name:
                                       ----------------------------------------

                                 Title:
                                       ----------------------------------------

                                      B-3


<PAGE>

                                  EXHIBIT C

                                 BILL OF SALE

          FOR GOOD AND VALUABLE CONSIDERATION, the receipt of which is hereby 
acknowledged, WHLW Real Estate Limited Partnership ("Seller") does hereby 
sell, transfer and convey to Natrol Real Estate, Inc. ("Purchaser"), the 
Personal Property as such term is defined in that certain Purchase and Sale 
Agreement between Seller and Purchaser dated as of December __, 1998 (the 
"Purchase Agreement").

          PURCHASER ACKNOWLEDGES THAT SELLER IS SELLING AND PURCHASER IS 
PURCHASING SUCH PERSONAL PROPERTY ON AN "AS IS, WHERE IS AN WITH ALL FAULTS" 
BASIS AND THAT THE PURCHASER IS NOT RELYING ON ANY REPRESENTATIONS OR 
WARRANTIES OR ANY KIND WHATSOEVER EXPRESS OR IMPLIED, FROM SELLER OR ANY 
SELLER PARTY AS TO ANY MATTERS CONCERNING SUCH PERSONAL PROPERTY, INCLUDING, 
WITHOUT LIMITATION, ANY WARRANTIES AS TO TITLE OR IMPLIED WARRANTIES OR 
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE. NOTWITHSTANDING THE 
FOREGOING, SELLER REPRESENTS THAT IT OWNS ALL OF THE PROPERTY FREE AND CLEAR 
OF ALL LIENS AND ENCUMBRANCES.

          The obligations of Seller are intended to be binding only on the 
property of Seller and shall not be personally binding upon, nor shall any 
resort be had to, the private properties of any Seller Party.

                                      C-1


<PAGE>

          Capitalized terms used herein and not defined herein shall be the 
meanings given to them in the Purchase Agreement.

Dated: December __, 1998           SELLER: WHLW Real Estate Limited Partnership

                                   By:  WHLW Gen-Par, Inc.
                                        General Partner


                                        Name:
                                              ---------------------------------

                                        Title:
                                              ---------------------------------




                                   PURCHASER: Natrol Real Estate, Inc.


                                        Name: 
                                              ---------------------------------

                                        Title:
                                              ---------------------------------

                                      C-2


<PAGE>

                                  EXHIBIT D

                 ASSIGNMENT OF WARRANTIES, PERMITS, CONTRACTS
                           AND GENERAL INTANGIBLES


          ASSIGNMENT OF WARRANTIES, PERMITS, CONTRACTS AND GENERAL 
INTANGIBLES (this "Assignment") made as of the __ day of December, 1998 by 
and between WHLW Real Estate Limited Partnership ("Assignor") and Natrol 
Real Estate, Inc. ("Assignee").

                             W I T N E S S E T H:

          WHEREAS, Assignor her simultaneously herewith conveyed to the 
Assignee all of the Assignor's right, title and interest in and to the 
premises located on Exhibit "A" attached hereto (the "Premises"), and in 
connection therewith. Assignor has agreed to assign to Assignee all of 
Assignor's right, title and interest in and to (i) the warranties and/or 
guaranties; if any, relating to the Premises to the extent assignable 
(collectively, "Warranties"), (ii) any governmental approvals or permits 
relating to the Premises to the extent assignable (collectively, "Permits"), 
(iii) the agreements, contracts instruments and understandings listed on 
Annex __ attached hereto (collectively, the "Contracts") and (iv) general 
intangibles relating to the Property including, without limitation, the trade 
name, to the extent provided in the Purchase Agreement, if any, used to 
identify the Premises or any variation thereof, provided Assignor makes 
absolutely nor representation or warranty that it has any ownership of or 
right to use any trade name (collectively, "General Intangibles").

          NOW THEREFORE, in consideration of the sum of Ten Dollars ($10.00) 
and other good and valuable consideration, the receipt and sufficiency of 
which are hereby acknowledged, the parties hereto hereby agree as follows:

          1.   To the extent assignable, Assignor hereby assigns unto 
assignee, all of the right, title and interest, if any, of Assignor in and to 
the Warranties, Permits, Contracts and General Intangibles;

          TO HAVE AND TO HOLD the same unto Assignee, its successors and 
assigns from and after the date hereof.

