Exhibit 10.1

SECURITY AGREEMENT AND STOCK PLEDGE

THIS SECURITY AGREEMENT AND STOCK PLEDGE ("Stock Pledge") is entered into as of July 3, 1995, by and between HomeFed Corporation, a Delaware corporation ("Borrower"), and Leucadia Financial Corporation, a Utah corporation ("Lender").

A. On October 22, 1992, Borrower filed in the United States Court for the Southern District of California (the "Bankruptcy Court"), a voluntary petition for relief under Chapter 11 of Title 11 of the United States Bankruptcy Code, which was later consolidated with an involuntary bankruptcy case initiated by certain holders of debentures on June 25, 1992, and is now assigned Case No. 92-07591-A11 (the "Bankruptcy Case").

B. Borrower filed a Fourth Amended Plan of Reorganization (the "Plan") in the Bankruptcy Case, which was approved by its creditors and confirmed by the Bankruptcy Court by Order of Confirmation dated December 19, 1994 (which Confirmation Order was modified as of June 14, 1995), and this Stock Pledge is made in order to facilitate implementation of the Plan.

C. Upon effectiveness of the Plan, Lender will be the largest shareholder of Borrower. Lender worked with Borrower to create the Plan. It is in the best interest of Lender and Borrower to enter into this Stock Pledge, and to perform their other respective obligations under and otherwise act in compliance with the Plan.

D. Upon the "Effective Date" of the Plan, Lender shall loan to Borrower the sum of Twenty Million and 00/100 Dollars ($20,000,000) (the "Loan") pursuant to the terms of a Loan Agreement between Lender and Borrower ("Loan Agreement"), which the parties shall execute on the date first written above. The Loan shall be evidenced by a Promissory Note ("Note") to be held by Lender.

E. This Stock Pledge is made pursuant to the Plan and the Loan Agreement in order to provide security for timely repayment of the Loan evidenced by the Note, and the performance by Borrower of its obligations under the Loan Agreement.

F. Under the terms of the Loan Agreement, Lender shall have the right to convert all or a portion of the Principal (as defined in the Loan Agreement) into Common Stock (as defined in the Loan Agreement). Any such conversion shall have no effect upon the enforceability of this Stock Pledge as it relates to the Obligations (defined below).

G. This Stock Pledge, together with the Plan, the Loan Agreement, the Note, the Payment Guaranties executed by each of the Subsidiaries (defined below), the Security Agreements securing the Payment Guaranties, the Deeds of Trust securing the performance of Borrower and the Subsidiaries, all related financing statements, and all documents referred to herein or in any of such other documents, are collectively referred to herein as the "Plan Documents."

NOW, THEREFORE, in consideration of the above recitals and the mutual agreements and promises contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and intending to be legally bound hereby, Borrower and Lender agree as follows:

Section 1.

Upon the terms of this Stock Pledge, for value received, Borrower, whose name and mailing address are set forth above its signature at the foot of this Stock Pledge, grants to Lender a security interest in the Collateral (defined below), in order to secure the prompt payment and performance in full of the Obligations (defined below) owed to Lender.

Section 2.

The term "Collateral" as used in this Stock Pledge shall mean the property of Borrower described in both subparagraphs (a) and (b) below. Collateral shall consist of "Stock Collateral" and "Non-Stock Collateral", including any respective insurance payable by reason of loss or damage thereto, described as follows:

(a) Stock Collateral shall consist of all of Borrower's right, title and interest in and to (i) 400 shares of the outstanding common stock of HomeFed Communities, Inc., a California corporation ("HomeFed Communities"), which shares constitute all of the outstanding shares of HomeFed Communities and are represented by a certificate of HomeFed Communities, and any and all securities now or hereafter issued in substitution, exchange or replacement therefor, or with respect thereto, and any and all warrants, options or other rights to subscribe to or acquire any additional stock or securities of HomeFed Communities; (ii) 20 shares of the outstanding common stock of HomeFed Resources Corporation, a California corporation ("HomeFed Resources"), which shares constitute all of the outstanding shares of HomeFed Resources and are represented by a certificate of HomeFed Resources, and any and all securities now or hereafter issued in substitution, exchange or replacement therefor, or with respect thereto, and any and all warrants, options or other rights to subscribe to or acquire any additional stock or securities of HomeFed Resources;
(iii) any and all other securities, and any and all warrants, options, or other rights to subscribe to or acquire securities; and (iv) the cash and noncash proceeds of the foregoing, including dividends. Collectively, HomeFed Communities and HomeFed Resources, together with Northfork Communities, a California general partnership ("Northfork") and Paradise Valley Communities No. 1, a California general partnership ("Paradise Valley"), are referred to herein as the "Subsidiaries."

(b) Non-Stock Collateral shall consist of all of Borrower's right, title and interest in and to any and all property of Borrower, including partnership interests, other than that described in subparagraph (a), acquired at any time, now existing or hereafter arising, and of any and all kinds whatsoever, real or personal, tangible or intangible, or otherwise, and including without limitation (i) accounts, deposit accounts, general intangibles, chattel paper, instruments (whether negotiable or non--negotiable), contract rights, and all rights of Borrower of every kind to the payment of money, (ii) all cash and cash equivalents, bank accounts (whether special or general), and collateral accounts, (iii) all equipment, furniture, fixtures, machinery, tools, tooling, goods, inventory, raw materials, work in process, finished goods and materials, and all accessories, parts, repossessions and returns thereto or therefor, (iv) the cash and noncash proceeds, products, increase, profits, additions, substitutions, replacements and accessions to, for, of, and from all of the foregoing, including all cash and noncash proceeds arising from the transfer of real property, and (v) all books and records of Borrower with respect to all of the foregoing.

Section 3.

The term "Obligations" as used in this Stock Pledge shall mean all present and/or future obligations of Borrower under the Loan Agreement and under the Note and of Borrower and the Subsidiaries under the other Plan Documents, and all other obligations of every kind or nature of Borrower or any of its Subsidiaries from time to time owed to Lender, whether due or to become due, matured or unmatured, liquidated or unliquidated, contingent or noncontingent, including obligations of performance as well as obligations of payment and including, without limitation, any and all expenses (including, without limitation, counsel fees and expenses) incurred by Lender in enforcing its rights under the Plan Documents, as well as interest that accrues after the commencement of the bankruptcy or insolvency proceeding by or against Borrower.

Section 4.

Borrower warrants and represents and covenants that all of the following are true:

(a) Ownership of Collateral. Borrower owns all right, title and interest in and to, and has unrestricted power to encumber, all Collateral. The Bankruptcy Court has confirmed Borrower's authority to execute and deliver this Stock Pledge. No dispute, right of setoff, counterclaim, or defense exists with respect to any Collateral and no person other than Borrower and Lender has or claims any title, lien, encumbrance or other interest in any Collateral, except for (i) taxes not yet delinquent and (ii) any title, lien, encumbrance or interest disclosed in writing to Lender and to which Lender has consented in writing. No financing statement or deed of trust has been filed, and no other security agreement has been made, covering the Collateral or any part thereof, except as listed on Exhibit "A" attached hereto and incorporated herein by this reference. The delivery of any of the Collateral at any time by Borrower to Lender shall constitute a warranty and representation to the foregoing effect with respect to such Collateral.

(b) No Other Interests. There is no outstanding right, subscription, call, option or any agreement to acquire or otherwise receive from Borrower any portion of the Collateral except as provided in the Plan Documents.

(c) Perfection of Interest. This Stock Pledge and the filing of UCC-l Financing Statements with respect to the Collateral will create a valid, enforceable and, to the full extent permissible under the Utah Uniform Commercial Code (the "Commercial Code"), perfected security interest in the Collateral, securing the payment and performance of the Obligations.

(d) Authorization. Borrower has obtained any and all necessary consents, approvals and waivers as may be required by the Plan, the Plan Documents or otherwise for the pledge of or creation of a security interest in the Collateral pursuant hereto or for the execution, delivery or performance hereof by Borrower, or for the exercise by Lender of the rights provided for herein or the remedies in respect of the Collateral pursuant hereto.

(e) Execution. This Stock Pledge has been duly executed and delivered by Borrower and constitutes the legal, valid and binding agreement of Borrower enforceable against Borrower in accordance with its terms and conditions.

(f) Offices. The chief executive office of Borrower is, for now, located at 529 East South Temple, Salt Lake City, Utah 84012. Borrower has no other place of business. Borrower shall give Lender ten (10) days' prior written notice of any change of such office, or of the addition of any other office(s).

