Document:

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                                  EXHIBIT 10.11

                           PURCHASE AND SALE AGREEMENT

         This Purchase and Sale Agreement is entered into this 16th day of June,
2000 (the "Agreement") by and among Professional Veterinary Products, Ltd., a
Nebraska corporation ("PVPL"), AAHA Services Corporation, a Colorado
corporation, ("Company") and American Animal Hospital Association, an Illinois
non-profit corporation ("AAHA").

                                    RECITALS

         A. PVPL desires to become a shareholder of Company, and

         B. Company desires to issue Company shares equal to ***% of the issued
and outstanding shares of the Company to PVPL, and PVPL desires to purchase such
shares.

         C. Following the issuance of the shares to PVPL, PVPL and AAHA will be
the owners of all of the issued and outstanding capital stock of the Company.

         NOW THEREFORE, in consideration of the above premises and other good
and valuable consideration the parties agree as follows:

                                    ARTICLE 1
                           PURCHASE AND SALE OF SHARES

         1.1 AUTHORIZATION OF STOCK. The Company has, or prior to Closing (as
defined in Section 1.2 below) will have, authorized the sale and issuance of ***
shares of its common stock (the "Stock" or the "Shares") to PVPL. It is the
intent of the parties that PVPL will acquire *** Shares at Closing.

         1.2 PURCHASE PRICE.

                  a. The purchase price for PVPL's Shares shall be $*** (the
         "Purchase Price").

                  b. PVPL shall pay to Company at the Closing the Purchase Price
         by wire transfer or in the form of a certified or cashier's check.

                  c. The closing of the transactions contemplated by this
         Agreement (the "Closing") shall take place at PVPL's offices at 10077
         S. 134th Street, Omaha, Nebraska on June 16, 2000 (the "Closing Date").

                  d. At the Closing, (i) Company will deliver to PVPL one or
         more certificates representing *** Shares, which is equal to ***
         percent (***%) of the issued and outstanding Shares of the Company,
         endorsed by all relevant and necessary parties and in such a manner
         that no other action is necessary by Company to issue the Shares; (ii)
         Company will provide proof satisfactory to PVPL that it has converted
         $*** of its debt to equity on its books and records as described in
         Section 6.1 herein; (iii) PVPL will deliver to Company the
         consideration specified in Section 1.2(a) above; and (iv) the parties
         will execute a shareholders agreement in the form attached hereto as
         Exhibit "A" (the "Shareholders Agreement").

         *** Confidential material omitted pursuant to a request for
         confidential treatment and filed separately with the Securities and
         Exchange Commission.

                                       1

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                                    ARTICLE 2
                    REPRESENTATIVES AND WARRANTIES OF COMPANY

         Company represents and warrants to PVPL that the statements contained
in this Article 2 are correct and complete as of the Closing Date.

         2.1 REPRESENTATIONS AND WARRANTIES. Company represents and warrants the
following to be true in all material respects:

                  a. Company does not have any liabilities in excess of
         $10,000.00 other than those disclosed on Schedule 2.1(a).

                  b. To the best of its knowledge, Company has duly filed or
         caused to be filed all tax reports and returns it is and was required
         to file.

                  c. Company has good and marketable title to, or a valid
         leasehold interest in, each item of tangible personal property used by
         it or reflected on its books and records as owned by it, including all
         machinery, automobiles, equipment and all physical inventories, free
         and clear of any encumbrance.

                  d. Company owns or has the right to use pursuant to license,
         agreement or permission all intellectual property necessary for the
         operation of its business, including but not limited to, all
         trademarks, service marks and copyrights.

                  e. Company is not a guarantor or otherwise liable for any
         obligation of any other person, firm or entity.

                  f. All notes and accounts receivable of Company are reflected
         properly on the books and records of Company, are valid receivables,
         are not subject to any setoffs or counterclaims, are presently current
         and are collectible consistent with ordinary business practices.

                  g. To the best of its knowledge, Company has complied with all
         applicable laws (including rules and regulations thereunder) of
         federal, state, local and foreign governments (and all agencies
         thereof) concerning the environment, public health and safety and
         employee health and safety, and no charge, complaint, action, suit,
         proceeding, hearing, investigation, claim, demand or notice is pending
         against any Company alleging any failure to comply with or liabilities
         arising under any such law or regulation.

         2.2 APPROVAL OF DR. REILLY. Company's Shareholder approved Dr. Lionel
Reilly as an additional member of Company's Board of Directors, effective as of
Closing. He will retain his office until the next regularly scheduled election
of the Board of Directors. At and after the next regularly scheduled election,
PVPL's right and ability to elect one or more directors shall be governed by the
Company's Articles and Bylaws and Section 10 of the Shareholders Agreement.

         2.3 FINANCIAL STATEMENT. Company shall provide to PVPL its most recent
unaudited financial statement within 30 days after Closing.

         2.4 COMPANY STATUS. Company is a subchapter "C" corporation duly
organized, validly existing and in good standing under the laws of the State of
Colorado. Company has full power and authority and all authorizations, licenses
and permits necessary to carry on the business in which it is engaged or in
which it presently proposes to engage and to own and use the properties owned
and used by it.

         2.5 AUTHORITY TO EXECUTE AGREEMENT. Company has full power and
authority to execute and deliver this Agreement and all other agreements
contemplated hereby to which the Company is a party, and to perform its
obligations hereunder and thereunder. Company's Board of Directors has duly
authorized the execution, delivery and performance of the Agreement.

                                       2

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         2.6 AUTHORIZED AND ISSUED CAPITAL STOCK. The entire authorized capital
stock of Company consists of Ten Thousand (10,000) Shares of which ***** (***)
Shares will be issued and outstanding after the issuance of the PVPL Shares. All
of the issued and outstanding Shares have been duly authorized, are validly
issued, fully paid and nonassessable and are held of record by the Company. As
of the date of Closing, the Shares are owned by AAHA (**** Shares) and PVPL
(**** Shares).

         2.7 OUTSTANDING OPTIONS. There are no outstanding or authorized
options, warrants, rights, contracts, calls, puts, rights to subscribe,
conversion rights or other agreements or commitments to which Company is a party
or which are binding upon Company providing for the issuance, transfer,
disposition or acquisition of any of its capital stock; there are no outstanding
or authorized equity appreciation, phantom stock or similar rights with respect
to Company; and, there are no voting trusts, proxies or any other agreements or
understandings with respect to the voting of the capital stock of Company.

         2.8 SHAREHOLDER AGREEMENTS. Except for the Shareholders Agreement
executed in conjunction herewith, there are no agreements between shareholders,
buy-sell agreements or any other agreements by and among Company's shareholders.

         2.9 COMPLIANCE. Neither the execution and the delivery of this
Agreement, or any other Material Agreements contemplated hereby to which either
AAHA or Company is a party, nor the consummation of the transactions
contemplated hereby or thereby, will (i) conflict with, result in a breach of,
constitute a default under, result in the acceleration of, or require the
payment of any amounts under, or create in any party the right to accelerate,
terminate, modify or cancel or require any notice under any shareholder
agreement, contract, lease, sublease, license, franchise, permit, indenture,
agreement or mortgage for borrowed money, instrument of indebtedness, security
interest or other obligation to which Company is a party or by which it is bound
or to which any of its assets is subject (or result in the imposition of any
security interest upon any of its assets) or (ii) violate any provision of the
Articles of Incorporation, Bylaws or other organization documents of Company, or
any statute, regulation, rule, judgment, order, decree, stipulation, injunction,
charge or other restriction of any government, governmental agency or court to
which Company is subject. No notice to, filing with or authorization, consent or
approval of any government or governmental agency by Company is necessary for
the consummation of the transactions contemplated by this Agreement. For
purposes of Sections 2.9 and 2.10, "Material Agreements" shall include and be
limited to the following:

         -        *******

         -        Services Agreement with AAHA dated August 22, 1996

         -        Logistics Agreement with PVPL

         -        All agreements with vendors of services and/or products to
                  Company

         2.10 CHANGES SINCE MAY 25TH DUE DILIGENCE. Except as disclosed herein
or in the Material Agreements, there has not been any material adverse change in
the assets, liabilities, business, financial condition, operations, results of
operations or business prospects of Company since May 25, 2000. Without limiting
the generality of the foregoing, since May 25, 2000.

                  a. Company has not sold, leased, transferred or assigned any
         of its assets, tangible or intangible, other than for a fair
         consideration in the ordinary course of business;

                  b. Company has not imposed any mortgage or pledge of, or
         subjection to any lien, charge, security interest or encumbrance of any
         kind on any of its assets, tangible or intangible;

                  c. Company has not made any capital expenditure (or series of
         related capital expenditures) except as recorded on the Company books;

         *** Confidential material omitted pursuant to a request for
         confidential treatment and filed separately with the Securities and
         Exchange Commission.

                                       3

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                  d. Company has not made any capital investment in, any loan to
         or any acquisition of the securities or assets of any other person (or
         series of related capital investments, loans and acquisitions)
         involving more than $10,000.00;

                  e. Company has not created, incurred, assumed or guaranteed
         any indebtedness (including capitalized lease obligations) involving
         more than $10,000.00 in the aggregate;

                  f. Company has not cancelled, delayed or postponed (beyond its
         normal practice) the payment of accounts payable and other liabilities;

                  g. Company has not cancelled, compromised, waived or released
         any right or claim (or series of related rights and claims) involving
         more than $10,000.00 in the aggregate;

                  h. In each contract in which Company has granted any license
         of any rights under or with respect to any intellectual property,
         Company has sought to protect its ownership of such rights;

                  i. With the exception of the Amendment to the Articles
         attached hereto as Exhibit "B", and the Amendments to the Bylaws
         attached hereto as Exhibit "C", there has been no change made or
         authorized in the Articles, Bylaws or other organizational documents of
         Company;

                  j. Company has not issued, sold or otherwise disposed of any
         of its capital stock or other equity securities, or granted any
         options, warrants or other rights to purchase or obtain (including upon
         conversion or exercise) any of its capital stock.

                  k. Company has not experienced any damage, destruction or loss
         (whether or not covered by insurance) materially adversely affecting
         its property or business;

                  l. Company has not made any loan to any of its directors,
         officers and employees giving rise to any claim or right on its part
         against the person or on the part of the person against it;

                  m. Company has not entered into any employment contract or
         collective bargaining agreement, written or oral, or modified the terms
         of any existing such contract or agreement;

                  n. Company has not committed to any of the foregoing.

         2.11 PVPL OWNERSHIP. Upon consummation of the Closing, PVPL will own
*** percent (***%) of the issued and outstanding Shares of the Company.

         2.12 NO SUBSIDIARIES. Company has no subsidiaries. Company does not
control directly or indirectly or have any direct or indirect equity
participation in any corporation, partnership, trust, joint venture, limited
liability company or other business association.

         2.13 INSURANCE. Company maintains commercial general liability
insurance, property insurance, casualty insurance and directors and officers
insurance in amounts which are sufficient to cover its exposure and typical of
similar entities of its type and size.

         2.14 NO REAL PROPERTY. Company does not own any real property. Company
currently utilizes space owned by AAHA. There is no separate written lease
agreement for such space; PROVIDED, HOWEVER, a portion of the consideration paid
by Company to AAHA as part of the Services Agreement includes rent for the space
Company is utilizing.

         *** Confidential material omitted pursuant to a request for
         confidential treatment and filed separately with the Securities and
         Exchange Commission.

                                       4

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         2.15 NO UNTRUE STATEMENTS. To the best knowledge of Company, this
Article 2 does not contain, and at the Closing Date, will not contain, any
untrue statement of material fact and does not omit to state any material fact
necessary in order to make the statements and information contained herein not
misleading.

                                    ARTICLE 3
                 REPRESENTATIONS AND WARRANTIES CONCERNING PVPL

         PVPL represents and warrants to Company that the statements contained
in this Article 3 are correct and complete as of the Closing Date.

         3.1 GOOD STANDING. PVPL is duly organized, validly existing and in good
standing under the laws of the State of Nebraska.

         3.2 POWER AND AUTHORITY. PVPL has full power and authority to execute
and deliver this Agreement, and all other agreements contemplated hereby to
which PVPL is a party, and to perform its obligations hereunder and thereunder.
PVPL's Board of Directors has duly authorized the execution, delivery and
performance of this Agreement.

                                    ARTICLE 4
                 REPRESENTATIONS AND WARRANTIES CONCERNING AAHA

         AAHA represents and warrants to PVPL that the statements contained in
this Article 4 are correct and complete as of the Closing Date.

         4.1 GOOD STANDING. AAHA is duly organized, validly existing and in good
standing under the laws of the State of Illinois.

         4.2 POWER AND AUTHORITY. AAHA has full power and authority to execute
and deliver this Agreement, and all other agreements contemplated hereby to
which AAHA is a party, and to perform its obligations hereunder and thereunder.

                                    ARTICLE 5
                                PREEMPTIVE RIGHTS

         The parties shall have such preemptive rights as are described in
Section 9 of the Shareholders Agreement.

                                    ARTICLE 6
                         CONDITIONS PRECEDENT TO CLOSING

         6.1 CONVERSION OF DEBT TO EQUITY. Company shall convert $**** of the
debt evidenced on its books and records to equity.

         *** Confidential material omitted pursuant to a request for
         confidential treatment and filed separately with the Securities and
         Exchange Commission.

                                       5

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         6.2 CUMULATIVE VOTING. Company's Articles of Incorporation shall be
amended to provide that as long as AAHA owns ***% of the Shares and PVPL owns
***% of the Shares, AAHA will be entitled to appoint six (6) members of the
Board of Directors and PVPL will be entitled to appoint *** (**) member of the
Board of Directors, all as described in Section 10 of the Shareholders
Agreement.

