Exhibit 10.1


 


PURCHASE AGREEMENT AND JOINT AND MUTUAL ESCROW INSTRUCTIONS


 


Between


 


AVIZA TECHNOLOGY, INC.


 


And


 


 FOWLER PROPERTY ACQUISITIONS,
LLC


 


For Property located in


 


Scotts Valley, California


 


March 6, 2008


 





















 


TABLE OF CONTENTS


 


	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  1.

  	
  Property Included in Sale

  	
  1

  
	
   

  	
   

  	
   

  
	
  2.

  	
  Purchase Price and Closing Date

  	
  2

  
	
   

  	
   

  	
   

  
	
  3.

  	
  Title to the Property

  	
  2

  
	
   

  	
   

  	
   

  
	
  4.

  	
  Due Diligence Review

  	
  3

  
	
   

  	
   

  	
   

  
	
  5.

  	
  Conditions to Closing

  	
  7

  
	
   

  	
   

  	
   

  
	
  6.

  	
  Remedies

  	
  8

  
	
   

  	
   

  	
   

  
	
  7.

  	
  Closing and Escrow

  	
  9

  
	
   

  	
   

  	
   

  
	
  8.

  	
  Representations and Warranties of Seller

  	
  11

  
	
   

  	
   

  	
   

  
	
  9.

  	
  Representations and Warranties of Buyer

  	
  13

  
	
   

  	
   

  	
   

  
	
  10.

  	
  Risk of Loss

  	
  13

  
	
   

  	
   

  	
   

  
	
  11.

  	
  Notices Regarding Hazardous Materials

  	
  14

  
	
   

  	
   

  	
   

  
	
  12.

  	
  Environmental Closure and Indemnification

  	
  14

  
	
   

  	
   

  	
   

  
	
  13.

  	
  Buyer’s Right to Cure Seller’s Default of
  Environmental Indemnity Obligations

  	
  15

  
	
   

  	
   

  	
   

  
	
  14.

  	
  Property Environmental Conditions, Seller
  Environmental Insurance and Assignment of Remediation Agreement

  	
  15

  
	
   

  	
   

  	
   

  
	
  15.

  	
  Release of Seller

  	
  16

  
	
   

  	
   

  	
   

  
	
  16.

  	
  Seller Lease

  	
  17

  
	
   

  	
   

  	
   

  
	
  17.

  	
  Possession

  	
  18

  
	
   

  	
   

  	
   

  
	
  18.

  	
  Encumbrances/Transfers/Prohibited Actions

  	
  18

  
	
   

  	
   

  	
   

  
	
  19.

  	
  Miscellaneous

  	
  18

  



 





















 


LIST
OF EXHIBITS


 


	
  Exhibit A

  	
  —

  	
  Description(s) of Real Property

  
	
   

  	
   

  	
   

  
	
  Exhibit A-1

  	
  —

  	
  Personal Property and Equipment Seller has Right to
  Remove

  
	
   

  	
   

  	
   

  
	
  Exhibit A-2

  	
  —

  	
  Personal Property, Trade Fixtures and Equipment Not
  Included in

  
	
   

  	
   

  	
  Property to be Sold

  
	
   

  	
   

  	
   

  
	
  Exhibit A-3

  	
  —

  	
  Fixtures and Equipment to be Removed by Seller on or
  before Closing

  
	
   

  	
   

  	
   

  
	
  Exhibit B

  	
  —

  	
  Grant Deed

  
	
   

  	
   

  	
   

  
	
  Exhibit C

  	
  —

  	
  Assignment of Service Contracts, Warranties and
  Guaranties and Other Intangible Property

  
	
   

  	
   

  	
   

  
	
  Exhibit D

  	
  —

  	
  Environmental Documents

  
	
   

  	
   

  	
   

  
	
  Exhibit E

  	
  —

  	
  Assignment of Remediation Agreement

  
	
   

  	
   

  	
   

  
	
  Exhibit F

  	
  —

  	
  Form of Seller Lease

  



 





















 


PURCHASE AGREEMENT AND JOINT AND MUTUAL ESCROW INSTRUCTIONS

Scotts Valley, California


 


THIS AGREEMENT AND JOINT AND MUTUAL ESCROW
INSTRUCTIONS is dated as of March 6, 2008 (the “Effective Date”), by
and between AVIZA TECHNOLOGY, INC., a Delaware corporation (“Seller”), and
FOWLER PROPERTY ACQUISITIONS, LLC, a California limited liability company (“Buyer”).


 


IN CONSIDERATION of the respective agreements
hereinafter set forth, Seller and Buyer agree as follows:


 


                                                1.                                      Property Included in Sale.  Seller agrees to sell and convey to Buyer,
and Buyer agrees to purchase from Seller, subject to the terms and conditions
set forth herein, all right, title and interest in and to the following:


 


A.                                    that certain real property consisting of
approximately 43.775 acres, located at 440 Kings Village Road, in the City of
Scotts Valley, California, County of Santa Cruz and more particularly described
in attached Exhibit A, which property is also commonly described as
the Aviza Technology Campus (the “Real Property”);


 


B.                                    all rights, privileges and easements
appurtenant to the Real Property, including, without limitation, all minerals,
oil, gas and other hydrocarbon substances on and under the Real Property, as
well as all development rights, air rights, water, water rights, well rights,
riparian rights and water stock relating to the Real Property and any
rights-of-way or other appurtenances used in connection with the beneficial use
and enjoyment of the Real Property and all of Seller’s right, title and
interest in and to all roads and alleys adjoining or servicing the Real
Property (collectively, the “Appurtenances”);


 


C.                                    all improvements, structures and fixtures
located on the Real Property, including, without limitation, nine (9) office
buildings totaling approximately 213,534 square feet and all apparatus,
equipment and appliances used in connection with the operation or occupancy of
the Real Property and such buildings, such as heating and air-conditioning,
electrical, plumbing, mechanical, elevator and freight systems and facilities
used to provide any utility, refrigeration, ventilation, garbage disposal, or
other services on or to the Real Property, and any other fixtures, improvements
and structures on the Real Property, including all on site parking improvements
except to the extent Seller has removed any of the equipment described on Exhibit A-1
from the Real Property prior to the Seller Relocation Date, as defined in Section 16
below and specifically excluding all of the personal property set forth on Exhibit A-2
attached hereto (collectively, the “Improvements”);


 


D.                                    any intangible personal property now or
hereafter owned by Seller and used in or related to the ownership, use,
development or operation of the Real Property and Improvements, including,
without limitation, all rights, warranties, guaranties, indemnifications,
causes of action, choses in action, permits, entitlements, approvals,
certificates of occupancy, plans and drawings (including, without limitation,
architectural and development plans and drawings), maps, surveys, applications
and submissions to and agreements with governmental agencies, specifications,
reports, studies, analyses and investigations, and, to the extent approved 


 


1





















 


by Buyer pursuant to this
Agreement, the Assumed Contracts (as herein defined), utility contracts or
other agreements or rights relating to the ownership, use and operation of the
Property, as defined below (collectively, the “Intangible Property”), except to
the extent specifically provided for in this Agreement.


 


All of the items referred to above are collectively
referred to as the “Property.”


 


2.                                      Purchase Price and Closing Date. 
The purchase price of the Property shall be Thirteen Million Dollars
($13,000,000) (the “Purchase Price”).


 


A.                                     The Purchase Price shall be paid as
follows:


 


i.                                          No later than two (2) business days
following the first date upon which both Buyer and Seller have executed this
Agreement (which first date of signing is defined herein as the “Effective Date”),
Buyer shall deposit in escrow with First American Title, 1850 Mt. Diablo Blvd.,Suite 300,
Walnut Creek, CA 94596, Attn: Gyda Kelly, tel. (925)927-2191, fax:
(925)927-2195, email: gkelly@firstam.com (“Escrow Agent”), a deposit in the
amount of Five Hundred Thousand Dollars ($500,000) (which deposit, plus any
interest accrued thereon under this Agreement from time to time shall be
referred to as the “Deposit”).  The
deposit shall be held in an interest-bearing account and interest accruing
thereon shall be held for the account of Buyer. 
In the event the sale of the Property as contemplated hereunder is
consummated, the Deposit shall be credited against the Purchase Price.  Upon Buyer’s delivery of the Inspection
Approval Notice (as hereafter defined), but subject to Section 5 and Section 6.B
below and any other provisions hereunder expressly providing for the return of
the Deposit to Buyer, the Deposit shall become non-refundable to Buyer.


 


ii.                                       The Purchase Price, reduced by the amount
of the Deposits and subject to further adjustment for Closing costs and
prorations and any withholding required by Federal, State or local taxation
laws, shall be paid to Seller in immediately available funds at the closing of
the purchase and sale as contemplated hereunder (the “Closing”).  The Closing shall occur in the office of the
Escrow Agent unless otherwise mutually agreed to by the parties.


 


B.                                    Closing Date and Extension Option. 
For the purposes of this Agreement, the “Closing Date” shall be (i) the
date that is thirty (30) days following the expiration of the Due Diligence
Period (as defined in Section 4.A. below), or (ii) such date as is
otherwise mutually agreed to by Buyer and Seller in writing, subject to
extension as provided in the next succeeding sentence.  Buyer shall have one (1) option to
extend the Closing Date for an additional thirty (30) days by delivery of
written notice to Seller no later than fifteen (15) days prior to the then
existing Closing Date.  In the event that
the Closing Date falls on a weekend or a day that is not a “business day” as
defined below, the Closing Date shall be two (2) business days thereafter.


 


3.                                      Title to the Property.


 


A.                                    Title Policy. 
At the Closing, Seller shall convey to Buyer insurable fee simple title
to the Real Property, the Appurtenances and Improvements subject only to the
Permitted Exceptions (as hereafter defined) and Seller’s obligation to remove
Fixtures and Equipment (as hereafter defined) from the Property pursuant to Section 3.C,
by duly executed and acknowledged grant deed substantially in the form of
attached Exhibit B (the “Deed”).


 


2





















 


Evidence of delivery of
insurable fee simple title shall be the issuance by First American Title
Insurance Company (“Title Company”) to Buyer of an ALTA 2006 Owner’s Policy of
Title Insurance  in the amount of the
Purchase Price (or a greater amount as reasonably requested by Buyer with such
additional coverage at Buyer’s cost), insuring fee simple title to the Real
Property, the Appurtenances and the Improvements in Buyer, subject only to such
exceptions as Buyer shall approve or be deemed to have approved pursuant to Section 4.E
below (the “Title Policy”).  The Title
Policy shall provide full coverage against mechanics and materialmen’s liens
arising out of the construction, repair or alteration of any of the
Improvements including any tenant improvements therein, and Seller shall
provide Title Company or Escrow Agent, as applicable, with any Owner’s
Affidavit or Owner’s Statement reasonably required in connection therewith, and
the Title Policy shall further contain such special endorsements as Buyer may
reasonably require (the “Endorsements”).


 


B.                                    Intangible Property. 
At the Closing, Seller shall transfer Intangible Property by such
instruments as Buyer may reasonably determine to be necessary, including,
without limitation, an assignment of Intangible Property in the form of
attached Exhibit C (the “Assignment of Intangible Property”), such
title to be free of any liens, encumbrances or interests.


 


C.                                    Fixtures and Equipment; Tenants. 
Notwithstanding anything to the contrary contained herein but subject to
the Seller Lease Options in Section 16 below, Seller shall deliver the
Property to Buyer at Closing free of all tenants in possession.  On the Seller Relocation Date (as defined in Section 16
below) Seller also covenants that it shall remove or cause to be removed, at
Seller’s sole cost, all furniture, trade fixtures and trade related equipment
described on Exhibit A-3 attached hereto (“Fixtures and Equipment”)
from the office buildings and the Property. Seller, at its sole cost, on or
before the Seller Relocation Date (as defined in Section 16 below), shall
promptly repair all holes in any roof on the Property caused by the removal of
such Fixtures and Equipment and/or any other personal property or equipment
that Seller has the right to remove from the Property pursuant to the terms of
this Agreement as well as any damage caused by the negligent removal of such
Fixtures and Equipment, personal property and equipment but shall not be liable
for any other non-negligent damage caused by such removal (such as, for
example, penetrations in flooring or interior walls left behind by such
removal). (1)


 


4.                                      Due Diligence Review.


 


A.                                    Delivery of Documents and Diligence
Period.  Seller agrees to make available to Buyer all
of the items described in Sections 4.D, 4.E and 4.F below which are within
Seller’s possession or control (the “Property Materials”), within five (5) days
after the date hereof.  Seller shall
provide Buyer with reasonable access (including Extranet access, use of an
office, conference room or similar private or semi-private space for conducting
review of such materials) to such materials at all reasonable times and shall
make reasonable accommodations to allow Buyer, at Buyer’s sole cost and
expense, to photocopy or otherwise reproduce such


 






(1)         The surrender related obligations can be
handled here or in the lease but if handled in both, need to be consistent with
each other.


 


3





















 


materials. Buyer, or its
designees, shall have until the date that is ninety (90) days after the
Effective Date (or the next business day thereafter if a weekend or other
non-business day) (the “Due Diligence Period”) to conduct its investigations
and inspections of the Property in accordance with Section 4.C below (the “Inspections
and Investigations”) and to review and approve the Property Materials and the
current state of title to the Property.


 


B.                                 Approval Deadline. 
On or prior to 5:00 PM Pacific Time on the date that the Due Diligence
Period expires (the “Approval Deadline”), Buyer shall notify Seller in writing,
in Buyers sole and absolute discretion, that Buyer either (a) approves of
the Property Materials and Buyer’s Inspections and Investigations of the
Property and elects to proceed with the transaction contemplated by this
Agreement in accordance with the terms hereof (the “Inspection Approval Notice”),
or (b) disapproves of the Property Materials and/or Buyer’s Inspections
and Investigations of the Property (the “Inspection Termination Notice”), in
which case this Agreement shall immediately terminate, the Deposit shall be
returned to Buyer, and the rights and obligations of the parties hereunder,
other than the surviving obligations hereunder and the terms of Section 6
below (to the extent applicable), shall terminate.  In the event of such termination by Buyer,
Buyer agrees to deliver to Seller, at no cost to Seller, no later than five (5) days
following such termination, all draft and final reports prepared by third
parties regarding the condition of the Property (including, without limitation,
environmental, geotechnical and other property condition reports as well as any
real property surveys).  If Buyer fails
to deliver the Inspection Approval Notice prior to the Approval Deadline, Buyer
shall be deemed to have delivered the Inspection Termination Notice.


 


C.                                 Property Inspection. 
Buyer and its agents, employees and contractors shall have the right
from the Effective Date through the Closing, upon 24 hours prior notice to
Seller, to enter upon the Property and shall be afforded full and complete
access to the Property, during normal business hours for the purpose of making
such investigations as Buyer deems prudent with respect to the condition of the
Property so long as Buyer does not interfere with Seller’s existing operations
on the Real Property.  Such inspections
and investigations may include, without limitation, invasive testing, survey
preparation, confirmation of compliance with state and local laws, seismic tests,
and environmental and Hazardous Material (as hereafter defined) studies
(including, without limitation, surface and subsurface tests, borings,
samplings and measurements and air and water quality sampling).  In the event that Buyer conducts any invasive
testing, Buyer shall restore the Property to the condition existing immediately
prior to such testing. Buyer may conduct any feasibility studies and other
investigations of the Property and Buyer’s intended use thereof that Buyer
deems necessary or appropriate. Seller shall reasonably cooperate and assist
Buyer in completing such inspections at no cost to Seller.  Except as provided below, Buyer agrees to
indemnify and hold Seller and the Property harmless from and against any and
all claims, demands, liabilities, liens, judgments, costs and expenses
including, without limitation, reasonable attorneys’ fees and disbursements
(collectively, “Claims”) arising out of the negligent conduct of Buyer, its
employees, agents, contractors and consultants in conducting the Inspections
and Investigations of the Property; provided, however, that such
indemnification shall not cover any Claims which are attributable to (i) pre-existing
adverse conditions affecting the Property, (ii) the conduct of Seller or
any party for whom Seller is legally responsible, or (iii) Buyer’s
discovery of any information potentially having a negative impact on Seller or
the Property (including, without limitation, any claims arising out of,
resulting from or incurred in connection with the discovery of any Hazardous
Materials on or


 


4





















 


about the Property).  Such indemnification shall survive the
completion of such Inspections and Investigations for a period of twenty four
(24) months.


 


D.                                 Buyer shall have the right, in the
exercise of its sole discretion, to approve all Service Contracts (as defined
in Section 4.F) which shall survive Closing.  Buyer shall notify Seller on or prior to the
Approval Deadline of the Service Contracts which it elects to assume in
connection with its purchase of the Property (the “Assumed Contracts”),
provided that any Service Contracts not expressly identified in writing by
Buyer to Seller on or prior to the Approval Deadline as an Assumed Contract
shall be deemed rejected by Buyer and 
Seller shall terminate, or initiate the termination of, all such Service
Contracts in accordance with their terms on or prior to the Closing at Seller’s
sole cost and expense and Seller shall indemnify and hold harmless Buyer from
any liability thereunder. Such indemnification and hold harmless obligation
shall survive the Closing.


 


E.                                     Title Review.


 


i.                                          Buyer shall review and approve of the
state of title to the Property and any existing surveys of the Property, as set
forth below. Seller shall deliver to Buyer at Seller’s sole cost and expense
within five (5) days following the Effective Date:


 


(a)                                 a current preliminary title report on the
Real Property, issued by Title Company, accompanied by copies of all documents
referred to in the report (collectively, the “Preliminary Report”);


 


(b)                                 copies of all existing and proposed
easements, covenants, restrictions, agreements or other documents which affect
title to the Property and which are not disclosed by the Preliminary Report,
or, if no such documents exist, a certification of Seller to that effect; and


 


(c)                                  the most current survey of the Property
(as such may be updated or replaced by Buyer, the “Survey”).


