EXHIBIT 10.5
AEHR TEST SYSTEMS
CAPITAL STOCK PURCHASE AGREEMENT
This Capital Stock Purchase Agreement ("Agreement") is made as of the 11th
day of September, 1979, by and between AEHR TEST SYSTEMS, a California
corporation (the "Company") and XXXXXXXX III, a California Limited Partnership
("Purchaser").
In consideration of the mutual promises, covenants and conditions
hereinafter set forth, the parties hereto mutually agree as follows:
1. SALE OF CAPITAL STOCK.
Subject to the terms and conditions hereof, on the Closing Date the
Company will issue and sell to Purchaser and Purchaser agrees to purchase
from the Company, 20,000 shares of Company's Capital Stock (the "Shares") at
a price of $2.50 per share. The term "Shares" refers to the purchased Shares
and all securities received in replacement of Shares or as stock dividends,
splits, or the like.
2. CLOSING DATES; PRICES; DELIVERY; QUALIFICATION.
(a) The closing of the purchase and sale of the Shares hereunder (the
"Closing") shall be held at the offices of Wilson, Sonsini, Xxxxxxxx & Xxxxxx,
Two Xxxx Xxxx Xxxxxx, Xxxxx 000, Xxxx Xxxx, Xxxxxxxxxx, at 10:00 a.m. on
September 11, 1979.
(b) At the Closing, the Company will deliver to Purchaser a
certificate representing the Shares to be purchased by it (which shall be issued
in Purchaser's name) against payment of the purchase
price therefor by a check, payable to the order of the Company.
(c) The sale of the securities which are the subject of this
Agreement, if not yet qualified with the California Corporations Commissioner,
is subject to such qualification, and the issuance of such securities, or the
receipt of any part of the consideration prior to such qualification is
unlawful. The rights of the parties to this Agreement are expressly conditioned
upon such qualification being obtained. The Closing referred to above is
subject to the provisions of this Section 2(c).
3. THE COMPANY'S REPRESENTATIONS AND WARRANTIES.
The Company represents and warrants to Purchaser that:
(a) The Company is a corporation duly organized, validly existing and
in good standing under the laws of the State of California and has all requisite
power and authority to own and lease property and to conduct its business as
presently conducted. The Company is, to the best of its knowledge, not required
to be qualified as a foreign corporation in any other jurisdiction. The Company
has no subsidiaries. Correct copies of Company's Articles of Incorporation,
By-Laws and Minutes of Directors and Stockholders Meetings have been made
available to Purchaser.
(b) Company's outstanding securities have been validly issued and
fully paid. Except as set forth in Exhibit A, no securities convertible into,
or exchangeable for, Shares of any class of capital stock of the Company and no
subscription, warrant, option or other right to purchase or acquire any Shares
of any class of capital stock of the Company or any securities convertible
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into, or exchangeable for, Shares of any class of capital stock of the Company
are authorized or outstanding and there is no commitment of the Company to issue
any Shares, warrants, options or such rights, except as contemplated herein.
(c) The Company is not a party to any contract, agreement or lease
which materially affects the conduct and operation of its business and
properties other than as described in this Agreement or on Exhibit B attached
hereto.
(d) The issuance, sale and delivery of the Shares to the Purchaser in
accordance herewith has been duly authorized by all requisite corporate action;
the Shares are not subject to preemptive or any other similar rights of the
stockholders of the Company; and the Shares being issued against payment of the
purchase price therefor will be validly issued and outstanding, fully paid and
nonassessable and in compliance with applicable legal requirements.
(e) To the best of the knowledge of the Company there is no action,
proceeding or investigation pending or threatened against or involving the
Company or any of its properties or assets which might result in any material
and adverse change in the property, assets or financial condition of the
Company, and to the best knowledge of the Company, it is not in violation of any
law or regulation applicable to it where said violation might result in any
material and adverse change in the property, assets or financial condition of
the Company.
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(f) The Company has no knowledge or information that any of its
officers or key employees intends to, or is considering, severing his employment
or other relationship with the Company, nor is any such individual incapacitated
or unable to carry on fulltime employment with the Company. Each employee
engaged in technical work has agreed to transfer to Company inventions made by
him relating to Company's business.
(g) No loan or agreement (oral or in writing) exists between the
Company and any officer or director or any member of the immediate family of
such officer or director except as disclosed in this Agreement or its financial
statements.
