Exhibit 10.7
AMENDMENT TO REGISTRATION RIGHTS
BY HOLDERS OF
RESTRICTED SECURITIES
Aehr Test Systems (the "Company") intends to enter into a stock purchase
agreement (the "Agreement") with Summit Ventures, L.P., and certain other
entities (the "Purchasers"). Certain shareholders of the Company also intend
to enter into a stock purchase agreement with the Purchasers. Each of the
undersigned hereby consents to the amendment of the registration rights set
forth in paragraph 5 of the Capital Stock Investment Agreement dated April
12, 1984, to read as set forth in Exhibit I hereto and to the grant of the
registration rights to the Purchasers as set forth in the Agreement.
Holder of Holder of
Restricted Securities Restricted Securities Date
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Xxxxxxxx III 158,824 September 17, 1985
By: /s/ Illegible
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Title: General Partner
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Rutven Associates I, L.P. 8,824 September 17, 1985
By: X.X. Xxxxxxxxxx,
Xxxxxxxxx, Towbin,
General Partner
By:
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Authorized Signatory
Rutven Associates II, L.P. 5,882 September 17, 1985
By: X.X. Xxxxxxxxxx,
Xxxxxxxxx, Towbin,
General Partner
By:
--------------------
Authorized Signatory
EXHIBIT I
5. REGISTRATION RIGHTS.
5.1 DEFINITIONS. As used in this paragraph 5, the following terms
shall have the following respective meanings:
(a) "Commission" shall mean the Securities and Exchange
Commission or any other Federal agency at the time administering the Act.
(b) "Act" shall mean the Securities Act of 1933, as amended, or
any similar federal statute and the rules and regulations of the Commission
thereunder, all as the same shall be in effect at the time.
(c) "Transfer" shall mean any disposition of the Shares which
would constitute a sale thereof within the meaning of the Act.
(d) "Restricted Securities" shall mean (i) the shares as that
term is defined under the Agreement, and (ii) the 20,000 shares of Capital
Stock purchased by Xxxxxxxx III, a California Limited Partnership, pursuant
to the Capital Stock Purchase Agreement dated September 11, 1979, as
subsequently converted into 100,000 shares of Capital Stock pursuant to a 5
for 1 stock split on April 21, 1982, and (iii) any Common Stock issued as a
dividend or other distribution with respect to, or in exchange for, or in
replacement of any of the shares of Capital Stock listed in (i) and (ii)
above; provided the obligation hereunder shall not have terminated with
respect thereto under paragraph 5.7 hereof.
5.2 OTHER REGISTRATION RIGHTS. Without the written consent of the
holders of fifty percent (50%) of the then outstanding Restricted Securities,
the Company shall not enter into any agreement with any holder or prospective
holder of any securities of the Company which would allow such holder or
prospective holder to make a demand registration which could result in such
registration statement being declared effective prior to the earlier of either
of the dates set forth in paragraph 5.3(a), or have other material terms more
favorable than those contained in paragraph 5.3 or which would limit the effect
of the proviso contained in the second sentence of paragraph 5.4.
5.3 REQUESTED REGISTRATION.
(a) If at any time after the earlier of (i) March 1, 1989, or
(ii) one hundred twenty (120) days after the effective
date of the first registration statement of a public offering of Capital
Stock of the Company (other than a registration statement relating either to
the sale of securities to employees of the Company pursuant to a stock
option, stock purchase or similar plan or a Commission Rule 145 transaction),
the Company shall be requested by the holders of not less than 50% of the
total number of shares of Restricted Securities, the Company shall promptly,
and in any case within ten (10) days, give written notice of such proposed
registration to all holders of Restricted Securities. Thereupon the Company
shall as expeditiously as possible use its best efforts to effect the
registration on Form S-1 (or on a form of general use then in effect under
the Act) of the shares of Restricted Securities which the Company has been
requested to register (i) in such request and (ii) in any response to such
notice given to the Company within twenty (20) days after the Company's
giving of such notice, in order to permit the sale or other disposition of
such shares in accordance with the intended method of sale or other
disposition given in the request and in any such response.