Section 5.

So long as any Obligation remains unpaid or unperformed, Borrower covenants and agrees to do all of the following:

(a) Preservation of Existence. Preserve and maintain its existence and good standing as a corporation in the state of Delaware, and qualify and remain qualified as a foreign corporation in California and each other jurisdiction in which the failure to qualify would have a material adverse effect on Borrower.

(b) Condition of and Title to Collateral. From time to time,
(1) promptly furnish Lender with any information or writings which Lender may reasonably request concerning the Collateral; (ii) permit Lender to inspect at reasonable hours all records of Borrower relating to the Collateral and to make and take away copies of such records; (iii) promptly notify Lender of any change in any fact or circumstances warranted or represented by Borrower in this Stock Pledge or in any other writing furnished by Borrower to Lender in connection with the Collateral or the Obligations; (iv) promptly notify Lender of any claim, action, or proceeding affecting the Collateral, or any part thereof, or any security interest therein, and, at the request of Lender, appear in and defend, at Borrower's expense, any such action or proceeding; (v) pay to Lender the amount of all court costs and attorneys' fees assessed by a court and incurred by Lender following any default hereunder by Borrower; and (vi) except to the extent prohibited by applicable law, pay any reasonable expenses incurred in the custody, preservation, use, or operation of the Collateral.

(c) Preservation of Stock Collateral. At no time, without the prior written consent of Lender: (i) sell, assign, transfer or exchange Borrower's rights in the Stock Collateral; or (ii) create any other security interest in or otherwise encumber the Stock Collateral, or any part thereof, or permit the same to be or become subject to any lien attachment, execution, sequestration, other legal or equitable process, or any encumbrance of any kind or character, except the security interest herein.

(d) Preservation, Use and Location of Non-Stock Collateral. Preserve, protect, and maintain all Non-Stock Collateral in good and salable condition, other than any particular item that is of no material value, and (i) use the Non-Stock Collateral lawfully, only in the ordinary business and activities of Borrower and as permitted by insurance policies, (ii) keep all Non-Stock Collateral at Borrower's chief executive office or at such other location or locations as Lender may approve in writing, except in the case of temporary removal for use in Borrower's business or for repairs, and keep all Non-Stock Collateral separate and identifiable to the fullest extent possible,
(iii) promptly notify Lender of any claim, action, or proceeding affecting any Non-Stock Collateral or the security interest therein and, unless Lender requests otherwise, appear in and defend any such action or proceeding at Borrower's expense, (iv) pay any reasonable expenses incurred by Borrower and, except to the extent prohibited by applicable law, by Lender in the custody, preservation, use or operation of the Non-Stock Collateral, and (v) pay and discharge promptly all taxes, assessments and governmental charges or levies imposed upon any Non-Stock Collateral.

(e) Maintenance of Insurance. Borrower will maintain, with financially sound and reputable companies acceptable to Lender, insurance policies (i) insuring its inventory and equipment against loss by fire, explosion, theft and such other casualties as are usually insured against by companies engaged in the same or similar businesses and (ii) insuring Borrower and Lender against liability for personal injury and property damage relating to such inventory and equipment, such policies to be in such amounts and against at least such risks as are usually insured against in the same general area by companies engaged in the same or similar businesses, naming Lender as an additional insured with a lender loss payable clause in favor of Lender. Borrower shall, if so requested by Lender, deliver to Lender as often as Lender may reasonably request, a report of a reputable insurance broker satisfactory to Lender with respect to the insurance on its inventory and equipment. All insurance with respect to the inventory and equipment shall (i) contain a clause which provides that Lender's interest under the policy will not be invalidated by any act or omission of, or any breach of warranty by, the insured, or by any change in the title, ownership or possession of the insured property, or by the use of the property for purposes more hazardous than is permitted in the policy, and (ii) provide that no cancellation, reduction in the amount or change in coverage thereof shall be effective until at least ten days after receipt by Lender of written notice thereof.

(f) Compliance with Warranties and Representations. Cause all warranties and representations made by Borrower in this Stock Pledge to remain true and promptly to notify Lender of any change in any fact or circumstances warranted or represented by Borrower in this Stock Pledge.

(g) Compliance with Laws, Etc. Borrower will comply, in all material respects, with all acts, rules, regulations, orders, decrees and directions of any governmental authority, applicable to the Collateral or any part thereof or to the operation of Borrower's business; provided, however, that Borrower may contest any act, regulation, order, decree or direction in any reasonable manner which shall not, in the sole opinion of Lender, adversely affect Lender's rights hereunder or adversely affect the priority of its lien on and security interest in the Collateral.

(h) Documentation. From time to time, if requested by Lender, execute and deliver to Lender, in form and substance acceptable to Lender, separate assignments, certificates, documents, financing statements, supplemental writings, and further instruments and take any and all further action as Lender may reasonably require in order to evidence, confirm, affirm, maintain, perfect or further assure the hypothecation to Lender of the Collateral or Lender's security interest therein, or to give any other person notice of Lender's interest in the Collateral; and Lender may deliver to or serve upon any other person or file in any appropriate public office any of the foregoing.

Section 6.

(a) Voting Rights. So long as no Default (defined below) occurs and remains continuing, and subject to the provisions of the Plan Documents and the security interest granted herein, Borrower shall be entitled to exercise any and all voting and other consensual rights pertaining to the Stock Collateral.

(b) Distributions. So long as no Default (defined below) occurs and remains continuing, and subject to the provisions of the Plan Documents and the security interest granted herein, Borrower shall be entitled to receive and to retain and use any and all dividends, distributions and other amounts paid in respect of the Stock Collateral; provided, however, that any and all such dividends, distributions and other amounts received in the form of stock, bonds, certificated securities, warrants, options or rights to acquire any of the foregoing, together with any certificates representing same, shall become Stock Collateral and forthwith shall be delivered to Lender, and shall further, if received by Borrower, be received in trust for the benefit of Lender, be segregated from the other property of Borrower and forthwith be delivered to Lender in the same form as received (with an assignment separate from certificate and any other necessary endorsements).

(c) Dealings in Stock Collateral. Lender shall have no responsibility for ascertaining any maturities, calls, conversions, exchanges, offers, tenders or similar matters relating to the Stock Collateral or for informing Borrower with respect to any of such matters (irrespective of whether Lender actually has, or may be deemed to have, knowledge thereof). Lender shall not be required to take any steps or actions with regard to the Stock Collateral as may be requested or authorized by Borrower unless (i) such steps are reasonable and will not adversely affect the value as collateral of the Stock Collateral, and (ii) such request or authorization by Borrower is made in writing and is actually received by Lender.

(d) Other Provisions. The terms of this Stock Pledge concerning affirmative covenants of Borrower, Default and related matters set forth additional provisions concerning the Stock Collateral.

Section 7.

(a) Default. For purposes of this Stock Pledge, the term "Default" means the existence or occurrence of any one or more of the events constituting an Event of Default under the Loan Agreement.

(b) Stock Collateral Voting Rights. With respect to any Stock Collateral, so long as a Default has occurred and is continuing:

(i) At the option of Lender, all rights of Borrower to exercise the voting and other consensual rights which Borrower would otherwise be entitled to exercise, and to receive the dividends and distributions which Borrower would otherwise be authorized to receive and retain, shall cease, and all such rights thereupon shall become vested in Lender which thereupon shall have the sole right to exercise such voting and other consensual rights and to receive and to hold as Collateral such dividends and distributions.

(ii) All dividends and other distributions which are received by Borrower contrary to the provisions of this Stock Pledge shall be received in trust for the benefit of Lender, shall be segregated from other funds of Borrower and forthwith shall be paid over to Lender as Collateral in the same form as so received (with an assignment separate from certificate and any other necessary endorsements).

