
<PAGE>
                                                                EXHIBIT 10.136












                         AGREEMENT OF PURCHASE AND SALE
                          AND JOINT ESCROW INSTRUCTIONS



<PAGE>



                         AGREEMENT OF PURCHASE AND SALE
                         AND JOINT ESCROW INSTRUCTIONS


                                Table of Contents
<TABLE>
<CAPTION>

                                                                       Page
                                                                       ----
<S>    <C>                                                               <C>
1.     Certain Basic Definitions..........................................1
       1.1 "Business Day".................................................1
       1.2 "Buyer's Address"..............................................2
       1.3 "Buyer's Counsel's Address"....................................2
       1.4 "Closing Date".................................................2
       1.5 "Close of Escrow"..............................................2
       1.6 "Contingency Period"...........................................2
       1.7 "Deposit"......................................................2
       1.8 "Escrow Holder"................................................2
       1.9 "Escrow Holder's Address"......................................3
       1.10 "Feasibility Period"..........................................3
       1.11 "Initial Deposit".............................................3
       1.12 "Official Records"............................................3
       1.13 "Purchase Price"..............................................3
       1.14 "Opening of Escrow"...........................................3
       1.15 "Second Deposit"..............................................3
       1.16 "Seller's Address"............................................4
       1.17 "Seller's Counsel's Address"..................................4
       1.18 "Title Company"...............................................4
2.     Purchase and Sale..................................................4

3.     Payment of Purchase Price..........................................4

4.     Escrow ............................................................5

5.     Condition of Title ................................................5

6.     Title Policy ......................................................6

</TABLE>

                                       i
<PAGE>

<TABLE>
<CAPTION>

                                                                       Page
                                                                       ----
<S>    <C>                                                               <C>
7.     Conditions to Close of Escrow .....................................6

8.     Deposits by Seller ...............................................17

9.     Deposits by Buyer.................................................18

10.    Cost and Expenses ................................................18

11.    Prorations .......................................................18

12.    Disbursements and Other Actions by Escrow Holder..................19

13.    Seller's Representations and Warranties...........................20

14.    Buyer's Covenants, Representations and Warranties; As-Is
       Condition of the Property.........................................20

15.    Liquidated Damages ...............................................22

16.    Damage or Condemnation Prior to Close of Escrow...................23

17.    Notices ..........................................................23

18.    Brokers ..........................................................24

19.    Legal Fees .......................................................24

20.    Assignment .......................................................24

21.    Confidentiality ..................................................25

22.    Miscellaneous ....................................................25

</TABLE>

<TABLE>
<S>                <C>
EXHIBIT "A"       LEGAL DESCRIPTION OF EAGLE PARCEL
EXHIBIT "B"       SITE PLAN
EXHIBIT "C"       GRANT DEED
EXHIBIT "D"       SELLER CERTIFICATE
EXHIBIT "E"       PARCEL 6 DEVELOPMENT AGREEMENT
EXHIBIT "F"       COSTCO REA
EXHIBIT "G"       OFF-SITE IMPROVEMENTS SUBJECT TO BUYERS
                  REIMBURSEMENT
EXHIBIT "G-1"     DEPICTION OF OFF-SITE IMPROVEMENTS
EXHIBIT "H"       SELLER-APPROVED CONTRACTORS
EXHIBIT "I"       ENVIRONMENTAL REPORTS

</TABLE>



                                       ii

<PAGE>

                         AGREEMENT OF PURCHASE AND SALE
                         AND JOINT ESCROW INSTRUCTIONS

TO: First American Title       Insurance  Escrow No. N981398G
    Company  Escrow Officer:   Toni Rice-Groetsch
    114 East Fifth Street      Title Order No. 253830
    Santa Ana, CA 92701        Title Officer: Gary R. Chaffin

         This AGREEMENT OF PURCHASE AND SALE AND JOINT ESCROW INSTRUCTIONS
("Agreement") is made and entered into as of this 26th day of February, 1998, by
and between LENNAR ROLLING RIDGE, INC., a California corporation ("Seller"), and
EAGLE HARDWARE & GARDEN, INC., a Washington corporation ("Buyer"), with respect
to the following:

                                    RECITALS

         A. Seller is the owner of that certain real property consisting of
approximately 11.7 acres of land located in the City of Chino Hills ("City"),
County of San Bernadino, State of California, which is more particularly
described on Exhibit "A" attached hereto, together with all appurtenances
thereto and improvements thereon, if any (the "Eagle Parcel"). The Eagle Parcel
is more particularly shown on the site plan attached hereto as Exhibit "B" (Site
Plan"). The Eagle Parcel, the real property owned by Seller ("Seller Parcel")
and the real property owned by Costco Wholesale Corporation, a Washington
corporation (the "Costco Parcel"), are located in the Crossroads Marketplace at
Chino Hills (the "Shopping Center").

         B. Seller desires to sell the Eagle Parcel to Buyer and Buyer desires
to purchase the Eagle Parcel from Seller upon the terms and conditions
hereinafter set forth. NOW THEREFORE, in consideration of the mutual covenants
and agreements herein contained and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, Seller and Buyer
hereby agree that the terms and conditions of this Agreement and the
instructions to First American Title Insurance Company ("Escrow Holder") with
regard to the escrow ("Escrow") created pursuant hereto are as follows:

                                 AGREEMENT

         1. Certain Basic Definitions. For purposes of this Agreement, the
following terms shall have the following definitions:

              1.1 "Business Day" means any day that is not (i) a Saturday or
     Sunday, or (ii) a holiday as defined in the California Government Code.


                                       
<PAGE>

        1.2  "Buyer's Address" means: 
             Eagle Hardware & Garden, Inc. 
             981 Powell Avenue SW Renton,
             Washington 98055 
             Attention: Mr. Richard T. Takata
             Facsimile No.: (425) 204-5169
             Telephone No.: (425) 227-5740

        1.3  "Buyer's Counsel's Address" means:
             William N. Moloney
             5711 N.E. Tolo Road
             Bainbridge Island, WA 98110
             Facsimile No.: (206) 842-5340
             Telephone No.: (206) 842-4044

         1.4 "Closing Date" means the date which is ten (10) Business Days after
the removal of contingencies set forth in paragraph 7 below within the time
period set forth in said paragraph; provided if the contingencies have not been
removed or waived (to the extent waivable hereunder) by the party for whose
benefit such conditions are established within the time frames set forth herein,
either shall have the right to terminate this Agreement at any time after one
hundred seventy five (175) days following the Opening of Escrow ("Outside
Closing Date").

         1.5 "Close of Escrow" means the date that the Grant Deed is recorded in
the Official Records.

         1.6 "Contingency Period" means the period commencing with the
expiration of the Feasibility Period and endings at 5:00 p.m. (California time)
on the date which is one hundred twenty (120) days after the expiration of the
Feasibility Period. The date on which the Contingency Period expires is referred
to as the "Contingency Approval Date". 


         1.7 The "Deposit" means collectively the "Initial Deposit" and the
"Second Deposit".

         1.8 "Escrow Holder" means First American Title Insurance Company.

         1.9 "Escrow Holder's Address" means:
             First American Title Insurance Company 
             114 East Fifth Street 
             Santa Ana, California 92701 
             Attention: Ms. Toni Rice-Groetsch 
             Facsimile No.: (714) 285-0329 
             Telephone No.: (714) 558-3211

                                       2
<PAGE>

         1.10 "Feasibility Period" means the period commencing with the Opening
of Escrow and ending at 5:00 p.m. (California time) on the date which is
forty-five (45) days after the Opening of Escrow. The date on which the
Feasibility Period expires is called the "Feasibility Approval Date".

         1.11 "Initial Deposit" means the amount of Fifty Thousand and No/100
Dollars ($50,000.00) payable upon the Opening of Escrow.

         1.12 "Official Records" means the office of the County Recorder of the
County and State in which the Eagle Parcel is located.

         1.13 "Purchase Price" shall mean Three Million Two Hundred Thousand and
No/100 Dollars ($3,200,000.00) or Six and 28/100 Dollars ($6.28) per square foot
of land within the Eagle Parcel; provided, however, Seller and Buyer acknowledge
and agree that the Purchase Price is based upon the parties' belief and
understanding that the Eagle Parcel contains 509,652 gross square feet of land.
The civil engineer retained to prepare the ALTA Survey of the Eagle Parcel shall
determine and certify to Buyer and Seller prior to the Close of Escrow the
actual total square footage of the Eagle Parcel based upon the final ALTA/ACSM
Survey provided to Buyer and Seller by such civil engineer. The Purchase Price
shall then be adjusted, if necessary, to equal the product obtained by
multiplying the actual number of square feet contained in the Eagle Parcel as
certified by such civil engineer by Six and 28/100 Dollars ($6.28).

         1.14 "Opening of Escrow" shall have the meaning set forth in paragraph
4(a) below.

         1.15 "Second Deposit" means the amount of Fifty Thousand and No/100
Dollars ($50,000.00) payable upon the Feasibility Approval Date.

         1.16 "Seller's Address" means:
              Lennar Rolling Ridge, Inc.
              18401 Von Karman Ave., Suite 540
              Irvine, California 92612
              Attention: R. Lang Cottrell
              Facsimile No.: (714) 442-4131
              Telephone No.: (714) 442-6100

         1.17 "Seller's Counsel's Address" means:
               Allen, Matkins, Leck, Gamble & Mallory LLP
               18400 Von Karman Avenue
               4th Floor
               Irvine, California 92612
               Attention: Monica E. Olson, Esq.
               Facsimile No.: (714) 553-8354
               Telephone No.: (714) 553-1313

                                       3
<PAGE>

         1.18 "Title Company" means First American Title Insurance Company.

     2. Purchase and Sale. Seller agrees to sell the Eagle Parcel to Buyer, and
Buyer agrees to purchase the Eagle Parcel from Seller, for the Purchase Price 
and upon the terms and conditions herein set forth.

     3. Payment of Purchase Price. The Purchase Price for the Eagle Parcel shall
be paid by Buyer as follows:



         (a) Initial Deposit. Concurrently with the Opening of Escrow, Buyer
shall deposit, or cause to be deposited with Escrow Holder, in cash, by bank
cashier's check made payable to Escrow Holder, or by a confirmed wire transfer
of funds (hereinafter referred to as "Immediately Available Funds"), the Initial
Deposit. The Initial Deposit and the interest accrued thereon shall be
applicable to the Purchase Price upon the Close of Escrow. Escrow Holder shall
place the Initial Deposit in an interest bearing account. Such account shall
have no penalty for early withdrawal and Buyer shall accept all risks with
regard to the account. The Initial Deposit and any interest accrued thereon,
shall be refundable to Buyer if Buyer or Seller terminates the Agreement on or
prior to the dates designated within and in accordance with the provisions of
paragraphs 7 or 16. Otherwise, the Initial Deposit shall be held and distributed
as provided herein.

         (b) Second Deposit On the Feasibility Approval Date, Buyer shall
deposit or cause to be deposited with Escrow Holder in Immediately Available
Funds the Second Deposit. Escrow Holder shall place the Second Deposit in the
interest-bearing account as described in Paragraph 3(a) above. The Second
Deposit and the interest accrued therein shall be applicable to the Purchase
Price upon the Close of Escrow. If Buyer or Seller terminates this Agreement on
or prior to the dates designated within, and in accordance with the provisions
of, paragraphs 7 or 16, the Deposit (or so much thereof that is then held by
Escrow Holder), plus accrued interest thereon, shall be refunded to Buyer.
Unless this Agreement has been terminated in accordance with the preceding
sentence, the Deposit (or so much thereof that is then held by Escrow Holder)
shall be non-refundable to Buyer unless Seller fails to convey the Eagle Parcel
to Buyer as provided herein and such failure constitutes a default by Seller
hereunder. Except as otherwise set forth herein, the Deposit (or so much thereof
that is then held by Escrow Holder) shall be retained by Seller pursuant to
paragraph 15 hereof if this Agreement is terminated by Buyer after the
expiration of the Feasibility Period or the Contingency Period, as applicable,
or if the Close of Escrow does not occur by the Closing Date for any reason
other than (i) Buyer's termination of this Agreement in accordance with
paragraph 16, or (ii) Seller's failure to convey the Eagle Parcel to Buyer as
provided herein and where such failure constitutes a default by Seller
hereunder.

         (c) Closing Funds. At least one (1) business day prior to the Close of
Escrow, Buyer shall deposit or cause to be deposited with Escrow Holder, in
Immediately Available Funds, the balance of the Purchase Price plus Escrow
Holder's estimate of Buyer's share of closing costs, prorations and charges
payable pursuant to this Agreement.

                                       4

<PAGE>

   4. Escrow
   
      (a) Opening of Escrow. For purposes of this Agreement, the Escrow shall
be deemed opened on the date Escrow Holder shall have received the Initial
Deposit from Buyer and a fully executed original of this Agreement from Seller
and Buyer (the "Opening of Escrow"), and Escrow Holder shall notify Buyer and
Seller, in writing, of the date Escrow is opened. Buyer and Seller agree to
execute, deliver and be bound by any reasonable customary supplemental escrow
instructions of Escrow Holder or other instruments as may reasonably be required
by Escrow holder in order to consummate the transaction contemplated by this
Agreement. Any such customary supplemental instructions shall not conflict with,
amend or supersede any portions of the Agreement unless expressly consented or
agreed to in writing by Buyer and Seller.

         (b) Close of Escrow. The Escrow shall close on or before the Closing
Date, provided that Buyer and Seller may, but shall not be obligated to, close
the Escrow upon such other earlier or late date as Buyer and Seller mutually
agree to in writing. 


     5. Condition of Title. It shall be a condition to the Close of Escrow for
Buyer's benefit that title to the Eagle Parcel shall be conveyed to Buyer by the
Grant Deed subject to the following conditions of title ("Approved Condition of
Title"):

         (a) a lien to secure payment of general and special real property
     taxes, bonds and assessments, not delinquent;
     
         (b) the lien of supplemental taxes assessed pursuant to Chapter 3.5
     commencing with Section 75 of the California Revenue and Taxation Code;

         (c) matters affecting the Condition of Title created by or with the
     written consent of Buyer,

         (d) all exceptions which are disclosed by the "Title Report" described
     in paragraph 7(a)(ii) below, which are approved by Buyer as provided
     herein;

         (e) all applicable laws, ordinances, rules and governmental regulations
     (including, but not limited to, those relative to building, zoning and land
     use) affecting the development, use, occupancy or enjoyment of the Eagle
     Parcel;

         (f) the "Costco REA" (defined in paragraph 7(c) below) and the
     Development agreement by and between the City and Seller for Parcel 6 of
     Tentative Parcel Map No. 14996 dated March 11, 1997 and recorded May 7,
     1997 as Instrument No. 19970162947 (the "Parcel 6 Development Agreement"),
     attached hereto as Exhibit "E";

         6. Title Policy. Title shall be insured at the Close of Escrow by the
Title Company issuing its ALTA Extended Coverage Owner's Form Policy of Title
Insurance ("Title Policy") in the amount of the Purchase Price showing title to
the Eagle Parcel vested in Buyer and the issuance of said Title Policy shall be
a condition to the Close of Escrow. The Title Company 


                                       5
<PAGE>

is directed to issue the Title Policy at the Close of Escrow in favor of Buyer,
insuring fee title to the Eagle Parcel to Buyer in the amount of the Purchase
Price subject only to the Approved Condition of Title.

    7. Conditions to Close of Escrow

         (a) Conditions to Buyer's Obligations. Buyer's obligation to consummate
     the transaction contemplated by this Agreement is subject to the
     satisfaction of the following condition for Buyer's benefit (or Buyer's
     waiver thereof, it being agreed that Buyer may waive any or all of such
     conditions) on or prior to the dates designated below for the satisfaction
     of such conditions. In the event Buyer timely terminates this Agreement and
     the Escrow in writing (on or before the dates designated below) due to the
     failure of any such conditions, then Buyer shall be entitled to the return
     of the Deposit (or so much thereof that may then be held by Escrow Holder)
     and all interest accrued thereon and both Seller and Buyer shall be
     relieved of all further obligations and liabilities under this Agreement
     (except for the indemnity and insurance obligations of Buyer set forth in
     paragraphs 7(a)(i)(B) and (D) below, the legal fees in paragraph 19 below,
     and the covenants of Buyer set forth in paragraph 21 below, which shall
     survive any such termination).

               (i) Inspection and Studies. Buyer's approval of the physical and
            environmental condition of the Eagle Parcel, and any engineering,
            soils, geotechnical, environmental, topography, hydrology, wetlands,
            use, development, development cost, signage or other feasibility
            studies that Buyer chooses to perform or is obligated to perform by
            any governmental agency in connection with Buyer's intended
            development of the Property, at Buyer's sole cost and expense, prior
            to the expiration of the Feasibility Period.

                   (A) Buyer shall have the right to commence Buyer's physical
              inspection of the Eagle Parcel and to undertake any engineering,
              environmental, soils or other studies of the Eagle Parcel
              immediately after the Opening of Escrow, provided that Buyer gives
              Seller not less than twenty-four (24) hours prior notice of its
              intended inspection(s) which notice shall be accomplished through
              telephone contact with R. Lang Cottrell, at (714) 442-6100. If
              Buyer conducts environmental testing beyond a so-called "Phase I
              Report" Buyer shall first obtain Seller's approval ( not to be
              unreasonably withheld) of (i) the identity of the environmental
              firm conducting such tests; (ii) information concerning the
              insurance policy and license carried by such environmental firm,
              and (iii) the scope of such testing. Buyer's physical inspection
              of and/or testing on the Eagle Parcel shall be conducted during
              normal business hours. Seller shall have the right to be present
              during any environmental investigations or inspection of the Eagle
              Parcel. Promptly following completion of the environmental work
              performed in accordance with this paragraph, Buyer shall, at its
              sole cost and expense, remove from the Eagle Parcel any and all
              wastes or drill cuttings generated from its activities and restore
              the Eagle 


                                       6
<PAGE>

              Parcel to its condition as it existed immediately prior to Buyer's
              entry to the Eagle Parcel. A draft copy of the environmental
              report prepared by or on behalf of Buyer which describes the
              results of the environmental work performed in accordance with
              this paragraph shall be delivered to Seller for review and comment
              at least three (3) Business Days prior to the report being
              finalized. Buyer shall use care and consideration in connection
              with its inspections or tests and Seller shall have the right to
              be present during any inspection of the Eagle Parcel by Buyer or
              its agents. Buyer shall restore the Eagle Parcel to its original
              condition immediately after any and all tests and/or
              investigations.

                   (B) Buyer shall protect, indemnify, defend (with counsel
              reasonably acceptable to Seller) and hold the Eagle Parcel, Seller
              and Seller's officers, directors, shareholders, participants,
              partners, affiliates, employees, representatives, invites, agents
              and contractors free and harmless from and against any and all
              claims, damages, liens, stop notices, liabilities, losses, costs
              and expenses, including reasonable attorneys' fees and court
              costs, resulting from Buyer's inspection and testing of the Eagle
              Parcel, including, without limitation, repairing any and all
              damages to any portion of the Eagle Parcel, arising out of or
              related (directly or indirectly) to Buyer's conducting such
              inspections, surveys, tests, and studies. However, the preceding
              sentence is not intended to apply to the mere discovery of
              Hazardous Materials on or under the Eagle Parcel or any
              consequences or actions taken by third parties other than Buyer's
              employees, agents, contractors, subcontractors, and/or consultants
              as a result of such discovery. The Buyer's indemnification
              obligations set forth herein shall survive the Close of Escrow and
              shall not be merged with the Grant Deed, and shall survive the
              termination of this Agreement and Escrow prior to the Close of
              Escrow.

                  (C) Within ten (10) Business Days from the Opening of Escrow,
              Seller shall provide Buyer with all material documents and files
              in Seller's possession and control pertaining to the physical
              and/or environmental condition of the Eagle Parcel, including any
              topographic surveys, soils tests, environmental assessments,
              environmental remediation documents and other material documents
              relating to the Eagle Parcel in Seller's possession and control
              (if any such documents exist) (except for appraisals and financial
              analyses generated by or made on behalf of Seller and those
              documents which are protected by the attorney-client and/or
              attorney work product privileges). Such documents and files shall
              be for Buyer's sole use and Buyer agrees that it will not make
              such copies available to any parties other than Nelson Wheeler,
              David Heerensperger, Richard Takata, Pete Gallina and Buyer's
              architects, engineers, consultants and counsel (collectively,
              "Buyer's Agents"). Buyer acknowledges that the right to receive
              such files and/or documents from Seller is a courtesy to Buyer and
              that Seller does not warrant the accuracy or content of any


                                       7
<PAGE>

              document provided to Buyer and that such files and documents shall
              not be deemed to be representations by Seller. Buyer hereby agrees
              to treat all such files and documents as strictly confidential,
              not to disclose any information gained by review of such files and
              documents to any parties other than Buyer's Agents, to use such
              information only in connection with its proposed purchase of the
              Eagle Parcel hereunder, and to take all measures necessary to
              safeguard such information in order to preserve its
              confidentiality. Buyer shall rely solely upon its own independent
              investigation concerning matters contained in such files and/or
              documents. Without limiting the provisions of this paragraph or
              paragraph 14 below, Buyer acknowledges and agrees that Seller does
              not make any representation or warranty, express or implied, as to
              the accuracy or completeness of any information contained in
              Seller's files or in the documents produced by Seller, including,
              without limitation, any environmental audit or report (if any).
              Buyer acknowledges further that Seller and Seller's affiliates
              and agents shall have no responsibility for the contents and
              accuracy of such disclosures, and Buyer agrees that the
              obligations of Seller in connection with the purchase of the Eagle
              Parcel shall be governed by this Agreement irrespective of the
              contents of any such disclosures or the timing or delivery
              thereof. 


                   Prior to any entry upon the Eagle Parcel by Buyer or Buyer's
              agents, contractors, subcontractors or employees, Buyer shall
              deliver to Seller a certificate of insurance for Buyer's
              commercial general liability insurance policy which evidences that
              Buyer is carrying a commercial general liability insurance policy
              with a financially responsible insurance company acceptable to
              Seller, covering (1) the activities of Buyer, and Buyer's agents,
              contractors, subcontractors and employees on or upon the Eagle
              Parcel, and (2) Buyer's indemnity obligation contained in
              paragraph 7(a)(i)(B). Such certificate shall evidence that such
              insurance policy shall have a per occurrence limit of at least One
              Million Dollars ($1,000,000) and an aggregate limit of at least
              Two Million Dollars ($2,000,000), shall name Seller as an
              additional insured, shall be primary and non-contributing with any
              other insurance available to Seller and shall contain a full
              waiver of subrogation clause.

                   (E) Buyer may, at its sole cost and expense, cause to be
              undertaken and completed, on or before the Feasibility Approval
              Date, a Phase I environmental assessment for the Eagle Parcel. A
              draft copy of the environmental report prepared by or on behalf of
              Buyer which describes the results of the Phase I assessment shall
              be delivered to Seller for review and comment at least three (3)
              Business Days prior to the report being finalized. The report
              shall expressly run to the benefit of Buyer and Seller. Upon
              Seller's request, Buyer shall make available the consultant
              preparing such report for the purpose of discussing Seller's
              comments and recommendations concerning the report. Buyer may
              provide to Buyer's 


                                       8
<PAGE>


              Agents the draft and final report and all environmental due
              diligence information acquired by Buyer, provided that Buyer's
              Agents shall keep such information confidential and shall not
              deliver or disclose any of the information to any governmental
              agency or other party without the prior written consent of Seller
              or unless otherwise required by law. In the event (i) such report
              indicates that the Eagle Parcel contains any Hazardous
              Material(s) (as defined in paragraph 14(c) below), or (ii) Seller
              is notified by the Environmental Protection Agency, or any other
              federal, state or local governmental or quasi-governmental entity
              (collectively, "Environmental Agency") prior to the Close of
              Escrow that the Eagle Parcel contains or may contain any Hazardous
              Materials(s), Buyer or Seller may elect to terminate this
              Agreement by delivering written notice to the other party and
              Escrow Holder of such election to terminate within ten (10)
              calendar days of such party's receipt of the environmental
              consultant's report or notice from any Environmental Agency, and
              thereafter neither Buyer nor Seller shall have any further
              liability hereunder (except for the indemnity and insurance
              obligations of Buyer set forth in paragraph 7(a)(i)(B) and (D)
              above, the legal fees in paragraph 19 below, and the covenants of
              Buyer set forth in paragraph 21 below), except that Buyer shall be
              entitled to the prompt return of the Deposit (or so much thereof
              as is currently held by Escrow Holder) less Buyer's share of any
              cancellation fees and costs and title company charges, all of
              which Buyer and Seller hereby each agree to pay their respective
              shares. Notwithstanding the foregoing, Buyer's right to terminate
              this Agreement as specified above shall be exercised on or before
              the expiration of the Feasibility Period except in the case where
              Seller has received, prior to the Close of Escrow, notice from an
              Environmental Agency that the Eagle Parcel contains or may contain
              Hazardous Material(s). Seller shall be under no obligation to
              Buyer to clean up or remove an Hazardous Material(s) discovered on
              the Eagle Parcel. 


                   In the event Seller does not elect to terminate this
              Agreement pursuant to this paragraph 7(a)(i)(E), and Buyer
              approves the physical condition of the Eagle Parcel, then whether
              or not an environmental study has been made of the Eagle Parcel,
              Buyer shall be deemed to have agreed to accept title AS-IS to the
              Eagle Parcel in accordance with the provisions of paragraph 14(c)
              hereof.


                   (F) Buyer shall be satisfied with the Eagle Parcel and
              Buyer's intended use thereof including that (1) Buyer's building
              configuration will be satisfactory adapted to the Eagle Parcel,
              (2) the proposed parking plan, on-site vehicle and pedestrian
              circulation plan and street access plan for the Eagle Parcel meet
              or exceed Buyer's minimum criteria, (3) the local governmental
              requirements for landscaping, open space, building to land ratios
              and set-backs can be satisfied within Buyer's plans, (4) utilities
              of adequate capacity will be available to meet Buyer's 


                                       9
<PAGE>

              needs in connection with Buyer's proposed development of the Eagle
              Parcel, and (5) the Eagle Parcel is otherwise feasible for Buyer's
              intended use.

                   (G) Buyer shall, at its own cost and expense, be satisfied
              with any and all impact fees, mitigation fees, permit costs,
              approval fees and other costs ("Development Costs") which Buyer
              will be obligated to pay in connection with its proposed
              development of the Eagle Parcel. Upon the expiration of the
              Feasibility Period, Buyer shall not be entitled to terminate this
              Agreement due to its dissatisfaction of the Development Costs.


                   (H) Buyer has submitted and Seller has approved a signage
              plan for the Eagle Parcel which was submitted to the City on
              January 27, 1998 ("Signage Plan"). The Signage Plan shall comply
              with all applicable government codes, rules and regulations and
              the terms and provisions of the Costco REA. Buyer shall be
              responsible for its prorata share of construction and maintenance
              costs for any Shared Sign(s) (as defined in the Costco REA)
              pursuant to the terms of the Costco REA, and any pylon signs
              constructed along the 71 Freeway as allowed by the Chino Hills
              sign code and as conforming to the Signage Plan. 

  
                   (I) Buyer shall be satisfied with the status of the payment
              of the "Facility Benefit Assessment Fees" and the "Facilities
              Development Fees" (as such terms are defined in the Parcel 6
              Development Agreement) (the "Fees") by Seller.

               If, during the Feasibility Period, Buyer determines that it is
         dissatisfied, in Buyer's sole and absolute discretion, with any aspects
         of the Eagle Parcel, with its condition or suitability for Buyer's
         intended use or development, and/or any other contingencies set forth
         in this paragraph 7(a)(i), then Buyer may terminate this Agreement and
         the Escrow created pursuant hereto by delivering written notice to
         Seller and Escrow Holder on or before the expiration of the Feasibility
         Period of Buyer's election to terminate. If Buyer fails to deliver any
         such written termination notice to Seller and Escrow Holder on or
         before the expiration of the Feasibility Period, then Buyer shall be
         conclusively deemed to be dissatisfied with the contingencies set forth
         in this paragraph 7(a)(i) and with all aspects of the Eagle Parcel,
         including, without limitation, the condition and suitability of the
         Eagle Parcel for Buyer's intended use, this Agreement and the Escrow
         created hereunder shall terminate and Buyer shall be entitled to the
         return of the Initial Deposit and all interest accrued thereon and both
         Seller Buyer shall be relieved of all further obligations and
         liabilities under this Agreement (except for the indemnity and
         insurance obligations of Buyer set forth in paragraphs 7(a)(i)(B) and
         (D) below, the legal fees in paragraph 19 below, and the covenants of
         Buyer set forth in paragraph 21 below, which shall survive any such
         termination. If Buyer waives said contingencies by delivering written
         notice to

                                       10
<PAGE>

         Seller prior to the expiration of the Feasibility Period, the Initial
         Deposit shall become non-refundable to Buyer except as otherwise set
         forth herein.


               (ii) Buyer's Review of Title. Within a reasonable period of time
         following the Opening of Escrow (but in no event later than fifteen
         (15) days after the Opening of Escrow), Seller shall deliver, or cause
         to be delivered, to Buyer a standard preliminary report from the Title
         Company with respect to the Eagle Parcel, together with the underlying
         documents relating to the Schedule Buyer exceptions set forth in such
         report (collectively, the "Title Report"). Within ten (10) days after
         the Opening of Escrow, Seller shall deliver to Buyer a current
         ALTA/ACSM qualifying survey of the Eagle Parcel ("Survey"). Buyer shall
         have until that date which is ten (10) Business Days after Buyer's
         receipt of the later of the Survey and the Title Report (the "Title
         Review Period") to give Seller and Escrow Holder written notice
         ("Buyer's Title Notice") of Buyer's disapproval or conditional approval
         of any matters shown in the Title Report or the Survey. The failure of
         Buyer to give Buyer's Title Notice on or before the end of the Title
         Review Period shall be conclusively deemed to constitute Buyer's
         disapproval of the condition of title to the Eagle Parcel. If Buyer
         disapproves or conditionally approves in writing any matter of title
         shown in the Title Report or on the Survey, then Seller may, but shall
         have no obligation to, within (5) Business Days after its receipt of
         Buyer's Title Notice ("Seller's Election Period"), elect to eliminate
         or ameliorate to Buyer's satisfaction the disapproved or conditionally
         approved title matters by giving Buyer written notice ("Seller's Title
         Notice") of those disapproved or conditionally approved title matters,
         if any, which Seller agrees to so eliminate or ameliorate by the
         Closing Date, provided, that, Seller shall have no obligation to pay
         any consideration or incur any liability in order to eliminate or
         ameliorate such disapproved title matters. If Seller does not elect to
         eliminate or ameliorate any disapproved or conditionally approved title
         matters, or if Buyer disapproves Seller's Title Notice, or if Seller
         fails to timely deliver Seller's Title Notice, then Buyer shall have
         the right, upon delivery to Seller and Escrow Holder (on or before
         three (3) Business Days following the expiration of Seller's Election
         Period) of a written notice, to either: (A) waive its prior
         disapproval, in which event said disapproved matters shall be deemed
         unconditionally approved; or (B) terminate this Agreement and the
         Escrow created pursuant hereto. Failure to take either one of the
         actions described in (A) and (B) above shall be deemed to be Buyer's
         election to take the action described in (B) above. If, in Seller's
         Title Notice, Seller has agreed to either eliminate or ameliorate to
         Buyer's satisfaction by the Closing Date certain disapproved or
         conditionally approved title matters described in Buyer's Title Notice,
         but Seller is unable to do so, then Buyer shall have the right (which
         shall be Buyer's sole and exclusive right or remedy for such failure),
         upon delivery to Seller and Escrow Holder (on or before one (1)
         Business Day prior to the Closing Date) of a written notice to either:
         (x) waives its prior disapproval, in which event said disapproved
         matters shall be deemed approved; or (y) terminate this Agreement and
         the Escrow created pursuant hereto, in which event Buyer shall be
         entitled to the return of the Deposit (or so much thereof as 



                                       11
<PAGE>
         may then be held by Escrow Holder), together with all interest accrued
         thereon while in Escrow. Failure to take either one of the actions
         described in (x) and (y) above shall be deemed to be Buyer's election
         to take the action described in (y) above. In the event this Agreement
         is terminated by Buyer pursuant to the provisions of this paragraph
         7(a)(ii), neither party shall have any further rights or obligations
         hereunder (except that the indemnity and insurance obligations of Buyer
         set forth in paragraphs 7(a)(i)(B) and (D) above, the legal fees in
         paragraph 19 below, and the covenants of Buyer set forth in paragraph
         21 below shall survive any such termination).