          2.   Effective as of the date hereof, Assignee hereby assumes and 
unconditionally agrees to observe and perform all of the Assignor's 
obligations under, relating to or arising out of the Contracts, originating 
on or subsequent to the date hereof Assignee hereby agrees to indemnify 
Assignor and its affiliates, against and hold Assignor and its affiliates 
harmless from any and all Claims (as defined in the Purchase Agreement), 
originating on or subsequent to the date hereof, under, relating to or 
arising out of the Contracts.

                                      D-3


<PAGE>

          3.   In the event of any dispute between Assignor and Assignee 
arising out of the obligations of Assignor under this Assignment or 
concerning the meaning or interpretation of any provision contained herein, 
the losing party shall pay the prevailing party's costs and expenses of such 
dispute, including, without limitation, reasonable attorneys' fees and 
costs. Any such attorneys' fees and other expenses incurred by either party 
in enforcing a judgment in its favor under this Assignment shall be 
recoverable separately from and in addition to any other amount included in 
such judgment, and such attorneys' fees obligation is intended to be 
severable from the other provisions of this Assignment and to survive and 
not be merged into any such judgment.

          4.   This Assignment shall not be construed as a representation or 
warranty by Assignor as to the transferability or enforceability of the 
Warranties, the Permits, the Contracts or the Intangible Property 
(collectively, the "INTERESTS"), and Assignor shall have no liability to 
Assignee in the event that any or all of the Interests (a) are not 
transferable to Assignee or (b) are canceled or terminated by reason of this 
assignment or any acts of Assignee. Furthermore, Assignee on behalf of itself 
and the Purchaser Parties hereby agrees that in no event or circumstances 
shall Assignor or any Seller Party have any personal liability under this 
Assignment, or to any of Assignee's creditors, or to any other party in 
connection with the Interests.

          5.   This Assignment shall be governed by and construed and in 
accordance with the laws of the State of California.

          6.   This Assignment is made without recourse and without any 
express or implied representation or warranty of any kind or nature, except 
as expressly set forth in the Purchase Agreement.

          7.   This Assignment is delivered pursuant to the Purchase 
Agreement attached hereto and to which this Assignment is an Exhibit thereof, 
and Assignee expressly acknowledges and affirms the provisions thereof. This 
Assignment may be executed in counterparts, each of which shall be deemed an 
original, and all of which shall taken together be deemed one document.

          8.   This Assignment shall be binding on Assignor and its 
successors, assigns and legal representatives and shall insure to the benefit 
of the Assignee and its successors, assigns and legal representatives.

          9.   This Assignment may be executed in separate counterparts, 
which, together, shall constitute one and the same fully executed Assignment.

          10.  The obligations of Assignor are intended to be binding only on 
the property of Assignor and shall not be personally binding upon, nor shall 
any resort be had to, the private properties of any Seller Party.

                                      D-4
<PAGE>

          Capitalized terms used herein and not defined herein shall have the 
meanings given to them in the Purchase Agreement.

          IN WITNESS WHEREOF, this Assignment has been duly executed as of 
the date first above written.


                              ASSIGNOR: WHLW Real Estate Limited Partnership


                               By: WHLW Gen-Par, Inc.
                                   General Partner



                                   Name:
                                         ------------------------------------
                                   Title:
                                         ------------------------------------



                              ASSIGNEE: Natrol Real Estate, Inc.



                                   Name:
                                         ------------------------------------
                                   Title:
                                         ------------------------------------

                                      D-5
<PAGE>

                                       EXHIBIT E

                             PURCHASER'S AS-IS CERTIFICATE

          THIS CERTIFICATE AND AGREEMENT ("Certificate") is made as of the 
     day of December, 1998, by Natrol Real Estate, Inc. ("Purchaser") and 
Natrol, Inc.("Tenant"), to and for the benefit and WHLW Real Estate Limited 
Partnership ("Seller").

