Exhibit 10.17
PURCHASE AND SALE AGREEMENT
FOR CERTAIN CLAIMS
1. Sale of Claim and other Transferred Rights.
Aehr Test Systems ("Seller"), its successors and assigns, in
consideration of the amount (the "Purchase Price") set forth in that certain
Purchase Price Letter, of even date herewith and incorporated herein by
reference, does hereby sell, grant, convey, transfer and assign to APS
Capital Corp., its successors and assigns ("Buyer") all of Seller's right,
title and interest in and to the Transferred Rights, each as more
specifically set forth below. The Transferred Rights transferred to Buyer
hereunder include, without limitation or offset, (a) all of the Claims (as
used in this Purchase and Sale Agreement for Certain Claims (this
"Agreement"), the term "Claims" includes all "claims" as such term is defined
in Section 101(5) of the Bankruptcy Code, 11 U.S.C. 101 et seq., herein
referred to as the "Code") of Seller against Spansion LLC (the "Debtor")
arising out of goods and services delivered to the Debtor, in the current
aggregate outstanding principal amount of $7,116,665 (the "Purchase Amount"),
described as the "Aehr Claim" in that certain Stipulation Between the
Debtors, Aehr Test Systems and Aehr Test Systems Japan Ltd. To Compromise
Claim No. 182 Filed By Aehr Test Systems, as approved by that certain Order
Granting Debtor's Motion for Order Approving Stipulation Between the Debtors,
Aehr Test Systems and Aehr Test Systems Japan Ltd. To Compromise Claim No.
182 Filed By Aehr Test Systems entered January 19, 2010 (the "Stipulation")
and included in a Proof of Claim filed by Seller in proceedings for
reorganization (the "Proceedings") in the United States Bankruptcy Court for
the District of Delaware (the "Court"), jointly administered under In re
Spansion Inc., et al., Chapter 11 Case No. 09- 10690 (KJC), assigned Claim
No. 182 (the "Proof of Claim"); (b) all of Seller's right, title and interest
in and to the Claims, including all agreements, instruments, invoices,
purchase orders, proofs of delivery and other documents evidencing, or
relating or referred to in, the Claims; (c) all of Seller's right to receive
principal, interest, fees, expenses, damages, penalties and other amounts in
respect of, or in connection with, any of the foregoing; (d) to the extent
relating to the Claims, all cure amounts ("Cure Amount") owing to Seller
pursuant to Section 365(b) of the Code (in the event a Cure Amount is owing
to Seller, Seller shall direct the Debtors to pay such Cure Amount directly
to Buyer), (e) all other claims, causes of action or other rights of any
nature against the Debtor, its affiliates, any guarantor or other third party
relating to or arising from the Claims and all related documents, together
with voting and other rights, property and benefits; (f) all cash,
securities, instruments and/or other property distributable, receivable or
payable, from and after March 1, 2009 (the "Petition Date"), on account of,
or exchanged in return for, any of the foregoing including, without
limitation, all proceeds of the foregoing (such property referred to in this
clause (f) is hereafter referred to as "Distributions"); (g) all of Seller's
rights in respect of the Stipulation; and (h) subject to any transfer
requirements in the Plan (defined below), all of Seller's rights in respect
of the Rights Offering (as defined in the Second Amended Joint Plan of
Reorganization Dated December 16, 2009, as amended (the "Plan")), including
all rights to Subscription Shares (defined below) arising from the Rights
Offering ((a)- (h) are together hereinafter referred to as the "Transferred
Rights").
The Transferred Rights shall in any event include those portions of the
Proof of Claim arising from (a) cancellation charges for goods and services
ordered by the Debtor prior to the
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Petition Date which were cancelled prior to delivery, in the amount of
$6,217,834, described as the "Cancellations Claim" in the Stipulation; (b)
the balance owing by Debtor to Seller under invoices 120975, 121022, and
120990, in the amount of $1,225,331, described as the "Three Invoice Claim"
in the Stipulation and (c) a credit given by Seller to Debtor in the amount
of $326,500 relating to an overpayment made by Debtor prepetition, described
as the "Credit" in the Stipulation.
The Transferred Right shall not include those portions of the Proof of
Claim arising from invoiced amounts due and owing under several transactions
for good and services delivered to the Debtor, in the amount of
$11,363,980.02, and the rights attendant thereto, previously transferred to
Fulcrum Credit LLC and described as the "Transferred Claim" in the
Stipulation and herein as the "Previously Transferred Claim".
If the Proof of Claim amount differs from the Purchase Amount set forth
above, Buyer shall nevertheless be deemed the owner of that Proof of Claim to
the extent of the Transferred Rights, subject to the terms of this Agreement,
and shall be entitled to identify itself as owner of such Proof of Claim to
the extent of the Transferred Rights on the records of the Court. For the
avoidance of doubt, the Claims shall include any and all general unsecured,
reclamation, priority, or secured claims of Seller in the Proceedings, or any
related case, other than those claims arising from the Previously Transferred
Claim. This Agreement shall be deemed an absolute and unconditional sale of
the Transferred Rights for the purpose of collection and satisfaction, and
shall not be deemed to create a security interest. Seller and Buyer are also
hereinafter referred to individually as a "Party" and collectively as the
"Parties."