(c) Remedies. Upon the occurrence of a Default, in addition to any and all other rights and remedies which it may then have hereunder, or at law or in equity, or under the Commercial Code, Lender at its option may: (i) declare the entire unpaid balance of principal of and all accrued interest on the Obligations immediately due and payable, without notice, demand, or presentment, which are hereby waived; (ii) reduce its claims to judgment, foreclose or otherwise enforce its security interest in all or any part of the Collateral by any available judicial procedure; (iii) after any notification required by this Stock Pledge, sell, or otherwise dispose of, at the office of Lender, or elsewhere as chosen by Lender, all or any part of the Collateral, and any such sale or other disposition may be as a unit or in parcels, by public or private proceedings, and by way of one or more contracts (it being agreed that the sale of all or any part of the Collateral shall not exhaust Lender's power of sale, but sales may be made from time to time until all of the Collateral has been sold or until the Obligations have been paid in full) and at any such sale it shall not be necessary to exhibit the Collateral; (iv) in its discretion, retain the Collateral in satisfaction of the Obligations whenever the circumstances are such that Lender is entitled to do so under the Commercial Code; (v) apply by appropriate judicial proceedings for appointment of a receiver for the Collateral, or any part thereof, and Borrower hereby consents to any such appointment; (vi) buy the Collateral at any public sale; and (vii) buy the Collateral at any private sale if the Collateral is of a type customarily sold in a recognized market or is of a type which is the subject of widely distributed standard price quotations. Lender shall be entitled to apply the proceeds of any sale or other disposition of the Collateral in the following order: first, to the payment of all its reasonable costs incurred in storing, preparing for sale, or selling all or any part of the Collateral and to the payment of attorneys' fees as provided for herein or in the Loan Agreement; and next, toward repayment of the Loan as provided in the Loan Agreement and Note. Lender shall account to Borrower for any surplus. If the proceeds are not sufficient to pay the Obligations in full, Borrower shall remain liable for any deficiency.

(d) Notice. Reasonable notification of time and place of any public sale of the Collateral or reasonable notification of the time after which any private sale or other intended disposition of the Collateral is to be made shall be sent to Borrower and to any other person entitled under the Commercial Code to notice; provided, that if the Collateral is perishable or threatens to decline speedily in value or is of a type customarily sold on a recognized market, Lender may sell or otherwise dispose of such Collateral without notification, advertisement, or other notice of any kind. It is agreed that notice sent or given not less than five calendar days prior to the taking of the action to which the notice relates is reasonable notification and notice.

(e) Stock Collateral. By virtue of the Securities Act of 1933, as amended ("1933 Act"), or any other laws or regulations, legal restrictions or limitations peculiar to securities may apply and affect Lender in any attempts to dispose of all or any portion of the Stock Collateral in the enforcement of Lender's rights and remedies hereunder. For these reasons, Lender is hereby authorized by Borrower, but is not obligated, in the event of any Default giving rise to Lender's rights to sell or otherwise dispose of any Stock Collateral, to sell all or any part of the Stock Collateral at private sale, subject to investment letter restrictions or in any other manner which will not require the Stock Collateral, or any part thereof, to be registered in accordance with the 1933 Act, as amended, or the rules and regulations promulgated thereunder, or any other law or regulation ("Registration"), at the best price reasonably obtainable by Lender at any such private sale or other disposition in any manner mentioned above. Lender is hereby further authorized by Borrower, but is not obligated, in the event of any Default giving rise to Lender's rights to sell or otherwise dispose of Collateral, to sell all or any part of the Stock Collateral at a public sale at the best price obtainable by Lender at any such public sale. A commercially reasonable public sale of Stock Collateral shall be deemed to include, but not be limited to, the following: (1) Lender shall publish a notice of the sale in a newspaper of general circulation in the county of the office of Lender or the county of the place of sale chosen by Lender if not at its office, and elsewhere as chosen by Lender; (ii) the notice of sale shall state that Lender reserves the right to bid for and purchase the Stock Collateral; (iii) all Stock Collateral of the same issuer shall be sold only as a block and shall not be sold jointly or broken down; (iv) the purchaser of the Stock Collateral shall provide an investment letter; (v) the certificate(s) for the shares of the Stock Collateral sold shall bear a legend to the effect that the shares are restricted and may not be sold or transferred without registration under the 1933 Act and under applicable state securities laws or under a valid exemption from the 1933 Act and from applicable state securities laws; and (vi) any other procedures or restrictions necessary to sell or dispose of the Stock Collateral or any part thereof, without Registration of the Stock Collateral or to comply with any other express requirements of the Commercial Code. Lender is also hereby authorized by Borrower, but is not obligated, to take such actions, give such notices, obtain such consents, and do such other things as Lender may deem required or appropriate in the event of a sale or disposition of any of the Stock Collateral. Borrower understands that Lender may in its discretion approach a restricted number of potential purchasers for a private sale and that a sale under such circumstances may yield a lower price for the Stock Collateral, or any part or parts thereof, than would otherwise be obtainable if the same were subject to an effective Registration and sold in the open market. Borrower also understands that a public sale of the Stock Collateral in any manner that will not require Registration may yield a lower price for the Stock Collateral than would otherwise be obtainable if the same were subject to an effective Registration and sold in the open market. Borrower agrees (i) that in the event Lender shall upon any Default sell the Stock Collateral, or any portion thereof, at such private sale or sales or at such public sale, or in connection with any sale that is pursuant to effective Registration, Lender shall have the right to rely upon the advice and opinion of any member firm of a national securities exchange as to the best price reasonably obtainable upon such private sale or public sale thereof, and (ii) that such reliance shall be conclusive evidence that Lender handled such matter in a commercially reasonable manner under the Commercial Code.

(f) No Waivers by Lender. The acceptance by Lender at any time and from time to time of partial payment of the aggregate amount due under the Note upon conversion of all or any portion of the Principal into Common Stock pursuant to the terms of the Loan Agreement, shall not be deemed to be a waiver of any Default then existing. No waiver by Lender of any Default shall be deemed to be a waiver of any other subsequent Default, nor shall any such waiver by Lender be deemed to be a continuing waiver. No delay or omission by Lender in exercising any right or power hereunder, or under any other writings executed by Borrower as security for or in connection with the Obligations, shall impair any such right or power or be construed as a waiver thereof or an acquiescence therein, nor shall any single or particular exercise of any such right or power preclude other or further exercise thereof, or the exercise of any other right or power of Lender hereunder or under such other writings.

(g) Remedies Cumulative. All rights and remedies of Lender under this Stock Pledge are cumulative of each other and every other right or remedy which Lender may otherwise have at law or in equity or under any other writing for the enforcement of the security interest herein or the collection of the Obligations, and the exercise or failure to exercise of one or more rights or remedies shall not prejudice or impair the concurrent or subsequent exercise of other rights or remedies. Should any person other than Borrower have heretofore executed or hereafter execute in favor of Lender any deed of trust, mortgage, or security agreement to secure the payment of the Obligations or any part thereof or should Borrower have heretofore executed or hereafter execute in favor of Lender any deed of trust, any mortgage or any other security agreement:
(i) the lien or security interest therein created and all rights, powers, privileges and remedies vested in Lender by the terms hereof shall exist concurrently with the security interest herein created and all rights, powers, privileges, and remedies vested in Lender by the terms hereof, and (ii) the exercise or failure to exercise by Lender of any right or power conferred upon it in any such instrument shall not prejudice or impair Lender's rights, titles, liens and powers existing hereunder.

Section 8.

(a) Filings. Lender shall have the right at any time to execute and file the original or a copy of this Stock Pledge as a financing statement, but the failure of Lender to do so shall not impair the validity or enforceability of this Stock Pledge.

(b) Actions With Respect to Collateral. Concerning the indebtedness to Lender comprising the Obligations, Lender, in its sole discretion without in any manner impairing Lender's rights and powers hereunder, may, at any time and from time to time, without further consent of or notice to Borrower, and with or without valuable consideration, (i) make loans or advances to Borrower, or otherwise incur or acquire obligations of Borrower; (ii) renew or extend the maturity of or accept partial payments upon the Obligations or any part thereof; (iii) release any person primarily or secondarily liable in respect thereof; (iv) alter in any manner that Lender may elect the terms of any instrument evidencing the Obligations or any part thereof either as to the maturity thereof, rate of interest, method of payment, parties thereto or otherwise; (v) renew, extend, or accept partial payments upon, release or permit substitutions for or withdrawals of, any security at any time directly or indirectly, immediately or remotely, securing the payment of the Obligations or any part thereof; and (vi) release or pay to any person otherwise entitled thereto, any amount paid or payable in respect of any such other direct or indirect security for the Obligations, or any part thereof.

