Document:

Exhibit 10.2

                           PURCHASE AND SALE AGREEMENT

                      (ADJACENT REAL PROPERTY - TRACT "B")

     BY THIS PURCHASE AND SALE AGREEMENT (this  "AGREEMENT")  entered into as of
the  31st  day  of  January,  2000,  THE  TESSERACT  GROUP,  INC.,  a  Minnesota
corporation  ("SELLER"),  and  EDUCATION  PROPERTY  INVESTORS,  INC.,  a  Nevada
corporation ("BUYER"), agree as follows:

1.   PURCHASE AND SALE.

     Subject to the terms and  conditions  set forth in this  Agreement,  Seller
agrees to sell to Buyer,  and Buyer agrees to purchase  from  Seller,  that real
property legally described on EXHIBIT "A" attached hereto,  together with all of
Seller's  right,  title and  interest in all  rights,  easements  and  interests
appurtenant  thereto,  including but not limited to, any streets or other public
ways adjacent to such real property and any development rights, water or mineral
rights owned by, or lease to, Seller, if any (the "SALE PROPERTY").

2.   ESCROW.

     Upon  execution of this  Agreement by Seller and Buyer,  the parties  shall
cause an escrow (the  "ESCROW") to be established  with Chicago Title  Insurance
Company,  2415 E.  Camelback  Road,  Suite 30,  Phoenix,  Arizona  85016  Escrow
Officer:  Jack Knott within three (3) business  days ("ESCROW  AGENT").  As used
herein,  the term  "OPENING OF ESCROW"  shall mean the day on which Escrow Agent
receives a copy of this Agreement  executed by both Buyer and Seller, and Escrow
Agent shall  immediately  notify Seller and Buyer of the Opening of Escrow.  The
parties shall deliver to Escrow Agent an executed copy of this Agreement,  which
shall  constitute  instructions to Escrow Agent,  and Escrow Agent shall execute
this Agreement to acknowledge acceptance of the Escrow.

3.   CLOSING.

     Consummation  of the sale  provided for herein (the  "CLOSING")  shall take
place on the closing date (the "CLOSING  DATE") defined in the Purchase and Sale
Agreement (FF&E - North Scottsdale) by and between Buyer and Seller of even date
herewith  (the "FF&E  PURCHASE  AND SALE  AGREEMENt")  through the Escrow at the
offices  of Escrow  Agent or at such other  place as Buyer and  Seller  mutually
agree in writing. At or prior to the Closing,  each of the parties shall execute
and deliver such documents and perform such acts as are provided for herein,  or
as are necessary,  to consummate the  transaction  contemplated  hereunder.  All
obligations of the parties to be performed at or prior to Closing are conditions
precedent to the Closing as well as covenants.
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4.   PURCHASE PRICE AND PAYMENT TERMS.

     4.1.  PURCHASE  PRICE.  The  total  purchase  price to be paid for the Sale
Property shall be ONE MILLION FOUR HUNDRED SIXTY-TWO THOUSAND AND NO/100 DOLLARS
($1,462,000.00) (the "PURCHASE PRICE"), to be paid by Buyer to Seller in cash or
by wire transfer of cash credit through Escrow at or before Closing.

     4.2.  INVESTMENT OF DEPOSITED  FUNDS. All funds deposited by Buyer pursuant
hereto shall be invested by Escrow Agent in such  investments as may be directed
from time to time by Seller and Buyer. All earnings on such invested funds shall
belong to the party receiving said funds pursuant to the terms hereof  (provided
that if the sale of the Sale  Property is  consummated,  Buyer  shall  receive a
credit toward the purchase  price,  and a  corresponding  credit toward the cash
payable by Buyer at Closing, in the amount of the accrued interest) and shall be
paid at such time as said party receives said funds.

5.   TITLE REPORT AND SURVEY.

     Promptly after Opening of Escrow,  (i) Seller shall deliver to Buyer a copy
of the  existing  ALTA survey of the Sale  Property in Buyer's  possession  (the
"SURVEY"),  (ii) Escrow  Agent shall issue to Buyer a  preliminary  title report
incident  to the  issuance  of the title  policy  referred  to in  Section  7.2,
together  with  legible  copies of matters  shown on Schedule  "B" thereto  (the
"TITLE REPORT"),  and (iii) Buyer shall have prepared,  at Buyer's  expense,  an
update of the existing Survey (the "UPDATE").

6.   INSPECTION PERIOD.

     6.1.  INSPECTION.  Within five (5) days of Opening of Escrow,  Seller shall
provide Buyer with any existing  A.L.T.A.  Survey  Seller has in its  possession
regarding this property. Buyer warrants and represents that it will conduct, and
will be responsible for, such examinations,  inspections or tests as Buyer deems
necessary  and  appropriate,  and Buyer will comply with all federal,  state and
local  laws  which  might  have in any way  related  to any  such  examinations,
inspections or tests.  Buyer warrants and represents that it will not damage the
Sale Property in the course of performing its  investigations.  Buyer shall,  on
demand by Seller,  defend,  hold harmless,  reimburse and indemnify Seller from,
for,  of and  against  any and all  direct  and  indirect,  known  and  unknown,
obligations, actions, liabilities,  judgments, claims, demands, losses, damages,
costs,  including  costs of defense,  expenses  and fees  (including  reasonable
attorneys'  fees  and  costs)  arising  from  or  relating  to any  such  entry,
examinations,  inspections,  tests or restoration of the Sale Property including
without  limitation any costs,  expenses and fees (including  attorneys'  fees),
incurred  to  establish  a right to  indemnification,  regardless  of  whether a
proceeding is instituted.  Buyer's  indemnity  shall survive the Closing and any
termination of this Agreement. Buyer acknowledges the importance of inspections,
including tests,  survey, and other studies to determine the value and condition
of the Sale Property.  Buyer  acknowledges  that more than one inspection can be
required  to perform  the  selected  inspections.  The  inspections  may include
physical,  environmental,  and other  types of  inspections  including,  but not
limited to, soil, square footage/acreage,  designated flood hazard areas, wells,
possible  environmental hazards (including,  but not limited to, radon gas, fuel
or  chemical  storage  tanks,  hazardous  waste,   petrochemicals,   pesticides,

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industrial polymers,  lead, sulfuric acid of high fertilizer  concentrates,  and
other  substances,  materials  or  products  which are not  natural  to the Sale
Property or which are subject to regulation under environmental or public health
and welfare laws and ordinances, location in a federal or state Superfund area),
geologic   conditions,   location  of  property  lines  and   water/utility  use
restrictions and fees for services (such as garbage or fire  protection).  Buyer
also  acknowledges  the  importance of further  inquiries and  consultations  of
governmental  agencies,   lenders,   insurance  agents,  architects,  and  other
appropriate persons and entities concerning the use of the Sale Property and the
surrounding areas under applicable  building,  zoning,  fire, health, and safety
codes,  and for evaluation of potential  hazards.  Buyer  specifically  releases
Seller of any liability for any defects in the Sale Property, including, but not
limited to, those which could have been  discovered by such  inspections.  Buyer
shall  provide,  at no cost,  copies of any and all reports  concerning the Sale
Property obtained by Buyer, without representation or warranty. If, on or before
5:00 p.m. (Arizona time) on February 15, 2001 (the "REVIEW DEADLINE") Seller has
not received  written notice from Buyer of any objections  that may arise in the
course of its  investigations,  then Buyer shall be deemed to have  approved all
matters  relating to the physical  condition and use of the Sale  Property,  and
shall  thereafter  waive any right to raise any  objections  with respect to the
physical  condition  and/or use of the Sale Property  (except with respect,  and
only with respect to, any Material New Matter (defined below).  Buyer shall have
the right to object to any new material adverse  condition that arises after the
Review  Deadline and before the Closing Date (any such matter being  referred to
herein as a "MATERIAL NEW  MATTER");  provided,  however,  Buyer must deliver to
Seller  written  objection  with respect to any Material New Matter on or before
the date that is three (3) business days after Buyer obtains knowledge  thereof.
If Seller has not received  written  notice from Buyer of any  objections to any
Material New Matter within such three (3) business day period,  then Buyer shall
be deemed to have  approved such Material New  Matter(s),  and shall  thereafter
waive  any right to raise any  objections  with  respect  to such  Material  New
Matter(s).  Upon timely receipt of written objection(s) from Buyer, Seller shall
thereafter  have five (5) business  days  following its receipt  thereof  within
which to notify Buyer in writing as to whether Seller,  in its sole and absolute
discretion, will cure any of the matters to which Buyer has objected,  provided,
however,  Seller  shall have no  obligation  whatsoever  to cure any  objections
raised by Buyer.  If Seller  fails to notify Buyer within such five (5) business
day period whether Seller will cure or remove the exceptions, defects or matters
to which Buyer has objected, then (a) Seller shall be deemed to have elected not
to cure such  matter,  and (b) Buyer shall elect  either (i) to  terminate  this
Agreement,  or (ii) waive its objections and purchase the Sale Property  subject
to the matters  objected to but which Seller has elected not to cure.  If Seller
timely  notifies  Buyer of its  intention  to cure any matter to which Buyer has
objected, Seller shall have until Closing to cure such matter.