The Company shall be obligated to have only one (1) registration
statement declared effective pursuant to this paragraph 5.3(a). The Company
shall not be required to effect a registration statement under this paragraph
5.3(a) during the first one hundred twenty (120) days after the effective date
of any registration statement filed by the Company under paragraph 5.3(b) or 5.4
hereof if the Company has complied with the provisions of paragraph 5.3(b) or
5.4.
The Company may include in the registration under this paragraph
5.3(a) any other shares of Capital Stock (including issued and outstanding
shares of Capital Stock as to which the holders thereof have contracted with the
Company for "piggyback" registration rights) so long as the inclusion in such
registration of such shares will not, in the opinion of the managing
underwriter(s), interfere with the successful marketing in accordance with the
intended method of sale or other disposition of all the shares of Restricted
Securities sought to be registered by the holder or holders of Restricted
Securities pursuant to this paragraph 5.3(a). If it is determined as provided
above that there will be such interference, the other shares of Capital Stock
sought to be included shall be excluded to the extent deemed appropriate by the
managing underwriter(s) and, if the number of Restricted Securities to be
included would itself be too large, the number of shares of the holder thereof
to be included shall be determined pro rata based on the total number of
Restricted Securities owned by each holder requesting to participate.
(b) In addition to the registration rights granted in paragraph
5.3(a), if a registration may be effected by the Com-
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pany on Form S-3 or a similar short-form registration statement, and the Company
shall be requested by the holders of not less than thirty percent (30%) of the
total number of shares of Restricted Securities, the Company shall, as
expeditiously as possible, use its best efforts to effect the registration on
Form S-3 or a similar short-form registration statement of the shares of
Restricted Securities which the Company has been requested to register in such
request.
The Company shall be obligated to have only one (1) registration
statement declared effective pursuant to this paragraph 5.3(b), and the rights
granted by this paragraph 5.3(b) may not be exercised during the first one
hundred twenty (120) days after the effective date of any registration statement
filed by the Company under paragraph 5.3(a) or 5.4 hereof if the Company has
complied with the provisions of paragraph 5.3(a) or 5.4.
5.4 "PIGGYBACK" REGISTRATIONS. If at any time the Company proposes to
register any of its securities under the Act (except with respect to
Registration Statements filed on Form S-8 or Form S-14 or such other similar
form then in effect under the Act), it will each such time give written
notice to all holders of Restricted Securities of its intention so to do and,
upon the written request of the holders of any Restricted Securities in order
to register such Restricted Securities, (which request shall be given within
twenty (20) days after the Company's giving of such notice and which shall
state the intended method of disposition of such Restricted Securities by the
prospective sellers), the Company will use its best efforts to cause the
Restricted Securities, as to which registration shall have been so requested,
to be included in the shares of Capital Stock to be covered by the
registration statement proposed to be filed by the Company, all to the extent
requisite to permit the sale or other disposition (in accordance with the
written request of the holders, as aforesaid) by the prospective seller or
sellers of such Restricted Securities so registered. Notwithstanding any
other provision of this paragraph 5.4, if the managing underwriter(s)
determines that the marketing factors require a limitation of the number of
shares to be underwritten, the managing underwriter(s) may exclude some or
all of the Restricted Securities from such registration and underwriting;
provided, however, that if any holders of shares of the Company's Capital
Stock other that the Registered Securities which shares possess registration
rights (the "Other Shares") request the Company to include the other shares
in the registration statement, such Other Shares be excluded from such
registration and underwriting along with the Restricted Shares on a pro-rata
basis (according to the number of shares having registration rights the
holders of which have requested such inclusion). in the event that any
registration pursuant to this paragraph 5.4 shall be, in whole or in part, a
firm commitment
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underwritten offering of securities of the Company, any request by such holders
pursuant to this paragraph 5.4 to register Restricted Securities must specify
that such shares are to be included in the underwriting (i) on the same terms
and conditions as the shares of Capital Stock, if any, otherwise being sold
through underwriters under such registration or (ii) on terms and conditions
comparable to those normally applicable to offerings of common stock in
reasonably similar circumstances in the event that no shares of Capital Stock,
other than Restricted Securities, are being sold through underwriters under such
registration.
