Agmt. Of Purchase & Sale & Joint Escrow Instructions

EXHIBIT 10.26


AGREEMENT OF PURCHASE AND SALE


AND JOINT ESCROW INSTRUCTIONS


AGREEMENT OF PURCHASE AND SALE
AND JOINT ESCROW INSTRUCTIONS
-----------------------------


Table of Contents
----------------- Paragraph Number Page - --------- ----


1. Purchase and Sale................................................ 2
2. Purchase Price................................................... 2
3. Payment of Purchase Price........................................ 2
4. Escrow........................................................... 3
5. Condition of Title............................................... 3
6. Title Policy..................................................... 4
7. Conditions to Close of Escrow.................................... 4
8. Deposits by Seller............................................... 8
9. Deposits by Buyer................................................ 9
10. Costs and Expenses............................................... 9
11. Prorations....................................................... 9
12. Disbursements and Other Actions by Escrow Holder................. 10
13. Covenants of Seller.............................................. 10
14. Representations and Warranties; As-Is............................ 12
15. Remedies......................................................... 14
16. Damage or Condemnation Prior to Closing.......................... 15
17. Notices.......................................................... 16
18. Brokers.......................................................... 17
19. Legal Fees....................................................... 18
20. Assignment....................................................... 18
21. Miscellaneous.................................................... 18
SIGNATURES............................................................. 20


EXHIBITS - --------


Exhibit "A-1" - Legal Description of the Land Exhibit "A-2" - Personal Property List Exhibit "B" - Grant Deed Exhibit "C" - Bill of Sale Exhibit "D" - Transferor's Certification of Non-Foreign Status Exhibit "E" - General Assignment Agreement Exhibit "X" - Disclosure Statement


AGREEMENT OF PURCHASE AND SALE
AND JOINT ESCROW INSTRUCTIONS
-----------------------------


TO: Chicago Title Company Escrow No.:__________________________
700 South Flower Street, Suite 900 Escrow Officer: Maggie Watson
Los Angeles, California 90017 Title Order No.: 00730051 M07
Title Officer:_______________________


THIS AGREEMENT OF PURCHASE AND SALE AND JOINT ESCROW INSTRUCTIONS
("Agreement") is made and entered into as of this 4th day of April 1997, by and - ----------- among SANDERS DEVELOPMENT CORPORATION, a Delaware corporation ("Sanders
------- Development"), and CALCOMP INC., a California corporation ("CalComp"), on the - ----------- ------- one hand; and LINCOLN PROPERTY COMPANY, N.C., INC., a Texas corporation
("Buyer"), on the other hand, with respect to the following. CalComp and ----- Sanders Development are collectively referred to as "Seller."
------


R E C I T A L S :
----------------


A. Seller desires to sell and convey to Buyer the following:


1. That certain real property located in the City of Anaheim, County of Orange, State of California, more particularly described on Exhibit
------- "A-1" attached hereto (the "Land"), together with the ten (10) buildings located - ----- ---- thereon, containing in the aggregate approximately 432,149 square feet of leasable space, commonly known as CalComp Complex (the "Buildings"), associated
--------- parking areas, and all other improvements located thereon (collectively, the
"Improvements"); - -------------


2. All of Seller's interest (if any) in all rights, privileges, easements and appurtenances benefiting the Land and/or the Improvements, including, without limitation, all mineral and water rights and all easements, rights-of-way and other appurtenances used or connected with the beneficial use or enjoyment of the Land and/or the Improvements (the Land, the Improvements and all such rights, privileges, easements and appurtenances are sometimes collectively hereinafter referred to as the "Real Property");
-------------


3. All personal property, equipment, supplies and fixtures described in Exhibit "A-2" attached hereto (collectively, the "Personal
------------- -------- Property"); and


4. All of Seller's interest in any intangible property appurtenant to the foregoing, including, without limitation, warranties, guaranties, licenses, permits, entitlements, governmental approvals and certificates of occupancy which benefit the Real Property and/or the Personal Property to the extent assignable without the payment of money or the consent of third parties (the "Intangible Personal Property"). The Real Property, the
---------------------------- Personal Property, Seller's interest as landlord under the Leases, and the Intangible Personal Property are collectively hereinafter referred to as the "Property." - ---------


B. Seller desires to sell the Property to Buyer and Buyer desires to purchase the Property from Seller upon the terms and conditions hereinafter set forth.