2. Representations and Warranties.
2.1 Seller's Representations.
Seller represents and warrants that (a) the Operative Documents (as
defined below) have been duly authorized, executed and delivered by Seller
and Seller has the requisite power and authority to execute, deliver and
perform them and the Operative Documents constitute the legal, valid and
binding agreements of Seller, enforceable against Seller in accordance with
their terms; (b) the execution, delivery or performance of the Operative
Documents will not violate or contravene any law, rule, regulation, order or
agreement affecting Seller or the Transferred Rights; (c) no consent,
approval, filing or corporate, partnership or other action is required as a
condition to, or otherwise in connection with, the execution, delivery and
performance of the Operative Documents by Seller or, if such consent,
approval, filing or corporate, partnership or other action is required, such
requirement has been satisfied; (d) Seller (i) is a sophisticated entity with
respect to the sale of the Transferred Rights, (ii) is an "accredited
investor", as such term is defined in Rule 501 of the Securities Act of 1933,
15 U.S.C. Section 77a et seq., as amended, and the rules and regulations
promulgated thereunder, (iii) has adequate information concerning the
business and financial condition of the Debtor and the status of the
Proceedings to make an informed decision regarding the sale of the
Transferred Rights, (iv) has agreed to the Purchase Price based on its own
independent investigation and credit determination without reliance upon
Buyer except as expressly set forth herein, and based on such information as
it has deemed appropriate, consulted with such advisors as it believes
appropriate and made its own analysis and decision to enter into this
Agreement; and (v) acknowledges that the consideration
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paid under this Agreement for the purchase of the Transferred Rights may
differ both in kind and amount from any Distributions, and that Buyer has not
given Seller any investment advice, credit information, or opinion on whether
the sale of the Transferred Rights is prudent or advisable; (e) (i) the
Claims arise from Seller's pre- petition liquidated, non- contingent, and
undisputed claims against the Debtor as described in the Proof of Claim, and
are fully enforceable under the Code and other applicable law, (ii) the Proof
of Claim was duly and timely filed in the Proceedings, and accurately
describes and accounts for the Claims and the Purchase Amount, (iii) the
Claims are stipulated by the Debtor and allowed by the Court as allowed
general unsecured prepetition claims in an amount $7,116,665.00, and (iv)
Seller has complied in all material respects with the Stipulation, including
without limitation by delivery of the Requested Waferpaks (as defined in the
Stipulation) in accordance with the terms thereof; (f) the amount of the
Claims is not less than the Purchase Amount; (g) (i) to the best of Seller's
knowledge, the Proof of Claim has not been revoked, withdrawn, amended or
modified in whole or in part and no rights thereunder have been waived and
statements promulgated in such Proof of Claim are true and correct, and (ii)
attached hereto as Exhibit A is a true, correct and complete copy of the
Stipulation and the Stipulation has not been revoked, withdrawn, amended or
modified in whole or in part and no rights thereunder have been waived and
the statements promulgated in such Stipulation are true and correct; (h) to
the best of Seller's knowledge, no objection to the Claims, the Stipulation
or any other part of the Transferred Rights exists, or may otherwise be
asserted by the Debtor or any other party; (i) the Transferred Rights are not
subject to an event of Impairment (as defined below); (j) the Claims are not
subject to any factoring agreement; (k) there are no offsets or defenses that
have been asserted by or on behalf of the Debtor or any other party to reduce
the amount of the Claims or to impair the value thereof; (l) there are no
preference or avoidance actions, including pursuant to Sections 547, 548, 550
or 502(d) of the Code, pending or threatened against Seller or the
Transferred Rights; (m) the Claims cannot be asserted, and will not be
allowed, in the Proceedings against any other parent, subsidiary or affiliate
of the Debtor; (n) Seller has not engaged in any acts, conduct or omissions
or had any relationship with the Debtor that might result in Buyer receiving
in respect of the Transferred Rights proportionately less payments or
distributions or less favorable treatment (including timing of payments or
distributions) than other holders of similarly situated claims against the
Debtor in the Proceedings; (o) no payment or other distribution has been
received by Seller, or by any third party on behalf of Seller, in full or
partial satisfaction of, or in connection with the Transferred Rights; (p)
Seller has not previously assigned, sold or pledged the Transferred Rights to
any third party, in whole or in part; (q) Seller is the sole owner and has
good legal and beneficial title to the Transferred Rights free of any and all
liens, claims, security interests, participations or encumbrances of any kind
or nature whatsoever (the "Encumbrances"); and Aehr Test Systems Japan Ltd.
has never held and holds no legal or equitable interest in the Claim, and
upon consummation of the transactions contemplated herein, Buyer will own and
have good legal and beneficial title to the Claims, free and clear of all
Encumbrances; (r) no creditors of Seller may assert an interest of any kind
to the Claims nor any other Transferred Rights, nor may any such creditors
file proofs of claim asserting such interest; (s) Seller is not and has never
been an "insider" of the Debtor within the meaning of Section 101(31) of the
Code, and is not a member of any official committee in the Proceedings; (t)
Seller is not, has never been and as a result of this transaction will not be
"insolvent" within the meaning of Section 1- 201(23) of the New York Uniform
Commercial Code or within the meaning of Section 101(32) of the Code; (u)
except as set forth in Schedule 1 attached hereto (the "Held Debtor
Property"), Seller does not
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hold, and did not hold, as of the filing of the Proceedings, any property of
or owe any funds or property to the Debtor; (v) Seller has engaged competent
outside legal advisors to represent its interest and rights with regard to
the transactions contemplated herein; (w) no proceedings are pending or
threatened against Seller before any relevant governmental authority that
will materially and adversely affect the Transferred Rights or any action
taken by Seller hereunder; (x) Seller has provided Buyer with all material
information in its possession, custody or control relating to the validity,
extent and/or priority of the Claims; (y) no broker, finder, or other person
acting under Seller's authority is entitled to any broker's commission or
other fee in connection with the transactions contemplated by this Agreement
for which Buyer could be responsible; and (z) the Transferred Rights are
Class 5B Claims (as defined in the Plan) entitled to participation in the
Rights Offering to the full extent of the $7,116,665 face amount of the
Claims, and the Seller does not hold any other Class 5A, Class 5B or Class 5C
Claims as of the Rights Offering Record Date (as defined in the Plan) except
to the extent transferred with the Previously Transferred Claim.
Seller agrees to indemnify, defend and hold Buyer and its officers,
directors, employees, agents and controlling persons harmless from and
against all losses, damages and liabilities, including reasonable attorneys
fees and expenses, that result from (I) Seller's breach of any
representation, warranty, covenant or agreement set forth in this Agreement;
(II) any obligation of Seller, Buyer or any entity to disgorge, in whole or
in part, or otherwise reimburse (by setoff or otherwise) the Debtor or any
other entity for any payments, property, setoffs or recoupments received,
applied or effected by or for the account of Seller under or in connection
with the Claims or otherwise from, against or on account of the Debtor;
(III) any act or omission by Seller in connection with or in any way relating
to the Claims, including without limitation any non-performance of any Seller
obligations under the Stipulation or any other contract with Debtor; (IV) the
Fulcrum Joint Direction (as hereinafter defined); and (V) the Held Debtor
Property.
2.2 Buyer's Representations. Buyer represents and warrants that,
(a) the Operative Documents (as defined below) have been duly authorized,
executed and delivered by Buyer, as applicable, and Buyer has the requisite
power and authority to execute, deliver and perform them; (b) the execution,
delivery and performance of the Operative Documents will not violate or
contravene any law, rule, regulation, order or agreement affecting Buyer; (c)
no consent, approval, filing or corporate, partnership or other action is
required as a condition to, or otherwise in connection with, the execution,
delivery and performance of the Operative Documents by Buyer or, if such
consent, approval, filing or corporate, partnership or other action is
required, such requirement has been satisfied; (d) Buyer (i) is a
sophisticated entity with respect to the sale of the Transferred Rights, (ii)
has adequate information concerning the business and financial condition of
the Debtor or any obligor and the status of the Proceedings to make an
informed decision regarding the aforementioned sale, (iii) has agreed to the
Purchase Price based on its own independent investigation and credit
determination without reliance upon Seller (except with respect to the
delivery of documents and information in Seller's possession, custody or
control evidencing its representations contained herein regarding the
validity, extent, and priority of the Claims), except as expressly set forth
herein, and based on such information as it has deemed appropriate, consulted
with such advisors as it believes appropriate and made its own analysis and
decision to enter into this Agreement; and (iv) acknowledges that the
consideration paid under this Agreement for the purchase of the Transferred
Rights may differ
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both in kind and amount from any Distributions, and that Seller has not given
it any investment advice, credit information, or opinion on whether the sale
of the Transferred Rights is prudent or advisable.