 


ii.                                       Buyer shall, on or prior to the Approval
Deadline, notify Seller in writing of Buyer’s approval of the state of title to
the Property and of the Survey, or Buyer’s disapproval of any exceptions or
matters reflected in the Preliminary Report and/or the Survey (each of said
disapproved exceptions or matters being a “Title Objection”).  Buyer’s failure to timely provide notice of a
Title Objection shall be deemed delivery by Buyer of an Inspection Termination
Notice.  “Permitted Exceptions” shall be
defined herein as all exceptions to title which have been approved or deemed
approved by Buyer, and those Objectionable Title Matters (as hereinafter
defined) waived by Buyer pursuant to the terms hereof.


 


iii.                                    In the event any additional title
exceptions (each an “Additional Exception”) are reported or discovered by the
Title Company or Buyer after the date of the Preliminary Report, Buyer shall
give Seller written notice of Buyer’s objection, if any, to such Additional
Exception on or prior to the later of the Approval Deadline or five (5) business
days after receipt of specific written notice from Seller of the existence of
any such Additional Exception.  The
failure of Buyer to give timely notice of objection to any Additional Exception
within the aforesaid time period shall be deemed approval by Buyer of such
Additional


 


5





















 


Exception and a waiver by
Buyer of any objection thereto.  If Buyer
approves or is deemed to have approved of any Additional Exceptions, the
Permitted Exceptions shall include all title matters approved by Buyer above
and any such approved or deemed approved Additional Exceptions.  Seller covenants and agrees that it will not
cause, create or consent to the creation of any Additional Exceptions.


 


iv.                                   In the event that Buyer delivers to
Seller an appropriate written notice of objection or disapproval of a Title Matter
or an Additional Exception (each such expressly disapproved matter identified
therein being referenced herein as an “Objectionable Title Matter”), Seller, in
its sole discretion within five (5) business days after receipt of Buyer’s
notice of an Objectionable Title Matter (the “Cure Notice Period”), may advise
Buyer in writing whether Seller will attempt to cure such Objectionable Title
Matter.  The Closing Date shall be
extended, as necessary, to provide Seller with (A) any applicable Cure
Notice Period, (B) a period of not less than five (5) business days
after the expiration of an applicable Cure Notice Period for Seller to attempt
to effectuate any cure which Seller agreed to undertake pursuant hereto.  In the event that Seller elects to attempt to
cure such Objectionable Title Matter, which cure shall result in the removal or
extinguishment of the Objectionable Title Matter or another method of cure
reasonably acceptable to Buyer, Seller shall have until the then scheduled
Closing Date (as such may have been extended pursuant to the preceding
sentence) to effectuate such cure, and Seller shall use commercially reasonable
efforts to effectuate such cure or Seller shall be deemed to be in default
hereunder.


 


v.                                      If Seller determines in its sole discretion
that it will be unable to cure any Objectionable Title Matters which it elected
to attempt to cure as provided above, after utilizing commercially reasonable
efforts to effectuate such cure, Seller shall deliver written notice thereof to
Buyer as soon as such determination is made but in no event later than five (5) business
days prior to the then scheduled Closing Date (as such may have been extended
as provided above) (each a “Notice of Inability to Cure”).


 


vi.                                   In the event that (a) Seller
delivers a Notice of Inability to Cure to Buyer, or (b) if Seller fails to
agree to cure an Objectionable Title Matter prior to the expiration of the
applicable Cure Notice Period as provided above, Buyer shall have the right, in
Buyer’s sole and absolute discretion, to provide written notice to Seller (the
applicable notice deadline being referred to as the “Waiver Notice Period”),
within five (5) business days after Buyer’s receipt of Seller’s Notice of
Inability to Cure for (a) above, or within five (5) business days
after the expiration of the applicable Cure Notice Period for (b) above,
that Buyer elects to either (i) waive the uncured Objectionable Title
Matters without any adjustment to the Purchase Price (each a “Title Waiver
Notice”) and proceed with the Closing on the later to occur of the then
scheduled Closing Date or five (5) business days after the expiration of
the applicable Waiver Notice Period, or (ii) terminate this Agreement in
which event the Deposit will be returned to Buyer and the rights and obligations
of the parties hereunder shall terminate except as otherwise set forth
herein.  In the event that Buyer fails to
deliver any such notice during the applicable Waiver Notice Period, Buyer shall
be deemed to have elected to terminate this Agreement and receive back the
Deposit.  The Closing Date shall be
extended, as necessary, to accommodate the response periods provided in this
paragraph.


 


6










 












 


F.             Additional Diligence Review.  Buyer shall review and approve or disapprove
the following during the Due Diligence Period in its sole and absolute
discretion:


 


i.              Property Condition Documents.  (a) all site plans, existing surveys,
parcel and subdivision maps, plans and specifications, engineering reports and
plans, soils and geotechnical reports, termite and pest control reports,
landscape plans, and floor plans, and certified copies of the as-built plans
and specifications for the Property, (b) all environmental reports and any
notices and correspondence from or with governmental or quasi-governmental
agencies regarding or reflecting on the physical and/or environmental condition
of the Property, and (c) a Natural Hazards Disclosure Report (to be obtained
by Seller and provided to Buyer).


 


ii.             Permits, Entitlements and
Related Agreements.  all governmental
applications, submissions, permits, plans, agreements, entitlements and
approvals relating to the development, construction, operation, use or occupancy
of the Property, including the tentative map and any conditions of tentative or
final map or zoning change approval, documents relating to the California
Environmental Quality Act, final map submissions, plan check related documents,
certificates of occupancy, development agreements, and impact fee agreements
applicable to the Property.


 


iii.            Contracts.  (a) all service contracts, utility
contracts, maintenance contracts, management contracts, leasing contracts, and
brokerage and leasing commission agreements affecting or relating to the
Property (collectively, the “Service Contracts”), (b) indemnification
provisions or agreements applicable to the Property, insurance policies and
other contracts or documents of significance to the Property, and (c) such
other information relating to the Property that is specifically and reasonably
requested by Buyer of Seller in writing during the Due Diligence Period to the
extent such information either is in the possession or control of Seller, or
any affiliate of Seller, or may be obtained by Seller, or any affiliate of
Seller, through the exercise of commercially reasonable efforts.


 


                5.             Conditions
to Closing.  The following conditions are precedent to
Buyer’s obligation to purchase the Property (the “Conditions Precedent”):


 


A.            The Title Company shall be
irrevocably committed to issue the Title Policy (with or without the
Endorsements) as of the Closing Date, subject only to the payment of applicable
premiums.


 


B.            Seller shall have kept, observed,
performed, satisfied and complied with all of its material obligations
hereunder (including terms and provisions of or related to this Agreement) in
all material respects from the Effective Date through the Closing Date, and all
of Seller’s representations and warranties contained in or made pursuant to
this Agreement, shall have been true and correct  in all material respects when made and shall
be true and correct in all material respects as of the Closing Date.  At the Closing Seller shall deliver to Buyer
a certificate certifying that each of Seller’s representations and warranties
contained in Section 8 below are true and correct in all material respects
as of the Closing Date (the “Rep Certificate”).


 


 


7

















 


C.            The soil and groundwater conditions
on the Property with respect to Hazardous Materials shall be substantially the
same on the day of Closing as on the date of Buyer’s execution of this
Agreement.


 


D.            On of before the Closing Date,
Seller shall have removed all Fixtures and Equipment (as defined in Section 3.C)
from the Property with respect to any portion of the Property that is not
included in a Seller Lease Option (as defined in Section 16 below).


 


E.             On or before the Closing Date, the
Property shall be free of all tenants in possession of the Property or any part
thereof other than Seller pursuant to the Seller Lease Options (as defined in Section 16
below).


 


The Conditions Precedent contained in this Section 5
are intended solely for the benefit of Buyer. 
Subject to the applicability of and without prejudice to Buyer’s rights
under Section 6.B below, if any of the Conditions Precedent is not
satisfied or approved in writing by Buyer, Buyer shall have the right, in its
sole discretion, to elect to either waive in writing said Condition Precedent
and proceed with the purchase, or terminate this Agreement and receive back its
Deposit.


 


6.             Remedies.


 


A.            In the event the sale of the
Property is not consummated after Buyer’s waiver of the conditions to Buyer’s
obligations, because of a default by Buyer of its obligation hereunder to
purchase the Property, the Deposit shall be paid to and retained by Seller as
liquidated damages and its sole and exclusive remedy for such default.  The parties have agreed that Seller’s actual
damages, in the event of a default by Buyer, would be extremely difficult or
impracticable to determine.  THEREFORE,
BY PLACING THEIR INITIALS BELOW, THE PARTIES ACKNOWLEDGE THAT THE DEPOSIT HAS
BEEN AGREED UPON, AFTER NEGOTIATION, AS THE PARTIES REASONABLE ESTIMATE OF
SELLER’S DAMAGES AND AS SELLER’S EXCLUSIVE REMEDY AGAINST BUYER, AT LAW OR IN
EQUITY, IN THE EVENT OF A DEFAULT UNDER THIS AGREEMENT ON THE PART OF
BUYER.  SELLER WAIVES ALL OTHER REMEDIES
AGAINST BUYER FOR SELLER’S FAILURE TO PURCHASE THE PROPERTY IN ACCORDANCE WITH
THIS AGREEMENT, INCLUDING SPECIFIC PERFORMANCE.


 


INITIALS:        Seller
/s/ O.C.              Buyer
/s/ M.E.      


 


B.            In the event the sale of the
Property is not consummated because of a default on the part of Seller, Buyer
may either (1) terminate this Agreement, by delivery of notice of
termination to Seller, whereupon (A) Buyer’s Deposit shall be immediately
returned to Buyer, and (B) Seller shall pay to Buyer any title, escrow,
legal, environmental assessment, and inspection fees incurred by Buyer and any
other out-of-pocket expenses incurred by Buyer in connection with the
acquisition, pre-development and/or development of the Property (including,
without limitation, due diligence costs, consultants’ fees, architectural and
engineering fees and costs, costs of soils and geotech studies and assessments,
application fees for governmental approvals and entitlements, development
approval costs, and attorneys’ fees) not to exceed Seventy Five Thousand
Dollars ($75,000) in the aggregate, and neither party shall have any 


 


 


8

















 


further rights or
obligations hereunder, or (2) sue for specific performance and recover any
out-of-pocket costs and expenses incurred by Buyer in pursuing a remedy for
specific performance.


 


7.             Closing and Escrow.


 


A.            Upon mutual execution of this
Agreement, the parties hereto shall deposit an executed counterpart of this
Agreement with Escrow Agent and this Agreement shall serve as instructions to
Escrow Agent (as the Escrow Agent for consummation of the purchase and sale
contemplated hereby).  Seller and Buyer
agree to execute such additional escrow instructions as may be appropriate to
enable the Escrow Agent to comply with the terms of this Agreement.


 


B.            At or before the Closing, Seller
shall deliver to Escrow Agent the following original documents:


 


i.              a duly executed and acknowledged
grant deed in form attached hereto as Exhibit B;


 


ii.             originals of the Assumed Contracts
(if any) and the Other Documents not previously delivered to Buyer pursuant to Section 4
above;


 


iii.            a duly executed Assignment of
Intangible Property in the form of attached Exhibit C, together
with any consents which are required or reasonably necessary in connection
therewith;


 


iv.            a duly executed Rep Certificate;


 


v.             an affidavit that Seller is not a “foreign
person” within the meaning of Section 1445(e)(3) of the Internal
Revenue Code of 1986 and is not subject to withholding under California or U.S.
tax law in form reasonably acceptable to Buyer, duly executed by Seller;


 


vi.            such resolutions, authorizations,
bylaws or other corporate and/or partnership documents or agreements relating
to Seller and its partners and/or shareholders as shall be reasonably required
by Buyer;


 


vii.           originals of the Property Materials
not previously delivered to Buyer pursuant to Section 4 above;


 


viii.          a duly executed assignment of the
Remediation Agreement (as defined in Section 14 below) (“Assignment of
Remediation Agreement”);


 


ix.            a duly executed Seller Lease; and


 


x.             any other instruments, records or
correspondence called for hereunder or reasonably required by the Escrow Agent
of Title Company to complete the Closing, including any closing statement
approvals and any Owner’s Affidavit or Owner’s Statement, which have not
previously been delivered.


 


 


9

















 


Buyer may waive compliance on Seller’s part under any
of the foregoing items by an instrument in writing.


 


C.            At or before the Closing, Buyer
shall deliver to Seller the following documents:


 


i.              a duly executed Assignment of
Intangible Property in the form of attached Exhibit C;


 


ii.             a duly executed Assignment of
Remediation Agreement;


 


iii.            if effected by Seller pursuant to Section 16
below, a duly executed Seller Lease;


 


iv.            a closing statement in form and
content satisfactory to Buyer and Seller;


 


v.             a duly executed Seller Lease;


 


vi.            the balance of the Purchase Price
owing; and


 


vii.           any other instruments, records or
correspondence called for hereunder or reasonably required by the Escrow Agent
of Title Company to complete the Closing, which have not previously been
delivered.


 


D.            Seller and Buyer shall each deposit
such other instruments as are reasonably required by the Escrow Agent or
otherwise required to close the escrow and consummate the purchase of the
Property in accordance with the terms hereof.


 


E.             The following are to be apportioned
as of the Closing Date, as follows:


 


i.              Utility Charges.  Seller shall use commercially reasonable
efforts to cause all the utility meters to be read on the Relocation Date, and
will be responsible for the cost of all utilities used prior to the Relocation
Date.  Buyer and Seller shall, subject to
the post closing reconciliation provided for hereunder, reasonably agree on the
amount of the utility charges to be prorated on the Relocation Date if meter
readings cannot occur on the Relocation Date. 
Seller shall be entitled to any utility deposit refunds.


 


ii.             Other Apportionments.  Amounts payable under the Assumed Contracts
(if any), operating and maintenance costs and any use taxes or related
impositions shall be, except to the extent inconsistent with the terms of this
Agreement, apportioned as of the Closing Date, subject to the terms of the
Seller Lease. In no event shall Buyer pay for any portion of Seller’s insurance
coverage for the Property. Buyer shall pay for a new or updated ALTA survey, if desired by
Buyer, for the Property.  Seller shall
pay the costs for the CLTA portion of the Title Policy and any curative endorsements
effected by Seller pursuant to the terms of Section 4.E.iv. above with
Purchaser to pay all other costs associated with the Title Policy and
endorsements.  Seller shall pay the cost
of any county transfer taxes applicable to the sale.  Buyer shall pay all recording fees.  Seller and Buyer
shall equally divide all escrow fees.  Seller shall be 


 


 


10

















 


responsible for all costs
incurred in connection with the prepayment or satisfaction of any loan or bond
secured by the Property, including, without limitation, any prepayment fees,
penalties or charges.  All other
customary costs and charges of the escrow for the sale not otherwise provided
for in this Section or elsewhere in this Agreement shall be allocated
pursuant to the custom and practice of Santa Cruz County (provided that in any
case, Buyer and Seller shall each pay their own attorney’s fees).


 


iii.            Real Estate Taxes and Special
Assessments.  General real estate
taxes payable for all tax years ending prior to the Closing Date shall be paid
by Seller.  General real estate taxes
payable for the tax year containing the Closing Date shall be prorated by
Seller and Buyer as of the Closing Date, subject to the terms of the Seller
Lease.  Seller shall pay the full amount
of any bonds, supplemental tax bills or assessments against the Property
including interest payable therewith, including any bonds, supplemental tax
bills or assessments that may be incurred after the Closing Date as a result of
or in relation to the construction or operation of the Improvements or a change
in ownership of the Property that took place prior to the Closing Date.


 


iv.            Post-Closing Reconciliation.  If any of the aforesaid prorations cannot be
calculated accurately on the Closing Date or Relocation Date, as applicable,
then they shall be calculated as soon after the Closing Date (or if meant to be
paid as of the Relocation Date, then the Relocation Date) as feasible.  Either party owing the other party a sum of
money based on such subsequent proration(s) shall promptly pay said sum to
the other party, together with interest thereon at the rate of eight percent
(8%) per annum from the Closing Date (or the Relocation Date, as applicable) to
the date of payment if payment is not made within ten (10) days after
delivery of a bill therefor.


 


v.             Survival.  The provisions of this Section 7 shall
survive the Closing.


 


                8.             Representations
and Warranties of Seller.  Seller hereby represents and warrants to and
covenants with Buyer, as of the Effective Date and through and including the
Closing Date, as follows:


 


A.            To Seller’s knowledge, the Property
Materials are and at the time of Closing will be complete.


 


B.            There are no mechanics’ liens or
claims outstanding in connection with the Property.


 


C.            Except as disclosed in the Property
Materials, Seller has received no written notice of any condemnation,
environmental, zoning or other land-use regulation or administrative
proceedings, either instituted or planned to be instituted, which would detrimentally
affect the use, operation or value of the Property currently operated, nor has
Seller received notice of any special assessment or impact fees or proceedings
affecting the Property (other than as set forth in the Preliminary Report).  Seller shall notify Buyer promptly of any
such proceedings of which Seller becomes aware.


 


 


11
















D.            Except with respect to the matters
described in Section 14 below, there is no litigation pending or, to the
best of Seller’s knowledge threatened, against Seller or any basis therefor
that arises out of the ownership of the Property or that might detrimentally
affect the value or the use or operation of the Property for its intended
purpose or the ability of Seller to perform its obligations under this
Agreement.  Seller shall notify Buyer
promptly of any such litigation of which Seller becomes aware.