A G R E E M E N T :
------------------


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 agree that the terms and conditions of this Agreement and the instructions to Chicago Title Company ("Escrow Holder") with regard to the escrow ("Escrow") created pursuant
------------- ------ hereto are as follows:


1. Purchase and Sale. Seller hereby agrees to sell the Property to
----------------- Buyer, and Buyer hereby agrees to purchase the Property from Seller, upon the terms and conditions herein set forth.


2. Purchase Price. The purchase price ("Purchase Price") for the
-------------- -------------- Property shall be Twenty-One Million Five Hundred Thousand Dollars ($21,500,000).


3. Payment of Purchase Price. The Purchase Price for the Property
------------------------- shall be payable by Buyer as follows:


(a) Initial Deposit. Concurrently with the Opening of Escrow (as
--------------- defined in Paragraph 4(a) below), Buyer shall deposit with Escrow Holder, in immediately available funds, the sum of Two Hundred Fifty Thousand Dollars ($250,000.00) (the "Initial Deposit"). The Initial Deposit shall be fully
--------------- refundable to Buyer up until the expiration of the Contingency Period (as defined in Paragraph 7(a)(ii) below). Provided Buyer has not previously terminated this Agreement, then from and after the expiration of the Contingency Period, the Initial Deposit shall be nonrefundable to Buyer in the event this Agreement and the Escrow are cancelled unless any of the following circumstances occur, in which event the Initial Deposit shall be refunded to Buyer upon the termination of this Agreement: (i) the Close of Escrow (as defined in Paragraph 4(b) below) fails to occur by reason of the failure of a condition to the closing for Buyer's benefit, or (ii) Seller fails to convey the Property to Buyer as provided herein.


(b) Second Deposit; Release of Initial Deposit. On the first
------------------------------------------ business day after the expiration of the Contingency Period, provided Buyer has not previously terminated this Agreement: (i) Buyer shall deposit or cause to be deposited with Escrow Holder, in immediately available funds, the additional sum of Two Hundred Fifty Thousand Dollars ($250,000.00) (the "Second Deposit"); and
-------------- (ii) Escrow Holder shall release the Initial Deposit to Seller. The Initial Deposit and the Second Deposit, together with all interest accrued thereon, are hereinafter collectively referred to as the "Deposits" and sometimes
-------- individually referred to as a "Deposit." Upon Escrow Holder's receipt of each
------- Deposit, Escrow Holder shall immediately invest it in an interest bearing account of a federally insured bank or savings and loan association acceptable to Buyer. The Second Deposit shall be nonrefundable to Buyer unless either of the following circumstances occur, in which event the Second Deposit shall be refunded to Buyer upon the termination of this Agreement: (i) the Close of Escrow (as defined in Paragraph 4(b) below) fails to occur by reason of the failure of a condition to the closing for Buyer's benefit, or (ii) Seller fails to convey the Property to Buyer as provided herein. The Deposits and all interest which shall accrue thereon shall be applied to the payment of the Purchase Price upon the Close of Escrow. No interest will accrue on the Initial Deposit after its release to Seller.


(c) Closing Funds. At least one (1) 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 or minus Buyer's share of closing costs, prorations and charges payable pursuant to this Agreement.


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 a fully executed original or originally executed counterparts of this Agreement from both Buyer and Seller (such date being referred to hereinafter as the "Opening of Escrow"). -----------------


(b) Close of Escrow. For purposes of this Agreement, the "Close
--------------- ----- of Escrow" shall be the date that the grant deed, the form of which is attached - --------- hereto as Exhibit "B" (the "Grant Deed"), conveying the Real Property to Buyer,
---------- ---------- is recorded in the Official Records of Orange County, California (the


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"Official Records"). Unless extended in writing by Buyer and Seller, the Close ---------------- of Escrow shall occur on or before June 13, 1997 (the "Closing Date"). Seller
------------ shall deliver possession of the Property to Buyer upon the Close of Escrow, subject only to the "Approved Condition of Title" (as defined in Paragraph 5
--------------------------- below).


