Item 1.01 Entry into a Material Definitive
Agreement
On February 26, 2020, Rubicon Technology,
Inc. (“Rubicon” or “Seller”) entered into a Real Estate Sale Contract (the “Agreement) with the Batavia
Park District, an Illinois municipal corporation (“Purchaser”). Pursuant to the Agreement, Rubicon agrees to sell,
and Purchaser agrees to purchase from Seller, Rubicon’s interest in that parcel of real property commonly known as Fox Valley
Business Park, Lot 101, Batavia, Illinois 60510, (the “Property”) consisting of permanent index number 12-27-428-016.
The closing of the sale of the Property
is subject to certain conditions precedent that have a very high degree of uncertainty. Rubicon believes that it is more likely
than not that the sale of the Property pursuant to the Agreement will be not consummated.
This transaction is subject to a vote by
the residents of Batavia on a referendum to approve the borrowing of money to purchase the land and construct a sports facility
(the “Vote”), the successful borrowing of funds (“Bond Financing”), various potential zoning changes and
other significant conditions. There is currently no anticipated closing date. The Company has agreed to sell the Property for Nine
Hundred Twenty-One Thousand Four Hundred One Dollars ($921,401) and it expects its net proceeds, if the sale is consummated, after
the payment of fees, real estate taxes, brokerage and legal fees, transfer and withholding taxes and other expenses to be approximately
Eight Hundred Fifty Thousand ($850,000).
Deposits
The Purchaser has made a Sixty Thousand
Dollar ($60,000) initial earnest money deposit with the escrow agent (“Initial Earnest Money Deposit”). The Initial
Earnest Money Deposit shall be non-refundable; however, it shall be credited towards the Purchase Price at Closing or forfeited
to the Seller as provided in the Agreement.
Within five (5) business days after the
Vote, if the residents approve the borrowing, Purchaser shall deposit with the escrow agent an additional Thirty Thousand Dollars
($30,000) (“Additional Earnest Money Deposit #1”). The Additional Earnest Money Deposit #1 shall be non-refundable
and shall be credited towards the Purchase Price at Closing or forfeited to the Seller as provided in the Agreement.
In the event Purchaser’s Bond Financing
is not completed by May 31, 2020, and Purchaser opts to continue with the purchase, Purchaser shall pay directly to Seller a fee
of Thirty Thousand Dollars ($30,000) (“Contract Extension Fee #1”). The Contract Extension Fee #1 shall be non-refundable
and shall not be credited towards the Purchase Price.
If Purchaser, is unable or unwilling to
complete the Bond Financing, then Purchaser may terminate the Agreement and amounts of Earnest Money on deposit with the escrow
agent shall be tendered to the Seller.
In the event Purchaser’s acquisition
and successful closing is not completed by July 20, 2020, Purchaser may extend the condition period until August 14, 2020, with
a payment of Thirty Thousand Dollars ($30,000.00) (“Contract Extension Fee #3”). Contract Extension Fee #3 shall be
non-refundable and shall not be credited towards the Purchase Price. In the event that Purchaser’s extension of the condition
period until August 14, 2020 is as a result of the failures of the Seller, Purchaser shall articulate such failure in written Notice
to the Seller and shall not be required to make the Contract Extension Fee #3 payment. Notwithstanding the foregoing, if Purchaser,
is unable or unwilling to complete the purchase, then Purchaser may terminate the Agreement and amounts of Earnest Money on deposit
with the escrow agent shall be tendered to the Rubicon.
In the event Purchaser has not successfully
completed re-zoning of the Property for “recreational use” as set forth in the Agreement by July 6, 2020, and Purchaser
opts to continue with the purchase, Purchaser shall pay directly to Seller a fee of Thirty Thousand Dollars ($30,000.00) (“Contract
Extension Fee #2”). Contract Extension Fee #2 shall be non-refundable and shall not be credited toward the Purchase Price.
Notwithstanding the foregoing, if Purchaser is unable or unwilling to complete the re-zoning, then Purchaser may terminate the
Agreement and amounts of Earnest Money on deposit with the escrow agent shall be tendered to the Seller.