               (iii) Buyer's Approval of Entitlements. Prior to the Contingency
         Approval Date, Buyer shall have satisfied itself with respect to all
         governmental codes and regulations and laws affecting the Eagle Parcel
         and its proposed development and shall have obtained, at its sole cost
         and expense, (or shall be satisfied of its ability to obtain at its
         sole cost and expense) all governmental approvals and permits necessary
         for Buyer's proposed development of the Eagle Parcel as a 135,418
         square foot hardware store with a 30,800 square foot garden center
         ("Eagle Store") in accordance with the Site Plan. Such approvals and
         permits shall include, without limitation, to the extent required by
         governmental bodies with jurisdiction, use permits, site plan
         approvals, signage approvals design review approvals, approvals of 
         ingress, egress, access and curb cuts to the Eagle Parcel, parking 
         variances and other similar approvals and building permits and similar
         permits for Buyer's proposed construction on the Eagle Parcel. The 
         approvals described above are collectively herein called "Approvals". 
         Notwithstanding anything to the contrary contained herein, no 
         Approvals shall be binding upon Seller or upon the Eagle Parcel until 
         Close of Escrow without Seller's prior written consent, which shall be
         in Seller's sole and absolute discretion. During the term of the 
         Escrow, Buyer shall use its commercially reasonable efforts, at its 
         sole cost and expense except as otherwise set forth herein, to pursue 
         the Approvals, and Seller agrees that it shall use good faith efforts 
         to assist Buyer in obtaining the Approvals, at no expense or liability
         to Seller.

               If, during the Contingency Period, Buyer determines that it is
         dissatisfied, in Buyer's sole and absolute discretion, with the status
         of the Approvals, then Buyer may terminate this Agreement and the
         Escrow created pursuant hereto by delivering written notice to Seller
         and Escrow Holder on or before the expiration of the Contingency Period
         of Buyer's election to terminate. If Buyer fails to deliver any such
         written termination notice to Seller and Escrow Holder on or before the
         expiration of the Contingency Period, then Buyer shall be conclusively
         deemed to be dissatisfied with the status of the Approvals, this
         Agreement and the Escrow created hereunder shall terminate and Buyer
         shall be entitled to a return of the Deposit or so much thereof that is
         currently held by Escrow Holder, and all interest accrued thereon and
         both Seller and Buyer shall be relieved of all further obligations and
         liabilities under this Agreement (except for the indemnity and
         insurance obligations of Buyer set forth in paragraphs 7(a)(i)(B) and
         (D) above, the legal fees in paragraph 19 below, and the covenants of
         Buyer 


                                       12
<PAGE>

         set forth in paragraph 21 below, which shall survive any such
         termination. If Buyer waives said contingencies by delivering notice to
         Seller prior to the expiration of the Contingency Period, the Deposit
         (or so much thereof as is currently held by Escrow Holder), shall
         become non-refundable to Buyer except as otherwise set forth herein.

               (iv) Financial Assistance Agreement. Prior to the Contingency
         Approval Date, Buyer shall use commercially reasonable efforts to
         negotiate a financial assistance agreement ("Financial Assistance
         Agreement") with the City The Financial Assistance Agreement shall
         provide that the City will provide Buyer with financial assistance in
         the amount of One Million and No/100 Dollars ($1,000,000) plus interest
         (the "Assistance Amount") and shall provide that Buyer will realize a
         net present value upon payment in full of the Assistance Amount to be
         paid in mutually agreeable installment amounts on an annual basis as a
         rebate against sales and other taxes payable to the City. The Financial
         Assistance Agreement shall provide that Seller is not bound by its
         terms or subject to any liability thereunder.

               If, during the Contingency Period, Buyer determines that it is
         dissatisfied, in Buyer's sole and absolute discretion, with the status
         of the Financial Assistance Agreement, then Buyer may terminate this
         Agreement and the Escrow created pursuant hereto by delivering written
         notice to Seller and Escrow Holder on or before the expiration of the
         Contingency Period of Buyer's election to terminate. If Buyer fails to
         deliver any such written termination notice to Seller and Escrow Holder
         on or before the expiration of the Contingency Period, then Buyer shall
         be conclusively deemed to be dissatisfied with the status of the
         Financial Assistance Agreement, this Agreement and the Escrow created
         hereunder shall terminate and Buyer shall be entitled to a return of
         the Deposit (or so much thereof that is currently held by Escrow
         Holder), and all interest accrued thereon and both Seller and Buyer
         shall be relieved of all further obligations and liabilities under this
         Agreement (except for the indemnity and insurance obligations of Buyer
         set forth in paragraphs 7(a)(i)(B) and (D) above, the legal fees in
         paragraph 19 below, and the covenants of Buyer set forth in paragraph
         21 below, which shall survive any such termination. If Buyer waives
         said contingencies by delivering notice to Seller prior to the
         expiration of the Contingency Period, the Deposit (or so much thereof
         as is currently held by Escrow Holder), shall become non-refundable to
         Buyer except as otherwise set forth herein.

               (v) Seller's Obligations. As of the Close of Escrow, Seller shall
         have performed all of the obligations required to be performed by
         Seller under this Agreement as of such date.

            (b) Conditions to Seller's Obligations. For the benefit of Seller,
     the Close of Escrow shall be conditioned upon the occurrence or
     satisfaction by Buyer of all obligations required to be performed by Buyer
     under this Agreement for Seller's benefit as of such date (or Seller's
     waiver thereof, it being agreed that Seller may waive such 


                                       13
<PAGE>

     condition). If the Close of Escrow does not occur, for any reason, 
     Buyer shall promptly deliver to Seller (not later than five (5) working 
     days after the termination of this Agreement) at no cost or expense to 
     Seller, all of the site engineering and other studies, reports, surveys, 
     entitlements (including but not limited to subdivision and zoning 
     applications and information, if any), and similar materials prepared by 
     or on behalf of Buyers with respect to the Eagle Parcel (but not any 
     sensitive or proprietary materials pertaining to Buyer's proposed use or 
     development of the Eagle Parcel), and shall, at Seller's request, assign 
     to Seller all of Buyer's right, title and interest in and to said rights 
     and matters.
               
            (c) Conditions to Buyer's and Seller's Obligations. Prior to the
     expiration of the Feasibility Period, Buyer and Seller shall exercise good
     faith in negotiating an amendment pursuant to paragraph 11.24 of that
     certain Construction, Operation and Reciprocal Easement Agreement by and
     between Seller and Costco Wholesale Corporation, a Washington corporation
     ("Costco"), recorded July 2, 1997 as Instrument No. 97-234748 (the "Costco
     REA"), a copy of which is attached as Exhibit "F" and the parties shall
     attempt to obtain the requisite approvals as required under the Costco REA
     for purposes of annexing the Eagle Parcel to the Shopping Center (the
     "Annexation Amendment"). The Annexation Amendment shall be in recordable
     form and shall include a site plan designating the Building Area and Common
     Area (as such terms are defined in the Costo REA) on the Eagle Parcel,
     which site plan shall be approved in accordance with the terms and
     provisions of paragraph 11.24 of the Costco REA. If the parties are unable
     to agree upon the terms of the Annexation Amendment or are unable to obtain
     the approvals required therefor prior to the expiration of the Feasibility
     Period, either party may terminate this Agreement and the Escrow created
     hereunder by delivering written notice to the other party and Escrow Holder
     prior to the expiration of the Feasibility Period whereupon (i) Buyer shall
     be entitled to the return of the Initial Deposit and all interest accrued
     thereon (less Buyer's share of escrow cancellation charges) and (ii) both
     Seller and Buyer shall be relieved of all further obligations and
     liabilities under this Agreement (except for the indemnity and insurance
     obligations of Buyer set forth in paragraph 7(a)(i)(B) and (D) above, the
     legal fees in paragraph 19 below, and the covenants of Buyer set forth in
     paragraph 21 below). Pursuant to the Annexation Amendment, (1) the Eagle
     Parcel and Buyer shall acquire a non-exclusive easement in, to, over and
     across the common areas in the Shopping Center for vehicular and pedestrian
     access and (2) Buyer shall be obligated to pay its Pro Rata Share (as
     defined in the Costco REA) of the cost of maintaining the Common Utility
     Lines and the Lettered Parcels of the Shopping Center (as defined in Costco
     REA), the cost of maintaining casualty and liability insurance for the
     Common Area of the Shopping Center and a ten percent (10%) administration
     fee for the Common Area of the Shopping Center (excluding all capitalized
     expenditures and management fees or other costs associated with management
     in the Shopping Center). Pursuant to the Annexation Amendment, Buyer shall
     be obligated to pay all real estate taxes and assessments for the Eagle
     Parcel and all casualty and liability insurance for the Eagle Parcel. In no
     event shall Seller be required to commence litigation, pursue legal action
     or initiate any claims against Costco nor shall Seller be 


                                       14
<PAGE>

     required to expend any sums to obtain the consent of Costco in connection
     with the negotiation of or approval to the Annexation Amendment.

            (d) Mutual Agreement on the Form of Development Agreement. During 
     the Feasibility Period, Buyer and Seller shall exercise good faith in 
     negotiating the terms and condition of a Development Agreement 
     ("Development Agreement") which contains a memorandum of agreement 
     suitable for recordation ("Memorandum of Development Agreement"). If the 
     parties are unable to agree upon the form of Development Agreement prior 
     to the Feasibility Approval Date, either party may terminate this 
     Agreement and the Escrow created hereunder by delivering written notice 
     to the other party and Escrow Holder prior to the expiration of the 
     Feasibility Period whereupon (i) Buyer shall be entitled to the return 
     of the Initial Deposit and all interest accrued thereon (less Buyer's 
     share of escrow cancellation charges) and (ii) both Seller and Buyer 
     shall be relieved of all further obligations and liabilities under this 
     Agreement (except for the indemnity and insurance obligations of Buyer 
     set forth in paragraph 7(a)(i)(B) and (D) above, the legal fees in 
     paragraph 19 below, and the covenants of Buyer set forth in paragraph 21 
     below). the Development Agreement will provide for (1) the construction, 
     at Buyer's sole cost and expense, of a standard Eagle Hardware & Garden 
     Store ("Eagle Store") and any other on-site improvements in accordance 
     with the Site Plan and the schedule of performance ("Schedule") mutually 
     approved by Buyer and Seller, (2) Buyer's agreement to fixturize, stock 
     and open the Eagle Store under the trade name "Eagle Hardware & Garden" 
     in accordance with the Schedule; (3) the operation of the Eagle Store in 
     a manner similar to other first-class stores operating under the trade 
     name "Eagle Hardware & Garden"; (4) the right of Seller to approve any 
     material changes to the Site Plan (except for changes required as a 
     condition of approval by the City), which approval will not be 
     unreasonably withheld; for purposes of this subpart "material changes" 
     include, without limitation changes and to the location or enlargement 
     of the building; (5) the construction and installation, at Seller's sole 
     cost and expense, of all water (fire protection and domestic), power, 
     communication conduits, sewer and surface water drainage lines 
     (including downspout collector lines), which shall be stubbed to the 
     Eagle Parcel property line in the size and capacities listed as follows: 
     electrical service-quantity and site of conduit is required by 
     electrical utility company to supply Buyer's minimum electrical 
     requirement of a 2000 amp, 480 volt, 3 phase, 4 wire primary service, 
     from exterior (surface or underground) transformer, domestic water 
     service adequate for 1" line, separate line for Eagle parcel irrigation, 
     fire sprinkler line-8" (detector check and PIV by Purchaser), 
     telephone-(2) 4" conduits and sewer service-6" line; (6) Buyer's 
     reimbursement to Seller of Buyer's prorata share of the cost of off-site 
     improvements constructed and required to be installed by Seller as more 
     particularly set forth in Exhibit "G" attached hereto, which prorata 
     share shall be based upon a fraction the numerator of which is the 
     square footage of the Eagle Parcel and the denominator of which is the 
     square footage of the Shopping Center, (7) Buyer's payment of all fees 
     for the development of the Eagle Parcel (excluding the Facility Benefit 
     Assessment Fees and the Facilities Development Fees under the Parcel 6 
     Development Agreement which are Seller's responsibility and which Seller 
     hereby either covenants to pay when due on or before Close of Escrow or 
     to indemnify Buyer against the nonpayment thereof), including, but

                                       15
<PAGE>

     not limited to signage permit fees, sewer connection fees; water meter 
     installation fees, school fees, building permit fees and development 
     application trust deposit fees at the times required by the City or 
     other governmental entity; (8) Buyer's use of a Seller-approved 
     contractor for Buyer's construction on the Eagle Parcel, which 
     Seller-approved contractors are listed in Exhibit "H" attached hereto; 
     (9) Seller's right of first refusal to develop the Eagle Parcel on 
     behalf of Buyer is Buyer chooses to do a build-to-suit lease and 
     Seller's right of First Refusal to purchase the Eagle parcel (at Buyer's 
     desired price or any lower price ultimately acceptable to Buyer) if 
     Buyer offers the Eagle Parcel for sale to any third party except in 
     connection with a merger or sale of Buyer or an acquisition of 
     substantially all of the assets of Buyer; (10) Buyer's assignment of the 
     Development Agreement to only an "Affiliate" (as defined in paragraph 
     20) of Buyer prior to the completion of the Eagle Store and opening same 
     for business (provided that any such assignment shall not relieve, alter 
     or release Buyer of its obligations under the Development Agreement 
     unless Seller expressly releases Buyer of such obligations in writing); 
     and (11) Buyer's assignment of the Development Agreement after the 
     completion of the Eagle Store and opening same for business shall not 
     relieve, alter or release Buyer of any of its post-closing obligations 
     set forth in the Development Agreement unless Seller expressly releases 
     Buyer of such obligations in writing.
                  

            (e) Parcel 6 Development Agreement Approvals. During the term of
     this Escrow, Seller shall provide the City with written notice of the
     transaction contemplated by this Agreement pursuant to the Parcel 6
     Development Agreement and shall attempt to obtain any City approvals
     required thereunder. The Close of Escrow shall be conditioned upon Seller's
     receipt of a written release (the "Release") in form satisfactory to
     Seller, whereby the City releases Seller from all of Seller's liability and
     obligations to the City under the parcel 6 Development Agreement, except
     the Fees. Buyer shall use commercially reasonable efforts to cooperate with
     Seller to obtain any City approvals required under the Parcel 6 Development
     Agreement, including, but not limited to, executing (1) the Grant Deed for
     purposes of acknowledging that Buyer expressly and unconditionally accepts
     the Eagle Parcel subject to the Parcel 6 Development Agreement and the
     duties and obligations set forth therein, except the Fees; (2) any
     documentation necessary to provide the City with security equivalent to any
     security provided by Seller, if any, to secure performance of the
     obligations in the Parcel 6 Development Agreement; (3) the Assumption
     Agreement in the form attached to the Parcel 6 Development Agreement as
     Exhibit "E"; and (4) any other documents that may be required by the City
     or Seller to demonstrate that Buyer assumes the rights, duties and
     obligations of Developer arising under or from the parcel 6 Development
     Agreement, except the Fees (the "Parcel 6 Assignment Documents"). If Seller
     has not obtained the City approvals required under the Parcel 6 Development
     Agreement or is not satisfied, in Seller's sole and absolute discretion,
     with the form of Release or its ability to obtain the Release prior to the
     expiration of the Contingency period, then Seller may terminate this
     Agreement and the Escrow created hereunder, whereupon, (i) Buyer shall be
     entitled to the return of the Deposit (or so much thereof that is currently
     held by Escrow Holder) and all interest accrued thereon (less Buyer's share
     of escrow cancellation charges) and (ii) both Seller and Buyer shall be
     relieved of all further obligations and liabilities under this


                                       16
<PAGE>

     Agreement (except for the indemnity and insurance obligations of Buyer set
     forth in paragraph 7(a)(i)(B) and (D) above, the legal fees in paragraph 19
     below, and the covenants of Buyer set forth in paragraph 21 below).

            (f) Limitation of Buyer's Remedies. Notwithstanding anything to the
     contrary contained herein, Buyer's sole remedy against Seller as a result
     of the failure of one or more of the conditions set forth herein shall be
     the termination of this Agreement as described in this Agreement.

         8. Deposits by Seller. At least one (1) business day prior to the Close
of Escrow, Seller shall deposit or cause to be deposited with Escrow Holder the
following documents and instruments:

            (a) Grant Deed. The Grant Deed, in the form attached hereto as
     Exhibit "C", duly executed by Seller and acknowledged.

            (b) Memorandum of Development Agreement. The Memorandum of
     Development Agreement, in the form agreed to pursuant to paragraph 7(d)
     above.

            (c) Seller's Certificate of Non-Foreign Status. A certificate of
     non-foreign status ("Firpta Certificate"), duly executed by Seller, in the
     form attached hereto as Exhibit "D" and a California Form 590 pursuant to
     which Seller certifies that Seller is exempt from withholding under
     California law.

            (d) Annexation Amendment. The Annexation Amendment, in the form
     approved in accordance with paragraph 7(c) above.

            (e) Parcel 6 Assignment Documents. The Parcel 6 Assignment Documents
     as provided in paragraph 7(e).

            (f) Other Instruments. Such other instruments and documents as are
     required under paragraph 22(b) hereof.

         9. Deposits by Buyer. Buyer shall deposit or cause to be deposited with
Escrow Holder the Initial Deposit and the Second Deposit, which are to be
applied towards the payment of the Purchase Price, and the balance of the
Purchase Price in the amounts and at the times set forth in paragraph 3 above.
In addition, Buyer shall deposit with Escrow Holder prior to the Close of
Escrow, the Grant Deed (whereby Buyer shall acknowledge that Buyer expressly and
unconditionally accepts the Eagle Parcel subject to the Parcel 6 Development
Agreement and assumes all the rights, duties and obligations of Developer
thereunder), the Parcel 6 Assignment Documents, the Annexation Amendment and the
Memorandum of Development Agreement, in the forms agreed to pursuant to
paragraph 7 above and such other fees, documents and instruments as are required
under paragraph 10.

         10. Costs and Expenses. The cost of the CLTA portion of the Title
Policy and the cost of the Survey shall be paid by Seller, and the premium and
any additional costs for the ALTA extended coverage above the premium for CLTA
coverage, if any, and the cost of any 


                                       17
<PAGE>

endorsements to the Title Policy, if any, shall be paid by Buyer. The escrow fee
of Escrow Holder shall be shared equally by Seller and Buyer. Seller shall pay
all documentary transfer taxes and recording fees payable in connection with the
recordation of the Grant Deed and other documents recorded through Escrow. Buyer
and Seller shall pay, respectively, the Escrow Holder's customary charges to
buyers and sellers for miscellaneous charges. If, as a result of no fault of
Buyer or Seller, Escrow fails to close, Buyer and Seller shall share equally all
of Escrow Holder's fees and charges.

         11. Prorations. The following prorations shall be made between Seller
and Buyer on the Close of Escrow, computed as of the Close of Escrow:

            (a) Taxes and Assessments. Real property taxes and assessments on
     the Eagle parcel shall be prorated on the basis that Seller is responsible
     for (i) all such taxes for the fiscal year of the applicable taxing
     authorities occurring prior to the "Current Tax Period" (as hereinafter
     defined) and (ii) that portion of such taxes for the Current Tax Period
     determined on the basis of the number of days which have elapsed from the
     first day of the Current Tax Period to the Close of Escrow, inclusive,
     whether or not the same shall be payable prior to the Close of Escrow. The
     phrase "Current Tax Period" refers to the fiscal year of the applicable
     taxing authority in which the Close of Escrow occurs. In the event that as
     of the Close of Escrow the actual tax bills for the year or years in
     question are not available and the amount of taxes to be prorated as
     aforesaid cannot be ascertained, then rates and assessed valuation of the
     previous year, with known changes, shall be used, and when the actual
     amount of taxes and assessments for the year or years in question shall be
     determinable, then such taxes and assessments will be re-prorated between
     the parties outside Escrow to reflect the actual amount of such taxes and
     assessments. If the Eagle Parcel is not a separate tax parcel, the real
     property taxes and assessments allocated to the Eagle Parcel shall be based
     on the approximate square footage of the Eagle Parcel as to the gross
     square footage of the tax parcel(s) in which the Eagle Parcel is located.

            (b) Escrow Statement. At least one (1) business day prior to the
     Close of Escrow the parties hereto shall agree upon all of the prorations
     to be made and submit a statement of the Escrow Holder (or sign a statement
     prepared by Escrow Holder) setting forth the same. In the event that any
     prorations, apportionments or computations made under this paragraph shall
     require final adjustment, then the parties hereto shall make the
     appropriate adjustments promptly when accurate information becomes
     available and either party hereto shall be entitled to an adjustment to
     correct the same. Any corrected adjustment or proration will be paid in
     cash to the party entitled thereto outside Escrow.

         12. Disbursements and Other Actions by Escrow Holder. Upon the Close of
Escrow, Escrow Holder shall promptly undertake all of the following in the
manner indicated:

            (a) Prorations. Prorate all matters referenced in paragraph 11 based
     upon the statement delivered into Escrow signed by the parties.



                                       18
<PAGE>

            (b) Recording. Cause the Grant Deed, the Annexation Amendment, the
     Memorandum of Development Agreement and any other documents which the
     parties hereto may mutually direct, to be recorded in the Official Records.

            (c) Funds. Disburse from funds deposited by Buyer with Escrow Holder
     towards payment of all items chargeable to the accounts of Buyer pursuant
     hereto in payment of such costs, including, without limitation, the payment
     of the Purchase Price to Seller, and disburse the balance of such funds, if
     any, to Buyer.

            (d) Title Policy. Direct the Title Company to issue the Title Policy
     to Buyer.

            (e) Documents to Seller. Deliver to Seller any documents to be
     delivered to Seller hereunder.

            (f) Documents to Buyer. Deliver to Buyer the Firpta Certificate and
     any other documents to be delivered to Buyer hereunder.

         13. Seller's Representations and Warranties. Seller hereby makes the
following representations and warranties to Buyer as of the date of this
Agreement, each of which is material and being relied upon by Buyer:

            (a) Authority. Seller has the legal right, power and authority to
     enter into this Agreement and to consummate the transactions contemplated
     hereby, and the execution, delivery and performance of this Agreement have
     been duly authorized and no other action by Seller is requisite to the
     valid and binding execution, delivery and performance of this Agreement,
     except as otherwise expressly set forth herein.

            (b) Foreign Person Affidavit. Seller is not a foreign person as
     defined in Section 1445 of the Internal Revenue Code.

            (c) Actions. Seller has no actual knowledge of and has received no
     written notice of any pending or threatened actions, suits, claims or
     proceedings affecting the Eagle Parcel, including, any judicial proceedings
     in eminent domain.

            (d) Hazardous Materials. To Seller's actual knowledge, except as
     disclosed in the Environmental Reports (as defined in paragraph 14(b)),
     there are no Hazardous Materials (as defined in Paragraph 14(c)) on the
     Eagle Parcel in violation of applicable laws in existence as of the date of
     this Agreement.

                  The term "actual knowledge of Seller" or similar phrases, as
used in this Agreement shall refer to the actual, present knowledge of R. Lang
Cottrell, Michael Bruckner, David Team and Phil Bowman as the date of this
Agreement without any duty of investigation or inquiry of any kind or nature
whatsoever, and "written notice" shall mean written notice actually received in
the Seller's Irvine, California Office.


                                       19
<PAGE>

            (e) Further Negotiations. During the term of the Escrow, Seller
     covenants and agrees that is shall not enter into negotiations nor commit
     to sell lease or otherwise transfer the Eagle Parcel or any portion thereof
     to any other party, so long as Buyer is proceeding in good faith to comply
     with its obligations and responsibilities under the terms of this
     Agreement.

         14. Buyer's Covenants, Representations and Warranties: As-Is Condition
of the Property. In consideration of Seller entering into this Agreement and as
an inducement to Seller to sell the Eagle Parcel to Buyer, Buyer makes the
following covenants, representations and warranties to Seller, each of which is
material and being relied upon by Seller:

            (a) Authority. Buyer has the legal right, power and authority to
     enter into this Agreement and consummate the transactions contemplated
     hereby, and the execution, delivery and performance of this Agreement have
     been duly authorized and no other action by Buyer is requisite to the valid
     and binding execution, delivery and performance of this Agreement, except
     as otherwise expressly set forth herein.

            (b) Seller's Environmental Inquiry. Buyer acknowledges and agrees
     that Seller has advised Buyer that the sole inquiry and investigation
     Seller has conducted in connection with the environmental condition of the
     Eagle Parcel is to obtain the environmental report(s) described in Exhibit
     "I" attached hereto (the "Environmental Reports"), and that, for purposes
     of California Health and Safety Code Section 25359.7, Seller has acted
     reasonably in relying upon said inquiry and investigation and the delivery
     of such Reports constitutes written notice to Buyer under said code
     section.

            (c) AS-IS Clause. Buyer acknowledges and agrees that it is
     purchasing the Eagle Parcel based solely upon Buyer's inspection and
     investigation of the Eagle Parcel and all documents related thereto, or its
     opportunity to do so, and Buyer is purchasing the Eagle Parcel in an "AS
     IS, WHERE IS" condition, without relying upon any representations or
     warranties, express, implied or statutory, of any kind, except as expressly
     set forth in paragraph 13. Without limiting the above, Buyer acknowledges
     that neither Seller, except as expressly set forth in paragraph 13, nor any
     other party has made any representations or warranties, express or implied,
     on which Buyer is relying as to any matters, directly or indirectly,
     concerning the Eagle Parcel including, but not limited to, the land, the
     square footage of the Eagle Parcel, improvements and infrastructure, if
     any, development rights and exactions, expenses associated with the Eagle
     Parcel, taxes, assessments, bonds, permissible uses, title exceptions,
     water or water rights, topography, utilities, zoning of the Eagle Parcel,
     soil, subsoil, the purposes for which the Eagle parcel is to be used,
     drainage, environmental or building laws, rules or regulations, toxic waste
     or Hazardous Materials or any other matters affecting or relating to the
     Eagle parcel. Buyer hereby expressly acknowledges that no such
     representations have been made. The closing of the purchase of the Eagle
     Parcel by Buyer hereunder shall be conclusive evidence that (1) Buyer has
     inspected or has caused to be inspected the Eagle Parcel, and (2) Buyer
     accepts the Eagle Parcel as being in apparently good and satisfactory
     condition and suitable for Buyer's purposes.


                                       20
<PAGE>

         Buyer shall perform and rely solely upon its own investigation
concerning its intended use of the Eagle Parcel, the Eagle Parcel's fitness
therefor, and the availability of such intended use under applicable statutes,
ordinances, and regulations, Buyer further acknowledges and agrees that Seller's
cooperation with Buyer in connection with Buyer's due diligence review of the
Eagle Parcel, whether by providing the Title Report, the Environmental Reports
and other documents, or permitting inspection of the Eagle parcel, shall not be
construed as any warranty or representation, express or implied, of any kind
with respect to the Eagle parcel, or with respect to the accuracy, completeness,
or relevancy of any such documents.

            (d) Limitation on Seller's Liability. Buyer represents and covenants
         that Seller shall not have any liability, obligation or responsibility
         of any kind with respect to the following:

                   (i) The content or accuracy of any report, study, opinion or
              conclusion of any soils, toxic, environmental or other engineer or
              other person or entity who has examined the Eagle Parcel or any
              aspect thereof;

                   (ii) The content or accuracy of any information released to
              Buyer by an engineer or planner in connection with the development
              of the Eagle Parcel;

                   (iii) The availability of building or other permits or
              approvals for the Eagle Parcel by any state or local governmental
              bodies with jurisdiction over the Eagle Parcel;

                   (iv) Any of the items delivered to Buyer pursuant to Buyer's
              review of the condition of the Eagle Parcel; and

                   (v) The content or accuracy of any other development or
              construction cost, projection, financial or marketing analysis or
              other information given to Buyer by Seller or reviewed by Buyer
              with respect to the Eagle Parcel.

            (e) Further Negotiations. During the term of this Escrow, Buyer
         covenants and agrees that is shall not negotiate with nor respond to
         solicitations from any other party (either verbally or in writing) to
         purchase any real property within three (3) miles of the exterior
         boundaries of the Eagle Parcel for purposes of developing the property
         in the manner contemplated by the terms of this Agreement, so long as
         Seller is proceeding in good faith to comply with its obligations and
         responsibilities under the terms of this Agreement.

         15. LIQUIDATED DAMAGES. IF BUYER COMMITS A DEFAULT UNDER THIS
AGREEMENT, THEN IN ANY SUCH EVENT, THE ESCROW HOLDER MAY BE INSTRUCTED BY SELLER
TO CANCEL THE ESCROW AND SELLER SHALL THEREUPON BE RELEASED FROM ITS OBLIGATIONS
HEREUNDER. BUYER AND SELLER AGREE THAT BASED UPON THE CIRCUMSTANCES NOW
EXISTING, 

                                       21
<PAGE>

KNOWN AND UNKNOWN, IT WOULD BE IMPRACTICAL OR EXTREMELY DIFFICULT TO ESTABLISH
SELLER'S DAMAGE BY REASON OF BUYER'S DEFAULT UNDER THIS AGREEMENT. ACCORDINGLY,
BUYER AND SELLER AGREE THAT IN THE EVENT OF DEFAULT BY BUYER UNDER THIS
AGREEMENT OCCURRING PRIOR TO THE EXPIRATION OF THE FEASIBILITY PERIOD, IT WOULD
BE REASONABLE AT SUCH TIME TO AWARD SELLER, AS SELLER'S SOLE AND EXCLUSIVE
REMEDY AT LAW AND IN EQUITY, "LIQUIDATED DAMAGES" EQUAL TO THE AMOUNT
REPRESENTED BY THE DEPOSIT PLUS ANY AND ALL ACCRUED INTEREST THEREON; AND BUYER
AND SELLER AGREE THAT IN THE EVENT OF A DEFAULT BY BUYER UNDER THIS AGREEMENT
OCCURRING AFTER THE FEASIBILITY APPROVAL DATE, IT WOULD BE REASONABLE AT SUCH
TIME TO AWARD SELLER AS SELLER'S SOLE AND EXCLUSIVE REMEDY AT LAW AND IN EQUITY,
"LIQUIDATED DAMAGES" EQUAL TO THE AMOUNT REPRESENTED BY THE INITIAL DEPOSIT PLUS
THE SECOND DEPOSIT PLUS ANY AND ALL ACCRUED INTEREST THEREON. THEREFORE, IF
BUYER COMMITS A DEFAULT UNDER THIS AGREEMENT, SELLER MAY INSTRUCT THE ESCROW
HOLDER TO CANCEL THE ESCROW WHEREUPON ESCROW HOLDER SHALL IMMEDIATELY PAY OVER
TO SELLER THE DEPOSIT, IF HELD BY ESCROW HOLDER, TOGETHER WITH ALL INTEREST
ACCRUED THEREON, AND SELLER SHALL BE RELIEVED FROM ALL OBLIGATIONS AND
LIABILITIES HEREUNDER, AND PROMPTLY FOLLOWING ESCROW HOLDER'S RECEIPT OF SUCH
INSTRUCTION, ESCROW HOLDER SHALL CANCEL THE ESCROW.