                                  RECITALS

          Seller. Purchaser and Tenant are parties to a Purchase and Sale 
Agreement, dated as of December     , 1998 (the "Purchase Agreement") which 
provides for the sale of a certain real property (the "Property") legally 
described on EXHIBIT A attached to the Purchaser Agreement and incorporated 
herein by this reference. Any capitalized terms not otherwise defined herein 
shall have the meaning ascribed to such term in the Purchase Agreement; and

          The Purchase Agreement requires, INTER ALIA, that, as a condition 
precedent to Seller's obligations under the Purchase Agreement. Purchaser and 
Tenant shall execute and deliver this Certificate to Seller at Closing.

          NOW, THEREFORE, in consideration of TEN AND NO/100 DOLLARS ($10.00) 
and other good and valuable consideration, the receipt and sufficiency of 
which are hereby acknowledged, each of Purchaser and Tenant hereby certifies 
and agrees as follows:

          1.       Each of Purchaser and Tenant hereby acknowledges that it has 
examined and investigated to its full satisfaction all facts, circumstances 
and matters relating to the Property, or otherwise relevant to its purchase 
of the foregoing, including without limitation:

                   (i) all matters relating to governmental and other legal 
          requirements with respect to the Property, such as taxes,
          assessments, zoning, use permit requirements and building  codes;

                   (ii) all zoning, land use, building, environmental and other
          statutes, rules, or regulations applicable to the Property;

                   (iii) to the extent in the possession of Seller or Seller's 
          property manager, a copy of a survey of the Property (a "SURVEY");

                                        E-1
<PAGE>

                   (iv) to the extent in the possession of Seller or Seller's
          property manager, reports, studies, assessments, investigations
          and other materials related to the presence of Hazardous Materials
          at, on or under the Property and the compliance of such Property
          with all environmental laws, including environmental assessment
          reports;

                   (v) the Lease with respect to the Property and all matters 
          in connection therewith, including, without limitation, the ability 
          of the Tenant thereto to pay the rent;

                   (vi) the Contracts and other documents or agreements of
          significance affecting the Property;

                   (vii) all matters relating to the income and operating or 
          capital expenses of the Property and all other financial matters; 
          and

                   (viii) all matters relating to title to the Property;

                   (ix) the physical condition of the Property, including, 
          without limitation, the interior, the exterior, the square footage 
          of the improvements or the leasehold improvements and of the tenant 
          space therein, the structure, the roof, the paving, the utilities, 
          and all other physical and functional aspects of the Property, 
          including the presence or absence of Hazardous Materials;

                   (x) any easements and/or access rights affecting the 
          Property;

                   (xi) all matters that would be revealed by an ALTA as-built 
          survey, a physical inspection or an environmental site assessment 
          of the Property;

                   (xii) all matters reflected on each of the Natural Hazard 
          Disclosure Statements; and

                   (xiii) all other matters of significance affecting, or 
          otherwise deemed relevant by the Purchaser with respect to, the 
          Property.

          2.       Purchaser acknowledges and agrees that (i) it has been given
the full opportunity to inspect and investigate all aspects of the Property, 
either independently or through agents, representatives or experts of 
Purchaser's choosing, as Purchaser considers necessary or appropriate, 
including without limitations those set forth in the Purchase Agreement, (ii) 
it has completed its independent investigation of the Property and the Due 
Diligence Materials, and (iii) it is acquiring the Property based  
exclusively on such independent investigation. The funding of the Deposit by

