<PAGE>

                                                                Exhibit 10(w)(1)

                           PURCHASE AND SALE AGREEMENT

                                 by and between

                                 ASHWORTH, INC.,
                             a Delaware corporation

                                    "SELLER"

                                       and

                                    LBA INC.,
                            a California corporation

                                     "BUYER"

<PAGE>

<TABLE>
<S>                                                                   <C>
1.    Sale of the Property........................................     1

2.    Deposits....................................................     1
      2.1      Initial Deposit....................................     1
      2.2      Additional Deposit.................................     2

3.    Purchase Price..............................................     2

4.    Conditions to Parties' Obligations..........................     2
      4.1      Buyer's Pre-Closing Conditions.....................     2
               4.1.1    Title.....................................     3
               4.1.2    Physical Inspections......................     3
               4.1.3    Contracts.................................     5
               4.1.4    New Lease.................................     5
      4.2      Closing Conditions.................................     5
               4.2.1    Buyer's Closing Conditions................     5
               4.2.2    Seller's Closing Conditions...............     6
      4.3      Failure of Conditions..............................     6
      4.4      Investigations Indemnity...........................     7

5.    Remedies/Liquidated Damages.................................     8
      5.1      Buyer's Default....................................     8
      5.2      Seller's Default...................................     8

6.    Closing and Escrow..........................................     9
      6.1      Escrow Instructions................................     9
      6.2      Date of Closing....................................     9
      6.3      Conveyance.........................................    10
      6.4      Closing Documents..................................    10
               6.4.1    Seller's Closing Documents................    10
               6.4.2    Buyer's Closing Payments and Documents....    10

7.    Interim Agreements..........................................    11

8.    Seller's Maintenance of the Property........................    11

9.    Casualty and Condemnation...................................    11

10.   Limited Liability...........................................    12

11.   Release.....................................................    12

12.   AS-IS Condition of Property.................................    14

13.   Prorations..................................................    15

14.   Closing Costs...............................................    16
</TABLE>

                                        i
<PAGE>

<TABLE>
<S>                                                                   <C>
15.   Brokers......................................................   16

16.   Notices......................................................   16

17.   Entire Agreement.............................................   17

18.   Assignment...................................................   17

19.   Severability.................................................   18

20.   California Law...............................................   18

21.   Modifications/Survival.......................................   18

22.   Confidentiality..............................................   18

23.   Counterparts.................................................   19

24.   Dispute Costs................................................   19

25.   Seller's Representations.....................................   19

26.   Buyer's Representations......................................   20

27.   Time of the Essence; and Business Days.......................   21

28.   Agreement Date...............................................   21

29.   No Third Party Beneficiaries.................................   22

30.   Drafts not an Offer to Enter into a Legally Binding Contract.   22

31.   Natural Hazard Disclosure Requirement Compliance.  ..........   22

32.   1031 Exchange................................................   22
</TABLE>

EXHIBITS

EXHIBIT A LEGAL DESCRIPTION OF THE REAL PROPERTY

EXHIBIT B FORM OF LEASE

EXHIBIT C ASSIGNMENT AND ASSUMPTION OF INTANGIBLES

EXHIBIT D GRANT DEED

                                      -ii-
<PAGE>

                           PURCHASE AND SALE AGREEMENT

         THIS PURCHASE AND SALE AGREEMENT (the "Agreement") is made and entered
into as of December 2, 2003 (the "Agreement Date"), by and between ASHWORTH,
INC., a Delaware corporation ("Seller"), and LBA INC., a California corporation
("Buyer"), with reference to the following facts.

                                R E C I T A L S :

         A.       Seller is the owner of that certain improved real property
located at 2791-2793 Loker Avenue, Carlsbad, California, as legally described in
Exhibit A attached hereto and made a part hereof (the "Real Property") together
with all (i) improvements, structures and fixtures (other than trade fixtures)
(collectively, the "Improvements"), (ii) easements, appurtenances, rights and
privileges actually belonging thereto (collectively, the "Appurtenances"), and
(iii) any intangible personal property now or hereafter owned by Seller and used
in the ownership, use or operation of the Real Property and/or Improvements,
including, without limitation, any and all guaranties, warranties, indemnities,
licenses, permits, entitlements, plans, specifications and similar documents and
rights, but specifically excluding any tradenames of Seller or any affiliated or
related entitled of Seller and any licenses and other similar documents and
rights related to the specific clothing and accessory design and manufacturing
operations of Seller (collectively, the "Intangibles"). The Real Property, the
Improvements, the Appurtenances and the Intangibles are collectively referred to
herein as the "Property."

         B.       Seller desires to sell to Buyer and Buyer desires to purchase
from Seller the Property, in accordance with the terms and provisions
hereinafter contained in this Agreement.

         NOW, THEREFORE, in consideration of the mutual promises and covenants
contained herein, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as follows:

         1.       Sale of the Property. Seller shall sell to Buyer and Buyer
shall purchase from Seller the Property at the Closing (defined in Section 6
below), subject to and on the terms and conditions contained herein.

         2.       Deposits.

                  2.1      Initial Deposit. Within two (2) calendar days after
the Agreement Date, Buyer shall place on deposit into the escrow account (the
"Escrow Account") to be opened with Stewart Title of California, Inc. located at
3111 Camino Del Rio North, Suite 900, San Diego, California 92108 (Attention:
John Demas) ("Escrow Holder") the amount of Two Hundred Thousand Dollars
($200,000.00) as an initial deposit (the "Initial Deposit"). The Escrow Holder
shall cause the Initial Deposit to be placed into an interest bearing bank
account acceptable to Buyer. Any interest earned on the Initial Deposit shall be
included as part of the Initial Deposit. The Initial Deposit and interest earned
thereon shall be refundable to Buyer until 5:00 p.m.

<PAGE>

(Pacific Time) on December 12, 2003 (with the period from October 31, 2003 (the
date upon which Buyer and Seller executed that certain letter of intent dated
October 24, 2003, between Buyer and Seller) until December 12, 2003 to be known
as the "Conditions Period"). For purposes hereof, the last day of the Conditions
Period (i.e., December 12, 2003) shall mean and be referred to herein as the
"Approval Date". If Buyer fails to deliver the Initial Deposit into the Escrow
Account strictly as and when contemplated herein, Seller shall have the right to
terminate this Agreement by delivering written notice thereof to Buyer at any
time and thereafter neither party shall have any further rights or obligations
hereunder except for the indemnities contained in Sections 4.4 and 15 below,
Buyer's covenants made herein which are expressly intended to survive any such
termination and Buyer's obligations under Section 4.3 below to deliver to Seller
the Due Diligence Materials (defined below) (collectively, "Buyer's Surviving
Obligations").

                  2.2      Additional Deposit. Unless Buyer notifies Seller
prior to 5:00 p.m. (Pacific Time) on the Approval Date that there are
Pre-Closing Conditions (defined below) remaining unsatisfied and that Buyer will
not waive such conditions (any such notice shall serve as a termination of this
Agreement), (i) at the end of the Conditions Period the Initial Deposit shall
become non-refundable to Buyer and shall be released by Escrow Holder to Seller
on the business day following the Approval Date, and (ii) within one (1)
business day after the Approval Date Buyer shall place on deposit into the
Escrow Account, the amount of One Hundred Fifty Thousand Dollars ($150,000.00)
as the additional deposit (the "Additional Deposit"), which shall be immediately
released by Escrow Holder to Seller. The Additional Deposit shall be
non-refundable to Buyer; provided, however, the Initial Deposit and the
Additional Deposit shall be refundable to Buyer if all of the Buyer's Closing
Conditions (defined below) are not satisfied or otherwise waived by Buyer in
accordance with the provisions of Section 4.3 of this Agreement. If Buyer fails
to deliver the Additional Deposit into the Escrow Account strictly as and when
contemplated herein, Seller shall have the rights provided under Section 5.1
below. The Initial Deposit and the Additional Deposit shall be applied to the
Purchase Price at the Closing. The Initial Deposit and the Additional Deposit
are collectively referred to herein as the "Deposits." No interest shall be
payable on the Deposits from and after the release thereof to Seller.

         3.       Purchase Price. The purchase price for the Property is Five
Million Seven Hundred Forty-Seven Thousand Thirty-Six and No/100 Dollars
($5,747,036.00) (the "Purchase Price"), as such amount may be adjusted for
prorations in accordance with the provisions of Section 13 below. At the
Closing, the balance of the Purchase Price remaining after deduction for the
Deposits and adjustment for prorations, shall be paid by Buyer to Seller in
cash, in immediately available funds via wire transfer in accordance with
Section 4.2.2.1 below.

         4.       Conditions to Parties' Obligations.

                  4.1      Buyer's Pre-Closing Conditions. Buyer's obligations
under this Agreement shall be subject to the satisfaction of or waiver by Buyer
of the following described matters (collectively, the "Pre-Closing Conditions")
on or before the earlier of (i) the time periods specified in each subsection
below, or (ii) 5:00 p.m. (Pacific Time) on the Approval Date:

                                      -2-
<PAGE>

                           4.1.1    Title. Buyer has previously received a
preliminary title report for the Property, together with all documents
evidencing exceptions to title referred to therein issued by Stewart Title of
California, Inc. (the "Title Company") (the preliminary title report and the
underlying documents thereto shall be collectively referred to herein as the
"Title Report"). Seller, at Seller's sole cost, shall cause to be prepared and
delivered to Buyer, not later than five (5) business days after the Agreement
Date, a current ALTA survey (the "Survey") of the Real Property in form
reasonably required by Title Company in order to issue the ALTA Policy (as
defined in Section 14 hereof). Buyer shall have until five (5) business days
after receipt of the Survey to either approve of the exceptions contained in the
Title Report and the Survey and the other matters disclosed thereby, or to
notify Seller in writing, specifying any exceptions or other matters to which
Buyer objects ("Title Objection Notice"). Buyer's failure to timely deliver a
Title Objection Notice shall be deemed to be Buyer's approval of the matters
shown in or disclosed by the Title Report and the Survey. Seller shall have a
period of three (3) business days after Seller's receipt of the Title Objection
Notice (a) to remove or cure, or agree to remove or cure prior to the Closing,
some or all of those exceptions or other matters to which Buyer has objected in
the Title Objection Notice, and to inform Buyer of the same, or (b) to advise
Buyer, in writing, that Seller will not agree to remove or cure some or all of
those exceptions or other matters to which Buyer has objected in the Title
Objection Notice; the foregoing election by Seller being at Seller's sole option
and discretion ("Title Response Notice"). If Seller fails to timely deliver to
Buyer the Title Response Notice, it shall be conclusively deemed that Seller has
elected not to remove or cure any of those exceptions or other matters to which
Buyer has objected as specified in the Title Objection Notice. If Seller advises
Buyer in its Title Response Notice that it will not remove or cure or agree to
remove or cure some or all of those exceptions or other matters to which Buyer
has objected in the Title Objection Notice (or Seller is deemed to have so
advised Buyer), then Buyer shall have until 5:00 p.m. (Pacific Time) on the date
that is three (3) business days after the date upon which Buyer receives the
Title Response Notice (or three (3) business days after the outside date for
Seller to deliver the Title Response Notice if Seller does not timely deliver
the same) to advise Seller, in writing, whether Buyer elects to waive such
objections and proceed with the acquisition of the Property or to terminate this
Agreement. Failure by Seller to remove or cure those specified exceptions or
other matters which Seller has expressly agreed to remove or cure in the Title
Response Notice within the specified period shall be deemed to be a failure of
this condition, in which event the Agreement shall terminate, and the Deposits
shall be returned to Buyer, and the parties shall have no further obligations
hereunder except for Buyer's Surviving Obligations, unless Buyer withdraws its
objections in writing. Notwithstanding the foregoing, on or prior to Closing
Seller shall remove or cause to be removed those certain monetary liens or
encumbrances affecting the Property which Seller has created, caused (e.g.,
judgment liens against Seller) or expressly permitted to exist other than
current taxes and assessments.

                           4.1.2    Physical Inspections. Without any warranty
or representation as to the accuracy or thoroughness thereof or to the ability
of Buyer to rely thereon, Seller previously has delivered to Buyer, to the
extent in Seller's possession (i) a copy of an environmental [Phase 1] site
assessment report with respect to an evaluation of Hazardous Materials (defined
below) in, on or under the Property, (ii) an asbestos report with respect to any
asbestos in the Real Property, and (iii) and ADA/Title 24 compliance report with
respect to the Real Property. After Buyer has provided to Seller a certificate
of insurance(s) evidencing Buyer's and Buyer's agents', consultants' and/or
contractors' (as the case may be) procurement of a commercial

                                      -3-
<PAGE>

general liability insurance policy as required herein, Seller shall permit Buyer
and its authorized agents, consultants and contractors to enter upon the
Property during reasonable business hours (provided, Buyer shall not interfere
with or disturb Seller's operation or use of the Property) to make and perform
such environmental evaluations, and other inspections and investigations of the
physical condition of the Property. Buyer shall maintain, and shall ensure that
its agents, consultants and contractors maintain, public liability and property
damage insurance insuring against any liability arising out of any entry, tests
or investigations of the Property pursuant to the provisions hereof. Such
insurance maintained by Buyer and its consultants, agents and contractors (as
applicable) shall be in the amount of One Million Dollars ($1,000,000.00)
combined single limit for injury to or death of one or more persons in an
occurrence, and for damage to tangible property (including loss of use) in an
occurrence. The policy maintained by Buyer shall insure the contractual
liability of Buyer covering the indemnities herein and shall (i) name the Seller
and its manager (and their successors, assigns and affiliates) as additional
insureds, (ii) contain a cross-liability provision, and (iii) contain a
provision that "the insurance provided by Buyer hereunder shall be primary and
non-contributing with any other insurance available to Seller." Buyer shall
provide Seller with evidence of such insurance coverage prior to any entry,
tests or investigations of the Property. The aforementioned insurance coverage
may be obtained under a blanket policy carried by Buyer or its agents,
consultants or contractors, as the case may be. Notwithstanding the foregoing,
Buyer shall not be permitted to undertake any intrusive or destructive testing
of the Property, including without limitation a "Phase II" environmental
assessment, without in each instance first obtaining Seller's written consent
thereto, which consent shall not unreasonably withheld. Prior to entering the
Property (and on each and every occasion), Buyer shall deliver to Seller prior
notice thereof (any verbal notice shall be where Buyer actually speaks with
Peter Case of Seller and not a voicemail message) and shall afford Seller a
reasonable opportunity to have a representative of Seller present to accompany
Buyer while Buyer performs its evaluations, inspections, tests and other
investigations of the physical condition of the Property. Prior to any entry to
perform any necessary on-site inspections, tests or investigations, Buyer shall
give Seller notice thereof (any verbal notice shall be where Buyer actually
speaks with Peter Case of Seller and not a voicemail message), including the
identity of the company or party(s) who will perform such inspections, tests or
investigations and the proposed scope of the inspections, tests or
investigations. Seller shall approve or disapprove any proposed inspections,
tests or investigations and the party(s) performing the same within two (2)
business days after receipt of such notice. Seller's failure to advise Buyer of
its disapproval of any proposed inspections, tests or investigations and the
party(s) performing the same within such two (2) business day period shall be
deemed Seller's approval thereof, except to the extent said proposed
inspections, tests or investigations relate to "Phase II" environmental matters,
in which event Seller's failure to advise Buyer of its approval or disapproval
of any proposed environmental inspections, tests or investigations and the
party(s) performing the same within such two (2) business day period shall be
deemed Seller's disapproval thereof. To the extent the same are not subject to
any confidentiality requirements or restrictions precluding the same, Buyer
shall promptly deliver to Seller copies of any reports relating to any
inspections, tests or investigations of the Property performed by or on behalf
of Buyer; provided, however, that Buyer shall not be deemed to have made any
warranty or representation whatsoever as to the accuracy or thoroughness thereof
or the ability of Seller to rely thereon. Buyer shall have until 5:00 p.m.
(Pacific Time) on the Approval Date to notify

                                      -4-
<PAGE>

Seller in writing of its approval or disapproval of any such evaluations,
inspections and investigations.

                           4.1.3    Contracts. Seller previously delivered to
Buyer for inspection by Buyer a copy of all service agreements, commission
agreements, maintenance agreements, easement agreements, improvement agreements,
license agreements, and other agreements related to or affecting the Property in
Seller's possession and not included as part of the title documents delivered
pursuant to Section 4.1.1 hereof (collectively, the "Contracts"). Except to the
extent Seller desires to maintain any Contracts in effect during the term of the
New Lease (as defined in Section 4.1.4 hereof), Seller shall cause all Contracts
that are of the nature of service agreements and maintenance agreements to be
terminated prior to Closing. Notwithstanding anything to the contrary contained
above, Seller shall cause any leasing agreement or property management agreement
with respect to the Property to be terminated prior to the Closing. In addition,
Seller shall deliver to Buyer such other documents and materials with respect to
the Property (as opposed to Seller itself or Seller's business) as are
reasonably requested by Buyer provided the same are not proprietary or subject
to any confidentiality requirement or restriction precluding such delivery.

                           4.1.4    New Lease. By the Approval Date, Buyer and
Seller shall have agreed upon the form of Seller's lease of the Property (the
"New Lease"), which New Lease (and on the Closing Date, Buyer and Seller shall
enter into the New Lease) shall contain, among other customary terms and
conditions and business terms to which the parties agree, the following business
terms: (a) the term of the New Lease shall commence upon the Close of Escrow and
terminate on September 31, 2004; (b) Seller shall have one (1) option to renew
the term of the New Lease for a period of sixty (60) days, which must be
exercised by Seller by providing Buyer with written notice of such exercise (at
the address set forth in the New Lease) at least ninety (90) days prior to the
expiration of the initial term of the New Lease; (c) the New Lease shall have a
rental rate of $.62 per square foot per month (based upon a square footage of
76,482) and Seller shall pay all expenses for the operation of the Project,
including, without limitation, taxes, insurance, utilities, but expressly
excluding mechanical and capital repairs except as otherwise set forth in the
Lease; and (d) Seller shall not have the right to assign its interests in the
New Lease or to sublease the Property or a portion thereof to any third party.
The foregoing shall be a condition for Seller's and Buyer's benefit.

                  4.2      Closing Conditions.

                           4.2.1    Buyer's Closing Conditions. Buyer's
obligation to consummate the purchase of the Property shall be subject to the
satisfaction or waiver by Buyer of the following conditions (collectively, the
"Buyer's Closing Conditions"):

                                    4.2.1.1  Seller's Delivery of Closing
Documents. Seller shall have delivered to Escrow Holder or Buyer, as
appropriate, all of the documents referred to in Section 6.4.1 below.

                                      -5-
<PAGE>
\
                                    4.2.1.2  No Default. Seller shall not be in
default of its obligations hereunder.

                                    4.2.1.3  Delivery of Title Policy. At the
Closing, the Title Company shall be irrevocably committed to issue to Buyer the
ALTA Policy (defined below). The ALTA Policy shall not include any title
exceptions which Seller has notified Buyer, in writing, it has agreed to remove
or cure prior to the Closing in accordance with the provisions of Section 4.1.1
hereof.

                                    4.2.1.4  Representations. Seller's
representations contained in Section 25 of this Agreement shall have been true
and correct in all material respects when made and shall be true and correct in
all material respects as of the Closing Date.

                           4.2.2    Seller's Closing Conditions. Seller's
obligation to consummate the sale of the Property is conditioned upon the
satisfaction or Seller's written waiver on or prior to the Closing Date of the
following conditions (collectively, the "Seller's Closing Conditions"):

                                    4.2.2.1  Balance of Purchase Price. Not
later than the Closing Date, Buyer shall deliver into the Escrow Account (for
payment to Seller), in immediately available funds, cash in an amount of the
balance of the Purchase Price remaining after deduction for the Deposits plus or
minus the costs, expenses and prorations required to be paid by Buyer and Seller
hereunder.

                                    4.2.2.2  No Default. Buyer shall not be in
default of its obligations hereunder.

                                    4.2.2.3  Buyer's Delivery of Closing
Documents. Each of the documents required to be delivered by Buyer pursuant to
Section 6.4.2 shall have been timely delivered as provided therein.

                                    4.2.2.4 Representations. All of Buyer's
representations and warranties contained herein shall be true and correct in all
material respects when made and shall be true and correct in all material
respects as of the Closing Date.