     6.2.  SOPHISTICATED  PARTY.  Buyer  warrants  and  represents  that it is a
sophisticated  party,  knowledgeable  and experienced in the acquisition of real
property,  and, that  condition of title,  survey  results and  inspections  and
investigations  are very  important  aspects  in the  purchase  and sale of real
property.

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7.   CLOSING DOCUMENTS.

     7.1. DEED AND OTHER  CONVEYANCE  DOCUMENTS.  On or before the Closing Date,
Seller and Buyer shall  execute where  indicated  (or obtain the execution  of),
have  acknowledged  as  appropriate,  and deliver to Escrow Agent the  following
documents:

          (a) A Special  Warranty  Deed  executed by Seller in favor of Buyer or
     its Assignee,  as defined in Section  14.4, in the form attached  hereto as
     EXHIBIT "B" (the "DEED");

          (b) An Affidavit of Real Property Value executed by Buyer and Seller;

          (c) A Non-Foreign Affidavit executed by Seller in the form attached as
     EXHIBIT "C"; and

          (d) Such  other  documents  as  Buyer,  Seller  or  Escrow  Agent  may
     reasonably request in connection with this transaction  consistent with the
     terms and conditions hereof.

     7.2.  OWNER'S POLICY.  At Closing,  Escrow Agent shall furnish to Buyer (or
its  Assignee),  at Buyer's  expense,  a standard  coverage  ALTA owner's  title
insurance policy (or, at Buyer's option, an extended coverage policy, subject to
Buyer's  payment  of  additional  charges   associated   therewith  as  provided
hereinafter)  issued by Escrow Agent, or the unconditional  commitment of Escrow
Agent to issue  such  policy  (which  commitment  shall be deemed  made upon the
recordation by Escrow Agent of the Deed),  in the amount of the Purchase  Price,
insuring  the title to the Sale  Property in Buyer,  subject only to the printed
exceptions  normally  contained in such  policies,  and the matters  approved by
Buyer pursuant to SECTION 5. The policy shall be standard or extended  coverage,
at Buyer's  option;  provided,  however,  Buyer  shall pay the  premium for such
policy.  In no event shall  Closing be extended  because of Buyer's  election of
extended coverage.

     7.3.  INABILITY  TO ISSUE.  If Escrow Agent is unwilling or unable to issue
the  policy or  commitment  described  above,  then the  Closing  Date  shall be
extended for a period of up to fifteen (15) days, at Seller's  option,  to allow
Seller, if it so elects, to attempt to eliminate the matter preventing  issuance
of the policy. If, however,  Seller does not elect to so extend the Closing Date
or if Escrow Agent remains unable or unwilling to issue the policy or commitment
on the extended Closing Date, then this Agreement shall automatically terminate,
and the parties hereto shall have no further  liability to each other under this
Agreement, except as otherwise specifically set forth in this Agreement.

8.   REPRESENTATIONS AND WARRANTIES.

     8.1.  SELLER'S  REPRESENTATIONS  AND  WARRANTIES.  Seller  hereby makes the
following representations and warranties:

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          (a) Seller is duly  organized,  validly  existing and in good standing
     under the laws of the state of  Minnesota,  is  qualified to do business in
     Arizona  and,  subject  only to approval  of the Court,  has full power and
     authority  to  enter  into  and  to  perform  its  obligations  under  this
     Agreement.

          (b) This  Agreement  and each of the  documents  and  agreements to be
     delivered by Seller at the Closing,  constitutes a valid,  legally  binding
     obligation of Seller,  enforceable  against  Seller in accordance  with its
     terms subject only to approval by the Court.

          (c) Seller is not a "foreign person" as defined in Section 1445 of the
     Internal Revenue Code of 1986, as amended, and any related regulations.

     8.2. RELEASE FROM OTHER  REPRESENTATIONS  AND WARRANTIES.  Seller is hereby
released  from  all  responsibility  and  liability   regarding  the  condition,
valuation or utility of the Sale Property.  Buyer  expressly  acknowledges  that
Buyer  has  not  relied  on  any   warranties,   promises,   understandings   or
representations,  express or implied,  of Seller or any agent of Seller relating
to the present or future physical condition,  development potential,  operation,
income  generated  by, or any other matter or thing  affecting or related to the
Sale  Property   which  are  not  contained  in  this   Agreement  and  no  such
representation  or  warranty  shall  be  implied.  Buyer is  acquiring  the Sale
Property  in  its  present  condition  and  state  of  repair,  "AS  IS".  Buyer
acknowledges  that  any  and  all  engineering  data,  soil  reports,  or  other
information  of any type which Buyer has  received or may receive from Seller or
Seller's agents is furnished without any warranty whatsoever.  Buyer agrees that
Buyer will not attempt to assert any liability against Seller for furnishing any
such information.  In particular, but without in any way limiting the foregoing,
Buyer hereby  releases  Seller from any and all  responsibility,  liability  and
claims for or arising out of the  presence on or about the Sale  Property or any
property  in the  vicinity of the Sale  Property  (including  in the soil,  air,
structures and surface and subsurface water) of materials,  wastes or substances
that are or become regulated under, or that are or become classified as toxic or
hazardous,   under  any  Environmental  Law,   including,   without  limitation,
petroleum,  oil, gasoline or other petroleum  products,  byproducts or waste. As
used herein,  "Environmental Law" shall mean, as amended and in effect from time
to time,  any federal,  state or local  statute,  ordinance,  rule,  regulation,
judicial  decision,  or the  judgment  or  decree of a  governmental  authority,
arbitrator or other private  adjudicator  by which Buyer or the Sale Property is
bound,  pertaining to health,  industrial  hygiene,  occupational  safety or the
environment,  including,  without  limitation,  the Comprehensive  Environmental
Response,  Compensation  & Liability Act of 1980,  the Resource,  Conservation &
Recovery  Act of 1976,  and the Arizona  Environmental  Quality  Act,  Title 49,
Arizona  Revised  Statutes,  and all rules  adopted and  guidelines  promulgated
pursuant to the foregoing.

     8.3.  BUYER'S  REPRESENTATIONS  AND  WARRANTIES.  Buyer  hereby  makes  the
following representations and warranties:

          (a) Buyer is duly  organized,  validly  existing and in good  standing
     under  the  laws of the  state  of its  organization,  is  qualified  to do
     business in Arizona and has full power and  authority  to enter into and to
     perform its  obligations  under this Agreement.  The person  executing this

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     Agreement  on behalf of Buyer has full power and  authority to do so and to
     perform every act and to execute and deliver every  document and instrument
     necessary  or  appropriate  to  consummate  the  transactions  contemplated
     hereby.

          (b) This  Agreement  and each of the  documents  and  agreements to be
     delivered  by Buyer  at the  Closing,  constitute  valid,  legally  binding
     obligations  of Buyer,  enforceable  against Buyer in  accordance  with its
     terms.