5. Condition of Title. It shall be a condition to the Close of
------------------ Escrow for Buyer's benefit that title to the Real Property be conveyed to Buyer by Seller by the Grant Deed subject only to the following approved condition of title ("Approved Condition of Title"):
---------------------------


(a) a lien to secure payment of real estate taxes 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 ("Code"); ----


(c) matters affecting the Real Property created by or with the written consent of Buyer (including the CalComp Lease, as hereinafter defined); and


(d) exceptions which are disclosed by the Report described in Paragraph 7(a)(i) hereof and which are approved or deemed approved by Buyer in accordance with such Paragraph 7(a)(i).


Seller covenants that, from and after the expiration of the Contingency Period, it will not intentionally cause title to the Real Property to differ from the Approved Condition of Title described in this Paragraph 5, provided that (i) the foregoing clause shall not limit Seller's rights under Paragraph 21(o) (Continued Marketing Efforts) and (ii) Seller shall have no obligation to remove any liens or other encumbrances affecting title to the Property except for item numbers 18 and 19 on that certain Preliminary Title Report dated February 10, 1997 prepared by Title Company (as hereinafter defined) under Order No. 007300051 which Seller shall cause to be removed as of the Close of Escrow. Any liens, encumbrances, encroachments, easements, restrictions, conditions, covenants, rights, rights-of-way or other matters affecting the Approved Condition of Title which may appear of record or be revealed after the date of the Report described in Paragraph 7(a)(i) below shall also be subject to Buyer's approval as a condition to the Close of Escrow for Buyer's benefit.


6. Title Policy. Title shall be evidenced by the willingness of the
------------ "Title Company" (as defined in Paragraph 7(a)(i) hereof) to issue its ALTA (Form B-1970) Owner's Policy of Title Insurance ("Title Policy") in the amount of the
------------ Purchase Price, showing title to the Real Property vested in Buyer (or its assignee), subject only to the Approved Condition of Title. If Buyer does not obtain a survey during the Title Review Period, Buyer will be deemed to have approved the standard survey exception on the Title Policy.


7. Conditions to Close of Escrow.
-----------------------------


(a) Conditions to Buyer's Obligations. The Close of Escrow and
--------------------------------- Buyer's obligation to consummate the transaction contemplated by this Agreement are subject to the satisfaction of the following conditions (or Buyer's written waiver thereof, it being agreed that Buyer may waive in writing any or all of such conditions) for Buyer's benefit on or prior to the dates designated below for the satisfaction of such conditions. In the event Buyer terminates this Agreement and the Escrow due to the nonsatisfaction of any such conditions, then Buyer shall be entitled to the immediate return of the Deposits:


(i) Title. Buyer shall have approved, as determined in
----- Buyer's sole and absolute discretion, the legal description of the Land and any matters of title as disclosed by the following documents (collectively, the "Title Documents") prepared at Seller's sole cost and expense and to be --------------- delivered to Buyer on or before the dates designated below (other than the Survey, as hereinafter defined, which shall be obtained by Buyer at Buyer's expense): (A) within three (3) days following the Opening of Escrow, a standard preliminary title report dated on or after the date of this Agreement issued by Escrow


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Holder, in its capacity as title insurer (the "Title Company"), with respect to
------------- the Real Property, as such report may be amended or supplemented from time to time to reflect additional title matters or survey exceptions (the "Report");
------ and (B) within three (3) days following the Opening of Escrow, legible copies of all documents, whether recorded or unrecorded, referred to in the Report to the extent legible copies are available to Seller. Buyer may also cause an ALTA "as built" survey of the Property ("Survey") to be prepared at Buyer's sole cost and expense.