Conditions Precedent
Due Diligence
The following are conditions precedent
(“DD Conditions”), which must be satisfied fully or waived in writing by Purchaser on or before March 17, 2020 before
Purchaser is obligated to purchase the Property. The DD Conditions must remain satisfied (if not waived) as of the closing. If
for any reason the Purchaser determines that the site is not satisfactory, or certain other conditions in the Agreement are not
met, on or before March 17, 2020, the Purchaser may terminate the Agreement upon written notice to Seller without cost or penalty
to either party (except as provided the Agreement), and the Agreement shall be null and void at which time the escrow agent shall
be directed to tender the Initial Earnest Money to the Seller and such amounts shall be retained by Seller. In the event that Purchaser
does not terminate this Contract, upon written notice to the Seller, on or before March 17, 2020, the DD Conditions set for in
the Agreement shall be deemed waived by the Purchaser. Purchaser shall be reasonable in making all determinations and opinions
to satisfy the DD Conditions. The DD Conditions are:
Purchaser has completed
all physical assessments of the property and obtained any and all environmental and/or use assessments of the Property prepared
by consultants approved by Purchaser, including, but not limited to, subsurface soil analysis, flood hazard determinations, Phase
One environmental site assessment, confirmation of availability/use of utilities and geothermal energy systems, and the results
thereof are satisfactory to Purchaser.
Purchaser has obtained
a preliminary title report from the Title Company on the Property, and has determined that the Property is not subject to any title
exceptions that would impede the development or contemplated use of the Property other than current taxes not delinquent, covenants,
conditions and restrictions of record, and those title exceptions approved by Purchaser in writing.
Purchaser has reviewed
all existing building code violations, leases, insurance policies, management agreements, employment agreements, vendor agreements
and any other agreements and/or reports related to the Property and the results are satisfactory to Purchaser.
The title company is
unconditionally prepared to issue to Purchaser or its nominee, at Closing, an ALTA Owner’s Policy in the full amount of the
purchase price, insuring fee simple title to the Property to be vested in Purchaser or its nominee, together with extended coverage
and any endorsements requested by Purchaser.
Purchaser’s Board
of Commissioners has authorized and approved the Agreement.
Bond Referendum/Lot
102 Closing/Zoning
The following are other conditions precedent
(“Other Conditions”), which must be satisfied fully or waived in writing by Purchaser before Purchaser is obligated
to purchase the Property. The Other Conditions must remain satisfied (if not waived) as of the closing. If for any reason any Other
Conditions set forth the Agreement are not met, the Purchaser may terminate the Agreement upon written notice to Seller without
cost or penalty to either party (except as otherwise provided in the Agreement), and the Agreement shall be null and void at which
time the escrow agent shall be directed to tender all the Earnest Money Deposit to the Seller and such amounts shall be retained
by Seller. In the event that Purchaser does not terminate the Agreement, upon written notice to the Seller, on or before certain
dates set forth in the Agreement, the Other Conditions set forth in the Agreement shall be deemed waived by the Purchaser. The
Other Conditions are:
Successful passage by
voter approval of the bond referendum scheduled for March 17, 2020, enabling Purchaser to procure and finance bonds for the acquisition
of the Property.
Purchaser’s successful
issuance of the bond(s) for the acquisition of the Property after approval of the referendum on or before May 31, 2020.
Purchaser successfully
obtaining all the necessary approval from the City of Batavia for re-zoning and use of the Property for its intended use as “recreational
use” on or before July 6, 2020. The parties agree to cooperate with one another in the re-zoning process for the Property
and any other necessary zoning changes or variance regarding the Fox Valley Business Park.
Purchaser’s successful
acquisition and closing of the purchase of the Property on or before July 20, 2020.
The foregoing description of the Agreement
is not complete and is qualified in its entirety by reference to the full text of the Agreement which is filed as Exhibit 10.1
to this Current Report on Form 8-K and incorporated herein by reference.
The closing of the sale of the Property
is subject to certain conditions precedent that have a very high degree of uncertainty. Rubicon believes that it is more likely
than not that the sale of the Property pursuant to the Agreement will be not consummated.