Document:

EXHIBIT 10.2

July 6,
2007

	
  Dennis M. Lindahl

  	
   

  	
  BY E-MAIL

  
	
  180 East Fifth Street, Suite 1300

  	
   

  	
   

  
	
  Saint Paul, Minnesota 55101

  	
   

  	
   

  

 

Re:                               Second Amendment to Employment Agreement

Dear
Dennis:

This letter sets forth our agreement to modify the terms of your
current employment agreement (the “Employment Agreement”), entered into March
1, 2006 and amended January 24, 2007, between yourself (“Executive”) and Gander
Mountain Company (the “Company”).

1.                                       Section 9(b) of the Employment Agreement is hereby
amended by deleting the following text:

Notwithstanding anything to
the contrary contained in Section 9(a) of this Agreement above, if (x)
Executive voluntarily resigns his employment with the Company effective on or
before July 23, 2007, and (y) as of the effective date of such resignation by
Executive no circumstances exist that would constitute Cause (as defined
below), then the Company shall, subject to Sections 9(j) and 9(k) of this
Agreement and in addition to any base salary earned through the Termination
Date and any Annual Incentive Bonus earned but unpaid for the completed fiscal
year preceding the fiscal year in which the Termination Date occurs, pay to
Executive severance pay in such amounts set forth in Sections 9(b)(i) and
9(b)(ii) above.

and
replacing it with the following text:

Notwithstanding anything to the contrary contained
in Section 9(a) of this Agreement above, if (x) Executive voluntarily resigns
his employment with the Company effective on or before September 14, 2007, and
(y) as of the effective date of such resignation by Executive no circumstances
exist that would constitute Cause (as defined below), then the Company shall,
subject to Sections 9(j) and 9(k) of this Agreement and in addition to any base
salary earned through the Termination Date and any Annual Incentive Bonus
earned but unpaid for the completed fiscal year preceding the fiscal year in
which the Termination Date occurs, pay to Executive severance pay in such
amounts set forth in Sections 9(b)(i) and 9(b)(ii) above less all amounts
received for work performed between July 24, 2007 and the Termination Date.

2.                                       Section 12 of the Employment Agreement is
hereby amended by adding the following text at the end of the section:

The parties agree that
simultaneously with the execution of this letter by Executive, Executive shall
sign a release of claims in the form attached to this letter (the “Release”).  In the event that Executive does not sign the
Release or rescinds the Release as provided therein, this letter agreement
shall have no effect and the Employment Agreement will continue in accordance
with its terms without the effect of this letter.

3.                                       Other than as expressly amended by this
letter, the Employment Agreement shall continue in full force and effect as so
amended.

We thank you for your
continued contribution to the Company.

	
  

  	
  Best Regards,

  
	
   

  	
  GANDER MOUNTAIN COMPANY,

  
	
   

  	
  a Minnesota corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Mark R. Baker

  	
   

  	
   

  
	
   

  	
   

  	
  Mark R. Baker

  
	
   

  	
   

  	
  Chief Executive Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
  Agreed and acknowledged:

  	
   

  
	
   

  	
   

  
	
   

  
	
  /s/ Dennis M. Lindahl

  	
   

  
	
  Dennis M. Lindahl

  	
   

  
	
   

  	
   

  
	
  Date: July 10, 2007Exhibit 10.1

	
  PURCHASE AGREEMENT AND JOINT AND MUTUAL ESCROW INSTRUCTIONS

  
	
   

  
	
  Between

  
	
   

  
	
  AVIZA
  TECHNOLOGY, INC.

  
	
   

  
	
  And

  
	
   

  
	
  MORLEY
  BROS., LLC

  
	
   

  
	
   

  
	
  For
  Property located in

  
	
   

  
	
  Scotts
  Valley, California

  
	
   

  
	
   

  
	
  July 9,
  2007

  

 

TABLE OF CONTENTS

	
  

  	
   

  	
  Page

  
	
  1.