 


E.             Seller is a corporation duly
organized and validly existing and in good standing under the laws of the State
of Delaware and is in good standing under the laws of the State of California;
this Agreement and all documents executed by Seller which are to be delivered
to Buyer at the Closing are and at the time of Closing will be duly authorized,
executed and delivered by Seller, are and at the time of Closing will be legal,
valid and binding obligations of Seller enforceable against Seller in
accordance with their respective terms, are and at the time of Closing will be
sufficient to convey title (if they purport to do so), and do not and at the
time of Closing will not violate any provision of any agreement or judicial
order to which Seller or the Property is subject.


 


F.             Seller hereby discloses to Buyer
that the Property is classified as a “Superfund” site by the United State
Environmental Protection Agency pursuant to CERCLA. Seller further discloses to
Buyer that it has provided all information material to the environmental
conditions of the Property in Seller’s possession or control to Buyer and that
to Seller’s knowledge, there are no other Hazardous Materials on the Property
in violation of Environmental Laws other than as set forth in the Property Materials.
For the purposes hereof, the following definitions shall apply:  (a) “Environmental Laws” means any
federal, state or local laws, statutes, codes, ordinances, rules, regulations,
standards, policies, court orders, decrees, administrative orders, guidelines
or other governmental directives, as well as common law, relating to protection
of human health or safety or the environment or relating to Hazardous
Materials, including without limitation, the Water Pollution Control Act (33
U.S.C. § 1251 et seq.), Resource Conservation and Recovery Act (42 U.S.C. §
6901 et seq.), Safe Drinking Water Act (42 U.S.C. § 3000(f) et seq.),
Toxic Substances Control Act (15 U.S.C. § 2601 et seq.), Clean Air Act (42
U.S.C. § 7401 et seq.), Comprehensive Environmental Response, Compensation and
Liability Act (42 U.S.C. § 9601 et seq.), and any law, statute, regulation, rule or
ordinance of California and any other governmental entity with jurisdiction
over the Real Property or part thereof, concerning such hazardous, special or
toxic materials, wastes or substances or any judicial or administrative
interpretation of such laws, rules or regulations; (b) Hazardous
Material” means (i) any “hazardous substance”, as defined by CERCLA; (ii) any
“hazardous waste”, as defined by the Resource Conservation and Recovery Act, as
amended; (iii) any petroleum product (new or used); (iv) any
pollutant or contaminant or hazardous, dangerous or toxic chemical, material or
substance within the meaning of or regulated by any federal, state or local
law, regulation, ordinance or requirement (including consent decrees and
administrative orders) relating to or imposing liability or standards of
conduct concerning any hazardous, toxic or dangerous waste, substance or
material, all as amended or hereafter amended, or (v) any other material
or substance now or in the future defined as or regulated under any
Environmental Law as a “hazardous substance,” “hazardous material”, “hazardous
waste”, “toxic substance”, “toxic pollutant”, “contaminant”, or “pollutant”;
and (c) “CERCLA” means the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended.  As of the date of execution of this
Agreement, Buyer has not completed its review of the


 


12

















 


information provided to
it by Seller concerning the environmental condition of the Property and Buyer
shall have until the Approval Deadline to review and approve or disapprove, in
its sole discretion, such information.


 


G.            As of the date of this Agreement,
Seller has not entered into any other agreement to sell the Property or granted
any option or right of first refusal or first opportunity to any party to
acquire any interest in any of the Property.


 


H.            Seller has neither filed nor been the
subject of any filing of a petition under the Federal Bankruptcy law or any
federal or state insolvency laws or laws for composition of indebtedness or for
the reorganization of debtors.


 


I.              There are no leases affecting the
Property (subject to Seller Lease as set forth in Section 16 below).


 


For purposes of this Agreement, whenever the phrase “to
Seller’s knowledge” or words of similar import are used, they shall be deemed
to refer to the actual knowledge of  Dale
Spencer and Patrick C. O’Connor, the persons most knowledgeable about the
Property.    The provisions of this Section 8
shall survive the Closing for a period of twelve (12) months.


 


9.             Representations and Warranties
of Buyer.  Buyer hereby represents and warrants to
Seller as follows:  Buyer is a duly
organized and validly existing limited liability company under the laws of the
State of California and is in good standing under the laws of the State of
California; this Agreement and all documents executed by Buyer which are to be
delivered to Seller at the Closing are or at the time of Closing will be duly
authorized, executed and delivered by Buyer, and are or at the Closing will be
legal, valid and binding obligations of Buyer, and do not and at the time of
Closing will not violate any provisions of any agreement or judicial order to
which Buyer is subject.  The provisions
of this Section 9 shall survive the Closing.


 


10.           Risk of Loss.  In the
event any of the Property is damaged or destroyed prior to the Closing Date,
such damage or destruction is covered by insurance maintained by Seller and the
cost to repair such damage or destruction is less than Two Hundred Thousand
Dollars ($200,000) as reasonably determined by Seller and Buyer (after
consultation with unaffiliated experts), then this Agreement shall remain in
full force and effect and Buyer shall acquire the Property upon the terms and
conditions set forth herein.  In such
event, Seller shall assign to Buyer all of Seller’s right, title and interest
in and to all proceeds of insurance on account of such damage or destruction
and credit Buyer at Closing the amount of Seller’s deductible or self-insured
retention applicable to such damage or destruction.  In the event (A) any portion of the
Property is damaged or destroyed prior to the Closing, and it would cost more
than Two Hundred Thousand Dollars ($200,000) more to repair such damage or
destruction, or such damage or destruction is not covered by insurance
maintained by Seller, or (B) if condemnation proceedings are threatened or
commenced against any portion of the Property, then, notwithstanding anything
to the contrary set forth in this Section, Buyer shall have the right, at its
election, either to terminate this Agreement, or to not terminate this
Agreement and purchase the Property.  If
Buyer elects to purchase the Property subject to such damage, destruction or
condemnation, Seller shall assign to Buyer all of its right, title and interest
in and to all proceeds of insurance or condemnation awards, as applicable, and
Seller shall credit Buyer at Closing the amount of


 


13

















 


Seller’s deductible or
self-insured retention applicable to such damage or destruction.  Buyer shall have thirty (30) days after
Seller notifies Buyer that an event described in the prior sentence has
occurred to make such election by delivery to Seller of an election notice (the
“Election Notice”).  Buyer’s failure to
deliver the Election Notice within such thirty (30) day period shall be deemed
an election to terminate this Agreement in its entirety.  In the event this Agreement is terminated
pursuant to this Section, Buyer and Seller shall each be released from all
obligations hereunder, except as otherwise expressly provided herein, and Buyer
shall be entitled to a return of the Deposit. 
The Closing Date shall be extended, as necessary, to provide the parties
with the election periods contemplated herein.


 


11.           Notices Regarding Hazardous
Materials.   Seller will promptly notify Buyer
if to the actual knowledge of Seller, and other than as disclosed herein and in
the Property Materials  (b) there is
any actual release or new discovery of any Hazardous Materials on the Property
in violation of Environmental Laws occurring after the Effective Date of this
Agreement and prior to Close of Escrow; or (c) if the Seller of the
Property may be subject to any threatened or pending investigations by any
governmental agency under any Environmental Law by reason of any event
occurring prior to Close of Escrow other than such threatened and pending
investigations relating to the Environmental Remediation.  If there is any new disclosure by Seller made
after the Approval Deadline which is reasonably likely to cost more than Fifty
Thousand Dollars ($50,000) to remediate or correct as reasonably determined by
Seller and Buyer (after consultation with unaffiliated experts), Buyer in its
sole discretion, may elect to treat the occurrence as a failure of a Condition
Precedent in favor of Buyer pursuant to Section 5 of this Agreement, unless
such condition is cured by Seller on or prior to such time.


 


12.           Environmental Closure and
Indemnification.   Seller covenants and agrees, at its
sole cost and expense, to indemnify, protect, defend (with counsel reasonably
satisfactory to Buyer), hold and save Buyer harmless against and from any and
all damages, losses, liabilities, obligations, penalties, claims, litigation,
demands, threats, defenses, judgments, suits, proceedings, costs, disbursements
or expenses of any kind or of any nature whatsoever (including, without
limitation, court costs, attorneys’ and experts’ fees and disbursements) which
may at any time be imposed upon, incurred by or asserted or awarded against
Buyer (or its successors, assigns or successors-in-interest in the Real Property)
based on or arising from or out of (i) any Hazardous Material on, under or
affecting all or any portion of the Real Property or any surrounding areas to
the extent released (as such term is defined by CERCLA) by Seller or its
agents, affiliates, representatives, employees or invitees (“Seller Caused
Contamination”), including, without limitation, any Third Party Claims relating
thereto (collectively, the “Seller Environmental Indemnity”), provided further
that for avoidance of doubt, Seller Caused Contamination shall exclude in all
cases any Hazardous Materials existing in the improvements, soil or
groundwater, in, on, under, about or migrating to the Property prior to October 10,
2003 (“Pre-Existing Contamination”), and (ii) Hazardous Materials
specifically permitted to remain in the improvements, soil or groundwater, in,
on, under or about the
Property by the governmental entity approving Seller’s Closure (as
defined below)  following completion of Seller’s  Closure. 
For purposes hereof, “Third Party Claims” means any claims or rights of
recovery by any person or entity, including governmental entities and include,
without limitation, claims for actual or alleged violations, injury, damage, or
loss to persons or properties; claims for damages, injuries or costs associated
with investigation, cost recovery, removal or remedial actions allegedly caused
by or associated with the Real Property or any conditions or operations
thereon; claims


 


14

















 


for any costs paid or
payable by either party hereto for damages, loss, injury, investigation,
removal, remediation or other liability in response to any demand, order or
claim or in anticipation of any enforcement or remedial action undertaken or
threatened by any government agency or private party.  Buyer’s rights under this Section 12
shall be in addition to all rights and remedies Buyer may have in law or
equity, including, without limitation, those rights of indemnity or
contribution under the Environmental Laws and any other similar applicable law
and under any document or instruments evidencing or relating to the
Property.  Seller covenants and agrees
that it shall take all actions required by governmental entities with jurisdiction
over the Property under Environmental Laws to complete all environmental
closure activities required as a result of its business operations on the
Property, including, without limitation, if required, the decontamination
and/or removal from the Property of its operating equipment (the “Closure”).  The provisions of this Section 12 shall
survive the Close of Escrow.


 


13.           Buyer’s Right to Cure Seller’s
Default of Environmental Indemnity Obligations.  Should Seller, after receiving a notice or
notices from the appropriate governmental entity, at any time default in or
fail to perform or observe any of its obligations under Section 12 of this
Agreement, Buyer shall have the right, but not the duty, without limitation
upon any of Buyer’s rights pursuant to this Agreement, in addition to such rights
under Section 12 above, to perform the same no earlier than five (5) days
following written notice to Seller and provided that Seller has not commenced a
cure for such default or failure and is not diligently prosecuting such cure to
completion, and Seller agrees to pay to Buyer, on demand, all reasonable costs
and expenses incurred by Buyer in connection therewith, including without
limitation, all attorneys’ and experts’ fees and disbursements, together with
interest from the date of expenditure at the lesser of: (a) twelve percent
(12%) per annum; or (b) the maximum rate permitted by applicable law.  The provisions of this Section 13 shall
survive the Close of Escrow.


 


14.           Property Environmental Conditions,
Seller Environmental Insurance and Assignment of Remediation Agreement.  Seller has disclosed to Buyer that the
Property is listed on the National Priorities List (“NPL”) under CERCLA and is
subject to a Consent Decree filed on July 16, 1991 (“Consent Decree”), a
Record of Decision (“ROD”) dated June 29, 1990 entered into by WJ
Communications, Inc. (formerly Watkins-Johnson Company, or “WJ”) and the
Environmental Protection Agency (“EPA”) pursuant to CERCLA.  Seller represents and based on that
representation, Buyer acknowledges that the Property is undergoing remediation
initially funded by WJ pursuant to a Guaranteed Fixed Price Remediation
Agreement dated June 25, 1999 by and between Aviza Technology, Inc.
(as assignee of the rights and obligations of Silicon Valley Group, Inc.),
Arcadis Geraghty & Miller (“Arcadis”) and WJ (“Remediation Agreement”).  The Consent Decree, ROD and Remediation
Agreement are collectively referred to herein as the “Permitted Environmental
Exceptions”.  Buyer agrees and
acknowledges that notwithstanding anything to the contrary contained herein,
the Permitted Environmental Exceptions shall be Permitted Exceptions for the
purposes of this Agreement.  Seller
agrees that it shall, at Closing, assign to Buyer the Remediation Agreement in the
form of the assignment agreement attached hereto as Exhibit E, or
in such other form as may be reasonably agreed to by Buyer and Seller.  During the Due
Diligence Period, Seller shall use commercially reasonable efforts to arrange,
at Seller’s sole cost and expense but without being required to expend more
than Five Thousand Dollars ($5,000), for Buyer to be added at Closing as an
additional insured on all policies of insurance relating to Hazardous Materials
presently or formerly at, on, under or emanating from the Property in form and
substance reasonably satisfactory to Buyer. As part of


 


15

















 


such commercially
reasonable efforts, Seller shall attempt to obtain a written commitment from
the applicable insurance companies to name Buyer as an additional insured as
described above at Closing, and if such decision on such additional insured
status is not reached by any applicable insurance company on or before the
expiration of the Due Diligence Period, then Seller shall continue to use
commercially reasonable efforts as stated above to obtain a decision on such
additional insured status from such insurance companies prior to Closing.  Promptly following the date Seller becomes
aware whether or not the applicable insurance companies will allow Buyer to be
an additional insured on such policies of insurance, Seller shall notify Buyer
in writing of such decision of the insurance companies.  In the event Seller is successful in adding
Buyer to the insurance policies as an additional insured, Seller shall not take
any actions to cancel any or all of the insurance policies or remove Buyer as
an additional insured therefrom.  This
paragraph 14 shall survive the Close of Escrow.


 


15.           Release of Seller. 
Buyer acknowledges that Buyer has had the opportunity to conduct prior
to the Closing, such studies and investigations of the Property as Buyer
desires, and that Buyer will have had the right to observe to its satisfaction,
and will have observed to its satisfaction the physical characteristics and
condition of the Property.  Buyer
acknowledges and agrees that the Property is to be purchased and accepted by
Buyer in its condition as of the Closing, “as is”, without any implied or
express warranty or representation by Seller, with all patent and latent
defects except as otherwise set forth in Sections 8, 12, 13 and 14 and subject
to the terms and conditions of the Seller Lease (collectively, the “Release
Carve-Outs”).  For purposes of
clarification, the Release Carve-Outs shall include, without limitation, (i) the
representations or warranties of Seller under Section 8 above, (ii) Seller’s
obligations under Sections 12, 13 and 14 above, and (iii) Seller’s obligations under the Seller
Lease. Except for the Release Carve-Outs, Seller disclaims the making of any
representations or warranties, express or implied regarding the Property or
matters affecting the Property, including, without limitation, title to or the
boundaries of the Property, topography, climate, air, water rights, utilities,
leases, water, present and future zoning, physical condition, soil condition,
pest control matters, engineering characteristics, traffic patterns, purposes
to which the Property may be suited, value, potential for development,
contamination, drainage, access to public roads, proposed routes of roads or
extensions thereof, and compliance with building, health, safety laws,
Environmental Laws, land use laws and regulations to which the Property may be
subject and all other matters in any way affecting the Property, or the use or
ownership thereof (herein collectively the “Property Matters”).  Buyer, moreover, acknowledges that Seller has
disclosed to Buyer the environmental documents and information identified on Exhibit D
attached hereto (“Environmental Documents”), which Exhibit may be updated
by Seller with any environmental documents and information provided to Buyer
prior to that day which is one (1) week prior to the Approval Deadline,
and that Seller cannot and does not make any warranty or representation
whatsoever concerning the completeness or the accuracy of information contained
in such documents, that Buyer is not relying upon any representations and
warranties, other than those specifically set forth in Section 8, made by
Seller or anyone acting or claiming to act on Seller’s behalf concerning the
Property.  Buyer further acknowledges
that it has not received from Seller any accounting, tax, legal, architectural,
engineering, property management, environmental or other advice with respect to
this transaction and is relying solely upon the advice of its own accounting,
tax, legal, architectural, engineering, property management, environmental and
other advisors.  THEREFORE, EXCEPT AS
EXPRESSLY SET FORTH IN THE RELEASE CARVE-OUTS, SELLER MAKES NO REPRESENTATIONS
OR WARRANTIES, EXPRESS


 


16

















 


OR IMPLIED, TO BUYER, AND
SELLER IS TRANSFERRING AND BUYER IS PURCHASING THE PROPERTY AT CLOSING IN ITS “AS-IS’
CONDITION ON THE CLOSING DATE, AND BUYER ASSUMES THE RISK THAT ADVERSE
PHYSICAL, ENVIRONMENTAL, ECONOMIC OR LEGAL CONDITIONS MAY NOT HAVE BEEN
REVEALED BY ITS INVESTIGATION.  The
acknowledgments contained in this Section constitute a conclusive
admission that Buyer, as a sophisticated, knowledgeable investor in commercial
property, has, except as herein specifically provided, relied upon its own
judgment as to any matter germane to the Property, or its purchase or
contemplated use thereof, and that any other statement with respect thereto,
whether oral, written, constructive express or implied, is immaterial to Buyer.
Except with respect to any claims arising out of (i) any breach of
covenants, obligations, representations or warranties set forth in or
comprising the Release Carve-Outs, (ii) any breach by Seller of any
obligation that expressly survives the Closing hereunder, (iii) any
post-closing obligations of Seller under this Agreement or any of the documents
to be executed at Closing pursuant to the terms of this Agreement (such as the
Seller Temporary Lease, if applicable), and (iv) fraudulent acts of Seller
or any of its agents, employees or other representatives, Buyer, for itself and
its agents, affiliates, successors and assigns, as of the Closing, hereby
releases and forever discharges Seller, its agents, affiliates, successors and
assigns from any and all rights, claims and demands at law or in equity,
whether known or unknown at the time of this Agreement, which Buyer has or may
have in the future, arising out of the physical, environmental, economic or
legal condition of the Property.  In
giving this release, Buyer expressly waives as of the Closing, as to the
matters released above, the benefit of any statutory provision or decisional
law, if any, that would preclude the extension of this release to claims which
Buyer did not know or suspect to exist at the time of execution of this
Agreement, which, if known by Buyer, may have materially affected the giving of
this release including the provisions of California Civil Code Section 1542
which provide:


 


“Section 1542.  (General Release - Claims Extinguished.)  A general release does not extend to claims
which the creditor does not know or suspect to exist in his or her favor at the
time of executing the release, which if known by him or her must have
materially affected his or her settlement with the debtor.”