                  4.3      Failure of Conditions. In the event that any or all
of the Pre-Closing Conditions are not satisfied or waived within the applicable
time periods specified in Section 4.1 above, then Buyer may terminate this
Agreement by delivering written notice thereof to Seller on or before the
expiration of said time periods. If Buyer timely elects to terminate this
Agreement as provided in the preceding sentence, the Initial Deposit shall be
returned to Buyer and neither Buyer nor Seller shall have any further liability
or obligation to each other, except for the indemnities contained in Sections
4.4, 15 and 24. Notwithstanding anything to the contrary contained herein if
Buyer terminates this Agreement for failure of a Pre-Closing Condition or for
any other reason, Buyer shall deliver to Seller a copy of all materials, tests,
audits, surveys, reports, studies and the results of any and all investigations
and inspections conducted by Buyer (excluding any proprietary materials)
(collectively, the "Buyer's Documents") and Buyer shall also return to Seller
any and all documents, agreements, reports and other materials given to Buyer by
or on behalf of Seller (collectively, the "Seller's Documents") (the Buyer's
Documents and the Seller's Documents are collectively referred to herein as the
"Due Diligence Materials")

                                      -6-
<PAGE>

within ten (10) days after such termination of this Agreement. The foregoing
covenants of Buyer shall survive any such termination of this Agreement. If
Buyer fails to timely terminate this Agreement in accordance with Section 4.1
above, (i) the Initial Deposit shall become non-refundable to Buyer subject to
the satisfaction or waiver of the Buyer's Closing Conditions (and shall be
released to Seller as provided in Section 2.2 above), and (ii) within one (1)
business day after the Approval Date, Buyer shall deposit into the Escrow
Account, the Additional Deposit which shall also become non-refundable to Buyer
subject to the satisfaction or waiver of the Buyer's Closing Conditions (and
shall be released to Seller as provided in Section 2.2 above). The funding by
Buyer of the Additional Deposit shall conclusively constitute Buyer's approval
of each and every aspect of the Property as well as of the Pre-Closing
Conditions. If the Pre-Closing Conditions are satisfied or waived by Buyer but
any or all of the Buyer's Closing Conditions are not satisfied or waived by
Buyer on or before the date established for the Closing, then Buyer shall notify
Seller in writing of those Buyer's Closing Conditions which have not been
satisfied or otherwise waived by Buyer. If the Buyer's Closing Condition in
question is either of those conditions specified in Sections 4.2.1.3 or 4.2.1.4
and Seller is not in any material manner responsible for the deviation or
failure of such Buyer's Closing Condition, then Buyer may elect to terminate
this Agreement by delivering written notice thereof to Seller, in which event
Seller shall promptly cause the return to Buyer of the Deposits, and the parties
shall have no further obligations hereunder except for the obligations hereunder
which expressly survive the termination hereof. If the Buyer's Closing Condition
in question is any other condition other than either of the conditions specified
in Sections 4.2.1.3 or 4.2.1.4 (or if the Closing Condition in question is
either of the conditions specified in Sections 4.2.1.3 or 4.2.1.4 and Seller is
in any material manner responsible for the deviation or failure of such
condition), then (1) Buyer may pursue the remedies available to it pursuant to
Section 5.2 below, or (2) Buyer may elect to waive the Buyer's Closing
Condition(s) in question and proceed with the purchase of the Property. If any
of the Seller's Closing Conditions are not satisfied or otherwise waived by
Seller prior to the Closing Date, then (1) Seller may pursue the remedies
available to it pursuant to Section 5.1 below, or (2) Seller may elect to waive
the Seller's Closing Condition(s) in question and proceed with the sale of the
Property.

                  4.4      Investigations Indemnity. Buyer shall keep the
Property free from all liens and shall indemnify, defend (with counsel
reasonably satisfactory to Seller), protect, and hold Seller and each of the
parties comprising Seller and each of their members, officers, trustees,
employees, representatives, agents, lenders, related and affiliated entities,
successors and assigns harmless from and against any and all claims, demands,
liabilities, judgments, penalties, losses, costs, damages, and expenses
(including, without limitation, attorneys' and experts' fees and costs) relating
to or arising in any manner whatsoever from any studies, evaluations,
inspections, investigations or tests made by Buyer or Buyer's agents or
representatives relating to or in connection with the Property, or entries by
Buyer or its agents or representatives in, on or about the Property.
Notwithstanding any provision to the contrary in this Agreement, the indemnity
obligations of Buyer under this Section 4.4 shall not include any loss incurred
by Seller solely as the result of Buyer's discovery (as opposed to exacerbation,
for which Buyer shall be responsible) of an existing condition with respect to
the Property, and (ii) shall survive any termination of this Agreement. In
addition to the foregoing indemnity, if there is any damage to the Property
caused by Buyer's and/or its agents' or representatives' entry in or on the
Property, Buyer shall immediately restore the Property substantially to the same
condition existing prior to Buyer's and its agents' or representatives' entry
in, on or about the Property. The term

                                      -7-
<PAGE>

"Hazardous Materials" as used in this Agreement shall mean and refer to (a) any
hazardous or toxic wastes, materials or substances, or chemicals, and other
pollutants or contaminants, which are or become regulated by applicable local,
state, regional and/or federal orders, ordinances, statutes, rules, regulations
(as interpreted by judicial and administrative decisions) and laws; (b)
asbestos, asbestos-containing materials or urea formaldehyde; (c)
polychlorinated biphenyls; (d) flammables, explosive, corrosive or radioactive
materials; (e) medical waste and biochemicals; and (f) gasoline, diesel,
petroleum or petroleum by-products.

         5.       Remedies/Liquidated Damages.

                  5.1      Buyer's Default. IF THE PURCHASE OF THE PROPERTY AS
PROVIDED IN THIS AGREEMENT IS NOT CONSUMMATED BY REASON OF ANY DEFAULT OF BUYER,
SELLER SHALL BE RELEASED FROM ITS OBLIGATION TO SELL THE PROPERTY TO BUYER.
BUYER AND SELLER HEREBY ACKNOWLEDGE AND AGREE THAT IT WOULD BE IMPRACTICAL
AND/OR EXTREMELY DIFFICULT TO FIX OR ESTABLISH THE ACTUAL DAMAGE SUSTAINED BY
SELLER AS A RESULT OF SUCH DEFAULT BY BUYER, AND AGREE THAT THE DEPOSITS
(INCLUDING ALL INTEREST) AND THE DELIVERY TO SELLER BY BUYER OF THE DUE
DILIGENCE MATERIALS IS A REASONABLE APPROXIMATION THEREOF. ACCORDINGLY, IN THE
EVENT THAT BUYER BREACHES THIS AGREEMENT, THE DEPOSITS (INCLUDING ALL INTEREST),
THE PAYMENT BY BUYER OF ALL ESCROW CANCELLATION CHARGES AND FEES, AND THE
DELIVERY TO SELLER BY BUYER OF THE DUE DILIGENCE MATERIALS SHALL CONSTITUTE AND
BE DEEMED TO BE THE AGREED AND LIQUIDATED DAMAGES OF SELLER, AND SHALL BE PAID
BY BUYER TO SELLER AND THE TITLE COMPANY AS SELLER'S SOLE AND EXCLUSIVE REMEDY.
SELLER AGREES TO WAIVE ALL OTHER REMEDIES AGAINST BUYER WHICH SELLER MIGHT
OTHERWISE HAVE AT LAW OR IN EQUITY BY REASON OF SUCH DEFAULT BY BUYER; PROVIDED,
HOWEVER, THE FOREGOING SHALL NOT LIMIT (I) BUYER'S OBLIGATIONS TO PAY TO SELLER
ALL ATTORNEYS' FEES AND COSTS OF SELLER TO ENFORCE THE PROVISIONS OF THIS
SECTION 5.1 AND/OR BUYER'S INDEMNITY OBLIGATIONS UNDER SECTIONS 4.4 AND 15
HEREOF, (II) BUYER'S INDEMNITY OBLIGATIONS UNDER SECTIONS 4.4 AND 15 HEREOF, OR
(III) THE ABILITY AND RIGHT OF SELLER TO ENFORCE SUCH INDEMNITIES. THE PAYMENT
OF THE DEPOSITS (INCLUDING ALL INTEREST) AND THE DELIVERY TO SELLER BY BUYER OF
THE DUE DILIGENCE MATERIALS 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.

                  SELLER'S INITIALS:_______ BUYER'S INITIALS:________

                  5.2      Seller's Default. IF THE SALE OF THE PROPERTY AS
PROVIDED IN THIS AGREEMENT IS NOT CONSUMMATED BY REASON OF ANY DEFAULT OF
SELLER, BUYER MAY EITHER (I) PROCEED AGAINST SELLER BY BRINGING AN ACTION FOR
SPECIFIC PERFORMANCE UNDER THIS AGREEMENT WITHOUT ANY RIGHT TO SEEK DAMAGES OF
ANY KIND OR NATURE (WHICH ACTION FOR SPECIFIC PERFORMANCE SHALL BE BROUGHT (IF
AT ALL) NO LATER THAN SIXTY