         6.3 PREEMPTIVE RIGHTS. Company's Articles of Incorporation shall be
amended to allow such preemptive rights as are necessary to implement Article 5
herein. A copy of the Amended Articles of Incorporation are attached hereto as
Exhibit "B".

         6.4 SHAREHOLDERS AGREEMENT. The parties hereto shall execute the
Shareholders Agreement.

                                    ARTICLE 7
                             POST-CLOSING COVENANTS

         The parties agree as follows with respect to the period following the
Closing:

         7.1 FURTHER ACTION. In case at any time after the Closing any further
action is necessary or desirable to carry out the purposes of this Agreement,
the parties shall take all reasonable action (including the execution and
delivery of such further instruments and documents) as the other parties
reasonably may request for such purposes. AAHA and Company acknowledge and agree
that from and after the Closing, PVPL will be entitled to review and/or
duplicate of all documents, books, records, agreements and financial data of any
sort relating to Company in accordance with Colorado Revised Statutes Section
7-116-102.

         7.2 CONFIDENTIALITY. From and after the Closing Date, PVPL, AAHA and
Company will maintain all information pertaining to the sale of AAHA's Shares in
confidence and not disclose any portion of information to any person other than
their attorneys, accountants, employees, advisors and bankers who need to know
such information; PROVIDED, HOWEVER, a) any party may issue a press release
pertaining to this transaction as long as the other parties have approved its
content, b) PVPL and Company may reference their relationship with each other in
their marketing materials; and c) PVPL will disclose the necessary information
required by the Securities Exchange Commission as required in its 10K and 10Q
filings. All prior Confidentiality Agreements between one or more of the
parties, including but not limited to, the Agreement dated May 25, 2000 are
hereby superceded by this Agreement and have no further force or effect after
the date of Closing.

         7.3 APPLICATION OF PROCEEDS. ***********

         Payment by PVPL of the *** dollar purchase price shall be conditioned
upon the receipt of the duly executed **** by legal counsel for Company. Upon
notification from Company's legal counsel to PVPL that such executed Settlement
Agreement has been received and placed in escrow, PVPL shall immediately wire
transfer the $*** dollars to Company and Company shall, in turn, wire the amount
due to *** and place $*** in escrow as provided for in the Settlement Agreement.
Upon notice from *** that the monies due have been received by ***, legal
counsel for Company shall then release the Settlement Agreement to Company.

         7.4 LINE OF CREDIT. After Closing and application of the payments
described herein, Company will not have any outstanding debt except for the
amounts payable to PVPL listed on Schedule 2.1(a); PROVIDED, HOWEVER, after
closing Company may thereafter utilize a line of credit through a state or
federally regulated financial institution as needed for ordinary business
purposes.

         *** Confidential material omitted pursuant to a request for
         confidential treatment and filed separately with the Securities and
         Exchange Commission.

                                       6

<PAGE>

         7.5 EXCHANGE OF FINANCIAL INFORMATION. Company and PVPL agree to
exchange financial information, including annual audited and semi-annual
unaudited financial statements, income statements, balance sheets and cashflow
statements at least on an annual basis. In addition, the parties agree to
provide the other party any other financial information, and provide access to
the other party's books and records, upon reasonable request.

                                    ARTICLE 8
                                    REMEDIES

         8.1 INDEMNIFICATION PROVISIONS FOR BENEFIT OF PVPL. Company agrees to
indemnify PVPL from and against all losses incurred by PVPL resulting from,
arising out of, relating to, in the nature of or caused by any breach of any
representation or warranty contained in Article 2 hereof or any breach or
failure to perform or comply with any obligation, agreement or covenant
contained in this Agreement.

         8.2 INDEMNIFICATION PROVISIONS FOR BENEFIT OF COMPANY. PVPL agrees to
indemnify Company from and against all losses resulting from, arising out of,
relating to, in the nature of or caused by the breach of any representation or
warranty of PVPL contained in Article 3 or any breach of failure to perform or
comply with any obligation, agreement or covenant contained in this Agreement.

         8.3 EXPIRATION OF INDEMNITIES. The representations and warranties and
rights of indemnification of this Agreement shall expire three years after the
Closing Date.

                                    ARTICLE 9
                                  MISCELLANEOUS

         9.1 SURVIVAL. Unless otherwise specifically provided herein, all
representations, warranties, covenants and agreements contained in this
Agreement will survive the execution and delivery of this Agreement.

         9.2 ENTIRE AGREEMENT. This Agreement (including the documents referred
to herein) constitutes the entire understanding among the parties and supersedes
any prior understandings, agreements or representations by or among the parties,
written or oral, that may have related in any way to the subject matter hereof.

         9.3 SUCCESSION AND ASSIGNMENT. This Agreement shall be binding upon and
inure to the benefit of the parties named herein and their respective successors
and permitted assigns. No party may assign either this Agreement or any of such
party's rights, interests or obligations hereunder without the prior written
approval of the other party.

         9.4 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original but all of which
together will constitute one and the same instrument.

         9.5 HEADINGS. The section headings contained in this Agreement are
inserted for convenience only and shall not affect in any way the meaning or
interpretation of this Agreement.

         9.6 NOTICES. All notices, demands or other communications to be given
or delivered under or by reason of the provisions of this Agreement or any of
the Agreements contemplated hereby shall be in writing and shall be deemed to
have been given when delivered personally to the recipient, one business day
after being sent to the recipient by reputable overnight courier service
(charges prepaid), or five business days after being mailed to the recipient by
certified or registered mail, return receipt requested and postage prepaid. Such
notices, demands and other communications shall be sent to each party at the
address below:

         If to PVPL:         Professional Veterinary Products, Ltd.
                             Attn: Dr. Lionel Reilly
                             10077 S. 134th Street
                             Omaha, Nebraska 68138

                                       7

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         If to AAHA:         American Animal Hospital Association
                             Attn: Dr. John Albers
                             12575 W. Bayaud Avenue
                             Lakewood, Colorado 80228

         If to Company:      AAHA Services Corporation
                             Attn: Dr. John Albers
                             12575 W. Bayaud Avenue
                             Lakewood, Colorado 80228

         Any party may give any notice, request, demand, claim or other
communication hereunder using any other means (including personal delivery,
expedited courier, messenger service, telecopy, telex, ordinary mail or
electronic mail), but no such notice, request, demand, claim or other
communication shall be deemed to have been duly given unless and until it
actually is received by the individual for whom it is intended. Any party may
change the address to which notices, requests, demands, claims and other
communications hereunder are to be delivered by giving the other parties notice
in the manner herein set forth.

         9.7 GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of Colorado.

         9.8 AMENDMENTS AND WAIVERS. No amendment, modification or waiver of any
provision of this Agreement shall be valid unless the same shall be in writing
and signed by the parties.

         9.9 SEVERABILITY. Any term or provision of this Agreement that is
invalid or unenforceable in any situation in any jurisdiction shall not affect
the validity or enforceability of the remaining terms and provisions hereof or
the validity or enforceability of the offending term or provision in any other
situation or in any other jurisdiction.

         IN WITNESS WHEREOF, this Agreement is executed as of the date first
above written.

                                      PROFESSIONAL VETERINARY PRODUCTS, LTD.

                                      By:      /s/ Lionel L. Reilly, D.V.M.
                                      Its:     President

                                      AMERICAN ANIMAL HOSPITAL ASSOCIATION

                                      By:      /s/ John W. Albers, D.V.M.
                                      Its:     Executive Director

                                      AAHA Services Corporation

                                      By:      /s/ John W. Albers, D.V.M.
                                      Its:     Chief Executive Officer

                                       8

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                                 SCHEDULE 2.1(a)

1.       ****

2.       ****

3.       ****

4.       ****

5.       ****

Note:    ****

         *** Confidential material omitted pursuant to a request for
         confidential treatment and filed separately with the Securities and
         Exchange Commission.<PAGE>
                                                                  EXHIBIT 10.12

CONFIDENTIAL TREATMENT REQUESTED

CONFIDENTIAL TREATMENT REQUESTED: PAGES WHERE CONFIDENTIAL TREATMENT HAS BEEN
REQUESTED ARE MARKED "CONFIDENTIAL TREATMENT REQUESTED" AND APPROPRIATE
SECTIONS, WHERE TEXT HAS BEEN OMITTED, ARE NOTED WITH "[CONFIDENTIAL TREATMENT
REQUESTED]." AN UNREDACTED VERSION OF THIS DOCUMENT HAS BEEN FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION.

                   PURCHASE AGREEMENT AND ESCROW INSTRUCTIONS

                  THIS PURCHASE AGREEMENT AND ESCROW INSTRUCTIONS
("Agreement") is made as of August 31, 2000 (the "Effective Date"), by and
between IVEY RANCH DEVELOPMENT COMPANY, LLC, a California limited liability
company ("Seller"), and IDEC PHARMACEUTICALS CORPORATION, a Delaware
corporation ("Buyer"), as follows:

         1. PURCHASE AND SALE. Upon all the terms and conditions contained
herein, Buyer hereby agrees to purchase from Seller and Seller agrees to
acquire from the existing fee owner, Ivey Ranch, Inc. (the "Fee Owner"), or
to cause the Fee Owner to convey directly to Buyer, and to sell to Buyer that
certain real property (the "Land") (a) located within the area commonly
referred to as Ocean Ranch in the City of Oceanside, California, (b)
consisting of approximately sixty and 4/10 (60.4) acres of net usable land
and (c) depicted on Exhibit A attached hereto and incorporated herein by this
reference. The Land is identified as Parcel 4 of proposed Lot Line Adjustment
No. PLA-10-2000 (the "Lot Line Adjustment"). Buyer acknowledges that the Lot
Line Adjustment will need to be recorded in the Official Records of San Diego
County, California to cause the Land to be one or more separate legal parcels
pursuant to the California Subdivision Map Act, all as contemplated by
Section 7(d) below. Buyer shall have the right to approve the recorded Lot
Line Adjustment, but approval shall not be unreasonably withheld if it is in
substantial conformance with the depiction on Exhibit A.

         2. OPENING OF ESCROW. Within two (2) business days of the execution
of this Agreement, Seller and Buyer shall open an escrow (the "Escrow") with
First American Title Insurance Company at Two First American Way, Santa Ana,
California 92707 (the "Escrow Holder") by delivering a fully executed copy of
this Agreement to Escrow Holder. Escrow Holder will execute copies of this
Agreement and return fully executed copies hereof to Buyer and Seller when
Escrow has opened. Escrow shall be deemed open upon Escrow Holder's execution
hereof. In addition, the parties agree to be bound by the standard escrow
General Provisions attached hereto as Exhibit B and incorporated herein by
this reference. In the event of any inconsistency between this Agreement and
such General Provisions, the provisions of this Agreement shall prevail.

         3. CLOSING OF ESCROW. The closing (the "Closing") of the purchase
and sale of the Land shall take place through Escrow three (3) business days
after recordation of the Lot Line Adjustment, but in no event later than
September 1, 2000 (the "Closing Date").

         4. PURCHASE PRICE. The purchase price for the Land (the "Purchase
Price") shall be Eighteen Million Four Hundred Seventeen Thousand One Hundred
Sixty-Eight Dollars ($18,417,168). The Purchase Price shall be payable as
follows:

                  (a) INITIAL DEPOSIT. Concurrently with the opening of
Escrow, Buyer shall deposit into Escrow cash in the amount of Two Hundred
Thousand Dollars ($200,000).

                  (b) ADDITIONAL DEPOSIT. On or before the expiration of the
Due Diligence Period (as defined in Section 7 below), Buyer shall deposit
into Escrow additional cash in the amount of One Hundred Fifty Thousand
Dollars ($150,000). Escrow Holder shall invest the initial and

<PAGE>

additional deposits (collectively, the "Deposit"), upon receipt, in an
interest-bearing account approved by Buyer, and, except as set forth in
Section 11(b) below, all interest thereon shall be credited to Buyer. Buyer
shall pay all costs and assume all risks in connection with the investment of
the Deposit.

                  (c) CASH AT CLOSING. The remainder of the Purchase Price
(after credit for the deposits made pursuant to Sections 4(a) and (b)) shall
be deposited into Escrow, in cash or by federal wire transfer of immediately
available funds, by Buyer at or prior to Closing.

         5.   COSTS AND PRORATIONS.

                  (a) ESCROW AND TITLE FEES. Buyer and Seller shall each pay
one-half (1/2) of the Escrow fees. Seller shall bear the cost of (i) all
documentary transfer taxes, (ii) the premium which would be required for an
ALTA Standard Coverage Owner's Policy of Title Insurance With Regional
Exceptions if issued by the Title Company (as defined below) insuring Buyer's
title to the Land in the amount of the Purchase Price, including a mechanics'
lien endorsement as described in Section 8(c) below and (iii) the cost of
recording the Grant Deed (as defined below). Buyer shall bear the cost of any
increased premium attributable to other endorsements and the delivery of an
extended coverage, ALTA Owner's Policy of Title Insurance. All other costs or
expenses not otherwise provided for in this Agreement shall be apportioned or
allocated between Buyer and Seller in the manner customary in San Diego
County, California.