(c) Limits on Obligations of Lender. Lender shall never be liable for its failure to use due diligence in the satisfaction of the Obligations, or any part thereof, or for its failure to give notice to Borrower of a Default or of a default in the payment of or upon any Collateral, whether pledged hereunder or otherwise. Lender shall have no duty to fix or preserve rights against prior parties to the Collateral, and shall never be liable for its failure to use diligence to collect any amount payable in respect of the Collateral, but shall be liable only to account to Borrower for what it may actually collect or receive thereon. Without limiting the generality of the immediately preceding sentence, Lender shall not be, required to take any steps or actions with regard to Collateral as may be requested or authorized by Borrower unless (i) Lender shall determine, in its sole discretion, that such steps or actions will not adversely affect the value of the Collateral as collateral, and (ii) such request or authorization by Borrower is made in writing and is actually received by Lender.

(d) Assignment. The rights, powers, and interest held by Lender under this Stock Pledge and the Loan Agreement and Note, together with all interest in and to the Collateral, may be transferred and assigned by Lender, in whole or in part, at such time and upon such terms as it may deem advisable. Borrower shall not be permitted to transfer or assign its rights or obligations under this Stock Pledge, or the other Plan Documents.

(e) Limitation on Interest. No provision herein or in the Loan Agreement or Note, any of the other Plan Documents, or any other promissory note, agreement or document executed by Borrower evidencing the Obligations, shall require the payment or permit the collection of interest in excess of the maximum permitted by law. If any excess of interest in such respect is provided for herein or in the Note or the Loan Agreement, or in any of the Plan Documents or other promissory note, agreement or document, the provisions of this Paragraph shall govern, and Borrower shall not be obligated to pay the amount of such interest to the extent that it is in excess of the amount permitted by law. The intention of the parties being to conform strictly to the usury laws now in force, all of the Plan Documents and all promissory notes, agreements or documents executed by Borrower evidencing the Obligations shall be held subject to reduction to the amount allowed under said usury laws as now or hereafter construed by the courts having jurisdiction.

Section 9.

(a) Binding Effect. This Stock Pledge shall be binding on Borrower and Borrower's legal representatives, successors and assigns, and shall inure to the benefit of Lender, its legal representatives, successors and assigns.

(b) Term. Until the Obligations shall have been paid and performed in full, all rights granted to Lender under this Stock Pledge shall continue to exist and may be exercised at any time irrespective of the fact that any of the Obligations or rights hereunder may have become barred by any statute of limitations, the benefits of which are hereby expressly waived by Borrower. Conversion of all or a portion of the Principal into Common Stock pursuant to the Loan Agreement shall not release Borrower from the terms of this Stock Pledge unless and until all Obligations are irrevocably satisfied in full.

(c) Governing Law. This Stock Pledge shall be governed by, and construed and enforced in accordance with, the internal laws of the State of Utah, excluding conflict of law provisions.

(d) Counterparts. This Stock Pledge may be executed in counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

(e) Severability. If any provision of this Stock Pledge is found by any court or arbitral tribunal of competent jurisdiction to be invalid or unenforceable, the invalidity of such provision shall not affect the other provisions of this Stock Pledge and all provisions not affected by the invalidity shall remain in full force and effect.

(f) Number and Gender; Headings. Each number and gender shall be deemed to include each other number and gender, as the context may require. The headings and captions contained in this Stock Pledge shall not constitute a part thereof and shall not be used in its construction or interpretation.

(g) Submission to Jurisdiction; Service of Process. Borrower and Lender agree to the following: (i) Any legal action or proceeding with respect to this Stock Pledge or any document related thereto may be brought in the courts of the State of Utah or of the United States of America for the District of Utah, and, by execution and delivery of this Stock Pledge, Borrower hereby accepts for itself and in respect of its property, generally and unconditionally, the jurisdiction of the aforesaid courts. Borrower hereby irrevocably waives any objection, including, without limitation, any objection to the laying of venue or based on the grounds of forum non conveniens, which Borrower may now or hereafter have to the bringing of any such action or proceeding in such respective jurisdictions. (ii) Borrower irrevocably consents to the service of process of any of the aforesaid courts in any such action or proceeding by the mailing of copies thereof by registered or certified mail, postage prepaid, to Borrower at its address provided herein. (iii) Nothing contained in this Section shall affect the right of Lender to serve process in any other manner permitted by law or commence legal proceedings or otherwise proceed against Borrower in any other jurisdiction.

(h) Amendment and Modification. This Stock Pledge may be amended or modified only by a writing executed by each party.

BORROWER ACKNOWLEDGES RECEIPT OF A COPY OF THIS SECURITY

AGREEMENT AND STOCK PLEDGE EXECUTED BY BORROWER ON THE DATE FIRST ABOVE STATED.

BORROWER:

HOMEFED CORPORATION, a Delaware
corporation
529 East South Temple
Salt Lake City, Utah 84102

By: /s/ Patricia A. Wood
    ---------------------------
    Patricia A. Wood, President
    ---------------------------
    [Print Name and Title]

LENDER:

LEUCADIA FINANCIAL CORPORATION,
a Utah corporation
529 East South Temple
Salt Lake City, Utah 84102

By: /s/ Joseph A. Orlando
    ---------------------------
    Joseph A. Orlando, V.P.
    ---------------------------
    [Print Name and Title]

EXHIBIT "A"

FINANCING STATEMENTS

The financing statements described in Section 8.4 of the Loan Agreement are incorporated herein by this reference.

All encumbrances of record listed on title insurance policies issued to Lender as of the date hereof covering real property that shall as of the date hereof be encumbered by the Deeds of Trust, are hereby incorporated herein by this reference.

Exhibit 10.21

TAX ALLOCATION AGREEMENT

This agreement (the "Agreement") is made as of November 1, 2002, by and among HomeFed Corporation, a Delaware corporation ("HomeFed"), CDS Holding Corporation, a Delaware corporation ("CDS Holding"), CDS Devco, Inc., a California corporation ("CDS Devco"), San Elijo Ranch, Inc., a California corporation ("SERI"), HomeFed Communities, Inc., a California corporation ("HFC Communities"), and HomeFed Resources Corporation, a California corporation ("HFC Resources" and, collectively, aside from HomeFed, the "Subsidiaries," with each of the Subsidiaries being a "Subsidiary").

WHEREAS, HomeFed is the common parent of an affiliated group of corporations (the "HomeFed Group") filing a consolidated federal income tax return;

WHEREAS, CDS Holding, CDS Devco, and SERI have been part of the HomeFed Group since October 22, 2002 and HFC Communities and HFC Resources have been part of the HomeFed Group since ________________; and

WHEREAS, HomeFed and the Subsidiaries wish to provide for the allocation among them of the consolidated Federal income tax liability and state or local income tax liabilities of the HomeFed Group and for certain related matters.

NOW, THEREFORE, in consideration of the foregoing premises and of the mutual covenants contained herein, the parties hereby agree as follows:

a. Except as otherwise provided herein, terms used in this Agreement shall have the meanings ascribed to them in, and shall be interpreted in accordance with, the Code, and the regulations and rulings issued thereunder, as in effect from time to time.

b. For purposes of this Agreement, the terms set forth below shall be defined as follows:

(1) "Code" means the Internal Revenue Code of 1986, as amended to the date hereof.

(2) "Consolidated Return" means a consolidated Federal income tax return and any returns of estimated Federal income tax filed by the HomeFed Group which includes any of the Subsidiaries.

(3) "Consolidated Return Year" means Parent's taxable year (or portion thereof) beginning on a day after October 21, 2002, for which Parent files a Consolidated Return.

(4) "HomeFed Group" shall have the meaning ascribed in the recitals to this Agreement.

(5) "HomeFed Group Tax" means with respect to any given Consolidated Return Year, the consolidated Federal income tax liability of the HomeFed Group that is reported on, and paid in respect of, any consolidated Federal income tax return and any returns of estimated Federal income tax required to be filed for such taxable year.

(6) "Parent" means HomeFed or any successor common parent corporation of the HomeFed Group.

(7) "Revised Tax Liability" means, for any Consolidated Return Year in which HomeFed Group Tax and/or a Subsidiary Tax (as the context may require) is revised (including, without limitation, by reason of (i) a "determination" within the meaning of Code Section 1313(a), (ii) HomeFed Group's filing of an amended federal income tax return, or (iii) an assessment of tax in accordance with Section 6213), the amount of any payment (i) required from a Subsidiary to Parent under Section 2(b), and (ii) required from Parent to a Subsidiary under
Section 3, shall be recomputed by substituting the revised HomeFed Group Tax and/or the revised Subsidiary Tax.