                                      -8-
<PAGE>

(60) DAYS AFTER SUCH DEFAULT BY SELLER AND SHALL BE DILIGENTLY PROSECUTED BY
BUYER TO COMPLETION), OR (II) TERMINATE THIS AGREEMENT, IN WHICH EVENT THE
DEPOSITS SHALL BE RETURNED TO BUYER, SELLER SHALL REIMBURSE BUYER FOR ITS
THIRD-PARTY, OUT-OF-POCKET EXPENSES AND COSTS ACTUALLY AND REASONABLY INCURRED
IN CONNECTION WITH THE NEGOTIATION AND CONSUMMATION OF THIS AGREEMENT
(INCLUDING, WITHOUT LIMITATION, REASONABLE ATTORNEYS' FEES AND EXPENSES) IN AN
AMOUNT NOT TO EXCEED $50,000, AND BUYER SHALL PROMPTLY DELIVER TO SELLER THE DUE
DILIGENCE MATERIALS. BUYER AND SELLER HEREBY ACKNOWLEDGE AND AGREE THAT IT WOULD
BE IMPRACTICAL AND/OR EXTREMELY DIFFICULT TO FIX OR ESTABLISH THE ACTUAL DAMAGE
SUSTAINED BY BUYER AS A RESULT OF SUCH MATERIAL DEFAULT BY SELLER, AND AGREE
THAT THE REMEDY SET FORTH IN CLAUSE (II) ABOVE IS A REASONABLE APPROXIMATION
THEREOF. ACCORDINGLY, IN THE EVENT THAT SELLER BREACHES THIS AGREEMENT, AND
BUYER ELECTS NOT TO EXERCISE THE REMEDY SET FORTH IN CLAUSE (I) ABOVE BUT
INSTEAD ELECTS THE REMEDY SET FORTH IN CLAUSE (II) ABOVE, SUCH SUMS SHALL
CONSTITUTE AND BE DEEMED TO BE THE AGREED AND LIQUIDATED DAMAGES OF BUYER WHICH
IS NOT INTENDED TO BE A FORFEITURE OR PENALTY, BUT IS INTENDED TO CONSTITUTE
LIQUIDATED DAMAGES TO BUYER PURSUANT TO CALIFORNIA CIVIL CODE SECTIONS 1671,
1676 AND 1677. BUYER AGREES TO, AND DOES HEREBY, WAIVE ALL OTHER REMEDIES
AGAINST SELLER WHICH BUYER MIGHT OTHERWISE HAVE AT LAW OR IN EQUITY BY REASON OF
SUCH DEFAULT BY SELLER; PROVIDED, HOWEVER, THE FOREGOING SHALL NOT LIMIT (I)
SELLER'S OBLIGATIONS TO PAY TO BUYER ALL ATTORNEYS' FEES AND COSTS OF BUYER TO
ENFORCE THE PROVISIONS OF THIS SECTION 5.2 AND/OR SELLER'S INDEMNITY OBLIGATIONS
UNDER SECTION 15 HEREOF, (II) SELLER'S INDEMNITY OBLIGATIONS UNDER SECTION 15
HEREOF, OR (III) THE ABILITY AND RIGHT OF BUYER TO ENFORCE SUCH INDEMNITY.

                  SELLER'S INITIALS:________ BUYER'S INITIALS:________

         6.       Closing and Escrow.

                  6.1      Escrow Instructions. Upon execution of this
Agreement, the parties hereto shall deposit a copy of an executed counterpart of
this Agreement with Escrow Holder and this instrument shall serve as the
instructions to Escrow Holder for consummation of the purchase and sale
contemplated hereby. Seller and Buyer agree to execute such additional and
supplementary escrow instructions as may be appropriate to enable the Escrow
Holder to comply with the terms of this Agreement; provided, however, that in
the event of any conflict between the provisions of this Agreement and any
supplementary escrow instructions, the terms of this Agreement shall control.

                  6.2      Date of Closing. Unless otherwise agreed to in
writing by the parties or extended as expressly provided in this Agreement, the
closing of escrow ("Closing") shall occur on or before February 17, 2004 (the
"Closing Date"), with time being of the essence. Such Closing Date may not be
accelerated or extended without the prior written approval of both

                                      -9-
<PAGE>

Seller and Buyer, except as otherwise expressly provided in this Agreement. In
the event the Closing does not occur on or before the Closing Date, then,
subject to the provisions of Section 5.1 above with respect to the Deposits, the
Escrow Holder shall, unless it is notified by both parties to the contrary
within three (3) days prior to the actual date on which the Closing occurs,
return to the depositor thereof items which may have been deposited hereunder.
Any such return shall not, however, relieve either party hereto of any liability
it may have for its wrongful failure to close.

                  6.3      Conveyance. At Closing, Seller shall convey to Buyer
fee simple title to the Property, by means of a grant deed in substantially the
form of Exhibit D attached hereto and made a part hereof ("Grant Deed"), subject
to the New Lease, all applicable laws, rules, regulations, codes, ordinances and
orders, those title exceptions and survey matters approved (or deemed approved)
by Buyer in accordance with the provisions of Section 4.1.1 and any title
exceptions caused by Buyer, its agents, representatives or employees, all real
estate taxes and assessments for the then applicable tax fiscal year in which
the Closing occurs, and general real estate taxes and assessments for subsequent
years not yet due and payable. The Closing shall mean the date that the Grant
Deed is recorded in the official records of San Diego County, possession of the
Property is delivered to Buyer, and Buyer fulfills all of its obligations
hereunder.

                  6.4      Closing Documents.

                           6.4.1    Seller's Closing Documents. Not later than
one (1) business day prior to the Closing Date, in addition to the Grant Deed,
Seller shall deliver to Buyer, or Escrow Holder for delivery to Buyer, all of
the following documents: (i) three (3) counterparts of the New Lease, duly
executed by Seller; (ii) three (3) counterparts of the Assignment and Assumption
of Intangibles in substantially the form attached hereto as Exhibit C, duly
executed by Seller; and (iii) a certificate of non-foreign status in accordance
with the requirements of Internal Revenue Code Section 1445, as amended (the
"FIRPTA Certificate") and a California Form 593-W with respect to the Property,
each duly executed by Seller; and (iv) such other documents and instruments as
may be reasonably required by Title Company to consummate the transaction
contemplated herein. Seller's timely making and delivery of the aforesaid
documents and information shall be a condition precedent to Buyer's obligations
under this Agreement. Time is of the essence with respect hereto.

                           6.4.2    Buyer's Closing Payments and Documents. Not
later than one (1) business day prior to Closing Date, and in addition to
Buyer's payment to Seller of the Purchase Price, Buyer shall deliver to Seller
or Escrow Holder for delivery to Seller, as applicable, the following: (i) three
(3) counterparts of the New Lease, duly executed by Buyer; (ii) three (3)
counterparts of the Bill of Sale and Assignment and Assumption of Intangibles in
substantially the form attached hereto as Exhibit C, duly executed by Buyer; and
(iii) such other documents and instruments as may be reasonably required by
Title Company to consummate the transaction contemplated herein. Buyer's timely
making and delivery of the aforesaid funds, documents and information shall be a
condition precedent to Seller's obligations under this Agreement. Time is of the
essence with respect hereto.

                                      -10-
<PAGE>

         7.       Interim Agreements.

                  Not later than two (2) business days prior to becoming legally
bound with respect to any new agreement, lease, Contract or modification of any
agreement that will result in a lien or encumbrance on, or otherwise affect, the
Property and that will survive Closing, Seller shall consult with and seek the
consent of Buyer, and shall provide reasonable detail to Buyer with respect
thereto, including, at Buyer's request, copies of the relevant documentation.
Any consent to be given by Buyer pursuant to this Section 7.1 shall not, prior
to the Approval Date, be unreasonably withheld, conditioned or delayed and shall
be deemed granted if Buyer does not respond in writing to Seller's request for
said consent within two (2) business days thereafter. After the Approval Date,
Buyer may withhold its consent to any such new agreement or modification in its
sole and absolute discretion.

         8.       Seller's Maintenance of the Property. Between the Agreement
Date and the Closing Date, Seller shall (i) maintain the Property in
substantially the same manner as prior hereto in accordance with Seller's normal
course of business, subject to reasonable wear and tear and further subject to
the occurrence of any damage or destruction to the Property by casualty or other
causes or events beyond the control of Seller; provided, however, that such
Seller's maintenance obligations under this Section 8 shall not include any
obligation to make capital expenditures or any other expenditures not incurred
in Seller's normal course of business; and (ii) continue to maintain its
existing insurance coverage. Notwithstanding the foregoing, prior to Closing
Seller shall cause the existing mezzanine racking system in the 2793 Loker
Avenue building of the Improvements to be removed and shall repair all damage
resulting from such removal.

         9.       Casualty and Condemnation. In the event there is any damage to
the Real Property or destruction of any improvement thereon or condemnation of
any portion of the Property after the Agreement Date, Buyer shall be required to
purchase the Property with a credit against the Purchase Price otherwise due
hereunder equal to the amount of any insurance proceeds or condemnation awards
actually collected by Seller prior to the Closing as a result of any such damage
or destruction or condemnation, plus the amount of any insurance deductible or
any uninsured amount or retention, less any sums expended by Seller prior to the
Closing for the restoration or repair of the Property. Seller agrees that it
will maintain its present casualty insurance policy with respect to the Property
in full force and effect until the Closing. If the insurance proceeds or
condemnation awards have not been collected as of the Closing, then such
proceeds or awards shall be assigned to Buyer, except to the extent needed to
reimburse Seller for sums it expended prior to the Closing for the restoration
or repair of the Property.

         Notwithstanding the foregoing, if the Property shall be damaged or
destroyed by a casualty or shall be condemned, to the extent that the cost of
repair or restoration to substantially the same condition existing prior to such
casualty (or, in the case of a condemnation, the value of the Property or
portion thereof so condemned) would exceed an amount equal to Five Hundred
Thousand Dollars ($500,000.00), then Seller shall give Buyer prompt notice
thereof and the Buyer may, at its option to be exercised by delivery of written
notice to Seller within five (5) business days of Seller's notice to the Buyer
of the occurrence of such casualty or condemnation, elect not to purchase the
Property under this Agreement. If Buyer so duly elects not to purchase the
Property, this Agreement shall terminate and neither party shall have any
further rights or

                                      -11-
<PAGE>

obligations under this Agreement other than those expressly stated to survive
the termination of this Agreement. Any dispute as to the costs of such repair or
restoration or value of a condemned portion of the Property shall be referred to
a licensed architect jointly selected by Buyer and Seller for resolution, and
the determination of such architect, which shall be made within a period of
twenty (20) days after such submittal by the parties, shall be final, conclusive
and binding on the parties. If the parties shall fail to agree upon the identity
of such architect within five (5) business days after either party has notified
the other of its choice of architect, then either party may at any time
thereafter apply to a court of competent jurisdiction to appoint immediately
such architect. The fees and expenses of such architect shall be paid equally by
Buyer and Seller, and the parties shall cooperate with such architect by
providing such information as such architect may reasonably require to resolve
the dispute. If Buyer does not elect, in writing, not to purchase the Property,
Buyer shall be obligated to consummate the purchase of the Property as required
by the terms hereof.

         10.      Limited Liability. Buyer on its own behalf and on behalf of
its agents, members, partners, employees, representatives, related and
affiliated entities, successors and assigns (collectively, the "Buyer Parties")
hereby agrees that in no event or circumstance shall any of the members,
partners, employees, representatives, officers, directors, agents, property
management company, affiliated or related entities of Seller, have any personal
liability under this Agreement, or to any of Buyer's creditors, or to any other
party in connection with the Property.