2.3 Excluded Information. Each Party is aware that the
consideration conveyed hereby may differ from the amount ultimately
distributed in the Proceedings with respect to the Transferred Rights and
that such amount may not be absolutely determined until entry of a final
order confirming a plan of liquidation/reorganization. Each Party
acknowledges that, except as set forth in this Agreement, neither Party nor
any agent or representative of that Party has made any representation
whatsoever to the other Party regarding the status of the Proceedings, the
condition of the Debtor (financial or otherwise), the condition of the
Claims, or any other matter relating to the Proceedings, the Claims or the
Debtor. Each Party acknowledges that, except as set forth in this Agreement:
(a) the other Party currently may have, and later may come into the
possession of, information on the Debtor, the Claims, or the status of the
Proceedings that is not known to it and that may be material to a decision to
buy or sell the Claims (the "Excluded Information");
(b) it has not requested the Excluded Information, and has agreed
to proceed with the purchase and sale of the Claims; and
(c) the other Party shall have no liability to it, and it
specifically waives and releases any Claims or causes of action that it might
have against the other Party whether under applicable securities laws or
otherwise, with respect to the nondisclosure of the Excluded Information;
provided, however, that Excluded Information shall not and does not affect
the truth or accuracy of each Party's representations or warranties in this
Agreement. The Parties represent to each other that they each have adequate
information concerning the business and financial condition of the Debtor and
the status of the Proceedings to make an informed decision regarding the sale
of the Transferred Rights and that they each have independently and without
reliance on the other Party, and based on such information as they have
deemed appropriate (including information available from the files of the
Court in the Proceedings), made their own analysis and decision to enter into
this Agreement.
3. Impairment and Disallowance.
If, notwithstanding the Stipulation, (a) through no action or failure
to act on the part of Buyer, all or any portion of the Claims becomes subject
to any counterclaim, defense, claim, right of setoff, withholding (tax or
otherwise), reduction, recoupment, avoidance, disallowance or subordination
or is otherwise impaired in any way; (b) all or any portion of the Claims
becomes affected by a preference or avoidance action, including pursuant to
Section 502(d) of the Code; (c) Buyer is not substituted for Seller to the
extent of the Claim in the Proceedings, except to the extent otherwise
provided under the Plan, (d) Seller has otherwise breached its
representations, warranties, covenants or agreements hereunder, or (e) the
Stipulation is objected to, withdrawn, vacated, amended, otherwise modified
or not determined to be a Final Order (as
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defined below) (each, an "Impairment"), on demand (the "Demand") of Buyer,
Seller agrees to immediately repay such portion of the consideration paid by
Buyer hereunder (including, for the avoidance of doubt, the Purchase Price
and any Excess Payment (as defined below)) as shall be calculated by
multiplying such consideration by a fraction, the numerator of which shall be
the amount of the Claims which was so affected by the Impairment and the
denominator of which shall be the Purchase Amount, together with interest on
such amount at a rate of ten percent (10%) per annum, from the date of this
Agreement to the date of such repayment by Seller to Buyer, provided however,
that Seller shall not be obligated to repay any portion of the consideration
paid by Buyer, nor shall Seller have any indemnification obligation to Buyer
under Section 2.1 above, to the extent that any portion of the Claims become
Impaired as a direct result of action taken by Seller at the written
direction of the Buyer. Buyer's Demand hereunder shall not be deemed an
election of remedies or any limitation on other rights that Buyer may have
hereunder or under applicable law "Final Order" means an order of the Court
which has not been reversed, stayed, modified, or amended and as to which (x)
any appeal taken, petition for certiorari or motion for rehearing or
reconsideration that has been filed has been finally determined or dismissed
or, (y) the time to appeal, seek certiorari or move for reconsideration or
rehearing has expired and no appeal, petition for certiorari or motion for
reconsideration or rehearing has been timely filed.
4. Additional Agreements.
4.1. Intentionally Omitted.
4.2. Proxy and Attorney- In- Fact.
Seller hereby irrevocably appoints Buyer as its true and lawful
attorney-in-fact and authorizes Buyer to act in Seller's name, place and
stead, to demand, ▇▇▇ for, compromise and recover all such amounts as now
are, or may hereafter become, due and payable for or on account of the
Transferred Rights, including with respect to the Rights Offering, the
Subscription Form and the Subscription Shares, but excluding any other rights
Seller may have against Debtor to the extent unrelated to the Transferred
Rights. Seller grants unto Buyer full authority to do all things Buyer deems
necessary or desirable to enforce the Transferred Rights pursuant to this
Agreement, including, for the avoidance of doubt, the right to amend, modify,
compromise, settle or abandon the Claims, the Stipulation and the Proof of
Claim(s) associated therewith, provided that any such action by Buyer shall
not lead to any liability for Seller; provided further, however, that Buyer
shall not have authority to agree to any release of liability of Debtor to
Seller, other than with respect to the Transferred Rights, without Seller's
consent. Seller agrees that the powers granted by this Section 4.2 are
discretionary in nature and that Buyer may exercise or decline to exercise
such powers at Buyer's sole option. Buyer shall have no obligation to take
any action to assert, prove or defend the Claims' validity or amount in the
Proceedings.
4.3. Further Actions; Cooperation.
Seller agrees to take certain actions and cooperate in good faith
with Buyer as follows: (a) At any time and from time to time on and after the
Closing Date, at the request of Buyer, and without further consideration,
Seller will execute, acknowledge and deliver all such other instruments of
sale, transfer, conveyance, confirmation, transfer powers, corporate
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resolutions and consents, and take such other action as Buyer may reasonably
deem necessary or desirable in order to effect the sale and transfer of the
Transferred Rights and all interests therein to Buyer, free and clear of all
liens, claims and encumbrances (including, without limitation, by obtaining,
at Seller's cost, releases of any liens or security interests asserted in the
Claims by any third party or parties), to cooperate with and assist Buyer in
enforcing the Transferred Rights (including, without limitation, the
provision of all such affidavits, testimony, instruments, invoices, liens,
pleadings, transcripts, communications, agreements and other documents that
evidence, or otherwise support the validity and enforceability of the
Transferred Rights and the filing of one or more amendments to the Proofs of
Claim) and otherwise to effectuate the purpose and intent of this Agreement.
(b) Seller agrees to forward to Buyer all documents, notices and
communications, of any nature, received from the Debtor, the Court or any
third party with respect to the Transferred Rights sold herein (including
notice of any proposed payment or delivery of property in respect of the
Claim or any modification of, objection to or other development with respect
to the Stipulation) and to vote the Claims, and to take such other action
with respect to the Transferred Rights in the Proceedings, as Buyer may from
time to time request. Buyer or Subsequent Buyer (defined below) may file
financing statements, continuation statements and amendments thereto (whether
or not signed by Seller) that describe the Claim, and any such financing
statement, continuation statement or amendment may be signed by Buyer or
Subsequent Buyer on behalf of Seller and may be filed at any time in any
applicable jurisdiction. Seller further agrees to execute the Notice to
Account Debtor attached hereto as Exhibit B, to be delivered by Subsequent
Buyer to Debtor.