         NOTHING CONTAINED IN THIS PARAGRAPH SHALL SERVE TO WAIVE OR OTHERWISE
LIMIT SELLER'S REMEDIES OR DAMAGES FOR CLAIMS OF SELLER AGAINST BUYER UNDER
PARAGRAPHS 7(a)(i)(B) AND/OR 21 HEREOF OR WAIVE OR OTHERWISE LIMIT SELLER'S
RIGHTS TO OBTAIN FROM BUYER ALL COSTS AND EXPENSES OF ENFORCING THIS LIQUIDATED
DAMAGE PROVISION, INCLUDING REASONABLE ATTORNEYS' FEES AND EXPERT COSTS AND
FEES, PURSUANT TO PARAGRAPH 19.

         SELLER AND BUYER ACKNOWLEDGE THAT THEY HAVE READ AND UNDERSTAND THE
PROVISIONS OF THIS PARAGRAPH 15 AND BY THEIR INITIALS IMMEDIATELY BELOW AGREE TO
BE BOUND BY ITS TERMS.

         /s/ Illegeble              /s/ Illegeble
         -----------------          ------------------  
         Seller's Initials          Buyer's Initials

         16. Damage or Condemnation Prior to Close of Escrow. Seller shall 
promptly notify Buyer of any casualty to the Eagle Parcel or any condemnation 
proceeding commenced prior to the Close of Escrow. If any such damage or 
proceeding relates to or may result in the loss of any material portion (in 
excess of 5% of the Eagle Parcel) of the Eagle Parcel, Seller or Buyer may, 
at their option, elect either to: (i) terminate this Agreement, in which 
event all funds deposited into Escrow by Buyer shall be returned to Buyer and 
neither party shall have any further rights or obligations hereunder, or (ii) 
continue the Agreement in effect, in which event 

                                       22
<PAGE>

upon the Close of Escrow, Buyer shall be entitled to any compensation, awards,
or other payments or relief resulting from such casualty or condemnation
proceeding relating to the Eagle Parcel and there shall be no adjustment to the
Purchase Price.

         17. Notices. All notices, approvals, demands, or other communications
required or permitted hereunder shall be in writing and shall be personally
delivered or sent by a nationally recognized overnight courier or sent by
registered or certified mail, postage prepaid, return receipt requested, and
shall be deemed received upon the earlier of (i) if personally delivered or sent
by overnight courier, the date of delivery to the address of the person to
receive such notice, (ii) if mailed, upon actual receipt or refusal to accept
delivery. All notices to Seller shall be sent to Seller's Address with a copy to
Seller's Counsel's address. All notices to Buyer shall be sent to Buyer's
Address with a copy to Buyer's Counsel's address. All notices to Escrow Holder
shall be sent to Escrow Holder's Address. If the date on which any notice to be
given hereunder falls on a Saturday, Sunday or legal holiday, then such date
shall automatically be extended to the next Business Day immediately following
such Saturday, Sunday, or legal holiday. Notice of change of address shall be
given by written notice in the manner detailed in this paragraph. Rejection or
other refusal to accept or the inability to deliver because of changed address
of which no notice was given shall be deemed to constitute receipt of the
notice, demand, request or communication sent.

         18. Brokers. Upon the Close of Escrow, Seller shall pay a real estate
brokerage commission to Nelson Wheeler and Majestic Realty with respect to this
transaction in accordance with Seller's separate agreement with said brokers and
Seller hereby agrees to indemnify and hold Buyer free and harmless from such
commission obligations. If any additional claims for brokers' or finders' fees
for the consummation of this Agreement arise, then Buyer hereby agrees to
indemnify, save harmless and defend Seller from and against such claims if they
shall be based upon any statement or representation or agreement by Buyer, and
Seller hereby agrees to indemnify, save harmless and defend Buyer if such claims
shall be based upon any statement, representation or agreement made by Seller.
The obligations of Buyer and Seller set forth in this paragraph 18 shall survive
the Close of Escrow and shall not be deemed merged into the Grant Deed upon
recordation.

         19. Legal Fees. In the event of the bringing of any action or suit by a
party hereto against another party hereunder by reason of any breach of any of
the covenants or agreements or any inaccuracies in any of the representations
and warranties on the part of the other party arising out of this Agreement or
any other dispute between the parties concerning this Agreement or the Eagle
Parcel, then in that event, the prevailing party in such action or dispute shall
be entitled to have and recover of and from the other party actual costs and
expenses of suit, and reasonable attorneys' fees as part of its judgment. Any
judgment or order entered in any final judgment shall contain a specific
provision providing for the recovery of all costs and expenses of suit,
including reasonable attorneys' fees (collectively "Costs") incurred in
enforcing, perfecting and executing such judgment. For the purposes of this
paragraph, Costs shall include, without limitation, attorneys' and experts'
fees, costs and expenses incurred in the following: (i) post judgment motions;
(ii) contempt proceeding; (iii) garnishment, levy, and debtor and third party
examination; (iv) discovery; and (v) bankruptcy litigation. This paragraph shall
survive any 


                                       23
<PAGE>

termination of this Agreement prior to the Closing and shall also survive the
Closing and shall not be deemed merged into the Grant Deed upon recordation.

         20. Assignment. Buyer shall not assign, transfer or convey its rights
and/or obligations under this Agreement and/or with respect to the Eagle Parcel
without the prior written consent of Seller, which consent Seller may withhold
in its sole, absolute and subjective discretion, provided, that, Buyer is not
required to obtain Seller's consent to a proposed assignment of this Agreement
(a) to an affiliate ("Affiliate") of Buyer so long as Buyer (i) is in control of
the management of such affiliate, and (ii) owns at least a fifty percent (50%)
interest therein or (b) to a partnership so long as Buyer, or an affiliate of
Buyer (which meets the above requirements), is the general partner of such
partnership or (c) to a limited liability company so long a Buyer, or an
affiliate of Buyer (which meets the above requirements), is the managing member
of such limited liability company and Buyer owns at least a twenty-five percent
(25%) interest in such limited liability company. Buyer agrees to deliver to
Seller such documentation and other evidence Seller may request to substantiate
that an assignment by Buyer to an affiliate satisfies the above parameters.
Except as specifically set forth above, any attempted assignment without the
prior written consent of Seller shall be void and Buyer shall be deemed in
default hereunder. Any permitted assignments shall not relieve, alter or release
the assigning party from its primary liability under this Agreement.

         21. Confidentiality. Except as specifically provided herein, Buyer and
Seller shall not disclose any of the terms or provisions of this Agreement prior
to the Close of Escrow to any person or entity not a party to this Agreement
(other than Buyer's Agents and Seller's Agents), and without Seller's prior
written approval, Buyer shall not issue any press release or make any public
statements relating to this Agreement or Buyer's intended use of the Eagle
Parcel (except as required under securities laws), and Buyer shall keep all
materials provided to Buyer by Seller, and all materials generated by Buyer in
the course of conducting its inspections, review of books and records, and other
due diligence activities relating to the Eagle Parcel (including, without
limitation, matters relating to the environmental condition of the Eagle
Parcel), whether obtained through documents, oral or written communications, or
otherwise (collectively, the "Information"), in strict confidence; provided,
however, Buyer may make necessary disclosures to Buyer's Agents. Seller may make
necessary disclosures to R. Lang Cottrell, Phil Bowman, David Team, and Seller's
counsel ("Seller's Agents"). Under no circumstances shall any of the Information
be used for any purpose other than the investigation of the Eagle Parcel in
connection with its purchase by Buyer as contemplated under this Agreement. Upon
the conclusion of Buyer's examination, Buyer shall return to Seller all original
materials, together with any copies made by Buyer, and all copies of any reports
or compilations of data generated from materials or other Information provided
to Buyer, and Buyer will cause Buyer's Agents acting on behalf of Buyer to
deliver to Seller all such materials in their possession.

         22. Miscellaneous.

            (a) Survival of Covenants. The covenants, representations and
         warranties of Buyer and Seller set forth in this Agreement shall
         survive the recordation of the Grant Deed and the Close of Escrow and
         shall not be deemed merged into the Grant Deed.

                                       24
<PAGE>

            (b) Required Actions of Buyer and Seller. Buyer and Seller agree to
         execute such instruments and documents and to diligently undertake such
         actions as may be required in order to consummate the purchase and sale
         herein contemplated and shall use good faith efforts to accomplish the
         Close of Escrow in accordance with the provisions hereof.

            (c) Time of Essence. Time is of the essence of each and every term,
         condition, obligation and provision hereof. All references herein to a
         particular time of day shall be deemed to refer to Los Angeles,
         California time.

            (d) Captions. Any captions to, or headings of, the paragraphs or
         subparagraphs of this Agreement are solely for the convenience of the
         parties hereto, are not a part of this Agreement, and shall not be used
         for the interpretation or determination of the validity of this
         Agreement or any provision hereof.

            (e) No Obligations to Third Parties. Except as otherwise expressly
         provided herein, the execution and delivery of this Agreement shall not
         be deemed to confer any rights upon, nor obligate any of the parties
         thereto, to any person or entity other than the parties hereto.

            (f) Exhibits. The Exhibits attached hereto are hereby incorporated
         herein by this reference for all purposes.

            (g) Amendment to this Agreement. The terms of this Agreement may not
         be modified or amended except by an instrument in writing executed by
         each of the parties hereto.

            (h) Waiver. The waiver or failure to enforce any provision of this
         Agreement shall not operate as a waiver of any future breach of any
         such provision or any other provision hereof.

            (i) Applicable Law. This Agreement shall be governed by and
         construed and enforced in accordance with the laws of the State of
         California.

            (j) Fees and Other Expenses. Except as otherwise provided herein,
         each of the parties shall pay its own fees and expenses in connection
         with this Agreement.

            (k) Entire Agreement. This Agreement supersedes any prior
         agreements, negotiations and communications, oral or written, including
         any letter of intent or letter of understanding previously executed by
         such parties, if any, and contains the entire agreement between Buyer
         and Seller as to the subject matter hereof. No subsequent agreement, 
         representation, or promise made by either party hereto, or by or to an
         employee, officer, agent or representative of either party shall be of
         any effect unless it is in writing and executed by the party to be 
         bound thereby.

            (l) Partial Invalidity. If any portion of this Agreement as applied
         to either party or to any circumstances shall be adjudged by a court to
         be void or 


                                       25
<PAGE>

         unenforceable, such portion shall be deemed severed from this Agreement
         and shall in no way effect the validity or enforceability of the
         remaining portions of this Agreement.

            (m) Successors and Assigns. Subject to the provisions of paragraph
         20 hereof, this Agreement shall be binding upon and shall inure to the
         benefit of the successors and assigns of the parties hereto.

            (n) Business Days. In the event any date described in this Agreement
         relative to the performance of actions hereunder by Buyer, Seller
         and/or Escrow Holder falls on a Saturday, Sunday or legal holiday, such
         date shall be deemed postponed until the next Business Day thereafter.

            (o) Independent Counsel. Buyer and Seller each acknowledge that: 
         (i) they have been represented by independent counsel in connection 
         with this Agreement; (ii) they have executed this Agreement with the 
         advice of such counsel; and (iii) this Agreement is the result of 
         negotiations between the parties hereto and the advice and assistance 
         of their respective counsel. The fact that this Agreement was prepared
         by Seller's counsel as a matter of convenience shall have no import or
         significance. Any uncertainty or ambiguity in this Agreement shall not
         be construed against Seller because Seller's counsel prepared this
         Agreement in its final form.

            (p) No Recorded Memorandum. Buyer shall not record this Agreement or
         any short form memorandum of this Agreement.

            (q) Exchange. Buyer acknowledges that Seller may desire to engage in
         a tax-deferred exchange ("Exchange") pursuant to Section 1031 of the
         Internal Revenue Code. To effect such Exchange, Seller may assign its
         rights in, and delegate its duties under, this Agreement, as well as
         the transfer of its interests in the Eagle Parcel, to an exchange
         accommodator selected by Seller. As an accommodation to Seller, Buyer
         agrees to cooperate with Seller in connection with its Exchange,
         including the execution of documents, therefor, provided the following
         terms and conditions are satisfied:

                   (i) Buyer shall in no way be obligated to pay any escrow
               costs, brokerage commissions, title charges, survey costs,
               recording costs or other charges incurred with respect to any
               exchange property;

                   (ii) In no way shall the Close of Escrow be contingent or
               otherwise subject to the consummation of the Exchange, and the
               Close of Escrow shall timely close in accordance with the terms
               of this Agreement notwithstanding any failure, for any reason, of
               the parties to an Exchange to effect same;

                   (iii) If, for any reason, the Close of Escrow does not occur,
               Buyer shall have no responsibility or liability to any third
               party involved in the Exchange;


                                       26
<PAGE>

                   (iv) Buyer will not be required to make any representations
               or warranties nor assume any obligations, nor spend any sum or
               incur any personal liability whatsoever in connection with the
               Exchange;

                   (v) All representations, warranties, covenants and
               indemnification obligations of Seller set forth in this Agreement
               shall not be affected or limited by Seller's use of an exchange
               accommodator,

                   (VI) Seller agrees to indemnify, protect, defend and hold
               Buyer harmless from and against any and all causes of action,
               claims, demands, liabilities, costs and expenses, including
               actual attorneys' fees and costs, incurred by Buyer in connection
               with and third party claims which may arise as a result of or in
               connection with the Exchange.

            (r) This Instrument. Seller's delivery of unsigned copies of this
         Agreement (and unsigned copies of documents referred to in this
         Agreement) is solely for the purpose of review by the party to whom
         delivered, and neither the delivery nor any prior communications
         between the parties, whether oral or written, shall in any way be
         construed as an offer by Seller, nor in any way imply that Seller is
         under any obligation to enter the transaction which is the subject of
         this Agreement. This instrument, once it has been signed by Seller and
         Buyer and a duplicate original thereof delivered by Seller and Buyer,
         shall contain the entire and only agreement between the parties, and no
         oral statements, representations, or prior written matter not contained
         in this instrument shall have any force or effect.

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

"Buyer"                             EAGLE HARDWARE & GARDEN, INC.,
                                    a Washington corporation

                                    By: /s/ Richard T. Takata
                                       ------------------------------
                                       Name: Richard T. Takata
                                       Title: President & CEO



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



"Seller"                            LENNAR ROLLING RIDGE, INC.,
                                    a California corporation

                                    By: /s/ David O. Team
                                       ------------------------------
                                       Name: David O. Team
                                       Title: President


                                       27
<PAGE>

ACCEPTANCE BY ESCROW HOLDER:

First American Title Insurance Company hereby acknowledges that it has received
originally executed counterparts or a fully executed original of the foregoing
Agreement of Purchase and Sale and Joint Escrow Instructions and agrees to act
as Escrow Holder thereunder and to be bound by and perform the terms thereof as
such terms apply to Escrow Holder.

         Dated: March 4, 1998   FIRST AMERICAN TITLE INSURANCE
                                COMPANY

                                   By: /s/ Toni Rice Groetsch
                                      --------------------------------
                                      Name: Toni Rice Groetsch
                                      Its: Authorized Agent


                                       28
<PAGE>

                                  EXHIBIT "A"

PARCEL NO. 6 OF PARCEL MAP NO. 14996, IN THE CITY OF CHINO HILLS, COUNTY OF SAN
BERNARDINO, STATE OF CALIFORNIA. AS PER PLAT RECORDED IN BOOK 182 OF PARCEL
MAPS, PAGE(S) 100 THROUGH 104, INCLUSIVE, RECORDS OF SAID COUNTY.

EXCEPTING THEREFROM ONE-HALF OF ALL OIL, OIL RIGHTS, MINERALS, MINERAL RIGHTS',
NATURAL GAS, NATURAL GAS RIGHTS AND OTHER HYDROCARBON SUBSTANCES BY WHATEVER
NAME KNOWN THAT MAY BE WITHIN OR UNDER SAID LAND. LYING A UNIFORM DEPTH OF 500
FEET BELOW THE SURFACE OF SAID LAND; WITHOUT, HOWEVER, ANY RIGHT TO USE FOR ANY
OF THE PURPOSES HEREINBEFORE MENTIONED ANY PORTION OF THE SURFACE OF SAID LAND
OR OF THE UPPER 5OO FEET TO A UNIFORM DEPTH OF THE SUBSURFACE OF SAID LAND, AS
RESERVED BY J. ROBERT MESERVE, AS TRUSTEE, IN DEED RECORDED AUGUST 14, 1961, IN
BOOK 5508, PAGE 448, OFFICIAL RECORDS.

ALSO EXCEPTING THEREFROM ALL OF THE OIL, GAS AND OTHER MINERAL AND HYDROCARBON
SUBSTANCES, AND ALL MINERAL RIGHTS AND INTERESTS IN SUCH PROPERTY, BELOW A DEPTH
OF 500 FEET BELOW THE SURFACE AND WITH THE RIGHT OF SURFACE ENTRY FOR THE
EXTRACTION OR EXPLOITATION THEREOF. AS RESERVED IN THE DEED FROM WAYNE F. MULLIN
ET AL RECORDED JUNE 27, 1978, IN BOOK 9462, PAGE 151, OFFICIAL RECORDS.


<PAGE>







                                    (GRAPHIC OMITTED)





                                       
<PAGE>

RECORDING REQUESTED BY
AND WHEN RECORDED MAIL 
THIS GRANT DEED AND ALL 
TAX STATEMENTS TO:

Mr. Richard T. Takata
Eagle Hardware & Garden, Inc.
981 Powell Avenue SW
Renton, WA 98055

--------------------------------------------------------------------------------
                              (Above Space for Recorder's Use Only)

                                   GRANT DEED

Documentary Transfer Tax not shown 
pursuant to Section 11932 of the Revenue 
and Taxation Code, as amended.

         FOR VALUABLE CONSIDERATION, receipt of which is hereby acknowledged,
LENNAR ROLLING RIDGE INC., a California corporation ("Grantor"), hereby GRANTS
to EAGLE HARDWARE & GARDEN, INC., a Washington Corporation ("Grantee"), the
following described real property (the "Property") located in the City of Chino
Hills, County of San Bernardino, State of California:

                SEE EXHIBIT "1" ATTACHED HERETO AND INCORPORATED
                            HEREIN BY THIS REFERENCE

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

                                      LENNAR ROLLING RIDGE, INC.,
                                      a California corporation

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

Grantee acknowledges and agrees by its signature below that Grantee expressly
and unconditionally accepts the Property subject to that certain Development
Agreement by and between the City of Chino Hills and Grantor for Parcel 6 of
Tentative Parcel Map No. 14996 dated March 11, 1997 and recorded May 7, 1997 as
Instrument No. 19970162947 (the "Parcel 6 


<PAGE>

Development Agreement") and agrees to assume and be bound by the rights, duties
and obligations of Developer arising under or from the Parcel 6 Development
Agreement.



                                      EAGLE HARDWARE & GARDEN, INC.,
                                      a Washington corporation

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


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





                                      C-2

<PAGE>

STATE OF ________________________)
                                 )     ss.
COUNTY OF _______________________)

         On ______________________, before me, _______________________, a 
Notary Public in and for said state, personally appeared ___________________, 
personally known to me (or proved to me on the bases of satisfactory 
evidence) to be the person whose name is subscribed to the within instrument 
and acknowledged to me that he/she executed the same in his/her authorized 
capacity, and that by his/her signature on the instrument, the person, or the 
entity upon behalf of which the person acted, executed the instrument.

         WITNESS my hand and official seal.
         ------------------------------------
         Notary Public in and for said State

STATE OF ___)
ss.
COUNTY OF ___)

         On ______________________, before me, _______________________, a 
Notary Public in and for said state, personally appeared ___________________, 
personally known to me (or proved to me on the bases of satisfactory
evidence) to be the person whose name is subscribed to the within instrument
and acknowledged to me that he/she executed the same in his/her authorized
capacity, and that by his/her signature on the instrument, the person, or the
entity upon behalf of which the person acted, executed the instrument.

         WITNESS my hand and official seal.
         ------------------------------------
         Notary Public in and for said State






                                     C-3


<PAGE>

             STATEMENT OF TAX DUE AND REQUEST THAT TAX DECLARATION
                   NOT BE MADE A PART OF THE PERMANENT RECORD
                      IN THE OFFICE OF THE COUNTY RECORDER
             (PURSUANT TO SECTION 11932 REVENUE AND TAXATION CODE)


TO:      Recorder
         County of San Bernardino

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

Grantor: Lennar Rolling Ridge, Inc., a California corporation

Grantee: Eagle Hardware & Garden, Inc., a Washington corporation

         The property described in the accompanying document is located in the
City of Chino Hills.

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

   X           Computed on full value of property conveyed.
--------
               Computed on full value, less liens and encumbrances remaining at
--------       the time of sale.

                            LENNAR ROLLING RIDGE, INC., a California corporation

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

NOTE:  After the permanent record is made, this form will be affixed to the
       conveying document and returned with it.


                                      C-4
<PAGE>


                                  EXHIBIT "A"

PARCEL NO. 6 OF PARCEL MAP NO. 14996, IN THE CITY OF CHINO HILLS, COUNTY OF SAN
BERNARDINO, STATE OF CALIFORNIA. AS PER PLAT RECORDED IN BOOK 182 OF PARCEL
MAPS, PAGE(S) 100 THROUGH 104, INCLUSIVE, RECORDS OF SAID COUNTY.

EXCEPTING THEREFROM ONE-HALF OF ALL OIL, OIL RIGHTS, MINERALS, MINERAL RIGHTS,
NATURAL GAS, NATURAL GAS RIGHTS AND OTHER HYDROCARBON SUBSTANCES BY WHATEVER
NAME KNOWN THAT MAY BE WITHIN OR UNDER SAID LAND. LYING A UNIFORM DEPTH OF 500
FEET BELOW THE SURFACE OF SAID LAND; WITHOUT, HOWEVER, ANY RIGHT TO USE FOR ANY
OF THE PURPOSES HEREINBEFORE MENTIONED ANY PORTION OF THE SURFACE OF SAID LAND
OR OF THE UPPER 500 FEET TO A UNIFORM DEPTH OF THE SUBSURFACE OF SAID LAND, AS
RESERVED BY J. ROBERT MESERVE, AS TRUSTEE, IN DEED RECORDED AUGUST 14, 1961, IN
BOOK 5508, PAGE 448, OFFICIAL RECORDS.

ALSO EXCEPTING THEREFROM ALL OF THE OIL, GAS AND OTHER MINERAL AND 
HYDROCARBON SUBSTANCES, AND ALL MINERAL RIGHTS AND INTERESTS IN SUCH 
PROPERTY, BELOW A DEPTH OF 500 FEET THE SURFACE AND WITHOUT THE RIGHT OF 
SURFACE ENTRY FOR THE EXTRACTION OR EXPLOITATION THEREOF. AS RESERVED IN THE 
DEED FROM WAYNE F. MULLIN ET AL RECORDED JUNE 27, 1978, IN BOOK 9462, 
PAGE 151, OFFICIAL RECORDS.

<PAGE>

                              SELLER'S CERTIFICATE

A. FEDERAL FIRPTA CERTIFICATE

         To inform EAGLE HARDWARE & GARDEN, INC., a Washington corporation (the
"Transferee") that withholding of tax under Section 1445 of the Internal Revenue
Code of 1986, as amended ("Code") will not be required by LENNAR ROLLING RIDGE,
INC., a California corporation (the "Transferor") upon the transfer of certain
real property by the Transferor to the Transferee, the undersigned hereby
certifies the following on behalf of the Transferor:

         1. The Transferor is not a foreign corporation, foreign partnership,
foreign trust, foreign estate or foreign person (as those terms are defined in
the Code and the Income Tax Regulations promulgated thereunder); and

         2. The Transferor's U.S. employer or tax (social security)
identification number is ___

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

B.   STATE OF CALIFORNIA - CALIFORNIA
     RESIDENT/NON-RESIDENT AFFIDAVIT

         Section 18662 of the Revenue and Taxation Code provides that a buyer
may be required to withhold 3-1/3% of the sales price of the California real
property sold by a non-resident Seller, unless the sales price of the property
is less than $100,000.00.

         Transferor hereby certifies that Transferor is a corporation qualified
to do business in the State of California.

         Transferor understands that this certificate may be disclosed to the
Franchise Tax Board of California by Transferee and that any false statement
contained herein could be punished by fine, imprisonment, or both.

         Under penalty of perjury, the undersigned declare that they have
examined this Certification and to the best of their knowledge and belief, it is
true, correct and complete, and they further declare that they have authority to
sign this document on behalf of the Transferor.

         "Transferor"      LENNAR ROLLING RIDGE, INC.,
                           a California corporation

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



<PAGE>

                             DEVELOPMENT AGREEMENT
                                 BY AND BETWEEN
                            THE CITY OF CHINO HILLS
                         AND LENNAR ROLLING RIDGE, INC.

                                FOR PARCEL 6 OF
                         TENTATIVE PARCEL MAP NO. 14996

         This Development Agreement ("Agreement") is made this 11th day of 
March, 1997, by and between the CITY OF CHINO HILLS, a general law city in 
the State of California ("City"), and LENNAR ROLLING RIDGE, INC., a 
California corporation (the "Developer") (collectively, City and Developer 
are referred to herein as "Parties"). In consideration of the mutual 
covenants and agreements contained in this Agreement, the City and Developer 
agree as follows:

         1. Recitals. This Agreement is made with respect to the following facts
and for the following purposes, each of which is acknowledged as true and
correct by the parties:

            A. The city is authorized pursuant to Government Code Sections 65864
through 65869.5 to enter into binding agreements with persons or entities having
legal or equitable interests in real property for the development of such
property in order to establish certainty in the development process.

            B. The Developer is the owner of certain real property generally
located near the interchange of the Pomona Freeway (SR-60) and the Chino Valley
Freeway (SR-71) within the City of Chino Hills (the "Development Site"), a
portion of which is the subject of this Agreement (the "Site"). The Site is more
specifically described by the legal description shown on Exhibit "A" attached
hereto.

            C. The Parties desire to enter into this Agreement in conformance
with the Government Code in order to achieve the development of the Site as
expressly provided under the terms of this Agreement and provide public services
and urban infrastructure, all in the promotion of the health, safety, and
general welfare of the residents of the City of Chino Hills.

            D. The development of the Development Site, as proposed by
Developer, will consist of the construction of a commercial development more
specifically described by the Preliminary Development Plan and the Project
Approvals as hereinafter defined. The development of the Site will consist of
that certain 11.68 acres of commercial development described in Exhibit "A"
pursuant to the Preliminary Development Plan (the "Project") and shall be
subject to those conditions of the Project Approvals as set forth in Exhibit "B"
that are applicable to the Site as provided in Exhibit "C."

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<PAGE>


            E. The Developer has applied for the following entitlements with
respect to the Site (collectively referred to as the "Project Approvals"):

               (1) Tentative Parcel Map No. 14996.

               (2) PD Amendment No. 96-01.

            F. On February 20, 1997 (continued from February 10, 1997), the
Planning Commission of the City of Chino Hills held a duly noticed public
hearing on the Developer's application for this Agreement, Tentative Parcel Map
No. 14996, PDP Amendment No. 96-01, and by Resolution Nos. 97-05 and 97-03
approved or recommended the approval of this Agreement and said entitlements.

            G. On March 3, 1997 (continued from February 25, 1997), the City
Council held a duly noticed public hearing on the Developer's application for
this Agreement, Tentative Parcel Map No. 14996, PDP Amendment No. 96-01,
approved the Project Approvals by Resolution Nos. 97R-16 and 97R-14,
respectively and introduced for first reading Ordinance No. 90 approving this
Agreement.

            H. On March 11, 1997, the City Council of the City adopted Ordinance
No. 90 approving this Agreement with the Developer.

            I. The City desires to obtain the binding agreement of the Developer
for the development of the Site in accordance with the provisions of this
Agreement and the Project Approvals.

            J. The Developer desires to obtain the binding agreement of the City
to permit the Developer to develop the Project and Site in accordance with the
"Applicable Rules" (as hereinafter defined), including any modifications
permitted by this Agreement.

            K. Developer has applied to the City in accordance with applicable
procedures for approval of this mutually binding Agreement. The Planning
Commission and City Council of the City have given notice of intention to
consider this Agreement, have conducted public hearings thereon pursuant to the
Government Code, and have found that the provisions of this Agreement are
consistent with the City's adopted plans and policies, the Chino Hills Municipal
Code (including the Chino Hills Development Code) and the Chino Hills General
Plan.

            L. This Agreement is consistent with the present public health,
safety, and welfare needs of the residents of the City of Chino Hills and the
surrounding region. The City has specifically considered and approved the impact
and benefits of this Project upon the welfare of the region.


                                       2
<PAGE>

            M. This Agreement will bind the City to the terms and obligations
specified in this Agreement and will limit, to the degree specified in this
Agreement and under State law, the future exercise of the City's ability to
delay, postpone, preclude or regulate development of the Project on the Site
except as provided for herein.

            N. An environmental review including appropriate studies, analyses,
reports and documents, has been conducted and prepared in conjunction with the
Agreement and the above referenced Project Approvals in accordance with the
California Environmental Quality Act, Public Resources Code Section 21000 et
seq. ("CEQA"), State CEQA Guidelines, 14 Cal. Admin. Code Sections 15000-15387,
("State CEQA Guidelines") and the local CEQA Guidelines adopted by the City of
Chino Hills by Resolution No. 96-06 ("Local CEQA Guidelines"). In accordance
with CEQA, the appropriate environment review documents were considered by the
Planning Commission and the City Council. The Planning Commission adopted and
recommended, by Resolution No. PC97-02 adopted on February 20, 1997, and the
City Council, after making appropriate findings, adopted, by Resolution No.
97R-13 adopted on March 3, 1997, an Initial Study/Addendum ("Initial
Study/Addendum") to that certain Rolling Ridge Estates PUD Environmental Impact
Report certified on October 20, 1981 by the Board of Supervisors of the County
of San Bernardino prior to the incorporation of the City of Chino Hills for the
Rolling Ridge Estates PUD (the "EIR") and the other environmental documentation
referenced in the Initial Study/Addendum provided appropriate environmental
review and found that a subsequent EIR could not be required. The EIR as updated
by the Initial Study/Addendum was adequate, that is satisfied the requirements
of CEQA, the State CEQA Guidelines the Local CEQA Guidelines and applicable City
rules, regulations, and policies, and that it fully and adequately described the
Project.

            O. This Agreement eliminates uncertainty in planning and provides
for the orderly development of the Site.

            P. Further, this Agreement eliminates uncertainty about the validity
of exactions imposed by the City, allows installation of necessary improvements,
provides for public services appropriate to the development of the Site, and
generally serves the public interest within the City of Chino Hills and the
surrounding region.