 


Buyer hereby
specifically acknowledges that Buyer has carefully reviewed this subsection and
discussed its import with legal counsel and that provisions of this subsection
are a material part of this Agreement.


 


 


	
  /s/ M. Earl

  	
   

  
	
  Buyer

  



 


16.           Seller Lease. 
Buyer agrees and acknowledges that Seller shall lease back the entire
property for one (1) year following the Closing to complete a relocation
from the Property to a new operating facility on the terms and conditions of
the lease attached hereto as Exhibit F (“Seller Lease”).  As set forth in the Seller Lease, Seller
shall have two (2) options to extend the Seller Lease for six (6) months
each (each a “Seller Lease Extensions”). 
To exercise a Seller Lease Extension per the terms of the Seller Lease,
Seller must deliver written notice of its desire to exercise its option no
later than ninety (90) days prior to the then existing expiration date of the
Seller Lease.  In addition, the Seller
Lease includes an option for Seller to extend the term of the Seller Lease on
Building 2 only for five (5) years following either the expiration of the
initial


 


17

















 


one (1) year term of
the Seller Lease or the end of the last exercised Seller Lease Extension,
whichever is later, in accordance with the terms of the Seller Lease (the “Building
2 Lease Option”) which must be exercised by Seller by written notice delivered
to Buyer no later than ninety (90) days prior to the time such option would
take effect.  For the purposes of this
Agreement, the end of the term of the Seller Lease shall be referred to herein
as the “Seller Relocation Date” (provided that with respect to Building 2, the
Seller Relocation Date with respect to Building 2 only shall be the end of the
term of the Building 2 Lease Option, if such option is exercised by Seller).


 


17.           Possession. 
Possession of the Property shall be delivered to Buyer on the Closing
Date free of all tenants and possession, with Fixtures and Equipment removed and
subject only to the Permitted Exceptions and the Assumed Contracts (if any) in
existence at the Closing Date and executed in accordance with this Agreement,
and subject to the Seller Temporary Lease, if effected by Seller.


 


18.           Encumbrances/Transfers/Prohibited
Actions.  Seller shall not (a) permit any
encumbrance, charge or lien to be placed upon or against the Property or suffer
to exist same unless such encumbrance, charge or lien has been approved in
writing by Buyer, or unless such encumbrance, charge or lien will be removed by
Seller prior to the Closing, and (b) sell, mortgage, pledge, lease,
hypothecate or otherwise transfer or dispose of all or any part of the Property
or any interest therein (except in the ordinary course of business consistent with
the other provisions of this Agreement) or initiate, consent to approve or
otherwise take any action with respect to zoning or any other governmental rules or
regulations presently applicable to all or any part of the Property, other than
such action as is necessary to maintain the Property in compliance with such rules and
regulations applicable to all or any part of the Property, without Buyer’s
prior written consent which may not be unreasonably withheld.


 


19.           Miscellaneous.


 


A.            1031 Exchange.  Seller’s rights and obligations hereunder may
be transferred and assigned by Seller, upon written notice to Buyer (and
pursuant to a form of assignment agreement and related documents reasonably
acceptable to Buyer), to an agent or other intermediary qualified under Section 1031
of the Internal Revenue Code to effect for Seller’s benefit a deferred Section 1031
exchange of the Property; provided that such assignment and such exchange shall
be without additional cost, expense or liability to Buyer, and that any related
documentation be provided to Buyer at least three (3) business days prior
to the Closing Date.  Buyer shall
cooperate as reasonably requested by Seller to effect any such transfer,
assignment or exchange.  Notwithstanding
anything to the contrary contained herein, in the event of an assignment of
this Agreement by Seller, Seller shall remain liable and responsible for all of
the obligations of “Seller” hereunder, regardless of such assignment.


 


B.            Notices.  Any notice, consent or approval required or
permitted to be given under this Agreement shall be in writing and shall be
deemed to have been given upon (i) hand delivery, (ii) one (1) day
after being deposited with Federal Express or another reliable overnight
courier service, or (iii) on the transmitted facsimile telecopy confirmed
as received, and addressed as follows:


 


18

















	
   

  	
   

  	
   

  	
   

  
	
  If to Seller:

  	
   

  	
  Aviza
  Technology, Inc.

  	
   

  
	
   

  	
   

  	
  440 Kings Village Road

  	
   

  
	
   

  	
   

  	
  Scotts Valley, CA
  95066-4027

  	
   

  
	
   

  	
   

  	
  Attn: Patrick C. O’Connor,
  Chief Financial Officer

  	
   

  
	
   

  	
   

  	
  Telephone:: (831)
  439-6360

  	
   

  
	
   

  	
   

  	
  Facsimile No.: (831)
  439-6320

  	
   

  
	
   

  	
   

  	
  Email:
  Pat.OConnor@aviza.com

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  With a copy to:

  	
   

  	
  Wilson Sonsini
  Goodrich & Rosati

  	
   

  
	
   

  	
   

  	
  650 Page Mill Road

  	
   

  
	
   

  	
   

  	
  Palo Alto, CA 94304

  	
   

  
	
   

  	
   

  	
  Attn: Marc Gottschalk

  	
   

  
	
   

  	
   

  	
  Telephone: (650)
  354-4250

  	
   

  
	
   

  	
   

  	
  Facsimile No.: (650)
  493-6811 Attn: Marc Gottschalk

  	
   

  
	
   

  	
   

  	
  email:
  mgottschalk@wsgr.com

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  If to Buyer:

  	
   

  	
  Fowler Property
  Acquisitions, LLC

  	
   

  
	
   

  	
   

  	
  100 Bush Street,
  Suite 510

  	
   

  
	
   

  	
   

  	
  San Francisco, CA 94104

  	
   

  
	
   

  	
   

  	
  Attn: Hannah Moriarty

  	
   

  
	
   

  	
   

  	
  Telephone: (415)249-6199

  	
   

  
	
   

  	
   

  	
  Facsimile
  No. (415)925-3440

  	
   

  
	
   

  	
   

  	
  Email:
  hmoriarty@fpacquisitions.com

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  With a copy to:

  	
   

  	
  Nancy Mauriello, Esq.

  	
   

  
	
   

  	
   

  	
  4665 MacArthur Court,
  Suite 200

  	
   

  
	
   

  	
   

  	
  Newport Beach, CA 92660

  	
   

  
	
   

  	
   

  	
  Telephone: (949)399-2525

  	
   

  
	
   

  	
   

  	
  Facsimile No. (949)399-2528

  	
   

  
	
   

  	
   

  	
  Email: nancy@nmapc.com

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  If to Escrow Agent:

  	
   

  	
  First American Title

  	
   

  
	
   

  	
   

  	
  1850 Mt. Diablo Blvd., Suite 300

  	
   

  
	
   

  	
   

  	
  Walnut Creek, CA 94596

  	
   

  
	
   

  	
   

  	
  Attn: Gyda Kelly

  	
   

  
	
   

  	
   

  	
  Telephone: (925)927-2191

  	
   

  
	
   

  	
   

  	
  Facsimile No. (925)927-2195

  	
   

  
	
   

  	
   

  	
  Email: gkelly@firstam.com

  	
   

  



 


or such other address as either party may from time to
time specify in writing to the other.


 


C.            Brokers and Finders.  Each party hereto represents and warrants to
the other that it has not engaged any broker or finder in connection with the
transaction contemplated by this Agreement to whom a commission may be owed
other than Sheldon Wiseman Commercial Real Estate representing Buyer and Janet
Thompson representing Seller. If, and only if, escrow closes hereunder, Seller
agrees to pay to Janet Thompson a real estate sales commission pursuant to the
terms of a separate written agreement between Seller and Janet


 


19

















 


Thompson.  If, and only if, escrow closes hereunder,
Buyer agrees to pay to Sheldon Wiseman Commercial Real Estate a real estate
sales commission pursuant to the terms of a separate written agreement between
Buyer and Sheldon Wiseman Commercial Real Estate. If any person or entity other
than Janet Thompson or Sheldon Wiseman Commercial Real Estate perfects a claim
for a commission or finder’s fee based upon any contact, dealings or
communication, the party through whom the person or entity makes its claim
shall be responsible for said commission or fee and all costs and expenses
(including reasonable attorneys’ fees) incurred by the other party in defending
against the same.  The provisions of this
paragraph shall survive the Closing.


 


D.            Successors and Assigns.  This Agreement shall be binding upon, and
inure to the benefit of, the parties hereto and their respective successors,
heirs, administrators and assigns.  Buyer
shall have the right, without notice to Seller, to assign its right, title and
interest in and to this Agreement to one or more assignees at any time before
the Closing Date, and in such event, the party originally designated as Buyer
shall be relieved of any and all obligations under this Agreement and any other
instruments executed pursuant hereto from and after the effective date of such
assignment, and such assignee(s) shall be responsible for the obligations
of Buyer from and after the effective date of such assignment.


 


E.             Amendments.  Except as otherwise provided herein, this
Agreement may be amended or modified only by a written instrument executed by
Seller and Buyer.


 


F.             Continuation and Survival of
Representations and Warranties.  All
representations and warranties by the respective parties contained herein or
made in writing pursuant to this Agreement are intended to and shall remain
true and correct as of the time of Closing, shall be deemed to be material, and
shall survive the execution and delivery of this Agreement and the Closing
subject to the terms of Section 8 above.


 


G.            Governing Law.  This Agreement shall be governed by and
construed in accordance with the laws of the State of California.


 


H.            Merger of Prior Agreements.  This Agreement and the exhibits hereto
constitute the entire agreement between the parties and supersede all prior
agreements and understandings between the parties relating to the subject
matter hereof.


 


I.              Enforcement.  In the event a dispute arises concerning the
performance, meaning or interpretation of any provision of this Agreement, the
defaulting party or the party not prevailing in such dispute shall pay any and
all costs and expenses incurred by the other party in enforcing or establishing
its rights hereunder, including, without limitation, court costs and attorneys’
fees and costs and expert witness fees and costs.


 


J.             Business Days/Time is of the
Essence.  Time is of the essence of
this Agreement.  In the event that any
time period set forth in this Agreement expires on a bank holiday or weekend
day, such time period shall be extended to the next business day.  For the purposes of this Agreement “business
day” shall mean any day, excluding weekends, banks in the State of California
are generally open for business.


 


20






 












 


K.            Severability.  If any provision of this Agreement, or the
application thereof to any person, place, or circumstance, shall be held by a
court of competent jurisdiction to be invalid, unenforceable or void, the
remainder of this Agreement and such provisions as applied to other persons,
places and circumstances shall remain in full force and effect.


 


L.            Marketing.  Buyer and Seller acknowledges that Buyer has
the right to terminate this Agreement at any time prior to the end of the
Diligence Period and therefore the purchase of the Property by Buyer is
contingent on Buyer’s satisfaction as specifically provided in the
Agreement.  As such, Buyer and Seller
agree that Seller may at any time after the date hereof pursue “back-up” offers
for the purchase of the Property so long as such offers are contingent on the
termination of this Agreement in accordance with its terms.


 


M.           Headings/Construction.  The titles and headings of the various
Sections and paragraphs hereof are intended solely for means of reference and
are not intended for any purpose whatsoever to modify, explain or place any
construction on any of the provisions of this Agreement.  The parties acknowledge that, with respect to
the transactions contemplated herein, (a) each party and its counsel have
reviewed and revised this Agreement and that the normal rule of
construction to the effect that any ambiguities are to be resolved against the
drafting party shall not be employed in the interpretation of this Agreement or
any amendments or exhibits thereto; (b) neither party has received from
the other any accounting, tax, legal or other advice; and (c) each party
has relied solely upon the advice of its own accounting, tax, legal and other
advisors; provided, however, it is acknowledged by Buyer and Seller that Buyer
has received certain accounting and financial information from Seller as
provided in this Agreement.


 


N.            Counterparts.  This Agreement may be executed in one or more
counterparts.  All such separate
counterparts together shall constitute one and the same instrument.


 


O.            Further Assurances.  At Closing, and from time to time thereafter,
Seller and Buyer agree that they shall at the request of the other make,
execute and deliver or obtain and deliver all such affidavits, deeds,
certificates, and other instruments and documents, and shall do or cause to be
done all such acts or things, which either party may reasonably require in
order to complete the consummation of the transactions contemplated by this
Agreement.


 


P.             Limited Liability.  The parties, on behalf of themselves, and
their members, partners, directors, officers, employees and representatives,
and the members, partners, directors, officers, employees and representatives
thereof (collectively with the parties, the “Constituent Parties”), hereby
agree that in no event or circumstance shall any of the Constituent Parties, or
any other individual or trust within the ownership structure of either party,
have any personal liability under this Agreement.


 


Q.            Confidentiality.  The parties shall keep the terms and
conditions of this Agreement and the transactions contemplated herein, and all
information delivered or provided in accordance herewith, in confidence and
shall not disclose such information to any third parties, except that Buyer and
Seller may disclose all such information to their employees, agents, members
and partners (and the members and partners thereof), advisors, prospective
lenders and investors and as otherwise required by law.  Buyer and Seller each may also disclose


 


 


21

















 


to the City of Scotts
Valley that Buyer holds a contractual right to purchase the Property pursuant
to this Agreement.


 


R.            Final Inspection and Additional
Seller Covenants.  Buyer shall have
the right to make a final walk-through inspection of the Property and the
Improvements (including the office building) prior to the Closing Date to
confirm the condition of the Property and the Improvements and the consistency
thereof with the terms of this Agreement.  Prior to the Closing, Seller shall maintain,
or cause to be maintained, the Real Property and Improvements in good condition
and repair and perform, at Seller’s sole cost and expense, all necessary
maintenance, repairs, and replacements required for the Real Property and
Improvements and operate the Real Property and Improvements in accordance with
the same management standards as were employed by Seller prior to the Effective
Date.  Prior to the Closing, Seller shall
comply with all laws, ordinances, rules and regulations applicable to the
use and/or occupancy of, and all operations activities on, the Property. Prior
to the Closing, Seller shall keep in effect all insurance coverage currently in
force with respect to the Real Property and promptly comply with all
requirements of the insurance companies with respect to such coverage.


 


S.             Joint and Mutual Escrow
Instructions.   This Agreement shall
constitute both an agreement between Buyer and Seller and escrow instructions
for Escrow Agent.   If Escrow Agent
requires separate or additional escrow instructions which it deems necessary
for its protection, Seller and Buyer agree to promptly upon request by Escrow
Agent to execute and deliver to Escrow Agent such separate and additional
escrow instructions (the “Additional Instructions”).  In the event of any conflict or inconsistency
between this Agreement and the Additional Instructions, this Agreement shall
prevail and govern, and the Additional Instructions shall so provide.  The Additional Instructions shall not modify
or amend the provisions of this Agreement unless otherwise agreed to in writing
by Seller and Buyer.


 


T.            ARBITRATION OF DISPUTES.  CLAIMS, DISPUTES AND OTHER
MATTERS IN QUESTION BETWEEN THE PARTIES TO THIS AGREEMENT ARISING UNDER SECTION 12
HEREOF SHALL BE SUBMITTED TO AND SETTLED BY ARBITRATION CONDUCTED IN THE COUNTY
OF SANTA CRUZ, CALIFORNIA, IN ACCORDANCE WITH THE RULES THEN IN EFFECT OF THE
AMERICAN ARBITRATION ASSOCIATION FOR “EXPEDITED PROCEDURES” FOR COMMERCIAL
ARBITRATION BY THREE (3) ARBITRATORS APPOINTED IN ACCORDANCE WITH SUCH
RULES.  THE PARTIES SHALL HAVE THE RIGHT
TO DISCOVERY IN ACCORDANCE WITH CODE OF CIVIL PROCEDURE SECTION 1283.05.  THE AWARD RENDERED BY THE ARBITRATORS SHALL
BE FINAL AND BINDING, AND JUDGMENT MAY BE ENTERED UPON IT IN ANY COURT
HAVING JURISDICTION THEREOF. 
NOTWITHSTANDING THE FOREGOING, THE PARTIES MAY APPLY TO ANY COURT
OF COMPETENT JURISDICTION FOR A TEMPORARY RESTRAINING ORDER, PRELIMINARY
INJUNCTION, OR OTHER INTERIM RELIEF, AS NECESSARY, WITHOUT BREACH OF THIS
ARBITRATION AGREEMENT AND WITHOUT ANY ABRIDGMENT OF THE POWERS OF THE
ARBITRATORS. THIS PROVISION SHALL BE SPECIFICALLY ENFORCEABLE IN ANY COURT OF
COMPETENT JURISDICTION.  NOTICE OF DEMAND
FOR ARBITRATION SHALL BE FILED IN WRITING WITH THE OTHER PARTY TO THIS
AGREEMENT AND WITH THE AMERICAN ARBITRATION ASSOCIATION. 