  	
  Property Included in Sale

  	
  1

  
	
  2.

  	
  Purchase Price and Closing Date

  	
  2

  
	
  3.

  	
  Title to the Property

  	
  3

  
	
  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

  	
  14

  
	
  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

  	
  16

  
	
  14.

  	
  Release of Seller

  	
  17

  
	
  15.

  	
  Seller Temporary Lease

  	
  19

  
	
  16.

  	
  Possession

  	
  20

  
	
  17.

  	
  Encumbrances/Transfers/Prohibited Actions

  	
  20

  
	
  18.

  	
  Development Approvals

  	
  20

  
	
  19.

  	
  Cooperation with Buyer

  	
  21

  
	
  20.

  	
  Miscellaneous

  	
  21

  

 

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

  	
  -

  	
  List Of Seller Incurred Development Expenses

  

 

PURCHASE AGREEMENT AND JOINT AND MUTUAL ESCROW
INSTRUCTIONS

Scotts Valley, California

THIS AGREEMENT AND JOINT AND MUTUAL ESCROW INSTRUCTIONS is dated as
of July 9, 2007 (the “Effective Date”), by and between AVIZA TECHNOLOGY,
INC., a Delaware corporation (“Seller”), and MORLEY BROS., 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 equipment described on Exhibit
A-1 from the Real Property prior to the Seller Relocation Date, as defined
in Section 16 below (Buyer acknowledging that Buyer’s plan following the
closing hereunder is to demolish the existing improvements and redevelop the
Real Property for residential purposes if Buyer receives all residential
entitlements required to develop such residential project) 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 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.

A.            The purchase price of the Property shall
be Sixteen Million Dollars ($16,000,000) (the “Purchase Price”).

B.            The Purchase Price shall be paid as
follows:

i.              No later than five (5) 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 Company, 1737 North First
Street, San Jose, California 95112, Attn: Liz Zankich (“Escrow Agent”), a
deposit in the amount of Three Hundred Thousand Dollars ($300,000) (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.             Unless this agreement is sooner terminated as provided
herein, upon Buyer’s delivery of the Inspection Approval Notice (as hereinafter
defined), Buyer will, deposit an additional Four Hundred Fifty Thousand Dollars
($450,000) into escrow with the Escrow Agent (which deposit, plus any interest
accrued thereon under this Agreement from time to time shall be referred to as
the “Second Deposit” and, together with the Initial Deposit, shall be referred
to as the “Deposit”).  Upon delivery by
Buyer to Escrow Agent, the Second Deposit, subject to Section 5 and
Section 6.B. below and any other provisions hereunder expressly providing
for the return of the Deposit to Buyer, shall become non-refundable to Buyer.

iii.            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.

C.            Closing Date. 
For the purposes of this Agreement, the “Closing Date” shall be (i) the
date that is eight (8) months following the Effective Date, or (ii) such
date as is

otherwise mutually agreed to by Buyer and Seller in writing.  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”).  Evidence of delivery of marketable and
insurable fee simple title shall be the issuance by First American Title
Insurance Company (“Title Company”) to Buyer of an ALTA Owner’s Policy of Title
Insurance (Form B, rev. 10/17/70) in the amount of the Purchase Price (or
a greater amount as reasonably requested by Buyer with such additional coverage
at Buyer’s cost), at no more than the Title Company’s standard rates, 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 Temporary Lease in Section 16 below, Seller shall deliver the
Property to Buyer at Closing free of all tenants in possession, if any, and
Seller shall have removed or caused 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 so that Buyer can proceed with its intended development of the
Property after Closing. Seller, at its sole cost, upon the later of Closing or,
if applicable, the Seller Relocation Date (as defined in Section 15 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).