(8) "Separate Company Tax Return" means the hypothetical Federal income tax return and any hypothetical returns of estimated Federal income tax a Subsidiary would have been required to file in any given Consolidated Return Year on which it would have reported its Subsidiary Tax.

(9) "Subsidiary Estimated Tax" means, in respect of a given Subsidiary, for any given Consolidated Return Year, the Subsidiary Tax determined through the end of each period for which estimated Federal income tax payments on a consolidated basis are due (whether or not any amounts are actually owing by Parent), which liability shall be calculated in accordance with Section 6655 of the Code.

(10) "Subsidiary Tax" means, for each Subsidiary, its Tax liability for the Consolidated Return Year, including the Subsidiary's Federal income tax liability, computed hypothetically on a separate company basis (without regard to the income, deductions and credits of any other member of the HomeFed Group) for all relevant taxable years determined (x) using the same elections and methods of accounting as are used with respect to the Subsidiary in determining HomeFed Group Tax; (y) giving effect to the modifications specified in Reg. Sec. 1.1552-1(a)(2)(ii); and (z) without regard to any amount attributable to a credit arising under Code Section 53.

(11) "Subsidiary-Generated Benefit" means, for each Subsidiary, the amount, if any, by which the Subsidiary's loss or credit or loss or credit carryover results in either (i) a reduction of HomeFed Group Tax for any given Consolidated Return Year or (ii) a refund obtained by Parent with respect to any given Consolidated Return Year; provided, however, that the Subsidiary-Generated Benefit for a taxable year shall not exceed the excess of (i) the consolidated Federal income tax of the HomeFed Group for such taxable year computed hypothetically by giving effect only to the loss or credit, or loss or credit carryovers of all members of the HomeFed Group other than the Subsidiary over
(ii) the HomeFed Group Tax for such taxable year.

(12) "Tax" means the regular Federal income tax, estimated Federal income tax or alternative minimum tax, as well as any other Federal tax not based on income, together with any and all interest, additions to tax, fines and penalties payable with respect thereto.

a. By Parent

In each Consolidated Return Year, Parent shall pay, in full, the HomeFed Group Tax, if any, that is reported on any Consolidated Return filed for such taxable year.

b. By the Subsidiaries

(1) In each Consolidated Return Year, each Subsidiary shall pay to Parent its Subsidiary Tax and its Subsidiary Estimated Tax for such taxable year. All payments by a Subsidiary of its Subsidiary Estimated Tax made with respect to such Consolidated Return Year shall reduce (but not below zero) its Subsidiary Tax paid for such taxable year. Parent shall reimburse each Subsidiary in accordance with Section 4 to the extent its aggregate Subsidiary Estimated Tax payments for any given Consolidated Return Year exceed its Subsidiary Tax for such taxable year.

(2) The amount required to be paid in Section 2(b)(1) above shall be paid in any given Consolidated Return Year no later than five (5) days prior to the date on which any Consolidated Return is required to be filed for such taxable year (taking account of any extensions thereof), or, with respect to any interest and/or penalty not paid with the Consolidated Return and not covered by
Section 5(c), no later than five (5) days prior to the date on which Parent is required to make payment thereof.

(3) Each Subsidiary shall, to Parent's satisfaction, consult and furnish Parent with all documentation Parent shall deem necessary to determine, in respect of any given Consolidated Return Year, the Subsidiary Tax and Subsidiary Estimated Tax for such taxable year no later than either seventy-five (75) days prior to the date on which the consolidated income is required to be filed or, as the context may require, no later than ten (10) days prior to the date on which the estimated Federal income tax return is required to be filed in such taxable year (in each case taking account of any extensions thereof). Notwithstanding the foregoing, in no case shall the documentation described in this Section 3(b)(3) necessary to determine the Subsidiary Tax, be required prior to forty-five (45) days after the end of the Consolidated Return Year. No later than ten (10) days prior to the date on which the consolidated Federal income tax return is required to be filed or, as the context may require, no later than five (5) days prior to the date the Parent is to make an estimated federal income tax payment, Parent shall provide each Subsidiary a reasonably detailed calculation of its Subsidiary Tax and its Subsidiary Estimated Tax (as the context may require).

a. Benefit Carried Back To A Prior Year. If a Subsidiary-Generated Benefit arises in any Consolidated Return Year, and the Subsidiary, had it been filing separate from the HomeFed Group for all relevant periods could have carried back to a prior Consolidated Return Year all or part of the loss, deduction or credit (not otherwise compensated in accordance with Section 3) that gave rise to such Subsidiary-Generated Benefit, the portion of such Subsidiary-Generated Benefit attributable to such loss, deduction or credit (or portion thereof) shall be applied to reduce (but not below zero) the Subsidiary Tax paid under Section 2 in respect of such prior Consolidated Return Year, and Parent shall pay to the Subsidiary the amount of such reduction in accordance with Section 4(b); provided, however, that the Subsidiary shall not be entitled to all or a portion of such payment to the extent the Subsidiary Tax for such prior taxable year had previously been reduced under this Section 3. In the event that the losses and credits of the Subsidiaries in any given Consolidated Return Year exceed the total losses and credits which result in a Subsidiary-Generated Benefit with respect to such Consolidated Return Year, the amount payable to the Subsidiaries under this Section 3(a) shall be allocated among the Subsidiaries in proportion to the losses of each Subsidiary and if the Subsidiary Benefit in such Consolidated Return Year exceeds that attributable to such losses any excess shall be allocated among the Subsidiaries in proportion to the credits of each Subsidiary with respect to such Consolidated Return Year.

b. Benefit Remaining Upon Departure From The HomeFed Group. If, at some future date, a Subsidiary ceases to be a member of the HomeFed Group but continues to be a corporation subject to Federal income tax, Parent shall pay to the Subsidiary at the time and to the extent provided by Section 4(b) below, (1) the aggregate amount of its Subsidiary-Generated Benefit for all Consolidated Return Years ending on or prior to such cessation date (the amount of the Subsidiary-Generated Benefit for the Consolidated Return Year ending on the cessation date shall be determined on the basis of an interim closing of the books) less the portion of the Subsidiary-Generated Benefit (x) applied to reduce amounts payable by the Subsidiary as provided for in this Section 3, (y) not described in (x) and allocable to any loss, deduction or credit the carryforward period for which would have expired at or prior to such time as such loss, deduction or credit carryover would have reduced the Subsidiary's Federal income tax in a subsequent taxable year had it filed a federal income tax return separate from the HomeFed Group during all relevant taxable years, or
(2) attributable to any loss, deduction or credit carryover which is allocable to the Subsidiary or its successor under Reg. Sec. 1.1502-79.

a. Of Tax Payments

(1) To the extent any amount (or part thereof) described in and required to be paid by Parent under Section 2(b)(1) represents all or a part of a tax refund to be received by the HomeFed Group, such payment shall be made no later than five (5) days after the receipt of such refund; to the extent any amount (or part thereof) described in and required to be paid by Parent under Section 2(b)(1) represents all or part of a credit against the HomeFed Group Tax for a succeeding Consolidated Return Year, such payment shall be made no later than five (5) days after such tax payment against which such amount is credited is to be paid by Parent.

(2) To the extent Section 4(a)(1) does not apply with respect to any amount (or portion thereof) described in and required to be paid by Parent under
Section 2(b)(1) for any given Consolidated Return Year, such payment shall be made no later than thirty (30) days after the date on which the Consolidated Return is required to be filed for such Consolidated Return Year (taking account of any extensions thereof).

(3) No later than fifteen (15) days prior to the date Parent is required to make a payment described in Section 2(b)(1) for any given Consolidated Return Year, a Subsidiary shall consult and furnish Parent with any and all documents Parent shall deem necessary in determining the Subsidiary's entitlement to and the amount of such payment.

b. Of A Subsidiary-Generated Benefit

(1) For any given Consolidated Return Year, any amount required to be paid under Section 3(a) shall be paid no later than thirty (30) days after the date on which the Consolidated Return is required to be filed for such taxable year (taking into account any extensions thereof).

(2) Any payment required to be made under Section 3(b) shall be made to the extent that the loss, deduction or credit carryover giving rise to the Subsidiary-Generated Benefit (and not previously applied under Section 3 to reduce the Subsidiary Tax for any Consolidated Return Year) would have reduced the Subsidiary's Federal income tax liability in a subsequent taxable year and shall be made no later than fifteen (15) days after the Subsidiary provides notice to Parent and also furnishes to Parent, to Parent's satisfaction, with any and all documents Parent shall deem necessary in determining entitlement and amount of such payment, including but not limited to, any Federal income tax returns for all such relevant taxable years.