 


22

















 


THE DEMAND SHALL BE MADE WITHIN A
REASONABLE TIME AFTER THE WRITTEN NOTICE OF CLAIM ABOVE. IN NO EVENT SHALL THE
DEMAND FOR ARBITRATION BE MADE AFTER THE DATE WHEN THE APPLICABLE STATUTE OF
LIMITATIONS WOULD BAR INSTITUTION OF A LEGAL OR EQUITABLE PROCEEDING BASED ON
SUCH CLAIM, DISPUTE, OR OTHER MATTER IN QUESTION. HOWEVER, ONCE A CLAIM IS
MADE, THE STATUTE OF LIMITATIONS SHALL BE TOLLED DURING THE THIRTY (30) DAY
PERIOD FROM THE TIME THE CLAIM IS FILED UNTIL THE DEMAND FOR ARBITRATION IS
FILED.


 


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


 


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


 


	
  SELLER’S INITIALS:

  	
   

  	
  /s/ O.C.

  	
   

  	
  BUYER’S INITIALS:

  	
   

  	
  /s/ M.E.

  	
   

  



 


[SIGNATURES ON FOLLOWING PAGE]


 


 


23

















 


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


 


	
   

  	
  Buyer: Fowler Property
  Acquisitions., LLC,

  a California limited liability company

  
	
   

  
	
   

  
	
  [BUYER
  TO INITIAL SECTION 6, 14 AND 20.T]

  	
  By:

  	
  /s/
  Michael B. Earl 

  
	
   

  	
   

  	
  Michael B. Earl, Manager 

  
	
   

  	
   

  	
   

  
	
   

  	
  Dated:

  	
   3/3/08

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Seller: AVIZA TECHNOLOGY, INC.,

  a Delaware corporation

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  [SELLER TO INITIAL SECTION 6 AND 20.T]

  	
  By:

  	
  /s/ Patrick C. O’Connor 

  
	
   

  	
   

  	
  Patrick C. O’Connor 

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Its: Chief Financial Officer 

  
	
   

  	
   

  	
   

  
	
   

  	
  Dated:

  	
  3/6/08

  
				



 


 


 


Instructions contained herein accepted this 9th day of
March, 2008


 


ESCROW AGENT:


 


FIRST AMERICAN TITLE INSURANCE COMPANY


 


	
  By:

  	
  /s/ Carol Allen

  	
   

  
	
  Name:

  	
  Carol Allen

  
	
  Its:

  	
  Escrow Agent

  



 






 












EXHIBIT A


 


DESCRIPTION(S) OF
REAL PROPERTY


 


[See attached]


 


 

















 


EXHIBIT A-1


 


EQUIPMENT SELLER MAY REMOVE
FROM PROPERTY


 


All trade
fixtures, equipment, furniture, cubicles and other personal property used by
Seller in the operation of Seller’s business, including, without limitation,
data networking equipment and telephone equipment and systems and back-up
generators, but excluding the Basic Building Systems used for the Operation of
the Property.  For these purposes the “Basic
Building Systems” shall mean all electrical, mechanical, outside telephone
wiring, plumbing and HVAC systems currently existing at the Real Property used
for the Operation of the Property.  The
term “Operation of the Property” shall mean the provision of electricity,
lighting, fire and life safety (including alarm systems), heating, cooling and
ventilation (including boilers, chillers and cooling towers), plumbing
(including fire sprinklers, sinks, bathrooms and sanitary systems) and
elevators.  [Note:
Notwithstanding the foregoing, the parties will negotiate and agree in writing
prior to the Approval Deadline, on the improvements, fixtures and equipment
Seller shall be permitted to leave in place at the Real Property on the Seller
Relocation Date]


 


 

















 


EXHIBIT A-2


 


EXCLUDED PROPERTY


 


1.          All personal property outside of the buildings on the
property relating to the groundwater and soil remediation systems (including,
without limitation, the monitoring wells, remediation systems and related
piping) to the extent not owned by Seller.


 


2.          All trade fixtures, equipment and personal property Seller
may remove from the Real Property as set forth in Exhibit A-1 to the
extent actually removed by Seller on or before the later of the Closing Date,
or, if applicable, the Seller Relocation Date.


 


3.          Nitrogen plant owned by Air Products and leased by Seller
which shall be removed on or before the Seller Relocation Date.


 


 





















 


EXHIBIT A-3


 


FIXTURES AND EQUIPMENT TO BE
REMOVED FROM PROPERTY BY SELLER ON OR BEFORE CLOSING


 


All
trade fixtures, equipment and personal property Seller may remove from the Real
Property as set forth in Exhibit A-1 to the extent actually removed by
Seller on or before the later of the Closing Date, or, if applicable, the
Seller Relocation Date.


 


 





















 


EXHIBIT B


 


GRANT DEED


 


RECORDING REQUESTED BY
AND

WHEN RECORDED MAIL TO:


 


                                                                 
                                                                  
                                                                  


                                                                 


 


 


Documentary Transfer Tax is not of public record and
is shown on a separate sheet attached to this deed.


 


GRANT DEED


 


FOR VALUE RECEIVED, AVIZA
TECHNOLOGY, INC., a Delaware corporation (“Grantor”), grants to [BUYER]
(“Grantee”), all that certain real property (the “Property”) situated in the
City of Scotts Valley, County of Santa Cruz, State of California, described on Schedule 1
attached hereto and by this reference incorporated herein, together with all its
right, title and interest in and to all buildings and improvements located on
the Property, subject to the Permitted Exceptions listed on Schedule B
attached hereto.


 


Grantor further grants to
the Grantee all of the Grantor’s right, title and interest in and to all
easements, privileges and rights appurtenant to the Property and pertaining to,
held and enjoyed in connection therewith and all of the Grantor’s right, title
and interest in and to any land lying in the bed of any street, alley, road or
avenue to the mesne line thereof in front of, or adjoining the Property.


 


IN WITNESS WHEREOF, the
undersigned has executed this Grant Deed dated as of
                       ,
200    .


 


	
   

  	
  AVIZA TECHNOLOGY, INC.,

  
	
   

  	
  a Delaware corporation 

  
	
   

  	
   

  
	
   

  	
  By: 

  	
   

  
	
   

  	
  Printed Name: 

  	
   

  
	
   

  	
  Its:

  	
   

  
				



 


 

















 


EXHIBIT C


 


ASSIGNMENT
OF SERVICE CONTRACTS,

WARRANTIES AND GUARANTIES

AND OTHER INTANGIBLE PROPERTY


 


THIS ASSIGNMENT is made
and entered into as of this
                
day of
                ,
20    , by AVIZA TECHNOLOGY, INC., a Delaware corporation (“Assignor”),
to  [BUYER] (“Assignee”).


 


FOR GOOD AND VALUABLE
CONSIDERATION, the receipt of which is hereby acknowledged, effective as of the
Effective Date (as defined below), Assignor hereby assigns and transfers unto
Assignee all of its right, title, claim and interest in and under
(collectively, the Assets”):


 


(A)          all warranties and guaranties made by
or received from any third party with respect to any building, building
component, structure, fixture, machinery, equipment, or material situated on,
contained in any building or other improvement situated on, or comprising a
part of any building or other improvement situated on, any part of that certain
real property described in Exhibit A attached hereto including, without
limitation, those warranties and guaranties listed in Schedule 1 attached
hereto (collectively, “Warranties”);


 


(B)           all of the Assumed Contracts (as
defined in that certain Purchase Agreement dated as of
                    ,
20    , between Assignor and Assignee (or Assignee’s
predecessor in interest) (the “Agreement”)), as listed in Schedule 2
attached hereto; and


 


(C) any other
Intangible Property (as defined in the Agreement).


 


ASSIGNOR AND ASSIGNEE
FURTHER HEREBY AGREE AND COVENANT AS FOLLOWS:


 


                1.             In
the event of any litigation between Assignor and Assignee arising out of this
Assignment, the losing party shall pay the prevailing party’s costs and
expenses of such litigation, including, without limitation, attorneys’ fees and
costs, court costs and expert witness fees and costs.


 


                2.             This
Assignment shall be binding on and inure to the benefit of the parties hereto,
their heirs, executors, administrators, successors in interest and assigns.


 


                3.             This
Assignment shall be governed by and construed and in accordance with the laws
of the State of California.


 


                4.             Assignor
agrees to indemnify and hold Assignee harmless from and against any and all
losses, costs, liabilities, damages and expenses, including, without
limitation, reasonable attorneys’ fees, accruing prior to the Effective Date
and arising out of the Assumed Contracts. 
Assignee agrees to assume all of Assignor’s obligations under the
Assumed Contracts accruing from and after the Effective Date.  Assignee agrees to indemnify and hold
Assignor harmless from and against any and all losses, costs, liabilities,
damages and expenses including, without 


 


 

















 


limitation, reasonable
attorney’s fees, arising from any breach by Assignee or its successors or
assigns of any of obligations under the Assumed Contracts accruing on or after
the Effective Date.


 


                5.             Assignor
agrees that it shall, at the request of Assignee, from time to time, execute
and deliver to Assignee all other and further instruments necessary to vest in
Assignee any of Seller’s right, title and interest in or to any of the property
assigned and conveyed hereunder, including, without limitation, the obtaining
of any required consents at Assignor’s sole cost and expense.


 


                6.             Assignor
does hereby represent to Assignee that Assignor is the lawful owner of the
Assets, that such Assets are free and clear of all encumbrances, and that
Assignor has good right to sell the same as aforesaid and will warrant and
defend the title thereto unto Assignee, its successors and assigns, against the
claims and demands of all persons whomsoever.


 


                7.             For
purposes of this Assignment, the “Effective Date” shall be the date of the
Closing (as defined in the Agreement).


 


IN WITNESS WHEREOF,
Assignor and Assignee have executed this Assignment the day and year first
above written.


 


	
  ASSIGNEE:

  	
  [BUYER]  

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Its:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  ASSIGNOR:

  	
  AVIZA
  TECHNOLOGY, INC., 

  
	
   

  	
  a Delaware
  corporation 

  
	
   

  	
   

  
	
   

  	
  By: 

  	
   

  
	
   

  	
  Its:

  	
   

  



 


 
















 


Exhibit A to Assignment of
Service Contracts

Warranties and

Guaranties and Other Intangible Property


 


NONE


 


 





















 


Schedule 1 to Assignment of
Service Contracts

Warranties and

Guaranties and Other Intangible Property


 


List of Warranties


 


NONE


 


 

















 


Schedule 2 to Assignment of Service
Contracts

Warranties and

Guaranties and Other Intangible Property


 


List of Contracts


 


NONE


 


 

















 


EXHIBIT D


 


ENVIRONMENTAL DOCUMENTS


 


See Lists attached


 


 

















 


EXHIBIT E


 


FORM OF ASSIGNMENT OF REMEDIATION AGREEMENT


 


THIS ASSIGNMENT OF
REMEDIATION AGREEMENT (“Assignment”) shall be effective as of
                              ,
2008 (the “Effective Date”) and is made by and between AVIZA TECHNOLOGY, INC.,
a Delaware corporation (“Assignor”), and
                                              ,
a
                                    
(“Assignee”).


 


This Assignment is made with reference to the
following facts and circumstances:


 


1.             ARCADIS
Geraghty & Miller (“ARCADIS”), a Delaware corporation, Assignor (as
successor by assignment from ASML US, Inc., formerly known as Silicon
Valley Group, Inc.) and WJ Communications, Inc.  (formerly known as Watkins-Johnson Company,
referred to herein as “WJ”), entered that certain Guaranteed Fixed Price
Remediation Agreement dated as of July 6, 1999 (“Remediation Agreement”),
whereby ARCADIS agreed to assume responsibility for satisfying the terms of a
Consent Decree by and between the United States Environmental Protection Agency
and WJ filed July 16, 1991 in Civil Action No. C91-20423 United
States v. Watkins-Johnson Company on the terms and conditions of the
Remediation Agreement for the benefit of WJ and Assignor.


 


2.             Assignor
desires to assign to Assignee all of Assignor’s right, title and interest in,
under and to the Remediation Agreement, and Assignee desires to accept such
assignment.


 


NOW, THEREFORE, in consideration of the premises and
for other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, Assignor and Assignee hereby agree as follows:


 


(a)           Assignment:  Assignor hereby assigns, transfers and
conveys to Assignee, and Assignee hereby accepts, as of the Effective Date, all
of Assignor’s right, title and interest in, under and to the Remediation
Agreement.  Also effective as of the
Effective Date, Assignee accepts this assignment and assumes and agrees to
keep, perform and fulfill, as a direct obligation to WJ and ARCADIS and for the
benefit of Assignor, all of the terms, covenants, conditions and obligations
required to be kept, performed and fulfilled by Assignor under the Remediation
Agreement from and after the Effective Date.


 


                (b)           Miscellaneous:  Assignor and Assignee shall execute and
deliver such additional documents and take such additional actions as either
may reasonably request to carry out the purposes of this Assignment.  This Assignment shall be binding upon and
shall inure to the benefit of the parties hereto and their respective heirs,
successors and assigns.  If either party
brings an action or legal proceeding with respect to this Assignment, the
prevailing party shall be entitled to recover its reasonable attorneys’ fees
and costs.  All captions contained in
this Assignment are for convenience of reference only and shall not affect the
construction of this Assignment.  This
Assignment may be executed in one or more counterparts, each of which shall be
an original, but all of which, taken together, shall constitute one and the
same Assignment.  If any one or more of
the provisions of this Assignment shall be invalid, illegal or unenforceable in



 


 

















 


any respect, the validity, legality and enforceability
of the remaining provisions contained herein shall not in any way be affected
or impaired thereby.  This Assignment
shall be governed by the laws of California without reference to conflicts of
laws principles.


 


IN WITNESS WHEREOF, Assignor and Assignee have
executed this Assignment intending it to be effective as of the Effective Date.


 


	
  ASSIGNOR:

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Date:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  ASSIGNEE:

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Date:

  	
   

  	
   

  



 


 

















 


EXHIBIT F


 


FORM OF SELLER LEASE


 


 
















FORM OF
LEASE


 


SUMMARY OF TERMS OF


LEASE AGREEMENT


 


	
  Landlord:

  	
   

  	
  FPA Kings
  Village Associates, LLC, a Delaware limited liability company

  
	
   

  	
   

  	
   

  
	
  Tenant:

  	
   

  	
  Aviza
  Technology, Inc. a Delaware corporation

  
	
   

  	
   

  	
   

  
	
  Leased
  Premises:

  	
   

  	
  440 Kings
  Village Road, Scott’s Valley, California

  
	
   

  	
   

  	
   

  
	
  Condition:

  	
   

  	
  As-Is - broom
  clean condition

  
	
   

  	
   

  	
   

  
	
  Use:

  	
   

  	
  Nine
  Building Technology Campus

  
	
   

  	
   

  	
   

  
	
  Lease
  Term:

  	
   

  	
  One
  (1) year with two (2) six (6) month options to extend,
  provided (i) that with respect to “Building 2”, the Lease Term shall be
  as provided in Section 4.3 below, and (ii) Tenant shall have the
  right to terminate this Lease during the first (1st) year on
  ninety (90) days advance written notice delivered to Landlord no earlier than
  the end of the third (3rd) full calendar month of the Lease Term.

  
	
   

  	
   

  	
   

  
	
  Commencement

  	
   

  	
   

  
	
  Date:

  	
   

  	
  Close of Escrow
  under that certain Purchase and Sale Agreement between Landlord and Tenant

  
	
   

  	
   

  	
   

  
	
  Base
  Rent:

  	
   

  	
  $106,767 per
  month for the Term with a 3.5% increase for each option extended.

  
	
   

  	
   

  	
   

  
	
  Taxes:

  	
   

  	
  Tenant shall pay
  all real estate taxes, personal property taxes, if any, and all taxes and
  license fees assessed due to the occupancy or use of the Leased Premises by
  Tenant

  
	
   

  	
   

  	
   

  
	
  Repairs &

  	
   

  	
   

  
	
  Maintenance:

  	
   

  	
  Tenant shall be
  responsible for repairs and maintenance as more specifically set forth in the
  Lease

  
	
   

  	
   

  	
   

  
	
  Alterations:

  	
   

  	
  Tenant shall
  have the right to remodel and alter the premises as Tenant deems necessary
  and as more specifically set forth in the Lease and with Landlord’s prior
  written consent

  
	
   

  	
   

  	
   

  
	
  Insurance:

  	
   

  	
  Tenant shall
  maintain General Liability Coverage and Fire Insurance consistent with
  Tenant’s historical practices

  
	
   

  	
   

  	
   

  
	
  Utilities:

  	
   

  	
  Tenant shall pay
  all utilities.

  
	
   

  	
   

  	
   

  
	
  Late
  Charges:

  	
   

  	
  5% of monthly
  rent after 10 days plus interest at 10% after 10 days.

  



 


i

















 


	
  Notice:

  	
   

  	
  Tenant:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Landlord:

  	
   

  	
  FPA Kings
  Village Associates, LLC

  
	
   

  	
   

  	
   

  	
   

  	
  4665 MacArthur
  Court, Suite 200

  
	
   

  	
   

  	
   

  	
   

  	
  Newport Beach,
  CA 92660

  



 


	
  Address
  for Payment of Rent:

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  FPA Kings
  Village Associates, LLC

  	
   

  	
   

  
	
   

  	
   

  	
  P.O. Box
  1410

  	
   

  	
   

  
	
   

  	
   

  	
  Suisun City, CA
  94585

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Holding

  	
   

  	
   

  	
   

  	
   

  
	
   Over:

  	
   

  	
  Month-to-month
  and subject to all other terms of Article 28 of the Lease.