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 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 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.  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, including compliance with, or Buyer’s ability
to comply with, all applicable laws and regulations which relate to the use and
occupancy of the Property or Buyer’s intended residential development of the
property, permit, zoning, land use, subdivision, and any proposed impositions,
assessments or governmental regulations affecting or potentially affecting the
Property.  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
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 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.

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”).

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, and, as of the day of Closing, there shall be no litigation or
administrative agency or other governmental proceeding of any kind whatsoever,
pending or threatened, which after Closing would, in Buyer’s sole discretion,
materially adversely affect the value of the Property or the ability of Buyer
to entitle and develop the Property for residential use as planned by Buyer
(except to the extent such proceeding is caused by Buyer), and no proceedings
shall be pending or threatened which could or would cause the redesignation or
other modification of the zoning classification of, or of any building or
environmental code requirements applicable to, any of the Property or any
property adjacent to the Property that would materially adversely affect the
ability of Buyer to entitle and develop the Property for residential use as
planned by Buyer.

D.            On of before the Closing Date, Seller
shall have removed all Fixtures and Equipment (as defined in Section 3.C) from
the Property if Seller does not effect the Seller Temporary Lease (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 Temporary Lease (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/ P.O.

  	
   

  	
  Buyer 

  	
   /s/ S.M.

  	
   

  

 

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 Five Hundred Thousand Dollars ($500,000) in the
aggregate, and neither party shall have any 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.            if effected by Seller pursuant to Section 16 below, a
duly executed Seller Temporary 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.

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 Temporary Lease;

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

v.             the balance of the Purchase Price owing; and

vi.            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 Closing Date, and will be responsible for the cost of all utilities used
prior to the Closing 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
at Closing if meter readings cannot occur on the Closing Date.  Seller shall be entitled to any utility
deposit refunds.  In the event Seller
effects the Seller Temporary Lease, the term “Closing Date” in this Section
8.E.i shall be replaced with “Seller Relocation Date.”

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 Temporary Lease, if effected by
Seller. 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
needed, for the Property.  Seller and
Buyer shall equally divide all costs for the Title Policy excluding the
Endorsements with Buyer to pay for all Endorsements other than any curative
endorsements effected by Seller pursuant to the terms of Section 4.E.iv.
above.  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 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.  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, then they shall be calculated as soon after the Closing 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 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 (i) as
currently operated, or (ii) as contemplated to be developed by Buyer for
residential purposes (excluding any of the foregoing undertaken by or at the
request of Buyer), 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.

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
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.            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.  Seller
shall not, after the Effective Date, enter into any new lease (other than the
Seller Temporary Lease, if applicable) or contract, or any amendment of an
existing lease or contract, without in each case obtaining Buyer’s prior
written consent thereto and providing Buyer with a copy of any such executed
document, unless such lease, contract or amendment will not survive the
Closing.  Buyer’s consent to such lease
or contract may be withheld at Buyer’s sole and absolute discretion.

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 effecting the Seller Temporary 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 Pat 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 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 (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”), or (ii) Seller’s Closure (as defined
below).  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 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.  The provisions of this Section 12 shall
survive the Close of Escrow.  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 also covenants and
agrees that it shall take all actions required by governmental agencies 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, the decontamination
and/or removal from the Property of its operating equipment (the “Closure”).  The Closure shall be completed, or caused to
be completed, by Seller on or before the Closing, provided that in the event
the Seller effects the Seller Temporary Lease, the Closure shall be completed
by the Seller Relocation Date.