                  (b) TAXES AND ASSESSMENTS. All current real property taxes
and all payments on general and special bonds and assessments on the Land
shall be prorated through Escrow between Buyer and Seller as of Closing based
upon the latest available tax information, using the customary escrow
procedures. Any taxes levied under the Supplemental Tax Roll and attributable
to the period prior to Closing shall be paid by Seller, and any such taxes
attributable to the period from and after Closing shall be paid by Buyer. If
the Land is part of a larger tax parcel which remains unsegregated on the San
Diego, California Tax Assessors' Rolls for the coming fiscal tax year and any
installment of tax becomes due before such segregation is made, then, prior
to the later of (i) thirty (30) days after notice from Seller, or (ii) two
(2) business days prior to the date such taxes become due and payable, Buyer
shall pay Seller for the percentage of taxes and assessments as regards the
Land on an acreage basis which is equal to the percentage obtained by
dividing the acreage of the Land by the acreage for the entire tax parcel.
Notwithstanding the foregoing, Buyer shall be fully and solely responsible
for the payment of all taxes levied under the Supplemental Tax Roll relating
to the Land, and if Seller pays for any such taxes, Buyer shall reimburse
Seller for such amounts upon thirty (30) days notice from Seller.
Additionally, if any portion of such tax parcel is reassessed due to
improvements constructed thereon, the owner of the portion of such tax parcel
upon which such improvements are constructed shall be fully and solely
responsible for such increased assessment, and if Seller pays for any such
taxes which are Buyer's responsibility, Buyer shall reimburse Seller for such
amounts upon thirty (30) days notice from Seller. If the Land is not
separately assessed and segregated at Closing, Buyer and Seller agree to
cause the Land thereafter to be separately assessed and segregated in Buyer's
name on the current tax roll as provided by applicable statutes.

                                       2

<PAGE>

         6.   HOLDBACK ACCOUNT.

                  (a) HOLDBACK AMOUNT. At Closing, ninety percent (90%) of
the Purchase Price (the "Holdback Amount") shall not be disbursed by Escrow
Holder to Seller, but shall be held in Escrow and disbursed as provided
herein. The remainder of the Purchase Price shall be disbursed to Seller at
Closing, after payment of Seller's share of Closing costs as provided herein.
Of the Holdback Amount, an amount equal to One Million Three Hundred Fifteen
Thousand Five Hundred Twelve Dollars ($1,315,512) shall be set aside to be
utilized as set forth in Section 6(b) below (the "Government Funds and Other
Savings Account"). The excess of the Holdback Amount over the Government
Funds and Other Savings Account shall be set aside to be utilized as set
forth in Section 6(c) below (the "Improvements Account"). Both the Government
Funds and Other Savings Account and the Improvements Account shall be
invested by Escrow Holder in separate FDIC-insured money-market accounts,
which accounts may be withdrawn immediately upon demand and do not carry any
early withdrawal penalties or other monetary penalties or charges. Any
interest earned with respect to the Government Funds and Other Savings
Account or the Improvements Account shall be for the benefit of Buyer.

                  (b) GOVERNMENT FUNDS AND OTHER SAVINGS ACCOUNT. After
Closing and until the issuance of the first building permit by the City for
construction of any building on the Land (the "Issuance Date"), Seller and
Buyer will each cooperate with the other in order to (i) cause Buyer, or any
assignee of Buyer's interest in the Land pursuant to a transfer or assignment
effective prior to the Issuance Date, to receive funds, credits or similar
monetary consideration from any governmental agency or public utility in
connection with the acquisition and/or development of the Land and/or the
conducting of business operations thereon (including, but not limited to,
funds for relocation costs and employee training), on terms and conditions
which Buyer is willing to accept in its sole discretion (the "Government
Funds") and (ii) determine whether there are any development-related and/or
construction-related expenses which Seller may assist Buyer in saving or
otherwise reducing (including, but not limited to, by performing additional
improvement work for Buyer and by utilizing economies of scale in order to
obtain better pricing for Buyer from consultants than Buyer could otherwise
obtain on its own), on terms and conditions which Buyer is willing to accept
in its sole discretion (the "Other Savings"). Notwithstanding anything to the
contrary contained herein, Seller shall not receive any credit pursuant to
this paragraph in connection with any of the funds, credits or similar
monetary consideration which are contemplated to be received by Buyer from
governmental agencies or public utilities as set forth in Exhibit C attached
hereto and incorporated herein by this reference or to the extent such
consideration reduces or offsets the costs of the Seller Improvements or
other obligations of Seller under this Agreement. To the extent Buyer, or any
assignee of Buyer's interest in the Land pursuant to a transfer or assignment
effective prior to the Issuance Date, at any time on or before the Issuance
Date, (i) receives (A) any Government Funds or (B) a written commitment which
Buyer is willing to accept in its sole judgment, from any governmental agency
or public utility that Buyer (or any of its successors in interest) will
receive any such Government Funds subject only to conditions reasonably
acceptable to Buyer, and provided that Seller's efforts have caused such
Government Funds to be made available or such commitment to be entered into,
or (ii) obtains any Other Savings or Seller enters into a binding written
agreement with Buyer to cause any such actions to be taken subject only to
conditions reasonably acceptable to Buyer, Seller shall have the right to a
release from the Government Funds and Other Savings Account in an amount
equal to the Monetary Value of such

                                       3

<PAGE>

 Government Funds received, or to be received, and/or such Other Savings
obtained, or to be obtained, by Buyer or its successors in interest. The
"Monetary Value" means the amount received, or to be received, net of
reasonable costs incurred by Buyer to generate or qualify for such amount
which would not otherwise have been incurred by Buyer, discounted from the
date of anticipated receipt to the date of proposed release at a discount
rate of six percent (6%) per annum. The release shall be confirmed in a
written instruction to Escrow Holder prepared by Seller, with a copy given to
Buyer. Unless Buyer gives written objection to Seller and to Escrow Holder
within five (5) days after the delivery to Buyer and Escrow Holder of any
such instruction by Seller (together with a detailed explanation of the
reason why the amount requested in such instruction is not to be released
pursuant to this paragraph), Escrow Holder shall remit such payment to Seller
from the Government Funds and Other Savings Account in the amount requested
by such instruction. Escrow Holder shall remit payment to Seller if Buyer
does not provide such written notice within such five (5) day period. If the
Monetary Value of Government Funds received, or to be received, plus the
Monetary Value of Other Savings obtained, or to be obtained, by Buyer or its
successors in interest is in excess of One Million Three Hundred Fifteen
Thousand Five Hundred Twelve Dollars ($1,315,512), then Seller shall be
entitled to receipt of all amounts contained in the Government Funds and
Other Savings Account, but Buyer shall have no obligation to make any
additional payments to Seller. If Buyer, or any assignee of Buyer's interest
in the Land pursuant to a transfer or assignment effective prior to the
Issuance Date, has not received, on or before the Issuance Date, Government
Funds or written commitment from any governmental agency satisfying the
foregoing provisions that Buyer (or its successors in interest) will receive
Government Funds, plus Other Savings or a written agreement with Seller
satisfying the foregoing provisions which will result in Buyer obtaining
Other Savings, in an amount at least equal to One Million Three Hundred
Fifteen Thousand Five Hundred Twelve Dollars ($1,315,512), then Buyer shall
have the right to demand a release from the Government Funds and Other
Savings Account of all remaining amounts therein (to the extent Seller has
not previously submitted a demand for any of such amounts and is entitled to
payment based upon the provisions set forth above) by giving written notice
of such demand to Escrow Holder and Seller. Unless Seller gives written
objection to Buyer and Escrow Holder within five (5) days after the delivery
to Seller and Escrow Holder of any such demand by Buyer, together with a
detailed explanation of the reason why the amounts remaining in the
Government Funds and Other Savings Account should not be released to Buyer
pursuant to this paragraph, Escrow Holder shall remit such payment to Buyer
from the Government Funds and Other Savings Account in the amount remaining
therein. Escrow Holder shall remit payment to Buyer if Seller does not
provide such written notice within such five (5) day period.

                  (c) IMPROVEMENTS ACCOUNT. The Improvements Account shall
consist of two pools of funds, to be identified as the "Phase I Pool" and the
"Phase IIA Pool" (which also may be referred to herein individually as a
"Pool" or collectively as the "Pools"). The Phase I Pool shall be Eleven
Million One Hundred Forty-Seven Thousand Twenty-Eight and 48/100 Dollars
($11,147,028.48). The Phase IIA Pool shall be Four Million One Hundred Twelve
Thousand Nine Hundred Ten and 72/100 Dollars ($4,112,910.72). Funds shall be
disbursed from the Phase I Pool and the Phase IIA Pool only as provided in
this Section 6(c). The Funds in the Phase I Pool shall be used solely to pay
seventy-two and 0188/10,000 percent (72.0188%) (the "Percentage") of the
costs of the items (the "Phase I Items") listed under the "Phase I Budget" in
the budget attached hereto as Exhibit D (the "Budget") (which items include
mass grading and

                                       4

<PAGE>

the Seller Improvements on the Land and certain adjacent property described
in the applicable plans for the Seller Improvements). The remaining
twenty-seven and 9812/10,000 percent (27.9812%) of the costs of the Phase I
Items shall be paid by Seller (including by funds from the construction loan
to be obtained by Seller in connection with the construction of the Phase I
Items). The funds in the Phase IIA Pool shall be used solely to pay the
Percentage of the costs of the items (the "Phase IIA Items") listed under the
"Phase IIA Budget" in the Budget (which items shall include only on-site
improvements for the portion of the Land (the "Phase IIA Land") included in
the Phase IIA Map (as defined in Section 13(f) below)). The remaining
twenty-seven and 9812/10,000 percent (27.9812%) of the costs of the Phase IIA
Items shall be paid by Seller (including by funds from the construction loan
to be obtained by Seller in connection with the construction of the Phase IIA
Items). After Closing, and subject to satisfaction of the conditions
precedent and the disbursement requirements set forth below, Seller shall
have the right to submit requests for disbursements from the applicable Pool
with the progress of the work of the Phase I Items and the Phase IIA Items no
more frequently than once in the aggregate in any calendar month. Such
disbursement requests shall be submitted to Buyer and Escrow Holder, shall
include invoices for the Phase I Items and the Phase IIA Items evidencing
amounts payable by Seller towards the cost of such items set forth in the
Budget, and shall be in the amount of the Percentage of the invoices for such
Phase I Items and Phase IIA Items delivered with the request to Buyer and
Escrow Holder. Prior to the first request for disbursement from a Pool,
Seller shall deliver to Buyer a detailed cost breakdown for each Phase I Item
and Phase IIA Item in the Budget, and Seller shall deliver an updated cost
breakdown with each subsequent request for disbursement. Upon disbursement of
any such funds, the remaining balance of the funds in the applicable Pool
shall be correspondingly reduced. The conditions precedent to the
disbursement of funds from the Phase I Pool are that (i) the Phase I Map (as
defined in Section 13(f) below) shall have been accepted by the City of
Oceanside, (ii) Seller shall have posted such bonds as are required by the
Phase I Map, (iii) Seller shall have entered into a subdivision improvement
agreement with the City of Oceanside with respect to the improvements
required by the Phase I Map, (iv) Buyer shall have received a letter
agreement from the City of Oceanside, in form acceptable to Buyer, in Buyer's
sole discretion, providing that Buyer's development and occupancy of the
Phase IIA Land for its intended use shall not be conditioned upon the
completion of the off-site improvements required by the Phase IIA Map or
otherwise by the City of Oceanside (the "City Development Letter"), (v) all
the conditions precedent to Seller's construction financing for the "Seller
Share" of the Budget for the Phase I Items, as shown in the Budget, shall
have been satisfied and Seller's lender shall be prepared to fund the loan
for the Seller Share of the Budget for such Phase I Items, and (vi) Seller
shall have obtained all applicable governmental permits, approvals and
authorizations required to complete the Phase I Items; provided, however,
that notwithstanding the foregoing, but subject to satisfaction of the
disbursement requirements set forth below, Seller shall be entitled to
request disbursements from the Phase I Pool for the Percentage of the total
cost of the mass grading and the City of Oceanside processing fee
(approximately One Hundred Sixty-Five Thousand Dollars ($165,000)) and major
drainage fee (approximately Eight Hundred Eleven Thousand Dollars ($811,000))
identified in the Phase I Budget prior to the recordation of the Phase I Map
provided that conditions (v) and, with respect to the mass grading, (iv) have
been satisfied. The conditions precedent to the disbursement of funds from
the Phase IIA Pool are that (i) the conditions precedent to the disbursement
of funds from the Phase I Pool have been satisfied, (ii) the Phase IIA Map
shall have been recorded and accepted by the City of Oceanside, (iii) Seller
shall have