            Q. The Project is phased with the completion of the Route 71
improvements. The California Department of Transportation is scheduled to
complete construction of Route 71 in August of 1997, which is before the first
commercial use on the Development Site is scheduled to open for business in
November of 1997.

         2. Definitions. In this Agreement, unless the context otherwise
requires:

            (a) "Applicable Rules" means the ordinances, rules, regulations, and
            official polices of the City, including any board, commission, or
            department of the City and any officer or employee of the City, in
            force as of the 

                                       3
<PAGE>

            "Effective Date" (as hereinafter defined) governing zoning,
            development, density, permitted uses, growth management,
            environmental consideration, building codes, grading requirements,
            improvement and construction standards and specifications and design
            criteria applicable to development of the Project and the Site as
            modified by Section 6(b) of this Agreement. The Applicable Rules
            shall be kept on file at the City Clerk's office.
            (b) "Discretionary Actions: Discretionary Approvals" are actions
            which require the exercise of judgment or a decision, and which
            contemplate and authorize the imposition of revisions or conditions,
            by the City, including any board, commission, or department of the
            City and any officer or employee of the City, in the process of
            approving or disapproving a particular activity, as distinguished
            from an activity which merely requires the City, including any
            board, commission, or department of the City and any officer or
            employee of the City, to determine whether there has been compliance
            with applicable statutes, ordinances, regulations, or conditions of
            approval.

            (c) "Effective Date" is the effective date of this Agreement and
            shall be the date the ordinance approving this Agreement, as signed
            by the parties, is effective under Government Code Section 36937.

            (d) "Facility Benefit Assessment Fees" or "FBA" shall mean the fees
            imposed by the City pursuant to Ordinance No. 65.

            (e) "Facilities Development Fees" or "FDF" shall mean the fees
            imposed by the City pursuant to Ordinance No. 64.

            (f) "Final Parcel Map" is the final approved map for the project.

            (g) "Public Improvements" mean those public improvements set forth
            in Section 7 herein that the Developer agrees to construct and
            dedicate to the City, according to the terms of this Agreement,
            other agreements as indicated in Section 7 and the Project
            Approvals.

            (h) "Subsequent Applicable Rules" means the ordinances, rules,
            regulations, and official policies of the City including any board,
            commission or department of the City and any officer or employee of
            the City, as they may be adopted, operative after the Effective Date
            of this Agreement which, other than as provided for in this
            Agreement, would govern the zoning, development, building codes,
            grading requirements, improvement and construction standards,
            density, permitted uses, growth management, environmental
            considerations, and design criteria applicable to the Project and
            Site, except that the most recent editions of the Uniform Housing
            Code, Uniform Building Code, Uniform Plumbing Code, Uniform
            Mechanical Code, National Electrical Code, Uniform Fire Code and the
            "Greenbook" Standard


                                       4
<PAGE>


            Specifications for Public Works Construction in the forms adopted by
            the City subsequent to the Effective Date of this Agreement shall
            not be considered Subsequent Applicable Rules subject to Section
            8(a) of this Agreement. The parties intend the development of the
            Project and the site to be subject to Subsequent Applicable Rules
            only to the extent permitted in Section 8(a) of this Agreement.

         3. Interest of Developer. The Developer represents to the City that, as
of the Effective Date, it owns the Site in fee, subject to encumbrances,
easements, covenants, conditions, restrictions, and other matters of record.

         4. Binding Effect. This Agreement, and all of the terms and conditions
of this Agreement, shall run with the land comprising the Site and shall be
binding upon and inure to the benefit of the Parties and their respective
successors in interest.

         5. Negation of Agency. The Parties acknowledge that, in entering into
and performing under this Agreement, each is acting as an independent entity and
not as an agent of the other in any respect. Nothing contained herein or in any
other document executed in connection herewith shall be construed as making the
City and Developer joint venturers, partners or employer/employee.

         6. Development of the Site. The following specific restrictions shall
govern the use and development of the Project and the Site:

            (a) "Permitted Uses." The Site may only be used for development of
            the Project.

            (b) "Development Standards." All design and development standards
            applicable to the development of the Site shall be in accordance
            with the Applicable Rules, the Project Approvals, the Project
            Conditions (as hereinafter defined) as amended or modified in the
            future by mutual consent, and any Subsequent Applicable Rules to the
            extent permitted in Section 8(a) of this Agreement. If there is a
            conflict between any of the Applicable Rules and Subsequent
            Applicable Rules to be applied, the City Council in its reasonable
            discretion, shall determine which shall apply.

            (c) "Applicable Project Conditions." The Applicable Project
            Conditions are those Project Conditions applicable to the Site that
            are set forth on Exhibit "C."

         7. Acknowledgments, Agreements and Assurances on the Part of the
Developer. The Developer acknowledges and agrees that the exchanged
consideration hereunder is fair, just and reasonable. Developer further
acknowledges that the consideration is reasonably related to the type and extent
of the impacts of the Project on the community and the Site,


                                       5
<PAGE>

and further acknowledges that said consideration is necessary to mitigate the
direct and indirect impacts caused by the development of the Project.

         In consideration of the foregoing and the City's assurances set out in
Section 8 below, Developer hereby agrees as follows:

            (a) Development of the Site. Developer will use its best and
            reasonable efforts, in accordance with customary and reasonable
            business judgment taking into consideration market conditions and
            other economic factors, to develop the Project on the Site in
            accordance with the terms and conditions of this Agreement, the
            Project Conditions, the Applicable Rules and any Subsequent
            Applicable Rules as hereinafter defined. Developer shall not be
            obligated to build any structures or otherwise develop the Site.
            Developer shall not be required to initiate or complete development
            of the Site within any specified period of time. However, the
            Developer agrees to provide the City with the right in its sole
            discretion, to approve or disapprove the retail uses located on
            fifty percent (50%) of the square footage of the floor area of
            buildings on the approved Site as shown on the approved Final
            Development Plan. In order to implement this section, the Developer
            shall submit each of the proposed retail uses to the City for its
            review and approval prior to entering into a lease or other legally
            binding agreement for the occupancy of a structure on the Site. If
            the City does not either accept or reject such submitted use within
            thirty (30) days, then such use will be deemed approved. When the
            City has approved uses for fifty percent (50%) of the total floor
            area of square footage of the structures planned on the Site, and
            such uses have been stocked and opened for business for at least one
            retail transaction consistent with the use approved by the City and
            subject to sales tax by the State of California has occurred, then
            this requirement shall be met and shall be deemed terminated.
            Nothing herein contained shall prevent Developer from leasing up to
            fifty percent (50%) of the floor area of buildings for uses not
            approved by City under this Section 7.

            (b) Easements. The Final Parcel Map shall describe and depict all
            easements including, but not limited to, public utilities, as are
            necessary to facilitate the construction or installation of the
            infrastructure itemized in Section 7(c) below and, by the
            recordation of such map, convey said easement to the City.

            (c) Project Conditions. Developer agrees to comply with and perform
            the Applicable Project Conditions subject to the Applicable Rules as
            modified to the extent noted in Section 8(a) of this Agreement.

         8. Acknowledgments, Agreements and Assurances on the Part of the City
Regarding Vesting. The City acknowledges and agrees that Developer's faithful
performance 


                                       6
<PAGE>

in developing the Project and the Site and in constructing and installing public
improvements, making payments and complying with Applicable Rules will fulfill
substantial public needs. The City acknowledges and agrees that there is good
and valuable consideration to the City resulting from Developer's assurances and
faithful performance thereof and the same is in balance with the benefits
conferred by the City on the Project and the Developer by this Agreement. In
order to effectuate the provisions of this Agreement, and in consideration for
the Developer's obligation to carry out the covenants and conditions set forth
in the preceding Section 7 of this Agreement, the City hereby agrees and assumes
Developer that Developer will be permitted to carry out and complete the
development of the Project within the Site, subject to the terms and conditions
of this Agreement, the Applicable Project Conditions and the Applicable Rules.
The City further agrees that:

            (a) Entitlement to Develop. The Developer is hereby granted the
            vested right to develop the Project on the Site to the extent and in
            the manner provided in this Agreement, subject to the Applicable
            Project Conditions, the Applicable Rules and, should the City make
            the findings set forth below in this Section 8(a), any Subsequent
            Applicable Rules. Subsequent Applicable Rules can bee applied to the
            Site by the City if and only if, after 10-day prior written notice
            is provided to the Developer and provided to the public pursuant to
            Government Code Section 65090, and after public hearing held by the
            City Council: (1) the City Council determines that the failure of
            the City to apply a Subsequent Applicable Rule will place residents
            of the City in a condition substantially dangerous to their health
            or safety, which condition cannot otherwise be mitigated in a
            reasonable manner and (2) such Subsequent Applicable Rule is applied
            consistently and evenly to all commercial developments in the City.
            Subsequent Applicable Rules with regard to FDF, FBA and
            administrative fees calculated solely to recover City administrative
            costs including, but not limited to, building permit fees and
            inspection fees imposed by the City and not otherwise restricted by
            the terms of this Agreement, may, notwithstanding the above, be
            imposed on Developer without the public hearing and the findings
            being made as set forth in this Section 8(a) as long as applied
            consistently and evenly to all commercial development in the City.
            Nothing in this Section or this Development Agreement is intended to
            prevent the City from adopting and amending certain Uniform Codes
            which are based on recommendations of a multi-state professional
            organization and which become applicable throughout the City -
            including the Project and Site subject to this Development Agreement
            and certain "Greenbook" Standard Specifications for Public Works
            Construction. Such Uniform Codes include, but are not limited to,
            the Uniform Housing Code, Uniform Building Code, Uniform Plumbing
            Code, Uniform Mechanical Code, National Electrical Code, and Uniform
            Fire Code.

            Finally, notwithstanding the above, the City shall not be permitted
            to increase the Facility Development Fees, Sewer Utility Connection
            Fees, Facility Benefit

                                       7
<PAGE>

            Assessment Fees, Water Capital Connection Fees and Building Permit
            Fees (collectively, "Fees") until twenty-four (24) months after the
            Effective Date of this Agreement. This twenty-four (24) month period
            shall be extended if litigation challenging the validity of this
            Agreement or any of the Project Approvals is brought by a third
            party not a party to this Agreement for the period from the
            commencement of such litigation until it is dismissed or final
            judgment is entered. In addition, this period shall be extended an
            additional six (six) months if four (4) of the six (6) large retail
            businesses designated as "major" or the Final Development Plan are
            constructed as established by the issuance of certificates of
            occupancy. Finally, in addition to the extensions already provided
            in this section, the City may extend this provision restricting Fee
            increases for up to four (4) years in its dole discretion.

            (b) Consistency With Applicable Rules. The following Applicable
            Rules are modified as set forth below for the development of the
            Project on the Site.

                  (1) The Community Development Director shall have the
                  discretion to approve PD Revisions in order to implement
                  subsequent Discretionary Actions described in Section 8(c)
                  below. However, this provision shall not be construed to
                  prevent the Community Development Director from referring PD
                  Revisions to the Planning Commission or City Council at his
                  sole discretion.

            All other Applicable Rules shall remain in full force and effect.

            (c) Subsequent Discretionary Actions. With respect to any
            Discretionary Action or Discretionary Approval that is or may be
            required subsequent to the execution of this Agreement including,
            without limitation, final development plans, conditional use
            permits, lot line adjustments and parcel maps, the City agrees that
            it will not unreasonably withhold from Developer or unreasonably
            condition or delay any such Discretionary Action or Discretionary
            Approval which must be issued by the City in order for the
            development of the Project to proceed as long as such requested
            approval is substantially consistent with the Applicable Rules,
            Project Approvals and this Agreement.

         9. [Intentionally left blank.]

         10. Liens and Credits.

            A. Reassessment District of 1994 Lien. Concurrently with or
            following the conveyance of a portion of the Development Site
            pursuant to a purchase and sale agreement between The Price Company
            and Lennar Rolling Ridge, Inc. ("Price Acquisition") whereby The
            Price Company purchases the property identified as the Site ("Price
            Parcel") in that certain Development Agreement

                                       8
<PAGE>

            between the City and Lennar Rolling Ridge, Inc. entered into
            concurrently herewith ("Price Agreement"), and in consideration for
            the Developer's obligation to carry out the covenants and conditions
            set forth in Section 7 of this agreement, and only in connection
            with the actual conveyance of the Site to an assignee whose
            assignment was made in compliance with the terms and conditions of
            Section 32 of this Agreement, the City shall cause to be satisfied
            and discharged through escrow, on behalf of the Developer, from
            funds allocated for that purpose from the FDF Program, any remaining
            Reassessment District of 1994 lien on the Site, which is currently
            estimated to be $352,001.21. This amount may change based upon the
            future annual assessments paid by Developer on the Site, if any.

            B. FDF and FBA Credits. The Developer is entitled to credits against
            the FDF and the FBA in an amount equal to the prior years' principal
            and interest payments for Assessment Districts 86-1 and 87-1 and for
            principal payments only for Reassessment District 1994 and as
            provided in that certain Reimbursement Agreement Enclave 4 between
            the County of San Bernardino and Rolling Ridge Estates Partners
            dated August 3, 1987, as amended by the City and Developer as the
            Successors to the County of San Bernardino and Rolling Ridge Estates
            Partners. This amount may change based on future annual assessments
            paid by the Developer, if any. The City agrees that Six Hundred
            Eighty-Seven Thousand Eight Hundred Thirty-Five Dollars and Twenty
            Cents ($687,835.20) of credits will be applied against FDF and FBA
            for the Site; such amount will be calculated for a total of 11.68
            acres.

         11. Cooperation and Implementation. The City agrees that it will
cooperate with Developer to the fullest extent reasonable and feasible to
implement this Agreement. Developer shall, in a timely manner, provide the City
with all documents, plans, and other information necessary for the City to carry
out its obligations under this Agreement.

         12. Review of Compliance.

            (a) Periodic Review. The City Manager of City shall review this
            Agreement annually, on or before the anniversary of the Effective
            Date, in accordance with the procedure and standards set forth in
            this Agreement in order to ascertain compliance by the Developer
            with the terms of this Agreement.

            (b) Special Review. The City Council or the City Manager of the City
            may order a special review of compliance with this Agreement at any
            time. The City Manager shall conduct such special reviews.

            (c) Procedure. During either a periodic review or a special review,
            the Developer shall be required to demonstrate good faith compliance
            with the

                                       9
<PAGE>

            terms of this Agreement. The burden of proof on this issue shall be
            on the Developer. The parties acknowledge that failure by the
            Developer to demonstrate good faith compliance shall constitute
            grounds for termination or modification of this Agreement pursuant
            to Section 13 of this Agreement in accordance with Government 
            Code Section 65865.1.

            (d) Notice of Default. If, on the basis of review of this Agreement,
            the City Manager concludes that the Developer has not complied in
            good faith with the terms of this Agreement, then the City Manager
            may issue a written "Notice of Non-Compliance" specifying the
            grounds therefor and all facts demonstrating such non-compliance.
            The Developer's failure to cure the alleged non-compliance within
            thirty (30) days after said notice is effective as determined by
            Section 18 below, or, if the nature of the default is such that it
            cannot be cured within thirty (30) days, failure to commence cure of
            default and diligently proceed to complete such cure with thirty
            (30) days of the effective date of said notice, shall constitute a
            default under this Agreement, subject to possible modification or
            termination of this Agreement as provided in Section 13 below.

         13. Proceedings Upon Modification or Termination. If the City 
determines to proceed with modification or termination of this Agreement 
following compliance with Section 12 above, the City shall give thirty (30) 
days prior written notice to the Developer of its intention to modify or 
terminate this Agreement and comply with the notice and public hearing 
requirements of Government Code Sections 65867 and 65868. Said notice to 
Developer shall set forth the noncompliance with terms and/or conditions of 
this Agreement then alleged and shall include a copy of any staff report 
explaining such alleged noncompliance. At the time and place set for the 
hearing on termination, the Developer shall be given an opportunity to be 
heard. If the City Council finds, based upon substantial evidence, that the 
Developer has not reasonably complied in good faith with the terms or 
conditions of this Agreement, the City Council may modify or terminate this 
Agreement.

         14. Modification, Amendment, or Cancellation. Subject to the notice and
hearing requirements of Section 65867 of the Government Code, this Agreement may
be modified or amended or canceled, in whole or in part, from time to time by
mutual consent of the Parties in interest in accordance with the provisions of
Section 65868 of the Government Code.

         15. Term of Agreement.

            (a) This Agreement shall commence upon the Effective Date. This
            Agreement shall remain in effect for a term of fifteen (15) years
            from the Effective Date, unless said term is terminated, canceled,
            modified, or extended by circumstance set forth in this Agreement or
            by mutual consent of the parties hereto.

                                       10
<PAGE>

            (b) Following the expiration of the term of this Agreement, this
            Agreement shall be deemed terminated and of no further force and
            effect; provided, such termination shall not automatically affect
            any right of the City or Developer arising from Project Approvals on
            the Site prior to the expiration of the term of this Agreement and
            arising from the duties of the Parties as prescribed in this
            Agreement.

         16. Remedies for Default. It is acknowledged by the Parties that the
City would not have entered into this Agreement if it were to have unlimited
liability and damages under this Agreement, or with respect to this Agreement,
or the application thereof. The Parties agree and recognize that, as a practical
matter, it will not be possible physically, financially, and as a matter of land
use planning, to restore the Site to its prior state once the construction is
commenced. Moreover, Developer has invested a considerable amount of time and
financial resources in planning the location, intensity of use, improvements and
structures for the development of the Site.

         For these reasons, the Parties agree that it will not be possible to
determine an amount of monetary damages which would adequately compensate either
of the Parties. Therefore, the Parties agree that monetary damages will not be
an adequate remedy for either Party should the other fail to perform its duties
under this Agreement. The Developer's remedies under this Agreement shall be
limited to the right to specifically enforce the terms of this Agreement and to
be awarded attorney's fees as provided for in Section 25. The City's remedies
under this Agreement shall also be limited to the right to specifically enforce
the terms of this Agreement and to be awarded attorney's fees as provided for in
Section 25. If the Developer fails to make any payment or complete any other act
or performance specified in this Agreement and to be awarded attorney's fees as
provided for in Section 25. If the Developer fails to make any payment or
complete any other act or performance specified in this Agreement in a
reasonable manner, the Developer shall have no further right or entitlement to
any building permits or certificates of occupancy for any portion of the site
until the default has been cured. The Parties recognize that this section may
result in the limitation or cessation of the rights otherwise conferred by this
Agreement upon the Developer, including any of the Developer's successors in
interest or assigns.

         17. Administration of Agreement and Resolution of Disputes. All
decisions by the City Staff concerning the interpretation and administration of
this Agreement and the Project which are the subject hereof are appealable to
the City Council and all such decisions by the City Council shall be final.
However, such decisions of the City Council and all such decisions by the City
Council shall be final. However, such decisions of the City Council shall also
be subject to judicial review pursuant to Code of Civil Procedure Section
1094.5, so long as such action is filed in a court of competent jurisdiction not
later than 90 days following the date on which the City's decision becomes final
pursuant to Code of Civil Procedure Section 1094.6(b).

         18. Notices. All notices under this Agreement shall be in writing and
shall be effective when personally delivered or upon the third day after deposit
in the United States mail as registered or certified mail, postage prepaid,
return receipt requested, to the following representatives of the Parties at the
addresses indicated below:


                                       11
<PAGE>

         If to City:       City of Chino Hills
                           Attention: City Clerk
                           2001 Grand Avenue
                           Chino Hills, CA 91709
                           Telecopier No. (909) 590-5646

         With a Copy to:   Mark D. Hensley, Esq.
                           Burke, Williams & Sorensen
                           611 West Sixth Street
                           25th Floor
                           Los Angeles, CA 90017
                           Telecopier No. (213) 236-2844

         If to Developer:  Lennar Rolling Ridge, Inc.
                           23333 Avenida La Caza
                           Coto de Caza, California 92679
                           Attention: Emile Haddad
                           President, California Land Division
                           Telecopier No. (714) 858-2799

         With a Copy to:   Samuels & Steel, LLP
                           18881 Von Karman Avenue
                           Suite 1400
                           Irvine, California 92612
                           Attention: Herbert N. Samuels, Esq.
                           Telecopier No. (714) 224-0141

Delivery of any notice shall be deemed made on the date of actual delivery
thereof to the address of the addressee, if personally delivered, and on the
date indicated in the return receipt or courier's records as the date of
delivery or first attempted delivery to the address of the addressee, if sent by
mail or courier. Notice may also be given by telecopier to any party having a
telecopier machine compatible with the telecopier machine of the party sending
the notice. Any notice given by telecopier shall be deemed delivered when
received by the telecopier machine of the receiving party if received before
5:00 p.m. (Pacific Time) on the business day received, or if received after 5:00
p.m. (Pacific Time) or on a day other than a business day (i.e., a Saturday,
Sunday, or legal holiday), then such notice shall be deemed delivered on the
next following business day. The transmittal confirmation receipt produced by
the telecopier machine of the sending party shall be prima facie evidence of
such receipt. Any party may change its address or telecopier number for notice
purposes by giving notice to the other party.

         19. Severability. If any provision of this Agreement is determined by a
court of competent jurisdiction to be invalid or unenforceable, or if any
provision of this Agreement is superseded or rendered unenforceable according to
any law which becomes effective after 


                                       12
<PAGE>

the Effective Date, the remainder of this Agreement shall be effective to the
extent the remaining provisions are not rendered impractical to perform, taking
into consideration the purposes of this Agreement.

         20. Time of Essence. Time is of the essence for each provision of this
Agreement of which time is an element.

         21. Force Majeure. In the event of unavoidable delays due to changes in
local, state or federal laws or regulations, floods, strikes, inability to
obtain materials, civil commotion, fire, acts of God, litigation challenging the
validity of this Agreement or any of the Project Approvals brought by a third
party not a party to this Agreement, or other circumstances which substantially
interfere with carrying out the Project as approved by the City in its sole
discretion, which are not due to actions of Developer and are beyond its
reasonable control, all time requirements in this Agreement shall be extended by
the time of such delay.

         22. Waiver. No waiver of any provision of this Agreement shall be
effective unless in writing and signed by a duly authorized representative of
the Party against whom enforcement of a waiver is sought.

         23. Constructive Notice and Acceptance. Every person, who, now or
hereafter, owns or acquires any right, title or interest in or to any portion of
the Site is, and shall be, conclusively deemed to have consented and agreed to
every provision contained herein, whether or not any reference to this Agreement
is contained in the instrument by which such person acquired an interest in the
Site.

         24. No Third Party Beneficiaries. This Agreement is made and entered
into for the sole protection and benefit of the Parties and their successors in
interest and assigns. No other person shall have any right of action based upon
any provision of this Agreement.

         25. Attorney's Fees. If either Party commences any action for the
interpretation, enforcement, termination, cancellation, or rescission of this
Agreement, or for specific performance for the breach hereof, the prevailing
party shall be entitled to its reasonable attorney's fees, litigation expenses
and costs.

         26. Mortgage Protection. Whenever City delivers any notice to Developer
with respect to any default by Developer, City shall at the same time deliver to
each holder of record of any deed of trust on the Property (the "Financier") a
copy of such notice, provided that the Financier has given prior written notice
of its name and address to City and the notice makes specific reference to this
Section.

         Each Financier that has given prior notice to City pursuant to this
section shall have the right, at its option and insofar as the rights of City
are concerned, to cure any such default within fifteen (15) days after the
receipt of the notice from City. If such default 


                                       13
<PAGE>

cannot be cured within such time period, the Financier shall have such
additional period as may be reasonably required to cure the same, provided that
the Financier delivers written notice to City of its intention to cure and
commences the cure within fifteen (15) days after receipt of the notice from
City and thereafter diligently prosecutes the same to completion. The City shall
not terminate this Agreement by reason of Developer's default without allowing
the Financier to cure the same as specified herein.

         Notwithstanding any cure by Financier, this Agreement shall be binding
and effective against the Financier and any owner of the Site, or any part
thereof, whose title thereto is acquired by foreclosure, trustee sale or
otherwise.

         27. Estoppel Certificate. Either Developer or City may, at any time 
and from time to time, deliver written notice to the other Party requesting 
that such Party certify in writing that, to the knowledge of the certifying 
party, (i) this Agreement is in full force and effect and a binding 
obligation of the Parties, (ii) this Agreement has not been amended, or if 
amended, the identify of each amendment, and (iii) the requesting Party is 
not in default under this Agreement, or if in default, a description of each 
such default. The Party receiving a request hereunder shall execute and 
return such certificate within thirty (30) days following receipt thereof. 
City acknowledges that a certificate hereunder may be relied upon by 
successors in interest to Developer and holders of record of deeds of trust 
on the Property.

         28. Certificate of Completion

         (a) The City shall furnish the Developer with a Certificate of
Completion for all or a portion of the completed items of the construction and
development of the Site and for any Applicable Project Conditions upon written
request therefor by the Developer. The City shall not unreasonably withhold a
Certificate of Completion. Such Certificate of Completion shall be a conclusive
determination of satisfactory completion of the construction required by this
Agreement upon the Site or any Applicable Project Conditions and the Certificate
of Completion shall so state. The Certificate of Completion shall be in such
form as to permit it to be recorded in the Recorder's Office of San Bernardino
County. After recordation of the Certificate of Completion, any party then
owning or thereafter purchasing, leasing or otherwise acquiring any interest
therein shall not (because of such ownership, purchase, lease or acquisition),
incur any obligation pursuant to this Agreement for the initial construction of
the improvements.

         (b) If the City refuses or fails to furnish the Certificate of 
Completion, after written request from the Developer, the City shall, within 
fifteen (15) days of written request therefor, provide the Developer with a 
written statement of the reasons the City refused or failed to furnish a 
Certificate of Completion. The statement shall also contain City's opinion of 
the actions the Developer must take to obtain a Certificate of Completion. 
The statement shall also contain City's opinion of the actions the Developer 
must take to obtain a Certificate of Completion. If the reason for such 
refusal is confined to the immediate availability of specific items of 
materials for construction or landscaping, the City shall issue its 
Certificate of Completion upon the 

                                       14
<PAGE>

posting of a bond by the Developer with the City in an amount representing the
fair value of the work not yet completed. If the City shall have failed to
provide such written statement within said fifteen (15) day period, the
Developer shall be deemed entitled to the Certificate of Completion.

         (c) Such Certificate of Completion shall not constitute evidence of
compliance with or satisfaction of any obligation of the Developer to any holder
of any deed of trust securing money loaned to finance the improvements, or any
part thereof. Such Certificate of Completion is not a notice of completion as
referred to in the California Civil Code, Section 3093.

         29. Incorporation of Exhibits. The following Exhibits are part of this
Agreement and each of which is incorporated herein by this reference:

         Exhibit No. A     Legal Description of Site
         Exhibit No. B     Project Conditions
         Exhibit No. C     Applicable Project Conditions
         Exhibit No. D     [Intentionally left blank]
         Exhibit No. E     Assumption Agreement Form

         30. Entire Agreement: Conflicts. This Agreement represents the entire
agreement of the parties. Should any or all of the provisions of this Agreement
be found to be in conflict with any other provisions found in the Project
Approvals, Applicable Rules, or Subsequent Applicable Rules, then the
provision(s) of this Agreement shall prevail.

         31. Indemnity. Developer shall indemnify, protect, defend, and hold
harmless, the City, and any agency or instrumentality thereof, and its elected
and appointed officials, officers, employees and agents from and against, any
and all liabilities, claims, actions, causes of action, proceedings, suits,
damages, judgments, liens, levies, costs and expenses of whatever nature,
including reasonable attorneys' fees and disbursements (collectively, "Claims")
arising out of or in any way relating to this Agreement, the Project, any
Discretionary Actions related to the development of the Site (including the
Project Approvals) or the environmental review conducted under CEQA, the Site
CEQA Guidelines or the Local CEQA Guidelines for the Project (excepting any
Claims arising out of City's default under this Agreement). If any legal or
equitable action or other proceedings is brought by any third party, including
any governmental entity or official, challenging the validity of any provision
of this Agreement or any action taken or decision made hereunder, the Parties
shall cooperate in defending such action or proceeding. If City fails to
cooperate in the defense, Developer shall not thereafter be responsible to
defend, indemnify, protect, 

                                       15
<PAGE>

defend, or hold harmless City. City may in its discretion participate in the
defense of any such claim, action, or proceeding.

         32. Right to Assign. Developer shall have the right to sell or transfer
the Property (provided that no such partial transfer shall violate the
Subdivision Map Act, Government Code Section 66410 et seq.) to any person,
partnership, joint venture, firm, or corporation at any time during the term of
this Development Agreement; provided, however, that any such sale, transfer, or
assignment shall include the assignment and assumption of the rights, duties,
and obligations arising under or from this Development Agreement and be made in
strict compliance with the following conditions precedent:

            (a) No sale, transfer, or assignment of any right or interest under
            this Development Agreement shall be made unless made together with
            the sale, transfer, or assignment of all or a part of the Property.
            Developer agrees to provide specific notice of this Agreement in any
            grant deed or other document purporting to transfer the title or an
            interest in the Property during the term of this Agreement or any
            extension thereof.

            (b) The Developer shall notify City, in writing, of such sale,
            transfer, or assignment and shall provide City with an executed
            agreement by the purchaser, transferee, or assignee and providing
            therein that the purchaser, transferee, or assignee expressly and
            unconditionally accepts the Property subject to this Development
            Agreement.

Any sale, transfer, or assignment not made in strict compliance with the
foregoing conditions shall constitute a default by the Developer under this
Agreement. Notwithstanding the failure of any purchaser, transferee, or assignee
to execute the agreement required by Section 32(b), the burdens of this
Agreement shall be binding upon such purchaser, transferee, or assignee, but the
benefits of this Agreement shall not inure to such purchaser, transferee, or
assignee until and unless such agreement is executed.

         33. Release of Transferring Developer. Notwithstanding any sale,
transfer, or assignment, a transferring Developer shall continue to be obligated
under this Agreement unless such Transferring Developer is given a release in
writing by City, which release shall be provided by City upon the full
satisfaction by such transferring Developer of ALL of the following conditions

            (a) The Developer no longer has a legal interest in all or any part
            of the Site except as a beneficiary under a deed of trust.

            (b) The Developer is not then in default under this Agreement.

            (c) The Developer or purchaser has provided City with the notice and
            executed agreement required under Section 32 above.

                                       16
<PAGE>

            (d) The purchaser, transferee, or assignee provides City with
            security equivalent to any security previously provided by Developer
            to secure performance of its obligations hereunder.

            (e) The Developer has reimbursed City for any and all City costs
            associated with Developer's transfer of all or a portion of the
            Site.

            (f) The Developer shall provide City with an executed agreement, in
            a form attached hereto as Exhibit "E" and incorporated herein by
            this reference in which the purchaser, transferee or assignee
            assumes all the duties and obligations of the Developer under this
            Agreement.

         34. Subsequent Assignment. Any subsequent sale, transfer, or assignment
after an initial sale, transfer, or assignment shall be made only in accordance
with and subject to the terms and conditions of Section 32.

         IN WITNESS WHEREOF, the Parties have each executed this Agreement of
the date first written above.

                                       CITY OF CHINO HILLS

                                       By: /s/ James S. Thalman
                                          ---------------------------
                                               James S. Thalman
                                               Mayor

                                       ATTEST:

                                       /s/ Linda D. Ruth
                                       ------------------------------
                                           Linda D. Ruth
                                           City Clerk


                                       APPROVED AS TO FORM:

                                       /s/ Mark D. Hensley
                                       ------------------------------
                                           Mark D. Hensley
                                           City Attorney


                                       17

<PAGE>

                                       LENNAR ROLLING RIDGE, INC.