9.   CONDITIONS TO CLOSING.

     9.1. SELLER'S CONDITIONS TO CLOSING. The following conditions are precedent
to Seller's obligations to sell the Sale Property and deliver the Deed:

          (a) This  Agreement  shall not have  terminated  pursuant to any other
     provision hereof;

          (b) The FF&E Purchase and Sale  Agreement (of which this  Agreement is
     an  attached   schedule)   shall  not  have   terminated  and  shall  close
     simultaneously herewith;

          (c) Buyer  shall not be in  material  default  of any of the terms and
     provisions required of Buyer hereunder;

          (d) All of Buyer's  representations  and warranties  contained  herein
     shall have been  materially true when made and shall be materially true and
     correct as of the Closing Date; and

          (e) Entry of an order by the Bankruptcy  Court in Seller's  Chapter 11
     case  approving  this  Agreement and the sale of the Sale Property free and
     clear of all liens,  encumbrances,  claims,  security interests and adverse
     interests  of any kind  pursuant to the  Bankruptcy  Code ss.363 (the "SALE
     ORDER").

     9.2. BUYER'S CONDITIONS TO CLOSING.  The following conditions are precedent
to Buyer's obligations to buy the Sale Property and deliver the Purchase Price:

          (a) This  Agreement  shall not have  terminated  pursuant to any other
     provision hereof;

          (b) The FF&E Purchase and Sale  Agreement (of which this  Agreement is
     an  attached   schedule)   shall  not  have   terminated  and  shall  close
     simultaneously herewith;

          (c) Seller  shall not be in  material  default of any of the terms and
     provisions required of Buyer hereunder;

          (d) All of Seller's  representations  and warranties  contained herein
     shall have been  materially true when made and shall be materially true and
     correct as of the Closing Date;

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          (e) Entry of the Sale Order; and

          (f) The simultaneous  closing of the transaction set forth in the Real
     Estate Purchase and Sale Agreement  Chicago Title Insurance  Company Escrow
     No. 2015243-42 dated January 12, 2001 by and between Buyer, as seller,  and
     Assignee, as buyer (the "CHURCH AGREEMENT").

10.  COMMISSIONS.

     Each party  hereto  represents  and  warrants  to the other that it has not
employed  any  other  broker  or  finder  in  connection  with  the  transaction
contemplated by this Agreement nor has it had any dealings with any person which
may entitle such person to a fee or commission from any party hereto. Each party
shall  defend  and hold  the  other  harmless  from all  liability  and  expense
including, without limitation, reasonable attorneys' fees arising from any claim
by any other broker,  agent or finder for commissions,  finder's fees or similar
charges, because of any act of such party.

11.  CONDEMNATION.

     In  the  event  of  condemnation  or  notice  of  condemnation  of all or a
substantial portion of the Sale Property prior to Closing,  Buyer shall have the
right to  terminate  this  Agreement by written  notice  delivered to Seller and
Escrow  Agent no later than ten (10) days  after the date of Buyer's  receipt of
notice of such  condemnation.  If Buyer elects to terminate this Agreement,  the
parties shall have no further  obligations  to each other under this  Agreement,
except as specifically  set forth in this Agreement.  If Buyer does not elect to
terminate this Agreement, the parties shall proceed to Closing with no reduction
in the  purchase  price and at Closing,  Seller  shall (i) pay to Buyer  through
Escrow any  condemnation  proceeds  received by Seller with  respect to the Sale
Property,  less  fees,  costs and  expenses  incurred  by  Seller in  connection
therewith; and (ii) assign to Buyer all of Seller's right, title and interest in
and to any condemnation  proceeds with respect to the Sale Property,  less fees,
costs and expenses incurred by Seller in connection therewith.

12.  PRORATIONS, CLOSING COSTS.

     12.1.  PRORATIONS.  At the Closing,  the parties shall obtain all necessary
information  and shall  prorate and adjust or direct Escrow Agent to prorate and
adjust  through  Escrow,  real estate  taxes and  assessments  based on the most
recent  information  and such proration  shall be final.  All cash on hand as of
12:01 a.m.,  Phoenix  time, on the Closing Date and all cash in any operating or
other  accounts  on the  Closing  Date  shall  belong to  Seller.  The  existing
insurance coverage for the Sale Property, if any, shall terminate at Closing and
any refund in premium shall be paid to Seller.

     12.2.  CLOSING COSTS.  All recording and similar charges shall be allocated
between Buyer and Seller in Escrow Agent's  customary  manner and Escrow Agent's
fees shall be paid one-half by Buyer and one-half by Seller; provided,  however,
that the defaulting  party shall be  responsible to pay any escrow  cancellation
fees if the Escrow fails to close. All other costs of Closing shall be allocated

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between Seller and Buyer in accordance  with the standard custom and practice of
Escrow  Agent.  Seller  and  Buyer  shall  each pay their  respective  financial
advisors' attorneys' and other professionals' fees.

     12.3.  POSSESSION.  Seller will deliver and Buyer will accept possession of
the Sale Property on the Closing Date.

13.  REMEDIES.

     13.1.  SELLER'S REMEDIES.  In the event of any default in this Agreement by
Buyer,  actual  damages to Seller will be difficult  to calculate  but Buyer and
Seller agree that the amount of Fifty Thousand and 00/100  Dollars  ($50,000.00)
("LIQUIDATED  DAMAGES") designated above is a reasonable  approximation thereof.
Accordingly,  if Buyer defaults, Seller shall be entitled as its sole remedy, to
terminate this Agreement and immediately upon such termination by Seller,  Buyer
shall pay to Seller, as Seller's sole remedy,  Liquidated  Damages and any other
monies paid on behalf of Seller. If, however, Buyer contests or opposes Seller's
right to collect  Liquidated  Damages or other sums or fails to  cooperate  with
Seller in collecting  the same,  Seller shall also be entitled to the additional
remedies  provided for in SECTION 13.3 below.  Nothing contained in this Section
shall prevent Seller from enforcing  Buyer's  obligations and liabilities  which
survive a termination of this Agreement as to which Seller shall have all rights
and remedies provided for or allowed by law or in equity.

     13.2. BUYER'S REMEDIES. In the event of a default hereunder by Seller, then
Buyer's  sole  and  exclusive  remedy  shall be  either  to (i)  terminate  this
Agreement or (ii) sue for specific  performance of this Agreement.  Buyer hereby
expressly  waives any and all claims for damages against Seller.  As a condition
precedent to any suit for specific  performance,  Buyer shall,  on or before the
Closing Date, shall have performed all of its obligations hereunder.

     13.3.  COSTS AND FEES.  If either  party  hereto  breaches any term of this
Agreement,  the  breaching  party  agrees  to pay the  non-breaching  party  all
attorneys' fees, expert witness fees,  investigation  costs,  costs of tests and
analysis,  travel and  accommodation  expenses,  deposition and trial transcript
costs,  court costs and other costs and expenses  incurred by the  non-breaching
party in enforcing this  Agreement or preparing for legal or other  proceedings,
whether or not instituted. If any legal or other proceedings are instituted, the
party prevailing in any such proceeding shall be paid all of the  aforementioned
costs,  expenses and fees by the other party,  and if any judgment is secured by
such prevailing party, all such costs,  expenses,  and fees shall be included in
such judgment, attorneys' fees to be set by the court and not by the jury.

     13.4. Intentionally Omitted.

     13.5. WAIVER. Excuse or waiver of the performance by the other party of any
obligation  under this  Agreement  shall only be  effective  if  evidenced  by a
written  statement  signed by the party so excusing.  No delay in exercising any
right or remedy shall  constitute a waiver  thereof,  and no waiver by Seller or
Buyer of the breach of any  covenant of this  Agreement  shall be construed as a
waiver of any preceding or succeeding  breach of the same or any other  covenant
or condition of this Agreement.

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     13.6. Intentionally Omitted.

14.  MISCELLANEOUS.

     14.1. NOTICES. No notice, consent, approval or other communication provided
for  herein  or given in  connection  herewith  shall be  validly  given,  made,
delivered or served  unless it is in writing and delivered  personally,  sent by
overnight  courier,  or sent by  registered  or  certified  United  States mail,
postage prepaid, with return receipt requested, if to:

     Seller, at:             THE TESSERACT GROUP, INC.
                             4515 East Muirwood Drive
                             Phoenix, Arizona 85048
                             Attn: Lucian Spataro, Ph.D.