5.5 REGISTRATION PROCEDURES AND EXPENSES. If and whenever the Company is
required by the provisions of this paragraph 5 to use its best efforts to effect
the registration of any of the Restricted Securities under the Act, each selling
shareholder will furnish in writing such information as is reasonably requested
by the Company for inclusion in the registration statement relating to such
offering and such other information and documentation as the Company shall
reasonably request, and the Company will, as expeditiously as possible:
(a) Prepare and file with the Commission a registration statement
with respect to such securities and use its best efforts to cause such
registration statement to become and remain effective for such period as may be
necessary to permit the successful marketing of such securities but not
exceeding ninety (90) days for a firm commitment underwritten offering pursuant
to paragraph 5.3(a) hereof; six (6) months for an offering pursuant to paragraph
5.3(b) hereof; or, with regard to an offering pursuant to paragraph 5.4 hereof,
ninety (90) days or for that period associated with the offering which gave rise
to rights under paragraph 5.4 hereof, whichever is longer.
(b) Prepare and file with the Commission such amendments and
supplements to such registration statement and the prospectus used in connection
therewith as may be necessary to comply with the provisions of the Act; and to
keep such registration statement effective for that period of time specified in
paragraph 5.5(a).
(c) Furnish to each selling shareholder such number of prospectuses
and preliminary prospectuses in conformity with the requirements of the Act and
such other documents as such seller may reasonably request in order to
facilitate the public sale or other disposition of the Restricted Securities
owned by such seller;
(d) If the Company is required by the underwriter(s), if any, of the
securities registered in a registration under this paragraph 5 to deliver an
opinion of counsel to such underwriter(s) in connection with such registration,
and if requested by any
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holder(s) of Restricted Securities participating in such registration, furnish
such opinion to such holder(s) on the day of delivery to the underwriter(s),
addressed to such underwriter(s) and to such holder(s), containing substantially
the following provisions: (i) that the registration statement covering such
registration of securities has become effective under the Act; (ii) that, to
the best of the knowledge of such counsel, no stop order suspending the
effectiveness thereof has been issued and no proceedings for that purpose have
been instituted or are pending or threatened under the Act; (iii) that at the
time the registration statement became effective, the registration statement and
the related prospectus complied as to form in all material respects with the
requirements of the Act and the applicable rules and regulations of the
Commission thereunder (except that such counsel need express no opinion as to
financial statements and related schedules contained therein); (iv) that while
such counsel has not independently verified the accuracy or completeness of the
information contained therein, such counsel has no reason to believe that the
registration statement at the time it became effective or the prospectus
contained any untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading; (v) that the descriptions in the registration statement and the
prospectus, and any amendments or supplements thereto, of all legal and
governmental matters and all contracts and other legal documents or instruments
described therein are accurate and fairly present the information required to be
stated therein concerning such matters, contracts, documents and instruments;
and (vi) that such counsel does not know of any legal or governmental
proceedings, pending or threatened, required to be described in the registration
statement or prospectus, or any amendment or supplement thereto, which are not
described as required, nor of any contracts or documents or instruments of a
character required to be described in the registration statement or prospectus,
or any amendment or supplement thereto, or to be filed as exhibits to the
registration statement which are not described or filed as required. Such
opinion shall be in such form as is customary for similar opinions delivered by
such counsel so long as such form is acceptable to the underwriter(s).
(e) If the Company is required by the underwriter(s), if any, of the
securities registered in a registration under this paragraph 5 to deliver a
letter from the independent certified public accountants of the Company to such
underwriter(s) in connection with such registration, and if requested by any
holder(s) of Restricted Securities participating in such registration, furnish
such letter to such holder(s) on the day of delivery to the underwriter(s),
addressed to such underwriter(s) and to such holder(s), providing substantially
that such accountants are independent certified public accountants within the
meaning of the Act and that
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in the opinion of such accountants, the financial statements and other financial
data of the Company included in the registration statement and the prospectus,
any amendment or supplement thereto, comply as to form in all material respects
with the applicable accounting requirements of the Act, and such other matters
as are customary in connection with public offerings.
(f) Use its best efforts to register or qualify the Restricted
Securities covered by such registration statement under such other securities or
blue sky laws of such jurisdictions as each such selling stockholder shall
reasonably request and do any and all other acts and things which may be
necessary or desirable to enable such seller to consummate the public sale or
other disposition in such jurisdiction of the Restricted Securities owned by
such seller.