                                        E-2
<PAGE> 

Purchaser and the execution of this certificate conclusively constitute 
Purchaser's approval of each and every aspect of the Property. Purchaser (i) 
is a sophisticated investor, (ii) is represented by competent counsel, (iii) 
understands the assumptions of risk and liability set forth in this 
Certificate and that, prior to Closing, Purchaser and its agents have 
inspected the Property, fully observed the physical characteristics and 
condition of the Property, performed a thorough investigation of the 
suitability of Purchaser's intended use of the Property, including without 
limitation, the suitability of the topography, the availability of water 
rights or utilities, the present and future zoning, subdivision and any and 
all other land use matters, the condition of the soil, subsoil or 
groundwater of the Property and any and all other environmental matters, the 
purpose(s) to which the Property is suited, drainage, flooding, access to 
public roads, and proposed routes or roads or extensions relative to the 
Property, (iv) acknowledges that its posting of the Deposit was deemed to be 
an acknowledgment by the Purchaser that, as of the date hereof, it had 
received the Date Diligence Materials and (v) understands that it will have 
no recourse whatsoever against Seller or any Seller Party except as expressly 
set forth in the Purchase Agreement and this Certificate. Such independent 
investigation by Purchaser included items set forth in the Purchase 
Agreement, the Purchaser agreeing that it has completed its due diligence 
investigation of the Property prior to the date hereof and is satisfied with 
results of such investigation and the Due Diligence Materials.

          3.  EACH OF PURCHASER AND TENANT SPECIFICALLY REPRESENTS, 
ACKNOWLEDGES AND AGREES THAT (i) SELLER SHALL SELL AND PURCHASER SHALL 
PURCHASE THE PROPERTY "AS IS, WHERE IS AND WITH ALL FAULTS," (ii) PURCHASER 
IS NOT RELYING ON ANY REPRESENTATIONS OR WARRANTIES OF ANY KIND WHATSOEVER, 
WHETHER ORAL OR WRITTEN, EXPRESS OR IMPLIED, STATUTORY OR OTHERWISE, FROM 
SELLER, NOR ANY SELLER PARTY AS TO ANY MATTER, CONCERNING THE PROPERTY, OR 
SET FORTH, CONTAINED OR ADDRESSED IN THE DUE DILIGENCE MATERIALS (INCLUDING 
WITHOUT LIMITATIONS, THE COMPLETENESS THEREOF), INCLUDING WITHOUT LIMITATION: 
(i) the quality, nature, habitability, merchantability, use, operation, 
value, marketability, adequacy or physical condition of the Property or any 
aspect or portion thereof, including, without limitation, structural 
elements, foundation, roof, appurtenances, access, landscaping, parking 
facilities, electrical, mechanical, HVAC, plumbing, sewage, and utility 
systems, facilities and appliances, soils, geology and groundwater, or 
whether the Property lies within a special flood hazard area, an area of 
potential flooding, a very high fire hazard severity zone, a wildland fire 
area, an earthquake fault zone or a seismic hazard zone, (ii) the dimensions 
or lot size of any Property or the square footage of the Improvements thereon 
or of any tenant space therein, (iii) the development or income potential, or 
rights of or relating to, the Property, or the Property's use, habitability, 
merchantability, or fitness, or the 

                                        E-3
<PAGE>

suitability, value or adequacy of the Property for any particular purpose, 
(iv) the zoning or other legal status of the Property or any other public or 
private restrictions on the use of the Property, (v) the compliance of the 
Property or its operation with any applicable codes, laws, regulations, 
statutes, ordinances, covenants, conditions and restrictions of any 
Governmental Authority or of any other person or entity (including, without 
limitation, the Americans with Disabilities Act), (vi) the ability of 
Purchaser to obtain any necessary governmental approvals, licenses or permits 
for Purchaser's intended use or development of the Property, (vii) the 
presence or absence of Hazardous Materials on, in, under, above or about 
the Property or any adjoining or neighboring property, (viii) the quality of 
any labor and materials used in any Improvements, (ix) the condition of title 
to the Property, (x) the Lease, Contracts or any other agreeements 
affecting the Property or the intentions of any party with respect to the 
negotiation and/or execution of any lease or contract with respect to the 
Property, (xi) Seller's ownership of the Property or any portion thereof or 
(xii) the economics of, or the income and expenses, revenue or expense 
projections or other financial matters, relating to, the operation of the 
Property. Without limiting the generality of the foregoing. Purchaser 
expressly acknowledges and agrees that Purchaser is not relying on any 
representation or warranty of the Seller, nor any Seller Party, whether 
implied, presumed or expressly provided at law or otherwise, arising by 
virtue of any statute, common law or other legally binding right or remedy in 
favor of Purchaser except as provided in Section 3.3 of the Purchase 
Agreement. Purchaser further acknowledges and agrees that Seller is under no 
duty to make any inquiry regarding any matter that may or may not be known to 
Seller or any partner, officer, employee, attorney, property manager, agent 
or broker of such Seller.