Not
later than sixty (60) days following the Effective Date of this Agreement,
Seller shall cause its environmental consultant to furnish to Seller and Buyer
for Buyer’s approval (which shall not be unreasonably withheld) an estimate of
the costs to be incurred to complete the Closure and to clean up and remediate
the Seller Caused Contamination to a standard that will allow residential
development of the Property (the “Consultant’s Estimate”), recognizing that
Seller has no responsibility as part of the Closure to address the Pre-Existing
Contamination (which could have an impact on residential development) (“Seller’s
Closure Standard”).  In the event Seller effects the Seller
Temporary Lease, an amount equal to one
hundred twenty-five percent (125%) of the Consultant’s Estimate approved by
Buyer during the Due Diligence Period shall be held back in escrow (the “Holdback
Funds”) from the proceeds of the Purchase Price (or other funds of Seller)
pursuant to written escrow instructions to be executed by Seller and Buyer and
delivered to Escrow Agent at Closing. Subject to the terms below, Seller shall
be entitled to draw upon such Holdback Funds following the Closing for the
purpose of completing the Closure and clean up and

remediation of the Seller Caused Contamination to
Seller’s Closure Standard.  At least five
(5) business days prior to each proposed draw on the Holdback Funds, Seller
shall submit to Escrow Agent and Buyer, the applicable draw request and
reasonable back up documentation evidencing the costs reasonably incurred by
Seller for which the draw request applies. 
Escrow Holder shall pay such draw request unless Buyer, in good faith,
submits an objection to payment (i) reasonably detailing why any or all of such
request does not apply to the Closure or any Seller Caused Contamination, or
(ii) contending that such costs for which the draw request applies were not
reasonably incurred by Seller or are in excess of the costs reasonably incurred
by Seller for which the draw request applies. 
In the event of such objection, Escrow Agent shall pay to Seller any
undisputed portion of the payment request and the disputed portion shall be
resolved in accordance with the provisions of Section 20.T. below.  In no way shall the amount of the Holdback
Funds limit Seller’s obligations under this Section 12.

Seller
shall use its best efforts to complete the Closure and such clean up or
remediation of the Seller Caused Contamination, if any, by the expiration or
earlier termination of the Seller Temporary Lease; however, subject to the
terms below, if such Closure or clean up or remediation of Seller Caused
Contamination has not been completed by the expiration or earlier termination
of the Seller Temporary Lease, Seller shall continue to use its best efforts to
complete such Closure and clean up and remediation of the Seller Caused
Contamination, if any.  The remaining
balance of the Holdback Funds, if any, shall be promptly refunded to Seller
following the date the Closure and clean up and remediation of Seller Caused
Contamination, if any, is completed.  If
such Closure and/or clean up and remediation of any Seller Caused Contamination
is not completed by the expiration or earlier termination of the Seller Temporary
Lease, then, in addition to all other rights under this Section 12, Buyer shall
have the right, but not the obligation, upon not less than five (5) days prior
written notice to Seller, to reasonably complete such Closure and/or clean up
and remediation of Seller Caused Contamination and may unilaterally draw down
up any remaining the Holdback Funds, without consent or approval of Seller or
written instructions to Escrow Agent required therefore, to pay or reimburse
Buyer for the costs Buyer incurs in completing such Closure and/or clean up or
remediation of Seller Caused Contamination, if any.  If the costs incurred by Buyer to complete
the Closure and/or clean up and remediation of Seller Caused Contamination, if
any, are greater than the remaining Holdback Funds, then, Seller shall pay or
reimburse Buyer, within ten (10) days following receipt of a written invoice(s)
and reasonable back up documentation, for such excess costs reasonably incurred
by Buyer. Any such amounts owing to Buyer and not paid within such ten (10) day
period shall bear interest at a rate of prime plus 2% per annum.

The
provisions of this Section 12 shall survive the Closing.

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.

A.            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 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.

14.           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 subject to the
terms and conditions of the Seller Temporary 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 and 13 above, and (iii) Seller’s obligations
under the Seller Temporary 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”), 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 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/ S.M.