                                       5

<PAGE>

posted such bonds as are required by the Phase IIA Map, (iv) Seller shall
have entered into a subdivision improvement agreement with the City of
Oceanside with respect to the improvements required by the Phase IIA Map, and
(v) Seller shall have obtained all applicable governmental permits, approvals
and authorizations required to complete the Phase IIA Items. Unless Buyer, in
its reasonable discretion, gives written objection to Seller and to Escrow
Holder within five (5) days after the delivery to Buyer and Escrow Holder of
any such request for disbursement by Seller (together with a detailed
explanation of the reason why the costs set forth in such request for
disbursement are not reimbursable pursuant to this paragraph), Escrow Holder
shall remit such payment to Seller from the applicable Pool of the
Improvements Account the Percentage of the amount of such invoiced cost as
provided above. Concurrently with the submission of all requests for
disbursements, Seller shall include with each submission the following
disbursement requirements: (i) conditional mechanics' lien releases relating
to the amounts being requested for release from the Improvements Account in
connection with such submission, if applicable, (ii) unconditional mechanics'
lien releases relating to the amounts disbursed from the Improvements Account
in connection with the immediately prior submission (except that this
subparagraph (ii) shall not apply with respect to the first such request), if
applicable, and (iii) an engineer's certification that the work which is the
subject of such request for disbursement has been performed in substantial
conformance with the approved plans therefor, if applicable. Buyer shall have
the right to obtain confirmation from its architect, construction consultant
and/or civil engineer as to the performance of the applicable work in
substantial conformance with the approved plans, as a condition to Buyer's
approval of any request for disbursement; provided that unless Buyer receives
confirmation from its architect, construction consultant and/or civil
engineer that the work is not being performed in substantial conformance with
the approved plans prior to the expiration of the above-referenced five (5)
day period, Buyer shall not have the right to object to the contemplated
release. Seller shall cooperate reasonably with Buyer and its
architect/engineer to inspect and verify the status of the work which has
been completed. Escrow Holder shall remit payment to Seller if Buyer does not
provide such written notice within such five (5) day period. Notwithstanding
the foregoing, in no event shall Seller be entitled to total disbursements
from either Pool comprising the Improvements Account in an amount in excess
of the relevant amount for the applicable Phase I Item or Phase IIA Item set
forth in the Budget prior to the satisfaction of the applicable milestones
for completion of such Phase I Item or Phase IIA Item set forth on Exhibit N.
If, upon Completion by Seller of all of the items set forth in the Budget,
any portion of the Improvements Account remains undisbursed (other than
interest earned thereon, which shall be for the benefit of Buyer as provided
in Section 6(a)), Escrow Holder shall remit such undisbursed amount to Seller
after written demand from Seller to Buyer and Escrow Holder, unless Buyer
gives written objection to Seller and to Escrow Holder within five (5) days
after the delivery to Buyer and Escrow Holder of any such demand by Seller
(together with a detailed explanation of the reason why such undisbursed
amount should not be disbursed to Seller). "Completion" of any improvement
shall not be deemed to have occurred until the following conditions have been
satisfied: Seller has delivered to Buyer (i) lien releases conditioned only
upon final payment in an amount to be covered by the final request for
disbursement relating to such improvement, (ii) evidence that the City
(and/or appropriate governmental authority) has completed and signed a final
inspection for such improvement, (iii) (A) the civil engineer of record shall
have delivered written confirmation to Buyer that the improvement has been
completed in substantial conformance with the approved plans and
specifications, and (B) Buyer's architect, construction

                                       6

<PAGE>

consultant or civil engineer shall not have disputed the foregoing
confirmation within five (5) days after delivery to Buyer of such
confirmation, and (iv) in the case of any grading of the Land, the soils
engineer of record has delivered written confirmation to Buyer that the work
has been completed in substantial conformance with the recommendations of the
soils report and the grading plan. Seller shall be responsible for and shall
pay all costs of the Phase I Items and the Phase IIA Items to the extent they
exceed the amounts held in the Phase I Pool and the Phase IIA Pool,
respectively. Notwithstanding the foregoing, subject to Section 29 below, if
Seller has not completed the applicable work by any of the milestones set
forth on Exhibit N prior to the date for the applicable milestone set forth
on Exhibit N, then Buyer shall have the right, but not the obligation, to
elect, by giving Seller written notice, to take over all or any portion of
the work contemplated by Exhibit D which accrues to the benefit of the Land,
including any work which must be in progress or completed in order to issue
development, construction and/or occupancy permits for the Land. In such
event, if Seller does not, within ten (10) business days of such notice, take
actions in order to perform the work contemplated by Exhibit D and diligently
pursue such actions to completion (but in any event within ninety (90) days
after such notice is delivered to Seller), then Buyer shall have the right to
take over such work, in which event Buyer shall also have the right to make
draws on the Improvements Account in the manner set forth above (except that
all references to Buyer shall be deemed to be references to Seller, and vice
versa, for purposes of determining the invoicing and approval provisions set
forth above in this paragraph). All contracts relating to the Seller
Improvements and the completion of Map Conditions which are Seller's
Responsibility (as defined in Section 13(d) below) hereunder shall expressly
include an assignment of Seller's rights thereunder to Buyer, at Buyer's
option, contingent upon exercise of such takeover right, at no additional
cost to Buyer. Seller hereby assigns to Buyer, at Buyer's option, contingent
upon Buyer's exercise of its takeover right, all plans, specifications,
permits, and warranties related to the work, to the extent required to allow
Buyer to complete the work, and Seller shall insure that all related
contracts permit such assignment at no additional cost to Buyer. Any such
assignments above shall be subordinate to any assignments of such rights to
the construction lender for the construction loan to be obtained by Seller in
connection with the construction of the Phase I Items and the Phase IIA
Items. Buyer's election to take over any work shall not cure or release any
default by Seller in timely completing the Seller Improvements or Map
Conditions which are Seller's Responsibility hereunder or relieve Seller of
liability for the costs thereof.

                  (d) ARBITRATION OF DISPUTES.

                           (i) Any disputes arising out of the matters in
Section 6(c) above shall be resolved through a binding arbitration conducted
by Robert Bein, William Frost & Associates ("RBF"), with Bob Kallenbaugh, or
such other person as mutually agreed upon by the parties, as the arbitrator.
Should either Buyer or Seller desire arbitration, such party shall send a
demand for arbitration, in accordance with the method specified in Section 20
below, to: (A) the non-demanding party, at the address in Section 20 below,
and (B) RBF, at Robert Bein, William Frost & Associates, 14725 Alton Parkway,
Irvine, California 92618, Attn: Mr. Bob Kallenbaugh. Notwithstanding the
submittal of a dispute for arbitration, Buyer shall continue to pay all
amounts not in dispute in accordance with Section 6(c) above and Seller shall
continue all work not in dispute.

                                       7

<PAGE>

                           (ii) Any disputes arising out of matters in
Section 6(b) above shall be resolved through a binding arbitration conducted
by a retired judge of the court, as arbitrator (whether referring to the
arbitrator in subsection (i) or (ii), the "Arbitrator"), in accordance with
California Code of Civil Procedure Sections 1280 through 1294.2, as may be
amended from time to time (or any successor statutes). Should either Buyer or
Seller desire arbitration, such party shall send a demand for arbitration, in
accordance with Section 20 below, to the non-demanding party (whether such
notice is sent pursuant to subsection (i) or (ii), the "Arbitration Demand").

                           (iii) On or before the (2nd) business day after
receipt of such Arbitration Demand, the parties shall cooperate in good faith
in the voluntary, informal exchange of all non-privileged documents and
information relevant to the dispute, including copies of all documents in
their possession or control on which they rely in support of their position
and which they intend to introduce at the arbitration hearing. The parties
hereby agree that such arbitration process shall be conducted without
discovery and hereby expressly waive any other rights to formal discovery.

                           (iv) With respect to disputes to be resolved
pursuant to subsection (i) above, upon the third (3rd) business day after the
receipt of such Arbitration Demand, the parties shall commence arbitration at
9:00 a.m. at the offices of RBF or at such other location mutually agreed
upon by the parties. With respect to disputes to be resolved pursuant to
subsection (ii) above, upon the fifteenth (15th) business day after the
receipt of such Arbitration Demand, the parties shall commence arbitration at
9:00 a.m. at the offices of the Arbitrator or at such other location mutually
agreed upon by the parties. With respect to any arbitration pursuant to this
section, such arbitration shall last no longer than one (1) day and the
Arbitrator shall render his decision no later than one (1) business day after
the conclusion of the arbitration. Seller and Buyer agree that such decision
shall be binding and non-appealable, and that both parties shall submit to
Escrow Holder the Arbitrator's decision within one (1) business day of the
Arbitrator's decision.

                           (v) "NOTICE: BY INITIALING IN THE SPACE BELOW YOU
ARE AGREEING TO HAVE ANY DISPUTE ARISING OUT OF THE MATTERS INCLUDED IN THE
`ARBITRATION OF DISPUTES' PROVISION DECIDED BY NEUTRAL ARBITRATION AS
PROVIDED BY CALIFORNIA LAW AND YOU ARE GIVING UP ANY RIGHTS YOU MIGHT POSSESS
TO HAVE THE DISPUTE LITIGATED IN A COURT OR JURY TRIAL. BY INITIALING IN THE
SPACE BELOW YOU ARE GIVING UP YOUR JUDICIAL RIGHTS TO DISCOVERY AND APPEAL,
UNLESS THOSE RIGHTS ARE SPECIFICALLY INCLUDED IN THE `ARBITRATION OF
DISPUTES' PROVISION. IF YOU REFUSE TO SUBMIT TO ARBITRATION AFTER AGREEING TO
THIS PROVISION, YOU MAY BE COMPELLED TO ARBITRATE UNDER THE AUTHORITY OF THE
CALIFORNIA CODE OF CIVIL PROCEDURE. YOUR AGREEMENT TO THIS ARBITRATION
PROVISION IS VOLUNTARY."

"WE HAVE READ AND UNDERSTAND THE FOREGOING AND AGREE TO SUBMIT DISPUTES
ARISING OUT OF THE MATTERS INCLUDED IN THE `ARBITRATION OF DISPUTES'
PROVISION TO NEUTRAL ARBITRATION."

                                       8

<PAGE>

                  /s/ DA                             /s/ PS
                  ---------------------              ---------------------
                  Seller's Initials                  Buyer's Initials

         7. PROPERTY MATTERS. During the period beginning as of the Effective
Date and ending on August 31, 2000 (the "Due Diligence Period"), Buyer shall
have the right to review and approve the matters set forth in Sections 7(a),
(b) and (c) below.

                  (a) PRELIMINARY REPORT. Buyer shall examine the June 26,
2000 Preliminary Title Report No. 1246081-20 (the "Preliminary Report") for
the Land issued by First American Title Insurance Company (the "Title
Company"), including all schedules and exhibits thereto and together with
true and correct copies of all instruments giving rise to any exceptions to
title to the Land. Seller shall not be obligated to cause any of the matters
listed as exceptions to title on the Preliminary Report to be removed. If the
Title Company discloses any additional exceptions to title which are not
shown on the Preliminary Report, then Buyer shall have until the later to
occur of (i) three (3) business days after receipt of written notice of the
existence of such additional exception or (ii) the expiration of the Due
Diligence Period, to review such exception. Unless Buyer gives Seller and
Escrow Holder written notice of Buyer's disapproval of such additional
exception prior to the expiration of the foregoing period, Buyer shall be
deemed to have approved of such additional exception. If Buyer timely gives
written notice to Seller and to Escrow Holder of Buyer's disapproval of such
additional exception, then Seller may either elect to terminate this
Agreement by giving written notice thereof to Buyer and to Escrow Holder or
to use its good faith efforts to cause such additional exception to be
removed from title prior to the Closing. If Seller is unable to cause such
additional exception to be removed from title prior to the Closing (after
electing to use good faith efforts to attempt to do so), then this Agreement
shall terminate and the provisions of Section 7(e) shall apply.
Notwithstanding the foregoing, if the Title Company discloses any new
monetary encumbrances (except as contemplated by this Agreement) which are
the result of actions of Seller or the Fee Owner, then Seller shall cause
such monetary encumbrances to be removed from title at or prior to Closing.

                  (b) PROPERTY STUDIES. Buyer may enter upon the Land, at
reasonable times after the giving of at least twenty-four (24) hours' notice to
Seller (unless Seller consents at the time of entry), for the purpose of
conducting such tests and studies as Buyer may deem necessary and desirable, all
at Buyer's sole cost. Seller hereby represents and warrants that it is
authorized and entitled by the Fee Owner to permit access to the Land by Buyer
on the terms and conditions set forth herein. Immediately after performing such
tests and studies, Buyer shall restore the Land to substantially the same
condition as prior to performing such tests and studies, including, without
limitation, recompaction or removal of any disrupted soil or material as Seller
may reasonably direct. Notwithstanding anything to the contrary contained
herein, Buyer shall not conduct any drilling on the Land or otherwise disturb
any soil on the Land without Seller's prior written consent, which shall not be
unreasonably withheld or delayed. Seller represents and warrants that the
documents listed on Exhibit Q attached hereto and incorporated herein by this
reference constitute all of the soils reports, geotechnical reports, hazardous
materials reports and environmental surveys in Seller's possession and relating
to the Land. Seller shall make available for inspection by Buyer at Seller's
offices all other materials in Seller's possession relating to the Land.
Additionally, Buyer shall have the right during the Due Diligence Period to
review and approve the zoning, land use and other governmental regulations,
laws, permits and approvals, and the design guidelines, tax bills, applicable
fees and title and survey matters, which

                                       9

<PAGE>

are applicable to the Land, and to otherwise determine the economic
feasibility of developing the Land for Buyer's intended use and the
availability of water to the Land. Buyer hereby agrees to indemnify, protect
and hold Seller and its affiliates and their respective officers, directors,
members, shareholders, contractors, subcontractors, agents and employees
harmless from any and all losses, damages, costs, liabilities and expenses,
including, without limitation, reasonable attorneys' fees (and those fees
incurred upon any appeals) and court costs incurred or suffered by Seller or
its affiliates or their respective officers, directors, members,
shareholders, contractors, subcontractors, agents and employees, to the
extent caused by the negligence or willful misconduct of Buyer or Buyer's
representatives during their inspections of the Land. Prior to entering the
Land, Buyer shall obtain a policy of commercial general liability insurance
in a minimum amount of One Million Dollars ($1,000,000) per occurrence/annual
aggregate, naming Seller and its members as additional insureds, and Buyer
shall provide Seller with a certificate evidencing that such insurance is in
place and that such additional insureds are named.

                  (c) GOVERNMENTAL APPROVALS. Buyer shall be reasonably
satisfied with its ability to obtain all City and governmental approvals
relating to Buyer's intended use of the Land other than the Phase I Map,
Phase IIA Map and those governmental approvals to be obtained by Seller in
order to complete the Seller Improvements.