         11.      Release. Buyer on its own behalf and on behalf of each of the
Buyer Parties hereby agrees that, except for any liability of Seller for a
breach of the express representations of Seller in Section 25 below, each of
Seller, Seller's partners or members, as the case may be, and each of their
partners, members, trustees, directors, officers, employees, representatives,
property managers, asset managers, agents, attorneys, affiliated and related
entities, heirs, successors and assigns (collectively, the "Releasees") shall
be, and are hereby, fully and forever released and discharged from any and all
liabilities, losses, claims (including third party claims), demands, damages (of
any nature whatsoever), causes of action, costs, penalties, fines, judgments,
attorneys' fees, consultants' fees and costs and experts' fees (collectively,
the "Claims") with respect to any and all Claims, whether direct or indirect,
known or unknown, foreseen or unforeseen, that may arise on account of or in any
way be connected with the Property including, without limitation, the physical,
environmental and structural condition of the Property or any law or regulation
applicable thereto, including, without limitation, any Claim or matter
(regardless of when it first appeared) relating to or arising from (i) the
presence of any environmental problems, or the use, presence, storage, release,
discharge, or migration of Hazardous Materials on, in, under or around the
Property regardless of when such Hazardous Materials were first introduced in,
on or about the Property, (ii) any patent or latent defects or deficiencies with
respect to the Property, (iii) any and all matters related to the Property or
any portion thereof, including without limitation, the condition and/or
operation of the Property and each part thereof, and (iv) the presence, release
and/or remediation of asbestos and asbestos containing materials in, on or about
the Property regardless of when such asbestos and asbestos containing materials
were first introduced in, on or about the Property. Except for any liability of
Seller for a breach of the express representations of Seller in Section 25
below, Buyer hereby waives and agrees not to commence any action, legal
proceeding, cause of action or suits in law or equity, of whatever kind or
nature, including, but not limited to, a private right of action under the
federal superfund laws, 42 U.S.C. Sections 9601 et seq. and California Health
and Safety

                                      -12-
<PAGE>

Code Sections 25300 et seq. (as such laws and statutes may be amended,
supplemented or replaced from time to time), directly or indirectly, against the
Releasees or their agents in connection with Claims described above and
expressly waives the provisions of Section 1542 of the California Civil Code
which provides:

         "A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES
         NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE
         RELEASE, WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED HIS
         SETTLEMENT WITH THE DEBTOR"

and all similar provisions or rules of law. Except for any liability of Seller
for a breach of the express representations of Seller in Section 25 below, Buyer
elects to and does assume all risk for such Claims heretofore and hereafter
arising, whether now known or unknown by Buyer. In this connection and to the
greatest extent permitted by law, Buyer hereby agrees, represents and warrants
that Buyer realizes and acknowledges that factual matters now unknown to it may
have given or may hereafter give rise to causes of action, claims, demands,
debts, controversies, damages, costs, losses and expenses which are presently
unknown, unanticipated and unsuspected, and Buyer further agrees, represents and
warrants that the waivers and releases herein have been negotiated and agreed
upon in light of that realization and that, subject to any liability of Seller
for a breach of the express representations of Seller in Section 25 below, Buyer
nevertheless hereby intends to release, discharge and acquit Seller from any
such unknown Claims, debts, and controversies which might in any way be included
as a material portion of the consideration given to Seller by Buyer in exchange
for Seller's performance hereunder. Without limiting the foregoing, if Buyer is
notified in writing of (a) a default in any of the covenants, agreements or
obligations to be performed by Seller under this Agreement and/or (b) any breach
or inaccuracy in any representation of Seller made in this Agreement, and Buyer
nonetheless elects to proceed to Closing, then, upon the consummation of the
Closing, Buyer shall be conclusively deemed to have waived any such default
and/or breach or inaccuracy and shall have no Claim against Seller or hereunder
with respect thereto. Notwithstanding anything to the contrary herein (i) Seller
shall not have any liability whatsoever to Buyer with respect to any matter
disclosed to Buyer in writing prior to the Closing Date; and (ii) none of the
Releasees other than Seller shall have any liability whatsoever under this
Agreement or with respect to the Property.

         Seller has given Buyer material concessions regarding this transaction
in exchange for Buyer agreeing to the provisions of this Section 11. Seller and
Buyer have each initialed this Section 11 to further indicate their awareness
and acceptance of each and every provision hereof. The provisions of this
Section 11 shall survive the Closing and shall not be deemed merged into any
instrument or conveyance delivered at the Closing.

         INITIALS:         SELLER:  ___________      BUYER:  ___________

         Notwithstanding anything in this Section 11 to the contrary, the
releases contained herein are not intended to and do not include (i) any claims
arising from a breach of Seller's representations or warranties set forth in
Section 25 below, (ii) any obligation or other covenant of Seller under this
Agreement which by its terms survives the Closing, or (iii) any claim based

                                      -13-
<PAGE>

upon a breach of contract by Seller, a personal injury or any actual release of
any Hazardous Materials by Seller (as opposed to the mere existence of any
Hazardous Materials in, on or under the Property that are not released by
Seller) brought by a third-party (private or governmental) against Buyer
alleging loss or seeking equitable or any other relief as to matters, acts or
omissions occurring, arising or accruing prior to the Closing Date.

         12.      AS-IS Condition of Property.

                  12.1     Buyer specifically acknowledges, represents and
warrants that prior to Closing, it and its agents and representatives will have
thoroughly inspected the Property and observed the physical characteristics and
condition of the Property. Notwithstanding anything to the contrary contained in
this Agreement, Buyer further acknowledges and agrees that Buyer is purchasing
the Property subject to all applicable laws, rules, regulations, codes,
ordinances and orders. Subject to any liability of Seller for a breach of the
express representations of Seller in Section 25 below, by Buyer purchasing the
Property and upon the occurrence of the Closing, Buyer waives any and all right
or ability to make a claim of any kind or nature against any of the Releasees
for any and all deficiencies or defects in the physical characteristics and
condition of the Property which would be disclosed by such inspection and
expressly agrees to acquire the Property with any and all of such deficiencies
and defects and subject to all matters disclosed by Seller herein or in any
separate writing with respect to the Property. Buyer further acknowledges and
agrees that except for any representations expressly made by Seller in Section
25 of this Agreement neither Seller or any of Seller's employees, agents or
representatives have made any representations, warranties or agreements by or on
behalf of Seller of any kind whatsoever, whether oral or written, express or
implied, statutory or otherwise, as to any matters concerning the Property, the
condition of the Property, the size (including square footage) of the Real
Property, the size (including square footage) of the Improvements , the present
use of the Property or the suitability of Buyer's intended use of the Property.
Buyer hereby acknowledges, agrees and represents that, subject to any liability
of Seller for a breach of the express representations of Seller in Section 25
below, the Property is to be purchased, conveyed and accepted by Buyer in its
present condition, "AS IS", "WHERE IS" AND WITH ALL FAULTS, and that no patent
or latent defect or deficiency in the condition of the Property whether or not
known or discovered, shall affect the rights of either Seller or Buyer hereunder
nor shall the Purchase Price be reduced as a consequence thereof. Any and all
information and documents furnished to Buyer by or on behalf of Seller relating
to the Property shall be deemed furnished as a courtesy to Buyer but without any
warranty of any kind from or on behalf of Seller. Buyer hereby represents and
warrants to Seller that Buyer has performed an independent inspection and
investigation of the Property and has also investigated and has knowledge of
operative or proposed governmental laws and regulations including without
limitation, land use laws and regulations to which the Property may be subject.
Buyer further represents that, except for any representations expressly made by
Seller in Section 25 of this Agreement, it shall acquire the Property solely
upon the basis of its independent inspection and investigation of the Property,
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 Real Property lies within a special flood hazard area, an area of
potential flooding, a very high fire

                                      -14-
<PAGE>

hazard severity zone, a wildland fire area, an earthquake fault zone or a
seismic hazard zone, (ii) the dimensions or lot size of the Real Property or the
square footage of the Improvements thereon, (iii) the development or income
potential, or rights of or relating to, the Real Property or its use,
habitability, merchantability, or fitness, or the suitability, value or adequacy
of such Real Property for any particular purpose, (iv) the zoning or other legal
status of the Real Property or any other public or private restrictions on the
use of the Real Property, (v) the compliance of the Real Property or its
operation with any applicable codes, laws, regulations, statutes, ordinances,
covenants, conditions and restrictions of any governmental or regulatory agency
or authority or of any other person or entity (including, without limitation,
the Americans With Disabilities Act), (vi) the ability of Buyer to obtain any
necessary governmental approvals, licenses or permits for Buyer's intended use
or development of the Real Property, (vii) the presence or absence of Hazardous
Materials on, in, under, above or about the Real 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 Real Property, (x) any
agreements affecting the Real Property or the intentions of any party with
respect to the negotiation and/or execution of any agreement with respect to the
Real 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 Real
Property. Without limiting the generality of the foregoing, Buyer expressly
acknowledges and agrees that Buyer is not relying on any representation or
warranty of Seller, nor any member partner, officer, employee, attorney,
property manager, agent or broker of Seller, 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 Buyer except as
expressly provided in Section 25 below. Buyer further acknowledges and agrees
that Seller is not under any duty to make any inquiry regarding any matter that
may or may not be known to the Seller or any member, partner, officer, employee,
attorney, property manager, agent or broker of Seller.

                           Seller's Initials:___________Buyer's Initials:_____

                  12.2     Any reports, repairs or work required by Buyer are
the sole responsibility of Buyer, and Buyer agrees that, subject to the
provisions of Section 8 above, there is no obligation on the part of 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. Buyer is
solely responsible for obtaining any certificate of occupancy or any other
approval or permit necessary for transfer or occupancy of the Property and for
any repairs or alterations necessary to obtain the same, all at Buyer's sole
cost and expense. The provisions of this Section 12 shall survive the Closing
and shall not be deemed merged into any instrument or conveyance delivered at
the Closing.