     With a copy to:         BRYAN CAVE LLP
                             Renaissance One
                             Two North Central Avenue, Suite 2200
                             Phoenix, Arizona 85004
                             Attn:  Robert J. Miller, Esq.

     Buyer, at:              Education Property Investors, Inc.
                             300 Esplanade Drive, Suite 1865
                             Oxnard, California 93030
                             Attn:  Julia Kopta, Esq., Legal Department

     With a copy to:         Education Property Investors, Inc.
                             300 Esplanade Drive, Suite 1865
                             Oxnard, California 93030
                             Attn: Steve Korbin, Esq.

     Escrow Agent, at:       Chicago Title Insurance Company
                             2415 E. Camelback Road, Suite 30
                             Phoenix, Arizona 85016
                             Attn:  Mr. Jack Knott

or to such other  addresses as any party hereto may from time to time  designate
in writing and deliver in a like manner to the other party.  Notices,  consents,
approvals,  and communications  given by mail shall be deemed delivered upon the
earlier of forty-eight (48) hours after deposit in the United States mail in the
manner  provided  above or upon delivery to the  respective  addresses set forth
above if delivered personally or sent by overnight courier.

     14.2.  RIGHT TO BID. Buyer  acknowledges and understands that the Court may
consider  higher and better offers for the Sale  Property.  Notwithstanding  any
other language to the contrary herein,  Buyer acknowledges and agrees that Buyer
shall not be entitled to receive any overbid protections,  breakup fees or other
buyer protections,  if Buyer is not ultimately approved as the buyer of the Sale
Property.

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     14.3.  INTERPRETATION.  The captions of the Sections of this  Agreement are
for  convenience  only and shall  not  govern or  influence  the  interpretation
hereof.  This Agreement is the result of  negotiations  between the parties and,
accordingly,  shall not be construed for or against  either party  regardless of
which  party  drafted  this  Agreement  or any portion  thereof.  Time is of the
essence of this Agreement.

     14.4.  SUCCESSORS AND ASSIGN.  All of the provisions  hereof shall inure to
the  benefit  of  and be  binding  upon  the  personal  representatives,  heirs,
successors and assigns of Seller and Buyer.  Buyer shall have no right to assign
its interest  hereunder  without the prior written consent of Seller in Seller's
sole and absolute  discretion,  and any such assignment  shall not release Buyer
hereunder,  and any such assignment  without  Seller's  consent shall be void at
Seller's  option.  Seller hereby consents to the assignment of this Agreement to
Thomas J. O'Brien, Bishop of the Roman Catholic Church of the Diocese of Phoenix
("ASSIGNEE"). If Buyer is a corporation,  partnership, limited liability company
or trust,  the transfer or  assignment  of any stock,  interest,  membership  or
beneficial interest in such corporation,  partnership, limited liability company
or trust in excess of  forty-nine  percent  (49%) shall be deemed an  assignment
within the meaning of this paragraph.

     14.5. NO  PARTNERSHIP,  THIRD PERSON.  It is not intended by this Agreement
to, and nothing contained in this Agreement shall, create any partnership, joint
venture or other  similar  arrangement  between  Seller  and  Buyer.  No term or
provision of this Agreement is intended to, or shall,  be for the benefit of any
person, firm, corporation or other entity not a party hereto (including, without
limitation,  any  broker),  and no such  party  shall have any right or cause of
action hereunder.

     14.6.  ENTIRE  AGREEMENT.  This Agreement  constitutes the entire agreement
between and reflects the reasonable  expectations  of the parties  pertaining to
the  subject  matter   hereof.   All  prior  and   contemporaneous   agreements,
representations and understandings of the parties,  oral or written,  are hereby
superseded  and  merged  herein.  No  change or  addition  is to be made to this
Agreement except by a written  agreement  executed by all of the parties.  Buyer
shall not record this Agreement nor any memorandum thereof in the public records
without the prior written approval of Seller,  which approval may be withheld in
Seller's sole and absolute discretion.

     14.7.  FURTHER  DOCUMENTS.  Buyer and Seller shall  execute and deliver all
such  documents and perform all such acts as  reasonably  requested by the other
party from time to time,  prior to and following  the Closing,  to carry out the
matters contemplated by this Agreement.

     14.8.  INCORPORATION OF EXHIBITS.  All exhibits  attached to this Agreement
are by this reference incorporated herein.

     14.9.  ARIZONA  LAW.  This  Agreement  shall be governed by the laws of the
State of Arizona  and, as  applicable,  Title 11 of the United  States Code (the
"Bankruptcy Code").

                                       10
<PAGE>
     14.10. DATE OF PERFORMANCE. If the date of performance of any obligation or
the last day of any time period  provided for herein  should fall on a Saturday,
Sunday or legal holiday,  then said obligation  shall be due and owing, and said
time period shall expire,  on the first day thereafter  which is not a Saturday,
Sunday or legal  holiday.  Except as may  otherwise  be set  forth  herein,  any
performance  provided for herein shall be timely made if completed no later than
5:00 p.m.,  Phoenix time,  on the day of  performance.  The funds  required from
Buyer  and all acts  required  of Buyer in order to close  the  Escrow  pursuant
hereto shall be deposited with Escrow Agent and be performed no later than 10:00
a.m.,  Phoenix  time,  on the Closing Date and shall be available  for immediate
distribution to Seller at Closing.

     14.11. Intentionally Omitted.

     14.12.  COUNTERPARTS.  This  Agreement  may be  executed  in any  number of
counterparts  and  delivered by facsimile  transmission.  Each such  counterpart
hereof shall be deemed an original,  but all  counterparts  shall constitute but
one agreement.

     14.13.  EXCULPATION.  Notwithstanding  anything to the contrary provided in
this  Agreement,  the liability of Seller,  if any, under this Agreement and any
other  document or agreement  executed by Seller in connection  with the Closing
shall  not  extend to nor be  enforceable  against  the  assets of Seller or any
partner  or  member of any  partner  in  Seller  except  to the  extent of their
interest in the Sale Property.

     14.14.  BANKRUPTCY  COURT  APPROVAL.  Seller  shall  file a motion  seeking
bankruptcy court approval of the transactions addressed herein promptly upon the
execution of this Agreement.

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

                                     THE TESSERACT GROUP, INC.,
                                     a Minnesota corporation

                                     By:    /S/ LUCIAN SPATARO
                                            ----------------------------
                                     Name:  LUCIAN SPATARO
                                     Title: CFO

                                                                        "SELLER"

                                     EDUCATION PROPERTY INVESTORS, INC.,
                                     a Nevada corporation

                                     By:    /S/ JULIA KOPTA
                                            ----------------------------
                                     Name:  JULIA KOPTA
                                     Title: SENIOR VICE PRESIDENT

                                                                         "BUYER"

                                       11
<PAGE>
                           ACCEPTANCE BY ESCROW AGENT

Escrow Agent agrees to act as escrow holder and Escrow Agent in accordance  with
the terms of this Agreement.

                                     ESCROW AGENT:

                                     By:   /S/ JACK KNOTT
                                           ----------------------------
                                     Name: JACK KNOTT
                                     Its:  MANAGER

                                       12
<PAGE>
                                   EXHIBIT "A"

                               (Legal Description)
<PAGE>
                                   EXHIBIT "B"

                              SPECIAL WARRANTY DEED

WHEN RECORDED, RETURN TO:

______________________________
______________________________
______________________________
______________________________

                              SPECIAL WARRANTY DEED

     For Ten Dollars  ($10.00)  and other good and valuable  consideration,  the
receipt    and     sufficiency    of    which    are    hereby     acknowledged,
_________________________________             __________________________________
("Grantor"),       hereby      grants,       sells      and      conveys      to
____________________________________________  ("GRANTEE"),  that  Sale  Property
located in  Maricopa  County,  Arizona  and  legally  described  on EXHIBIT  "A"
attached hereto and  incorporated  herein by this  reference,  together with all
interests,  privileges  and  easements  appurtenant  thereto  and  any  and  all
improvements located thereon (the "PROPERTY").