                  (d) SUBDIVISION MAP ACT. At or prior to Closing, Seller
shall have complied with all applicable laws and ordinances, including,
without limitation, the California Subdivision Map Act and Department of Real
Estate Regulations, necessary to convey the Land to Buyer as a legally
subdivided parcel. Seller shall use commercially reasonable efforts and
diligence to process City approval of the Lot Line Adjustment, at Seller's
cost, in compliance with applicable laws. If Seller is not in compliance with
such laws and ordinances after Seller's exercise of such commercially
reasonable efforts, then Buyer or Seller may elect to terminate this
Agreement. Notwithstanding anything to the contrary contained herein, if
Seller is not in compliance with the California Subdivision Map Act at the
scheduled time of Closing, the time of Closing shall be extended for such
reasonable periods as are necessary for Seller to so comply as long as such
delays do not unreasonably and adversely affect Buyer's intended use of the
Land, but not to exceed ninety (90) days.

                  (e) TERMINATION. Unless Buyer gives written notice to
Seller and to Escrow Holder stating that Buyer is satisfied with all of the
items in Sections 7(a) through (c) above prior to the expiration of the Due
Diligence Period, Buyer shall be deemed to have disapproved of such items and
this Agreement shall automatically terminate as of the expiration of the Due
Diligence Period. Upon termination of this Agreement pursuant to Section
7(a), (b), (c) or (d) above, Escrow Holder shall return all funds deposited
into Escrow and any documents held by Escrow Holder to the parties depositing
same. All title and Escrow cancellation charges, if any, shall be paid
equally by Buyer and Seller. Upon return of such funds and documents by
Escrow Holder and subject to the indemnity in Section 7(b) above and Section
12 below, the parties hereto shall have no further rights or obligations
under this Agreement, which shall be deemed canceled for all purposes.

                                       10

<PAGE>

         8.   DOCUMENTS AT CLOSING.

                  (a) COVENANT INSTRUMENT AND CC&R INSTRUMENT. Buyer
acknowledges that Seller intends to encumber the Land with certain
conditions, covenants and restrictions by means of (i) a Declaration of
Covenants, Conditions and Restrictions (the "CC&R Instrument"), the
preliminary form of which is attached hereto and incorporated herein as
Exhibit E and (ii) an Agreement of Covenants (the "Covenant Instrument") in
substantially the form attached hereto and incorporated herein as Exhibit F.
Prior to Closing, Buyer and Seller shall execute, have acknowledged and
deliver into Escrow the Covenant Instrument. Buyer and Seller shall use their
best efforts to agree upon and mutually finalize the form of CC&R Instrument
and cause the same to be recorded no later than the recordation of the Phase
I Map. Buyer shall cause any and all other persons or entities to which Buyer
conveyed any interest in the Land, to execute, recordable instruments
subordinating their interests in the Land to the CC&R Instrument.

                  (b) TRANSFER AND POSSESSION. Seller shall deliver (or cause
to be delivered) through Escrow an executed and recordable Grant Deed in the
form attached hereto and incorporated herein as Exhibit G (the "Grant Deed")
sufficient to convey good title to Buyer, subject only to the exceptions
described in the next following subsection. Seller will need to enter the
Land after Closing for the purpose of causing the improvements contemplated
by Section 14(a) to be completed. As a result, Seller and Buyer shall enter
into a License Agreement in the form attached hereto and incorporated herein
as Exhibit H (the "License Agreement") granting such right to Seller as of
Closing. When all required funds and instruments have been deposited into
Escrow by the appropriate parties and when all other conditions to Closing
have been fulfilled, Escrow Holder shall cause the Grant Deed to be recorded,
shall immediately thereafter cause the Covenant Instrument to be recorded,
and shall immediately thereafter cause the Option Memorandum (as defined in
Section 31) to be recorded. Buyer shall not be entitled to possession of the
Land until the Grant Deed and the Covenant Instrument have been so recorded.
Additionally, as of Closing, Escrow Holder shall deliver a fully executed
copy of the License Agreement to each of Seller and Buyer.

                  (c) TITLE. Seller shall cause the Title Company to be
prepared or committed to deliver to Buyer an ALTA Standard Coverage With
Regional Exceptions Owner's Policy of Title Insurance dated as of Closing,
together with a mechanic's lien endorsement insuring Buyer's title against
mechanics' or materialmens' liens for all work in process or with priority on
or before conveyance of title to Buyer (the "Title Policy"). If Buyer
requires an extended coverage ALTA Owner's Policy of Title Insurance or
endorsements, Buyer shall notify Escrow Holder of such requirement and
deliver to Escrow Holder, at Buyer's sole cost and expense and in a timely
manner so as to not delay the Closing, an ALTA survey adequate for the
issuance of such ALTA extended coverage policy. The Title Policy shall insure
Buyer's title to the Land in an amount equal to the Purchase Price, and show
title vested in Buyer subject only to:

                           (i)   All exceptions set forth on the Grant Deed;

                           (ii)  The usual printed Title Company exceptions;

                           (iii) All exceptions shown on the Preliminary
Report and not required to be removed by Seller pursuant to Section 7(a); and

                                       11

<PAGE>

                           (iv) All other exceptions approved in writing by
Buyer.

Pending Closing, Buyer shall not, without the prior written consent of
Seller, which consent may be withheld in Seller's sole discretion, record
this Agreement or a short form or memorandum hereof, or take any other action
which would materially and adversely affect the marketability of Fee Owner's
title to the Land.

                  (d) ASSIGNMENT AGREEMENT. Within five (5) business days
after request therefor, Buyer shall deliver to Seller an executed agreement
whereby Buyer consents to Seller's assignment of its rights under this
Agreement to its lender (with such other provisions as such lender may
reasonably require), in a form reasonably approved by Buyer and such lender.

         9. UTILITY EASEMENTS. Buyer acknowledges that, in order to
facilitate development of the surrounding real property, Seller may desire to
establish easements over portions of the Land for the installation and
maintenance of gas, electric, telephone, sewer, water, storm drain, cable
television and other utilities which are normally associated with similar
developments, provided, however, that such easements shall be located within
the building setback areas for the Land, shall not unreasonably interfere
with Buyer's intended use of the Land and shall be subject to Buyer's prior
written approval, which approval shall not be unreasonably withheld or
delayed. In addition, all construction or improvement work within the
easement area shall be completed on or before Completion of the Seller
Improvements. Without limiting the foregoing, Seller agrees to cause the 69KV
power line currently existing across the Land to be relocated as depicted on
Exhibit I attached hereto and incorporated herein by this reference. Such
relocation shall be completed at the sole cost and expense of Seller,
provided that if Buyer desires any portion of such power line to be placed
underground, then Buyer shall pay to Seller in advance, all additional costs
to be incurred by Seller in connection with the undergrounding of such power
line.

         10. ASSIGNMENT. Until the Completion by Seller of the Seller
Improvements required to be installed by Seller pursuant to Section 14(a) below
and the completion of the Map Conditions which are Seller's Responsibility
hereunder, Seller shall not assign its rights or interests under this Agreement
without Buyer's prior written consent, which consent may be withheld by Buyer in
its sole discretion. After the Completion by Seller of the Seller Improvements
required to be installed by Seller pursuant to Section 14(a) below and the
completion of the Map Conditions which are Seller's Responsibility hereunder,
Seller shall have the right to assign its rights or interests under this
Agreement with Buyer's consent, which shall not be unreasonably withheld.
Notwithstanding the foregoing, prior to Completion of such Seller Improvements
and completion of the Map Conditions which are Seller's Responsibility, Seller
may assign its rights or interests under this Agreement without Buyer's consent
(provided that Buyer shall first be given a fully executed copy of the written
assignment in a form reasonably acceptable to Buyer, and provided that no such
assignment shall relieve Seller of liability hereunder), to (a) any entity which
controls, is controlled by, or is under common control with Seller (for purposes
hereof "control" means the legal ability to make the day-to-day business
decisions for an entity), provided that the assignee shall assume, in writing,
for the benefit of Buyer, the obligations, liabilities, representations and
warranties of Seller under this Agreement, or (b) a lender as security for a
loan, the proceeds of which will be utilized in connection with the development
of Ocean Ranch. In the event that any such lender requires an agreement such as
is described in Section 8(d)

                                      12

<PAGE>

above as a condition to such loan, Buyer agrees to enter into an agreement
reasonably required by such lender. Buyer shall not assign its rights or
interests hereunder without Seller's prior written consent, which consent may
be withheld by Seller in its sole discretion. Notwithstanding the foregoing,
Buyer may assign all (but not less than all) of its rights and interests
under this Agreement, without Seller's consent (provided that Seller shall
first be given a fully executed copy of the assignment in a form reasonably
acceptable to Seller, and provided that no such assignment shall relieve
Buyer of liability hereunder), to (a) any entity which controls, is
controlled by, or is under common control with Buyer (for purposes hereof
"control" means the legal ability to make the day-to-day business decisions
for an entity), provided that the assignee shall assume, in writing, for the
benefit of Seller, the obligations, liabilities, representations and
warranties of Buyer under this Agreement, (b) any entity resulting from the
merger, consolidation or other reorganization with Buyer whether or not Buyer
is the surviving entity, (c) any entity which acquires all or substantially
all of the assets or stock of Buyer or (d) any entity as part of a
sale-leaseback, synthetic lease, operating lease or similar transaction
pursuant to which Buyer or a permitted assignee under subparagraph (a), (b)
or (c) above leases back the Land pursuant to a written lease of at least ten
(10) years (not including options). Any attempted assignment made in
violation of this Section shall be null and void.

         11. TIME OF ESSENCE AND DEFAULTS. Time is of the essence of every
provision of this Agreement in which time is an element. Failure by one party
to perform any obligation within the time and on the terms and conditions
required hereunder shall discharge the other party's duties and obligations
to perform hereunder upon written notice or demand from the other party.
However, if Escrow is not in a condition to close by the agreed Closing Date,
Escrow Holder shall continue to comply with the instructions contained herein
until a written demand has been made by a party entitled to do so for the
cancellation of Escrow, as described below. Escrow Holder shall notify the
other party of any such demand, and shall immediately cancel Escrow without
any further instructions from any party.

                  (a) SELLER'S FAILURE. If Seller fails (i) to deposit the
Grant Deed pursuant to Section 8(b) above, or (ii) to be in a position by the
scheduled Closing Date to convey title to the Land in accordance with this
Agreement subject only to the matters described in Section 8(c) above, and
Buyer is unwilling to accept such title to the Land as Seller may be able to
convey without any agreed diminution in the Purchase Price, then, without
prejudice to any rights to damages which Buyer may have against Seller,
Seller shall be in default under this Agreement and Buyer may terminate this
Agreement and the Escrow by giving written demand to Seller and Escrow
Holder. In the event of any such termination, (A) Escrow Holder shall
promptly return all funds and shall return all instruments to the parties
which had deposited the same and (B) all title and Escrow cancellation
charges shall be charged to Seller. Such termination shall not cure or excuse
a default by Seller hereunder or impair or waive any rights or remedies
available to Buyer as a result of Seller's default, except as otherwise
expressly provided in this Agreement.

                  (b) BUYER'S FAILURE. IF ESCROW DOES NOT CLOSE DUE TO BUYER'S
BREACH OF THIS AGREEMENT, THEN SELLER SHALL RETAIN ALL SUMS THEN HELD BY ESCROW
HOLDER PURSUANT TO SECTION 4(a) AND/OR SECTION 4(b) ABOVE, TOGETHER WITH
INTEREST EARNED THEREON, AS LIQUIDATED DAMAGES, WHICH AMOUNT IS THE BEST
ESTIMATE BY THE PARTIES OF THE DAMAGES SELLER WOULD SUFFER FROM SUCH BREACH, IT
BEING AGREED

                                       13

<PAGE>

THAT IT IS EXTREMELY DIFFICULT, IF NOT IMPOSSIBLE AND IMPRACTICABLE, TO FIX
THE EXACT AMOUNT OF DAMAGE WHICH WOULD BE INCURRED BY SELLER AS A RESULT OF
SUCH DEFAULT BY BUYER. THEREUPON ESCROW SHALL BE CANCELED AS PROVIDED ABOVE,
ALL INSTRUMENTS SHALL BE RETURNED TO THE RESPECTIVE PARTIES WHO DEPOSITED
SAME, THE PARTIES SHALL COMPLY WITH SECTION 12 BELOW AND BUYER SHALL PAY ALL
TITLE AND ESCROW CANCELLATION CHARGES. IN ADDITION, ESCROW HOLDER IS HEREBY
IRREVOCABLY INSTRUCTED BY BUYER AND SELLER TO DISBURSE TO SELLER ALL SUCH
SUMS THEN HELD BY ESCROW HOLDER PURSUANT TO SECTION 4(a) AND/OR SECTION 4(b)
ABOVE AS LIQUIDATED DAMAGES FOR BUYER'S FAILURE TO COMPLETE THE PURCHASE OF
THE LAND AS PROVIDED HEREINABOVE, PURSUANT TO CALIFORNIA CIVIL CODE SECTIONS
1671 ET. SEQ. BUYER AGREES THAT THE LIQUIDATED DAMAGES AS SET FORTH IN THIS
PARAGRAPH RELATE TO DAMAGES WHICH SELLER IS ENTITLED TO RECEIVE AS A RESULT
OF BUYER'S FAILURE TO CLOSE ESCROW, BUT DO NOT LIMIT SELLER'S RIGHTS IN THE
EVENT OF BREACHES BY BUYER PURSUANT TO THE INDEMNITY OBLIGATIONS OR THE
POST-CLOSING OBLIGATIONS OF BUYER SET FORTH HEREIN. THE PAYMENT TO SELLER OF
SUCH LIQUIDATED DAMAGES SHALL CONSTITUTE SELLER'S SOLE AND EXCLUSIVE REMEDY
AGAINST BUYER FOR BUYER'S FAILURE TO COMPLETE THE PURCHASE OF THE LAND AS
PROVIDED HEREINABOVE, ALL OTHER REMEDIES FOR SUCH FAILURE BEING EXPRESSLY
WAIVED BY SELLER, INCLUDING BUT NOT LIMITED TO ALL RIGHTS SELLER MAY HAVE
PURSUANT TO CALIFORNIA CIVIL CODE SECTION 3389 TO SPECIFICALLY ENFORCE THIS
AGREEMENT.