                                       By: /s/ Emile Haddad
                                       ----------------------------
                                               Emile Haddad
                                               Vice President

                                       By: /s/ Theresa Pointon
                                       ----------------------------
                                               Theresa Pointon
                                               Asst. Secretary


                                       18

<PAGE>

                           ALL-PURPOSE ACKNOWLEDGMENT

State of California )
County of Orange    )

On March 15, 1997, before me, Dee Baker Notary Public, personally appeared 
Emile K. Haddad & Theresa Pointon

[X]     personally know to me -OR-
[ ]     proved to me on the basis of satisfactory evidence to be the persons
        whose names are subscribed to the within instrument and acknowledged
        to me that they executed the same in their authorized capacities, and
        that by their signatures on the instrument the persons, or the entity
        upon behalf of which the persons acted, executed the instrument.

        Witness my hand and official seal.

[SEAL]
                                       Dee Baker
                                       ----------------------------------
                                       SIGNATURE OF NOTARY

                          CAPACITY CLAIMED
                             BY SIGNER

[ ]   INDIVIDUAL(S)
[ ]   OFFICERS(S) TITLE(S):
      Vice President & Asst. Secretary
      --------------------------------
[ ]   PARTNER(S)
[ ]   ATTORNEY-IN-FACT
[ ]   TRUSTEE(S)
[ ]   SUBSCRIBING WITNESS
[ ]   GUARDIAN/CONSERVATOR
[ ]   OTHER: ____________________
___   Chairperson _______________
_________________________________

SIGNER IS REPRESENTING:
Name of person(s) or entity(ies):
_________________________________
_________________________________



                                       19
<PAGE>

ALL-PURPOSE ACKNOWLEDGMENT

State of California     )
County of San Bernardino)

On April 22, 1997, before me, Marisa Somenzi, personally appeared James S. 
Thalman & Linda D. Ruth

[X]      personally know to me -OR-

[ ]      proved to me on the basis of satisfactory evidence to be the persons
         whose names are subscribed to the within instrument and acknowledged
         to me that they executed the same in their authorized capacities, and
         that by their signatures on the instrument the persons, or the entity
         upon behalf of which the persons acted, executed the instrument.

         Witness my hand and official seal.


                                        /s/ Marisa Somenzi
                                        -------------------------------
                                        SIGNATURE OF NOTARY


[seal]
                              CAPACITY CLAIMED
                                 BY SIGNER

[ ]    INDIVIDUAL(S)
[X]    OFFICERS(S) TITLE(S):
       Mayor & City Clerk
       -------------------------
[ ]    PARTNER(S)
[ ]    ATTORNEY-IN-FACT
[ ]    TRUSTEE(S)
[ ]    SUBSCRIBING WITNESS
[ ]    GUARDIAN/CONSERVATOR
[ ]    OTHER: ___________________

___    Chairperson ______________
_________________________________

SIGNER IS REPRESENTING:
Name of person(s) or entity(ies):
_________________________________
_________________________________

                                       20
<PAGE>

                           ALL-PURPOSE ACKNOWLEDGMENT

State of California            )
County of _______________      )

On _________________, 1997, before me,___________________________, personally
appeared ___________________

[ ]      personally know to me -OR-
[ ]      proved to me on the basis of satisfactory evidence to be the person(s)
         whose name(s) are subscribed to the within instrument and acknowledged
         to me that he/she/they executed the same in his/her/their authorized
         capacity(ies), and that by his/her/their signature(s) on the instrument
         the person(s), or the entity upon behalf of which the person(s) acted,
         executed the instrument.

         Witness my hand and official seal.

                              ______________________________
                              SIGNATURE OF NOTARY


                              CAPACITY CLAIMED
                                  BY SIGNER

[ ]    INDIVIDUAL(S)
[ ]    OFFICERS(S) TITLE(S):
[ ]    PARTNER(S)
[ ]    ATTORNEY-IN-FACT
[ ]    TRUSTEE(S)
[ ]    SUBSCRIBING WITNESS
[ ]    GUARDIAN/CONSERVATOR
[ ]    OTHER: ___________________
___    Chairperson ______________
_________________________________

SIGNER IS REPRESENTING:
Name of person(s) or entity(ies):
_________________________________
_________________________________

                                       21


<PAGE>









                                   EXHIBIT A
                           LEGAL DESCRIPTION OF SITE










                                       22
<PAGE>

                                   PARCEL #6

THAT PORTION OF PARCEL 4 OF PARCEL MAP 10048 IN THE CITY OF CHINO HILLS, COUNTY
OF SAN BERNARDINO, STATE OF CALIFORNIA AS PER MAP RECORDED IN PARCEL MAP BOOK
120, PAGES 5-7 INCLUSIVE, IN THE OFFICE OF THE COUNTY RECORDER OF SAN BERNARDINO
COUNTY, DESCRIBED AS FOLLOWS:

BEGINNING AT A POINT ON THE SOUTHEASTERLY LINE OF SAID PARCEL 4, SAID POINT 
BEING THE EASTERLY TERMINUS OF A CURVE CONCAVE NORTHERLY HAVING A RADIUS OF 
1100.00 FEET, A RADIAL TO SAID POINT BEARS SOUTH 40DEG.29'50" EAST; THENCE 
WESTERLY, ALONG SAID CURVE, AND ALONG SAID SOUTHEASTERLY LINE THROUGH A 
CENTRAL ANGLE OF 39DEG.33'47" AN ARC DISTANCE OF 759.56 FEET; THENCE NORTH 
25DEG.45'50" WEST 286.10 FEET; THENCE NORTH 52DEG.26'01" EAST 1011.31 FEET; 
THENCE SOUTH 45DEG.36'20" EAST 160.10 FEET; THENCE SOUTH 56DEG.29'32" EAST 
353.32 FEET; THENCE SOUTH 50DEG.17'22" WEST 269.59 FEET TO THE BEGINNING OF A 
NONTANGENT 1500.00 FOOT RADIUS CURVE CONCAVE NORTHWESTERLY, A RADIAL TO SAID 
CURVE BEARS SOUTH 40DEG.02'05" EAST, THENCE SOUTHWESTERLY ALONG SAID CURVE 
THROUGH A CENTRAL ANGLE OF 8DEG.28'49" AN ARC DISTANCE OF 222.01 FEET TO A 
BEGINNING OF A REVERSE 20.00 FOOT RADIUS CURVE CONCAVE SOUTHEASTERLY ALSO 
BEING A POINT ON SAID SOUTHEASTERLY LINE OF PARCEL 4, A RADIAL TO SAID POINT 
BEARS NORTH 31DEG.33' 16" WEST, THENCE SOUTHWESTERLY ALONG SAID CURVE THROUGH 
A CENTRAL ANGLE OF 8DEG.56'34" AN ARC DISTANCE OF 3.12 FEET TO THE POINT OF 
BEGINNING.

                                Sheet 1 of 2

<PAGE>

        [EXHIBIT TO ACCOMPANY LEGAL DESCRIPTION OVER PARCEL 6 OF 
           TENTATIVE PARCEL MAP NO. 14996 CITY OF CHINO HILLS]


<PAGE>

                                   EXHIBIT B

                               PROJECT CONDITIONS

The conditions of approval attached to the Project Approvals and the conditions
to the proposed Final Development Plan approved in concept by the City Council
on March 3, 1997 relating to the Site are hereby incorporated into this Exhibit
B and this Agreement by this Reference. Such Project Conditions are the Project
Conditions to which Exhibit "C" of this Agreement makes reference when
specifying which of such Project Conditions are the "Applicable Project
Conditions."

                                       23
<PAGE>

                                  EXHIBIT "C"

                         APPLICABLE PROJECT CONDITIONS
                                (Option Parcel)

         These portions of all of the Conditions of Approval that are 
"Applicable Project Conditions" are:

I.       Preliminary Development Plan Amendment No. 96-01 to the Rolling Ridge
Estates Planned Unit Development (PD17-127)

            Conditions No. 23, 24, 25, 33, 34, 37, 38, 40, 53, 54, 58, 61, 62,
            63, 66, 72, 74, 77, 78, 79, 81-84, 90, 96, 97, 101, 102, G2, G3, G5,
            G6, G8, G10, H3, A1, A3, B3, N6, V2, V3, E1, E3, E4-E13.

II.      Final Development Plan

Conditions No. 1, 2, 3, 4, 5-11, 13-18, 20-35, 37, 38, 41, 42.

III.     Tentative Parcel Map No. 14995

Conditions No. 2, 3, 4, 6, 7, 10-13, 24-29, 31, 35-43, 45-50.

                                       24
<PAGE>


                                   EXHIBIT D

                           [INTENTIONALLY LEFT BLANK]

                                       25
<PAGE>


                                   EXHIBIT E

[Recording Information]

                                     [FORM]

                              ASSUMPTION AGREEMENT
                     BY AND BETWEEN THE CITY OF CHINO HILLS
                                AND [DEVELOPER]

         This Assumption Agreement ("Agreement") is made this ___ day of ______,
1997 by and between the City of Chino Hills, a general law city in the State of
California ("City") and [Transferee, Purchaser or Assignee], a _________ (the
"Transferee"). In consideration of the mutual covenants and agreements contained
in this Agreement, the City and Transferee agree as follows:

         1.       Recitals

         This Agreement is made with respect to the following facts and for the
following purposes, each of which is acknowledged as true and correct by the
parties:

         A. The City and Lennar Rolling Redge, Inc. ("Developer") entered into
Development Agreement, adopted by Ordinance No.___ on ______ ("Development
Agreement") with respect to the Site as that term is legally described in
Exhibit A attached hereto and incorporated herein by this reference.

         B. Developer no longer has a legal interest in all or any part of the
Site if applicable: [except as a beneficiary under a deed of trust].

         C. The Developer is not in default of the Development Agreement.

         D. The City has been provided a notice and an executed agreement
required under Section 32 of the Development Agreement.

         [If applicable: E. The Transferee has provided the City with security
previously provided by Developer to secure performance of its obligations under
the Development Agreement.]

         F. The Developer has reimbursed City for any and all City costs
associated with Developer's transfer of all or a portion of the Site.

         2. The Transferee hereby agrees to assume all of the duties and
obligations of the Developer under the Development Agreement.

                                       26
<PAGE>

         3. The Developer is released from its duties and obligations under the
Development Agreement pursuant to Section 33 of the Development Agreement.

         IN WITNESS WHEREOF, the parties have each executed this Agreement on
the date first written above.

                              CITY OF CHINO HILLS


                              By 
                                ----------------------------------------
                                Mayor


                              ATTEST:


                              ------------------------------------------
                              City Clerk


                              APPROVED AS TO FORM:


                              ------------------------------------------
                              City Attorney


                              [TRANSFEREE]
                              By
                                ----------------------------------------
                                  President


                              By
                                ----------------------------------------
                                  Secretary

                              [Acknowledgments Executed and Attached]

                                       27
<PAGE>

RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO:

Costco Companies, Inc.                                   [STAMP]
999 Lake Drive
Issaquah, Washington 98027

Attn: Corporate Counsel

--------------------------------------------------------------------------------
                                             Space Above for Recorder's Use Only




                     CONSTRUCTION, OPERATION AND RECIPROCAL
                               EASEMENT AGREEMENT

                                 By and Between
                          LENNAR ROLLING RIDGE, INC.,
                            a California corporation

                                      and

                          Costco Wholesale Corporation
                            a Washington corporation

Location of Property
Chino Hills, California

<PAGE>

                     CONSTRUCTION, OPERATION AND RECIPROCAL
                              EASEMENT AGREEMENT
                               TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                         Page(s)
<S>      <C>      <C>                                                        <C>
ARTICLE I         DEFINITIONS...............................................   2
         1.1.     DEFINITIONS...............................................   2

ARTICLE II        CONSTRUCTION OBLIGATIONS..................................   9
         2.1.     Developer Construction....................................   9
         2.2.     Costco Construction.......................................  10
         2.3.     Developer Plans and Specifications........................  10
         2.4.     Costco Plans and Specifications...........................  11
         2.5.     Interference by Construction..............................  12
         2.6.     Construction Indemnities..................................  13
         2.7.     Cost of Construction......................................  13
         2.8.     Signs.....................................................  13
         2.9.     Staging and Storage Areas.................................  15

ARTICLE III       EASEMENTS.................................................  16
         3.1.     Easements.................................................  16
         3.2.     Unimpeded Access Between Parcels..........................  21
         3.3.     Use by Permittees.........................................  21
         3.4.     Unauthorized Use and Closure of Common Area...............  22
         3.5.     Prohibition Against Granting Easements....................  22
         3.6.     Present Easements to Future Development Parcel............  22

ARTICLE IV        PROJECT DEVELOPMENT RESTRICTIONS..........................  23
         4.1.     Building Area.............................................  23
         4.2.     Common Area...............................................  23
         4.3.     Separate Operation........................................  23
         4.4.     Parking Ratio and Standards...............................  23
         4.5.     Building Height Limitations...............................  25
         4.6.     Certain Setbacks..........................................  25
         4.7.     Drive-Up Stacking.........................................  26

ARTICLE V.        USE RESTRICTIONS..........................................  26
         5.1.     Use in General............................................  26
         5.2.     Prohibited Uses...........................................  26
         5.3.     Non-Interference with Common Area.........................  30
         5.4.     Exclusive Use.............................................  31

ARTICLE VI        MAINTENANCE OF IMPROVEMENTS...............................  32
         6.1.     Maintenance of Buildings..................................  32
         6.2.     Maintenance of Common Area................................  32
         6.3.     Certain Maintenance Responsibilities......................  32
         6.4.     Common Utility Lines and Lettered Parcels.................  33

ARTICLE VII       DAMAGE TO IMPROVEMENTS....................................  34
         7.1.     Restoration of Common Area................................  34
         7.2.     Restoration of Buildings..................................  35
         7.3.     Clearing of Premises......................................  35
</TABLE>
                                       
<PAGE>

<TABLE>
<S>      <C>      <C>                                                        <C>
ARTICLE VIII      EMINENT DOMAIN............................................  36

ARTICLE IX        GENERAL PROVISIONS........................................  36
         9.1.     Realty Taxes and Assessments..............................  36
         9.2.     Indemnification...........................................  36
         9.3.     Liability Insurance.......................................  37
         9.4.     Blanket Insurance.........................................  37
         9.5.     Release and Waiver of Subrogation.........................  37
         9.6.     Ownership of Lettered Parcels.............................  37

ARTICLE X         REMEDIES..................................................  38
         10.1.    Legal Action Generally....................................  38
         10.2.    Injunctive and Declaratory Relief.........................  38
         10.3.    Owner's Right to Cure or Abate............................  38
         10.4.    Lien......................................................  39
         10.5.    Personal Obligation.......................................  40
         10.6.    Remedies Cumulative.......................................  40

ARTICLE XI        MISCELLANEOUS.............................................  40
         11.1.    Notices...................................................  40
         11.2.    Binding Effect............................................  41
         11.3.    Attorneys' Fees...........................................  41
         11.4.    Breach Shall Not Permit Termination.......................  41
         11.5.    Breach-Effect on Mortgagee and Right to Cure..............  42
         11.6.    Effect on Third Parties...................................  42
         11.7.    No Partnership............................................  42
         11.8.    Modification..............................................  42
         11.9.    Severability..............................................  43
         11.10.   Governing Law.............................................  43
         11.11.   Terminology...............................................  43
         11.12.   Counterparts..............................................  43
         11.13.   Captions..................................................  43
         11.14.   Consent...................................................  43
         11.15.   Estoppel Certificate......................................  43
         11.16.   Not A Public Dedication...................................  44
         11.17.   Release...................................................  44
         11.18.   Time of Essence...........................................  44
         11.19.   Entire Agreement..........................................  44
         11.20.   Excuse for Non-Performance................................  45
         11.21.   Mechanics' Liens..........................................  45
         11.22.   Duration..................................................  45
         11.23.   Waiver of Default.........................................  45
         11.24.   Future Annexation.........................................  46
         11.25.   Exhibits..................................................  47

                                                         Page of First Reference

Exhibit "A" =     Parcel Map................................................   1
Exhibit "B" =     Site Plan.................................................   7
Exhibit "C" =     Permanent Access and Utility Easements....................  16
</TABLE>

                                       
<PAGE>


                     CONSTRUCTION, OPERATION AND RECIPROCAL
                               EASEMENT AGREEMENT

                                 By and Between
                          LENNAR ROLLING RIDGE, INC.,
                            a California corporation

                                      and

                          Costco Wholesale Corporation
                            a Washington corporation

Location of Property
Chino Hills, California

CONSTRUCTION, OPERATION AND RECIPROCAL
EASEMENT AGREEMENT
TABLE OF CONTENTS

                                       
<PAGE>


           CONSTRUCTION, OPERATION AND RECIPROCAL EASEMENT AGREEMENT
                           (Chino Hills, California)

         This Construction, Operation and Reciprocal Easement Agreement is 
made and entered into as of this 2nd day of July, 1997, by and between Lennar 
Rolling Ridge, Inc., a California corporation ("Developer"), and Costco 
Wholesale Corporation, a Washington corporation ("Costco").

                                   RECITALS;

         A. Developer is the owner of that certain real property, referred to 
herein as the "Developer Parcels", located in the City of Chino Hills, County 
of San Bernardino, State of California. The Developer Parcels are designated 
as Parcels 1, 4 and 5, according to Parcel Map No. 14996 (the "Parcel Map"), 
on file in the Official Records of San Bernardino County, State of California 
(the "Recorder's Office"), a copy of which is attached hereto as Exhibit "A" 
and is incorporated herein by this reference. Developer is also the Owner of 
Parcel 6 of the Parcel Map (the "Future Development Parcel") which may be 
annexed to the Shopping Center for all purposes in the future as further 
provided below and which will, in any event; be benefitted and burdened by 
certain specified rights and obligations hereunder whether or not said Future 
Development Parcel is annexed to the Shopping Center for all purposes.

         B. Costco is the owner of that certain real property located in the 
City of Chino Hills, County of San Bernardino, State of California, 
designated as Parcels 2 and 3 of the Parcel Map and collectively referred to 
herein as the "Costco Parcel".

         C. Developer intends to construct certain buildings on the Developer 
Parcels and to construct certain "Common Area" improvements on the Developer 
Parcels, all in accordance with the provisions and limitations contained 
herein.

         D. Costco intends to construct certain buildings on the Costco 
Parcel and to construct certain Common Area improvements on the Costco 
Parcel, all in accordance with the provisions and limitations contained 
herein.

         E. Costco is also the owner of Parcel B under the Parcel Map and 
Developer is the owner of Parcels A, C and D of the Parcel Map, which parcels 
(the "Lettered Parcels") comprise non-buildable slope areas. As further 
provided below, the 

                                       
<PAGE>

parties desire to share the cost of maintaining said lettered parcels among 
parcels 1, 2, 3, 4, 5 and 6 of the Parcel Map.

         F. The parties hereto recognize that for the optimum development and 
operation of the "Project" it is necessary that they agree to certain 
matters, including, but not limited to, matters relating to the construction 
and maintenance of facilities on, and the use and restrictions on the use of, 
their respective Parcels, and that in the absence of such agreements neither 
party hereto would be willing to undertake the development or operation of 
their respective Parcels, and the parties desire that all Persons who acquire 
portions of the Project shall take subject to this Agreement in order that 
the development and operation of the Project will be in conformity herewith. 
Accordingly, Developer and Costco intend to establish certain reciprocal 
easements, covenants and conditions with respect to their Parcels.

                                   ARTICLE I

                                  DEFINITIONS

         1.1. Definitions.

         (a) "Agreement" or "REA" shall mean this Construction, Operation and 
Reciprocal Easement Agreement, as may from time to time be amended.

         (b) "Building" or "Buildings" or "Store" or "Stores" shall mean the 
building(s) on each Parcel.

         (c) "Building Area" shall (subject to the limitations referenced in 
this subsection) mean the limited portions of the Project ("Envelope Areas") 
designated by "building limit lines" on the "Site Plan" (as defined below). 
The Owners acknowledge that the Site Plan depicts the particular building 
footprints approved by the City under the current "Final Development Plan" 
and that the construction of any buildings outside of those footprints may 
require approval of the City. Subject to any required City approvals, 
however, and compliance with the other terms and conditions of this 
Agreement, the Envelope Areas shall define, among the Owners, the allowable 
locations for buildings (rather than such current Final Development Plan 
footprints). Building Area shall include, without limitation, the area 
designated "Gas Station Area" on the Costco Parcel. An Owner of a Parcel 
shall be permitted to construct on such "Envelope Areas", or cause to be 
constructed on such "Envelope Areas", such buildings, structures or outdoor 
sales areas, in the locations and exterior configuration as such Owner 
selects, and such buildings, structures or outdoor sales areas shall be 
Building Area within the meaning of the foregoing definition, so long as 

                                       2
<PAGE>

the same (i) do not fail to conform to any provision of this Agreement 
including, without limitation Article IV and (ii) are built in accordance 
with all set backs, zoning and other ordinances of any governmental entity 
having jurisdiction. Without limitation upon the foregoing, an Owner may 
construct more than one Building within a particular Envelope Area provided 
that all of the Buildings within a particular Envelope Area do, when 
considered in the aggregate, comply with all of the requirements with respect 
thereto under the terms of this Agreement including, without limitation, the 
satisfaction of the parking ratios for any multiple Buildings within a 
particular Envelope Area within the legal lot on which such Envelope Area is 
located. Similarly, any references herein to a particular "Pad" or "Major" 
numbers (e.g., "Pad 1") will be deemed to refer to all of the Buildings which 
may exist from time to time within the Envelope Area which contains the 
proposed Building footprint designated on the Site Plan by such "Pad" or 
"Major" number on the Site Plan.

         (d) "City" shall mean the city of Chino Hills, California.

         (e) "Common Area" shall be the portion of the Project intended for 
the nonexclusive use by the Owners and their tenants, subtenants, employees, 
concessionaires, licensees, customers, and business invitees, in common with 
other users as permitted by this Agreement.

         Common Area shall include, but not be limited to, Parking Area, 
access roads, driveways, walkways, sidewalks, and landscaping. The Common 
Area shall include all items of Common Area shown on the Site Plan.

         Common Area shall not include any Floor Area and truck and/or 
loading docks or the concrete apron or ramp leading to such areas but will 
include any asphalt paved areas immediately adjacent to and adjoining such 
concrete apron or ramp area.

         Common Area shall not include any drive-through areas adjacent to 
any drive-through customer service window(s), drive-through customer service 
machines (such as bank "ATMs") or any drive-through or apron areas adjacent 
to any gasoline pumps or gasoline service station areas.

         (f) "Costco Building" shall mean the building or buildings now or 
hereafter located on the Costco Parcel.

         (g) "Costco Building Entrance" means the primary entrance to the 
Costco Building as the same is depicted on the Site Plan attached hereto. For 
the purposes of any restrictions relating to distances from the Costco 
Building Entrance, the 

                                       3
<PAGE>

distance shall be calculated from the center of the primary entrance to the 
Costco Building as shown on the Site Plan attached hereto to that portion of 
the other subject building or outdoor sales area which is closest to the 
Costco Building Entrance (rather than to the Entrance to the other subject 
building or outdoor sales area).

         (h) "Costco Common Area" shall mean the Common Area within the 
Costco Parcel.

         (i) "Costco Parcel" shall mean that certain real property located in 
the City designated as Parcels 2 and 3 of the Parcel Map. If the Costco 
Parcel initially comprises or is later subdivided into more than one legal 
lot, then the term Costco Parcel shall collectively refer to all of such 
legal lots.

         (j) "Default Interest Rate" shall mean the lesser of: (i) five 
percent (5%) per annum in excess of the "Prime Rate," and (ii) the highest 
lawful rate. The "Prime Rate" shall be the rate announced as such from time 
to time by Bank of America or its successor. If there shall be no such 
announced rate of such bank or its successor, then the "Prime Rate" shall be 
such equivalent rate as is charged from time to time by major money-center 
banks.

         (k) "Developer" and "Costco" as used in this Agreement respectively 
refer to such Owners and their respective successors and assigns, and shall, 
so far as the terms, convenants, provisions and conditions of this Agreement 
to be kept, performed, observed and enforced by them are concerned, refer 
only to the Person who at the time in question is the Owner which respect to 
the respective Developer Parcel or Costco Parcel, as the case may be 
appropriate, it being agreed and understood that such terms, covenants and 
conditions shall be binding upon, enforceable against, and enforceable by 
each Owner only with respect to the respective successive periods in which 
each is an Owner and with respect to obligations which accrue during their 
respective period of ownership. Except as otherwise provided below, if Parcel 
1 is subdivided, the term "Developer" shall refer to the entity which is the 
original "Developer" hereunder so long as such entity or an individual 
successor or assignee so designated in a recorded instrument is the owner of 
not less than five (5) acres of land within the Project and thereafter the 
term "Developer" shall be deemed to refer to a Majority-in-Interest of the 
Owners of the Developer Parcels.

         (l) "Developer Common Area" shall mean all Common Area within the 
Project, other than the Costco Common Area.

         (m) "Developer Common Area Plans" shall mean those architectural 
plans for the construction of the Developer Common Area which conform to the 
Site Plan and the City's approved 

                                       4
<PAGE>

design standards and which are approved pursuant to  Section 2.3 below.

         (n) "Developer Parcels" shall mean that certain real property, 
located in the City designated as Parcels 1, 4 and 5 of the Parcel Map. If 
the Developer Parcels are subdivided into additional legal lots, then the 
term "Developer Parcels" shall collectively refer to all of such legal lots.

         (o) "Floor Area" shall mean the aggregate number of square feet of 
floor space in the Project, from time to time, of all floors in any 
structure, whether roofed or not, whether or not actually occupied, including 
basement space and subterranean areas, and balcony and mezzanine space, 
measured from the exterior faces or the exterior lines of the exterior walls 
(including basement walls) and the actual number of square feet of any 
outdoor area appropriated for use to display and/or sell merchandise as 
permitted hereunder. Notwithstanding the foregoing, the term "Floor Area" 
shall not include any of the following:

         (i) one temporary outside sales area on the Costco Parcel of up to 
fifteen thousand (15,000) square feet in size;

         (ii) any structures on the Costco Parcel used primarily for the sale 
of petroleum products such as diesel fuel, gasoline and motor oil in 
conjunction with a gasoline sale or service station ("Costco Gas Station");

         (iii) One temporary outdoor sales area on a Developer Parcel of up 
to fifteen thousand (15,000) square feet in size provided such temporary 
outdoor sales area is utilized solely by a tenant or owner occupying not less 
than fifty thousand (50,000) square feet of Floor Area and said temporary 
outdoor sales area on the Developer Parcels (of which there may only be one 
for all of the Development Parcels) is not less than four hundred feet (400') 
from the Costco Building Entrance;

         (iv) any balcony, mezzanine, basement space or subterranean area 
which (a) is not considered to be building area by the City for the purposes 
of determining the required parking for the Project, (b) is not used for the 
display or sale of food or merchandise, (c) is utilized solely as an 
ancillary use to the primary use on such Parcel such as storage, store office 
or employee break rooms, and (d) such ancillary use does not aggregate more 
than 15% of the size of the ground floor space on such Parcel;

         (v) the upper levels of any multi-deck stock areas created for 
convenience to increase the usability of space for stock purposes;

                                       5
<PAGE>

         (vi) all truck loading areas, truck tunnels, and truck parking, turn 
around and dock areas and ramps;

         (vii) drive-through areas adjacent to any drive-through customer 
service window(s), drive-through customer service machines (such as bank 
"ATMs") or any drive-through or apron areas adjacent to any gasoline pumps or 
service areas;

         (viii) any outdoor area which comprises a part of a day care center; 
and

         (ix) all Common Area.

         (p) "Future Development Parcel" or "Future Annexation Parcel" means 
Parcel 6 of the Parcel Map.

         (q) "Lettered Parcels" or "Lettered Lots" means the parcels 
designated "Parcels A, B, C and D" on the Parcel Map.

         (r) "Majority of the Developer Parcel Owners" shall mean those 
Owners collectively owning not less than 50.1% of the gross land area within 
the Developer Parcels. For example, if there are 30 acres in the Developer 
Parcels, then a Majority of the Developer Parcel Owners would be those Owners 
owning not less than an aggregate of 15.1 acres.

         (s) "Mortgage" shall mean any first or second mortgage, indenture of 
first or second mortgage, or first or second deed of trust on the interest, 
whether fee or leasehold, of an Owner in a Parcel and, to the extent 
applicable, a "Sale and Leaseback" or "Assignment and Subleaseback" 
transaction as herein contemplated.

         (t) "Mortgagee" shall mean a mortgagee, or trustee and beneficiary 
under a deed of trust and to the extent applicable, a fee owner or lessor or 
sublessor of any Parcel which is the subject of a lease under which any Owner 
becomes a lessee in a so-called "Sale and Leaseback" or "Assignment and 
Subleaseback" transaction.

         (u) "Owner" and "Owners" as used in this Agreement shall mean the 
Persons executing this Agreement, or their successors in interest as 
hereinafter provided, as shown by the Official Records of the Recorder's 
Office, as of the date of the exercise of powers or rights or the performance 
by such Owners of obligations created by this Agreement. Such reference shall 
include any Person designated in writing by any of the Owners to act in the 
manner and at the time provided herein with complete authority and in the 
place of such Owner in the matter for which action is taken, powers exercised 
or performance required, provided such written authority shall be recorded in 
the Recorder's Office, and provided further that:

                                       6
<PAGE>

         (i) Sale. In the event of the assignment, transfer or conveyance of 
the whole of the interest of any of the Owners in and to the Parcel in which 
such Owner presently has an interest, without retaining any beneficial 
interest other than under the terms of a deed of trust or mortgage or without 
simultaneously acquiring a new interest by way of leasehold, life estate or 
other possessory interest, then the powers conferred upon such Owner shall be 
deemed assigned, transferred or conveyed and the obligations assumed with its 
interest in such Parcel;

         (ii) Sale Leaseback or Financing. In the event the whole of the 
interest of such Owner in and to the Parcel in which it has a present 
interest is assigned, transferred or conveyed but a new interest is created 
in such Owner simultaneously with such assignment, transfer or conveyance by 
way of leasehold or similar possessory arrangement, or in the event such 
Owner shall convey its interest in said Parcel or any part thereof by deed of 
trust or other security instrument as security for indebtedness, then the 
following shall apply: (A) said fee owner and party in possessions may 
designate (in the manner described in subsection (iv) (below) that either 
(but not both) of them shall have the powers and obligations of the Owner 
with respect to such Parcel, (B) in the absence of such a designation all of 
said powers and obligations shall remain with the party retaining the 
possessory interest, and (C) the interest of both such fee owner and holder 
of such possessory interest shall remain subject to all of the terms and 
conditions hereof. In the event the interest of such Owner referred to in 
this subsection shall cease and terminate, then upon such termination the 
powers and/or obligations of such Owner shall vest in accordance with 
subsections (i), (iii) or (iv) hereof, whichever is applicable;

         (iii) Subdivision. In the event a Parcel is divided into one or more 
separate legal lots, each of such separate legal lots shall thereafter be 
considered to be a "Parcel" and the owners of each such legal lot shall be an 
"Owner"; provided, however, that there may be no more than twelve (12) 
Developer Parcels (including the existing Developer Parcels and any separate 
legal parcels which may be created out of them) and no Parcel may be 
subdivided into condominium units. Any Parcel or Parcels subdivided as a 
aforesaid shall remain subject to all terms and conditions of this Agreement, 
including without limitation, the requirement that a revised Site Plan must 
be approved by Costco and a Majority of the Developer Parcel Owners prior to 
the construction of any buildings in any location other than within the 
Building Area (including permissible Envelope Areas pursuant to Section 
1.1(c) above) designated on the Site Plan attached hereto as Exhibit "B".