(3) Notwithstanding the foregoing, there shall be no double benefit to either the HomeFed Group or a Subsidiary by reason of the utilization of deductions, losses, credits, carryovers, carrybacks, etc. and payments made hereunder. To the extent appropriate, such items and payments hereunder shall be adjusted equitably.

a. For any given Consolidated Return Year, each Subsidiary shall pay to Parent, and Parent shall refund to each Subsidiary, an amount equal to the excess of a Revised Tax Liability over the amounts previously paid for such taxable year by the relevant party (as the context may require). The parties recognize that the Revised Tax Liability for any taxable year is not necessarily the Parent's or a Subsidiary's final tax liability for that taxable year, and may be recomputed in accordance with this Section 5(a) more than once.

b. A payment or refund required under Section 5(a) above shall be made (as the context may require) no later than (i) five (5) days prior to the date on which Parent is required to make an additional payment of tax with respect to a Revised Tax Liability, (ii) five (5) days after the receipt of a refund attributable to a Revised Tax Liability or (iii) five (5) days after the event giving rise to a Revised Tax Liability if such event does not result in the payment of additional tax or the receipt of a refund.

c. A payment or refund required under Section 5(a) above shall include a portion of any interest and/or penalty paid or credited by the Internal Revenue Service that is allocated to a Subsidiary in proportion with its respective adjustments. The amounts payable to or by the Subsidiary pursuant to this Section 5(c) shall be paid at the same time the amounts payable pursuant to Section 5(a) are paid.

d. Other than as provided in Section 5(c), a payment or refund required under
Section 5(a) above shall not bear interest.

Any corporation acquired by a Subsidiary shall become a party to this Agreement at the time such corporation is entitled or required to become a member of the HomeFed Group and the parties hereto that acquired such new member shall cause such new member to deliver to Parent a written instrument to such effect. The parties hereto hereby agree to the inclusion of any such acquired corporation as a party to this Agreement. This Agreement may be amended, as may be necessary or appropriate, to take into account any special circumstances arising from the inclusion of such acquired corporation in the HomeFed Group.

a. Parent shall prepare and file all Tax returns, and any other returns, documents or statements required to be filed with respect to or on which is reflected the determination of the Tax liability of the HomeFed Group for all taxable years of the HomeFed Group (including taxable years ending prior to or including the date hereof).

b. In its sole discretion, Parent shall have the right to make all decisions and elections with respect to all Tax returns described in Section 7(a) above and with respect to all matters relating to the Tax liability of the HomeFed Group and Subsidiaries (with respect to any taxable year in which a Subsidiary was a member of the HomeFed Group), for all taxable years of the HomeFed Group thereof
(including taxable years ending prior to or including the date hereof) including, without limitation,

(1) the right to determine (i) the manner in which such returns, documents or statements shall be prepared and filed, including, without limitation, the manner in which any item of income, gain, loss, deduction or credit shall be reported, (ii) whether any amended returns shall be filed, (iii) whether any filing extensions may be requested and (iv) the elections that will be made by any member,

(2) the right to contest, compromise or settle any adjustment or deficiency proposed, asserted or assessed as a result of any audit of such returns,

(3) the right to control any filing, prosecution, contest, compromise or settlement of any claim for refund, including the right to determine whether any refunds, to which the HomeFed Group may be entitled, shall be paid by way of refund or credited against the Tax liability for the Affiliated Group.

Such determination shall be binding and conclusive upon the parties for purposes hereof.

c. Each Subsidiary hereby irrevocably appoints Parent as its agent and attorney-in-fact to take such action (including the execution of documents) as Parent may deem appropriate to effect the foregoing.

d. All expenses incurred by Parent resulting from actions described under this
Section 7, to the extent that such actions relate to a Subsidiary, shall be shared equally by Parent and the Subsidiary.

a. In the event that any Subsidiary ceases to be included in the HomeFed Group, the Subsidiary and Parent shall furnish each other with information required to prepare accurately (i) the consolidated Federal income tax return of the HomeFed Group for the last taxable year in which the Subsidiary had been included in the HomeFed Group, (ii) the Federal income tax returns for all taxable years thereafter of the Subsidiary (and its predecessors and successors) and Parent, respectively, in which the Tax liability of either may be affected by their former affiliation (including, for example, the apportionment of any consolidated loss or credit carryover to the Subsidiary) and (iii) any Consolidated Return, including information necessary to determine any Tax liability payable with respect to such return, to the extent such determination is based upon the operations of the Subsidiary.

b. In the case of a termination of affiliation described in Section 8(a), the Subsidiary shall furnish Parent with all information and assistance as may be requested that relates to a Consolidated Return Year, including but not limited to (i) information and assistance required to apply for and obtain the benefit of any carryback to a Consolidated Return Year of the loss, deduction or credit of the Subsidiary, provided, however, that this provision shall not be construed to prevent the Subsidiary from validly electing not to carryback such loss, deduction or credit and (ii) information and assistance concerning the status of any Tax audit or refund claim relating to a Consolidated Return Year; provided, that expenses incurred with respect to any such Tax audit or refund claim shall be shared in a manner Parent shall deem equitable.

c. Payments under this Section 8 shall be made in accordance with principles analogous to those set forth under Sections 2, 3, or 5 hereof and at the time(s) set forth therein, as if the Subsidiary had still been a member of the HomeFed Group.

d. Each Subsidiary acknowledges Parent's right to make an election under Reg. Sec. 1.1502-20(g) with respect to the Subsidiary and shall satisfy all procedural requirements prescribed by Reg. Sec. 1.1502-20(g) in connection with such election. Parent and the Subsidiaries agree that Parent shall not be required to compensate if such election is made.

e. A Subsidiary shall not, without the prior written consent of Parent, file an application for a carryback adjustment of the Subsidiary Tax with respect to any given Consolidated Return Year. In the event any such application is filed after obtaining prior consent, the Subsidiary shall be entitled to that portion of the actual refund that is attributable to the Subsidiary determined in accordance with Section 5 hereof; provided, that the Subsidiary shall not be entitled to any portion of such refund to the extent the items giving rise to such carryback had previously reduced its Subsidiary Tax or gave rise to a payment to the Subsidiary under Sections 3, 4 or 5 hereof.

All disputes arising under this Agreement shall be decided by the public accountants regularly employed by Parent at the time the Consolidated Return is filed for such taxable year. Such determination shall be binding and conclusive upon the parties for the purposes hereof. Expenses incurred with respect to any such determination shall be shared in a manner Parent deems equitable.

As between Parent and each Subsidiary, the provisions of this Agreement shall fix the liability of each to the other as to the matters covered hereunder, even if such provisions are not controlling for Tax or other purposes (including, but not limited to, the computation of earnings and profits for Federal tax purposes), and even if Parent and other corporations which now are, or which from time to time may become, members of the HomeFed Group enter into other arrangements for the allocation of the portion of the total Tax liability of the HomeFed Group which is allocable to them.

Each Subsidiary shall, jointly and severally, indemnify, defend and hold harmless from and against any and all liabilities Parent and each other member of the HomeFed Group for the amount of any Subsidiary Tax. CDS Holding, CDS Devco and SERI shall, jointly and severally, indemnify, defend and hold harmless Parent and each other member of the HomeFed Group from and against any and all liabilities for all Taxes for which each may become liable under Treasury Regulation Section 1.1502-6 solely by reason of being a member of a consolidated group prior to joining the HomeFed Group. HomeFed, HFC Communities and HFC Resources shall, jointly and severally, indemnify, defend and hold harmless CDS Holding, CDS Devco and SERI from and against any and all liabilities for all Taxes of the HomeFed Group that relate to taxable periods (or portions thereof) that ended on or before October 21, 2002.

In the event Parent files consolidated, combined or unitary tax returns or reports in any state or local jurisdiction on behalf of, and pays such taxes owed, in all or in part, by the HomeFed Group, principles and procedures analogous to the principles and procedures (including the indemnity provision in Section 11) stated herein shall apply to determine the parties' respective liability in respect thereof and the payments to be made.