4.4. Distributions.
Seller agrees that any distribution received by Seller from and after January
20, 2010 (the "Trade Date") on account of the Transferred Rights, whether in
the form of cash, securities, instruments or any other property, shall
constitute property of Buyer to which Buyer has an absolute right. Seller
shall hold such property on behalf of and in trust for Buyer and will at its
own expense, deliver to Buyer any such property in the same form received
(free of any withholding, setoff, claim, or deduction of any kind), together
with any endorsements or documents necessary to transfer such property to
Buyer within two (2) business days of receipt in the case of cash (the "Cash
Distribution") and five (5) business days in the case of securities, notes or
other instruments, which are in good deliverable form. In the event Seller
fails to deliver the Cash Distribution to Buyer within two (2) business days
of Seller's receipt, Seller shall be obligated to pay Buyer interest on the
Cash Distribution at a rate equal to the Prime Rate (calculated as an average
for the period of default) plus eight percent (8%) per annum (the "Default
Rate"), from the date of Seller's receipt to the date of Buyer's receipt
thereof. Buyer in turn agrees that any distribution received by Buyer from
and after the Trade Date on account of the Previously Transferred Claim,
whether in the form of cash, securities, instruments or any other property,
shall constitute property to which Seller does not have an interest. Buyer
shall hold such property and will, upon receipt of a joint written direction
and instructions (the "Fulcrum Joint Direction") executed by Seller and
Fulcrum Credit , LLC (or its assignee, as applicable), deliver any such
property to either Seller or Fulcrum Credit, LLC (or its assignee, as
applicable), as directed, in the same form received (free of any withholding,
setoff, claim, or deduction of any kind), together with any endorsements or
documents necessary to transfer such property within two (2) business days
of receipt in the
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case of cash (the "Cash Distribution") and five (5) business days in the case
of securities, notes or other instruments, which are in good deliverable
form, all at Seller or Fulcrum Credit LLC's (or its assignee's, as
applicable) expense. The Fulcrum Joint Direction shall, in form and
substance satisfactory to the Buyer in Buyer's reasonable discretion, provide
that Seller and Fulcrum Credit, LLC shall jointly and severally indemnify,
defend and hold Buyer, its officers directors, employees, agents and
controlling persons harmless from and against all losses, damages, claims,
damages and liabilities, including reasonable attorney's fees, arising from
or relating to the Fulcrum Joint Direction.
4.5. Claim Resolution.
Seller covenants not to compromise or settle the Claims or the
Transferred Rights, or change the Purchase Amount, without the prior written
consent of Buyer. In performing any of its obligations under this Agreement,
Seller hereby covenants to act reasonably at all times to maximize the amount
of the Claims and to minimize the amount of time in which all components of
the Claims and the Transferred Rights are quantified and paid.
5. Rights Offering; Escrow.
The parties acknowledge that, pursuant to the Plan, the holders
of Class 5 A, Class 5B or Class 5C Claims as of the Rights Offering Record
Date have the right to participate in the Rights Offering. In order to
participate in the Rights Offering, such holder must complete those steps
outlined in the Subscription Form for Class 5B Claims for Rights Offering and
ancillary Subscription Agreement (together, the "Subscription Form").
Seller, as the holder of the Claim on the Rights Offering Record Date, is
entitled to purchase 85,652 Rights Offering Shares (as defined in the
Subscription Form) (the "Subscription Shares") for $722,046.36 (the
"Subscription Price"). Seller hereby agrees to complete, execute and deliver
to Subsequent Buyer on the Closing Date (i) a completed, fully executed
Subscription Form (in the form attached hereto as Exhibit F) evidencing
subscription for the Subscription Shares at the Subscription Price and
designating Subsequent Buyer its recipient for the Subscription Shares, and
(ii) an Assignment Separate from Certificate in the form attached hereto as
Exhibit C (the "Stock Power"). In the event Seller is not permitted to
designate Subsequent Buyer its recipient for the Subscription Shares or
Seller otherwise receives all or any portion of the Subscription Shares,
promptly upon receipt of such Subscription Shares, and in any event within
five (5) business days thereof, Seller shall deliver to Subsequent Buyer such
Subscription Shares in the same form received (free of any withholding,
setoff, claim, or deduction of any kind), together with any endorsements or
documents necessary to evidence transfer to Subsequent Buyer, and such
Subscription Shares shall be deemed transferred to Subsequent Buyer pursuant
to the Stock Power. In the event that Seller is required to expend any
funds, other than deminimis amounts, to transfer title to the Subscription
Shares in accordance with federal and state securities laws and this
Agreement, Buyer shall reimburse Seller for any such expenditures, provided
such expenditures were incurred with the prior written consent of Buyer.
Seller represents and warrants that Seller is not, and will not be after
giving effect to any transfer of the Subscription Shares to Subsequent Buyer,
an "affiliate" of the Debtor. Seller further represents and warrants that,
upon receipt thereof, Seller shall hold such Subscription Shares in trust for
and for the sole
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benefit of Subsequent Buyer, Seller shall have no equitable or beneficial
interest in or to the Subscription Shares and Seller shall act at Subsequent
Buyer's direction with respect thereto. Seller is authorized to and will
transfer good and marketable title to the Subscription Shares to Subsequent
Buyer, free and clear of any liens, security interests or encumbrances or
other rights of third parties of any kind or nature whatsoever and not
subject to any prior sale, transfer, assignment or participation by Seller or
agreement to assign, convey, transfer or participate, in whole or in part.
On the Funding Date (defined below), Subsequent Buyer shall
deliver the Subscription Price (the "Escrow Funds") to JPMorgan Chase Bank,
N.A. as Escrow Agent (the "Escrow Agent") pursuant to that certain Escrow
Agreement by and among Seller, Subsequent Buyer and the Escrow Agent attached
hereto as Exhibit D (the "Escrow Agreement"), to be held in accordance with
the terms thereof and this Section 5. Upon Subsequent Buyer's receipt from
Seller of a notice and acknowledgement in the form of Exhibit G attached
hereto duly executed by Seller and Spansion, Inc. (or other form of notice
and acknowledgment from Spansion, Inc. in form and substance satisfactory to
Subsequent Buyer in its reasonable discretion), Subsequent Buyer and Seller
shall promptly deliver a joint direction to the Escrow Agent directing the
release of the Escrow Funds, without interest, to directly satisfy payment
for the Subscription Shares. Upon any determination by Subsequent Buyer and
Seller, in their reasonable discretion, that receipt of the Subscription
Shares by either Subsequent Buyer directly or Seller, for delivery to or
holding in trust for and for the sole benefit of Subsequent Buyer, is
impossible and payment for the Subscription Shares no longer applicable,
Subsequent Buyer and Seller shall promptly deliver a joint direction to the
Escrow Agent directing the release of the Escrow Funds, with interest, to
Subsequent Buyer. Seller acknowledges and agrees that, in any event, it has
no interest in or entitlement to the Escrow Funds except to the extent it is
required to pay the Subscription Price. In the event there is a delay in
Seller's delivery and transfer of title to the Subscription Shares to
Subsequent Buyer, despite Seller's best efforts, caused solely by a legal
restriction which prohibits delivery and transfer of title of the
Subscription Shares to Subsequent Buyer, Buyer shall hold Seller harmless
with respect to any decrease in the value of the Subscription Shares caused
solely by such delay.