         (iv) Fractional Interests. In the event any of the Owners shall 
transfer its present interest in a Parcel or a 

                                       7
<PAGE>

portion of such interest in such manner as to vest its present interest in 
such Parcel in more than one Person other than by creation of a separate 
legal lot (e.g., by the creation of a tenancy-in-common, joint tenancy or the 
like), then not less than fifty-one percent (51%) in interest of such 
transferees shall designate one of their number to act on behalf of all of 
such transferees in the exercise of the powers granted to such Owner under 
this Agreement. So long as such designation remains in effect, such designee 
shall be an Owner hereunder and shall have the power to bind such Parcel and 
such transferees, and such transferees shall not be deemed to be Owners. Any 
such designation must be in writing and served upon the other Owners hereto 
by registered or certified mail, and must be recorded in the Recorder's 
Office. In the absence of such written designation, the acts of the Owner 
whose interest is so divided with respect to the exercise of the powers 
vested by this instrument shall be binding upon all Persons having an 
interest in such Parcel until such time as written notice of such designation 
is given and recorded in the Recorder's Office; and

         (v) Release. Whenever the rights, powers and obligations conferred 
upon any of the Owners are vested in another Owner or owners pursuant to the 
provisions of subsections (i), (ii), (iii) or (iv) above, the transferor 
shall, subject to this Article I, be released or discharged from the 
obligations thereafter accruing under the terms of this Agreement, and the 
transferee(s) of such interest shall be bound by the covenants and 
restrictions herein contained.

         (v) "Parcel" or "Parcels" shall mean the Developer Parcels and/or 
the Costco Parcel, as the context may require. "Parcel 1", "Parcel 2", 
"Parcel 3", "Parcel 4", "Parcel 5", "Parcel 6" and "Parcel 7" shall mean the 
legal parcels which are so designated on the Parcel Map.

         (w) "Parcel Map" shall mean that Parcel Map No. 14996 on file in the 
Official Records of San Bernardino County, a copy of which is attached hereto 
as Exhibit "A" and is incorporated herein by this reference. Any references 
herein to Lots or Parcels by number or letter shall be deemed to refer to the 
lot bearing the corresponding number or letter on the Parcel Map.

         (x) "Parking Area" shall mean those portions of the Common Area used 
for the parking of motor vehicles, including incidental and interior 
roadways, pedestrian stairways, walkways, curbs and landscaping within or 
adjacent to areas used for parking of motor vehicles, together with all 
improvements to the Common Area which at any time are erected thereon. Such 
areas shall not include truck ramps and loading and delivery areas or 
drive-through area adjacent to any customer service window(s), drive-through 
area adjacent to any customer service machines, or

                                       8
<PAGE>

any drive-through or apron areas adjacent to any gasoline pumps or service 
areas.

         (y) "Permittees" shall mean the Owners, all Persons from time to 
time entitled to the use and occupancy of Floor Area in the Project under any 
lease, deed or other arrangement whereunder such Person has acquired a right 
to the use and occupancy of any floor Area, and their respective officers, 
directors, employees, agents, contractors, customers, visitors, invitees, 
licensees and concessionaires.

         (z) "Person" or "Persons" shall mean and include individuals, 
partnerships, firms, associations, joint ventures, corporations, or any other 
form of business entity.

         (aa) "Project" or "Shopping Center" shall mean the property 
consisting of the Developer Parcels and the Costco Parcel.

         (bb) "Separate Signs" means monument signs which: (i) are adjacent 
to Peyton Drive or Chino Avenue, (ii) extend above the grade of said adjacent 
public streets by no more than six feet (6'), (iii) are permitted by the 
applicable governmental requirements, (iv) identify individual occupants of 
the Project, and (v) do not limit the size or location of the Shared Sign(s).

         (cc) "Shared Sign(s)" shall mean the free-standing sign(s) for the 
Project, other than the "Separate Signs" (as defined above). the conditions 
for the use of the Shared Sign(s) are provided for in Section 2.7.

         (dd) "Site Plan" shall mean that certain plan attached as Exhibit 
"B" and made a part hereof by this reference. Any revisions, modifications or 
other changes to the Site Plan requested by an Owner shall require the prior 
approval of Costco and a Majority of the Owners of the Developer Parcels, 
which approval may be granted or withheld in the sole, absolute and 
unrestricted discretion of such parties.

                                   ARTICLE II

                            CONSTRUCTION OBLIGATIONS

         2.1. Developer Construction. Prior to Developer's use or occupancy 
of each Building on the Developer Parcels, Developer shall construct, or 
cause to be constructed: (a) a sufficient portion of the Developer Common 
Area located on the Developer Parcel upon which a Building has opened for use 
or occupancy adequate to satisfy the parking ratio requirements hereunder and 
located in reasonable proximity to such Building; plus (b) any other Common 
Area on the Developer Parcels which the City 

                                       9
<PAGE>

requires as a condition to the occupancy of such Building or as a condition 
to the use or occupancy of any other Building(s) which has then been 
completed within the Project; plus (c) any other Common Area on the Developer 
Parcels which is reasonably necessary to the operation of the Project.

         2.2. Costco Construction. Prior to Costco's use or occupancy of the 
building on the Costco Parcel, Costco shall construct, or cause to be 
constructed, the Common Area on the Costco Parcel. In addition, Costco shall 
have the right to enter upon the Developer Parcels to construct such 
driveways within the Permanent Access Easement or such other Common Area as 
is reasonably necessary to the operation of the buildings on the Costco 
Parcel.

         2.3. Developer Plans and Specifications. Prior to commencing 
construction or modification of any portion of the Developer Common Area, 
Developer shall deliver to Costco three (3) copies of the proposed Developer 
Common Area Plans, in accordance with Section 11.1 below and shall include a 
letter specifically referring to this provision, the deemed approved 
procedure and the time periods hereunder. Each such submission shall 
specifically identify any deviations from the requirements of this Agreement. 
Within fifteen (15) days following delivery of the Developer Common Area 
Plans, Costco shall approve the Developer Common Area Plans or request 
reasonable revisions. If following the expiration of such fifteen (15)-day 
period Costco has failed to respond as aforesaid, then Developer may send 
Costco a notice in accordance with Section 11.1 below specifically referring 
to this provision, to the deemed approval procedure and to the time periods 
hereunder ("Default Notice"). If Costco fails to approve such plans or to 
request reasonable revisions within fifteen (15) days of Costco's receipt of 
said Default Notice, Costco shall be deemed to have approved said Developer 
Common Area Plans. Costco shall give reasons for any request for revision of 
the Developer Common Area Plans. Costco and Developer shall act in good faith 
and use reasonable efforts to agree on the final form of the Developer Common 
Area Plans incorporating any revisions requested by Costco. It shall not be 
considered unreasonable for Costco to require the Developer Common Area Plans 
to fully comply with the terms and conditions of this Agreement and nothing 
contained herein shall limit Costco's discretion in approving or disapproving 
any proposed deviations. On reaching agreement on such plans, Costco and 
Developer shall sign such plans as approved and Developer shall promptly 
submit such plans for approval by the City. If any such plans are proposed to 
be changed, other than insubstantial changes required during construction in 
response top field conditions, such changes shall be submitted for 
re-approval in accordance with this Section. If the Developer Parcels are 
owned by more than one entity, then the term "Developer" as used in 

                                       10
<PAGE>

Section 2.3. shall be deemed to refer to each Owner of a Developer Parcel.

         Notwithstanding anything herein which may appear to be to the 
contrary, Developer shall not be required to seek the consent of Costco or 
any other Owner to any modification to the Common Area shown on the "original 
plans" of the Developer Common Area which have previously been approved by 
Costco, which do not substantially alter the circulation patterns within the 
Project from such "original plans" for the Developer Common Area and which do 
not result in any deviations from the parking ratio, Building Area locations 
or other requirements of this Agreement. For example, and without limitation 
upon the foregoing, changes in the location of cart corrals, the re-striping 
of parking spaces to different sizes (subject to Section 4.4(a) below) and 
the alteration of the angles of parking spaces relative to drive aisles 
(e.g., from ninety degrees to sixty degrees) made after the approval of the 
"original plans" for the Developer Common Area shall not require such consent 
if the Developer Parcels remains in compliance with the requirements of this 
Agreement. As used herein, the term "original plans" for the Developer Common 
Area shall refer to those Developer Common Area Plans approved by Costco 
after Developer has determined the initial location of 
the Buildings to be located within the Envelope Areas on the Developer 
Parcels and the corresponding location of the drive aisles and parking rows 
adjacent to such Buildings.

         2.4. Costco Plans and Specifications. Prior to the modification of 
any portion of the Costco Common Area, Costco shall deliver to Developer 
three (3) copies of the proposed Costco Common Area Plans, in accordance with 
Section 11.1 below and shall include a letter specifically referring to this 
provision, the deemed approved procedure and the time periods hereunder. Each 
such submission shall specifically identify any deviations from the 
requirements of this Agreement. Within fifteen (15) days following delivery 
of the Costco Common Area Plans, Developer shall approve the Costco Common 
Area Plans or request reasonable revisions. If following the expiration of 
such fifteen (15) day period Developer has failed to respond as aforesaid, 
then Costco may send Developer a notice in accordance with Section 11.1 below 
specifically referring to this provision, to the deemed approval procedure and 
to the time periods hereunder ("Default Notice"). If 
Developer fails to approve such plans or to request reasonable revisions 
within fifteen (15) days of Developer's receipt of said Default Notice, 
Developer shall be deemed to have approved said Costco Common Area Plans. 
Developer shall give reasons for any request for revision of the Costco 
Common Area Plans. Costco and Developer shall act in good faith and use 
reasonable efforts to agree on the final form of the Costco Common Area Plans 
incorporating any revisions requested by Developer. It shall not be 
considered unreasonable for Developer to require the Costco Common Area Plans 
to fully comply with the 

                                       11
<PAGE>

terms and conditions of this Agreement and nothing contained herein shall 
limit Developer's discretion in approving or disapproving any proposed 
deviations. On reaching agreement on such plans, Costco and Developer shall 
sign such plans as approved and Costco shall promptly submit such plans for 
approval by the City. If any such plans are proposed to be changed, other 
than insubstantial changes required during construction in response to field 
conditions, such changes shall be submitted for re-approval in accordance 
with this Section. The term "Developer" as used in this Section 2.4 shall 
have the meaning specified therefor in Article 1 above.

         Notwithstanding anything herein which may appear to be to the 
contrary, Costco shall not be required to seek the consent of Developer or 
any other Owner to any modification to the Common Area shown on the original 
plans of the Costco Common Area (as depicted in the Site Plan) which do not 
substantially alter the circulation patterns within the Project and which do 
not result in any deviations from the parking ratio, Building Area locations 
or other requirements of this Agreement. For example, and without limitation 
upon the foregoing, changes in the location of cart corrals, the re-striping 
of parking spaces to different sizes and the alteration of the angles of 
parking spaces relative to drive aisles (e.g., from sixty degrees to ninety 
degrees) shall not require such consent if the Costco Parcel remains in 
compliance with the requirements of this Agreement.

         2.5 Interference by Construction. Each Owner agrees that any 
construction work to be undertaken by it shall be performed (a) so as not to 
cause any increase in the cost of constructing the remainder of the Project 
or any part thereof, (b) so as not to unreasonably interfere with any 
construction work being performed on the remainder of the Project, or any 
part thereof, and (c) so as not to unreasonably interfere with and minimize 
disruptions of the access to, use, occupancy or enjoyment of the remainder of 
the Project or any part thereof by the other Owner and the Permittees of the 
other Owner. Except to the extent limited by Section 2.6, any damage 
occurring to any portion of the Project as a result of such construction work 
shall be the responsibility of the Owner performing such construction work or 
causing such construction work to be performed and shall be repaired by such 
Owner, at such owner's sole cost and expense, to the same condition as 
existed immediately prior to such work promptly upon the completion of such 
construction work. Any construction work on the Developer Parcels which (i) 
would limit or impair the use of the shared driveways adjacent to any side of 
the Costco Parcel or the two primary driveways from the Costco Parcel to 
Peyton Drive and (ii) is proposed to be accomplished during the period from 
October 15 to January 1 of any year, shall be subject to Costco's prior 
approval, which approval shall not be unreasonably withheld but may be 
conditioned upon reasonable

                                       12
<PAGE>

measures to minimize interference with the business operations on the Costco
Parcel.

         2.6. Construction Indemnities. Each Owner covenants and agrees to 
indemnity, defend, and hold harmless the other Owner from and against all 
claims and all costs, losses, damages, expenses and liabilities (including 
reasonable attorneys' fees) incurred in connection with all claims, including 
any action or proceedings brought thereon, arising from or as a result of any 
mechanic's liens, stop notices, or other claims regarding materials supplied 
or work performed, or the death of, or any accident, injury, loss or damage 
whatsoever caused to any natural person, or to the property of any Person, as 
shall occur by reason of the performance of any construction, or of any 
Utility Use as defined in Section 3.1(e) below, by or at the request of the 
indemnitor, except to the extent of claims caused by the negligence, 
recklessness or willful misconduct of the indemnitee, its licensees, 
concessionaires, agents, servants or employees, or any agents, servants or 
employees of such licensees or concessionaires where the same may occur.

         The indemnitee shall give the indemnitor notice of any suit or 
proceeding entitling the indemnitee to indemnification pursuant to this 
Section 2.6 and the indemnitor shall defend the indemnitee in such suit or 
proceeding with counsel approved by the indemnitee.

         2.7. Cost of Construction. Except as otherwise set forth in this 
Agreement or in any separate agreement between Owners, each Owner shall be 
responsible for the cost and expense of all improvements to be constructed on 
its Parcel.

         2.8. Signs.

              (a) Each Owner may place such sign or signs on the exterior of 
the Building on its Parcel as shall be permitted by applicable governmental 
requirements.

              (b) Subject to the terms of this Agreement, each Owner may 
place such freestanding signs on its Parcel as satisfy the definition of a 
"Separate Sign."

              (c) The following shall apply to the primary free-standing sign 
for the Project (the "Shared Sign"):

                   (i) the location(s) thereof shall be at the northern 
corner of the Developer Parcels near to the top of the slopes to Riverside 
Drive and Highway 71.

                   (ii) the Owner of the Costco Parcel and each Owner of a 
store designated "Major" on the Site Plan shall have the right to place a 
panel on the Shared Sign(s), each such panell 

                                       13
<PAGE>

shall be equal in size; provided, however, that the panel for the building on 
the Costco Parcel and the panel for any other Major Building which is 
occupied by a business utilizing more than eighty thousand (80,000) square 
feet of Floor Area shall be fifteen percent (15%) larger than the other 
panels; provided further, however, that if there is no longer a business on 
the Costco Parcel which occupies more than eighty thousand (80,000) square 
feet of Floor Area, then the panels for the other Major parcels may be 
increased to be equal in size to the panel for the Costco Parcel.

         (iii) the Owner of the Costco Parcel shall be entitled to have "top 
billing" on the Shared Sign(s).

                   (iv) If any Owner elects to construct such Shared Sign(s), 
it shall give notice of such intention to the other Owner(s), and if the 
other Owner(s) notifies such constructing Owner within sixty (60) days of its 
receipt of such notice that it elects to be included on the Shared Sign, then 
the Owners shall cooperate in good faith to design the Shared Sign and each 
Owner shall pay the cost of its panel and a portion of the other costs of 
such Shared Sign(s) equal to the relative portion of the panel areas thereon 
which it elects to utilize.

                   (v) If an Owner constructs the Shared Sign(s) and Costco 
does not initially elect to have panel(s) included thereon, Costco may elect 
to make the same contribution Costco would have been required to make toward 
costs of the Shared Sign (exclusive of the cost of Costco's panel which is 
not then being installed) if it had elected to be included on such Shared 
Signs. In such event, the constructing owner shall submit each Shared Sign 
plan to the city for approval with a place thereon for Costco's panel and the 
constructing owner shall design and build each Shared Sign in a manner such 
that Costco's panel can be added at a later time. If Costco elects to make 
the initial contribution under this clause (v), Costco shall have the right 
to later elect to have its panel included on the Shared Sign(s) and, upon 
Costco's making such election, the constructing owner shall cause Costco's 
panel (of the size and position described in "clause (ii)" above to be 
included on the Shared Sign(s) and Costco shall reimburse constructing owner 
for any cost of moving or replacing the then existing panels to accommodate 
Costco's panel.

                   (vi) If an Owner constructs the Shared Sign(s) and Costco 
does not initially elect to either have its panel included thereon under 
clause (iv) above, then Costco may nevertheless elect to have a panel (of the 
size and position described in "clause (iii)" above) included thereon at a 
later date, but the following shall apply: (A) Costco shall be solely 
responsible for obtaining and bearing the cost of any necessary 

                                       14
<PAGE>

governmental approvals to modify and/or rebuild the Shared Sign(s), (B) 
Costco shall be responsible for reconstructing the Shared Sign(s) at its sole 
cost and expense including, without limitation, the cost of any structural 
work and the cost of moving or replacing any other panels, and (C) Costco 
shall coordinate the foregoing with the other Owners utilizing the Shared 
Sign(s) to minimize any disturbance to their use of the Shared Sign(s) during 
the course of such construction activity.

                   (vii) The cost of maintaining the Shared Sign shall be 
allocated among the Owners whose panels are then included on the Shared Sign 
in proportion to their respective Panel Area, except that each party shall 
pay the cost of repairing or replacing its own panel.

              (d) The Costco Monument Sign. The Owner of the Parcel upon 
which the described "Costco Monument Sign" is located hereby grants and 
conveys to the Owner of the Costco Parcel, for the benefit of the owner of 
the Costco Parcel and the Costco Parcel, an exclusive easement over such 
portion of the granting Owner's Parcel to construct a Separate Sign in the 
location designated "Costco Monument Sign" on the Site Plan.

         2.9. Staging and Storage Areas.

              (a) Staging Area. In connection with any construction, 
reconstruction, repair or maintenance on its Parcel, each Owner reserves the 
right to create a temporary staging and/or storage area in the Common Area on 
its Parcel ("Staging Area"), but on no other Parcel, at such location as will 
not unreasonably interfere with access between such Owner's parcel and the 
other areas of the Project. Without the prior written consent of the other 
Owner, no Owner shall be permitted to establish a Staging Area within two 
hundred feet (200') of the primary entrance to any Building which comprises 
more than forty thousand (40,000) square feet of Floor Area which would be 
open for business during the use of the Staging Area (the "Prohibited Area"). 
It shall be reasonable for the relevant Owner to withhold such consent if the 
Staging Area would be established or would remain in place during the period 
from October 15 to January 1, if the Owner withholding its consent has, or 
intends to have, an operating business on its Parcel during any portion of 
such period. Prior to the commencement of any work which requires the 
establishment of a Staging Area in the Common Area on an Owner's Parcel, the 
constructing Owner shall give the other Owner at least thirty (30) days prior 
notice of the proposed location of its Staging Area, except in the event of 
an emergency or other circumstances requiring immediate action. All parking 
of construction vehicles, including vehicles of workers, shall occur only on 
the constructing Owner's Parcel and shall not occur on the Prohibited Area 
unless such parking has been approved in

                                       15
<PAGE>

the same manner as the approval of a Staging Area pursuant to this provision. 
Upon completion of such work, the constructing Owner shall restore the 
affected Common Area to a condition equal to or better than that existing 
prior to commencement of such work.

              (b) Temporary License. Each Owner hereby grants to each other 
Owner and its respective contractors, materialmen and laborers a temporary 
license for access and passage over and across the Common Area of the 
grantor's Parcel as shall be reasonably necessary for the grantee to 
construct and/or maintain improvements upon the grantee's Parcel; provided, 
however, that such license shall be in effect only during periods when actual 
construction and/or maintenance is being performed, and provided further that 
the use of such license shall not unreasonably interfere with the use and 
operation of the Common Area by others. Prior to exercising the rights 
granted herein, the grantee shall first provide the grantor with a written 
statement describing the need for such license, and shall furnish a 
certificate of insurance showing that its contractor has obtained the same 
liability insurance as each Owner is required to carry pursuant to Section 
9.3 of this Agreement. Any Owner availing itself of the temporary license 
shall promptly pay all costs and expenses associated with such work, shall 
diligently complete such work as quickly as possible, and shall promptly 
clean the area and restore the affected portion of the Common Area to a 
condition which is equal to or better than the condition which existed prior 
to the commencement of such work. Notwithstanding the foregoing, the event a 
dispute exists between the contractors, laborers, suppliers and/or others 
connected with construction activities, each Owner shall have the right to 
prohibit the contractors, laborers, suppliers and/or others working for 
another Owner from using the Common Area on its Parcel.

                                  ARTICLE III

                                   EASEMENTS

         3.1. Easements. Each Owner hereby grants and conveys to each of the 
other Owners, for the benefit of the other Owners and their respective 
Parcels, the following easements in, to, over, and across each other Owner's 
Parcel:

              (a) parking Easements. Each Parcel and Owner shall have a 
nonexclusive easement in, to, over and across the Common Area on the other 
Owners' parcels, each such easement for the purpose of parking vehicles of 
Permittees thereon, limited, however, to purposes connected with or 
incidental to use of such parking for Project purposes.

                                       16
<PAGE>

         (b) Access Easement. Each Parcel and Owner shall have nonexclusive 
easements in, to, over and across the Common Area on each other Owners' 
Parcel, including driveways, for vehicular (including service vehicles) and 
pedestrian ingress and egress, and access and the right of access between the 
public streets adjacent to the Project and each owner's Parcel.

         (c) Common Utility Lines. Each Parcel and owner shall have 
non-exclusive perpetual easements in, to, over, under, along and across those 
portions of the Common Area located on each other Parcel designated "Common 
Utility Lines" on Exhibit "C" hereto as for the installation, operation, 
flow, passage, use, maintenance, connection, repair, relocation, and removal 
of shared utility facilities ("Common Utility Lines") serving the grantee 
Owner(s)' Parcel, including but not limited to, sanitary sewers, storm 
drains, water (fire and domestic), gas, electrical, cable television, 
telephone and communication lines. The easement area shall be no wider than 
necessary to reasonably satisfy the requirements of a private or public 
utility, or five feet (5') on each side of the centerline if the easement is 
not granted to a public or private Utility Owner. Upon request, the grantee 
Owner shall provide to the grantor Owner a copy of an as-built survey showing 
the location of such Utility Line.

         (d) Construction: Modifications and Maintenance of Common Utility 
Lines. The following shall apply with respect to work on the Common Utility 
Lines.

              (i) all such repair, maintenance and replacement work shall be 
performed and shared pursuant to Section 6.4 below, except for work which is 
performed to provide initial or additional services to a particular parcel 
which shall, unless otherwise agreed to by the affected Owners, be borne by 
the Owner performing such work;

              (ii) Developer shall use reasonable efforts to cause the Common 
Utility Lines located within the Costco Parcel and any driveways adjacent to 
the Costco Parcel or from the Costco Parcel to Peyton Drive to be initially 
constructed to accommodate the foreseeable needs of the Buildings to be built 
on the Developer parcels and Future Development Parcel so that alterations or 
other work to the Common Utility Lines which might affect the use of the 
surface of the Common Areas or the continuous provision of utility service 
through the Common Utility Lines will not be necessary. To the extent 
practicable, any unforeseen needs of the Developer Parcels shall be 
accommodated through Separate Utility Lines which do not impact the Costco 
Parcel or any driveway adjacent to the Costco Parcel or from the Costco 
Parcel to Peyton Drive, except that unforeseen needs of the Future 
Development Parcel may be accommodated through Separate Utility Lines in such 
location as Costco may approve pursuant to Section 3.1(e) below;

                                       17
<PAGE>

              (iii) at least thirty (30) days prior to performing any work 
within the easement areas granted for Common Utility Lines under clause (c) 
above (other than emergencies), the Owner performing such work shall first 
provide the other Owners with a written statement describing the need for 
such work, the nature of the work to be performed, the anticipated 
commencement and completion dates for the work and shall furnish a 
certificate of insurance showing that its contractor has obtained the minimum 
insurance coverage required by Article 9 hereof;

              (iv) the Owner performing such work pursuant to the provisions 
of this subsection shall cause all work in connection therewith (including 
general clean-up and proper surface and/or subsurface restoration) to be 
completed as quickly as practicable and in a manner so as to minimize 
interference with the use of the Common Area;

              (v) the Owner performing such work agrees to defend, protect, 
indemnify, and hold harmless the other Owners from and against all claims or 
demands, including any action or proceeding brought thereon, and all costs, 
losses, expenses and liabilities of any kind related thereto (including 
reasonable attorneys fees and court costs) arising out of or resulting from 
the exercise of the right to install, maintain and operate the Common Utility 
Line as herein provided;

              (vi) if such work would take place on the Costco Parcel or on 
any driveway adjacent to the Costco Parcel or from the Costco Parcel to 
Peyton Drive, such work shall not (except for emergencies) be conducted 
during the months of November, December or January without the prior written 
consent of the Owner of the Costco Parcel and each other owner affected 
thereby;

              (vii) such work shall not interfere with or diminish the 
utility service to any Owner during business hours; and if an electrical 
line/computer line is being relocated, then the Owner performing such work 
and the other Owners affected thereby Owner shall coordinate any interruption 
at any time to eliminate any detrimental effects;

              (viii) such work shall not reduce or unreasonably impair the 
usefulness or function of such Common Utility Line;

              (ix) such work shall be completed using materials and design 
standards which equal or exceed those originally used; and

              (x) such work shall have been approved by the provider of such 
service and the appropriate governmental or quasi-governmental agencies 
having jurisdiction over such work.

                                       18
<PAGE>

         (e) Separate Utility Lines; Developer Parcels. Each Parcel and Owner 
shall have non-exclusive perpetual easements in, to, over, under, along and 
across those portions of the Common Area located on each other Parcel 
necessary for the installation, operation, flow, passage, use, maintenance, 
connection, repair, relocation, and removal of utility facilities ("Separate 
Utility Lines") serving and grantee Owner(s)' Parcel, including but not 
limited to, sanitary sewers, storm drains, water (fire and domestic), gas, 
electrical, cable television, telephone and communication lines. The initial 
location of any separate utility Line and schedule for its installation shall 
be subject to the prior written approval of the Owner whose Common Area is to 
be burdened thereby, such approval not to be unreasonably withheld or 
delayed. It shall not be unreasonable for the Owner of a Parcel containing an 
operating business to disapprove construction on its Parcel during November, 
December and January. The easement area shall be no wider than necessary to 
reasonably satisfy the requirements of a private or public utility, or five 
feet (5') on each side of the centerline if the easement is not granted to a 
private or public utility Owner. Upon request, the grantee Owner shall 
provide to the grantor Owner a copy of an as-built survey showing the 
location of such Separate Utility Line. Notwithstanding the foregoing, there 
shall be no easements for Separate Utility Lines encumbering the Costco 
Parcel except for the benefit of the Future Development Parcel.

         At least thirty (30) days prior to exercising the right granted 
under this clause (d) (other than emergencies), the grantee Owner shall first 
provide the grantor Owner with a written statement describing the need for 
such easement, shall identify the proposed location of the Separate Utility 
Line, the nature of the service to be provided, the anticipated commencement 
and completion dates for the work and shall furnish a certificate of 
insurance showing that its contractor has obtained the minimum insurance 
coverage required by Article 9 hereof. Except as otherwise agreed to by the 
grantor Owner and the grantee Owner, any Owner installing Separate Utility 
Lines pursuant to the provisions of this subsection shall pay all costs and 
expenses with respect thereto and shall cause all work in connection 
therewith (including general clean-up and proper surface and/or subsurface 
restoration) to be completed as quickly as practicable and in a manner so as 
to minimize interference with the use of the Common Area. In addition, the 
grantee Owner of any Separate Utility Line agrees to defend, protect, 
indemnify, and hold harmless the other Owners from and against all claims or 
demands, including any action or proceeding brought thereon, and all costs, 
losses, expenses and liabilities of any kind related thereto (including 
reasonable attorneys fees and court costs) arising out of or resulting from 
the exercise of the right to install, maintain and operate the Separate 
Utility Line as herein provided.

                                       19
<PAGE>

         (f) Underground Utilities. All utility lines shall be underground 
except:

              (i) ground mounted electrical transformers;

              (ii) as may be necessary during periods of construction, 
reconstruction, repair, or temporary service;

              (iii) as may be required by governmental agencies having 
jurisdiction;

              (iv) as may be required by the provider of such service;

              (v) fire hydrants; and

              (vi) irrigation and lighting pedestals required to operate 
Common Area improvements.

         (g) Relocation of Common Utilities. Each Owner of a Parcel upon 
which a Common Utility Line is located shall have the right to relocate the 
Common Utility Lines located on its parcel (but not on any other Parcel) at 
its sole cost and expense upon compliance with each of the conditions set 
forth in Section 3.1 (d) hereof; provided, however, that no Owner may 
relocate any Common Utility Line located in any driveway adjacent to the 
Costco Parcel or from the Costco Parcel to Peyton Drive without the prior 
written consent of the Owner of the Costco Parcel, which consent may be 
granted or withheld in the sole, absolute and unrestricted discretion of the 
Owner of the Costco Parcel.

         (h) Relocation of Separate Utility Lines. the grantor Owner shall 
have the right to relocate a Separate Utility Line upon thirty (30) days' 
prior written notice (except that such prior written notice shall not be 
required for emergencies), provided that such relocation:

              (i) if such work would take place on any driveway adjacent to 
the Costco Parcel or from the Costco Parcel to Peyton Drive, such work shall 
not be commenced (except for emergencies) during the months of November, 
December or January without the prior written consent of the Owner of the 
Costco Parcel and each other Owner affected thereby;

              (ii) shall not interfere with or diminish the utility service 
to any Owner during business hours; and if an electrical line/Computer line 
is being relocated, then the grantor Owner and grantee Owner shall coordinate 
any interruption at any time to eliminate any detrimental effects;

              (iii) shall not reduce or unreasonably impair the usefulness or 
function of such Separate Utility Line;

                                       20
<PAGE>

         (iv) shall be performed without cost or expense to grantee Owner;

              (v) shall be completed using materials and design standards 
which equal or exceed those originally used; and

              (vi) shall have been approved by the provider of such service 
and the appropriate governmental or quasi-governmental agencies having 
jurisdiction over such work.

Documentation of the relocated easement area, including the furnishing of an 
"as-built" survey, shall be the grantor Owner's expense and shall be 
accomplished as soon as possible following completion of such relocation.

         (i) Drainage. Each Parcel and Owner shall have the perpetual right 
and easement to discharge surface storm drainage and/or runoff from each 
Owner's Parcel over, upon and across the Common Area of each other Owner's 
Parcel, upon the following conditions and terms:

              (i) The Common Area grades and the surface water 
drainage/retention system for the Shopping Center shall be initially 
constructed in strict conformance with the details approved by the Owners as 
part of the Common Area Plans; and

              (ii) No Party shall alter or permit to be altered the surface 
of the Common Area or the drainage/retention system constructed on its parcel 
if such alteration would impair such Parcel's acceptance of storm waters as 
contemplated by the Common Area Plans or would materially increase the flow 
of surface water onto an adjacent Parcel either in the aggregate or by 
directing the flow of surface water to a limited area.