(h) The Company has furnished to Purchaser a copy of its unaudited
financial statements. Such financial statements fairly present the financial
position of the Company as of June 30, 1979 and the Company's operations for the
period covered. Such financial statements have been prepared in accordance with
generally-accepted accounting principles applied on a consistent basis and are
in accordance with the books and records of the Company. Since June 30, 1979
there have been no material changes in the assets or liabilities or in the
financial condition or business of the Company which alone or in the aggregate
have been adverse.
(i) The Company has good and marketable title to all of its
properties and assets, including without limitation the properties and assets
reflected in the financial statements delivered to Purchaser, and assets used in
the course of its business, except for property disposed of in the ordinary
course of its business since the effective date of such financial statements.
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(j) TO the best knowledge of the Company;
(i) neither the Company nor any of its employees is in breach
of any provision of any prior Agreement entered into between either the Company
or the employee and any third party, including any employee confidentiality or
patent assignment agreements, that in any way adversely affects the Company's
ability to conduct its business or affects the employee's performance of his
duties as an employee of the Company;
(ii) the Company is not knowingly infringing any patents or
other rights relating to the business and propped business of Company;
(iii) none of the employees of the Company are knowingly
violating any trade secrets of any prior employer; and
(iv) the Company has all of the rights required to carry on
the business it intends to pursue.
(k) No representation or warranty in this Agreement or any writing
furnished to the Purchaser in connection with the transaction contemplated by
this Agreement contains any untrue statement of a material fact or omits to
state a material fact necessary in order to make the statements made, in light
of the circumstances under which they were made, not misleading.
4. REPRESENTATIONS OF PURCHASER.
In connection with the purchase of the Shares, Purchaser represents to
the Company the following:
(a) It is purchasing the Shares for investment for its own account
only and not with a view to, or for resale in
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connection with, any "distribution" thereof within the meaning of the Securities
Act of 1933 ("Securities Act").
(b) It understands that the securities have not been registered under
the Securities Act by reason of a specific exemption therefrom, which exemption
depends upon, among other things, the bona fide nature of his investment intent
as expressed herein. In this connection, it understand that, in the view of the
Securities and Exchange Commission ("Commission"), the statutory basis for such
exemption may not be present if its representations meant that its present
intention was to hold these securities for a minimum capital gains period under
the tax statutes, for a deferred sale, for a market rise, for a sale if the
market does not rise, on for a year or any other fixed period in the future.
(c) It further acknowledges and understands that the securities
must be held indefinitely unless they are subsequently registered under the
Securities Act or an exemption form such registration is available. It
further acknowledges and understands that the Company is under no obligation
to register the securities. It understands that the certificate evidencing
the securities will be imprinted with a legend which prohibits the transfer
of the securities unless they are registered or such registration is not
required in the opinion of counsel for the Company.
(d) It is aware of the adoption of Rule 144 by the Commission,
promulgated under the Securities Act, which permits limited public resale of
securities acquired in a non-public offering subject to the satisfaction of
certain conditions, including,
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among other things, the availability of certain current public information about
the Company, the resale occurring not less than two years after it has purchased
and paid for the securities to be sold, the sale being through a broker in an
unsolicited "broker's transaction" and the amount of securities being sold
during any six-month period not exceeding specified limitations (generally, 1%
of the total amount outstanding).
(e) It further acknowledges and understands that the Company may not
be satisfying the current public information requirement of Rule 144 at the time
it wishes to sell the securities; and, if so, it would be precluded from selling
the securities under Rule 144 even if the two-year minimum holding period had
been satisfied.
(f) It further acknowledges that in the event all of the requirements
of Rule 144 are not met, compliance with Regulation A or some other registration
exemption will be required; and that although Rule 144 is not exclusive, the
staff of the Commission has expressed its opinion that persons proposing to sell
private placement securities other than in a registered offering and other than
pursuant to Rule 144 will have a substantial burden of proof in establishing
that an exemption from registration is available for such offers or sales and
that such persons and the brokers who participate in the transactions do so at
their own risk.
5. SURVIVAL OF WARRANTIES.
All agreements, representations and warranties contained herein or
made in writing by or on behalf of the Company and/or
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by Purchaser in connection with the transactions contemplated hereby shall
survive the execution and delivery of this Agreement, any investigation at any
time made by the Corporation or by Purchaser or on Purchaser's behalf, and the
purchase of the Shares. All statements as to factual matters contained in any
certificate or other instrument delivered by or on behalf of the Company
pursuant hereto or in connection with the transactions contemplated hereby shall
be deemed representations and warranties as of the date of such certificate or
instrument.