     SUBJECT TO:  current  taxes not yet due and  payable,  assessments  and any
other liens arising therefrom,  all reservations in patents,  deed restrictions,
if any,  all  easements,  rights of way,  covenants,  conditions,  restrictions,
encroachments, liens, encumbrances, obligations and liabilities as may appear of
record,  all other matters that can be  determined  by a visual  inspection or a
complete and accurate  survey of the  Property,  and those  matters set forth on
EXHIBIT "B".

     Notwithstanding any warranty which may otherwise be implied from the use of
any word,  phrase or clause  herein,  Grantor  warrants  title to the  Property,
subject to the matters referred to above, only against its own acts, but not the
acts of any others.

     DATED as of this _____ day of ___________________, 200__.

                                            ___________________________________,
                                            ___________________________________

                                            BY: _______________________________,
                                                _______________________________

                                                By:    ________________________
                                                Name:  ________________________
                                                Title: ________________________

<PAGE>
STATE OF ARIZONA      )
                      ) ss.
County of Maricopa    )

     The foregoing document was acknowledged before me this _____ day of
_______________, 200__, by ____________________________, the ___________________
of ____________________________, a(n) ___________________________, for and on
behalf of said ________________________________.

     IN WITNESS WHEREOF, I hereunto set my hand and official seal.

                                        ________________________________
                                        Notary Public

My commission expires:

________________________________
<PAGE>
                             Exhibit "A" to the Deed

                        Legal Description of the Property
<PAGE>
                             Exhibit "B" to the Deed

                              Permitted Exceptions
<PAGE>
                                   EXHIBIT "C"

                         SELLER'S NON-FOREIGN AFFIDAVIT

                              NON-FOREIGN AFFIDAVIT

Section 1445 of the Internal Revenue Code of 1986 provides that a transferee of
a United States Sale Property interest must withhold tax if the transferor is a
foreign person. To inform the transferee that withholding tax is not required
upon disposition of a U.S. Sale Property interest by
______________________________________________________________ ("Transferor") to
______________________________________________________________ ("Transferee"),
the undersigned hereby certifies the following on behalf of the Transferor:

     1.   Transferor is not a foreign corporation, partnership, trust, estate,
          or individual as those terms are defined in the Internal Revenue Code
          and Income Tax Regulations;

     2.   Transferor's U.S. Employer Identification Number is _________________;
          and

     3.   Transferor's principal office is: ________________________________.

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

Under penalties of perjury, I, the undersigned, declare that I have examined
this certification and to the best of my knowledge and belief it is true,
correct and complete, and I further declare that I have all authority to sign on
behalf of Transferor.

DATED this _____ day of _______________________, 200__.

                                            ___________________________________,
                                            ___________________________________

                                            By:    ____________________________
                                            Name:  ____________________________
                                            Title: ____________________________

THIS  AFFIDAVIT  must be retained  until the end of the fifth (5th) taxable year
following the taxable year in which the transfer referred to above takes place.

                       [ACKNOWLEDGMENT ON FOLLOWING PAGE]
<PAGE>
STATE OF ARIZONA      )
                      ) ss.
County of Maricopa    )

     The foregoing document was acknowledged before me this _____ day of
_______________, 200__, by ____________________________, the ___________________
of ____________________________, a(n) ___________________________, for and on
behalf of said ________________________________.

     IN WITNESS WHEREOF, I hereunto set my hand and official seal.

                                        ________________________________
                                        Notary Public

My commission expires:

________________________________<PAGE>   1

                                                                    EXHIBIT 10.1

                                 GOTO.COM, INC.

                                 1998 STOCK PLAN
        (AS AMENDED AND RESTATED APRIL 6, 1999; AS AMENDED MAY 25, 2000)

     1.   Purposes of the Plan. The purposes of this 1998 Stock Plan are:

     o    to attract and retain the best available personnel for positions of
          substantial responsibility,

     o    to provide additional incentive to Employees, Directors and
          Consultants, and

     o    to promote the success of the Company's business.

     Options granted under the Plan may be Incentive Stock Options or
Nonstatutory Stock Options, as determined by the Administrator at the time of
grant. Stock Purchase Rights may also be granted under the Plan.

     2.   Definitions. As used herein, the following definitions shall apply:

          (a)  "Administrator" means the Board or any of its Committees as shall
be administering the Plan, in accordance with Section 4 of the Plan.

          (b)  "Applicable Laws" means the requirements relating to the
administration of stock option plans under U.S. state corporate laws, U.S.
federal and state securities laws, the Code, any stock exchange or quotation
system on which the Common Stock is listed or quoted and the applicable laws of
any foreign country or jurisdiction where Options or Stock Purchase Rights are,
or will be, granted under the Plan.

          (c)  "Board" means the Board of Directors of the Company.

          (d)  "Code" means the Internal Revenue Code of 1986, as amended.

          (e)  "Committee" means a committee of Directors appointed by the Board
in accordance with Section 4 of the Plan.

          (f)  "Common Stock" means the common stock of the Company.

          (g)  "Company" means GoTo.com, Inc., a Delaware corporation.

          (h)  "Consultant" means any person, including an advisor, engaged by
the Company or a Parent or Subsidiary to render services to such entity.

          (i)  "Director" means a member of the Board.

          (j)  "Disability" means total and permanent disability as defined in
Section 22(e)(3) of the Code.

          (k)  "Employee" means any person, including Officers and Directors,
employed by the Company or any Parent or Subsidiary of the Company. A Service
Provider shall not cease to be an Employee in the case of (i) any leave of
absence approved by the Company or (ii) transfers between locations of the
Company or between the Company, its Parent, any Subsidiary, or any successor.
For purposes of Incentive Stock Options, no such leave may exceed ninety days,
unless reemployment upon expiration of such leave is guaranteed by statute or
contract. If reemployment upon expiration of a leave of absence approved by the
Company is not so guaranteed, on the 181st day of such leave any

<PAGE>   2

Incentive Stock Option held by the Optionee shall cease to be treated as an
Incentive Stock Option and shall be treated for tax purposes as a Nonstatutory
Stock Option. Neither service as a Director nor payment of a director's fee by
the Company shall be sufficient to constitute "employment" by the Company.

          (l)  "Exchange Act" means the Securities Exchange Act of 1934, as
amended.

          (m)  "Fair Market Value" means, as of any date, the value of Common
Stock determined as follows:

               (i)  If the Common Stock is listed on any established stock
exchange or a national market system, including without limitation the Nasdaq
National Market or The Nasdaq SmallCap Market of The Nasdaq Stock Market, its
Fair Market Value shall be the closing sales price for such stock (or the
closing bid, if no sales were reported) as quoted on such exchange or system for
the last market trading day prior to the time of determination, as reported in
The Wall Street Journal or such other source as the Administrator deems
reliable;

               (ii) If the Common Stock is regularly quoted by a recognized
securities dealer but selling prices are not reported, the Fair Market Value of
a Share of Common Stock shall be the mean between the high bid and low asked
prices for the Common Stock on the last market trading day prior to the day of
determination, as reported in The Wall Street Journal or such other source as
the Administrator deems reliable; or

               (iii) In the absence of an established market for the Common
Stock, the Fair Market Value shall be determined in good faith by the
Administrator.

          (n)  "Incentive Stock Option" means an Option intended to qualify as
an incentive stock option within the meaning of Section 422 of the Code and the
regulations promulgated thereunder.

          (o)  "Nonstatutory Stock Option" means an Option not intended to
qualify as an Incentive Stock Option.

          (p)  "Notice of Grant" means a written or electronic notice evidencing
certain terms and conditions of an individual Option or Stock Purchase Right
grant. The Notice of Grant is part of the Option Agreement.

          (q)  "Officer" means a person who is an officer of the Company within
the meaning of Section 16 of the Exchange Act and the rules and regulations
promulgated thereunder.

          (r)  "Option" means a stock option granted pursuant to the Plan.

          (s)  "Option Agreement" means an agreement between the Company and an
Optionee evidencing the terms and conditions of an individual Option grant. The
Option Agreement is subject to the terms and conditions of the Plan.

          (t)  "Option Exchange Program" means a program whereby outstanding
Options are surrendered in exchange for Options with a lower exercise price.

          (u)  "Optioned Stock" means the Common Stock subject to an Option or
Stock Purchase Right.