         3.2. Unimpeded Access Between Parcels. The Owners covenant that at 
all times free access between each Parcel and the remainder of the Project 
will not be impeded and will maintained. Except as specifically depicted on 
the Site Plan or as may be approved in writing by Costco and a Majority of 
the Owners of the Developer Parcels, no fence, division, partition, rail, or 
obstruction of any type or kind shall ever be placed, kept, permitted, or 
maintained between the legal lots comprising the Project or between any 
subsequent division thereof or upon or along any of the common property lines 
of any portion thereof, except within the confines of the Building Area, and 
except as may be required at any time and from time to time in connection 
with the construction, maintenance, and repair of Common Area.

         3.3. Use by Permittees. The use of all easements provided for in 
this Article; and the use of the entire Common Area will, in each instance, 
be nonexclusive, and for the use and benefit of all Permittees.

                                       21
<PAGE>

         3.4. Unauthorized Use and Closure of Common Area. Each Owner hereby 
reserves the right to eject or cause the ejection from the Common Area on its 
Parcel of any Person or Persons not authorized, empowered or privileged to 
use the Common Area pursuant to this Agreement. Each Owner also reserves the 
right to close off the Common Area on its Parcel for such reasonable period 
or periods of time as may be legally necessary to prevent the acquisition of 
prescriptive rights by anyone; provided, however, that prior to closing off 
any portion of the Common Area, as herein provided, such Owner shall give 
written notice to the other Owners of its intention to do so, and shall 
coordinate such closing with the other Owners so that no unreasonable 
interference with the operation of the Project shall occur.

         3.5. Prohibition Against Granting Easements. Except as provided in 
Section 3.6 below, no Owner, nor any Person not an Owner, shall grant an 
easement or easements of the type set forth in this Article III for the 
benefit of any property not within the Project at the time of such grant 
(i.e., not originally a part or annexed pursuant to Section 11.24 below); 
provided, however, that the foregoing shall not prohibit an Owner from 
granting or dedicating easements on its Parcel of the type described in this 
Article III to governmental or quasi-governmental authorities or to public 
utilities.

         3.6. Present Easements to Future Development Parcel. Each Owner 
hereby grants to the Owner of the Future Development Parcel: (a) 
non-exclusive underground utility easements in the locations designated on 
Exhibit "C" hereto on the same terms as the grant of the easement over the 
Common Utility Line to the Owners and (b) a shared driveway easement from 
Peyton Drive to the Future Development Parcel across the approximately three 
hundred and seventy five foot (375') long driveway closest to the Future 
Development Parcel as depicted on Exhibit "C" hereto; provided, however, the 
Owner of the Future Development Parcel may not exercise the aforesaid 
driveway easement unless: (i) the Future Development Parcel has theretofore 
been annexed to the Shopping Center pursuant to Section 11.24 below or (ii) 
it has constructed a continuous concrete block wall of at least six (6) feet 
in height on the Future Development Parcel contiguous to the border of the 
Costco Parcel. If the Future Annexation Panel is not annexed to the Shopping 
Center, the Owner of such parcel shall make an equitable contribution toward 
the cost of maintaining the Common Utility Lines and driveway which it 
utilizes in proportion to its use of the same.

                                       22
<PAGE>

                                   ARTICLE IV
                        PROJECT DEVELOPMENT RESTRICTIONS

         4.1. Building Area. No Owner shall suffer or permit any buildings,
structures or outdoor sales areas to be built or maintained other than in the
"Building Area" on their respective Parcels (as defined above). Without
limitation upon the foregoing, all appurtenant canopies, above-ground supports,
loading docks, truck ramps and other outward extensions of buildings shall be
built or maintained only in such Building Area.

         4.2. Common Area. Except as provided in Section 5.3(c) below, no
improvements may be built or maintained in the Common Area other than parking
lots, driveways, lights, signs, landscaping, underground utilities and
improvements normally found in a parking lot. Except as provided in Section
5.3(c) below, no portion of the Common Area may be used for any purpose other
than the parking of vehicles and vehicular and pedestrian ingress and egress.
Without limitation upon the foregoing, but subject to Section 5.3(c) below, no
portion of the Common Area may be used for Christmas tree sales, shows,
carnivals, sales by merchants using vehicles or booths, fireworks sales, kiosks
or any other purpose which would limit or impair ingress or egress or the use of
any parking spaces.

         4.3. Separate Operation. There shall be differences in grade or
barriers (except for emergency vehicles access points) between the Project and
any contiguous property so that the parking areas on the Project shall not be
readily available to the users of any other property. Each Owner shall post such
signs and implement such rules and regulations and enforcement means as shall be
reasonably necessary in order to restrict the Project, and the Owners shall
cooperate with each other in enforcing such exclusive area.

         4.4. Parking Ratio and Standards

         (a) In addition to the applicable requirements of any government agency
having jurisdiction over the Project, the Owners covenant that the widths of
parking spaces, parking lanes and parking bays shall be at least equal to the
widths shown on the Site Plan; provided, however, that each Owner shall have the
right, in its sole, absolute and unrestricted discretion, to reduce the size of
any parking stalls on its Parcel to such minimum size as is permitted by the
applicable governmental requirements; and provided further, however, that the
size of any parking spaces on any Developer Parcel within four hundred fifty
feet (450') of the Costco Building Entrance may not be reduced except to the
same extent that the Owner of the Costco Parcel has 


                                       23
<PAGE>

heretofore reduced the size of the spaces on the Costco Parcel which are within
four hundred fifty feet (450') of the Costco Building Entrance.

         (b) The Permittees shall not be prohibited or prevented from parking in
the Common Area so long as space is available in such parking area; provided,
however, that the employees of each occupant of the Developer Parcels shall be
required to park on the Developer Parcels and the employees of each occupant of
the Costco Parcel shall be required to park on the Costa Parcel. Each Owner with
respect to the Developer Parcels shall use all reasonable efforts to cause the
employees of all occupants of its Parcel to comply with the foregoing employee
parking requirements. There shall be no fees or charges imposed upon users of
the parking areas of the Common Area unless the same have been approved by both
the Owner of the Costco Parcel and a Majority-in-Interest of the Owners of the
Developer Parcels, each in their sole, absolute and unrestricted discretion.

         (c) There shall be maintained at all times on the Common Area on each
Parcel a number of parking spaces at least equal to the number of spaces which
would be legally required for the building sizes and uses on such Parcel if such
Parcel were not benefitted by any parking rights over any other parcels.

         (d) Without limitation upon the preceding subsection, there shall be
maintained at all times on each Parcel not less than the following number of
parking spaces for each one thousand (1,000) square feet of Floor Area utilized
for the following uses on such Parcel:

                   (i) retail uses: 5:1;

                   (ii) restaurants and fast food which do not have Floor Area
(including, without limitation, patio areas so used) utilized as a bar, as a
dance floor, as a pool room or as a similar areas dedicated primarily to
alcoholic beverage sales or entertainment rather than to food service: 10:1;

                   (iii) restaurants and fast food which contain Floor Area
(including, without limitation, patio areas so used) utilized as a bar, as a
dance floor, as a pool room or as a similar area dedicated primarily to
alcoholic beverage sales or entertainment [other than incidental entertainment
uses as provided in Section 5.2.2(b)] rather than to food service: 12:1;

                   (iv) Theatres: one parking space per two (2) seats;

                   (v) Entertainment Uses and Health Clubs: 15:1;

                                       24
<PAGE>

                   (vi) all uses other than the foregoing uses (including,
without limitation, other commercial or industrial uses): 5:1;

                   (vii) the Costco Gas Station: such parking spaces (if any)
required by the City;

                   (viii) Hotel lodging rooms: one space per lodging room.

         Notwithstanding the foregoing, any restaurant or fast food operation
located within the Store of any business comprising not less than twenty
thousand (20,000) square feet which is incidental to the primary business
conducted within such Store will only be required to maintain a parking ratio of
5 stalls per one thousand (1,000) square feet of Floor Area. Such restaurant or
fast food use shall be considered "incidental" to the extent the same does not
exceed fifteen percent (15%) of the aggregate size of the Store, and any excess
over such fifteen percent (15%) shall be required to meet the parking ratio
requirements applicable to restaurants and fast food operations. In addition,
and notwithstanding the generally higher applicable parking ratios for
restaurants and fast food operations, "Snack Shops" shall be subject to a
parking ratio equal to the greater of (a) 8:1000 or (b) the legally required
parking ratio with respect thereto. The term "Snack Shops" shall mean any fast
food operation which (a) comprises less than one thousand two hundred (1,200)
square feet of Floor Area each and (b) contains less than fifty percent (50%)
seating and counter area such as a cookie, ice cream or sandwich shop. Any
"Snack Shops" in excess of an aggregate of six thousand (6,000) square feet on
all of the Developer Parcels shall be required to meet the 10:1000 ratio
generally applicable to other fast food operations.

         4.5. Building Height Limitations. The height of the buildings on the
Building Areas designated "Pads" on the Site Plan shall not exceed twenty-five
feet (25') or contain more than one story; provided, however, that architectural
elements comprising less than twenty five percent (25%) of a Building's frontage
may be up to twenty-eight (28') in height.

         4.6. Certain Setbacks. No Building shall be constructed on any
Developer Parcel which is within thirty feet (30') of the Building(s) or
Building Area on the Costco Parcel. In connection with the foregoing limitation,
Developer acknowledges that Costco proposes to construct on the Costco Parcel
its typical facility which is classified as an "unlimited area" building under
certain applicable building codes (i.e., a building of the type designed II-N or
V-N under the Uniform Building Code). If required by any governmental authority,
Developer shall join in a recordable declaration which confirms the existence of
a thirty foot (30') clear or "no-build" area adjacent to the Costco Parcel.

                                       25
<PAGE>

         4.7. Drive-Up Stacking. Without limitation upon the Site Plan approval
or other provisions of this Agreement, if a business use contains a drive-up
service window or machine (such as a remote banking teller, automated teller
machine or food ordering/dispensing facility), then there shall be created space
for stacking not less that five (5) automobiles for each drive-up unit without
impairment of any parking spaces or driveways.

                                   ARTICLE V
                                USE RESTRICTIONS

         5.1. Use in General. No part of the Project may be used for other than
retail and/or wholesale sales and services, restaurants, offices to the extent
permitted pursuant to Section 5.2.1(r) and 5.2.1(s) and for industrial uses to
the extent permitted pursuant to Section 5.2.1(s).

         5.2. Prohibited Uses.

         5.2.1 Generally Prohibited Uses. No use or operation will be made,
conducted or permitted on or with respect to all or any part of the Project,
which use or operation is obnoxious to, or out of harmony with, the development
or operation of retail or wholesale facilities, including but not limited to,
the following:

                   (a) any public or private nuisance;

                   (b) any noise or sound that is objectionable due to
intermittence, beat, frequency, shrillness or loudness;

                   (c) any obnoxious odor;

                   (d) any excessive quantity of dust, dirt, or fly ash;
provided however, this prohibition shall not preclude the sale of soils,
fertilizers, or other garden materials or building materials in containers;

                   (e) any fire, explosion or other damaging or dangerous
hazard, including the storage, display or sale of explosives or fireworks but
the foregoing shall not prohibit the operation of a gas station in accordance
with applicable laws;

                   (f) any distillation, other than so-called micro-brewing of
beer, refining, smelting, agriculture or mining operations;

                   (g) any mobile home or trailer court, labor camp, junk yard,
stock yard or animal raising. Notwithstanding the foregoing, pet shops shall be
permitted within the Project;

                                       26
<PAGE>

                   (h) any drilling for and/or removal of subsurface substances;

                   (i) any dumping of garbage or refuse, other than in enclosed
receptacles intended for such purposes; and

                   (j) any cemetery, mortuary or similar service 
establishment; any automobile, truck, trailer or recreational vehicle sales, 
leasing or display which is not entirely conducted inside of a Building, 
except as provided in Section 5.3(c)(vi);

                   (k) any teenage discotheque, discotheque, dance hall,
nightclub, music hall, pool room other than as an integral part of a restaurant,
massage parlor, off-track betting facility, casino, card club, bingo parlor,
facility containing gaming equipment, or bar or tavern which is not an integral
part of a restaurant;

                   (l) any fire sale, flea market, bankruptcy sale (unless
pursuant to a court order) or auction operation;

                   (m) any bar, tavern, restaurant or other establishment which
has more than 30% of its Floor Area (including, without limitation, patio areas
so used) utilized as a bar, as a dance floor, as a pool room or as a similar
area dedicated primarily to alcoholic beverage sales or entertainment rather
than to food service;

                   (n) any school, training or educational facility, including
but not limited to: beauty schools, barber colleges, nursery schools, reading
rooms, places of instruction or other operations catering primarily to students
or trainees rather than to customers; provided however, this prohibition shall
not be applicable to on-site employee training by an occupant incidental to the
conduct of its business at the Project and the foregoing shall not prohibit the
operation of a day care center whose indoor and outdoor areas are located wholly
within a permissible Building Area;

                   (o) any apartment, home or other residential use;

                   (p) any automobile body and fender repair work;

                   (q) any church, synagogue, mosque or other place of worship;

                   (r) except as permitted by Section 5.2.1(s) below, any office
use other than (i) an office incidental to a retail operation or (ii) so-called
"retail offices" such as an insurance agency, medical office, real estate
broker, travel agency, retail 

                                       27
<PAGE>

income tax office, private employment agency, or retail bank; provided that no
such retail office shall exceed three thousand (3,000) square feet in size and
no governmental offices shall be permitted) and no medical offices in excess of
one thousand square (1,000) feet of Floor Area may be located within eight
hundred fifty feet (850') of the Costco Building Entrance; and

                   (s) any industrial or office use (other than "retail offices"
which are governed by the preceding subsection) so long as the Costco Parcel is
used primarily for retail and/or wholesale sales; provided, however, that the
Costco Parcel may be used for industrial and/or office use (and the other uses
allowed in such event under Section 5.2.2(h) below), and in such event, the
Developer Parcels may be used for industrial and/or office use, subject,
however, to the other terms of this Agreement, including, but not limited to,
parking ratio requirements and the other prohibitions in Section 5.2.1 and
5.2.2. If the Costco Parcel shall be used for office or industrial use (other
than the aforesaid retail offices) and the retail offices) and the retail or
wholesale use shall later be resumed on the Costco Parcel, the prohibition
against office and industrial use shall not resume against the Developer
Parcels.

         5.2.2 Uses Limited As To Location. Except to the extent permitted under
Section 5.2.2(h) below, the following uses shall be prohibited on the Developer
Parcels:

                   (a) any car washing establishment other than (i) a single
vehicle automated car wash which is incidental to a gas station operation, (ii)
a car wash located on Pads 1, 2, 3, or 4, (iii) a car wash located on Pad 10, or
the Future Development Parcel; provided, if Costco shall have approved the
configuration and layout thereof in Costco's reasonable discretion if the car
wash is to be located on Pad 10 or (if annexed) on the Future Development
Parcel;

                   (b) any entertainment, recreation or amusement use, whether
directed to children or adults other than a retail store which sells or rents
video or musical recordings for off-premises use ("Entertainment Uses") located
within seven hundred and fifty feet (750') of the Costco Building Entrance. Such
"Entertainment Uses" shall include, without limitation, any one or more of the
following: skating rink, bowling alley, bowling alley, planned play environment,
arcade games, amusement gallery, rides, video or redemption games, play for fun
casino games, golf simulations, rodeo simulations, other sport simulations and
carnival activities. Notwithstanding the foregoing, however, Entertainment Uses
shall be allowed anywhere on the Developer Parcels as an incidental use which is
included within a retail store or restaurant provided such incidental use does
not exceed the lesser of twenty-five percent (25%) of the Floor Area of the
primary use facility or two thousand (2,000) square feet per 

                                      28

<PAGE>


primary use facility (such Entertainment Use shall be treated as part of the
Floor Area of the primary use for parking ratio and all other purposes, and a
restaurant or fast food facility which is not licensed to serve any alcoholic
beverages shall be subject to 10:1000 parking ratio provided any Entertainment
Use included within such facility qualifies as an incidental use under the
foregoing standards);

                   (c) health spas, health clubs, gyms, exercise studios, dance
studios, yoga or martial arts schools or similar facilities ("Health Club")
located within seven hundred fifty feet (750') of the Costco Building Entrance;

                   (d) any theater, playhouse, cinema or movie theater
("Theatres") located within seven hundred and fifty feet (750') of the Costco
Building Entrance;

                   (e) any restaurant, fast food facility, bar, tavern or other
establishment serving prepared food or drink which is licensed to serve any
alcoholic beverages (i.e., including beer and wine) except as follows: (i) Pad
1, Pad 2, Pad 3 or Pad 4 may (subject to the 30% limitation under Section
5.2.1(m) be utilized for such purposes, (ii) that portion of the "Majors" which
is located more than seven hundred and fifty feet (750') from the Costco
Building Entrance may (subject to the 30% limitation under Section 5.2.1(m)) be
used for such purposes and (iii) Pads 5 and 10 may be utilized for such purposes
provided that the facility thereon has no more than 20% of its Floor Area
(including, without limitation, patio areas so used) utilized as a bar, as a
dance floor or as a similar area dedicated primarily to alcoholic beverage sales
or entertainment rather than to food service;

                   (f) Any restaurant, or other establishment serving prepared
food or drink for on-premises or immediate off-premises consumption on Pads 6, 7
or 9 or on that portion of the Major Buildings located within seven hundred
fifth feet (750') of the Costco Building Entrance; provided, however, this
limitation shall not be applicable to: (i) any establishments which are an
"incidental" use to a Store comprising at least twenty thousand (20,000) square
feet of Floor Area as the term "incidental" is used in Section 4.4 above, or
(ii) any so-called fast-food facilities on Pads 6, 7 or 9 which are not licensed
to serve alcoholic beverages and do not offer waiter or waitress service;

                   (g) Any hotel, motel or other lodging facility ("Hotel");

                   (h) The Costco Parcel may be used for any of the uses limited
under this Section 5.2.2. If the Costco Parcel is utilized for an Entertainment
Use (other than an incidental use), as a Health Club, as a Theatre, as a Hotel
or as an industrial or 


                                       29
<PAGE>

office use (other than an incidental use), then in such event and only in such
event, any portion of the Developer Parcels may be used as an Entertainment Use,
as a Health Club, as a Theatre, as a Hotel or as a restaurant (subject to the
30% limitation under Section 5.2.1(m)). All of such uses, whether on the Costco
Parcel or on the Developer Parcel shall be subject to the other terms of this
REA, including but not limited to, parking ratio requirements. Any Hotel use on
the Developer Parcels shall be permitted only under the conditions set forth in
this subsection, shall be located more than seven hundred and fifty (750') from
the Costco Building Entrance, and shall be required to satisfy the applicable
parking ratio requirement for each type of use within such facility as if each
use were a separate business. Any banquet rooms shall be treated as an
Entertainment Use and be subject to a 15 per 1000 parking ratio requirement.
Notwithstanding the foregoing, the aforesaid seven hundred and fifty foot (750')
limitation on Hotel uses on the Developer Parcels shall not be applicable if the
Costco Parcel is utilized as a Hotel.

         The Building Envelope Area containing Pad 4 shall be permitted to be
used for the uses under Sections 5.2.2(b), (c) and (d) as if it were entirely
located more than 750' from the Costco Building Entrance notwithstanding the
fact that a portion of said Envelope Area is located closer than 750' to the
Costco Building Entrance.

         5.2.3 Building to Land Ratio. Without limitation upon any other
provision hereof, the Building Floor Area to land square footage ratio for each
legal parcel upon which a "Pad" Building is located shall be no greater than
twenty-five percent (25%). Developer shall not materially alter the size or
configuration of Parcel 4 or Parcel 5.

         5.3 Non-Interference with Common Area. In order to provide for the
orderly development and operation of the Project:

                   (a) Except as provided in Section 5.3(c) below, no Owner
shall permit any display or sale of merchandise, or any storage or placement of
merchandise, portable signs or other objects belonging to an occupant of said
Owner's Parcel outside the defined exterior walls, roof and permanent doorways
of any Building; provided, however, that this restriction shall not apply to any
outdoor sales area located within a Building Area.

                   (b) No Owner shall permit any occupant of said Owner's Parcel
to carry any merchandise or substance or to perform any activity in relation to
the use of such Owner's Parcel which would (i) cause or threaten the
cancellation of any insurance covering any portion of the Project or (ii)
increase the insurance rates applicable to the Common Area or the Buildings on
the other Owner's Parcel over the rates which would otherwise 

                                       30
<PAGE>

apply unless such occupant shall pay the increased insurance cost on demand.

                   (c) The restrictions under Section 4.2, Section 5.2, 
Section 5.3(a) or elsewhere within this Agreement shall not be deemed to 
prohibit (i) the use by Costco of the sidewalk area on its Parcel adjacent to 
its Building for food sales by vendors from movable carts or kiosks (such as 
hot dog cart and cooler or the like), as an outdoor dining area, or for the 
sale of bulk items, (ii) the use by Costco of the sidewalks on its Parcel for 
the storage of shopping carts, (iii) the use by Costco of the Common Areas of 
its Parcel for the storage of shopping carts, or any other use consistent 
with Costco's business purposes, so long as such cart storage or other use 
does not reduce the number of parking spaces on such Parcel below the minimum 
parking radio requirements under Section 4.4 above; (iv) the use by Costco of 
one temporary outdoor sales area of up to fifteen thousand (15,000) square 
feet in size within the Common Area on the Costco Parcel; (v) the use by the 
Owner of the Developer Parcels of one temporary outdoor sales area of up to 
(15,000) square feet in size within the Common Area on the Developer Parcels 
to be located not less than four hundred feet (400') from the Costco Building 
Entrance; or (vi) the display for sale by Costco within the Common Area on 
the Costco Parcel of up to five (5) cars for sale or (viii) the operation of 
a gas station on the Costco Parcel.

         5.4. Exclusive Use. No portion of the Shopping Center other than the
Costco Parcel shall be used or operated as a wholesale or retail general
merchandise facility which has a merchandising concept based upon a relatively
limited number of stock keeping units in a large number of product categories or
as a wholesale grocer; provided, however, that this use restriction shall lapse
if the Costco Parcel ceases to be operated for such use by anyone and such
non-use continues for a period of one (1) year plus any period of repair,
remodeling, reconstruction or casualty restoration. The foregoing prohibition
includes, but shall not be limited to: (i) any business which operates as a
membership warehouse club, (ii) any business operated under the following trade
names of Sam's or BJ's, and (iii) any businesses similar to those operated under
the following trade names: Costco, Price Club, Sam's, BJ's, Jetro or Smart and
Final. The foregoing prohibition shall not prohibit any wholesale or retail
merchandise facility (other than a wholesale grocer which is prohibited) which
specializes in a particular type of merchandise including, without limitation,
home improvement store (e.g., HomeBase, Home Depot, Orchard Supply), a toy
and/or children's store (e.g., Toys R Us, Kids R Us, Babies R Us), a pet store
(e.g., Petco, PetsMart), an office supply store (e.g., Staples, Office Max,
Tri-Max or Office Depot) or apparel (e.g., Ross, Marshalls, The Gap, Old Navy).
Also, the foregoing shall not prohibit a general merchandise store which carries
a large number 

                                       31
<PAGE>

of stock keeping units in a large number of categories including, without
limitation, a conventional discount department store (e.g., Target, WalMart,
K-Mart) or a modern supermarket and/or drug store (e.g., Lucky, Sav-On, Longs or
Albertsons).

                                   ARTICLE VI

                          MAINTENANCE OF IMPROVEMENTS

         6.1. Maintenance of Buildings. Each Owner shall at all times during the
term of this Agreement, at its sole cost and expense, maintain, or cause to be
maintained, the exterior of buildings from time to time located on such Owner's
Parcel, in good repair, clean condition and free of trash and debris, reasonable
wear and tear excepted, subject to Article VII.

         6.2. Maintenance of Common Area. Each Owner shall at all times during
the term of this Agreement, at its sole cost and expense, maintain and repair
the Common Area located on such Owner's Parcel and keep it in good condition and
repair, clean, free of rubbish and other hazards to persons using such area,
properly lighted and landscaped (in accordance with City approved landscaping
plans). Any unimproved Common Area shall be kept dust and litter-free. The
minimum standard of maintenance for the improved Common Area shall be comparable
to the standard of maintenance followed in other first class developments of
comparable size in the State of California and in compliance with all applicable
governmental laws, rules, regulations orders and ordinances, and the provisions
of this Agreement. All Common Area improvements shall be repaired or replaced
with materials at least equal to the quality of the materials being replaced or
replaced so as to maintain the architectural and aesthetic harmony of the
Project as a whole.

         6.3. Certain maintenance Responsibilities. The maintenance and repair
obligations of each Owner hereunder with respect to its Parcel(s) shall include,
but shall not be limited to, the following:

                   (a) Drive and Parking Areas. Maintaining, cleaning and
replacing all paved surfaces and curbs in a smooth and evenly covered condition,
such work shall include, without limitation, sweeping, restriping, resealing and
resurfacing.

                   (b) Debris and Refuse. Periodic removal of all papers,
debris, filth, refuse, ice and snow, including sweeping to the extent necessary
to keep the Common Area in a first-class, clean and orderly condition. All
sweeping shall be at appropriate intervals during such times as shall not
interfere with the conduct of business or use of the Common Area by persons
intending to conduct business with occupants of the Project.

                                       32
<PAGE>

                   (c) Sign and Markers. Placing, cleaning, keeping in repair,
replacing and repainting any appropriate directional signs or markers, including
any handicapped parking signs.

                   (d) Lighting. Maintaining, cleaning and replacing Common Area
lighting facilities, including lamps, ballasts and lenses. Each Owner shall
cause the lighting on its Parcel to remain illuminated until the later to occur
of 10:00 p.m. or two (2) hours after the last business located on such Parcel
shall have closed for business on that day.

                   (e) Obstructions. Keeping the Common Area free from any
obstructions including those caused by the sale or display of merchandise,
unless such obstruction is permitted under the provisions of this Agreement.

                   (f) Sidewalks. Maintaining, cleaning and replacing of all
sidewalks, including those adjacent and contiguous to buildings located within
the Project. Sidewalks shall be cleaned and swept at appropriate intervals
during such time as shall not interfere with the conduct of business or use of
the Common Area.

         6.4. Common Utility lines and Lettered Parcels.

                   (a) Cost Allocation. The cost of the maintenance and repair
of the Common Utility Lines and the Lettered Lots shall be borne as follows:
each Parcel Owner (which shall include the Owner of the Future Development
Parcel for the purposes of this Section 6.4 and the corresponding remedies
provisions under Section 10 below) shall be responsible for a share ("Pro Rata
Share") of the applicable work determined as follows:

                        (i) as to the Common Utility Lines, each Owner's share
shall be equal to a fraction the numerator of which is the number of square feet
of land area within the subject Parcel and the denominator of which is the
number of square feet of land within Parcels 1 through 6 of the Parcel Map.

                        (ii) as to the Lettered Parcels, each Owner's share
shall be equal to a fraction the numerator of which is the number of square feet
of land within the subject parcel (except that the Future Development Parcel
shall be deemed to contain a number of square feet equal to the sum of the
number of square feet in both Parcels 6 and 7 of the Parcel Map) and the
denominator of which is the number of square feet of land within Parcels 1
through 7 of the Parcel Map.

                        (iii) the foregoing allocation of the cost of
maintaining the Lettered Parcels shall apply among the Owners notwithstanding
the fact that each Owner of a parcel within the Parcel Map may have a different
or greater obligation to the City with respect to the maintenance of the
Lettered Parcels under a 

                                       33
<PAGE>

recorded covenant, whether such covenant is recorded on, before or after the 
date hereof.

                   (b) Performance of Maintenance; Reimbursement. Unless the
Owner of the Costco Parcel and the Owner of a Majority-in-Interest of the
Developer Parcels shall otherwise agree in a writing which has been recorded in
the Official Records of the County in which the Shopping Center is located, the
Owner of the largest number of square feet of land within the Developer Parcels
shall be responsible to accomplish the maintenance and repair of (i) the Common
Utility Lines, and (ii) the Lettered Parcels. The Owner responsible for
performing any work under this Section 6.4(b) shall be entitled to reimbursement
from each other Owner for each other Owner's Pro Rata Share of the cost of the
work which it has performed pursuant to this Section 6.4(b) and said
reimbursement shall be due within thirty (30) days of a request therefor
accompanied by reasonable supporting documentation. The rights and remedies
provided under Section 10.4 below shall be applicable hereto including, without
limitation, the right of another Owner to cure or abate under Section 10.3 below
if an Owner fails to perform its maintenance responsibilities under this Section
6.4(b) and the right of a "Creditor Owner" who has not been paid the
reimbursement due it under this Section to file a Claim of Lien pursuant to
Section 10.4 below.

                   (c) The maintenance of the Lettered Parcels pursuant to
Section 6.4(b) above includes irrigating, fertilizing, pruning and replacing as
appropriate the landscaping and/or landscape irrigation on the Lettered Parcels.

                   (d) Nothing contained in Section 6.4, however, shall limit or
impair the obligations of any Owner who initially installed any improvements
under a separate agreement for the failure to initially install the same in
accordance with such agreement or to permit any Owner to recover any costs
relating to the Common Utility Lines or Lettered Parcels reimbursed under an
applicable warranty.

                                  ARTICLE VII

                             DAMAGE TO IMPROVEMENTS

         7.1. Restoration of Common Area. In the event of any damage or
destruction to the Common Area on any Parcel, whether insured or uninsured, the
Owner with respect to such Parcel shall restore, repair or rebuild such Common
Area with all due diligence as nearly as possible to at least as good a
condition as it was in immediately prior to such damage or destruction.

                                       34
<PAGE>

         7.2. Restoration of Buildings. In the event of damage to or destruction
of the Building(s) on an Owner's Parcel, such Owner may, but shall not be
obligated to, restore and reconstruct such Building(s) within such Owner's
Building Area. In the event an Owner so elects, such Owner shall restore and
reconstruct such Building(s) to at least as good a condition as it or they were
in immediately prior to such damage or destruction. All such restoration and
reconstruction shall be performed in accordance with the following requirements,
as the same are applicable thereto.

                   (a) No such work shall be commenced which would alter the
Common Area from the plans originally approved therefor unless the Owner
desiring to perform the same has in each instance complied with the appropriate
provisions of Article II with respect to plan approval. (b) All work shall be
performed in a good and workmanlike manner and shall conform to and comply with:

                        (i) the plans and specifications prepared therefor as
aforesaid;

                        (ii) all applicable requirements of laws, codes,
regulations and rules; and

                        (iii) all applicable requirements of this Agreement.

                   (c) All such work shall be completed with due diligence, and
at the sole cost and expense of the Owner performing the same.

         7.3. Clearing the Premises. Whenever an Owner elects not to restore,
repair or rebuild its Building(s) that has or have been damaged or destroyed,
such Owner, at its sole cost and expense, shall raze such Building(s) or such
part thereof as has or have been damaged or destroyed, clear the premises of all
debris, and all areas not restored to their original use shall, at the expense
of such Owner, be leveled, cleared and improved with, at the option of the Owner
of such Parcel, either landscaping or parking area, of like standard and design
as the Common Area of the Project.