                  Buyer's Initials                   Seller's Initials
                  /s/ PS                             /s/ DA
                  ---------------------              ----------------------

         12. FURTHER DOCUMENTS AND ACTS. Each of the parties hereto agrees to
cooperate in good faith with each other, and to execute and deliver such
further documents and perform such other acts as may be reasonably necessary
or appropriate to consummate and carry into effect the transactions
contemplated under this Agreement. If this Agreement is terminated for any
reason, Buyer shall return to Seller any studies, reports or other documents
previously supplied to Buyer by Seller.

         13. REPRESENTATIONS, WARRANTIES AND COVENANTS OF BUYER.

                  (a) SOLE RELIANCE. Except as expressly set forth herein,
Buyer represents and warrants that it is relying solely upon its own
inspection, investigation and analyses of the Land in purchasing the Land and
is not relying in any way upon any representations, statements, agreements,
warranties, studies, reports, descriptions, guidelines or other information
or material furnished by Seller or its representatives, whether oral or
written, express or implied, of any nature whatsoever regarding any of the
foregoing matters. Notwithstanding the foregoing, Seller acknowledges that
Buyer is relying on Seller's construction of the Seller Improvements pursuant
to Section 14(a) below and Seller's completion of the Map Conditions which
are Seller's Responsibility hereunder.

                                       14

<PAGE>

                  (b) AS IS, WHERE IS. Except as expressly set forth herein,
Buyer represents and warrants that it is acquiring the Land "AS IS, WHERE IS"
without representation by Seller, and that no patent or latent condition
affecting the Land in any way, whether or not known or discoverable or
hereafter discovered, shall affect Buyer's obligation to purchase the Land or
any of Buyer's other obligations contained in this Agreement, nor shall any
such condition give rise to any right of damages, rescission or otherwise
against Seller. Notwithstanding the foregoing, Seller acknowledges that Buyer
is relying on Seller's agreement to construct the Seller Improvements
pursuant to Section 14(a) below and Seller's completion of the Map Conditions
which are Seller's Responsibility hereunder.

                  (c) U. S. LAND SALES ACT. Buyer is informed by Seller that
the Land is currently zoned by the appropriate governmental authority for
industrial or commercial development or will be restricted to such uses by
the CC&R Instrument and/or other recorded documents; that the appropriate
local authorities have approved, or will approve prior to Closing, access
from the Land to a public street or highway; and that Seller intends that
this sale of the Land comply with the exemption requirements of the
Interstate Land Sales Full Disclosure Act (the "Act"). Accordingly, Buyer
hereby represents and warrants to Seller as follows:

                           (i) It is a duly organized corporation,
partnership, trust or other business entity which is engaged in commercial or
industrial business;

                           (ii) It has been represented in this transaction
by an independent attorney, accountant, real estate broker, investment
advisor or other representative of its own selection; and

                           (iii) It is purchasing the Land either (x)
substantially for its own use, or (y) under a binding commitment to sell or
lease the Land to an entity which meets the requirements of subparagraph (i)
above, is engaged in commercial or industrial business, and is not affiliated
with Seller or its agent.

                  (d) SUBDIVISION MAP CONDITIONS. Buyer understands that in
connection with the subdivision of certain real property of which the Land is
a part, the City imposed certain map conditions, a copy of which is attached
hereto as Exhibit R and incorporated herein by this reference (the "Map
Conditions"). Seller shall comply with those Map Conditions which are listed
on Exhibit R as "Seller's Responsibility", and Buyer shall comply with those
Map Conditions which are listed on Exhibit R as "Buyer's Responsibility." All
Map Conditions which are Seller's Responsibility and which may impede or
delay issuance of building permits for Buyer's improvements shall be
completed in good and workmanlike manner by December 31, 2001. Further, all
Map Conditions which are Seller's Responsibility and which may impede or
delay issuance of a certificate of occupancy for Buyer's improvements shall
be timely completed, in good and workmanlike manner, so as to not impede or
delay the issuance of such certificate of occupancy.

                  (e) UTILITIES. Buyer covenants that, to the extent
applicable, unless waived by the City, Buyer shall be fully responsible for
the payment of, and Buyer covenants that Buyer shall pay when due, all
hook-up, connection and usage fees for gas, electric, telephone, sewer,
water, storm drain and all other utilities which are normally associated with
the development and

                                       15

<PAGE>

operation of buildings similar to the buildings which Buyer and Seller
contemplate that Buyer will construct on the Land (the "Buildings").

                  (f) MAPPING. Seller has informed Buyer that Seller will
record a map consisting of Lots 1, 2, 3, 4 and 5 of Tentative Tract Map No.
T-1-99 per the milestone date of Phase I on Exhibit N (the "Phase I Map").
The Phase I Map shall have a lot configuration of the portion of the Land
included therein approved by Buyer and providing for the dedication and
improvement of Corporate Center Drive providing access to the Phase I Land
adequate for Buyer's intended use of the Phase I Land. Seller will record a
second map consisting of, at a minimum, three lots (Lots 7, 8 and 9 of such
tract) per the milestone date of Phase IIA on Exhibit N (the "Phase IIA
Map"). The Phase IIA Map shall have a lot configuration of the Phase IIA Land
approved by Buyer and providing for the dedication and improvement of the
portion of Ocean Ranch Boulevard providing access to the Phase IIA Land
adequate for Buyer's intended use of the Phase IIA Land. To the extent
required by the applicable governmental agency, Buyer covenants to execute
(and cause its lenders, if any, to execute) any such maps reasonably
requested by Seller in connection therewith. Buyer shall execute (and cause
its lenders, if any, to execute) any such documents within five (5) days
after request therefor by Seller. Notwithstanding the foregoing, Buyer shall
not be required to execute any such documents if such documents impose on
Buyer requirements or restrictions which would materially and adversely
affect Buyer's contemplated use of the Land or any obligation or liability
related to the Seller Improvements or any other improvements to be
constructed by Seller.

                  (g) FEES.

                           (i) Buyer acknowledges that Buyer may be subject
to the payment of several fees as a result of its ownership, construction and
use of the Land and improvements thereon. Buyer shall be solely responsible
for paying all such fees, and Seller shall have no responsibility in
connection with the payment of any such fees. Notwithstanding the foregoing,
Buyer believes that it will obtain exemptions from all, or substantially all,
of such fees. Notwithstanding anything to the contrary set forth herein, if
Buyer has obtained or obtains an exemption for any such fees, Buyer shall not
be obligated to pay amounts to Seller in connection with credits relating to
such fees; however, if Buyer has not obtained or does not obtain an exemption
for any such fees but instead such fees will not be applicable to Buyer due
to the previous actions of Seller, then Buyer shall pay to Seller amounts in
connection with credits relating to such fees, as provided in Subsection (ii)
below.

                           (ii) Seller may in the future have credits
available to satisfy certain fees which Buyer is obligated to pay pursuant to
subsection (i) above. Buyer agrees to notify Seller at least ten (10)
business days prior to the date upon which Buyer intends to pay any fees for
which Buyer is responsible to any governmental agency, public utility or
school district in connection with the obtaining of building permits within
the Land. If Seller gives Buyer written notice prior to the expiration of
such ten (10) business day period that Seller has credits available to
satisfy any such fees (or that Seller has otherwise taken actions to cause
such fees to be satisfied, excluding, however, as a result of the inclusion
of amounts to satisfy such development impact fees within financings by
community facilities districts, assessment districts or similar mechanisms),
Buyer shall pay to Seller, in cash, at the expiration of such ten (10)
business day period, an amount equal to the amount of credits which Seller
has agreed to make available to

                                       16

<PAGE>

Buyer (or the amount Seller has previously caused to be satisfied, if
applicable, excluding, however, the inclusion of amounts to satisfy such
development impact fees within financings by community facilities districts,
assessment districts or similar mechanisms) and Seller shall make such
credits available to Buyer, if applicable. By giving Buyer notice that Seller
has credits available to satisfy any such fee (or that Seller has otherwise
taken actions to cause such fees to be satisfied, excluding, however, as a
result of the inclusion of amounts to satisfy such development impact fees
within financings by community facilities districts, assessment districts or
similar mechanisms), Seller will be representing that it has such credits
available and that it will assign them to Buyer for its use (or that it has
otherwise taken actions to cause such fees to be satisfied, excluding,
however, as a result of the inclusion of amounts to satisfy such development
impact fees within financings by community facilities districts, assessment
districts or similar mechanisms).

                  (h) CFD. Buyer agrees that Seller shall have the right,
either before or after the Closing, to cause a new community facilities
district or similar assessment district to be formed which encumbers the Land
along with other property, or to cause the issuance of new bonds and/or the
placement of new assessments under any existing assessment or improvement
district. If the formation of such community facilities district or
assessment district, or the issuance of new bonds and/or the placement of new
assessments under any existing assessment or improvement district, occurs
after the Closing, then Buyer shall execute (and cause its lenders, if any,
to execute) any documents reasonably required in connection with the
formation of such district and/or the sale of bonds by such district. Seller
agrees that any new community facilities district or assessment district
which Seller is instrumental in forming will apply to all, or substantially
all, of the approximately four hundred (400) acres commonly referred to as
Ocean Ranch. The provisions of this paragraph shall be binding on Buyer, and
on any successor purchaser of the Land or any part thereof. Buyer shall
notify any such successor purchaser of the obligations of this paragraph and
obtain such successor purchaser's written agreement to be bound by the same
with Seller being a third party beneficiary to such agreement.
Notwithstanding any provision contained in this subsection (h) to the
contrary, Buyer shall not be obligated to execute any documents as provided
above if, as a result thereof, it is contemplated that the special tax
assessment levied against the Land as a result of the creation of the
aforesaid community facilities district or assessment district will cause the
overall tax rate (regular and special assessments combined) imposed upon the
Land immediately following the sale of bonds by such community facilities or
assessment district to exceed two percent (2%) of the value of the Land and
any improvements thereon.

                  (i) CC&R INSTRUMENT. Buyer and Seller shall agree upon the
final form of CC&R Instrument to be recorded after the Closing. Therefore,
Buyer covenants to execute and acknowledge (and cause its lenders, if any, to
execute and acknowledge) such document so as to result in the CC&R Instrument
encumbering the Land. Buyer shall execute and acknowledge (and cause its
lenders, if any, to execute and acknowledge) such document within five (5)
days after request therefor by Seller.

                  (j) DEFAULTS. Buyer represents and warrants that the
execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby will not result in any breach of the terms
of, conditions of, or constitute a default under, any instrument or

                                       17

<PAGE>

obligation by which Buyer is bound, or violate any order, writ, injunction or
decree of any court in any litigation to which Buyer is a party.

                  (k) VALIDITY. Buyer represents and warrants that it is a
valid, legal and duly constituted corporation organized and in good standing
under the laws of the State of Delaware, that it has full right and authority
to enter into this Agreement to acquire the Land and to perform its other
obligations hereunder, and that the persons executing this Agreement and the
documents to be executed by Buyer at Closing are and will be duly authorized
so as to fully and legally bind Buyer.

                  (l) INTENTIONALLY OMITTED.

                  (m) SURVIVAL. All the representations, warranties,
covenants, agreements and indemnities of Buyer set forth in this Agreement
shall be true upon the execution of this Agreement, and shall be deemed to be
repeated at and as of Closing and shall survive Closing. Additionally, all
indemnities by Buyer of Seller set forth in this Agreement shall survive the
termination of this Agreement.

                  (n) INDEMNITY. Subject to the limitation on Seller's
remedies set forth in Section 11(b), Buyer hereby agrees to indemnify,
protect and hold harmless and defend Seller and its affiliates, and their
respective members, officers, directors, shareholders, employees and agents
from and against any and all losses, damages, costs, liabilities and
expenses, including, without limitation, reasonable attorneys' fees (and
those fees incurred upon any appeals) incurred or suffered by Seller or any
such other entities as a result of the breach by Buyer of any of the
representations and warranties contained in this Agreement, the failure by
Buyer to comply with any of the covenants contained in this Agreement or any
other default by Buyer under the terms of this Agreement. Section 11(b) sets
forth the damages which Seller is entitled to receive as a result of Buyer's
failure to close Escrow and this Section 13(n) applies only to breaches by
Buyer which are expressly excluded from such limitation on remedies.