  	
   

  
	
  Buyer

  	
   

  

 

15.           Seller Temporary Lease. 
Buyer agrees and acknowledges that Seller may need up to eighteen (18)
months following the Closing to complete a relocation from the Property to a
new operating facility.  Seller agrees
that Seller and Buyer shall negotiate, during the Due Diligence Period, a lease
by Seller of the Property (the “Seller Temporary Lease”) which shall have the
following basic provisions in addition to any other terms and conditions
negotiated by Seller and Buyer in their sole discretion during the Due
Diligence Period:  (i) the term of the
Lease shall be twelve (12) months following the Closing with one (1) option for
six (6) months (“Option Term”), provided that Seller shall be permitted to
terminate the Seller Temporary Lease effective at any after the end of the
sixth (6th) month of the term on sixty (60) days
advance written notice to Buyer (the “Term” and the end of the Term, the “Seller
Relocation Date”); (ii) Seller shall be responsible for (x) all costs and
liabilities associated with the operating the Property during the Term
including payment for property taxes and assessments and all costs of any kind
or nature associated with operating, insuring, repairing and maintaining the
Improvements including, without limitation, code compliance costs arising from
Seller’s use or operation of the Property and utility costs, and (y) in
addition, during the Option Term, for Buyer’s “cost of carry” for the Property
(including, without limitation, debt service payments); (iii) Seller shall be
responsible for all customary insurance costs incurred by Buyer for its
comprehensive general liability and “all risk” or “special causes of loss”
property insurance (including, without limitation, rental loss insurance); (iv)
Buyer shall have no responsibility or liability for the business operations of
Seller on the Property or for the Improvements and shall be permitted to take
during the Term any actions Buyer desires in furtherance of Buyer’s development
plan (including the Development Approvals and any development of the
undeveloped portion of the Property) so long as Buyer does not unreasonably
interfere with Seller’s operations on the Property; (v) Seller shall deliver a
security deposit to be held by Buyer in the amount of Seller’s reasonable
estimate of three months worth of expenses (taxes and assessments, insurance,
utilities and maintenance) for the Property; provided, however, if Seller
exercises its option to extend the Term for six months as provided above, then
prior to the commencement of the Option Term, Seller shall increase the
Security Deposit by an amount equal to three (3) months of debt service
payments to be incurred by Buyer with respect to the Property; (vi) Seller
shall, at its sole cost, complete the Closure before the end of term (or
earlier termination as the case may be); (vii) Seller shall manage the Property
in the same manner in which Seller has been managing the Property during the
period of its ownership of the Property; (viii) Seller shall not do anything on
the Property which would increase the costs to demolish the Improvements; (ix)
within ten (10) days following request by Buyer, Seller shall deliver to Buyer
an estoppel certificate reasonably requested by Buyer in connection with the
sale or financing of

the Property, or applicable portion thereof, certifying such matters
related to the Property or the Seller Temporary Lease as may be reasonably
requested by a lender making a loan to Buyer or a purchaser of the Property, or
applicable portion thereof, and (x) Buyer or its agents or nominees shall have
the right to conduct environmental testing of the Property so long Buyer takes
steps, or causes its agents or nominees to take steps, to minimize any
interference with Seller’s business operations on the Property.  Buyer and Seller shall execute the Seller
Temporary Lease at Closing solely in the event that Seller has delivered
written notice no later than sixty (60) days prior to the Closing indicating
that Seller intends to effect the Seller Temporary Lease.  On or before the Approval Deadline, Seller
and Buyer shall amend this Agreement by attaching the form of the Seller
Temporary Lease as an Exhibit hereto.

16.           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.

17.           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 be withheld in Buyer’s sole discretion.