Buyer shall have from the Opening of Escrow until 5:00 p.m. on May 27, 1997 (the "Title Review Period") to give Seller and Escrow Holder written notice
------------------- ("Buyer's Title Notice") of Buyer's disapproval of the legal description or any -------------------- matters shown in or disclosed by the Title Documents or the Survey.


The failure of Buyer to give Buyer's Title Notice on or before the expiration of the Title Review Period shall be deemed to constitute Buyer's disapproval of the respective matters relating thereto. If Buyer disapproves or conditionally approves any of the foregoing matters, Seller may, within five (5) business days after its receipt of Buyer's Title Notice, elect to eliminate or ameliorate to Buyer's satisfaction such disapproved or conditionally approved matters. Within such five (5) business day period, Seller shall give Buyer written notice (which shall hereinafter be referred to as "Seller's Title Notice"), of those disapproved or conditionally approved --------------------- matters, if any, which Seller covenants and agrees to either eliminate from the Title Policy as exceptions to title to the Property or to ameliorate to Buyer's satisfaction by the Closing Date as a condition to the Close of Escrow for Buyer's benefit. If Seller does not elect in Seller's Title Notice to eliminate or ameliorate any disapproved or conditionally approved matters as provided above, or if Seller elects to ameliorate (as determined in Buyer's sole and absolute discretion) but not eliminate any disapproved or conditionally approved matters, then Buyer shall have the right, in Buyer's sole and absolute discretion, by a writing delivered to Seller and Escrow Holder not less than five (5) business days after receipt of Seller's Title Notice, to (A) waive its prior disapproval, in which event said disapproved matter(s) shall be deemed approved, or (B) terminate this Agreement and the Escrow created pursuant hereto, in which event the Deposits shall be immediately returned to Buyer, and this Agreement, the Escrow and the rights and obligations of the parties hereunder shall terminate. Buyer's failure to terminate this Agreement in accordance with the preceding sentence will be deemed Buyer's approval of the Title Documents. If Seller fails to timely deliver Seller's Title Notice, then Seller will be deemed to have elected not to eliminate or ameliorate to Buyer's satisfaction any disapproved or conditionally approved matters set forth in Buyer's Title Notice on or before the Close of Escrow. Notwithstanding anything to the contrary contained in this Agreement, Buyer hereby disapproves all liens evidencing monetary encumbrances (other than liens for non-delinquent real property taxes or assessments). If after expiration of the Title Review Period, the Title Company supplements the Title Report by adding new exceptions or changing or modifying any existing exceptions thereto, Buyer shall have five (5) business days to review and approve, disapprove or conditionally approve such matters. If Buyer disapproves or conditionally approves of any such new or changed exception, Seller and Buyer shall proceed in accordance with the provisions of this paragraph with respect to the procedures for Buyer's review and Seller's response to such new or changed title matters.


(ii) Review and Approval of Documents and Materials. Seller
---------------------------------------------- shall deliver to Buyer, or shall make available to Buyer for review and photocopying at the Property, within seven (7) business days after the Opening of Escrow (or, in the case of items described in clause (F) below, following Buyer's request for such items) the documents and materials respecting the Property set forth below, to the extent in the possession and control of Seller (collectively, the "Documents and Materials"). Buyer shall have the right to
----------------------- review and approve or disapprove, in its sole and absolute discretion, any or all of the Documents and Materials during the period commencing at the Opening of Escrow and ending on 5:00 p.m. on June 3, 1997 (the "Contingency Period").
------------------ The failure of Buyer to give Seller written notice terminating this Agreement on or before the expiration of the Contingency Period shall be deemed to constitute Buyer's approval thereof.