  



 


ii

















 


LEASE AGREEMENT


 


                This Lease Agreement (“Lease”) is entered into as of
                              ,
2008 (the “Commencement Date”) between FPA KINGS VILLAGE ASSOCIATES, LLC, a
Delaware limited liability company (“Landlord”) and AVIZA TECHNOLOGY, INC., a
Delaware corporation (“Tenant”).


 


RECITALS


 


                A.            Landlord
is the owner of certain Leased Premises and all improvements thereon located at
440 Kings Village Road, Scott’s Valley, California (the “Leased Premises”).


 


                B.            The
Leased Premises are improved with structures and facilities, landscaping and a
parking area that comprise a  nine
building technology campus;


 


                C.            Tenant
desires to lease the Leased Premises from Landlord and Landlord desires to
lease the Leased Premised to Tenant on the terms and conditions set forth
herein.


 


                NOW, THEREFORE, Landlord and Tenant agree as follows:


 


ARTICLE 1 — DEFINITIONS


 


                As used in this Lease, the following terms shall have
the following meanings:


 


1.1           “Alterations” is defined in Section 11.1.


 


1.2           “Rent” is defined in Article 5.


 


1.3           Intentionally left blank.


 


1.4           “Commencement Date” is defined in Section 4.1.


 


1.5           “Environmental Laws” means all
federal, state, local, or municipal laws, rules, orders, regulations, statutes,
ordinances, codes, decrees, or requirements of any government authority
regulating, relating to, or imposing liability or standards of conduct
concerning any Hazardous Substance (as later defined), or pertaining to
occupational health or industrial hygiene (and only to the extent that the
occupational health or industrial hygiene laws, ordinances, or regulations
relate to Hazardous Substances on, under, or about the Leased Premises),
occupational or environmental conditions on, under, or about the Leased
Premises, as now or may at any later time be in effect, including without
limitation, the Comprehensive Environmental Response, Compensation and
Liability Act of 1980 (“CERCLA”) [42 USCS §§ 9601 et seq.]; the Resource
Conservation and Recovery Act of 1976 (“RCRA”) [42 USCS §§ 6901 et seq.]; the
Clean Water Act, also known as the Federal Water Pollution Control Act (“FWPCA”)
[33 USCS §§ 1251 et seq.]; the Toxic Substances Control Act (“TSCA”) [15 USCS
§§ 2601 et seq.]; the Hazardous Materials Transportation Act (“HMTA”) [49 USCS
§§ 1801 et seq.]; the Insecticide, Fungicide, Rodenticide Act [7 USCS §§ 136 et
seq.]; the Superfund Amendments and Reauthorization Act [42 USCS §§ 9601 et
seq.]; the Clean Air Act [42 USCS 


 


1

















 


§§ 7401 et seq.]; the Safe
Drinking Water Act [42 USCS §§ 300f et seq.]; the Solid Waste Disposal Act[42
USCS §§ 6901 et seq.]; the Surface Mining Control and Reclamation Act [30 USCS
§§ 1201 et seq.]; the Emergency Planning and Community Right to Know Act [42
USCS §§ 11001 et seq.]; the Occupational Safety and Health Act [29 USCS §§ 655
and 657]; the California Underground Storage of Hazardous Substances Act [H &
S C §§ 25280 et seq.]; the California Hazardous Substances Account Act [H &
S C §§ 25300 et seq.]; the California Hazardous Waste Control Act [H &
S C §§ 25100 et seq.]; the California Safe Drinking Water and Toxic Enforcement
Act [H & S C §§ 24249.5 et seq.]; the Porter-Cologne Water Quality Act
[Wat C §§ 13000 et seq.] together with any amendments of or regulations
promulgated under the statutes cited above and any other federal, state, or
local law, statute, ordinance, or regulation now in effect or later enacted
that pertains to occupational health or industrial hygiene, and only to the
extent that the occupational health or industrial hygiene laws, ordinances, or
regulations relate to Hazardous Substances on, under, or about the Leased
Premises, or the regulation or protection of the environment, including ambient
air, soil, soil vapor, groundwater, surface water, or land use.


 


1.6           “Hazardous Substances” includes
without limitation:


 


1.6.1        Those substances included within the
definitions of “hazardous substance,” “hazardous waste,” “hazardous material,” “toxic
substance,” “solid waste,” or “pollutant or contaminant” in CERCLA, RCRA, TSCA,
HMTA, or under any other Environmental Law;


 


1.6.2        Those substances listed in the United
States Department of Transportation (DOT) Table [49 CFR 172.101], or by the
Environmental Protection Agency (EPA), or any successor agency, as hazardous
substances [40 CFR Part 302];


 


1.6.3        Other substances, materials, and wastes
that are or become regulated or classified as hazardous or toxic under federal,
state, or local laws or regulations; and


 


1.6.4        Any material, waste, or substance that
is (i) a petroleum or refined petroleum product, (ii) asbestos, (iii) polychlorinated
biphenyl, (iv) designated as a hazardous substance pursuant to 33 USCS §
1321 or listed pursuant to 33 USCS § 1317, (v) a flammable explosive, or (vi) a
radioactive material.


 


1.7           “Term” is defined in Section 4.1.


 


1.8           “Law” shall mean any constitution,
statute, ordinance, regulation, rule, judicial decision, administrative order,
or other requirement of any governmental entity.


 


1.9           “Leased Premises” is defined in
Recital A.


 


1.10         “Trade Fixtures” is defined in Section 12.1.


 


1.11         “Business” is defined in Recital D.


 


2

















 


ARTICLE 2 — LEASE OF LEASED
PREMISES


 


                2.1           Landlord
leases to Tenant and Tenant leases from Landlord the Leased Premises for the
term, at the rental, and upon all other terms, covenants, and conditions in
this Lease.


 


                2.2           This
Lease confers no rights either to the subsurface of the land beneath the
building or to any oil, gas, minerals or other hydrocarbon substances below the
ground level of the Leased Premises.


 


ARTICLE 3 — USE OF LEASED
PREMISES


 


                3.1           The
Leased Premises shall be used for all purposes previously utilized by Tenant as
the prior owner including a research campus and manufacturing facility for
semiconductor products including office use, storage, warehouse and distribution
and other legal uses related thereto. 
Tenant may not use the Leased Premises for other purposes without the
prior written approval of Landlord which shall not be unreasonably withheld.


 


                3.2           Tenant
shall not do or permit any act that (i) causes any structural damage to
the Leased Premises, or (ii) causes damage to any part of the Leased
Premises, except for ordinary wear and tear and to the extent reasonably
necessary for the installation of Trade Fixtures, equipment, machinery, or the
construction of alterations as permitted under this Lease or as approved in
writing in advance by Landlord, such approval not to be unreasonably withheld
or delayed.


 


                3.3           Tenant
shall not operate or permit the operation of any equipment or machinery on the
Leased Premises that could (i) materially damage the Leased Premises, (ii) impair
the efficient operation of the Leased Premises’ heating, ventilation, or air
conditioning system, (iii) block or otherwise impede the operation of the
Leased Premises’ sprinkler system, (iv) overload or otherwise place an
undue strain on the Leased Premises’ electrical and mechanical systems, or (v) damage,
overload, or corrode the Leased Premises’ sanitary sewer system.


 


                3.4           Tenant
shall not install or attach anything in the Leased Premises in excess of the
load limits established for the Leased Premises.  Tenant shall contain and dispose of all dust,
fumes, or waste products generated by Tenant’s use of the Leased Premises so as
to avoid (i) unreasonable fire or health hazards, (ii) damage to the
Leased Premises, or (iii) any violation of any Law.


 


                3.5           Tenant
shall not commit any waste in or around the Leased Premises and shall keep the
Leased Premises in as neat, clean, attractive and orderly a condition as on the
Commencement Date, reasonable wear and tear excepted.


 


                3.6           Tenant
shall use the Leased Premises in compliance with all-applicable Laws, recorded
covenants and restrictions, and requirements of any fire insurance underwriters
or rating bureaus, now or later in effect.


 


3

















 


ARTICLE
4 — LEASE TERM


 


4.1           Term. The
term of this Lease shall be for one (1) year commencing on
the Commencement Date, and ending one (1) year thereafter unless sooner
terminated pursuant to the terms of this Lease, except as extended pursuant to
Sections 4.2 and 4.3 below, and provided that Tenant shall have the right to
terminate this Lease during the first (1st) year of the Lease Term
on ninety (90) days advance written notice delivered to Landlord no earlier than
the end of the third (3rd) full calendar month of the Lease Term.


 


4.2           Option
Term. Landlord
hereby grants the Tenant, two (2) options to extend the Lease Term for the
entire Leased Premises by a period of six (6) months each (each an “Option Term”).  Such options shall be exercisable only by
written notice delivered by Tenant to Landlord as provided below, provided
that, as of the date of delivery of such notice, (i) Tenant is not then in
default under this Lease (beyond any applicable notice and cure periods),
and  (ii) Tenant has not been in
default under this Lease (beyond any applicable notice and cure periods) more
than once during the prior twelve (12) month period.  Upon the proper exercise of the applicable
option to extend, then the Lease Term, as it applies to the entire Leased
Premises, shall be extended for a period of six (6) months.  The rights contained in this Section 4.2
shall only be exercised by the Tenant (and not any other assignee, sublessee or
other transferee of the Tenant’s interest in this Lease) if Tenant is in
occupancy of the entire Leased Premises.  
The Rent during either Option Term shall be 3.5% greater than the
immediately preceding Term.


 


4.3           Building 2 Option. 
Tenant shall have the right to lease Building 2 on the Premises
comprising 1500 square feet of space (which square footage Landlord and Tenant
agree is accurate regardless of any measurement to the contrary) for a term of
five (5) years commencing on the expiration of the first anniversary of
the Commencement Date, at a rental rate of $.75 per square foot plus [operating expenses] [Note: can either be gross rent with all costs
included except utilities which are separately metered, or can be done as a
operating expense pass through.  Given
the size of the space, we would recommend a gross rent for sake of simplicity] (“Building
2 Option”).  The
Building 2 Option shall be upon the same terms and conditions as this Lease
subject to such reasonable changes as are agreed to by Landlord and Tenant to
address the conversion of the Premises to multi-tenant use.


 


ARTICLE
5 — RENT


 


5.1           Commencing on the first day of the first calendar month
after the Commencement Date and continuing thereafter on the like day of each
successive month for twelve (12) consecutive months, Tenant shall pay to
Landlord, in advance, and without offset (except as specifically set forth in Article 21
below), deduction, prior notice or demand, rent (“Rent”), initially at the Base
Rent shown in the Summary of Terms of this Lease, per month in advance on the
first day of each month.  Rent shall be
payable in lawful money of the United States to Landlord at the address stated
in this Lease or to any other address that Landlord may designate from time to
time.  Any amount of Rent due for any
period less than a full calendar month shall be a prorated amount.


 


4






 












 


ARTICLE 6 — TAXES AND ASSESSMENTS


 


                6.1           Tenant shall pay all real property
taxes and all other taxes, permit, inspection, and license fees, and other
public charges of whatever nature that are assessed against the Leased Premises
and/or arise because of the occupancy, use, or possession of the Leased
Premises (including, but not limited to, taxes on personal property, whether of
Landlord or Tenant), subsequent to the commencement of the Term of this Lease,
and all installments that are due during the Term of this Lease.  Tenant shall pay all such taxes before the
last day on which payment may be made without penalty or interest.


 


                6.2           Landlord agrees to give to Tenant at
least thirty (30) calendar days prior to their coming due, all bills received
by Landlord for taxes, assessments, and public charges payable by Tenant.


 


                6.3           All
property taxes levied on the Leased Premises for the tax year in which the
Commencement Date falls shall be appropriately prorated between Landlord and
Tenant, so that Tenant’s share will reflect the portion of that tax year in
which Tenant has possession of the Leased Premises under this Lease.  Taxes levied on the Leased Premises for the
tax year in which the Termination Date occurs shall be similarly prorated
between Landlord and Tenant to reflect the period of Tenant’s possession of the
Leased Premises during that tax year. 
Tenant shall pay Tenant’s share of those taxes to Landlord directly, and
that payment shall constitute full performance under this Lease with respect to
this tax liability.


 


                6.4           Tenant shall not be required to pay,
discharge, or remove any tax (including penalties and interest), assessment,
tax lien, forfeiture, or other imposition or charge against the Leased Premises
or any part of the Leased Premises or any improvements required by this Lease
to be paid by Tenant, so long as Tenant diligently and in good faith contests
the validity or the legality of the assessment, levy, or charge by appropriate
legal proceedings, which should prevent the collection of the tax, assessment,
imposition, or charge contested; provided however, that Tenant, prior to the
date that the tax, assessment, imposition, or charge is due and payable, shall
either have paid it to Landlord under protest or shall have, (i) in the
case of real estate taxes, posted a bond with Landlord sufficient to cover the
amount of the taxes and penalties and interest and, (ii) in the case of
taxes other than real estate taxes, given to Landlord a letter executed by an
officer of Tenant assuring Landlord that the tax, assessment, imposition, or
charge will be paid when and to the extent that the legal proceedings conclude
in a final determination that the tax, assessment, imposition, or charge is
valid, legal and owing.  Upon such final
determination, Tenant agrees to immediately pay the contested tax, assessment,
imposition, or charge, together with all interest and penalties, if any, and
remove and discharge any lien or forfeiture arising from the prior
nonpayment.  Any proceedings for
contesting the validity, legality, or amount of any tax, assessment,
imposition, or charge, or to recover any tax, assessment, imposition, or charge
paid by Tenant, may be brought by Tenant in the name of Landlord or in the name
of Tenant, or both, as Tenant deems advisable. 
Landlord agrees that Landlord will, upon the reasonable request of
Tenant, execute or join in the execution of any instrument or document
necessary in connection with any proceeding. 
However, if Tenant brings any proceedings, Tenant agrees to indemnify Landlord
for all losses, costs, or expenses that may be imposed on Landlord in
connection with the proceeding.  Tenant’s
right to contest taxes as provided in this 


 


5

















 


Lease shall not extend beyond the point where
Landlord’s title to the Leased Premises could be lost.  In any event, Tenant shall notify Landlord in
advance of any tax contest proceedings that Tenant intends to initiate, and
shall then inform Landlord of all significant developments in the proceedings
as they may occur.


 


                6.5           If Tenant has not paid any tax,
assessment, or public charge required by this Lease to be paid by Tenant before
its delinquency, or if a tax, assessment, or public charge is contested by
Tenant and that tax, assessment, or public charge has not been paid within five
(5) days after a final determination of the validity, legality, or amount
of the tax, assessment or public charge, then Landlord may, but shall not be
required to, pay and discharge the tax, assessment, or public charge.  If a tax, assessment, or public charge,
including penalties and interest, are paid by Landlord, the amount of that
payment shall be due and payable to Landlord by Tenant with the next succeeding
rental installment, and shall bear interest at the rate of ten percent (10%)
per annum from the date of the payment by Landlord until repayment by Tenant.


 


                6.6           The covenants and agreements to pay
taxes by Tenant in this Article 6 shall not be deemed to include the
payment of any inheritance, estate, succession, transfer, gift, franchise,
corporation, income, or profit tax, or capital levy that is or may be imposed
on Landlord, or any increase in real property tax that results from a
reassessment of the Leased Premises resulting from the sale or transfer of any
interest in the Leased Premises within three (3) years after the
Commencement Date.  If any excepted taxes
become a lien against the Leased Premises, Landlord agrees to pay and discharge
them before foreclosure of the lien or to take the steps analogous to those
permitted to Tenant under Section 6.4 to contest the taxes, so long as the
steps sufficiently protect Tenant’s quiet enjoyment of the Leased
Premises.  If Landlord fails to pay and
discharge those taxes prior to the institution of proceedings to foreclose the
lien, Tenant, at Tenant’s sole option, may advance the funds required to pay
and discharge the taxes, together with all penalties and interest, in which
event the amount of funds so advanced shall be immediately due and payable from
Landlord to Tenant and shall bear interest at the rate of ten percent (10%) per
annum from the date of payment by Tenant, until repaid.  Alternatively, Tenant may apply the amount
advanced to the payment of the next succeeding rental installment or
installments otherwise payable to Landlord until the advance, with interest,
has been repaid to Tenant; provided, however, that the rights of Tenant under
this Section 6.7 shall be limited to those instances where the foreclosure
or other enforcement of the lien may disturb Tenant’s possession and peaceful
enjoyment of the Leased Premises.


 


ARTICLE 7 — SECURITY DEPOSIT


 


                7.1           Upon
the Commencement Date, Tenant shall provide Landlord with a security deposit in
an amount equal to the first month’s base rent which Landlord shall retain
throughout the Term of this Lease.  If
Tenant fails to pay Base Rent or other charges due hereunder or otherwise
defaults with respect to any provision of this Lease, then Landlord may draw
upon, use, apply or retain all or any portion of the security deposit for the
payment of any Base Rent or other charge in default, for the payment of any
other sum which Landlord has become obligated to pay by reason of Tenant’s
default, or to compensate Landlord for any loss or damage which Landlord has
suffered thereby.  If Landlord so uses or
applies all or any portion of the security deposit, then Tenant, within ten (10) days
after demand therefor, shall deposit cash with 


 


6

















 


Landlord in the amount
required to restore the security deposit to the full amount stated above.  Upon the expiration of this Lease, Landlord
shall return to Tenant so much of the security deposit as has not been applied
by Landlord pursuant to this paragraph, or which is not otherwise required to
cure Tenant’s defaults.