          (v)  "Optionee" means the holder of an outstanding Option or Stock
Purchase Right granted under the Plan.

          (w)  "Parent" means a "parent corporation," whether now or hereafter
existing, as defined in Section 424(e) of the Code.

          (x)  "Plan" means this 1998 Stock Plan.

<PAGE>   3

          (y)  "Restricted Stock" means shares of Common Stock acquired pursuant
to a grant of Stock Purchase Rights under Section 11 of the Plan.

          (z)  "Restricted Stock Purchase Agreement" means a written agreement
between the Company and the Optionee evidencing the terms and restrictions
applying to stock purchased under a Stock Purchase Right. The Restricted Stock
Purchase Agreement is subject to the terms and conditions of the Plan and the
Notice of Grant.

          (aa) "Rule 16b-3" means Rule 16b-3 of the Exchange Act or any
successor to Rule 16b-3, as in effect when discretion is being exercised with
respect to the Plan.

          (bb) "Section 16(b) " means Section 16(b) of the Exchange Act.

          (cc) "Service Provider" means an Employee, Director or Consultant.

          (dd) "Share" means a share of the Common Stock, as adjusted in
accordance with Section 13 of the Plan.

          (ee) "Stock Purchase Right" means the right to purchase Common Stock
pursuant to Section 11 of the Plan, as evidenced by a Notice of Grant.

          (ff) "Subsidiary" means a "subsidiary corporation", whether now
or hereafter existing, as defined in Section 424(f) of the Code.

     3.   Stock Subject to the Plan. Subject to the provisions of Section 13 of
the Plan, the maximum aggregate number of Shares which may be optioned and sold
under the Plan is 15,320,893 Shares, plus an annual increase to be added on the
first day of the Company's fiscal year beginning in 2000 equal to the lesser of
(i) 7,500,000 Shares, (ii) 5% of the outstanding shares on such date or (iii) a
lesser amount determined by the Board. The Shares may be authorized, but
unissued, or reacquired Common Stock.

     If an Option or Stock Purchase Right expires or becomes unexercisable
without having been exercised in full, or is surrendered pursuant to an Option
Exchange Program, the unpurchased Shares which were subject thereto shall become
available for future grant or sale under the Plan (unless the Plan has
terminated); provided, however, that Shares that have actually been issued under
the Plan, whether upon exercise of an Option or Right, shall not be returned to
the Plan and shall not become available for future distribution under the Plan,
except that if Shares of Restricted Stock are repurchased by the Company at
their original purchase price, such Shares shall become available for future
grant under the Plan.

     4.   Administration of the Plan.

          (a)  Procedure.

               (i)  Multiple Administrative Bodies. The Plan may be administered
by different Committees with respect to different groups of Service Providers.

               (ii) Section 162(m). To the extent that the Administrator
determines it to be desirable to qualify Options granted hereunder as
"performance-based compensation" within the meaning of Section 162(m) of the
Code, the Plan shall be administered by a Committee of two or more "outside
directors" within the meaning of Section 162(m) of the Code.

               (iii) Rule 16b-3. To the extent desirable to qualify transactions
hereunder as exempt under Rule 16b-3, the transactions contemplated hereunder
shall be structured to satisfy the requirements for exemption under Rule 16b-3.

<PAGE>   4

               (iv) Other Administration. Other than as provided above, the Plan
shall be administered by (A) the Board or (B) a Committee, which committee shall
be constituted to satisfy Applicable Laws.

          (b)  Powers of the Administrator. Subject to the provisions of the
Plan, and in the case of a Committee, subject to the specific duties delegated
by the Board to such Committee, the Administrator shall have the authority, in
its discretion:

               (i)  to determine the Fair Market Value;

               (ii) to select the Service Providers to whom Options and Stock
Purchase Rights may be granted hereunder;

               (iii) to determine the number of shares of Common Stock to be
covered by each Option and Stock Purchase Right granted hereunder;

               (iv) to approve forms of agreement for use under the Plan;

               (v)  to determine the terms and conditions, not inconsistent with
the terms of the Plan, of any Option or Stock Purchase Right granted hereunder.
Such terms and conditions include, but are not limited to, the exercise price,
the time or times when Options or Stock Purchase Rights may be exercised (which
may be based on performance criteria), any vesting acceleration or waiver of
forfeiture restrictions, and any restriction or limitation regarding any Option
or Stock Purchase Right or the shares of Common Stock relating thereto, based in
each case on such factors as the Administrator, in its sole discretion, shall
determine;

               (vi) to reduce the exercise price of any Option or Stock Purchase
Right to the then current Fair Market Value if the Fair Market Value of the
Common Stock covered by such Option or Stock Purchase Right shall have declined
since the date the Option or Stock Purchase Right was granted;

               (vii) to institute an Option Exchange Program;

               (viii) to construe and interpret the terms of the Plan and awards
granted pursuant to the Plan;

               (ix) to prescribe, amend and rescind rules and regulations
relating to the Plan, including rules and regulations relating to sub-plans
established for the purpose of qualifying for preferred tax treatment under
foreign tax laws;

               (x)  to modify or amend each Option or Stock Purchase Right
(subject to Section 15(c) of the Plan), including the discretionary authority to
extend the post-termination exercisability period of Options longer than is
otherwise provided for in the Plan;

               (xi) to allow Optionees to satisfy withholding tax obligations by
electing to have the Company withhold from the Shares to be issued upon exercise
of an Option or Stock Purchase Right that number of Shares having a Fair Market
Value equal to the amount required to be withheld. The Fair Market Value of the
Shares to be withheld shall be determined on the date that the amount of tax to
be withheld is to be determined. All elections by an Optionee to have Shares
withheld for this purpose shall be made in such form and under such conditions
as the Administrator may deem necessary or advisable;

               (xii) to authorize any person to execute on behalf of the Company
any instrument required to effect the grant of an Option or Stock Purchase Right
previously granted by the Administrator;

               (xiii) to make all other determinations deemed necessary or
advisable for administering the Plan.

<PAGE>   5

          (c)  Effect of Administrator's Decision. The Administrator's
decisions, determinations and interpretations shall be final and binding on all
Optionees and any other holders of Options or Stock Purchase Rights.

     5.   Eligibility. Nonstatutory Stock Options and Stock Purchase Rights may
be granted to Service Providers. Incentive Stock Options may be granted only to
Employees.

     6.   Limitations.

          (a)  Each Option shall be designated in the Option Agreement as either
an Incentive Stock Option or a Nonstatutory Stock Option. However,
notwithstanding such designation, to the extent that the aggregate Fair Market
Value of the Shares with respect to which Incentive Stock Options are
exercisable for the first time by the Optionee during any calendar year (under
all plans of the Company and any Parent or Subsidiary) exceeds $100,000, such
Options shall be treated as Nonstatutory Stock Options. For purposes of this
Section 6(a), Incentive Stock Options shall be taken into account in the order
in which they were granted. The Fair Market Value of the Shares shall be
determined as of the time the Option with respect to such Shares is granted.

          (b)  Neither the Plan nor any Option or Stock Purchase Right shall
confer upon an Optionee any right with respect to continuing the Optionee's
relationship as a Service Provider with the Company, nor shall they interfere in
any way with the Optionee's right or the Company's right to terminate such
relationship at any time, with or without cause.

          (c)  The following limitations shall apply to grants of Options:

               (i)  No Service Provider shall be granted, in any fiscal year of
the Company, Options to purchase more than 1,000,000 Shares.

               (ii) In connection with his or her initial service, a Service
Provider may be granted Options to purchase up to an additional 1,000,000 Shares
which shall not count against the limit set forth in subsection (i) above.

               (iii) The foregoing limitations shall be adjusted proportionately
in connection with any change in the Company's capitalization as described in
Section 13.

               (iv) If an Option is cancelled in the same fiscal year of the
Company in which it was granted (other than in connection with a transaction
described in Section 13), the cancelled Option will be counted against the
limits set forth in subsections (i) and (ii) above. For this purpose, if the
exercise price of an Option is reduced, the transaction will be treated as a
cancellation of the Option and the grant of a new Option.