6. Survival; Subsequent Transfer.
The terms of this Agreement shall be binding upon, and shall inure to
the benefit of and be enforceable by Buyer and its respective successors and
assigns. Seller hereby acknowledges that Buyer may re-sell, assign,
participate or otherwise transfer to a third person or entity (individually
and collectively, "Transferee") the Claims in whole or in part, together with
all right, title and interest of Buyer in and to this Agreement without the
prior consent of or notice to Seller and to the extent of such re-sale,
assignment, participation or transfer Buyer shall be relieved of its
obligations hereunder. Seller further acknowledges and agrees that the sale,
assignment, participation or any other transfer to the Transferee of Buyer's
interest in the Claims, in whole or in part, will cause Buyer to forward and
convey all papers, documents, agreements, instruments, invoices, purchase
orders, proofs of delivery and other documents evidencing ("Upstream Due
Diligence"), or relating or referring to, the Claims, the Transferred Rights
and the transactions contemplated hereby. All representations, warranties,
covenants and agreements contained herein shall survive the execution and
delivery of this Agreement and any such re-sale, assignment, participation or
other transfer thereof, and shall inure to the benefit of Buyer and its
9
respective successors and assigns. Without limiting the generality of the
foregoing, Seller acknowledges and agrees that on the Closing Date,
immediately subsequent to the execution and delivery of this Agreement and
consummation of the transactions contemplated hereby, Buyer is selling the
Transferred Rights in their entirety (including all right, title and interest
of Buyer in and to this Agreement) to CFIP Master Fund, Ltd. ("Subsequent
Buyer") and all representations, warranties, covenants and agreements
contained herein shall inure to the benefit of and be enforceable by
Subsequent Buyer and its successors and assigns as fully as if Subsequent
Buyer were an original Party hereto.
7. CONFIDENTIALITY.
THE PARTIES HEREBY COVENANT THAT THEY WILL MAINTAIN CONFIDENTIALITY OF
THE TERMS OF THE PURCHASE PRICE LETTER, INCLUDING, BUT NOT LIMITED TO (A) THE
PURCHASE PRICE, AND (B) THE PURCHASE RATE. NOTWITHSTANDING SUCH AGREEMENT,
THE PARTIES ACKNOWLEDGE THAT SELLER MAY BE REQUIRED TO DISCLOSE THE AGGREGATE
AMOUNT OF THE PURCHASE PRICE IN ITS PUBLIC FILINGS WITH THE SECURITIES AND
EXCHANGE COMMISSION AND MAY BE REQUIRED TO PROVIDE SUCH INFORMATION IN
RESPONSE TO QUESTIONS FROM INVESTORS AND ANALYSTS. UNLESS REQUIRED BY LAW,
SECURITIES AND EXCHANGE COMMISSION REGULATIONS OR A COURT OF COMPETENT
JURISDICTION, SELLER SHALL NOT DISCLOSE THE PURCHASE PRICE AND/OR THE
PURCHASE RATES PAID FOR THE TRANSFERRED RIGHTS, AND SELLER SHALL PROVIDE
BUYER WITH NOTICE PRIOR TO MAKING ANY DISCLOSURE UNDER THIS SECTION,
INCLUDING THE CONTENT OF THE PROPOSED DISCLOSURE, THE REASONS THAT SUCH
DISCLOSURE IS REQUIRED BY LAW, SECURITIES AND EXCHANGE COMMISSION REGULATIONS
OR A COURT OF COMPETENT JURISDICTION, AND THE TIME AND PLACE THAT DISCLOSURE
WILL BE MADE.
8. Default.
If either Party fails to make a payment or distribution to the other
Party within the time period specified in this Agreement, the Party failing
to make full payment of any amount when due shall, upon demand of the other
Party, pay such due amount together with interest for each day from (and
including) the date hereof, to (but excluding) the date when actually paid,
at a rate equal to the Default Rate.
9. Dispute Resolution.
This Agreement shall be governed by and construed in accordance with
the laws of the State of New York, without giving effect to the choice of law
principles thereof. Each Party hereto irrevocably and unconditionally
consents to the jurisdiction of the courts located in the State of New York
and the Bankruptcy Court (as defined in the Plan) for any action to enforce,
interpret or construe any provision of this Agreement, and also hereby
irrevocably waives any defense of improper venue or forum non conveniens to
any such action brought in those courts and waives any right to demand trial
by jury.
10
10. Purchase Price and Settlement.
Payment by Buyer of the Purchase Price attributable to the sale of the
Claims shall be made in accordance with the Purchase Price Letter on the same
day (the "Funding Date") as the mutual execution (the "Closing Date") by both
Seller and Buyer of this Agreement, the Purchase Price Letter and the
applicable Exhibits hereto (together the "Operative Documents"), unless (i)
such execution occurs after 11:00 a.m. Central Time, in which case the
Funding Date shall be the next business day after the Closing Date, or (ii)
an extension of the Funding Date is agreed to in writing by Seller. The
Purchase Price shall be paid by wire transfer of immediately available funds
and constitutes an amount equal to the product of (x) the Purchase Rate (as
set forth in the Purchase Price Letter), and (y) the Purchase Amount. On the
Funding Date, Buyer shall also fund the Escrow pursuant to the terms of
Section 5 above and the Escrow Agreement.
11. Miscellaneous.
11.1. Evidence of Transfer.
Seller hereby acknowledges and consents to all terms set forth in
this Agreement and hereby waives its right to raise any objection thereto
pursuant to Rule 3001(e) of the Federal Rules of Bankruptcy Procedure
("FRBP"), and consents to the substitution of Buyer for Seller in the
Proceedings with respect to the Transferred Rights, but not the Previously
Transferred Claim. Seller agrees that Buyer may file a notice of transfer
with the Court pursuant to Section 3001(e) of the FRBP, including the
Evidence of Transfer of Claim ("Evidence of Transfer"), substantially in the
form attached hereto as Exhibit E and that Seller shall cooperate with Buyer
in connection therewith. Seller grants Buyer the right to make any
corrections to the Evidence of Transfer necessary or appropriate to effect
the sale of the Claims and the Transferred Rights. Seller hereby waives any
notice or hearing requirements imposed by Rule 3001 of the FRBP, and
stipulates that an order may be entered recognizing this Agreement and the
Evidence of Transfer as an unconditional transfer and sale, and the Buyer
herein as the valid owner of the Transferred Rights.
11.2. Notices and Deliveries. All demands, notices, consents, and
communications hereunder shall be in writing and shall be deemed to have
been duly given when hand-delivered or duly deposited in the mails, by
certified or registered mail, via electronic mail, or via overnight courier,
receipt verified, to the address set forth herein, or such other address as
may be furnished hereafter by notice in writing. If to the Buyer: APS Capital
Corp., ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇ ▇-▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, Tel:
(▇▇▇) ▇▇▇-▇▇▇▇: ▇▇▇▇▇▇@▇▇▇-▇▇▇▇▇▇▇▇▇.▇▇▇, Fax: (▇▇▇) ▇▇▇-▇▇▇▇. If to the
Seller: Aehr Test Systems Attn: ▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇
▇▇▇▇▇; Tel: (▇▇▇) ▇▇▇-▇▇▇▇ ▇▇▇▇; Fax: (▇▇▇) ▇▇▇-▇▇▇▇; email:
▇▇▇▇▇▇▇@▇▇▇▇.▇▇▇.
11.3. Entire Agreement. The Operative Documents, together with
any exhibits hereto or thereto, constitute the entire agreement by the
Parties hereto and supersede any other agreement, whether written or oral,
that may have been made or entered into prior to the date hereof between
Seller on the one hand and Buyer on the other hand with respect to the
Claims. Each Party agrees and acknowledges that (a) except as expressly
stated in this Agreement, each Party makes no representations or warranties,
express or implied, with respect to the transactions
11
contemplated herein or therein; and (b) Seller's sale of the Transferred
Rights and other property, if any, to Buyer is irrevocable, and each Party
shall have no recourse to the other except as specifically set forth in this
Agreement.