         13.      Prorations. Without affecting Seller's obligations under the
New Lease, real property taxes and assessments, water, sewer and utility
charges, and other expenses normal to the operation and maintenance of the
Property shall be prorated as of and through the Closing Date on the basis of a
365-day year. In the event that as of the Closing the actual tax bills for the
year or years in question are not available and the amount of taxes to be
prorated as aforesaid cannot be ascertained, then rates and assessed valuation
of the previous year, with known changes, shall be used, and when the actual
amount of taxes and assessments for the year or years in question shall be
determinable, then such taxes and assessments will be reprorated

                                      -15-
<PAGE>

between the parties outside of Escrow to reflect the actual amount of such taxes
and assessments. The provisions of this Section 14 shall survive the Closing.

         14.      Closing Costs. Except as expressly set forth herein, all costs
associated with the transfer of title and the associated escrow shall be in
accordance with the customary practices in San Diego County. Seller shall pay
(i) one-half (-1/2) of the escrow fee charged by Escrow Holder, (ii) the cost of
any and all documentary county transfer taxes, and (iii) the premium charged by
the Title Company for the CLTA portion of the ALTA Policy (excluding any
endorsements thereto). At Closing, Buyer shall obtain from the Title Company an
ALTA Owner's Policy of Title Insurance (Form 1970, Amended 10-17-70)) (the "ALTA
Policy"). At Closing, Buyer shall pay (i) one-half (-1/2) of the escrow fee
charged by Escrow Holder, and (ii) the cost of any and all costs and incremental
premiums or other charges related to the ALTA Policy (including all endorsements
thereto) in excess of the cost of the CLTA portion thereof. Each party shall be
solely responsible for its own legal fees and costs.

         15.      Brokers. Seller and Buyer respectively represent that there
are no brokers or other intermediaries entitled to receive brokerage commissions
or fees or other compensation out of or with respect to the sale of the
Property, except for Cushman and Wakefield of California, Inc. ("Broker"). At
Closing, and only if the Closing actually occurs, Seller shall pay to the Broker
a brokerage commission, the amount of which shall be as specified in separate
agreements between Seller and the Broker. Seller and Buyer shall indemnify and
save and hold each other harmless from and against all claims, suits, damages
and costs incurred or resulting from the claim of any person, except the Broker
(payment of the Broker being Seller's responsibility), that a commission, fee or
remuneration is due in connection with this transaction pursuant to an agreement
made with said claimant. The provisions of this Section 15 shall survive the
Closing or any termination of this Agreement.

         16.      Notices. Any notice required or permitted to be given under
this Agreement shall be in writing and shall be deemed to have been given when
delivered by U.S. mail, registered or certified, return receipt requested,
postage prepaid, or by overnight delivery service showing receipt of delivery,
or by personal delivery, or by facsimile transmission (provided a copy is
concurrently sent by another method identified above). Such notices shall be
sent to the parties at the following addresses, or such other address as may
otherwise be indicated by any such party in writing.

                  If to Seller:             Ashworth, Inc.
                                            2765 Loker Avenue West
                                            Carlsbad, CA 92008
                                            Attention:  Mr. Peter Case
                                            Phone number: (760) 929-4640
                                            Facsimile number: (760) 476-8440

                                      -16-
<PAGE>

                  with a copy to:       Allen Matkins Leck Gamble & Mallory LLP
                                        12348 High Bluff Drive, Suite 100
                                        San Diego, California  92130-3546
                                        Attention: Thomas B. Crosbie, Esq.
                                        Phone number: 858-481-5055
                                        Facsimile number: 858-481-5028

                  If to Buyer:          c/o Layton-Belling & Associates, LLC
                                        4440 Von Karman Avenue, Suite 150

                                        Newport Beach, California 92660
                                        Attention: Steven R. Layton
                                        Phone number: (949) 833-0400
                                        Facsimile number: (949) 955-9325

                  with a copy to:       Orrick, Herrington & Sutcliffe LLP
                                        777 South Figueroa Street. Suite 3200
                                        Los Angeles, California 90017
                                        Attention: Richard C. Mendelson, Esq.
                                        Phone number: (213) 629-2020
                                        Facsimile number: (213) 612-2499

Notices as aforesaid shall be effective upon the earlier of actual receipt, or
twenty-four (24) hours after deposit with the messenger or delivery service, or
the next business day after delivery to an overnight delivery service, or within
three (3) days after the deposit in the U.S. mail, or upon confirmation of
transmission by facsimile, or when receipt is refused.

         17.      Entire Agreement. This Agreement constitutes the entire
understanding of the parties and all prior agreements, representations, and
understandings between the parties, whether oral or written, are deemed null and
void, all of the foregoing having been merged into this Agreement. The parties
acknowledge that each party and/or its counsel have reviewed and revised this
Agreement and that no rule of construction to the effect that any ambiguities
are to be resolved against the drafting party shall be employed in the
interpretation or enforcement of this Agreement or any amendments or exhibits to
this Agreement or any document executed and delivered by either party in
connection with this Agreement.

         18.      Assignment. Buyer may not assign its rights, obligations and
interest in this Agreement to any other person or entity other than a "Permitted
Assignee" (defined below), without first obtaining Seller's prior written
consent thereto, which consent may be given or withheld in Seller's sole and
absolute discretion. Seller's prior consent shall not be required in connection
with any assignment to a Permitted Assignee. Except as provided below with
respect to a Permitted Assignment, any assignment by Buyer shall not relieve
Buyer from any liability or its obligations under or in connection with this
Agreement. Any attempted assignment not in compliance with the provisions of
this Section 18 shall be null and void. This Agreement shall inure to the
benefit of and be binding upon the parties to this Agreement and their
respective successors and permitted assigns. As used herein, a "Permitted
Assignee" shall mean any corporation, partnership, limited liability company or
other entity controlled by, under common

                                      -17-
<PAGE>

control with, or which controls, Buyer or another entity in which Buyer is a
member, partner, shareholder or manager. Provided that the Permitted Assignee of
Buyer shall assume, in writing, all of Buyer's obligations and liabilities
hereunder (and a copy of such written assignment and assumption agreement shall
be delivered to Seller prior to the Closing), then Buyer shall, upon such
assignment and assumption and the consummation of the Closing, be released from
any and all obligations and liabilities hereunder.

         19.      Severability. If for any reason, any provision of this
Agreement shall be held to be unenforceable, it shall not affect the validity or
enforceability of any other provision of this Agreement and to the extent any
provision of this Agreement is not determined to be unenforceable, such
provision, or portion thereof, shall be, and remain, in full force and effect.

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

         21.      Modifications/Survival. Any and all exhibits attached hereto
shall be deemed a part hereof. This Agreement, including exhibits, if any,
expresses the entire agreement of the parties and supersedes any and all
previous agreements between the parties with regard to the Property, including
without limitation, that certain letter of intent dated October 24, 2003. There
are no other understandings, oral or written, which in any way alter or enlarge
its terms, and there are no warranties or representations of any nature
whatsoever, either expressed or implied, except as may expressly be set forth
herein. Any and all future modifications of this Agreement will be effective
only if it is in writing and signed by the parties hereto. The terms and
conditions of such future modifications of this Agreement shall supersede and
replace any inconsistent provisions in this Agreement.

         22.      Confidentiality. Buyer agrees that, (a) except as otherwise
provided or required by valid law, (b) except to the extent Buyer considers such
documents or information reasonably necessary to prosecute and/or defend any
claim made with respect to the Property or this Agreement, and (c) except to the
extent deemed necessary by Buyer, in its sole and absolute discretion, to
deliver such documents or information to Buyer's employees, paralegals,
attorneys and/or consultants in connection with Buyer's evaluation of this
transaction, (i) Buyer and Buyer's agents, consultants, representatives,
attorneys, employees, successors and assigns (collectively, the "Buyer's
Representatives"), shall use reasonable efforts to keep the contents of any
materials, reports, documents, data, test results, and other information related
to the transaction contemplated hereby, including without limitation, the Due
Diligence Materials and all information regarding Buyer's acquisition or
ownership of the Property strictly confidential, (ii) Buyer and Buyer's
Representatives shall keep and maintain the contents of this Agreement,
including without limitation, the amount of consideration being paid by Buyer
for the Property strictly confidential, and (iii) Buyer and Buyer's
Representatives shall refrain from generating or participating in any publicity
or press release regarding this transaction without the prior written consent of
Seller. Buyer acknowledges that significant portions of the Due Diligence
Materials are proprietary in nature and that Seller would suffer significant and
irreparable harm in the event of the misuse or disclosure of the Due Diligence
Materials. Without affecting any other rights or remedies that either party may
have, Buyer acknowledges and agrees that Seller shall be entitled to seek the
remedies of injunction, specific performance and other equitable relief for any
breach, threatened breach or anticipatory breach of the provisions of this
Section 22 by

                                      -18-
<PAGE>

Buyer or any of Buyer's Representatives. The provisions of this Section 22 shall
survive any termination of this Agreement but shall not survive the Closing.

         23.      Counterparts. This Agreement may be executed in counterparts.
All executed counterparts shall constitute one agreement, and each counterpart
shall be deemed an original. Buyer and Seller agree that the delivery of an
executed copy of this Agreement by facsimile shall be legal and binding and
shall have the same full force and effect as if an original executed copy of
this Agreement had been delivered.

         24.      Dispute Costs. In the event any dispute between the parties
with respect to this Agreement result in litigation or other proceeding, the
prevailing party shall be reimbursed by the party not prevailing in such
proceeding for all reasonable costs and expenses, including, without limitation,
reasonable attorneys' and experts' fees and costs incurred by the prevailing
party in connection with such litigation or other proceeding and any appeal
thereof. Such costs, expenses and fees shall be included in and made a part of
the judgment recovered by the prevailing party, if any. The provisions of this
Section 24 shall survive any termination of this Agreement or the Closing.

         25.      Seller's Representations. Seller hereby represents to Buyer
that the following matters are true and correct as of the date of execution of
this Agreement and shall, except as otherwise disclosed in writing by Seller to
Buyer, be true and correct as of the Closing:

                  25.1     Seller is a Delaware corporation, duly formed,
validly existing and in good standing under the laws of the State of Delaware.