     7.   Term of Plan. Subject to Section 19 of the Plan, the Plan shall become
effective upon its adoption by the Board. It shall continue in effect for a term
of ten (10) years unless terminated earlier under Section 15 of the Plan.

     8.   Term of Option. The term of each Option shall be stated in the Option
Agreement. In the case of an Incentive Stock Option, the term shall be ten (10)
years from the date of grant or such shorter term as may be provided in the
Option Agreement. Moreover, in the case of an Incentive Stock Option granted to
an Optionee who, at the time the Incentive Stock Option is granted, owns stock
representing more than ten percent (10%) of the total combined voting power of
all classes of stock of the Company or any Parent or Subsidiary, the term of the
Incentive Stock Option shall be five (5) years from the date of grant or such
shorter term as may be provided in the Option Agreement.

     9.   Option Exercise Price and Consideration.

          (a)  Exercise Price. The per share exercise price for the Shares to be
issued pursuant to exercise of an Option shall be determined by the
Administrator, subject to the following:

               (i)  In the case of an Incentive Stock Option

<PAGE>   6

                    (1)  granted to an Employee who, at the time the Incentive
Stock Option is granted, owns stock representing more than ten percent (10%) of
the voting power of all classes of stock of the Company or any Parent or
Subsidiary, the per Share exercise price shall be no less than 110% of the Fair
Market Value per Share on the date of grant.

                    (2)  granted to any Employee other than an Employee
described in paragraph (A) immediately above, the per Share exercise price shall
be no less than 100% of the Fair Market Value per Share on the date of grant.

               (ii) In the case of a Nonstatutory Stock Option, the per Share
exercise price shall be determined by the Administrator. In the case of a
Nonstatutory Stock Option intended to qualify as "performance-based
compensation" within the meaning of Section 162(m) of the Code, the per Share
exercise price shall be no less than 100% of the Fair Market Value per Share on
the date of grant.

               (iii) Notwithstanding the foregoing, Options may be granted with
a per Share exercise price of less than 100% of the Fair Market Value per Share
on the date of grant pursuant to a merger or other corporate transaction.

          (b)  Waiting Period and Exercise Dates. At the time an Option is
granted, the Administrator shall fix the period within which the Option may be
exercised and shall determine any conditions which must be satisfied before the
Option may be exercised.

          (c)  Form of Consideration. The Administrator shall determine the
acceptable form of consideration for exercising an Option, including the method
of payment. In the case of an Incentive Stock Option, the Administrator shall
determine the acceptable form of consideration at the time of grant. Such
consideration may consist entirely of:

               (i)  cash;

               (ii) check;

               (iii) promissory note;

               (iv) other Shares which (A) in the case of Shares acquired upon
exercise of an option, have been owned by the Optionee for more than six months
on the date of surrender, and (B) have a Fair Market Value on the date of
surrender equal to the aggregate exercise price of the Shares as to which said
Option shall be exercised;

               (v)  consideration received by the Company under a cashless
exercise program implemented by the Company in connection with the Plan;

               (vi) a reduction in the amount of any Company liability to the
Optionee, including any liability attributable to the Optionee's participation
in any Company-sponsored deferred compensation program or arrangement;

               (vii) any combination of the foregoing methods of payment; or

               (viii) such other consideration and method of payment for the
issuance of Shares to the extent permitted by Applicable Laws.

     10.  Exercise of Option.

          (a)  Procedure for Exercise; Rights as a Shareholder. Any Option
granted hereunder shall be exercisable according to the terms of the Plan and at
such times and under such conditions as determined by the Administrator and set
forth in the Option Agreement. Unless the Administrator provides otherwise,
vesting of Options

<PAGE>   7

granted hereunder shall be tolled during any unpaid leave of absence. An Option
may not be exercised for a fraction of a Share.

     An Option shall be deemed exercised when the Company receives: (i) written
or electronic notice of exercise (in accordance with the Option Agreement) from
the person entitled to exercise the Option, and (ii) full payment for the Shares
with respect to which the Option is exercised. Full payment may consist of any
consideration and method of payment authorized by the Administrator and
permitted by the Option Agreement and the Plan. Shares issued upon exercise of
an Option shall be issued in the name of the Optionee or, if requested by the
Optionee, in the name of the Optionee and his or her spouse. Until the Shares
are issued (as evidenced by the appropriate entry on the books of the Company or
of a duly authorized transfer agent of the Company), no right to vote or receive
dividends or any other rights as a shareholder shall exist with respect to the
Optioned Stock, notwithstanding the exercise of the Option. The Company shall
issue (or cause to be issued) such Shares promptly after the Option is
exercised. No adjustment will be made for a dividend or other right for which
the record date is prior to the date the Shares are issued, except as provided
in Section 13 of the Plan.

     Exercising an Option in any manner shall decrease the number of Shares
thereafter available, both for purposes of the Plan and for sale under the
Option, by the number of Shares as to which the Option is exercised.

          (b)  Termination of Relationship as a Service Provider. If an Optionee
ceases to be a Service Provider, other than upon the Optionee's death or
Disability, the Optionee may exercise his or her Option within such period of
time as is specified in the Option Agreement to the extent that the Option is
vested on the date of termination (but in no event later than the expiration of
the term of such Option as set forth in the Option Agreement). In the absence of
a specified time in the Option Agreement, the Option shall remain exercisable
for three (3) months following the Optionee's termination. If, on the date of
termination, the Optionee is not vested as to his or her entire Option, the
Shares covered by the unvested portion of the Option shall revert to the Plan.
If, after termination, the Optionee does not exercise his or her Option within
the time specified by the Administrator, the Option shall terminate, and the
Shares covered by such Option shall revert to the Plan.

          (c)  Disability of Optionee. If an Optionee ceases to be a Service
Provider as a result of the Optionee's Disability, the Optionee may exercise his
or her Option within such period of time as is specified in the Option Agreement
to the extent the Option is vested on the date of termination (but in no event
later than the expiration of the term of such Option as set forth in the Option
Agreement). In the absence of a specified time in the Option Agreement, the
Option shall remain exercisable for twelve (12) months following the Optionee's
termination. If, on the date of termination, the Optionee is not vested as to
his or her entire Option, the Shares covered by the unvested portion of the
Option shall revert to the Plan. If, after termination, the Optionee does not
exercise his or her Option within the time specified herein, the Option shall
terminate, and the Shares covered by such Option shall revert to the Plan.

          (d)  Death of Optionee. If an Optionee dies while a Service Provider,
the Option may be exercised within such period of time as is specified in the
Option Agreement (but in no event later than the expiration of the term of such
Option as set forth in the Notice of Grant), by the Optionee's estate or by a
person who acquires the right to exercise the Option by bequest or inheritance,
but only to the extent that the Option is vested on the date of death. In the
absence of a specified time in the Option Agreement, the Option shall remain
exercisable for twelve (12) months following the Optionee's termination. If, at
the time of death, the Optionee is not vested as to his or her entire Option,
the Shares covered by the unvested portion of the Option shall immediately
revert to the Plan. The Option may be exercised by the executor or administrator
of the Optionee's estate or, if none, by the person(s) entitled to exercise the
Option under the Optionee's will or the laws of descent or distribution. If the
Option is not so exercised within the time specified herein, the Option shall
terminate, and the Shares covered by such Option shall revert to the Plan.

          (e)  Buyout Provisions. The Administrator may at any time offer to buy
out for a payment in cash or Shares an Option previously granted based on such
terms and conditions as the Administrator shall establish and communicate to the
Optionee at the time that such offer is made.

<PAGE>   8

     11.  Stock Purchase Rights.

          (a)  Rights to Purchase. Stock Purchase Rights may be issued either
alone, in addition to, or in tandem with other awards granted under the Plan
and/or cash awards made outside of the Plan. After the Administrator determines
that it will offer Stock Purchase Rights under the Plan, it shall advise the
offeree in writing or electronically, by means of a Notice of Grant, of the
terms, conditions and restrictions related to the offer, including the number of
Shares that the offeree shall be entitled to purchase, the price to be paid, and
the time within which the offeree must accept such offer. The offer shall be
accepted by execution of a Restricted Stock Purchase Agreement in the form
determined by the Administrator.