11.4. Amendments and Waivers. This Agreement may be amended,
modified, superseded, or canceled, and any of the terms, representations,
warranties or covenants hereof may be waived, only by written instrument
executed by the Party against whom enforcement of such amendment is sought,
or, in the case of a waiver, by the Party waiving compliance; provided,
Subsequent Buyer must in any event consent to any such amendment.
11.5. Limited Liability. Notwithstanding anything contained in
this Agreement to the contrary, Seller agrees that, absent fraud or material
misstatement, (a) no member, general or limited partner or officer or
director of either Buyer or Subsequent Buyer shall be personally liable for
any obligation or liability of Buyer or Subsequent Buyer, as applicable,
under this Agreement, and (b) all obligations and liabilities of either Buyer
or Subsequent Buyer under this Agreement are enforceable solely against Buyer
or Subsequent Buyer, as applicable, and such Party's assets and not against
any assets of any member, general or limited partner, or officer or director
of such Party. BUYER DOES NOT ASSUME AND SHALL NOT BE RESPONSIBLE FOR ANY
OBLIGATIONS OR LIABILITIES OF SELLER, INCLUDING DISABILITIES OF THE CLAIMS,
RELATED TO, OR IN CONNECTION WITH, THE CLAIMS, THE TRANSFERRED RIGHTS OR THE
PROCEEDINGS.
11.6. Captions; Counterparts; Execution. The captions in this
Agreement are for convenience only and shall not be considered a part of or
affect the construction or interpretation of any provision of this Agreement.
This Agreement may be executed in one or more counterparts, each of which
shall be an original, but all of which together shall constitute one and the
same instrument. All telecopied or telefaxed confirmations, and other
transaction documents, and signatures thereto, shall be duplicate originals.
11.7. Severability. If any provision hereof is found by an
arbitrator(s) or a court of competent jurisdiction to be prohibited or
unenforceable in any jurisdiction, such provision shall be ineffective as to
such jurisdiction only to the extent of such prohibition or unenforceability,
and such prohibition or unenforceability shall not invalidate the balance of
such provision as to such jurisdiction to the extent it is not prohibited or
unenforceable, nor invalidate such provision in any other jurisdiction, nor
invalidate the other provisions hereof.
11.8. Cooperation. Each Party hereto agrees to cooperate in good
faith with reasonable requests by the other Party hereto in order to
effectuate the intents and purposes of this Agreement.
[Remainder Of Page Left Intentionally Blank]
[Signature Page Follows]
12
IN WITNESS WHEREOF, the Seller and the Buyer have caused this
Agreement to be duly executed as of this 25 day of January, 2010.
SELLER:
AEHR TEST SYSTEMS
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------
Title: VP, CFO
------------------------
BUYER:
APS Capital Corp.
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇
-------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇▇
------------------------
Title: President
------------------------
Acknowledged and Agreed:
AEHR TEST SYSTEMS JAPAN LTD.
By: /s/ ▇▇▇▇▇ ▇▇▇▇
-------------------------
Name: ▇▇▇▇▇ ▇▇▇▇
------------------------
Title: PRESIDENT
------------------------
13
EXHIBIT A
STIPULATION
(See attached.)
14
EXHIBIT B
FORM OF NOTICE TO ACCOUNT DEBTOR
(See attached.)
15
Notice to Account Debtor
January ___, 2010
VIA CERTIFIED MAIL/
RETURN RECEIPT REQUESTED
------------------------------
------------------------------
------------------------------
Re: Aehr Test Systems ("Seller")
Dear Sir or Madam:
As of the date hereof, Assignor has directly or indirectly (i)
assigned to CFIP Master Fund, Ltd., its successors and assigns ("Buyer") all
right, title and interest in, to and under those claims in the amount of
$7,116,665 described as the "Aehr Claims" in the Stipulation Between the
Debtors, Aehr Test Systems and Aehr Test Systems Japan Ltd. To Compromise
Claim No. 182 Filed By Aehr Test Systems, as approved by that certain Order
Granting Debtor's Motion for Order Approving Stipulation Between the Debtors,
Aehr Test Systems and Aehr Test Systems Japan Ltd. To Compromise Claim No.
182 Filed By Aehr Test Systems entered January 19, 2010 (the "Claim") and has
agreed to notify you that you should make any payments with respect to the
Claim directly to Buyer.
ACCORDINGLY, YOU ARE HEREBY NOTIFIED TO MAKE ANY AND ALL PAYMENTS AND OTHER
DISTRIBUTIONS ON ACCOUNT OF THE CLAIM THAT YOU NOW OR MAY HEREAFTER OWE TO
SELLER DIRECTLY TO BUYER BY WIRE TRANSFER TO THE ACCOUNT SET FORTH BELOW.
Any payments you make to Seller after your receipt of this Notice
may not satisfy your obligations. The Claim shall not be subject to any
setoff, counterclaim or deduction, if any, arising from any after the
assignment to Buyer. Payments and other distributions may be made only to
Buyer. This Notice shall be effective until further written notice to you
from Buyer.
16
If you have any questions concerning this matter, please call ______ at
___/___-____.
SELLER:
AEHR TEST SYSTEMS
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------
Title: VP, CFO
-------------------------
BUYER:
CFIP MASTER FUND,LTD.
By Chicago Fundamental Investment
Partners, LLC.
By:
-------------------------
Name:
------------------------
Title:
------------------------
WIRE INSTRUCTIONS:
Bank Name:
----------------------
ABA No:
-------------------------
Acct:
---------------------------
Acct No:
------------------------
Ref:[Spansion Inc. - Aehr Test Systems]
17
EXHIBIT C
FORM OF BLANK STOCK POWER
(See attached.)
18
ASSIGNMENT SEPARATE FROM CERTIFICATE
FOR VALUE RECEIVED, Aehr Test Systems hereby sells, assigns,
transfers and conveys unto CFIP Master Fund, Ltd. __________ shares of Common
Stock, par value $______ per share, of Spansion, Inc., standing in its name
on the books of said corporation and represented by Certificate
No(s). _____________________________ herewith and does hereby irrevocably
direct transfer of said stock on the books of said corporation.
Dated: __________________, 2010
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------
Title: VP, CFO
-------------------------
19
EXHIBIT D
FORM OF ESCROW AGREEMENT
(See attached.)
20
ESCROW AGREEMENT
THIS ESCROW AGREEMENT (as the same may be amended or modified
from time to time pursuant hereto, this "Escrow Agreement") is made and
entered into as of January __, 2010, by and among CFIP Master Fund, Ltd.
("Party A"), Aehr Test Systems ("Party B", and together with Party A,
sometimes referred to individually as "Party" or collectively as the
"Parties"), and JPMorgan Chase Bank, National Association (the "Escrow
Agent").
WHEREAS, the Parties have agreed to deposit in escrow certain funds and wish
such deposit to be subject to the terms and conditions set forth herein.
NOW THEREFORE, in consideration of the foregoing and of the mutual covenants
hereinafter set forth, the parties hereto agree as follows:
1. Appointment. The Parties hereby appoint the Escrow Agent as their
escrow agent for the purposes set forth herein, and the Escrow Agent hereby
accepts such appointment under the terms and conditions set forth herein.
2. Fund. Party A agrees to deposit with the Escrow Agent the sum of
$722,054.00 (the "Escrow Deposit"). The Escrow Agent shall hold the Escrow
Deposit and, subject to the terms and conditions hereof, shall invest and
reinvest the Escrow Deposit and the proceeds thereof (the "Fund") as directed
in Section 3.