18.           Development Approvals. In the event Buyer acquires the
Property, Buyer intends to construct, or cause to be constructed, a residential
development project thereon (“Proposed Development”).  Following the expiration of the Due Diligence
Period, provided Buyer delivers its Inspection Approval Notice on or before the
expiration of the Due Diligence Period, Buyer shall have the right to pursue
the following in connection with the Proposed Development (collectively, “Development
Approvals”), the parties hereto that acknowledging that in the event Buyer does
not close the purchase of the Property that Seller will be bound by the
Development Approvals obtained by Buyer (or Seller as provided below):  (i) approval by the City of Scotts Valley of
a General Plan Amendment application prepared by Buyer which changes the
general plan designation for the Property to permit residential development on
the Property, (ii) approval by the City of Scotts Valley of an environmental impact
report (or issuance of a negative declaration, if applicable), with respect to
the residential development project contemplated to be developed by Buyer on
the Property, (iii) approval by the City of Scotts Valley of a rezoning of the
Property to allow for the development of for-sale residential units on the
Property (consistent with the General Plan Amendment referred to above), (iv)
site and architectural review approval by the City of Scotts Valley with
respect to Buyer’s contemplated development of the Property (consistent with
the General Plan Amendment), (v) approval by the City of Scotts Valley of a
Tentative Map for the Property which provides for the creation of multiple
residential lots within

the Property, and (vi) such other permits and approvals as may be
required to develop the Proposed Development. 
During the Due Diligence Period, Buyer will provide to Seller, for
Seller’s approval (which shall not be unreasonably withheld or delayed) a
tentative entitlement schedule for Buyer’s submittal of applications for
Development Approvals and the identification of a consulting team to be hired
or employed by Buyer in connection with the pursuit of the Development
Approvals. Seller acknowledges that such entitlement schedule to be furnished
by Buyer to Seller for Seller’s approval will set forth target dates for
submittals of Development Approval applications but that due to City procedural
requirements, many of which are outside of Buyer’s control, Buyer may or may
not be able meet such target dates for submittal of such Development Approval
applications. Buyer and Seller agree to meet bi-weekly to coordinate the
processing of Development Approval applications.

During the Due Diligence Period, Seller shall continue
to process for approval by the City of Scotts Valley, the applications for
Development Approvals referred to in clauses (i) though (iii) of the
immediately preceding paragraph, except that Seller shall not make any
modifications or changes to such applications or Development Approvals without
the prior written consent of Buyer (which consent shall not be unreasonably
withheld). Promptly following the expiration of the Due Diligence Period,
provided Buyer has delivered its Inspection Approval Notice to Seller, Seller
shall assign to Buyer in writing all of Seller’s Development Approval
applications and engineering and architecture applicable thereto, if any.  Neither Seller nor Buyer make any
representation or warranty that Buyer or Seller will be able to obtain the
Development Approvals or any of them.

19.           Cooperation with Buyer. 
Each party hereto agrees to reasonably cooperate with the other, at no
cost to the cooperating party, in such other party’s efforts to obtain the
Development Approvals referred to above; provided, however, Buyer shall
reimburse Seller at Closing for Seventy Five Thousand Dollars ($75,000) toward Seller’s
all third party, out-of-pocket costs and expenses paid in connection with
preparing, filing and processing the applications for the Development Approvals
referred to in clauses (i) through (iii) of the first paragraph of Section 18
above plus any other similar costs incurred by Seller approved in writing by Buyer
at Buyer’s sole discretion.  Such
reimbursed costs include, filing, permit and consulting fees including those
already incurred and identified on Exhibit F attached hereto. Such
cooperation of Seller shall include, without limitation, the prompt execution,
acknowledgment and delivery of any applications, permits, maps and other
documents pertinent thereto as may be necessary for Buyer to obtain the
Development Approvals, To the extent it is necessary for Seller to deliver
documents to Buyer as provided above, such delivery shall be made, where
possible, within seventy-two (72) hours after the request therefore. Seller
agrees that it will not take any action inconsistent with the Proposed
Development and/or efforts to obtain the Development Approvals referred to
above.

20.           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:

	
  

  	
  If to Seller:

  	
  Aviza Technology, Inc.