         14. REPRESENTATIONS, WARRANTIES AND COVENANTS OF SELLER.

                  (a) SELLER IMPROVEMENTS. Seller, at its sole cost and
expense, shall cause the following improvements (collectively, the "Seller
Improvements") to be Completed (as defined in Section 6(c) above): (i) rough
grading of the Land in substantial conformance with the plans and
specifications identified in Exhibit J (the "Rough Grading"), (ii) utilities
stubbed to the boundary of the Land as more particularly described on Exhibit
K attached hereto (the "Utilities"), (iii) a brine line from Oceanside
Boulevard to the boundary of the Land as more particularly described on
Exhibit K connecting to the City line to be constructed in Oceanside
Boulevard, (iv) streets to the boundary of the Land as more particularly
described on Exhibit L attached hereto (the "Street Improvements"), (v)
perimeter landscaping as more particularly described and/or depicted on
Exhibit M attached hereto (the "Perimeter Landscaping") and (vi) relocation
of the 69 KV line as shown on Exhibit I. Notwithstanding the foregoing, the
parties acknowledge that the improvement plans for certain of the Seller
Improvements will be modified. Buyer shall have the right to approve any such
modifications to the improvement plans for any of the Seller Improvements.
Buyer shall respond to any request for approval of modifications to such
improvement plans as quickly as commercially reasonable, but in no event

                                       18

<PAGE>

later than ten (10) business days after Buyer's receipt of a written request
for approval. Failure of Buyer to disapprove any such request within such ten
(10) business day period (together with a detailed explanation of the reasons
for such disapproval) shall be deemed approval of such modifications. Seller
shall Complete the Seller Improvements in a good and workmanlike manner, in
conformance with the schedule ("Seller's Schedule") attached hereto as
Exhibit N. Seller shall be responsible for Completing the Seller Improvements
notwithstanding unanticipated soils or site conditions which may increase the
difficulty or cost of the work. In connection with such work, Seller shall
(i) comply with the provisions of the License Agreement attached hereto as
Exhibit H and (ii) comply with all applicable federal, state and local laws,
ordinances, rules, regulations and requirements and the terms of all
applicable permits, approvals and subdivision improvement agreements. Seller
shall process with all applicable governmental authorities having
jurisdiction over the Land or the surrounding areas all applications,
licenses, permits, approvals and authorizations reasonably required in order
to perform the Seller Improvements in a timely manner so as to enable Seller
to Complete the Seller Improvements in conformance with Seller's Schedule.
Upon Completion of the Seller Improvements located on the Land, Seller shall
assign to Buyer, on a non-exclusive basis, all warranties, guaranties,
certifications and the like obtained by Seller in connection with the design,
engineering, soils engineering and construction of such improvements to the
extent relating to the Land; provided, however, that Seller shall remain
responsible for performing all obligations under any maintenance or warranty
period required under the terms of any governmental permit or approval
relating to the Seller Improvements. In addition, Seller shall be responsible
for obtaining acceptance of all public improvements by the applicable public
agency.

                  (b) CC&R INSTRUMENT. Seller covenants to cause at least
those portions of Ocean Ranch depicted on Exhibit S attached hereto and
incorporated herein by this reference (the "Annexation Property") to be
annexed to the CC&R Instrument concurrently with the closing of the
transactions pursuant to which such properties are sold to third parties.
Buyer acknowledges that additional property may also be annexed to the CC&R
Instrument, but that Seller's covenant pursuant to this paragraph only
applies to the Annexation Property.

                  (c) DEFAULTS. Seller represents and warrants that the
execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby will not result in any breach of the terms
of, conditions of, or constitute a default under, any instrument or
obligation by which Seller is bound, or violate any order, writ, injunction
or decree of any court in any litigation to which Seller is a party.

                  (d) VALIDITY. Seller represents and warrants that it is a
valid, legal and duly constituted limited liability company, organized under
the laws of the State of California, that it has full right and authority to
enter into this Agreement to convey or to cause the Fee Owner to convey the
Land (provided that Buyer acknowledges that Ivey Ranch, Inc. is the fee owner
of the Land) and to perform its other obligations hereunder, and that the
persons executing this Agreement and the documents at Closing on behalf of
Seller are and will be duly authorized so as to fully and legally bind Seller.

                  (e) MAP CONDITIONS. Seller, at its sole cost and expense,
shall cause all work required to satisfy Map Conditions which are Seller's
responsibility pursuant to Exhibit R, to be Completed (as defined in Section
6(c)) on or before the milestone date(s) set forth on Exhibit N.

                                       19

<PAGE>

                  (f) SURVIVAL. All the representations, warranties,
covenants, agreements and indemnities of Seller set forth in this Agreement
shall be true upon the execution of this Agreement, and shall be deemed to be
repeated at and as of Closing and shall survive Closing. Additionally, all
indemnities by Seller of Buyer set forth in this Agreement shall survive the
termination of this Agreement. Notwithstanding the foregoing, if Seller
determines after the date of this Agreement and prior to Closing that any of
its representations or warranties set forth herein would be inaccurate if
repeated as of Closing, as a result of new information first discovered by
Seller after the date of execution of this Agreement, Seller shall give
written notice of such determination to Buyer within five (5) business days
after Seller's receipt of such information. Buyer shall have five (5)
business days after receipt of such notice to either terminate this Agreement
or to accept such representation, as modified by such new information. In the
event that Buyer does not give written notice to Escrow Holder and Seller
prior to the expiration of such five (5) day period of Buyer's election to
terminate this Agreement, Buyer shall be deemed to have accepted such
representation as modified by such notice. In no event shall Seller have any
liability to Buyer or otherwise be deemed to be in breach hereunder as a
result of any such new information obtained by Seller and disclosed to Buyer
as contemplated above.

                  (g) NON-FOREIGN AFFIDAVIT. Seller is not a foreign person
and is a United States person as defined in Section 7701(a)(30) of the
Internal Revenue Code, as amended. Prior to Closing, Seller shall deliver to
Escrow (with a copy to Buyer) an affidavit, executed and sworn to under
penalty of perjury, substantially in the form attached hereto as Exhibit O,
together with California Form 590.

                  (h) CONDEMNATION. To Seller's actual knowledge, without any
duty of independent investigation, there is no pending or threatened action
or governmental proceeding in condemnation or eminent domain with respect to
the Land or which would affect Seller's ability to complete the Seller
Improvements.

                  (i) LITIGATION. To Seller's actual knowledge, without any
duty of independent investigation, there is no litigation pending or
threatened against Seller or the Fee Owner in connection with the ownership
of the Land or which might detrimentally affect the value of the Land or the
use or operation of the Land for Buyer's intended purposes, or the ability of
Seller to perform its obligations under this Agreement.

                  (j) HAZARDOUS MATERIALS. To Seller's actual knowledge,
without any duty of independent investigation, there are no Hazardous
Materials located on the Land in violation of any Environmental Laws. As used
herein, Hazardous Materials shall include, but are not limited to, substances
which are flammable, explosive, corrosive, radioactive, toxic, asbestos or
asbestos-containing materials, or other substances defined or regulated as
hazardous substances, hazardous materials, toxic substances or hazardous
wastes in any of the Environmental Laws. "Environmental Laws" means all
governmental laws, statutes, ordinances, resolutions, rules, regulations,
restrictions and requirements applicable to the Land as presently in effect,
including without limitation the Comprehensive Environmental Response,
Compensation and Liability Act (42 U.S.C. Sections 9601, et seq.), the
Resource Conservation and Recovery Act (42 U.S.C. Sections 6901, et seq.),
the Clean Water Act (33 U.S.C. Sections 466, et seq.), the Safe Drinking
Water Act (14 U.S.C. Sections 300f, et seq.), the Hazardous Materials
Transportation Act (49 U.S.C. Sections 5101, et

                                       20

<PAGE>

                                               CONFIDENTIAL TREATMENT REQUESTED

seq.), the Toxic Substances Control Act (15 U.S.C. Sections 2601, et seq.),
the California Hazardous Waste Control Act (California Health and Safety Code
Sections 25100, et seq.), the California Hazardous Substances Account Act
(California Health and Safety Code Sections 25300, et seq.), the Safe
Drinking Water and Toxic Enforcement Act ("Proposition 65n") (California
Health and Safety Code Sections 25249.5, et seq.), and the Porter-Cologne
Water Quality Control Act (California Health and Safety Code Sections 13000,
et seq.), and any similar federal, state or local laws, regulations or
publications currently in existence.

                  (k) [CONFIDENTIAL TREATMENT REQUESTED]

                  (l) INDEMNITY. Seller hereby agrees to indemnify, protect
and hold harmless and defend Buyer and its affiliates, and their respective
officers, directors, shareholders, employees and agents from and against any
and all losses, damages, costs, liabilities and expenses, including, without
limitation, reasonable attorneys' fees (and those fees incurred upon any
appeals) incurred or suffered by Buyer or any such other entities as a result
of the breach by Seller of any of the representations and warranties
contained in this Agreement, the failure by Seller to comply with any of the
covenants contained in this Agreement or any other default by Seller under
the terms of this Agreement.

                  (m) CITY APPROVAL. Seller hereby covenants to timely
process City of Oceanside approval of the Phase I Map and the Phase IIA Map,
in a form reasonably approved by Buyer, including provisions for the
dedication and improvement of Ocean Ranch Boulevard and Corporate Center
Drive adjacent to the Land in order to cause recordation of such maps prior
to the deadline therefor set forth in Exhibit N.

                  (n) SUBDIVISION IMPROVEMENT AGREEMENT. Seller hereby
covenants to enter into a subdivision improvement agreement and to post bonds
for the public improvements required for the Phase I Map and the Phase IIA
Map.

         15. MAINTENANCE AND EROSION CONTROL. Except as provided in Section
14(a), Buyer shall assume the responsibility and obligation for maintenance
of the Land commencing as of the Completion by Seller of the grading of the
Land pursuant to Section 14(a) above, including, without limitation,
providing and maintaining the necessary controls to minimize any erosion, all
as required by all applicable governmental agencies.

         16. BROKER'S COMMISSION. Except for Steve Bollert of Burnham Real
Estate Services, Inc. (representing Buyer) and Coldwell Banker (representing
Seller), Seller represents and warrants to Buyer and Buyer represents and
warrants to Seller that no broker or finder has been engaged by Seller or
Buyer, respectively, in connection with any of the transactions contemplated
by this Agreement, and that no broker or finder is in any way connected with
any of such transactions. Seller shall pay a commission to Coldwell Banker,
in an amount as set forth in a separate agreement between Seller and Coldwell
Banker, dated May 23, 2000, and Seller shall pay through Escrow at Closing a
commission to Steve Bollert of Burnham Real Estate Services, Inc., in an
amount as set forth in a letter agreement from Seller and Coldwell

                                       21

<PAGE>

Banker to Steve Bollert of Burnham Real Estate Services, Inc., dated May 23,
2000. Except as expressly set forth above, in the event of any claim for
broker's or finder's fees or commissions in connection with the negotiation,
execution or consummation of this Agreement or the transactions contemplated
hereby, Buyer shall indemnify, save harmless and defend Seller from and
against such claim if it shall be based upon any statement or representation
or agreement made by Buyer, and Seller shall indemnify, save harmless and
defend Buyer from and against such claim if it shall be based upon any
statement, representation or agreement made by Seller.

         17. WAIVER, CONSENT AND REMEDIES. Each provision of this Agreement
to be performed by either party shall be deemed both a covenant and a
condition and shall be a material consideration for the other party's
performance hereunder, and any breach thereof by either party shall be deemed
a material default hereunder. Either party may specifically and expressly
waive in writing any portion of this Agreement or any breach thereof, but no
such waiver shall constitute a further or continuing waiver of any preceding
or succeeding breach of the same or any other provision. The consent by one
party to any act by the other for which such consent was required shall not
be deemed to imply consent or waiver of the necessity of obtaining such
consent for the same or any similar acts in the future. No waiver or consent
shall be implied from silence or any failure of a party to act, except as
otherwise specified in this Agreement. Subject to the limitation on Seller's
remedies as set forth in Section 11(b) and subject to the limitations on
Buyer's remedies as set forth below, all rights, remedies, undertakings,
obligations, options, covenants, conditions and agreements contained in this
Agreement shall be cumulative and no one of them shall be exclusive of any
other. Except as otherwise specified herein, either party may pursue any one
or more of its rights, options or remedies hereunder or may seek damages in
the event of the other party's breach hereunder, or may pursue any other
remedy at law or equity, whether or not stated in this Agreement.

         18. ATTORNEYS' FEES. In the event of any action, arbitration or
other proceeding instituted between Seller, Buyer and/or Escrow Holder in
connection with this Agreement, then as between Buyer and Seller the
prevailing party shall be entitled to recover from the losing party all of
its costs and expenses, including, without limitation, court costs, all costs
of appeals, arbitration costs and reasonable attorneys' fees.

         19. EMINENT DOMAIN PROCEEDINGS. If at any time during the Escrow
period all or any portion of the Land is threatened with condemnation or
legal proceedings are commenced under the power of eminent domain, then
notwithstanding anything to the contrary contained herein, either Seller or
Buyer may terminate this Agreement and cancel Escrow by giving written notice
to Escrow Holder and the other party. Thereupon, all instruments shall be
returned to the respective parties who deposited the same, Buyer and Seller
shall each pay one-half (1/2) of all title and Escrow cancellation charges,
all other funds then in Escrow and any funds paid outside of Escrow shall be
disbursed to Buyer, and each party shall be excused from any further
obligations hereunder or liability to the other party except pursuant to the
indemnity in Section 7(b) above and Section 12 above.