Notwithstanding the termination of this Agreement, its provisions shall remain in effect with respect to any period of time during the tax year in which termination occurs for which income of a Subsidiary must be included in the consolidated return.

a. Unless otherwise expressly provided in this Agreement, each party shall bear any and all expenses that arise from their respective obligations under this Agreement.

b. This Agreement contains the entire understanding of the parties hereto with respect to the subject matter contained herein. No alteration, amendment or modification of any of the terms of this Agreement shall be valid unless made by an instrument signed in writing by an authorized officer of each party.

c. This Agreement has been made in and shall be construed and enforced in accordance with the laws of the State of Delaware from time to time obtaining, without regard to conflict of laws principles.

d. This Agreement shall be binding upon and inure to the benefit of each party and all successors hereto and shall not be assignable by any party without the prior written consent of all parties.

e. All notices and other communications hereunder shall be deemed to have been duly given if delivered by hand or mailed, certified or registered mail, with postage prepaid addressed to the party to which the notice or other communication is given at its address as set forth below, or at such other address of which a party sends written notice to the other party hereto pursuant to this Section 14, to the attention of the President of such other party.

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

g. The headings of the Sections of this Agreement are inserted for convenience only and shall not constitute a part hereof.

[Remainder of Page Intentionally Left Blank]

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

HOMEFED CORPORATION

By:    /s/ Erin N. Ruhe
       ---------------------------
Name:  Erin N. Ruhe
Title: Vice President

HOMEFED COMMUNITIES, INC.

By:    /s/ Paul J. Borden
       ---------------------------
Name:  Paul J. Borden
Title: President

HOMEFED RESOURCES CORPORATION

By:    /s/ Paul J. Borden
       ---------------------------
Name:  Paul J. Borden
Title: President

CDS HOLDING CORPORATION

By:    /s/ Paul J. Borden
       --------------------------
Name:  Paul J. Borden
Title: Chairman

CDS DEVCO, INC.

By:    /s/ Paul J. Borden
       --------------------------
Name:  Paul J. Borden
Title: President

SAN ELIJO RANCH, INC.

By:    /s/ Paul J. Borden
       ---------------------------
Name:  Paul J. Borden
Title: President

Exhibit 10.22

RECORDING REQUESTED BY:
AND WHEN RECORDED RETURN TO:

AMENDMENT NO. 1 TO FIRST AMENDED AND RESTATED DEVELOPMENT
AGREEMENT AND OWNER PARTICIPATION AGREEMENT
BETWEEN
THE CITY OF SAN MARCOS,
THE SAN MARCOS REDEVELOPMENT AGENCY,
AND
SAN ELIJO HILLS DEVELOPMENT COMPANY, LLC

AMENDMENT NO. 1 TO FIRST AMENDED AND RESTATED DEVELOPMENT AGREEMENT AND OWNER PARTICIPATION AGREEMENT BETWEEN THE CITY OF SAN MARCOS, THE SAN MARCOS REDEVELOPMENT AGENCY, AND SAN ELIJO HILLS DEVELOPMENT COMPANY, LLC

This Amendment No. 1 to First Amended and Restated Development Agreement and Owner Participation Agreement ("Amendment") is entered into by and between the City of San Marcos, a municipal corporation ("City"), the San Marcos Redevelopment Agency ("Agency"), and San Elijo Hills Development Company, LLC, a Delaware limited liability company ("Owner"), with regard to the development of real property in the City of San Marcos.

RECITALS

A. On August 15, 1997, the parties hereto or their predecessors-in-interest caused to be recorded in the Office of the San Diego County Recorder as document no. 1997-0395018 that certain First Amended and Restated Development Agreement and Owner Participation Agreement between the City of San Marcos, the San Marcos Redevelopment Agency, and San Elijo Ranch, Inc. ("Development Agreement") concerning the real estate development commonly known as San Elijo Hills located in the City of San Marcos, California, more particularly described therein (the "Project");

B. Section 4.4 of the Development Agreement authorizes its amendment in the manner provided for in Government Code Section 65868;

C. This Amendment is necessary and desirable to insure the financing and installation of public infrastructure consistent with the Circulation Element of the San Marcos General Plan.

D. The terms and conditions of this Amendment have undergone extensive review by the City and its City Council, and have been found to be fair, just, reasonable and will advance the health, safety and welfare of San Marcos residents;

E. This Amendment is consistent with the San Marcos General Plan and San Elijo Hills Specific Plan;

F. The requirements of the California Environmental Quality Act have been satisfied in connection with this Amendment; and

G. All actions taken and approvals given by the City have been in accordance with applicable legal requirements for notice, public hearings, findings, and other procedural matters.

H. It is the intention of the parties that this Amendment shall be binding upon those portions of the Project identified in the Specific Plan as Project Planning Areas C2 (Subareas a, b and c), F2, I1, I2, J, K1, K2, O, S, T, V1, and V2. No other portions of the Project are affected or bound hereby.

NOW, THEREFORE, in consideration of the above recitals and of the mutual covenants hereinafter contained and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties agree as follows:

AGREEMENT

1. Purpose and Effect. The purpose and effect of this Amendment shall be to modify and supplement the provisions of the Development Agreement. Except as modified or supplemented herein, the provisions of the Development Agreement shall remain in full force and effect. In the event of any inconsistency, the terms and conditions of this Amendment will prevail. Capitalized terms not otherwise defined in this Amendment shall have the meaning ascribed to them in the Development Agreement.

2. San Elijo Road Improvements. The provisions below are hereby inserted following subparagraph "m" of Section A.1 at page 5 of Exhibit "B," entitled "Schedule of Performance":

n. Upon the earlier of thirty (30) days from the effective date of the Amendment, or the issuance of a residential building permit for the 1,350th equivalent single family dwelling unit, excluding therefrom building permits issued for Area R, construction offices, model homes or affordable units as described in the first full paragraph of page 1 of this Exhibit "B" (hereafter "Equivalent Building Permit"), Owner will submit to CDFG and USF&WS (as defined in Section 5.11 of the Development Amendment and hereafter referred to as "Resource Agencies"), and any other governmental agency with lawful jurisdiction (collectively "Regulatory Agencies"), applications necessary for the improvement of that portion of San Elijo Road (formerly known as Questhaven Road) westerly of the Project's western boundary and easterly the eastern boundary of the University Commons Specific Plan (hereafter, the "San Elijo Road Dip") necessary to construct the segment to the standards identified in City Resolution 99-5317, adopted October 26, 1999 (hereafter, the "Mitigation Monitoring Program").

o. Upon the earlier of December 1, 2003, or the issuance of the 2,000th Equivalent Building Permit, Owner will submit to the Resource Agencies all applications necessary for the improvement of that portion of San Elijo Road easterly of the Project's eastern boundary and westerly of the existing terminus of Twin Oaks Valley Road (hereafter, "San Elijo Road East"), necessary to construct the segment to the standards identified in the Mitigation Monitoring Program.

p. Owner will submit to the City an application to amend CFD 99-01 as needed to generate the San Elijo Road CFD Funds, defined in Exhibit "C", Section 11 hereof, upon the earlier of January 31, 2004, or the issuance of the 2000th Equivalent Building Permit (the "CFD Amendment"). The CFD Amendment will not propose to exceed an aggregate 1.75% maximum tax rate for the projected home sales prices. In the event the City and/or Agency do not timely approve the CFD Amendment in the form submitted by Owner, Owner shall have no obligation to provide Owner's Advance or Owner's Contribution pursuant to Sections 11.2 and 11.3 of Exhibit "C".

q. Upon the earlier of March 30, 2004, or the issuance of the 2000th Equivalent Building Permit, Owner will submit to the City a complete design for the San Elijo Road Dip and San Elijo Road East in a form substantially consistent with existing draft plans exchanged by the City and Owner. The City will determine whether the submittal is complete pursuant to existing plan check application procedures. Owner will promptly respond to the City's reasonable requests for additional information necessary to insure a complete design submittal. City plan check and inspection fees are inapplicable to the subject improvements and will not be imposed.

r. Owner will construct the San Elijo Road Dip improvements upon the earlier of July 30, 2004, or the issuance of the 2,000th Equivalent Building Permit. Owner's obligation to commence physical construction is conditioned upon the City's acquisition of all required rights of way, the issuance of all necessary Regulatory Agency permits and approvals, including without limitation those required from the Resource Agencies, and the City/Agency approval of the CFD Amendment.

s. Possession of rights-of-way necessary for the construction of San Elijo Road East will be acquired by the City, using its powers of eminent domain if necessary, at no expense to Owner, upon the earlier of September 30, 2004, or the issuance of the 2,100th Equivalent Building Permit. Owner will cause plats and legal descriptions to be prepared, the cost of which shall be reimbursed as a component of Owner's Advance, defined at Section 11.3 of Exhibit "C" hereof.

t. Owner will commence construction of San Elijo Road East not later than January 31, 2005, provided that the City has acquired all necessary rights of way, and all necessary permits and approvals, including without limitation (i) permits and approvals necessary for the grading of all of Phase 3 of the Project, and (ii) the CFD Amendment, have been issued by all governmental agencies with jurisdiction over the improvements, including without limitation the City, Agency and Resource Agencies. Following commencement of construction Owner thereafter will diligently pursue construction to completion in accordance with the Development Agreement. Owner's obligation to continue construction once commenced is conditioned upon the availability of the City/Agency Contribution, as defined in Section 11.1 of Exhibit "C," sufficient to complete the improvements.