  
	
   

  	
   

  	
  440 Kings
  Village Road

  
	
   

  	
   

  	
  Scotts Valley,
  CA 95066-4027

  
	
   

  	
   

  	
  Attn: Patrick
  O’Connor, Chief Financial Officer

  
	
   

  	
   

  	
  Fax No.:
  650-439-6320

  
	
   

  	
   

  	
   

  
	
   

  	
  With a copy to:

  	
  Wilson Sonsini Goodrich & Rosati

  
	
   

  	
   

  	
  650 Page Mill
  Road

  
	
   

  	
   

  	
  Palo Alto, CA
  94304

  
	
   

  	
   

  	
  Attn: Marc
  Gottschalk

  
	
   

  	
   

  	
  Fax No.:
  650-493-6811

  
	
   

  	
   

  	
   

  
	
   

  	
  If to Buyer:

  	
  Morley Bros., LLC

  
	
   

  	
   

  	
  99 Almaden
  Blvd., Suite 720

  
	
   

  	
   

  	
  San Jose, CA
  95113

  
	
   

  	
   

  	
  Attn: Sean
  Morley

  
	
   

  	
   

  	
  Facsimile No.: (408) 904-7530

  
	
   

  	
   

  	
   

  
	
   

  	
  With a copy to:

  	
  Berliner Cohen

  
	
   

  	
   

  	
  10 Almaden
  Blvd., 11th Floor

  
	
   

  	
   

  	
  San Jose, CA
  95113

  
	
   

  	
   

  	
  Attn: Sam Farb

  
	
   

  	
   

  	
  Facsimile No.:
  (408) 998-5388

  
	
   

  	
   

  	
   

  
	
   

  	
  If to Escrow
  Agent:

  	
  First American Title Insurance Company

  
	
   

  	
   

  	
  1737 North First
  Street

  
	
   

  	
   

  	
  San Jose, CA
  95112

  
	
   

  	
   

  	
  Attn: Liz
  Zankich

  
	
   

  	
   

  	
  Facsimile No.:
  (408) 451-7818

  

 

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 Robert Kaufman of Intero
Realty, representing Buyer. If, and only if, escrow closes hereunder, Buyer
agrees to pay to Intero Realty a real estate sale commission pursuant to the
terms of a separate written agreement between Buyer and Intero Realty.  If any person or entity other than Robert
Kaufman of Intero Realty 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.

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. 
[Intentionally deleted]

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 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. 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/ P.O.

  	
   

  	
  BUYER’S INITIALS:

  	
  /s/ S.M.

  	
   

  

[SIGNATURES
ON FOLLOWING PAGE]

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

	
  

  	
  Buyer: MORLEY BROS., LLC, a California

  limited liability company

  	 

	
   

  	
   

  	 

	
   

  	
   

  	 

	
  [BUYER TO
  INITIAL

  SECTION 6, 14 AND 20.T]

  	
  By:

  	
  Morley & Company, LLC,

  a California limited liability company,

  a Member 

  	 

	
   

  	 

	
   

  	 

	
   

  	
  By:

  	
  /s/ Sean Morley

  	
   

  	 

	
   

  	
   

  	
  Sean Morley

  	 

	
   

  	
  Its:

  	
  Manager

  	 

	
   

  	
   

  	
   

  	 

	
   

  	
  Seller: AVIZA TECHNOLOGY, INC.

  a Delaware corporation

  	 

	
   

  	
   

  	 

	
   

  	
   

  	 

	
  [SELLER TO
  INITIAL

  SECTION 6 AND 20.T]

  	
  By:

  	
  /s/ Patrick C.
  O’Connor

  	
   

  	 

	
  Its:

  	
  Executive VP and
  CFO

  	
   

  	 

	
   

  	
  Dated:

  	
  7/9/07

  	
   

  
									

Instructions contained herein accepted this 9 day of July,
2007

ESCROW AGENT:

FIRST AMERICAN TITLE INSURANCE COMPANY

	
  By:

  	
  /s/ Liz Zankich

  	
   

  
	
  Name:

  	
  Liz Zankich

  
	
  Its:

  	
  Escrow Agent

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00126-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00126-of-00352.parquet"}]]