3. Investment of Fund. During the term of this Escrow Agreement, the
Fund shall be invested in a JPMorgan Chase Bank, N.A. money market deposit
account ("MMDA") or a successor or similar investment offered by the Escrow
Agent, unless otherwise instructed in writing by the Parties and as shall be
acceptable to the Escrow Agent. The rate of return on an MMDA varies from
time to time based upon market conditions. Written investment instructions,
if any, shall specify the type and identity of the investments to be
purchased and/or sold. The Escrow Agent is hereby authorized to execute
purchases and sales of investments through the facilities of its own trading
or capital markets operations or those of any affiliated entity. The Escrow
Agent or any of its affiliates may receive compensation with respect to any
investment directed hereunder including without limitation charging an agency
fee in connection with each transaction. The Parties recognize and agree
that the Escrow Agent will not provide supervision, recommendations or advice
relating to either the investment of moneys held in the Fund or the purchase,
sale, retention or other disposition of any investment described herein. The
Escrow Agent shall not have any liability for any loss sustained as a result
of any investment in an investment made pursuant to the terms of this Escrow
Agreement or as a result of any liquidation of any investment prior to its
maturity or for the failure of the Parties to give the Escrow Agent
instructions to invest or reinvest the Escrow Fund. The Escrow Agent shall
have the right to liquidate any investments held in order to provide funds
necessary to make required payments under this Escrow Agreement.
4. Disposition and Termination. Upon the terms and subject to the
conditions set forth in the Underlying Agreement, upon determination between
the Parties as to entitlement to the Escrow Deposit, Party A and Party B
agree to deliver a Joint Direction to the Escrow Agent directing the Escrow
Agent to disburse to either Party A or Party B the Escrow Deposit and to
disburse to Party A the amount of the Fund in excess of the Escrow Deposit.
In the event conflicting demands are made upon the Escrow Agent, the Escrow
Agent may withhold performance until such time as said conflicting demands
shall have been withdrawn, the Parties shall have delivered to the Escrow
Agent a Joint Direction or the rights of the Parties shall have been settled
by court adjudication, arbitration, final order or otherwise. A "Joint
Direction" means a joint written direction executed by an authorized
representive of Party A as set forth on Schedule 1 and an authorized
representative of Party B as set forth on Schedule 1. Upon delivery of the
Fund by the Escrow Agent, this Escrow Agreement shall terminate, subject to
the provisions of Sections 7 and 8 which shall survive such termination.
5. Escrow Agent. (a) The Escrow Agent shall have only those duties as
are specifically and expressly provided herein, which shall be deemed purely
ministerial in nature, and no other duties shall be implied. The Escrow
Agent shall neither be responsible for, nor chargeable with, knowledge of,
nor have any requirements to
Form Basic Three Party Escrow Agreement 1 ▇▇▇▇▇ ▇ ▇▇▇▇ (312) 954-0078
May 2008 ▇▇▇▇▇.▇.▇▇▇▇@▇▇▇▇▇▇▇▇.▇▇▇
comply with, the terms and conditions of any other agreement, instrument or
document between the Parties, in connection herewith, if any, including
without limitation the Purchase and Sale Agreement for Certain Claims by and
between Party B and APS Capital Corp. dated as of the date hereof (the
"Underlying Agreement"), nor shall the Escrow Agent be required to determine
if any person or entity has complied with any such agreements, nor shall any
additional obligations of the Escrow Agent be inferred from the terms of such
agreements, even though reference thereto may be made in this Escrow
Agreement. In the event of any conflict between the terms and provisions of
this Escrow Agreement, those of the Underlying Agreement, any schedule or
exhibit attached to the Escrow Agreement, or any other agreement among the
Parties, with respect to the Escrow Agent, the terms and conditions of this
Escrow Agreement shall control. The Escrow Agent may rely upon and shall not
be liable for acting or refraining from acting upon any written notice,
document, instruction or request furnished to it hereunder and believed by it
to be genuine and to have been signed or presented by the proper Party or
Parties without inquiry and without requiring substantiating evidence of any
kind. The Escrow Agent shall be under no duty to inquire into or investigate
the validity, accuracy or content of any such document, notice, instruction
or request. The Escrow Agent shall have no duty to solicit any payments
which may be due it or the Fund, including, without limitation, the Escrow
Deposit nor shall the Escrow Agent have any duty or obligation to confirm or
verify the accuracy or correctness of any amounts deposited with it
hereunder.
(b) The Escrow Agent shall not be liable for any action taken, suffered or
omitted to be taken by it except to the extent that a final adjudication of a
court of competent jurisdiction determines that the Escrow Agent's gross
negligence or willful misconduct was the primary cause of any loss to either
Party. The Escrow Agent may execute any of its powers and perform any of its
duties hereunder directly or through attorneys, and shall be liable only for
its gross negligence or willful misconduct (as finally adjudicated in a court
of competent jurisdiction) in the selection of any such attorney. The Escrow
Agent may consult with counsel, accountants and other skilled persons to be
selected and retained by it. The Escrow Agent shall not be liable for any
action taken, suffered or omitted to be taken by it in accordance with, or in
reliance upon, the advice or opinion of any such counsel, accountants or
other skilled persons. In the event that the Escrow Agent shall be uncertain
or believe there is some ambiguity as to its duties or rights hereunder or
shall receive instructions, claims or demands from any party hereto which, in
its opinion, conflict with any of the provisions of this Escrow Agreement, it
shall be entitled to refrain from taking any action and its sole obligation
shall be to keep safely all property held in escrow until it shall be given a
direction in writing by the Parties which eliminates such ambiguity or
uncertainty to the satisfaction of Escrow Agent or by a final and non-
appealable order or judgment of a court of competent jurisdiction. The
Parties agree to pursue any redress or recourse in connection with any
dispute without making the Escrow Agent a party to the same. Anything in
this Escrow Agreement to the contrary notwithstanding, in no event shall the
Escrow Agent be liable for special, incidental, punitive, indirect or
consequential loss or damage of any kind whatsoever (including but not
limited to lost profits), even if the Escrow Agent has been advised of the
likelihood of such loss or damage and regardless of the form of action.
6. Succession. (a) The Escrow Agent may resign and be discharged from
its duties or obligations hereunder by giving thirty (30) days advance notice
in writing of such resignation to the Parties specifying a date when such
resignation shall take effect. If the Parties have failed to appoint a
successor escrow agent prior to the expiration of thirty (30) days following
receipt of the notice of resignation, the Escrow Agent may petition any court
of competent jurisdiction for the appointment of a successor escrow agent or
for other appropriate relief, and any such resulting appointment shall be
binding upon all of the parties hereto. Escrow Agent's sole responsibility
after such thirty (30) day notice period expires shall be to hold the Fund
(without any obligation to reinvest the same) and to deliver the same to a
designated substitute escrow agent, if any, or in accordance with the
directions of a final order or judgment of a court of competent jurisdiction,
at which time of delivery Escrow Agent's obligations hereunder shall cease
and terminate, subject to the provisions of Sections 7 and 8 hereunder. The
Escrow Agent shall have the right to withhold an amount equal to any amount
due and owing to the Escrow Agent, plus any costs and expenses the Escrow
Agent shall reasonably believe may be incurred by the Escrow Agent in
connection with the termination of the Escrow Agreement.