All expenses incurred by the Company in complying with paragraphs 5.3,
5.4, and 5.5 hereof, including, without limitation, all registration and filing
fees, printing expenses, fees and disbursements of counsel for the Company, blue
sky fees and expenses, the fees and disbursements of counsel for the
shareholders in the case of a registration pursuant to paragraph 5.3(a) only and
the expense of any special audits incident to or required by any registrations
(but excluding the compensation of regular employees of the Company which shall
be paid in any event by the Company) are herein called Registration Expenses;
and all underwriting discounts and selling commissions applicable to the sales
and all other fees and disbursements of counsel for the selling stockholders are
herein called Selling Expenses. The Company will pay all Registration Expenses
in connection with each registration pursuant to paragraphs 5.3 and 5.4, except
as may be required to update any registration statement kept effective for more
than the period of time required by paragraph 5.5(a). All Selling Expenses in
connection with each registration pursuant to paragraphs 5.3 and 5.4 shall be
borne by the Company and the selling stockholders pro rata in proportion to the
securities covered thereby being sold by them, except for the aforementioned
fees and disbursements of counsel for the selling shareholders, which expense
shall be borne solely by such shareholders.
In the event holders of Restricted Securities propose to sell
Restricted Securities in accordance with this paragraph 5 pursuant to an
underwritten offering, the Company shall have the right to approve the managing
underwriter(s) for such offering; PROVIDED, HOWEVER, that such approval shall
not be unreasonably withheld.
5.6 INDEMNIFICATION. In the event of a registration of any of the
Restricted Securities under the Act pursuant to this
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paragraph 5, the Company will hold harmless the seller of such Restricted
Securities and each underwriter of such Restricted Securities and each other
person, if any, who controls such seller or underwriter within the meaning of
Section 15 of the Act, against any losses, claims, damages or liabilities, joint
or several, to which such seller or underwriter or controlling person may become
subject under the Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon any
untrue statement or alleged untrue statement of any material fact contained, on
the effective date thereof, in any registration statement under which such
Restricted Securities were registered under the Act, any preliminary prospectus
or final prospectus contained therein, or any amendment or supplement thereof,
or arise out of or are based upon the omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make
the statements therein not misleading; and will reimburse such seller and each
such underwriter and each such controlling persons for any legal or any other
expenses reasonably incurred by them in connection with investigating or
defending any such loss, claim, damage, liability or action; PROVIDED, HOWEVER,
that the Company will not be liable in any such case to the extent that any such
loss, claim, damage or liability arises out of or is based upon an untrue
statement or alleged untrue statement or omission or alleged omission made in
such registration statement, said preliminary prospectus or said prospectus or
said amendment or supplement in reliance upon and in conformity with written
information furnished to the Company through an instrument duly executed by such
seller or underwriter specifically for use in the preparation thereof; and
PROVIDED, FURTHER, that if any losses, claims, damages or liabilities arise out
of or are based upon an untrue statement, alleged untrue statement, omission or
alleged omission contained in any preliminary prospectus which did not appear in
the final prospectus, the Company shall not have any liability with respect
thereto to (i) the seller or any person who controls such seller within the
meaning of Section 15 of the Act, if the seller delivered a copy of the
preliminary prospectus to the person alleging such losses, claims, damages, or
liabilities and failed to deliver a copy of the final prospectus, as amended or
supplemented if it has been amended or supplemented, to such person at or prior
to the written confirmation of the sale to such person, or (ii) any underwriter
or any person who controls such underwriter within the meaning of Section 15 of
the Act, if such underwriter delivered a copy of the preliminary prospectus to
the person alleging such losses, claims, damages or liabilities and failed to
deliver a copy of the final prospectus, as amended or supplemented if it has
been amended or supplemented, to such person at or prior to the written
confirmation of the sale to such person.