3. Satisfaction of Fair Share Funding Requirement. The parties agree that this Amendment constitutes satisfaction of the "Fair Share Funding Mechanism" requirement contained in Section A.1.h at page 4 of Exhibit "B" of the Development Agreement.

4. Tolling Extension. The following provision is added as Section A.3 at page 6 of Exhibit "B":

3. Tolling Extension. Owner's obligations, the building permit thresholds and target dates set forth in Section A.1, Subparagraphs "n" through "t" of this Exhibit "B" are deemed extended and excused in the event Owner is unable to satisfy its obligations thereunder due to circumstances beyond the reasonable control of Owner ("Tolling Extension"). The Tolling Extension will be limited to the time period during which the obligation(s) at issue may not reasonably be satisfied. For example, the inability to timely obtain Regulatory Agency or other governmental permits and approvals necessary to grade all of Phase 3 of the Project or to construct the San Elijo Road Dip or San Elijo Road East will activate the Tolling Extension. During the Tolling Extension Owner may continue to develop the Project and obtain building permits uninterrupted provided, however, that under no circumstances may Owner exceed the building permit thresholds contained in the Development Agreement and related Project entitlements, and further provided that Owner continues to diligently pursue the satisfaction of the item(s) delayed during the Tolling Extension. The parties acknowledge that pursuant to the Development Agreement Owner had no affirmative duty to perform the obligations contained in Section
A.1, Subparagraphs "n" through "t" on the terms and conditions established in this Amendment.

5. San Elijo Road Financing. The provisions below are hereby inserted following Section 10 at page 11 of Exhibit "C," entitled "Questhaven/Twin Oaks Valley Corridor Public Facilities Financing Plan":

11. SAN ELIJO ROAD DIP/SAN ELIJO ROAD EAST FINANCING.

In satisfaction of the "fair share funding mechanism" requirement contained in Section A.1.h at page 4 of Exhibit "B" of the Development Agreement, the parties have agreed upon the financing of San Elijo Road improvements, including the San Elijo Road Dip and San Elijo Road East (collectively, "San Elijo Road Improvements") as follows:

11.1 City/Agency Contribution. The City and Agency will fund the Actual Costs, as defined in Exhibit "D", Section 4.3 of the Development Agreement, of the San Elijo Road Improvements ("City/Agency Contribution"), less Owner's Contribution, defined below, in a timely manner so as not to impede or delay development of the Project.

11.2 Owner's Contribution. Owner will contribute an amount not to exceed eleven million dollars ($11,000,000) towards the costs of the San Elijo Road Improvements ("Owner's Contribution"), consisting of ten million dollars ($10,000,000) allocated to physical construction costs, and one million dollars ($1,000,000) allocated to Owner's Advance, defined in Section 11.3, below. Owner's Contribution will be funded through CFD No. 99-01 proceeds ("San Elijo Road CFD Funds") generated from those portions of the Project undeveloped as of the effective date of this Amendment, including Project Planning Areas C2 (Subareas a, b and c), F2, I1, I2, J, K1, K2, O, S, T, V1, and V2. To the extent Owner's Advance is less than one million dollars ($1,000,000) for any reason, Owner's Contribution allocated to physical construction funding may exceed ten million dollars ($10,000,000). In no event will Owner's Advance and CFD 99-01 proceeds allocated to physical construction funding collectively exceed eleven million dollars ($11,000,000). Regardless of the Actual Costs of the San Elijo Road Improvements and the amount of the City/Agency Contribution required to ensure completion of the San Elijo Road Improvements, the parties agree that Owner's Contribution will not exceed $11,000,000.

11.3 Owner's Advance. Subject to the right of reimbursement from proceeds of CFD No. 99-01, as part of Owner's Contribution Owner will advance up to one million dollars ($1,000,000) for the design, application processing, Resource Agency permitting, and other soft costs associated with the San Elijo Road Improvements, excluding construction costs and right of way acquisition ("Owner's Advance").

11.4 Owner's Financial Assurances. In the event a financial consultant mutually acceptable to the parties determines, in his or her professional judgment, that CFD No. 99-01 will not generate Owner's Contribution, Owner will provide financial assurances to the City and Agency, acceptable to all parties in their reasonable discretion, demonstrating Owner's ability to fund the shortfall.

11.5 City/Agency Financial Assurances. The City and Agency represent and warrant the availability of the City/Agency Contribution to ensure timely completion of the San Elijo Road Improvements.

IN WITNESS WHEREOF, this Amendment has been executed by the City of San Marcos, acting by and through its City Manager pursuant to Ordinance No. 90-04 (2003MOD), and by the San Marcos Redevelopment Agency acting by and through its Executive Director pursuant to Resolution No. RDA 2003-341, and by Owner.

Dated this 11th day of February, 2004.

SAN MARCOS REDEVELOPMENT AGENCY                THE CITY OF SAN MARCOS



By: /s/ Rick Gittings                          By: /s/ Rick Gittings
   -----------------------------------             ---------------------------
     Rick Gittings, Executive Director             Rick Gittings, City Manager

                                               OWNER:

APPROVED AS TO FORM:
SAN MARCOS CITY ATTORNEY                       SAN ELIJO HILLS DEVELOPMENT
                                               COMPANY, LLC, a
                                               Delaware limited liability
                                               company


By: /s/ Helen Holmes Peak                      By: /s/ Curt R. Noland
    ----------------------------------            ------------------------------
     Helen Holmes Peak, City Attorney             Curt R. Noland, Vice President

Exhibit 10.23

AMENDMENT
to the
ADMINISTRATIVE SERVICES AGREEMENT

THIS AMENDMENT NO. 6 dated as of December 31, 2003 to the ADMINISTRATIVE SERVICES AGREEMENT ("Agreement") dated as of March 1, 2000 (such agreement as amended is referred to herein as the "Agreement") between Leucadia Financial Corporation, a Utah corporation ("Leucadia"), HomeFed Corporation, a Delaware corporation ("HomeFed"), HomeFed Resources Corporation, a California corporation ("HomeFed Resources") and HomeFed Communities, Inc., a California corporation ("HomeFed Communities").

The following new paragraph shall replace in its entirety paragraph 4 of the Agreement:

"4. Term and Termination. The term of this Agreement shall continue until December 31, 2004, unless extended in writing by mutual agreement of the parties. HomeFed shall have the right to terminate this Agreement, without restriction or penalty, upon 30 days prior written notice to the other party. In all events, the provisions of Section 7. "Indemnification" shall survive the termination of this Agreement, whether as a result of the passage of time or the election of HomeFed or otherwise."

In all other respects, the Agreement shall remain unchanged.

[SIGNATURE PAGE TO FOLLOW]

IN WITNESS WHEREOF, this Agreement has been executed as of the date first hereinabove written.

LEUCADIA FINANCIAL CORPORATION
Address: 529 East South Temple
Salt Lake City, UT 84102

By: ___________________________
Name: Joseph A. Orlando
Title: Vice President

HOMEFED CORPORATION
Address: 1903 Wright Place, Suite 220
Carlsbad, CA 92008

By: ___________________________
Name: Paul J. Borden
Title: President

HOMEFED RESOURCES CORPORATION
Address: 1903 Wright Place, Suite 220
Carlsbad, CA 92008

By: ___________________________
Name: Paul J. Borden
Title: President

HOMEFED COMMUNITIES, INC.
Address: 1903 Wright Place, Suite 220
Carlsbad, CA 92008

By: ___________________________
Name: Paul J. Borden
Title: President