6. CONDITIONS OF CLOSING.
The Purchaser's obligation to purchase and pay for the Shares on each
Closing Date is subject to the fulfillment prior to or on each Closing Date of
the following conditions, any or all of which may be waived in whole or in part
by the Purchaser:
(a) The representations and warranties of the Company under this
Agreement shall be deemed to have been made on the Closing Date and shall then
be true and correct, and Purchaser shall not have discovered any material error,
misstatement or omission therein. The Company shall have performed and complied
with all obligations and conditions required to have been performed or complied
with by it under the Agreement on or prior to the Closing Date.
(b) There shall have been delivered to Purchaser a certificate, dated
at the Closing Date, signed by the Company's President, certifying that the
conditions specified in paragraph 6(a) have been fulfilled.
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7. CONDITIONS OF COMPANY'S OBLIGATION AT CLOSING.
The Company's obligation to deliver the Shares at the Closing is
subject to fulfillment prior to or on the Closing Date of the following
conditions, any or all of which may be waived, all or in part, by Company.
(a) The representations and warranties of Purchaser shall be true as
of the Closing Date.
(b) There shall have been received by the Company, prior to the
Closing Date, a Permit from the California Commissioner of Corporations for the
sale and issuance of the Shares; the Company agrees to use its best efforts to
so qualify the sale and issuance of the Shares prior to the Closing Date.
8. REGISTRATION RIGHTS.
If the Company shall grant to any future purchasers of the Company's
capital Stock any rights to demand or request registration of the Company's
securities under the Securities Act, the holder of any Shares purchased
hereunder shall have the right to registration comparable to the greatest rights
under such future grants.
9. LEGENDS.
The certificate or certificates representing the Shares shall bear the
following legends:
IT IS UNLAWFUL TO CONSUMMATE A SALE OR TRANSFER OF THIS SECURITY, OR
ANY INTEREST THEREIN, OR TO RECEIVE ANY CONSIDERATION THEREFOR,
WITHOUT THE PRIOR WRITTEN CONSENT OF THE CALIFORNIA COMMISSIONER OF
CORPORATIONS OF THE STATE OF CALIFORNIA, EXCEPT AS PERMITTED IN THE
COMMISSIONER'S RULES.
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THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR
INVESTMENT AND NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE SALE OR
DISTRIBUTION THEREOF. NO SUCH SALE OR DISPOSITION MAY BE EFFECTED
WITHOUT AN EFFECTIVE REGISTRATION STATEMENT RELATED THERETO OR AN
OPINION OF COUNSEL FOR THE COMPANY THAT SUCH REGISTRATION IS NOT
REQUIRED UNDER THE SECURITIES ACT OF 1933.
10. MISCELLANEOUS.
(a) Any Notice, demand or request required or permitted to be given
under this Agreement shall be in writing and shall be deemed sufficient when
delivered personally or sent by telegram or forty-eight (48) hours after being
deposited in the U.S. mail, as certified or registered mail, with postage
prepaid, and addressed, if to the Company, at its principal place of business,
Attention: the President, and if to Purchaser, at his address as shown on the
stock records of the Company.
(b) The rights and benefits of this Agreement shall inure to the
benefit of, and be enforceable by the Company and Purchaser, their successors
and assigns, except that the right of Purchaser to purchase Shares may be
assigned only with the prior written consent of the Company.
(c) Both parties agree to execute any additional documents necessary
to carry out the purposes of this Agreement.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
COMPANY: PURCHASER:
AEHR TEST SYSTEMS MAYFIED III
By /s/ XXXX X. XXXXXXX By /s/ [ILLEGIBLE]
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, President , General Partner
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EXHIBIT A
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Option Holder Number of Shares
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Xxxxxx Xxxxx 1,000
Xxxxx Xxxxx 1,000
Xxxxxxxx Xxxxx 2,000
Xxxxxx Xxxx 3,000
Xxxxxxx X. Xxxxxxx 2,000
Xxxx X. Xxxxxxx 5,000
At a meeting of the Board of Directors of Aehr Test Systems held on June
29, 1979, the Board of Directors authorized the grant of an additional 5,000
shares to Xxxx X. Xxxxxxx, to take place on December 31, 1979, if the
corporations's performance for the year ended on that date is according to plan.