 


ARTICLE 8
— DELIVERY OF POSSESSION


 


                Landlord shall deliver
possession of the Leased Premises to Tenant on the Commencement Date in “broom
clean” condition, free of all debris, materials and equipment (other than
equipment and other assets, if any, which have concurrently been acquired by
Tenant or which were on the Leases Premises and previously used by
Tenant).  Landlord and Tenant shall,
prior to Commencement Date, perform a walk-through of the Leased Premises.  Tenant accepts  possession of the Leased Premises in its then
existing condition, “AS-IS”, including all patent and latent defects and
subject to all applicable Laws governing and regulating the use of the Leased
Premises, and any recorded covenants or restrictions.


 


ARTICLE 9 — HAZARDOUS SUBSTANCES


 


                9.1           Tenant agrees that any and all
handling, transportation, storage, treatment, disposal, or use of Hazardous
Substances by Tenant, Tenant’s employees, agents, customers and vendors in or
about the Leased Premises (“Tenant’s Hazardous Substances”) shall strictly
comply with all applicable Environmental Laws.


 


                9.2           Tenant agrees to indemnify, defend
and hold Landlord harmless from any liabilities, losses, claims, damages,
penalties, fines, attorney fees, expert fees, court costs, remediation costs,
investigation costs, or other expenses resulting from or arising out of the
use, storage, treatment, transportation, release, or disposal of Tenant’s
Hazardous Substances on or about the Leased Premises.


 


                9.3           If any Tenant Hazardous Substances
result in the contamination or deterioration of the Leased Premises or any
water or soil beneath the Leased Premises, Tenant shall promptly take all
action necessary to investigate and remedy that contamination.


 


                9.4           Landlord and Tenant each agree to
promptly notify the other of any communication received from any governmental
entity concerning Hazardous Substances or the violation of Environmental Laws
that relate to the Leased Premises.


 


                9.5           Tenant shall not allow to be used and
shall not use, handle, store, transport, generate, release, or dispose of any
Hazardous Substances on, under, or about the Leased Premises, except that
Tenant may use or allow to be used:  (i) small
quantities of common chemicals such as adhesives, lubricants, cleaning fluids
and normal office supplies in order to conduct business at the Leased Premises
and (ii) other Hazardous Substances that are necessary for the operation
of Tenant’s Business.  At any time during
the term of this Lease, Tenant shall, within ten (10) days after written
request from Landlord, disclose in writing all Hazardous Substances that are
being used by Tenant on the Leased Premises, the nature of the use, and the
manner of storage and disposal.


 


7

















 


ARTICLE 10 — REPAIRS AND
MAINTENANCE


 


                Tenant shall, at
Tenant’s sole cost and expense, keep and maintain the roof, foundation,
heating, ventilation and air condition system, on-site parking area,
landscaping and interior and exterior of the building(s) on the Leased
Premises in as good a condition and repair as on the Commencement Date and to
deliver to Landlord physical possession of the Leased Premises at the end of
the Term and any extensions thereof in such condition, reasonable wear and tear
and loss by fire (not covered by insurance) or other casualty or by earthquake
or other act of God excepted.  Landlord
and Tenant hereby agree that Exhibit A attached hereto is an
accurate reflection of the condition of the Leased Premises on the Commencement
Date and that in no event shall Tenant be required to return the Leased
Premises to Landlord at the end of the Lease Term in a condition better than
that described on such Exhibit A. 
Notwithstanding anything to the contrary in this Lease, in no event
shall Tenant’s obligations under this Lease require Tenant to perform any
repair or replacement of any item that could be amortized as a capital expense
under Generally Accepted Accounting Principles. 
In the event such repair or replacement arises, and such repair or
replacement, if not performed, would materially interfere with Tenant’s
occupancy or use of the Leased Premises, Landlord shall perform such repair or
replacement at Landlord’s sole cost and expense and Tenant shall reimburse
Landlord each year of the Lease Term for one (1) year of the amortized
cost of such repair or replacement, Landlord applying a commercially reasonable
interest rate for such amortization (provided that Tenant shall only pay a pro
rata share of its amortized share during the term of the Building 2 Lease
extension based on the square footage the Building 2 premises bears to the
entire Leased Premises as measured on the Commencement Date).


 


ARTICLE 11 — ALTERATIONS


 


                11.1         Provided that Tenant first obtains
Landlord’s written consent, which shall not be unreasonably withheld, Tenant
may make alterations, improvements, or additions or otherwise alter the Leased
Premises (“Alterations”) which Tenant deems reasonable and prudent in Tenant’s
operation of the Leased Premises. Tenant shall provide Landlord with copies of
all plans and specifications relating to the Alterations which shall be
constructed substantially in compliance with the plans and specifications and
by a licensed contractor in accordance with all applicable Laws.   Notwithstanding the foregoing, Tenant shall be
permitted without Landlord’s consent, but upon prior notice to Landlord, to
continue to install and remove equipment, including, without limitation,
facilitizing the clean room by adding or removing such penetrations as may be
necessary, consistent with the normal course of operations of Tenant’s use of
the Leased Premises to date.


 


                11.2         Tenant shall not commence construction
of any Alterations until all required governmental approvals and permits have
been obtained,


 


                11.3         Tenant shall pay, when due, all claims
for labor or materials furnished or alleged to have been furnished in
connection with the Alterations that are or may become mechanics’ or
materialmen’s liens against the Leased Premises or the Leased Premises or any
interest in them. Tenant shall have the right to, in good faith, contest the
validity of any lien, claim, or demand, provided that Tenant shall, at Tenant’s
sole expense, defend Landlord against the lien, claim, or 


 


8

















 


demand, and, upon the request of Landlord, Tenant
shall furnish to Landlord a surety bond in an amount equal to the contested
lien, claim, or demand indemnifying Landlord against liability and holding the
Leased Premises free from the effect of the lien, claim, or demand.  In addition, Landlord may require Tenant to
pay Landlord’s attorney fees and costs in connection with the defense of any
lien, claim, or demand.  Tenant shall pay
and satisfy any adverse judgment that may be rendered to enforce the lien,
claim, or demand against the Landlord or the Leased Premises.


 


                11.4         Any Alterations made shall remain on
and be surrendered with the Leased Premises upon expiration or termination of
the Term.


 


                11.5         Tenant shall make any alteration,
addition, or change of any sort to the Leased Premises that is required by any
Law because of:


 


                                11.5.1      Tenant’s particular use or change of use
of the Leased Premises;


 


                                11.5.2      Tenant’s application for any permit or
governmental approval; or


 


                                11.5.3      Tenant’s construction or installation of
any Alterations.


 


Except for the
foregoing matters in Section 11.5, Tenant shall not be required to make any
alteration, addition, or change of any sort to the Leased Premises that is
required by any Law, which obligations shall be the responsibility of Landlord.


 


ARTICLE 12 — TRADE FIXTURES


 


                12.1         Without the need for Landlord’s prior
consent, Tenant shall have the right, at any time and from time to time during
the Term and any renewal or extension, at Tenant’s sole cost and expense, to
install and affix in, to, or on the Leased Premises items for use in Tenant’s
trade or business that Tenant, in Tenant’s sole discretion, deems advisable
(collectively, “Trade Fixtures”).  Trade
Fixtures or any other equipment installed in the Leased Premises by Tenant
shall remain the property of Tenant and may be removed at the expiration of the
Term or any extension, provided that any damage to the Leased Premises caused
by the removal of Trade Fixtures or equipment shall be repaired by Tenant.


 


                12.2         Tenant’s obligations with respect to
the removal or abandonment of Trade Fixtures and other property, and
restoration requirements are subject to the terms of that certain Purchase
Agreement and Joint and Mutual Escrow Instructions, Scotts Valley, California
dated as of           , 2008
(“Purchase Agreement”), and in the event of any conflict between the terms and
conditions of that Purchase Agreement and this Lease, the terms and conditions
of the Purchase Agreement shall prevail..


 


ARTICLE 13 — INSURANCE


 


                13.1         Tenant shall, at Tenant’s expense,
obtain and keep in force during the term of this Lease:


 


9

















 


                                13.1.1      Commercial general liability insurance
(sometimes referred to as broad form comprehensive general liability
insurance), including property damage, against liability for bodily injury,
personal injury, death, and damage to property occurring on the Leased Premises
with liability limits and property damage in commercially reasonable amounts
and consistent with Tenant’s historical practice; and


 


                                13.1.2      Standard fire and “all risk” property
damage insurance, with business interruption with extra expense, vandalism and
malicious mischief endorsements, insuring all of Tenant’s personal property,
equipment and Trade Fixtures located on the Leased Premises, as well as the
Building and other improvements and the Leased Premises for a percentage of
their full replacement value that is commercially reasonable and consistent
with Tenant’s historical practice.


 


                13.2         Each policy of insurance required to be
carried by Tenant pursuant to Section 13.1 shall:


 


                                13.2.1      Name Landlord as an additional insured;


 


                                13.2.2      Intentionally omitted.


 


                                13.2.3      Provide that the policy shall not be subject
to cancellation, lapse, or change, except after at least thirty (30) days’
prior written notice to Landlord.


 


                If
Tenant has in full force a blanket policy of liability insurance with the same
coverage for the Leased Premises as described in Section 13.1 that
protects against those items described therein, that blanket insurance shall
satisfy the requirements of Section 13.1, provided that the blanket policy
specifically states the address of the Leased Premises as being covered and the
requirements of this Section 13.2 are satisfied.  A copy of each policy evidencing the
insurance required to be carried by Tenant pursuant to Sections 13.1 and 13.2
or a certificate of the insurer, certifying that the policy has been issued,
which provides the coverage required by Sections 13.1 and 13.2 and which
contains the specified provisions, shall be delivered to Landlord within thirty
(30) days after the Commencement Date.


 


                13.3         Notwithstanding anything to the
contrary in this Lease, Tenant and Landlord each release the other and waive
the entire right of recovery against the other for any damage or liability
arising out of or incident to the perils insured against, up to the extent of
such insurance, whether due to the negligence of Landlord, Tenant, or their
respective employees, agents, contractors, and invitees.  Prior to obtaining the required policies of
insurance, Tenant and Landlord shall notify their respective insurance carriers
that the previous waiver of subrogation is in this Lease.


 


ARTICLE 14 — DAMAGE AND DESTRUCTION


 


                14.1         If building or other improvements
constructed on the Leased Premises are damaged or destroyed, whether partially
or entirely, by any cause. Tenant, at Tenant’s own cost and expense, but only
to the extent that Tenant has received the proceeds of insurance for such
purpose, shall either (i) repair, restore or reconstruct the damaged or
destroyed building and other 


 


10

















 


improvements so that the condition and quality of
the new building and other improvements shall be as near as reasonably possible
to the condition and quality immediately prior to the damage or destruction, or
(ii) have the right to terminate this Lease upon the date of damage or
destruction by written notice delivered to Landlord no later than thirty (30)
days following the date of such damage or destruction, provided that Tenant
shall assign to Landlord all insurance proceeds associated with such damage or
destruction that relate to the buildings and other improvements that are not
associated with Tenant’s business at the Leased Premises (as opposed to the
operation of the building in general). 
Except as set forth in the preceding sentence, Damage to or destruction
of any portion of any building, fixtures or other improvements on the Leased
Premises by fire, the elements or any other cause shall not terminate this
Lease or entitle Tenant to surrender the Leased Premises or otherwise affect
the respective obligations of the parties, any present or future law to the
contrary notwithstanding.


 


                14.2         If the Leased Premises are damaged or
destroyed in whole or in part, Tenant shall proceed with due diligence to have
plans and specifications prepared and obtain approval by Landlord, which
approval shall not be unreasonably withheld, to commence rebuilding,
reconstruction or restoration as promptly as possible after the occurrence of
the event causing the damage or destruction, and thereafter to diligently
complete the work.  If Tenant does not
proceed with due diligence and does not diligently finish the work, Landlord or
any beneficiary under any deed of trust covering the Leased Premises, if
permitted by the deed of trust, may, but shall not be obligated to, enter the
Leased Premises and do whatever may be necessary for the rebuilding,
reconstruction, repair or restoration of any building or improvements damaged
or destroyed.


 


ARTICLE 15 — CONDEMNATION


 


If any part of the Leased
Premises is condemned or otherwise taken under the power of eminent domain or
conveyed in lieu of condemnation, and the condemnation or taking materially and
adversely affects Tenant’s occupancy of the Leased Premises, Tenant shall have
the right to terminate this Lease.  If
any part of the Leased Premises is condemned or taken and that materially and
adversely affects the normal operation of the Leased Premises, Landlord, at
Landlord’s option, may terminate this Lease. 
In either event, any award that may be paid in connection with any
condemnation or taking shall be shared by Landlord and Tenant pursuant to applicable
law.  If a part of the Leased Premises is
condemned or taken, and neither party elects to terminate this Lease, but the
Leased Premises have been damaged as a consequence, Landlord shall not be
required to repair or restore any damage to the Leased Premises, provided that
the Rent for the remainder of the term of this Lease shall be proportionately
reduced, based on the degree of interference with Tenant’s use of the Leased
Premises.  If the Leased Premises is
temporarily condemned or taken, this Lease shall be unaffected, and Tenant
shall continue to pay all rent payable under this Lease; provided, however,
that in such case, Tenant shall be entitled to receive that portion of any
award that represents compensation for the use or occupancy of the Leased
Premises.


 


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ARTICLE 16 — UTILITIES


 


                Tenant shall
promptly pay, as they become due, all charges for water, gas, electricity,
telephone, sewer service, waste pick-up, and any other utilities or services
furnished directly to or used by Tenant on or about the Leased Premises,
including but not limited to any connection or hook-up fees and any penalties
for discontinued or interrupted service.


 


ARTICLE 17 — ASSIGNMENT AND SUBLETTING; RIGHT OF FIRST OFFER


 


                17.1         Tenant may not assign this Lease or
sublet all or any part of the Leased Premises without Landlord’s prior written
consent which shall not be unreasonably withheld.  Landlord’s decision to approve or disapprove
any requested assignment shall be made by providing Tenant with written notice
no later than fourteen (14) calendar days after receipt of written notice from
Tenant requesting approval.  Landlord’s
failure to provide written notice of disapproval within such fourteen (14) day
period shall be deemed an approval.   An
assignment by Tenant shall release Tenant from all further duties or
liabilities to Landlord under the Lease and Landlord shall execute and deliver
to Tenant an instrument releasing Tenant from all further duties or liabilities
under this Lease.  Landlord shall also
refund Tenant’s Security Deposit.


 


ARTICLE 18 — INDEMNITY


 


                18.1         Tenant agrees to indemnify, defend, and
hold Landlord, and Landlord’s employees, agents and contractors harmless from
all liability, penalties, losses, damages, costs, expenses, causes of action,
claims, or judgments arising by reason of any death, bodily injury, personal
injury, or property damage resulting from any cause occurring in or about or
resulting from an occurrence in or about the Leased Premises during the Term,
excepting therefrom any occurrence resulting from the negligence or willful
misconduct of Landlord, Landlord’s agents or employees.


 


                18.2         Landlord agrees to indemnify, defend,
and hold Tenant and Tenant’s employees, agents and contractors harmless from
all liability, penalties, losses, damages, costs, expenses, causes of action,
claims or judgments arising by reason of any death, bodily injury, personal
injury, or property damage resulting from the negligence or willful misconduct
of Landlord or Landlord’s agents, employees, and contractors, wherever it occurs.  The provisions of this Section 18.2
shall survive the expiration or sooner termination of this Lease.


 


ARTICLE 19 — DEFAULT


 


                Each of the following shall
constitute an event of default under this Lease (each, an “Event of Default”):


 


                19.1         Failure to pay rent or any amounts due
under this Lease within five (5) days following receipt by Tenant of
written notice from Landlord that such amount is due;


 


                19.2         Tenant’s failure to perform any of the
covenants, conditions, or provisions of this Lease to be performed by Tenant
where such failure continues for a period of thirty (30) days.  However, if the nature of Tenant’s failure
reasonably requires more than thirty (30) days to cure, 


 


12

















 


Tenant shall not be deemed to be in default if
Tenant commences to cure within the thirty (30) day period and thereafter
diligently continues the cure to completion.


 


                19.3         Any of the following:


 


                                19.3.1      The making by Tenant of any general
arrangements or assignments for the benefit of creditors;


 


                                19.3.2      Tenant’s becoming a “debtor” as defined in
the federal Bankruptcy Law, unless, in the case of a petition filed against
Tenant, it is dismissed within sixty (60) days after filing;


 


                                19.3.3      The appointment of a trustee or receiver
to take possession of substantially all of Tenant’s assets at the Leased
Premises or of Tenant’s interest in this Lease, where possession is not
restored to Tenant within thirty (30) days of this appointment; or


 


                                19.3.4      The attachment, execution, or other
judicial seizure of substantially all of Tenant’s assets located at the Leased
Premises or of Tenant’s interest in this Lease, where this seizure is not
discharged within thirty (30) days after the seizure.


 


                19.4         The vacation or abandonment of the
Leased Premises by Tenant.


 


ARTICLE 20 — REMEDIES


 


                Subject to the provisions of Section 19.2,
upon the occurrence of an Event of Default, Landlord, in addition to any other
rights or remedies available to Landlord at law or in equity, shall have the
right to:


 


                20.1         Terminate this Lease and all rights of
Tenant by giving Tenant written notice that this Lease is terminated, in which
case Landlord may recover from Tenant the sum of:


 


                                20.1.1      The worth at the time of award of any
unpaid rent that had been earned at the time of termination;


 


                                20.1.2      The worth at the time of award of the
amount by which (A) the unpaid rent that would have been earned after
termination until the time of award exceeds (B) the amount of rental loss,
if any, as Tenant affirmatively proves could have been reasonably avoided;


 


                                20.1.3      The worth at the time of award of the
amount by which (A) the unpaid rent for the balance of the term after the
time of award exceeds (B) the amount of rental loss, if any, as Tenant
affirmatively proves could be reasonably avoided;


 


                                20.1.4      Any other amount necessary to compensate
Landlord for all the detriment proximately caused by Tenant’s failure to
perform Tenant’s obligations or that, in the ordinary course of things, would
be likely to result; and


 


                                20.1.5      All other amounts in addition to or in
lieu of those previously stated as may be permitted from time to time by
California law.