                  25.2     This Agreement and all documents executed by Seller
that are to be delivered to Buyer at Closing (i) are, or at the time of Closing
will be, duly authorized, executed and delivered by Seller, (ii) do not, and at
the time of Closing will not, violate any provision of any judicial order to
which Seller is a party or to which Seller or the Property is subject and (iii)
constitute (or in the case of closing documents will constitute) a valid and
legally binding obligation of Seller. Seller has full and complete power and
authority to enter into this Agreement and, to perform its obligations
hereunder. Seller hereby further represents and warrants to Buyer that Seller is
not presently the subject of a bankruptcy, insolvency or probate proceeding and
Seller does not anticipate nor intend to file or cause to be filed any
bankruptcy or insolvency proceeding involving Seller or Seller's assets during
the pendency of this Agreement.

                  25.3     Seller is not a "foreign person" within the meaning
of Section 1445(f)(3) of the Internal Revenue Code, as amended.

                  25.4     Seller has not been served with respect to any
pending actions, suits, arbitrations, claims or proceedings, at law, in equity
or otherwise, affecting, all or any portion of the Property or in which Seller
is a party by reason of Seller's ownership of the Property, including but not
limited to, judicial, municipal or administrative proceedings in eminent domain,
noticed alleged building code violations, health and safety violations, federal,
state or local agency action regarding environmental matters, federal
environmental protection agency or zoning violations, personal injuries or
property damages alleged to have occurred at the Property or by reason of the
condition or use of or construction on the Property.

                                      -19-
<PAGE>

                  25.5     To Seller's knowledge, and except as otherwise
disclosed in writing to Buyer, Seller has received no written notice alleging
that any aspect of the use, operation or development of the Property is in
violation of (i) any applicable laws, ordinances or restrictions, (ii) any
judicial or administrative action, or (iii) any recorded restrictions.

                  25.6     Seller has delivered to Buyer copies of all Contracts
that will survive Closing and to which Seller is a party or which are in
Seller's possession and, to Seller's knowledge, there are no other Contracts
that will survive Closing other than those disclosed in the Title Report. To
Seller's knowledge, the copies of the Contracts delivered to Buyer are true,
correct and complete.

                  25.7     Except for the New Lease, there are no leases,
licenses or other occupancy agreements affecting the Property.

                  25.8     Except as expressly set forth in the New Lease, there
are no leasing commissions due or payable pursuant to or in connection with the
execution of the New Lease with respect to any broker claiming under Seller.

                  25.9     Peter Case and Keith Almryde are the representatives
or employees of Seller who are most knowledgeable with respect to the Property.

         Where a representation or warranty is limited to the knowledge of
Seller or the knowledge of Seller is referred to herein, such representation or
warranty or reference is deemed to be limited to the current, actual knowledge,
without independent investigation or inquiry, of Peter Case and Keith Almryde.
The representations, warranties and indemnities of Seller set forth in this
Section 25 and in any Exhibits to this Agreement shall survive the Closing and
continue until one (1) year after the Closing and shall automatically lapse and
become null and void after said one (1) year period, and Buyer shall thereafter
be barred from bringing or asserting any claim against Seller by reason of a
breach of any of such representations or warranties by Seller unless prior to
the expiration of such time period, such claim is asserted in writing delivered
to Seller specifying the alleged breach.

         26.      Buyer's Representations. Buyer hereby represents and warrants
to Seller that Buyer is a corporation, duly formed, validly existing and in good
standing under the laws of the State of California. Buyer further represents and
warrants that this Agreement and all documents executed by Buyer that are to be
delivered to Seller at Closing (a) are, or at the time of Closing will be, duly
authorized, executed and delivered by Buyer, (b) do not, and at the time of
Closing will not, violate any provision of any judicial order to which Buyer is
a party or to which Buyer is subject and (c) constitute (or in the case of
closing documents will constitute) a valid and legally binding obligation of
Buyer. Buyer further represents and warrants to Seller that Buyer has full and
complete power and authority to enter into this Agreement and to perform its
obligations hereunder. Buyer hereby further represents and warrants to Seller
that (i) Buyer is not presently the subject of a bankruptcy, insolvency or
probate proceedings and Buyer does not anticipate nor intend to file or cause to
be filed any bankruptcy or insolvency proceeding involving Buyer or Buyer's
assets during the pendency of this Agreement, (ii) Buyer is a sophisticated
investor with substantial experience in investing in assets of the same type as
the Property and has such knowledge and experience in financial and business
matters that Buyer is

                                      -20-
<PAGE>

capable of evaluating the merits and risks of an investment in the Property,
(iii) Buyer is represented by competent counsel, (iv) Buyer shall furnish all of
the funds for the purchase of the Property (other than funds supplied by
institutional lenders which will hold valid mortgage liens against the Property)
and such funds will not be from sources of funds or properties derived from any
unlawful activity, (v) prior to Closing, Buyer and its agents will have
thoroughly inspected the Property, fully observed the physical characteristics
and condition of the Property, and performed a thorough investigation of the
suitability of Buyer's intended use of the Property, including without
limitation, the suitability of the topography; the availability of water rights
or utilities; any natural hazard of any kind or nature, including without
limitation, flood hazard, earthquake fault or seismic hazard, or forest fire
risk or hazard; 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, and (vi) Buyer
understands it will have no recourse whatsoever against Seller or any of the
other Releasees except as otherwise expressly set forth in this Agreement. The
foregoing representations and warranties of Buyer shall survive the Closing and
continue until one (1) year after the Closing and shall automatically lapse and
become null and void after said one (1) year period, and Seller shall thereafter
be barred from bringing or asserting any claim against Buyer by reason of a
breach of any of such representations or warranties by Buyer unless prior to the
expiration of such time period, such claim is asserted in writing delivered to
Buyer specifying the alleged breach.

         27.      Time of the Essence; and Business Days. Time is of the essence
in the performance of each of the parties' respective obligations contained
herein. Unless the context otherwise requires, all periods terminating on a
given day, period of days, or date shall terminate at 5:00 p.m. (Pacific Time)
on such date or dates and references to "days" shall refer to calendar days
except if such references are to "business days" which shall refer to days which
are not a Saturday, Sunday or legal holiday. Notwithstanding the foregoing, if
any period terminates on a Saturday, Sunday or legal holiday, under the laws of
the State of California, the termination of such period shall be on the next
succeeding business day. The time in which any act provided under this Agreement
is to be done, shall be computed by excluding the first day and including the
last day, unless the last day is a Saturday, Sunday or legal holiday under the
laws of the State of California, and then it is also so excluded.

         28.      Agreement Date. The parties hereby covenant and agree that the
"Agreement Date" shall be the date on which the Escrow Holder confirms in
writing to both Seller and Buyer that the Escrow Holder has actually received
from both parties two (2) signed and initialed original counterparts of this
Agreement and the Escrow Holder is in a position to release to each of the
parties a fully executed original of this Agreement signed and initialed in
counterparts. The Escrow Holder shall insert such date in each original
counterpart of this Agreement on Page 1 hereof. If either party fails to submit
two (2) signed and initialed original counterparts of this Agreement to Escrow
Holder within five (5) business days after the delivery to Escrow Holder by the
other party of two (2) signed and initialed original counterparts of this
Agreement, then the party which delivered to Escrow Holder said signed and
initialed counterparts of this Agreement may, at its option, withdraw such
signed and initialed counterparts therefrom without any obligation to resubmit
same to Escrow Holder thereafter.

                                      -21-
<PAGE>

         29.      No Third Party Beneficiaries. Except as otherwise expressly
set forth herein, Seller and Buyer do not intend, and this Agreement shall not
be construed, to create a third-party beneficiary status or interest in, nor
give any third-party beneficiary rights or remedies to, any other person or
entity not a party to this Agreement.

         30.      Drafts not an Offer to Enter into a Legally Binding Contract.
The parties hereto agree that the submission of a draft of this Agreement by one
party to another is not intended by either party to be an offer to enter into a
legally binding contract with respect to the purchase and sale of the Property.
The parties shall be legally bound with respect to the purchase and sale of the
Property pursuant to the terms of this Agreement only if and when the parties
have been able to negotiate all of the terms and provisions of this Agreement in
a manner acceptable to each of the parties in their respective sole discretion,
including without limitation, all of the exhibits hereto, and each of Seller and
Buyer have fully executed and delivered (or caused the delivery) to each other a
counterpart of this Agreement, including without limitation, all exhibits
hereto.

         31.      Natural Hazard Disclosure Requirement Compliance. Buyer and
Seller acknowledge that Seller may be required to disclose if the Property lies
within the following natural hazard areas or zones: (i) a special flood hazard
area designated by the Federal Emergency Management Agency (California Civil
Code Section 1103(c)(1)); (ii) an area of potential flooding (California
Government Code Section 8589.4); (iii) a very high fire hazard severity zone
(California Government Code Section 51178 et seq.); (iv) a wild land area that
may contain substantial forest fire risks and hazards (Public Resources Code
Section 4135); (v) earthquake fault zone (Public Resources Code Section 2622);
or (vi) a seismic hazard zone (Public Resources Code Section 2694) (sometimes
all of the preceding are herein collectively called the "Natural Hazard
Matters"). Seller has engaged or will cause the Title Company or such other
company selected by Seller to engage the services of a natural hazard disclosure
expert (the "Natural Hazard Expert"), to examine the maps and other information
specifically made available to the public by government agencies for the
purposes of enabling Seller to fulfill its disclosure obligations, if and to the
extent such obligations exist, with respect to the natural hazards referred to
in California Civil Code Section 1102.6a and to report the result of its
examination to Buyer and Seller in writing. If delivered to Buyer not later than
one (1) business day prior to the Approval Date, the written report prepared by
the Natural Hazard Expert regarding the results of its full examination will
fully and completely discharge Seller from its disclosure obligations referred
to herein, if and to the extent any such obligations exist, and, for the purpose
of this Agreement, the provisions of Civil Code Section 1102.4 regarding
non-liability of Seller for errors or omissions not within its personal
knowledge shall be deemed to apply and the Natural Hazard Expert shall be deemed
to be an expert, dealing with matters within the scope of its expertise with
respect to the examination and written report regarding the natural hazards
referred to above.

         32.      1031 Exchange. Each of the parties hereto has requested that
the other party hereto cooperate with such party in effecting a like-kind
exchange under Section 1031 of the Internal Revenue Code (as amended, the
"Code"). Each party hereto agrees to cooperate with the other to effectuate said
exchange transaction, and such parties shall reimburse the other for any actual,
documented and reasonable costs incurred by such other party (and expressly
preapproved in writing by the other party) in providing any such accommodation;
provided, however, that (i) neither party shall be obligated or required to take
title to any other property in

                                      -22-
<PAGE>

connection with such exchange, (ii) the transactions contemplated by this
Agreement are in no way conditioned on the success or feasibility of such
exchange and (iii) the Closing may not be extended to accommodate the exchange.
To effect such exchange, the parties acknowledge and agree that each party may
assign its rights in, and delegate its duties under, this Agreement to any
exchange accommodator that such party may determine.