                                       35

<PAGE>

                                  ARTICLE VIII

                                 EMINENT DOMAIN

         In the event any part of the Project, including the Common Area, 
shall be taken by eminent domain or any other similar authority of law, the 
entire award for value of the land and improvements so taken shall belong to 
the Owner whose property was so taken or its tenants, as their leases may 
provide, and the other Owner (or Owners, as the case may be) shall not claim 
any portion of such award by virtue of any interests created by this 
Agreement. However, the other Owner (or Owners, as the case may be) may file 
a claim with the condemning authority over and above the value of the 
property so taken to the extent of any damage suffered by such Owner (or 
Owners, as the case may be) resulting from the severance of such area taken. 
The Owner whose property was so condemned shall promptly repair and restore 
in accordance with this Agreement the remaining portion of its Parcel as 
nearly as practicable to the condition existing just prior to such 
condemnation without contribution from the other Owner.

                                   ARTICLE IX

                               GENERAL PROVISIONS

         9.1. Realty Taxes and Assessments. Each Owner shall, at its sole 
cost and expense, pay when due, all real estate taxes and assessments which 
may be levied, assessed, or charged by any public authority against such 
Owner's Parcel, the improvements thereon or any other part thereof including, 
without limitation, the Common Area on its Parcel. In the event an Owner 
shall deem any real estate tax or assessment (including the rate thereof or 
the assessed valuation of the property) to be excessive or illegal, such 
Owner shall have the right, at its own cost and expense, to contest the same 
by appropriate proceedings, and nothing contained in this section shall 
require such Owner to pay any such real estate tax or assessment as long as 
(a) no other Owner's Parcel would be immediately affected by such failure to 
pay (or bond); and (b) the amount or validity thereof shall be contested in 
good faith. If the failure to pay (or bond) such tax would affect the other 
Owner's Parcel, such other Owner shall have the right to pay such tax and 
shall have a lien on the nonpaying Owner's Parcel for the amount so paid 
until reimbursed for such payment. Any such lien shall be subject to and 
junior to, and shall in no way impair or defeat the lien or charge of any 
Mortgagee.

         9.2. Indemnification. Each Owner shall indemnify, defend, and save 
the other Owner harmless from and against any and all demands, liabilities, 
damages, expenses, causes of action, suits, claims, and judgments, including 
reasonable attorneys' fees, 

                                       36

<PAGE>

arising from injury or death to person or damage to property that occurs on 
the indemnifying Owner's Parcel. An Owner shall not be entitled to such 
indemnification for any damage caused to such Owner by reason of its 
negligence, recklessness or willful misconduct.

         9.3. Liability Insurance. Each Owner (and contractors as required 
pursuant to Section 2.8 (b) above, and in such event the provisions in this 
Section 9.3 shall apply fully to such contractors) shall severally, at all 
times during the term of this Agreement, maintain or cause to be maintained 
in full force and effect a comprehensive general public liability insurance 
policy covering its Parcel, with a financially responsible insurance company 
or companies, including coverage for any accident resulting in bodily injury 
to or death of any person and consequential damages arising therefrom, and a 
comprehensive property damage insurance, each in an amount not less than 
$5,000,000, as such amount is adjusted to pursuant hereto, per occurrence and 
including coverage of the contractual liability contained in Section 9.2 
above. Each Owner's public liability policy with respect to the Common Area 
on its Parcel shall name the other Owner as an additional insured. Each Owner 
shall furnish to each other Owner requesting the same in writing, evidence 
that the insurance referred to in this Section 9.3 is in full force and 
effect and that the premiums for such policy have been paid. Such insurance 
shall provide that the same may not be canceled, reduced below the required 
minimum or materially amended without at least thirty (30) days prior written 
notice being given by the insurer to all other Owners. The aforesaid 
$5,000,000 coverage limit shall be adjusted on each fifth year anniversary of 
December 31, 1997 by the change in the Consumer Price Index (or comparable 
successor index) for the area in which the Shopping Center is located.

         9.4. Blanket Insurance. Any insurance required to be carried 
pursuant to this Article IX may be carried under a policy or policies 
covering other liabilities and locations of an Owner; provided, however, that 
such policy or policies apply to the Parcels required to be insured by this 
Article IX in an amount not less than the amount of insurance required to be 
carried by such Owner with respect thereto, pursuant to this Article IX.

         9.5. Release and Waiver of Subrogation. Although the Owners are not 
obligated to carry casualty insurance hereunder, if an Owner elects to carry 
casualty insurance, it shall use reasonable efforts to obtain a waiver of 
subrogation from its carrier for the benefit of the other Owners.

         9.6. Ownership of Lettered Parcels. Neither Costco nor Developer 
shall transfer, sell or in any manner alienate the Lettered Parcels or any 
part thereof without the consent of the Community Development Director of the 
City, except that each of

                                       37

<PAGE>

Lettered Parcels A and B may be sold or encumbered together with the sale 
or encumbrance of an adjacent buildable parcel in the Shopping Center of not 
less than five (5) acres in land area, and Lettered Parcels C and D may be 
sold or encumbered together with the sale or encumbrance of the Future 
Development Parcel.

                                   ARTICLE X

                                    REMEDIES

         10.1. Legal Action Generally. If any of the Owners breaches any 
provision of this Agreement, then any other Owner may institute legal action 
against the defaulting Owner for specific performance, injunction, 
declaratory relief, damages, or any other remedy provided by law. All 
remedies herein or at law shall be cumulative and not inclusive. As used 
herein, any reference to rights or remedies "at law" or "under applicable 
law" shall also include any rights or remedies "in equity".

         10.2. Injunctive and Declaratory Relief. In the event of any 
violation or threatened violation by any owner, tenant, or occupant of the 
Project (or any portion thereof) of any of the terms, covenants, conditions, 
and restrictions herein contained, in addition to any other remedies provided 
for in this Agreement, any Owner shall have the right to enjoin such 
violation or threatened violation and to bring an action for declaratory 
relief in a court of competent jurisdiction.

         10.3. Owner's Right to Cure or Abate. If any Owner (a "Defaulting 
Owner") violates any covenant, condition or restriction contained in this 
Agreement, or permits or suffers any occupant of its Parcel or Building Area 
to violate any covenant, condition or restriction of this Agreement, then in 
addition to any other remedy provided for in this Agreement, any Owner (the 
"Creditor Owner") may demand by written notice (the "Default Notice") that 
the violation be cured. Except for utility service interruptions or similar 
emergencies which shall not require advance notice or cure periods hereunder, 
if the Defaulting Owner does not cure the violation within thirty (30) days 
after receipt of the Default Notice, or if such default is of a kind which 
cannot reasonably be cured within thirty (30) days, and the Defaulting Owner 
does not with such thirty (30) day period commence to cure such default and 
diligently thereafter prosecute such cure to completion, then Creditor Owner 
(and its agents and employees) shall have the right to (i) pay any sum owed 
by the Defaulting Owner to the Person entitled thereto, (ii) enter upon the 
Parcel or Building Area of the Defaulting Owner (or any portion of the Common 
Area owned by the Defaulting Owner) and summarily abate, remove or otherwise 
remedy any improvement, thing or condition which violates the terms of this 
Agreement, and (iii) enter upon the Parcel or Building Area 

                                       38

<PAGE>

of the Defaulting Owner (or any portion of the Common Area owned by the 
Defaulting Owner) and perform any obligation of the Defaulting Owner to be 
performed thereon. The Defaulting Owner shall, within ten (10) days of 
written demand by the other Owner, accompanied by appropriate supporting 
documentation, reimburse the Creditor Owner for all costs and expenses 
incurred by the Creditor Owner in undertaking any of the actions permitted by 
clauses (i) through (iii) in the preceding sentence, including without 
limitation, wages, benefits and overhead allocable to the time expended by 
any employee of the Creditor Owner in taking such actions, together with 
interest thereon at the rate equal to the Default Interest Rate, from the 
date such costs and expenses were advanced or incurred by the Creditor Owner.

         10.4. Lien. Any Creditor Owner shall be entitled to a lien against 
the Parcel of the Defaulting Owner, which lien shall be created and 
foreclosed in accordance with this Section 10.4.

                  (a) Creation. A lien authorized by this Section 10.4 shall 
be created by recording a written instrument (the "Claim of Lien") in the 
Official Records of San Bernardino County, California, which (i) references 
this Agreement by recording number, (ii) alleges a specific breach of this 
Agreement, (iii) states the amount owed by the Defaulting Owner through the 
recording date of the Claim of Lien, (iv) contains a legal description of the 
Parcel or Building Area of the Defaulting Owner, and (v) is executed and 
acknowledged by the Creditor Owner.

                  (b) Amount. A lien created pursuant to this Section 10.4 
shall include (i) the amount stated in the Claim of Lien, (ii) all costs and 
expenses incurred in creating and foreclosing such lien (including attorneys' 
fees), (iii) all amounts which become due from the Defaulting Owner (or its 
successors or assigns) to the Creditor Owner after the date the Claim of Lien 
is recorded, Whether such amounts arise from a continuation of the default 
alleged in the Claim of Lien or from some other default under this Agreement, 
and (iv) interest on all of the foregoing at the Default Interest Rate.

                  (c) Priority. The priority of a lien created pursuant to 
this Section 10.4 shall be established solely by reference to the date the 
Claim of Lien is recorded, and, accordingly, the same shall be junior to any 
deed of trust or similar security instrument recorded after the date of this 
Reciprocal Easement Agreement and prior to the recordation of any such Claim 
of Lien.

                  (d) Extinguishment. If the Defaulting Owner cures its 
default, and pays all amounts secured by a lien created pursuant to this 
Section 10.4, the Creditor Owner shall record an instrument sufficient in 
form and content to clear title to the 

                                       39

<PAGE>

Parcel or Building Area of the Defaulting Owner from the Creditor Owner's 
lien.

                  (e) Foreclosure. A lien created pursuant to this Section 
10.4 shall be foreclosed judicially, in the same manner as provided for 
foreclosure of a mortgage of real property in the State of California.

         10.5. Personal Obligation. Each Owner and Permittee, by acceptance 
of the deed to, lease of or other conveyance of all or a portion of a Parcel 
or Building Area or interest therein, shall be deemed to covenant and agree 
to be personally bound by this Agreement. Any sum not paid, or other 
obligation not performed when due, together with interest payable hereunder, 
and all costs and attorneys' fees incurred in connection with collection, 
shall be the personal obligation of the Person or Persons who were the Owners 
and/or Permittees of the Parcel at the time the payment or obligation became 
due. The personal obligation shall not be released by any transfer of the 
parcel subsequent to the date such payment or obligation became due, but such 
obligation shall run with the land and shall be binding upon any successor 
Owner. Said successor Owner shall not be personally obligated for any such 
payments or obligations which became due prior to its period of ownership, 
and accordingly the other Owners may seek to enforce such prior payments and 
obligations solely against the prior Owner and against the new Owner's 
interest in the Shopping Center.

         10.6. Remedies Cumulative. The remedies provided in this Article 10 
are in addition to any remedies available elsewhere in this Agreement or 
under applicable law. Exercise of one remedy shall not be deemed to preclude 
exercise of other remedies for the same default, and all remedies available 
to an Owner may be exercised cumulatively.

                                   ARTICLE XI

                                 MISCELLANEOUS

         11.1. Notices. Any notice, payment, demand, offer, or communication 
required or permitted to be given by any provision of this Agreement shall be 
deemed to have been sufficiently given or served for all purposes if sent by 
registered or certified mail (return receipt requested), postage and charges 
prepaid, or by Federal Express or other reputable overnight delivery service 
requiring a signature upon receipt, addressed as follows:

                                       40

<PAGE>

         To Developer:     Lennar Rolling Ridge Inc.
                           23333 Avenida la Caza
                           Coto de Caza, CA 92679
                           Attn: President Land Division

         and               Lennar Partners
                           2049 Century Park East
                           Suite 920
                           Los Angeles, CA 90067
                           Attn: David Team

         with a copy to:   Samuels & Steel, LLP
                           18881 Von Karman, Suite 1400
                           Irvine, CA 92612
                           Attn: Herbert N. Samuels, Esq.

         To Costco:        Costco Companies, Inc.
                           999 Lake Drive
                           Issaquah, Washington 98027
                           Attn: Corporate Counsel

         with a copy to:   Greenberg Glusker Fields
                           Claman & Machtinger, LLP
                           1900 Avenue of the Stars, Suite 2200
                           Los Angeles, CA 90067
                           Attn: Henry D. Finkelstein, Esq.

Any such notice shall be deemed to be given on the date on which it is 
received or receipt thereof is refused.

         11.2. Binding Effect. All of the limitations, covenants, conditions, 
easements, and restrictions contained herein shall attach to and run with the 
Developer Parcels and the Costco Parcel, and shall, except as otherwise set 
forth herein, benefit or be binding upon the successors and assigns of the 
respective Owners. This Agreement and all the terms, covenants and conditions 
herein contained shall be enforceable as equitable servitudes in favor of 
said Parcels and any portion thereof.

         11.3. Attorneys' Fees. In the event of any action between the Owners 
hereto for breach of or to enforce any provision or right hereunder, the 
unsuccessful Owner in such action shall pay to the successful Owner all costs 
and expenses expressly including but not limited to, reasonable attorneys' 
fees incurred by the successful Owner in connection with such action.

         11.4. Breach Shall Not Permit Termination. It is expressly agreed 
that no breach of this Agreement shall entitle any Owner to cancel, rescind, 
or otherwise terminate this Agreement, and such limitations shall not affect 
in any manner any of the rights or 

                                       41

<PAGE>

remedies which the Owners may have by reason of any breach of this Agreement.

         11.5. Breach - Effect on Mortgagee and Right to Cure. Breach of any 
of the covenants or restrictions contained in this Agreement shall not defeat 
or render invalid the lien of any Mortgage made in good faith, but all of the 
foregoing provisions, restrictions, and covenants shall be binding and 
effective against any owner of any portion of the Project, or any part 
thereof, who acquires title by foreclosure or trustee's sale or by deed in 
lieu of foreclosure or trustee's sale.

Notwithstanding any other provision in this agreement for notices of default, 
the Mortgagee of any Owner in default hereunder shall be entitled to notice 
of said default, in the same manner that other notices are required to be 
given under this Agreement; provided, however, that said Mortgagee shall 
have, prior to the time of the default, notified the Owner hereto giving said 
notice of default of the Mortgagee's mailing address. In the event that any 
notice shall be given of the default of an Owner and such Defaulting Owner 
has failed to cure or commence to cure such default as provided in this 
Agreement then and in that event the Owner giving such notice of default 
covenants to give such Mortgagee (which has previously given the above stated 
notice to such Owner) under any Mortgage affecting the Parcel of the 
Defaulting Owner an additional notice given in the manner provided above, 
that the Defaulting Owner has failed to cure such default and such Mortgagee 
shall have thirty (30) days after said additional notice to cure any such 
default, or, if such default cannot be cured within thirty (30) days, 
diligently to commence curing within such time and diligently pursue such 
cure to completion within a reasonable time thereafter. Giving of any notice 
of default or the failure to deliver a copy to any Mortgagee shall in no 
event create any liability on the part of the Owner so declaring a default.

         11.6. Effect on Third Parties. Except for Section 11.5 which is for 
the benefit of a Mortgagee and Sections 9.6 and 11.8 which are for the 
benefit of the City, the rights, privileges, or immunities conferred 
hereunder are for the benefit of the Owners and not for any third party.

         11.7. No Partnership. Neither this Agreement nor any acts of the 
Owners hereto shall be deemed or construed by the parties hereto, or any of 
them, or by any third person, to create the relationship of principal and 
agent, or of partnership, or of joint venture, or of any association between 
any of the Owners to this Agreement.

         11.8. Modification. No modification, waiver, amendment, discharge, 
or change of this Agreement shall be valid unless the same is in writing and 
signed by Costco and a Majority of the 

                                       42

<PAGE>

Developer Parcel Owners. Any change, modification, amendment or rescission 
which is made without the written consent of Costco and a Majority of the 
Developer Parcel Owners shall be null and void and of no effect. No consent 
or approval of any Owner other than the Costco and a Majority of the 
Developer Parcel Owners shall be required in order to modify or amend any 
provisions of this Agreement. This Agreement shall not be amended in any 
manner which affects the extent, use of maintenance of the Lettered Parcels 
without the prior written consent of the Community Developer Director of the 
City. Neither the Lettered Parcels, nor any portion thereof, shall be 
deannexed from the Shopping Center.

         11.9. Severability. In the event any term, covenant, condition, 
provision, or agreement contained herein is held to be invalid, void, or 
otherwise unenforceable, by any court of competent jurisdiction, such holding 
shall in no way affect the validity of enforceability of any other term, 
covenant, condition, provision, or agreement contained herein.

         11.10. Governing Law. This Agreement and the obligations of the 
Owners hereunder shall be interpreted, construed, and enforced in accordance 
with the laws of the State of California.

         11.11. Terminology. All personal pronouns used in this Agreement, 
whether used in the masculine, feminine, or neuter gender, shall include all 
other genders; the singular shall include the plural and vice versa.

         11.12. Counterparts. This Agreement may be executed in multiple 
counterparts, each of which shall be deemed to be an original agreement, and 
all of which shall constitute one agreement.

         11.13. Captions. Article and section titles or captions contained 
herein are inserted as a matter of convenience and for reference, and in no 
way define, limit, extend, or describe the scope of this agreement or any 
provisions hereof.

         11.14. Consent. In any instance in which any Owner shall be 
requested to consent to or approve of any matter with respect to which such 
Owner's consent or approval is required by any of the provisions of this 
Agreement, such consent or approval or disapproval shall be given in writing, 
and shall not be unreasonably withheld or delayed, unless the provisions of 
this Agreement with respect to a particular consent or approval shall 
expressly provide otherwise.

         11.15. Estoppel Certificate. Each Owner hereby severally covenants 
that within thirty (30) days of the written request of the other Owner it 
will issue to such other Owner or to any prospective Mortgagee, or purchaser 
of such Owner's Parcel an estoppel certificate stating: (a) whether the Owner 
to whom the 

                                       43

<PAGE>

request has been directed knows of any default under this Agreement and if 
there are known defaults specifying the nature thereof; (b) whether to its 
knowledge this Agreement has been assigned, modified or amended in any way 
(and if it has, then stating the nature thereof); and (c) whether to the 
Owner's knowledge this Agreement as of that date is in full force and effect.

         11.16. Not A Public Dedication. Nothing herein contained shall be 
deemed to be a gift or dedication of any portion of the Project to the 
general public or for the general public or for any public purpose 
whatsoever, it being the intention of the Owners hereto that this agreement 
shall be strictly limited to and for the purposes herein expressed.

         11.17. Release. If an Owner shall sell, transfer or assign its 
entire Parcel or its interest therein, it shall, except as provided otherwise 
in this Agreement be released from its unaccrued obligations hereunder from 
and after the date of such sale, transfer or assignment. It shall be a 
condition precedent to the release and discharge of any grantor or assignor 
Owner that the following conditions are satisfied: (a) such grantor or 
assignor shall give notice to the other Owner of any such sale, transfer, 
conveyance or assignment promptly following the filing for record of the 
instrument effecting the same, and (b) the transferee shall execute and 
deliver to the other Owner a written statement in which: (i) the name and 
address of the transferee shall be disclosed; and (ii) the transferee shall 
acknowledge its obligation hereunder and agree to be bound by this Agreement. 
Failure to deliver any such written statement shall not affect the running of 
any covenants herein with the land, nor shall such failure negate, modify or 
otherwise affect the liability of any transferee pursuant to the provisions 
of this Agreement, but such failure shall constitute a default by the 
transferee hereunder.

         Anything in this Section to the contrary notwithstanding, it is 
expressly understood and agreed that no such sale, transfer or assignment 
shall effectuate a release pursuant to this Section until such successor in 
interest to the transferor Owner has expressly undertaken to be fully bound 
under the provisions of this Agreement in the place and stead of the 
transferor Owner.

         11.18. Time of Essence. Time is of the essence with respect to the 
performance of each of the covenants and agreements contained in this 
Agreement.

         11.19. Entire Agreement. This Agreement and the exhibits hereto 
contain all the representations and the entire agreement between the Owners 
with respect to the subject matter hereof. Any prior correspondence, 
memoranda or agreements are superseded in total by this Agreement and 
Exhibits hereto. The provisions of this Agreement shall be construed as a 
whole according to their common meaning and not strictly for or against any 
Owner. This

                                       44

<PAGE>

Agreement is not, however, intended to supersede the provision of any lease 
as between an Owner and its tenant.

         11.20. Excuse for Non-Performance. Each Owner shall be excused from 
performing any obligation or undertaking provided in this Agreement, except 
any obligation to pay any sums of money under the applicable provisions 
hereof (unless such payment is conditioned upon performance of any obligation 
or undertaking excused by this Section), in the event and so long as the 
performance of any such obligation is prevented or delayed, retarded or 
hindered by act of God, fire, earthquake, floods, explosion, actions of the 
elements, war, invasion, insurrection, riot, mob violence, sabotage; 
inability to procure or general shortage of labor, equipment, facilities, 
materials or supplies in the ordinary course on the open market; failure of 
normal transportation; strikes, lockouts, action of labor unions; 
condemnation, requisition; laws, orders of governmental approvals or permits 
despite the exercise of due diligence and best efforts by an Owner or any 
other cause, whether similar or dissimilar to the foregoing, not within the 
reasonable control of such Owner, other than the lack of or inability to 
obtain funds.

         11.21. Mechanics' Liens. In the event any mechanics' liens are filed 
against the Parcel of any Owner, the Owner permitting or causing such line to 
be filed hereby covenants either to pay the same and have it discharged of 
record, promptly, or to take such action as may be required to reasonably and 
legally object to such lien, or to have the lien removed from such Parcel, 
and in all events agrees to have such lien discharged prior to the entry of 
judgment for foreclosure of such lien. Upon request of the other Owner, the 
Owner permitting or causing such lien to be filed against the other Owner's 
Parcel agrees to furnish such security or indemnity conforming to this 
Agreement as may be required, to and for the benefit of such other Owner, to 
permit a title endorsement to such Owner's title policy to be issued relating 
to such Owner's Parcel without showing thereon the effect of such lien.

         11.22. Duration. This Agreement and each term, easement, covenant, 
restriction and undertaking of this Agreement will remain in effect for a 
term of ninety nine (99) years from the recordation date hereto and shall be 
renewed for successive ten (10) year periods if Costco and a 
Majority-in-Interest of the Developer Parcel Owners elect by written notice 
to the other Owners to so renew. The easements under Sections 3.1(c) 
(captioned "Utilities") and 3.1(e) (captioned "Drainage") and the 
restrictions under Section 4.6 (captioned "Certain Setbacks") shall survive 
the termination of this Agreement. In addition, those access easements shown 
on Exhibit "D" hereto shall survive the termination of this Agreement.

         11.23. Waiver of Default. No waiver of any default by any Owner to 
this Agreement shall be implied from any omission by any other Owner to take 
any action in respect of such default if such default continues or is 
repeated. No express written waiver of any 

                                       45

<PAGE>

default shall affect any default or cover any period of time other than the 
default and period of time specified in such express waiver. One or more 
written waivers of any default in the performance of any term, provision or 
covenant contained in this Agreement shall not be deemed to be a waiver of 
any subsequent default in the performance of the same term, provision or 
covenant or any other term, provision or covenant contained in this 
Agreement. The consent or approval by any Owner to or of any act or request 
by any other Owner requiring consent or approval shall not be deemed to waive 
or render unnecessary the consent to or approval of any subsequent similar 
acts or requests. The rights and remedies given to any Owner by this 
Agreement shall be deemed to be cumulative and no one of such rights and 
remedies shall be exclusive of any of the others, or if any other right or 
remedy at law or in equity which any such Owner might otherwise have by 
virtue of a default under this Agreement, and the exercise of one such right 
or remedy by any such Owner shall not impair such Owner's standing to 
exercise any other right or remedy.

         11.24. Future Annexation.

                  (a) Future Development Parcel. The Owner of the property 
shown on Exhibit "D" as "Future Development Parcel" or "Parcel 6" (the 
"Future Development Parcel") may elect to cause the same to be included 
within the Project upon the same terms and conditions (including, without 
limitation, parking ratio requirements and Building Area limitations) as are 
applicable to the original Project. Such annexation shall be effective upon 
the recordation of an amendment to this Agreement executed by the Owners of a 
Majority-in-Interest of the Developer Parcels, by the Owner of the Costco 
Parcel and by the Owner of the Future Development Parcel, which amendment 
shall include a site plan ("Revised Site Plan") designating the Building Area 
and Common Areas on the Future Development Parcel as provided in Section 
11.24(b) below.

                  (b) Designation of Future Development Parcel Building Area. 
This Section 11.24(b) shall only be applicable if the Future Development 
Parcel is annexed to the Project. At such time as Developer has determined 
the improvements which it wishes to construct on the Future Development 
Parcel, Developer shall prepare and submit to Costco and any other then 
Owners for their approval the Revised Site Plan, showing the proposed 
location of the Building Area and Common Area on the Future Development 
Parcel and its integration with the original Project. Upon approval of the 
Revised Site Plan by the Owners of a Majority-in-Interest of the Developer 
Parcels, by the Owner of the Costco Parcel and by the Owner of the Future 
Development Parcel, such Owners shall enter into an amendment to this 
Agreement in recordable form substituting the Revised Site Plan for the Site 
Plan attached hereto as Exhibit "B", and upon the execution of such amendment 
and recordation thereof in the Recorder's Office, the terms "Building Area" 
and "Common Area" shall be deemed to refer to those areas so designated on 
the Revised Site Plan. Costco and each of the Owners 

                                       46

<PAGE>

of the Developer Parcels agree not to unreasonably withhold or delay its 
consent to a proposed Revised Site Plan so long as (a) the location of the 
Building Areas on the Future Development Parcel do not materially impair the 
ingress to or egress from any Parcel, (b) the Building Area and Common Area 
on the Future Development Parcels shall be configured so that the Common Area 
on each Parcel will support its own parking needs, (c) the relative size of 
the Building Area and Common Area shall be in conformity with the parking 
ratio and other requirements of this Agreement, and (d) the location of the 
Building Area on the Future Development Parcel 6 is no closer to Peyton Drive 
than the Building on the Costco Parcel.

                  (c) Separation if Not Annexed. If the Future Development 
Parcel is to be developed and not annexed to the Project, the Owner of the 
Future Development Parcel shall be obligated to construct and maintain, at 
its sole cost and expense, a six foot (6') high block wall on the Future 
Development Parcel contiguous with its common lot line with the Costco 
Parcel. Said wall shall be completed no later than the opening for business 
of any facility on the Future Development Parcel. If the Future Development 
Parcel is not annexed to the Project, then the restrictions contained in this 
agreement shall not be applicable to the Future Development Parcel, but the 
Future Development Parcel and its owner shall remain benefitted and burdened 
(and its owner shall be deemed to be an "Owner") under Section 3.6 above 
(captioned "Present Easement to Future Development Parcel"), under Section 
6.4 (captioned "Common Utility Lines and Lettered Parcels"), under Section 10 
(captioned "Remedies") and under this Section 11.24.

         11.25. Exhibits. The following are attached to this Agreement.

                  Exhibit "A" - Parcel Map
                  Exhibit "B" - Site Plan
                  Exhibit "C" - Common Utility Lines and Permanent
                                Access Easements

                  Executed as of the date first above written.

         "Developer"                LENNAR ROLLING RIDGE, INC.,
                                         a California corporation


                                    By: /s/ Illegible
                                       -------------------------------
                                         Its: V.P.
                                             -------------------------

         "Costco"                   COSTCO WHOLESALE CORPORATION,
                                         a Washington corporation

                                    By: /s/ Richard J. Olin
                                       -------------------------------
                                         Its: Assistant Secretary
                                             -------------------------

                                       47

<PAGE>

STATE OF WASHINGTON        )
                           ) SS:
COUNTY OF KING             )

         On July 1, 1997, before me, V.A. Hilkemeir, a Notary Public, 
personally appeared Richard J. Olin, personally known to me (or proved to me 
on the basis of satisfactory evidence) to be the person whose name is 
subscribed to the within instrument and acknowledged to me that he executed 
the same in his authorized capacity, and that by his signature on the 
instrument the person(s) or the entity upon behalf of which the person acted, 
executed the instrument.

         WITNESS my hand and official seal.

Signature ___________________
                                                                          (Seal)


STATE OF CALIFORNIA        )
                           ) SS:
COUNTY OF                  )

         On ________________, 1997, before me, _____________, a Notary 
Public, personally appeared _____________, personally known to me (or proved 
to me on the basis of satisfactory evidence) to be the person(s) whose 
name(s) is/are subscribed to the within instrument and acknowledged to me 
that he/she/they executed the same in his/her/their authorized capacity(ies), 
and that by his/her/their signature(s) on the instrument the person (s) or 
the entity upon behalf of which the person(s) acted, executed the instrument.

         WITNESS my hand and official seal.

Signature ___________________
                                                                          (Seal)



                                      48


<PAGE>

                               EXHIBIT A

                         PARCEL MAP NO. 14996

<PAGE>

                               EXHIBIT A

                         PARCEL MAP NO. 14996

<PAGE>

                               EXHIBIT A

                         PARCEL MAP NO. 14996

<PAGE>

                               EXHIBIT B

<PAGE>

                               EXHIBIT B

<PAGE>

                         PARCEL MAP NO. 14996

<PAGE>

                         PARCEL MAP NO. 14996

<PAGE>

STATE OF                   )
                           ) SS:
COUNTY OF                  )


         On _____________, 1997, before me, _____________, a Notary Public, 
personally appeared _____________, personally known to me (or proved to me on 
the basis of satisfactory evidence) to be the person(s) whose name(s) is/are 
subscribed to the within instrument and acknowledged to me that he/she/they 
executed the same in his/her/their authorized capacity(ies), and that by 
his/her/their signature(s) on the instrument the person(s) or the entity upon 
behalf of which the person(s) acted, executed the instrument.

         WITNESS my hand and official seal.

Signature ___________________
                                                                          (Seal)


STATE OF CALIFORNIA        )
                           ) SS:
COUNTY OF                  )

         On ________________, 1997, before me, _____________, a Notary 
Public, personally appeared _____________, personally known to me (or proved 
to me on the basis of satisfactory evidence) to be the person(s) whose 
name(s) is/are subscribed to the within instrument and acknowledged to me 
that he/she/they executed the same in his/her/their authorized capacity(ies), 
and that by his/her/their signature(s) on the instrument the person (s) or 
the entity upon behalf of which the person(s) acted, executed the instrument.

         WITNESS my hand and official seal.

Signature ___________________
                                                                          (Seal)


                                      49

<PAGE>

                             OFF-SITE IMPROVEMENTS
                        SUBJECT TO BUYER'S REIMBURSEMENT

1.  Installation of landscaping along Peyton Drive.

2.  Installation of landscaping and irrigation along slopes ("Lettered Lots" as
defined in the Parcel 6 Development Agreement) as shown on Exhibit G-1.

3.  Installation of road, curb, gutters and landscaping within the internal 
access road from Rock Springs South to the Eagle Parcel substantially as 
shown on Exhibit G-1.

                                       

<PAGE>

                             CROSSROADS MARKETPLACE
                                 at CHINO HILLS

<PAGE>

                          SELLER-APPROVED CONTRACTORS

                     [To be Provided as Approved by Seller]




                                       
<PAGE>

                             ENVIRONMENTAL REPORTS

                                [To be Provided]