(A) Improvement Plans. Plans, drawings and
----------------- specifications relating to all of the Improvements;


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(B) Agreements. Legible copies of any and all existing
---------- management contracts, maintenance contracts, service contracts, reciprocal easement agreements, if any, and any other existing contracts or agreements affecting or relating to the leasing, ownership, operation, maintenance, construction or development of the Property which may remain in effect following the Close of Escrow (collectively, the "Contracts");


(C) Environmental, Soils and Engineering Reports. All
-------------------------------------------- existing soils, environmental (including any and all Phase I and/or Phase II environmental assessment reports) and building reports and engineering data pertaining to the Real Property or any portion thereof and any and all architectural studies, grading plans, topographical maps and similar data respecting the Real Property;


(D) Tax Statements and Utility Bills. Legible copies of
-------------------------------- the most recently issued bills for all real property taxes or assessments payable with respect to the Property or any portion thereof or interest therein and copies of all utility bills for the past twelve (12) months;


(E) Copies of Expense Statements or Bills. Copies of
------------------------------------- all expense reports and statements or bills relative to the following information and/or data with respect to the Property: (i) maintenance and repair costs during calendar years 1995 and 1996; and (ii) any material extraordinary or periodic expenses, repairs, replacements or other improvements incurred in connection with the ownership, operation, maintenance or repair of the Property during calendar years 1995 and 1996; and


(F) Miscellaneous. Such other documents in Seller's
------------- possession and control which relate to the Property (excluding, however, Seller's appraisal(s) of the Property and other proprietary or privileged information).


Buyer acknowledges that the Documents and Materials delivered or made available to Buyer under this Section 7(a)(ii) have been delivered or made available for Buyer's convenience, but that Seller makes no representations or warranties of any kind regarding their accuracy, completeness or thoroughness (other than as expressly set forth in Paragraph 14(a) below).


(iii) Inspections and Studies. On or before the expiration
----------------------- of the Contingency Period, Buyer shall have the right to approve or disapprove, in Buyer's sole and absolute discretion, the results of any and all inspections, investigations, tests and studies, including, without limitation, investigations with regard to zoning, building codes and other governmental regulations; architectural inspections; engineering tests; soils, seismic and geologic reports; inspections of all or any portion of the Improvements (including, without limitation, structural, mechanical and electrical systems, roofs, pavement, landscaping and public utilities); inspections, investigations, tests and studies with respect to the environmental condition of the Property; and any other physical inspections and/or investigations as Buyer may elect to make or obtain. The failure of Buyer to give Seller written notice of Buyer's termination of this Agreement prior to the expiration of the Contingency Period shall be deemed to constitute Buyer's approval of the Property.


Except as provided in the following sentence, during the term of this Escrow, Buyer, its agents, consultants, contractors and subcontractors shall have the right, at Buyer's sole cost and expense, to enter upon the Real Property to conduct or make any and all inspections and tests (including, without limitation, environmental assessments of the Real Property) as may be necessary or desirable in Buyer's discretion, provided that such inspections and tests do not materially interfere with Seller's use or enjoyment of the Property. Neither Buyer nor its agents, consultants, contractors or subcontractors shall be entitled to drill or bore on or through the surface of the Property without Seller's prior consent, which may be given or withheld in Seller's reasonable discretion. Any consent given by Seller to environmental investigations is hereby conditioned upon Buyer's agreement to (i) provide Seller with copies of all information and reports resulting from such investigations and (ii) "split samples" of any materials taken on or from the Property. Prior to the exercise of the right of entry, and at all times while Buyer or its agents are present upon the Real Property, Buyer shall arrange for, keep and maintain in full


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force and effect (and shall provide Seller a copy of or certificate evidencing) a policy of commercial general liability insurance with a per occurrence limit of not less than $1,000,000 and an aggregate single limit of at least $1,000,000, which policy shall be issued by an insurer reasonably acceptable to Seller and shall name Seller as an additional insured. Buyer shall promptly repair any damage to the Property which is directly caused by the entry onto the Property by Buyer, its agents, contractors or subcontractors. Buyer shall keep the Property free of all liens arising directly out of such entry onto the Property. Buyer hereby indemnifies and holds Seller and the Property harmless from and against any and all costs, losses, damages, liabilities, liens, claims and expenses arising out of or resulting from entry by Buyer or its agents, consultants, contractors and ...