         IN WITNESS WHEREOF the parties have caused this Agreement to be
executed as of the day and year first above written.

                                    SELLER:

                                    ASHWORTH, INC.,
                                    a Delaware corporation

                                    By: ________________________________
                                        ________________________________

                                        By: /s/Peter Case
                                            ----------------------------
                                            Name: Peter Case
                                            Title: VP Finance

                                    BUYER:

                                    LBA INC.,
                                    a California corporation

                                    By: /s/Steven R. Layton
                                        --------------------------------
                                        Name:  Steve R. Layton
                                        Title:  Authorized Signatory

                                    By: ________________________________
                                        Name: __________________________
                                        Title: _________________________

                                      -23-
<PAGE>

                                    EXHIBIT A

                     LEGAL DESCRIPTION OF THE REAL PROPERTY

                                                                      01-0228374

                  THE LAND REFERRED TO HEREIN IS SITUATED IN THE STATE OF
                  CALIFORNIA, COUNTY OF SAN DIEGO AND IS DESCRIVED AS FOLLOWS:

                  LOT 15 OF CARLSBAD TRACT NO. 74-21, IN THE CITY OF CARLSBAD,
                  COUNTY OF SAN DIEGO, STATE OF CALIFORNIA, ACCORDING TO MAP
                  THEREOF NO. 10372, FILED IN THE OFFICE OF THE COUNTY RECORDER
                  OF SAN DIEGO COUNTY, APRIL 13, 1982.

                  EXCEPTING THEREFORM ALL MINERALS, OIL AND GAS RIGHTS BELOW THE
                  DEPTH OF 500 FEET BELOW THE SURFACE OF SAID LAND WITHOUT THE
                  RIGHT OF SURFACE ENTRY AS RESERVED BY KAISER DEVELOPMENT
                  COMPANY, A CALIFORNIA CORPORATION IN DEED RECORDED JANUARY 15,
                  1988 AS FILE NO. 88-021669 OF OFFICIAL RECORDS.

                                    EXHIBIT A
                                      -1-
<PAGE>

                                    EXHIBIT B

                              INTENTIONALLY OMITTED

                                    EXHIBIT B
                                       -1-
<PAGE>

                                    EXHIBIT C

                    ASSIGNMENT AND ASSUMPTION OF INTANGIBLES

         This Assignment and Assumption of Intangibles (the "Assignment") is
made and entered into as of this 24th day of February, 2004 ("Assignment Date"),
by and between ASHWORTH, INC., a Delaware corporation ("Assignor"), and LBA
INDUSTRIAL FUND - CANYON, INC. a Delaware corporation ("Assignee"), with
reference to the following facts.

                                R E C I T A L S :

         A.       Assignor and LBA INC., a California corporation ("LBA"), are
parties to that certain Purchase and Sale Agreement, made and entered into as of
December 2, 2003 (as assigned by LBA to Assignee, the "Purchase Agreement"),
pursuant to which Assignor agreed to sell to Assignee, and Assignee agreed to
purchase from Assignor that certain improved real property located at 2791-2793
Loker Avenue, Carlsbad, California, as legally described in Exhibit A attached
hereto and made a part hereof (the "Real Property") together with all (i)
improvements, structures and fixtures (other than trade fixtures) (collectively,
the "Improvements"), and (ii) easements, appurtenances, rights and privileges
pertaining thereto (collectively, the "Appurtenances"). The Real Property, the
Improvements, and the Appurtenances are collectively referred to herein as the
"Property."

         B.       Assignee has acquired fee title to the Property from Assignor
on the Assignment Date. Assignor now desires to assign and transfer to Assignee
all of Assignor's rights and interests in, to and under the Intangibles (as
hereinafter defined).

         NOW, THEREFORE, for valuable consideration, the receipt and adequacy of
which is hereby acknowledged, the parties hereto agree as follows:

         1.       Assignment and Assumption of Intangibles. Effective as of the
Assignment Date, Assignor hereby grants, transfers, conveys, assigns and
delegates to Assignee all of its rights and interests of Assignor in, to and
under all intangible property now owned by Assignor in connection with any
portion of the Property, including without limitation, all governmental permits,
approvals, guaranties, warranties, indemnities, licenses, permits, entitlements,
plans, specifications and similar documents and rights and licenses (to the
extent assignable and specifically excluding any tradenames of Seller or any
affiliated or related entities of Seller and any licenses and other similar
documents and rights related to the specific clothing and accessory design and
manufacturing operations of Seller) (collectively, the "Intangibles"). Assignee
hereby accepts such assignment and delegation by Assignor and agrees to fully
perform and assume all the obligations of Assignor under the Intangibles arising
from and after the Assignment Date.

         2.       No Warranties. Assignee does hereby covenant with Assignor,
and represents and warrants to Assignor, that Assignor is transferring the
Intangibles to Assignee without any warranty of any kind or nature. This
Assignment shall not be construed as a representation or warranty by Assignor as
to the transferability or enforceability of the Intangibles, and Assignor

                                    EXHIBIT C
                                       -1-
<PAGE>

shall have no liability to Assignee in the event that any or all of the
Intangibles (a) are not transferable to Assignee or (b) are cancelled or
terminated by reason of this Assignment or any acts of Assignee.

         3.       Dispute Costs. In the event of any dispute between Assignor
and Assignee arising out of the obligations of the parties 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.       Counterparts. 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. Assignor and Assignee agree that the delivery of an
executed copy of this Assignment by facsimile shall be legal and binding and
shall have the same full force and effect as if an original executed copy of
this Assignment had been delivered.

         5.       Survival. This Assignment and the provisions hereof shall
inure to the benefit of and be binding upon the parties to this Assignment and
their respective successors, heirs and permitted assigns.

         6.       Limited Liability. 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. Assignee on its
own behalf and on behalf of its agents, members, partners, employees,
representatives, successors and assigns hereby agrees that in no event or
circumstance shall any of the members, partners, employees, representatives,
officers, directors, agents, property management company, affiliated or related
entities of Assignor have any personal liability under this Assignment, or to
any of Assignee's creditors, or to any other party in connection with the
Property.

         7.       No Third Party Beneficiaries. Except as otherwise expressly
set forth herein, Assignor and Assignee do not intend, and this Assignment shall
not be construed, to create a third-party beneficiary status or interest in, nor
give any third-party beneficiary rights or remedies to, any other person or
entity not a party to this Assignment.

                                    EXHIBIT C
                                       -2-
<PAGE>

         IN WITNESS WHEREOF, the parties hereto have executed this Assignment as
of the Assignment Date.

                                    ASSIGNOR:

                                    ASHWORTH, INC.,
                                    a Delaware corporation

                                    By: /s/Peter Case
                                        --------------------------------
                                        Name:  Peter Case
                                        Title: VP Finance

                                    ASSIGNEE:

                                    LBA INDUSTRIAL FUND - CANYON, INC.,
                                    a Delaware corporation

                                    By: /s/Steven R. Layton
                                        --------------------------------
                                        Name:  Steven R. Layton
                                        Title: Authorized Signatory

                                    EXHIBIT C
                                       -2-
<PAGE>

                                    EXHIBIT D

                                   GRANT DEED

RECORDING REQUESTED BY:

Stewart Title of California, Inc.

WHEN RECORDED MAIL TO:

Orrick Herrington & Sutcliffe LLP
777 South Figueroa Street, Suite 3200
Los Angeles, California 90017
Attn: Richard C. Mendelson, Esq.

MAIL TAX STATEMENTS TO:

c/o Layton-Belling & Associates
4440 Von Karman Avenue, Suite 150
Newport Beach, California 92660
Attn: Mr. Thomas C. Rutherford

                    Space Above This Line for Recorder's Use

                                   GRANT DEED

         In accordance with Section 11932 of the California Revenue and Taxation
Code, Grantor has declared the amount of transfer tax which is due by separate
statement which is not being recorded with this Grant Deed.

         For valuable consideration, receipt of which is acknowledged, ASHWORTH,
INC., a Delaware corporation, formerly known as Charter Golf Inc., a Delaware
corporation ("Grantor"), hereby grants to LBA INDUSTRIAL FUND - CANYON, INC., a
Delaware corporation ("Grantee"), that certain real property located in the City
of Carlsbad, County of San Diego, State of California, as legally described in
Exhibit A attached hereto and made a part hereof (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)      A non-delinquent 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;

                                    EXHIBIT D
                                      -1-
<PAGE>

         (b)      The liens for real property taxes for the fiscal year
2003-2004 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 a survey of the
Property; and

         (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.

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

DATED: February 24, 2004

                                    GRANTOR:

                                    ASHWORTH INC.,
                                    a Delaware corporation

                                        By:_____________________________
                                            Name:_______________________
                                            Title:______________________

                                    EXHIBIT D
                                       -2-

<PAGE>

Document No.:__________________

Date Recorded: __________________, 2003

              STATEMENT OF TAX DUE AND REQUEST THAT TAX DECLARATION
                  NOT BE MADE A PART OF PERMANENT RECORD IN THE
                          OFFICE OF THE COUNTY RECORDER

                      (PURSUANT TO SECTION 11932 R&T CODE)

To:      Registrar Recorder

         County of _________________, California

Request is hereby made in accordance with the provisions of the Documentary
Transfer Tax Act that the amount of tax due not be shown on the original
document which names:

                            ------------------------
                                  (as grantor)

                            ------------------------
                                  (as grantee)

                  Property described in the accompanying document is located in
                  (_) unincorporated area of the County of __________________
                  (_) City of __________________________________________

The amount of tax due on the accompanying document is $____________

                  (X) Computed on full value of property convened, or
                  (_) computed on full value less liens and encumbrances
                             remaining at time of sale

                                    GRANTOR:

                                    ASHWORTH INC.,
                                    a Delaware corporation

                                    By:
                                        a ______________________________

                                        By:
                                            Name:_______________________
                                            Title:

                                    EXHIBIT D
                                       -3-