          (b)  Repurchase Option. Unless the Administrator determines otherwise,
the Restricted Stock Purchase Agreement shall grant the Company a repurchase
option exercisable upon the voluntary or involuntary termination of the
purchaser's service with the Company for any reason (including death or
Disability). The purchase price for Shares repurchased pursuant to the
Restricted Stock Purchase Agreement shall be the original price paid by the
purchaser and may be paid by cancellation of any indebtedness of the purchaser
to the Company. The repurchase option shall lapse at a rate determined by the
Administrator.

          (c)  Other Provisions. The Restricted Stock Purchase Agreement shall
contain such other terms, provisions and conditions not inconsistent with the
Plan as may be determined by the Administrator in its sole discretion.

          (d)  Rights as a Shareholder. Once the Stock Purchase Right is
exercised, the purchaser shall have the rights equivalent to those of a
shareholder, and shall be a shareholder when his or her purchase is entered upon
the records of the duly authorized transfer agent of the Company. No adjustment
will be made for a dividend or other right for which the record date is prior to
the date the Stock Purchase Right is exercised, except as provided in Section 13
of the Plan.

     12.  Non-Transferability of Options and Stock Purchase Rights. Unless
determined otherwise by the Administrator, an Option or Stock Purchase Right may
not be sold, pledged, assigned, hypothecated, transferred, or disposed of in any
manner other than by will or by the laws of descent or distribution and may be
exercised, during the lifetime of the Optionee, only by the Optionee. If the
Administrator makes an Option or Stock Purchase Right transferable, such Option
or Stock Purchase Right shall contain such additional terms and conditions as
the Administrator deems appropriate.

     13.  Adjustments Upon Changes in Capitalization, Dissolution, Merger or
Asset Sale.

          (a)  Changes in Capitalization. Subject to any required action by the
shareholders of the Company, the number of shares of Common Stock covered by
each outstanding Option and Stock Purchase Right, and the number of shares of
Common Stock which have been authorized for issuance under the Plan but as to
which no Options or Stock Purchase Rights have yet been granted or which have
been returned to the Plan upon cancellation or expiration of an Option or Stock
Purchase Right, as well as the price per share of Common Stock covered by each
such outstanding Option or Stock Purchase Right, shall be proportionately
adjusted for any increase or decrease in the number of issued shares of Common
Stock resulting from a stock split, reverse stock split, stock dividend,
combination or reclassification of the Common Stock, or any other increase or
decrease in the number of issued shares of Common Stock effected without receipt
of consideration by the Company; provided, however, that conversion of any
convertible securities of the Company shall not be deemed to have been "effected
without receipt of consideration." Such adjustment shall be made by the Board,
whose determination in that respect shall be final, binding and conclusive.
Except as expressly provided herein, no issuance by the Company of shares of
stock of any class, or securities convertible into shares of stock of any class,
shall affect, and no adjustment by reason thereof shall be made with respect to,
the number or price of shares of Common Stock subject to an Option or Stock
Purchase Right.

          (b)  Dissolution or Liquidation. In the event of the proposed
dissolution or liquidation of the Company, the Administrator shall notify each
Optionee as soon as practicable prior to the effective date of such proposed
transaction. The Administrator in its discretion may provide for an Optionee to
have the right to exercise his or her Option until fifteen (15) days prior to
such transaction as to all of the Optioned Stock covered thereby, including

<PAGE>   9

Shares as to which the Option would not otherwise be exercisable. In addition,
the Administrator may provide that any Company repurchase option applicable to
any Shares purchased upon exercise of an Option or Stock Purchase Right shall
lapse as to all such Shares, provided the proposed dissolution or liquidation
takes place at the time and in the manner contemplated. To the extent it has not
been previously exercised, an Option or Stock Purchase Right will terminate
immediately prior to the consummation of such proposed action.

          (c)  Merger or Asset Sale. In the event of a merger of the Company
with or into another corporation, or the sale of substantially all of the assets
of the Company, each outstanding Option and Stock Purchase Right shall be
assumed or an equivalent option or right substituted by the successor
corporation or a Parent or Subsidiary of the successor corporation. In the event
that the successor corporation refuses to assume or substitute for the Option or
Stock Purchase Right, the Optionee shall fully vest in and have the right to
exercise the Option or Stock Purchase Right as to all of the Optioned Stock,
including Shares as to which it would not otherwise be vested or exercisable. If
an Option or Stock Purchase Right becomes fully vested and exercisable in lieu
of assumption or substitution in the event of a merger or sale of assets, the
Administrator shall notify the Optionee in writing or electronically that the
Option or Stock Purchase Right shall be fully vested and exercisable for a
period of fifteen (15) days from the date of such notice, and the Option or
Stock Purchase Right shall terminate upon the expiration of such period. For the
purposes of this paragraph, the Option or Stock Purchase Right shall be
considered assumed if, following the merger or sale of assets, the option or
right confers the right to purchase or receive, for each Share of Optioned Stock
subject to the Option or Stock Purchase Right immediately prior to the merger or
sale of assets, the consideration (whether stock, cash, or other securities or
property) received in the merger or sale of assets by holders of Common Stock
for each Share held on the effective date of the transaction (and if holders
were offered a choice of consideration, the type of consideration chosen by the
holders of a majority of the outstanding Shares); provided, however, that if
such consideration received in the merger or sale of assets is not solely common
stock of the successor corporation or its Parent, the Administrator may, with
the consent of the successor corporation, provide for the consideration to be
received upon the exercise of the Option or Stock Purchase Right, for each Share
of Optioned Stock subject to the Option or Stock Purchase Right, to be solely
common stock of the successor corporation or its Parent equal in fair market
value to the per share consideration received by holders of Common Stock in the
merger or sale of assets.

     14.  Date of Grant. The date of grant of an Option or Stock Purchase Right
shall be, for all purposes, the date on which the Administrator makes the
determination granting such Option or Stock Purchase Right, or such other later
date as is determined by the Administrator. Notice of the determination shall be
provided to each Optionee within a reasonable time after the date of such grant.

     15.  Amendment and Termination of the Plan.

          (a)  Amendment and Termination. The Board may at any time amend,
alter, suspend or terminate the Plan.

          (b)  Shareholder Approval. The Company shall obtain shareholder
approval of any Plan amendment to the extent necessary and desirable to comply
with Applicable Laws.

          (c)  Effect of Amendment or Termination. No amendment, alteration,
suspension or termination of the Plan shall impair the rights of any Optionee,
unless mutually agreed otherwise between the Optionee and the Administrator,
which agreement must be in writing and signed by the Optionee and the Company.
Termination of the Plan shall not affect the Administrator's ability to exercise
the powers granted to it hereunder with respect to Options granted under the
Plan prior to the date of such termination.

     16.  Conditions Upon Issuance of Shares.

          (a)  Legal Compliance. Shares shall not be issued pursuant to the
exercise of an Option or Stock Purchase Right unless the exercise of such Option
or Stock Purchase Right and the issuance and delivery of such Shares shall
comply with Applicable Laws and shall be further subject to the approval of
counsel for the Company with respect to such compliance.

<PAGE>   10

          (b)  Investment Representations. As a condition to the exercise of an
Option or Stock Purchase Right, the Company may require the person exercising
such Option or Stock Purchase Right to represent and warrant at the time of any
such exercise that the Shares are being purchased only for investment and
without any present intention to sell or distribute such Shares if, in the
opinion of counsel for the Company, such a representation is required.

     17.  Inability to Obtain Authority. The inability of the Company to obtain
authority from any regulatory body having jurisdiction, which authority is
deemed by the Company's counsel to be necessary to the lawful issuance and sale
of any Shares hereunder, shall relieve the Company of any liability in respect
of the failure to issue or sell such Shares as to which such requisite authority
shall not have been obtained.

     18.  Reservation of Shares. The Company, during the term of this Plan, will
at all times reserve and keep available such number of Shares as shall be
sufficient to satisfy the requirements of the Plan.

     19.  Shareholder Approval. The Plan shall be subject to approval by the
shareholders of the Company within twelve (12) months after the date the Plan is
adopted. Such shareholder approval shall be obtained in the manner and to the
degree required under Applicable Laws.

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