         20. NOTICES. Any notice, request, demand, consent, approval or other
communication required or permitted hereunder or by law shall be validly
given or made only if in writing and delivered in person to an officer or
duly authorized representative of the other party, deposited in the United
States mail, duly certified or registered (return receipt requested), postage
prepaid, or

                                       22

<PAGE>

delivered by Express Mail of the U.S. Postal Service or Federal Express or
any other courier guaranteeing overnight delivery, charges prepaid. Notices,
requests, demands, consents, approvals and other communications may also be
transmitted by telecopy. All notices, requests, demands, consents, approvals
and other communications shall be addressed to the party for whom intended,
as follows:

<TABLE>
          <S>                       <C>
           If to Seller:             Ivey Ranch Development Company, LLC
                                     c/o Stirling Enterprises
                                     25200 La Paz Road, Suite 210
                                     Laguna Hills, CA  92653
                                     Attn: Dougall Agan
                                     Fax:  (714) 586-3305

           with copies to:           Ivey Ranch, Inc.
                                     c/o Gilliss & Valla
                                     3470 Mount Diablo Boulevard
                                     Suite A-215
                                     Lafayette, CA  94549
                                     Attn: Thomas P. Gilliss
                                     Fax:  (925) 926-9011

           and                       Latham & Watkins
                                     650 Town Center Drive, Suite 2000
                                     Costa Mesa, CA 92626
                                     Attn: Kenneth A. Wolfson, Esq.
                                     Fax: (714) 755-8290

           If to Buyer:              IDEC Pharmaceuticals Corporation
                                     3030 Callan Road
                                     San Diego, CA 92121
                                     Attn: Phillip Schneider
                                     Fax:  (858) 431-8892

           and                       IDEC Pharmaceuticals Corporation
                                     3030 Callan Road
                                     San Diego, CA 92121
                                     Attn: Corporate Secretary
                                     Fax:  (858) 431-8892

           with a copy to:           Allen, Matkins, Leck, Gamble & Mallory, LLP
                                     501 West Broadway, 9th Floor
                                     San Diego, CA 92101-3547
                                     Attn: Ellen B. Spellman, Esq.
                                     Fax:  (619) 233-1158

</TABLE>

                                       23

<PAGE>

<TABLE>

          <S>                       <C>
           If to Escrow Holder:      First American Title Insurance Company
                                     Two First American Way
                                     Santa Ana, CA  92707
                                     Attn: Maricel Borras
                                     Fax:  (714) 800-4793
</TABLE>

Any party may from time to time, by written notice to the other, designate a
different address which shall be substituted for that specified above. If any
notice or other document is sent by mail as aforesaid, the same shall be
deemed fully delivered and received on the date of delivery evidenced by the
certified, registered or Express Mail receipt. Any notice or other document
sent by overnight courier service shall be deemed delivered on the date of
delivery verified in writing by the courier service. If any notice is sent by
telecopy, the same shall be deemed served or delivered upon confirmation of
transmission thereof, but only if such notice is also sent by one of the
other methods specified above. Any notice or other document sent by any other
manner shall be effective only upon actual receipt thereof.

         21. GENDER AND NUMBER. In this Agreement (unless the context
requires otherwise), the masculine, feminine and neuter genders and the
singular and the plural shall be deemed to include one another, as
appropriate.

         22. ENTIRE AGREEMENT. This Agreement and its exhibits constitute the
entire agreement between the parties hereto pertaining to the subject matter
hereof, and the final, complete and exclusive expression of the terms and
conditions thereof. All prior agreements, representations, negotiations and
understandings of the parties hereto, oral or written, express or implied,
are hereby superseded and merged herein.

         23. CAPTIONS. The captions used herein are for convenience only and
are not a part of this Agreement and do not in any way limit or amplify the
terms and provisions hereof.

         24. GOVERNING LAW. This Agreement and the exhibits attached hereto
have been negotiated and executed in the State of California and shall be
governed by and construed under the laws of the State of California.

         25. INVALIDITY OF PROVISIon. If any provision of this Agreement as
applied to either party or to any circumstance shall be adjudged by a court
of competent jurisdiction to be void or unenforceable for any reason, the
same shall in no way affect (to the maximum extent permissible by law) any
other provision of this Agreement, the application of any such provision
under circumstances different from those adjudicated by the court, or the
validity or enforceability of this Agreement as a whole.

         26. AMENDMENTS. No addition to or modification of any provision
contained in this Agreement shall be effective unless fully set forth in
writing by both Buyer and Seller.

         27. COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute but one and the same instrument.

                                       24

<PAGE>

                                               CONFIDENTIAL TREATMENT REQUESTED

         28. BINDING AGREEMENT. Subject to the restrictions on assignment set
forth herein, this Agreement shall be binding upon and shall inure to the
benefit of the parties hereto and their respective heirs, executors,
administrators, successors and assigns.

         29. FORCE MAJEURE. Irrespective of whether this Section is
specifically referred to, the time limits herein provided for the performance
of the obligations of the respective parties shall be extended for and
throughout such period of time as the performance of such obligations is
prevented or delayed due to strikes, lock-outs, acts of government,
unreasonable delays in excess of standard turn-around times of government in
responding to applications or requests in connection with the Land, acts of
God, wars, riots, civil insurrection or abnormal force of elements, but
excluding (a) the financial inability of the party required to perform and
(b) economic conditions generally. In no event shall any extension of said
period of time be deemed to have occurred unless the party required to
perform such obligation has given written notice to the other party within
said period of time setting forth the facts giving rise to such extension.

         30. CONSTRUCTION. The parties acknowledge that each party and its
counsel have reviewed and approved this Agreement and that the normal rule of
construction to the effect that any ambiguities are to be resolved against
the drafting party shall not be employed in the interpretation of this
Agreement or any amendments or exhibits hereto.

         31. OPTION AGREEMENT. Seller hereby grants to Buyer an option (the
"Option") to acquire that certain real property (the "Option Land") (a)
located within an area commonly referred to as Ocean Ranch, (b) consisting of
approximately twenty-seven (27) acres of Net Usable Land (as defined below)
and (c) consisting of Lots 19 and 20 as shown on Tentative Map T-1-99 for
Ocean Ranch and depicted on Exhibit P attached hereto and incorporated herein
by this reference. "Net Usable Land" shall mean an amount equal to the gross
square footage of the Land minus the slope area within the Land, as such
slope area is described on any recorded final tract map or parcel map, and
adding thereto the setback area included within such area. Following the
Closing of the purchase and sale of the Land, Seller and Buyer shall
diligently pursue preparation of an option agreement more particularly
detailing the terms and provisions governing the grant, exercise and closing
of the Option and attaching the form of purchase agreement to be executed by
Buyer and Seller upon Buyer's exercise of the Option (the "Option Purchase
Agreement"). Such Option Purchase Agreement shall be substantially on the
same terms and conditions as this Agreement, except as set forth in this
Section 31, and except for such changes as are reasonably necessary in order
to accurately reflect the different real property being acquired.
Concurrently with the Closing, Buyer shall deposit into Escrow, cash in the
amount of Five Hundred Thousand Dollars ($500,000) as consideration for the
grant of the Option (the "Option Consideration"). Interest accrued on the
Option Consideration shall be for the benefit of Seller. The Option
Consideration shall be applicable to the purchase price for the Option Land,
but shall otherwise be nonrefundable, except in the event of a default by
Seller or Fee Owner or if the Option Purchase Agreement terminates due to the
failure of a final map to timely record. The Option Consideration shall be
held in Escrow and immediately released to Seller upon Escrow Holder's
receipt of notification from Seller that seller's improvements have been
completed (such "completion" to be defined in the option agreement). Failure
of Buyer to timely deposit the Option Consideration shall result in the
Option being of no force or effect. The Option shall automatically expire if
it is not unconditionally exercised by Buyer on or before that day which is
[CONFIDENTIAL TREATMENT REQUESTED] after the Closing. Buyer may exercise such
Option only by

<PAGE>

                                               CONFIDENTIAL TREATMENT REQUESTED

giving written notice to Seller of Buyer's election to so exercise the Option
within the time set forth above. The closing of the purchase and sale of the
Option Land shall occur upon the later to occur of (a) ten (10) business days
after the exercise of the Option or (b) two (2) business days after the
recordation of the lot line adjustment, tract map or parcel map resulting in
the Option Land being a separate legal parcel pursuant to the California
Subdivision Map Act. If the closing of the Option Land occurs concurrently
with the Closing for the Land, then the purchase price for the Option Land
shall equal [CONFIDENTIAL TREATMENT REQUESTED] per square foot of Net Usable
Land within the Option Land. If Seller's exercise of the Option occurs after
the Closing for the Land, but prior to that date which is [CONFIDENTIAL
TREATMENT REQUESTED] after the Closing for the Land, then the purchase price
for the Option Land shall be [CONFIDENTIAL TREATMENT REQUESTED] per square
foot of Net Usable Land within the Option Land. If Seller's exercise of the
Option occurs on or after that date which is [CONFIDENTIAL TREATMENT REQUESTED]
after the Closing for the Land, then the purchase price for the Option Land
shall equal [CONFIDENTIAL TREATMENT REQUESTED] per square foot of Net Usable
Land within the Option Land. Within five (5) business days of the exercise of
the Option, Buyer and Seller shall enter into the Option Purchase Agreement.
Additionally, the Government Funds and Other Savings Account concept set
forth in Section 6(b) above shall not be applicable in connection with the
Option Land, and, as a result, the Holdback Amount shall be equal to Ninety
Percent (90%) of the Purchase Price. Additionally, the seller's improvements
shall include mass grading of the Option Land and all off-site improvements
required under the final map or reasonably required to improve the Option
Land. If Seller has completed any of the applicable improvements, Seller
shall be entitled to an immediate release concurrently with the closing of
the transaction involving the Option Land in the applicable amount. Further,
Buyer acknowledges that Seller's ability to commit to a schedule pursuant to
which Seller will improve and subdivide the Option Land is contingent upon
other purchase and sale transactions for the immediately adjoining land also
being consummated. As a result, Seller is not committing pursuant to this
paragraph to any specific time schedule with respect to such improvements.
Buyer and Seller agree to work together in good faith in order to determine a
time schedule which will meet Buyer's needs, but which will also permit
Seller to fund the required improvements with the proceeds of the sale of the
Option Land and with the proceeds of other purchase and sale transactions in
the immediate vicinity of the Option Land. Notwithstanding anything to the
contrary contained above, if Buyer exercises the Option, but Seller is unable
to cause the Option Land to be subdivided as a separate legal parcel pursuant
to the California Subdivision Map Act within [CONFIDENTIAL TREATMENT REQUESTED]
after the date of exercise of the Option, despite using Seller's commercially
reasonable efforts to do so, then the Option shall automatically expire and
terminate and Seller shall return to Buyer the Option Consideration;
provided, however, that Buyer shall have the right to extend such deadline in
[CONFIDENTIAL TREATMENT REQUESTED] increments for up to [CONFIDENTIAL TREATMENT
REQUESTED] after the date of exercise of the Option, and, in the event of
such extension, (i) Seller shall continue to use commercially reasonable
efforts to cause the Option Land to be subdivided, and (ii) Buyer shall pay
to Seller, within fifteen (15) days of written demand therefor, an amount
equal to the real estate taxes and assessments, reasonable costs for
operation and maintenance of the Option Land (including without limitation
erosion control) and insurance premiums actually incurred by Seller.
Concurrently with the Closing, Buyer and Seller and Fee Owner shall enter
into a memorandum of option agreement (the "Option Memorandum") in the form
attached hereto as Exhibit T and incorporated herein by this reference. Buyer
hereby covenants that, within ten (10) days after expiration of the Option,
Buyer shall deliver to Seller a termination of option in a form reasonably
acceptable to a reputable title company resulting in the Option Memorandum no
longer being of record.

                                       26

<PAGE>

                  IN WITNESS WHEREOF, the parties have executed this
Agreement as of the date first above written and such date shall be deemed
the date of this Agreement.

                                     SELLER:

                                     IVEY RANCH DEVELOPMENT COMPANY, LLC,
                                     a California limited liability company

                                     By:  STIRLING ENTERPRISES, LLC,
                                          a California limited
                                          liability company, Member

                                          By: /s/ Dougall Agan
                                              ------------------------------
                                              Its: Member
                                                   -------------------------

                                          By: /s/ Chris Downey
                                              ------------------------------
                                              Its: Member
                                                   -------------------------

                                     By:  IVEY RANCH, INC., a California
                                          corporation, Member

                                          By: /s/ Thomas Gilliss
                                              ------------------------------

                                              Its: President
                                                   -------------------------

                                     BUYER:

                                     IDEC PHARMACEUTICALS CORPORATION,
                                     a Delaware corporation

                                          By: /s/ Phillip Schneider
                                              ------------------------------

                                              Its: VP & CFO
                                                   -------------------------

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

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

                                       27

<PAGE>

                  The undersigned is executing this Agreement where indicated
below solely for the purpose of acknowledging the terms and conditions of
this Agreement, and the undersigned hereby agrees to convey the Land and the
Option Land to Seller or Buyer, as applicable, in a timely manner so as to
permit Seller to perform its obligations pursuant to this Agreement.

                                     IVEY RANCH, INC., a California corporation

                                     By: /s/ Thomas Gilliss
                                         ------------------------------

                                         Its: President
                                              -------------------------

                                       28

<PAGE>

                               LIST OF EXHIBITS
<TABLE>
                  <S>                   <C>
                  EXHIBIT A             LAND

                  EXHIBIT B             ESCROW INSTRUCTIONS

                  EXHIBIT C             CITY INCENTIVE LETTER

                  EXHIBIT D             BUDGET

                  EXHIBIT E             CC&R INSTRUMENT

                  EXHIBIT F             COVENANT INSTRUMENT

                  EXHIBIT G             GRANT DEED

                  EXHIBIT H             LICENSE AGREEMENT

                  EXHIBIT I             POWER LINE RELOCATION

                  EXHIBIT J             ROUGH GRADING

                  EXHIBIT K             UTILITIES AND BRINE LINE

                  EXHIBIT L             STREET IMPROVEMENTS

                  EXHIBIT M             PERIMETER LANDSCAPING

                  EXHIBIT N             SELLER'S SCHEDULE

                  EXHIBIT O             FIRPTA CERTIFICATE

                  EXHIBIT P             OPTION LAND

                  EXHIBIT Q             DELIVERED DOCUMENTS

                  EXHIBIT R             MAP CONDITIONS

                  EXHIBIT S             ANNEXATION PROPERTY

                  EXHIBIT T             MEMORANDUM OF OPTION

</TABLE>

* The exhibits have been omitted from this agreement as filed with the
  Securities and Exchange Commission. The omitted information is considered
  immaterial from an investor's perspective. IDEC will furnish supplementally
  a copy of any of the documents to the SEC upon the request of the SEC.

                                       29

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