 


13

















 


                As used in clauses 20.1.1,
20.1.2 and 20.1.3 just above, the “worth at the time of award” is computed by
allowing interest at the rate of six percent (6%) per annum.  As used in this section the term rent shall
include Base Rent and any other payments required by Tenant.


 


                20.2         Continue this Lease, and from time to
time, without terminating this Lease, either (i) recover all rent and
other amounts payable as they become due or (ii) relet the Leased Premises
or any part of the Leased Premises on behalf of Tenant for any term, at any
rent, and pursuant to any other provisions as Landlord deems advisable, all
with the right, at Tenant’s cost, to make alterations and repairs to the Leased
Premises.


 


                20.3         Upon the occurrence of an Event of
Default, Landlord shall also have the right, with or without terminating this
Lease, to re-enter the Leased Premises and remove all persons and property from
the Leased Premises.  Landlord may cause
property so removed from the Leased Premises to be stored in a public warehouse
or elsewhere at the expense and for the account of Tenant.


 


                20.4         None of the following remedial actions,
singly or in combination, shall be construed as an election by Landlord to
terminate this Lease unless Landlord has in fact given Tenant written notice
that this Lease is terminated or unless a court of competent jurisdiction
decrees termination of this Lease: any act by Landlord to maintain or preserve
the Leased Premises; any efforts by Landlord to relet the Leased Premises; any
re-entry, repossession, or reletting of the Leased Premises; or any re-entry,
repossession, or reletting of the Leased Premises by Landlord pursuant to this Article 20.  If Landlord takes any of the previous
remedial actions without terminating this Lease, Landlord may nevertheless at
any time after taking any remedial action terminate this Lease by written
notice to Tenant.


 


                20.5         If Landlord relets the Leased Premises,
Landlord shall apply the revenue as follows: first, to the payment of any
indebtedness, other than rent due from Tenant to Landlord; second, to the
payment of any cost of reletting, including without limitation finder’s fees
and leasing commissions; third, to the payment of the cost of any maintenance
and repairs to the Leased Premises; and fourth, to the payment of rent and
other amounts due and unpaid.  Landlord
shall hold and apply the residue, if any, to payment of future amounts payable
as they become due.  Should revenue from
reletting during any month, after application pursuant to the foregoing
provisions, be less than the sum of (i) Landlord’s expenditures for the
Leased Premises during that month and (ii) the amounts due from Tenant
during that month, Tenant shall pay the deficiency to Landlord immediately upon
demand.


 


                20.6         After the occurrence of an Event of
Default, Landlord, in addition to or in lieu of exercising other remedies, may,
but without any obligation to do so, cure the breach underlying the Event of
Default for the account and at the expense of Tenant; provided that Landlord by
prior notice shall first allow Tenant a reasonable opportunity to cure, except
in cases of emergency, where Landlord may proceed without prior notice to
Tenant.  Tenant shall, upon demand,
immediately reimburse Landlord for all costs, including costs of settlements,
defense, court costs, and attorney fees, that Landlord may incur in the course
of any cure.


 


14

















 


                20.7         Except insofar as this is inconsistent
with or contrary to any provisions of this Lease, no right or remedy conferred
upon or reserved to either party is intended to be exclusive of any other right
or remedy given now or later or existing at law or in equity or by
statute.  Except to the extent that
either party may have otherwise agreed in writing, no waiver by that party of
any violation or nonperformance by the other party of any obligations,
agreements, or covenants shall be deemed to be a waiver of any subsequent
violation or nonperformance of the same or any other covenant, agreement, or
obligation, nor shall any forbearance by either party to exercise a remedy for
any violation or nonperformance by the other party be deemed a waiver by that
party of rights or remedies with respect to that violation or nonperformance.


 


ARTICLE 21 — DEFAULT BY LANDLORD


 


                Landlord shall not be in default unless Landlord
fails to perform obligations required of Landlord within thirty (30) days after
written notice by Tenant to Landlord specifying in what respect Landlord has
failed to perform the obligation. 
However, if Landlord’s obligation requires more than thirty (30) days
for performance, Landlord shall not be in default if Landlord commences to
perform within the thirty (30) day period and afterwards diligently completes
it.  Subject to the initial notice above
and/or as otherwise agreed by the parties in the case of an emergency, in the
event of a Landlord default hereunder, Tenant may cure the same at the expense
of Landlord (i) immediately in the case (A) of emergency, or (B) where
such default will result in a material violation of Law by Tenant, if not cured
immediately and (ii) in any other case if such default continues for
thirty (30) days following the receipt by Landlord of written notice of such
default from Tenant without Landlord commencing to cure said default.  All costs incurred in good faith by Tenant in
curing such default shall be reimbursable by Landlord within thirty (30) days
of demand, and if not so reimbursed by Landlord within such period, may be
offset against any Base Rent or other charges thereafter coming due hereunder.


 


ARTICLE 22 — LATE CHARGES


 


                Tenant acknowledges that late
payment of Rent due under this Lease will cause Landlord to incur costs not
contemplated by this Lease, the exact amount of which will be extremely
difficult to ascertain.  Therefore, if
any sum due from Tenant is not received by Landlord within ten (10) calendar
days after its due date, then without any requirement for notice to Tenant,
Tenant shall pay to Landlord a late charge equal to five percent (5%) of the
overdue sum.  The parties agree that the
late charge represents a fair and reasonable estimate of the costs Landlord
will incur because of late payment by Tenant.


 


ARTICLE 23 — INTEREST ON PAST DUE OBLIGATIONS


 


                Any amount that is due to
Landlord and not paid when due, where Tenant’s failure to pay continues for ten
(10) calendar days thereafter, shall bear interest from the date due at
the lesser of ten percent (10%) per annum or the maximum rate then allowable by
law; provided, however, that interest shall not be payable on late charges
incurred by Tenant.


 


15

















 


ARTICLE
24 — SUBORDINATION


 


                24.1         Landlord agrees that it shall provide
Tenant a subordination and non-disturbance agreement to Tenant from any lender
or other security holder with an interest in the Leased Premises existing on or
after the Commencement Date in commercially reasonable form which shall provide
at a minimum that so long as Tenant is not in default of this Lease such lender
or other security holder shall recognize all of Tenant’s rights under this Lease.  Tenant shall execute any reasonable
subordination agreement requested by any lender of Landlord provided that such
subordination agreement further provides for the non-disturbance of Tenant as
set forth in Section 24.2.


 


                24.2         If any mortgage or deed of trust to
which this Lease is subordinate is foreclosed or a deed in lieu of foreclosure
is given to the mortgagee or beneficiary, or if any ground lease to which this
Lease is subordinate is terminated, this Lease shall not be barred, terminated,
cut off, or foreclosed.  Further, the
rights and possession of Tenant under this Lease shall not be disturbed, so
long as (i) no Event of Default has occurred under this Lease, and (ii) Tenant
attorns to the purchaser or grantee, or, if requested, enters into a new lease
for the balance of the Term of this Lease on the same terms and provisions in
this Lease.  Tenant’s covenant under Section 24.1
to subordinate this Lease to any mortgage, deed of trust, or other
hypothecation is conditioned on each senior instrument containing the
commitments specified in this Section 24.2.


 


ARTICLE 25 — ESTOPPEL CERTIFICATES


 


                25.1         At all times during the term of this
Lease, each party agrees, following any request by the other party, promptly to
execute and deliver to the requesting party within ten (10) days following
delivery of a request an estoppel certificate:


 


                                25.1.1      Certifying that this Lease is unmodified
and in full force, or if modified stating the nature of the modification and
certifying that this Lease, as so modified, is in full force,


 


                                25.1.2      Stating the date to which the rent and
other charges are paid in advance, if any,


 


                                25.1.3      Acknowledging that there are not, to the
certifying party’s knowledge, any uncured defaults on the part of any party, or
if there are uncured defaults, specifying the nature of the defaults, and


 


                                25.1.4      Certifying any other information about the
Lease as may be reasonably required by the requesting party.


 


ARTICLE 26 — TRANSFER BY LANDLORD


 


                Landlord agrees that Landlord
shall not sell the Leased Premises during the term of this Lease, except
subject to the Lease.


 


16

















 


ARTICLE 27 — SURRENDER OF THE LEASED PREMISES


 


                Upon the
expiration or sooner termination of this Lease, Tenant shall vacate the Leased
Premises in the same condition as existed at the Commencement Date except
for:  (i) reasonable wear and tear;
and (ii) damage caused by any peril or condemnation; and except as
otherwise provided for in the Purchase Agreement.


 


ARTICLE 28 — HOLDING OVER


 


                At the end of the Term, or any
extension, if Tenant holds over for any reason, it is hereby agreed that in the
absence of a written agreement to the contrary that tenancy shall be from
month-to-month only and not a renewal of this Lease, nor an extension for any
further term.  The month-to-month tenancy
shall be subject to every other term, covenant, and condition contained in this
Lease that is consistent with and not contrary to a month-to-month tenancy,
provided however, the rent during any hold over period shall be 150% of the
rent immediately prior to the expiration of the Term.


 


ARTICLE 29 — ENTRY


 


                29.1         Landlord and its agents may enter the
Leased Premises upon twenty-four (24) hours prior notice to Tenant and at
reasonable times for the purpose of: (i) inspecting the Leased Premises; (ii) posting
notices of non-responsibility; (iii) supplying any service to be provided
by Landlord to Tenant; (iv) showing the Leased Premises to prospective
purchasers, mortgagees, or tenants; (v) making necessary alterations,
additions, or repairs; and (vi) responding to an emergency; provided,
however, that Landlord shall use all reasonable efforts not to disturb
unnecessarily Tenant’s use and occupancy of the Leased Premises by such entry.


 


                29.2         Landlord shall have the right to use
any means Landlord deems necessary and proper to enter the Leased Premises in
an emergency.  Any entry into the Leased
Premises obtained by Landlord in accordance with this section shall not be a
forcible or unlawful entry into, or a detainer of, the Leased Premises, or an
eviction, actual or constructive, of Tenant from the Leased Premises.


 


ARTICLE 30 — SIGNS


 


                Tenant may place and maintain
upon any building or elsewhere on the Leased Premises any signage that Tenant
deems appropriate for the conduct of its business, without first obtaining
Landlord’s written consent.  Tenant shall
maintain any signage placed upon the Leased Premises by Tenant in good
appearance and repair at all times during this Lease.


 


ARTICLE 31 — SECURITY MEASURES


 


                Tenant acknowledges that
Landlord shall have no obligation to provide any guard service or other
security measures to the Leased Premises and Tenant assumes all responsibility
for the protection of Tenant, Tenant’s agents, invitees, and customers, and the
property of Tenant and of Tenant’s agents, invitees, and customers from acts of
third parties.


 


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ARTICLE 32 — MISCELLANEOUS


 


                32.1         Severability.  If any provision of this Lease is held by a court
of competent jurisdiction to be either invalid or unenforceable, the remaining
provisions of this Lease shall remain in effect, unimpaired by the holding.


 


                32.2         Time of Essence.  Time is of the essence under this
Lease.


 


                32.3         Additional Rent.  All monetary obligations of Tenant
to Landlord under the Lease, including but not limited to the Base Rent, shall
be deemed rent.


 


                32.4         Entire Agreement.  This Lease constitutes the entire
agreement between Landlord and Tenant, and there are no agreements or representations
respecting the use of the Leased Premises between the parties except as
expressed in this Lease.  There are no
oral agreements between Landlord and Tenant affecting this Lease and this Lease
supersedes and cancels all previous negotiations, arrangements, brochures,
agreements, and understandings, if any, between Landlord and Tenant with
respect to the subject matter of this Lease. 
This instrument shall not be legally binding until both Landlord and Tenant
executes it.  No subsequent change or
addition to this Lease shall be binding unless in writing and signed by
Landlord and Tenant.


 


                32.5         Notices.  Except as otherwise expressly provided by
law, all notices or other communications required or permitted by this Lease or
by law to be served on or given to either party to this Lease by the other
party shall be in writing and shall be deemed given when personally delivered
to the party to whom they are directed, or in lieu of the personal service,
upon deposit in the United States Mail, certified or registered, return receipt
requested, postage prepaid, addressed to:


 




	
  Tenant:

  	
  Aviza
  Technology, Inc.

  
	
   

  	
  440 Kings Village Road

  
	
   

  	
  Scotts Valley, CA 95066

  
	
   

  	
  Telephone: (831) 439-6360

  
	
   

  	
  Fax: (831) 439-6320

  
	
   

  	
  Attn: Patrick C. O’Connor,
  Chief Financial Officer

  
	
   

  	
   

  
	
  With a copy to:

  	
  Wilson Sonsini
  Goodrich & Rosati

  
	
   

  	
  650 Page Mill Road

  
	
   

  	
  Palo Alto, CA 94304

  
	
   

  	
  Telephone: (650) 354-4250

  
	
   

  	
  Fax: (650) 493-6811

  
	
   

  	
  Attn: Marc
  Gottschalk, Esq.

  
	
   

  
	
  Landlord:

  	
  FPA Kings Village
  Associates, LLC

  
	
   

  	
  4665 MacArthur Court,
  Suite 200

  
	
   

  	
  Newport Beach, CA 92660

  
	
   

  	
  Telephone: (949)399-2500
  ext. 246

  






 


 


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  Fax: (949)399-2535

  
	
   

  	
  Attn: Joan Camera

  
	
   

  	
   

  
	
  With a copy to:

  	
  Nancy Mauriello, Esq.

  
	
   

  	
  4665 MacArthur Court, Suite 210

  
	
   

  	
  Newport Beach, CA 92660

  
	
   

  	
  Telephone: (949)399-2525

  
	
   

  	
  Fax: (949)399-2528

  






 


 


                Either party, Tenant or Landlord
may change the address for the purpose of this section by giving written notice
of the change to the other party in the manner provided in this section.


 


                32.6         Waivers.  Neither waiver by Landlord nor any provisions
in this Lease shall be deemed a waiver of any other provision of this Lease, of
any subsequent breach of this Lease by Tenant, or of any other provision.  Landlord’s consent to or approval of any act
by Tenant shall not waive the necessity for Landlord’s consent to or approval
of any subsequent act by Tenant. 
Landlord’s acceptance of rent shall not be a waiver of any preceding
breach of Tenant, other than Tenant’s failure to pay the rent that Landlord accepted,
regardless of Landlord’s knowledge of the preceding breach at the time of
acceptance of the rent.


 


                32.7         Memorandum.  Landlord shall execute and deliver to Tenant
for recording a memorandum of this Lease in the form of Exhibit “B.”


 


                32.8         Cumulative Remedies.  No remedy of election under this Lease shall
be deemed exclusive but shall, wherever possible, be cumulative with all other
remedies at law or in equity.


 


                32.9         Covenants and Conditions.  Each term of this Lease performable by Tenant
shall be deemed both a covenant and a condition.


 


                32.10       Binding Effect.  This Lease shall be binding on and inure to
the benefit of the parties and their successors and assigns.


 


                32.11       Broker’s Fee.  The parties warrant to each other that each
has not dealt with any real estate agents or broker.  Each party agrees to indemnify, defend, and
hold the other harmless from all loss, claim, cost, and expense incurred as a
result of the breach of this warranty.


 


                32.12       Authority.  If Landlord or Tenant is a
corporation, limited liability company or partnership, each individual
executing this Lease on behalf of such party represents and warrants that the
individual is duly authorized to execute and deliver this Lease on behalf of
the corporation in accordance with the bylaws of the corporation, the operating
agreement of the limited liability company or on behalf of the partnership in
accordance with the partnership agreement of the partnership, and that this
Lease is binding upon the corporation, limited liability company or
partnership, as applicable, in accordance with its terms.  Each of the persons executing this Lease on
behalf of a corporation or limited liability company covenants and warrants
that the party for whom the person is executing this Lease is a duly authorized
and existing entity, that it is qualified to do business in California, and
that the entity has full right and authority to enter into this Lease.


 


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                32.13       Governing Law.  California law shall govern this Lease, and
any litigation concerning this Lease between the parties shall be venued in the
Superior Court of Santa Clara County.


 


                32.14       Counterparts.  This
Lease may be executed in one or more counterparts, each of which shall be
deemed an original, but all of which together shall constitute one and the same
fully executed instrument when each party has executed and delivered a
counterpart to the other party.  Delivery
of an executed counterpart of this Agreement by facsimile or any other reliable
means shall be deemed to be as effective for all purposes as delivery of the
manually executed counterpart.


 


The parties have executed
this Lease as of the date first set forth above.


 


	
  LANDLORD:

  	
  TENANT:

  
	
   

  
	
  FPA Kings Village
  Associates, LLC,

  	
  AVIZA Technology, Inc.,

  
	
  a Delaware limited
  liability company

  	
  a Delaware corporation

  
	
  By its Manager:

  
	
  GF King Village, LLC,

  
	
  a Delaware limited
  liability company

  	
  By:

  	
   

  
	
   

  
	
   

  	
  Name: Patrick C. O’Connor

  
	
   

  
	
  By:

  	
   

  	
   

  	
  Title: Chief Financial
  Officer

  
	
   

  	
  Michael B. Earl, Manager

  
					



 


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