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In the event of any registration of any of the Restricted Securities
under the Act pursuant to this paragraph 5, each seller of such Restricted
Securities, severally and not jointly, will indemnify and hold harmless the
Company and each person, if any, who controls the Company within the meaning of
Section 15 of the Act, each officer of the Company who signs the registration
statement, each director of the Company and each underwriter and each person who
controls any underwriter within the meaning of Section 15 of the Act, against
any and all such losses, claims, damages or liabilities referred to in the first
paragraph of this paragraph 5.6, if the statement, alleged statement, omission
or alleged omission in respect of which such loss, claim, damage or liability is
asserted was made in reliance upon and in conformity with information furnished
in writing to the Company by or on behalf of such seller specifically for use in
connection with the preparation of such registration statement, preliminary
prospectus, prospectus, amendment or supplement; PROVIDED, HOWEVER, that if any
losses, claims, damages or liabilities arise out of or are based upon an untrue
statement, alleged untrue statement, omission or alleged omission contained in
any preliminary prospectus which did not appear in the final prospectus which
did not appear in the final prospectus, such seller shall not have any such
liability with respect thereto to (i) the Company, any person who controls the
Company within the meaning of Section 15 of the Act, any officer of the Company
who signed the registration statement or any director of the Company, if the
Company delivered a copy of the preliminary prospectus to the person alleging
such losses, claims, damages or liabilities and failed to deliver a copy of the
final prospectus, as amended or supplemented if it has been amended or
supplemented, to such person at or prior to the written confirmation of the sale
to such person or (ii) any underwriter or any person controlling such
underwriter within the meaning of Section 15 of the Act, if such underwriter
delivered a copy of the preliminary prospectus to the person alleging such
losses, claims, damages or liabilities and failed to deliver a copy of the final
prospectus, as amended or supplemented if it has been amended or supplemented,
to such person at or prior to the written confirmation of the sale to such
person.
5.7 TERMINATION OF CONDITIONS AND OBLIGATIONS. The obligations and
conditions precedent imposed by this paragraph 5 shall cease and terminate as
to any of such Restricted Securities when (a) such securities shall have been
effectively registered under the Act and sold or otherwise disposed of in
accordance with the intended method of disposition by the seller or sellers
thereof set forth in the registration statement covering such securities and (b)
at such time as an opinion of counsel with respect to free transferability shall
have been rendered pursuant to paragraph 5.8. Whenever the conditions imposed
by this paragraph 5 shall terminate as herein provided, the holder of any of the
Restricted Securities
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bearing the first legend set forth in paragraph 4.2 as to which such conditions
shall have terminated shall be entitled to receive from the Company, without
expense, a new stock certificate not bearing such legend.
5.8 NOTICE OF PROPOSED TRANSFERS. The holder of any of the
Restricted Securities by acceptance thereof agrees to comply in all respects
with the provisions of this paragraph 5.8. Prior to any proposed transfer of
any of the Restricted Securities (other than under circumstances described in
paragraph 5.3 or 5.4 hereof or a transfer to any partner, retired partner or the
estate thereof in the case of any partnership Purchaser), the holder thereof
shall give written notice to the Company of such xxxxxx's intention to effect
such transfer. Each such notice shall describe the manner and circumstances of
the proposed transfer in sufficient detail, and shall be accompanied by an
unqualified written opinion of counsel for the shareholder (which counsel shall
be reasonably satisfactory to the Company) to the effect that (i) such proposed
transfer does not create a situation which would require the registration of any
of the Restricted Securities under the Act; and (ii) the proposed transfer may
be effected without registration under the Act of the Restricted Securities to
be transferred (as, for example, that such transfer may be made pursuant to and
in compliance with the conditions of Rule 144 or Rule 237 under the Act (or any
other similar rule in effect at the time)). The Company's acceptance of such an
opinion as satisfactory shall not be unreasonably withheld. Such proposed
transfer may be effected only if the Company shall have received such notice and
opinion of counsel, whereupon the holder of such Restricted Securities shall be
entitled to transfer such Restricted Securities in accordance with the terms of
notice delivered by the holder to the Company. The certificate issued upon the
transfer of any such Restricted Securities as above provided (and the
certificate evidencing any untransferred balance of such Restricted Securities)
shall bear the first restrictive legend set forth in paragraph 4.2 above, except
that the certificate shall not bear such restrictive legend and, as provided in
paragraph 5.7 hereof, the holder thereof shall be entitled to receive from the
Company, without expense, a new certificate not bearing such legend, if the
opinion of counsel referred to above is to the further effect that such legend
or legends are not required in order to establish compliance with any provisions
of the Act.
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