          4.       ANY REPORTS, REPAIRS OR WORK REQUIRED BY EITHER PURCHASER OR
TENANT ARE THE SOLE RESPONSIBILITY OF PURCHASER AND TENANT, AND EACH OF 
PURCHASER AND TENANT AGREES THAT THERE IS NO OBLIGATION ON THE PART OF THE 
SELLER TO MAKE ANY CHANGES. ALTERATIONS OR REPAIRS TO THE PROPERTY OR TO CURE 
ANY VIOLATIONS OF LAW OR TO COMPLY WITH THE REQUIREMENTS OF ANY INSURER. 
PURCHASER IS SOLELY RESPONSIBLE FOR OBTAINING ANY CERTIFICATE OF OCCUPANCY OR 
ANY OTHER  APPROVAL OR PERMIT NECESSARY FOR TRANSFER OR OCCUPANCY OF ANY 
PROPERTY AND FOR ANY REPAIRS OR ALTERATIONS NECESSARY TO OBTAIN THE SAME. ALL 
AT PURCHASER'S SOLE COST AND EXPENSE.

          5.       Purchaser acknowledges and agrees that the provisions of this
Certificate were a material factor in Seller's acceptance of the Purchase Price 
and agreements to sell the Property to Purchaser, and Seller is unwilling to 
sell the Properties unless Seller and the other Seller Parties are 
expressly released to the extent set forth in Section 6 of the Purchase 
Agreement.

                                      E-4

<PAGE>

         IN WITNESS WHEREOF, each of Purchaser and Tenant has executed this 
Certificate as of the date first set forth herein above.


                              NATROL REAL ESTATE, INC.
                              a California corporation



                              By: 
                                  --------------------
                              Name:
                              Title:



                              NATROL, INC.
                              a California corporation



                              By: 
                                  --------------------
                              Name:
                              Title:

                              E-5


<PAGE>
                              EXHIBIT F

                 NATURAL HAZARD DISCLOSURE STATEMENT

                                 F-1


<PAGE>

                              EXHIBIT G

                              GRANT DEED

Recording Requested by and 
When Recorded Mail to,
and Mail Tax Statements to:

-----------------------------
-----------------------------
-----------------------------

Attention:
          -------------------

-------------------------------------------------------------------------------

                Space Above This Line for Recorder's Use

                                  GRANT DEED

          The undersigned Grantor declared that Documentary Transfer Tax is 
not part of the public records.

          For valuable consideration, receipt of which is acknowledged,
__________, a ___________  ("Grantor"), hereby grants to
__________, a ___________  ("Grantee"), that certain real property located in 
the City of ___________, County of ___________, State of California, as 
legally described in EXHIBIT A attached hereof and made a part hereto (the 
"Property") together with all of Grantor's right, title and interest in and 
to all improvements and structures located thereon, and all easements, 
appurtenances, rights and privileges of Grantor appertaining to the Property.

          The Property is conveyed subject to:

          (a)  The lien of supplemental taxes, if any, assessed pursuant to 
the provisions of Chapter 3.5 (commencing with Section 75) of the Revenue and 
Taxation Code of the State of California;

          (b)  The liens for real property taxes for the fiscal year 19__ - 
19__ not yet due and payable;
    
          (c)  All liens, encumbrances, easements, leases, covenants, 
conditions and restrictions of record;

          (d)  All matters which would be disclosed by an inspection of the 
Property; and

                                 G-1




<PAGE>

          (e)  Zoning ordinances and regulations and any other laws, 
ordinances, regulations or orders of any governmental agency having or 
claiming jurisdiction over the use, occupancy or enjoyment of the Property.

                                 G-2



<PAGE>


          IN WITNESS WHEREOF, Grantor has caused its duly authorized 
representative to execute this instrument as of the date hereinafter written.

DATED: December____ 1998

GRANTOR:


WHLW  Real Estate Limited Partnership,
a Delaware limited partnership

By: WHLW Gan-Par, Inc.
    General Partner

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

                                 G-3