(b) Any entity into which the Escrow Agent may be merged or converted or with
which it may be consolidated, or any entity to which all or substantially all
the escrow business may be transferred, shall be the Escrow Agent under this
Escrow Agreement without further act.
Form Basic Three Party Escrow Agreement 2 ▇▇▇▇▇ ▇ ▇▇▇▇ (312) 954-0078
May 2008 ▇▇▇▇▇.▇.▇▇▇▇@▇▇▇▇▇▇▇▇.▇▇▇
7. Compensation and Reimbursement. Party A and Party B agree to (a)
pay the Escrow Agent upon execution of this Escrow Agreement and from time to
time thereafter reasonable compensation for the services to be rendered
hereunder, which unless otherwise agreed in writing shall be as described in
Schedule 2 attached hereto, and (b) pay or reimburse the Escrow Agent upon
request for all expenses, disbursements and advances, including, without
limitation reasonable attorney's fees and expenses, incurred or made by it in
connection with the preparation, negotiation, execution, performance,
delivery, modification and termination of this Escrow Agreement.
8. Indemnity. The Parties shall jointly and severally indemnify, defend
and save harmless the Escrow Agent and its affiliates and their respective
successors, assigns, directors, officers, managers, attorneys, accountants,
experts, agents and employees (the "indemnitees") from and against any and
all losses, damages, claims, liabilities, penalties, judgments, settlements,
actions, suits, proceedings, litigation, investigations, costs or expenses
(including, without limitation, the fees and expenses of outside counsel and
experts and their staffs and all expense of document location, duplication
and shipment) (collectively "Losses") arising out of or in connection with
(a) the Escrow Agent's execution and performance of this Escrow Agreement,
tax reporting or withholding, the enforcement of any rights or remedies under
or in connection with this Escrow Agreement, or as may arise by reason of any
act, omission or error of the indemnitee, except in the case of any
indemnitee to the extent that such Losses are finally adjudicated by a court
of competent jurisdiction to have been primarily caused by the gross
negligence or willful misconduct of such indemnitee, or (b) its following any
instructions or other directions, whether joint or singular, from the
Parties, except to the extent that its following any such instruction or
direction is expressly forbidden by the terms hereof. The Parties hereto
acknowledge that the foregoing indemnities shall survive the resignation,
replacement or removal of the Escrow Agent or the termination of this Escrow
Agreement. The Parties hereby grant the Escrow Agent a lien on, right of
set-off against and security interest in, the Fund for the payment of any
claim for indemnification, fees, expenses and amounts due hereunder. In
furtherance of the foregoing, the Escrow Agent is expressly authorized and
directed, but shall not be obligated, to charge against and withdraw from the
Fund for its own account or for the account of an indemnitee any amounts due
to the Escrow Agent or to an indemnitee under this Section 8. The
obligations contained in this Section 8 shall survive the termination of this
Escrow Agreement and the resignation, replacement or removal of the Escrow
Agent.
9. Patriot Act Disclosure/Taxpayer Identification Numbers/Tax Reporting.
(a) Patriot Act Disclosure. Section 326 of the Uniting and Strengthening
America by Providing Appropriate Tools Required to Intercept and Obstruct
Terrorism Act of 2001 ("USA PATRIOT Act") requires the Escrow Agent to
implement reasonable procedures to verify the identity of any person that
opens a new account with it. Accordingly, the Parties acknowledge that
Section 326 of the USA PATRIOT Act and the Escrow Agent's identity
verification procedures require the Escrow Agent to obtain information which
may be used to confirm the Parties identity including without limitation
name, address and organizational documents ("identifying information"). The
Parties agree to provide the Escrow Agent with and consent to the Escrow
Agent obtaining from third parties any such identifying information required
as a condition of opening an account with or using any service provided by
the Escrow Agent.
(b) Taxpayer Identification Numbers ("TIN")
The Parties have provided the Escrow Agent with their respective fully
executed Internal Revenue Service ("IRS") Form W-8, or W-9 and/or other
required documentation. The Parties each represent that its correct TIN
assigned by the IRS, or any other taxing authority, is set forth in the
delivered forms.
Form Basic Three Party Escrow Agreement 3 ▇▇▇▇▇ ▇ ▇▇▇▇ (312) 954-0078
May 2008 ▇▇▇▇▇.▇.▇▇▇▇@▇▇▇▇▇▇▇▇.▇▇▇
(c) Tax Reporting
All interest or other income earned under the Escrow Agreement shall be
allocated to Party A and reported, as and to the extent required by law, by
the Escrow Agent to the IRS, or any other taxing authority, on IRS Form 1099
or 1042S (or other appropriate form) as income earned from the Escrow Deposit
by Party A whether or not said income has been distributed during such year.
Any other tax returns required to be filed will be prepared and filed by
Party A and/or Party B with the IRS and any other taxing authority as
required by law. The Parties acknowledge and agree that Escrow Agent shall
have no responsibility for the preparation and/or filing of any income,
franchise or any other tax return with respect to the Fund or any income
earned by the Escrow Deposit. The Parties further acknowledge and agree that
any taxes payable from the income earned on the investment of any sums held
in the Escrow Deposit shall be paid by Party A. In the absence of written
direction from the Parties, all proceeds of the Fund shall be retained in the
Fund and reinvested from time to time by the Escrow Agent as provided in this
Agreement. Escrow Agent shall withhold any taxes it deems appropriate,
including but not limited to required withholding in the absence of proper
tax documentation, and shall remit such taxes to the appropriate authorities.
10. Notices. All communications hereunder shall be in writing and shall
be deemed to be duly given and received:
(a) upon delivery, if delivered personally, or upon confirmed
transmittal, if by facsimile;
(b) on the next Business Day (as hereinafter defined) if sent by
overnight courier; or
(c) four (4) Business Days after mailing if mailed by prepaid registered
mail, return receipt requested, to the appropriate notice address set
forth below or at such other address as any party hereto may have
furnished to the other parties in writing by registered mail, return
receipt requested.
If to Party A CFIP Master Fund, Ltd.
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇ and ▇▇▇▇ ▇▇▇▇
Tel No.: (▇▇▇) ▇▇▇-▇▇▇▇
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
If to Party B Aehr Test Systems
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Tel No.: (▇▇▇) ▇▇▇-▇▇▇▇ v. 321
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
If to the Escrow Agent JPMorgan Chase Bank, N.A.
420 ▇. ▇▇▇ ▇▇▇▇▇, Mail Code IL1-0113
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
Notwithstanding the above, in the case of communications delivered to the
Escrow Agent pursuant to (a), (b) and (c) of this Section 10, such
communications shall be deemed to have been given on the date received by an
officer of the Escrow Agent or any employee of the Escrow Agent who reports
directly to any such officer at the above-referenced office. In the event
that the Escrow Agent, in its sole discretion, shall determine that an
emergency exists, the Escrow Agent may use such other means of communication
as the Escrow Agent deems appropriate. "Business Day" shall mean any day
other than a Saturday, Sunday or any other day on which the Escrow Agent
located at the notice address set forth above is authorized or required by
law or executive order to remain closed.
Form Basic Three Party Escrow Agreement 4 ▇▇▇▇▇ ▇ ▇▇▇▇ (312) 954-0078
May 2008 ▇▇▇▇▇.▇.▇▇▇▇@▇▇▇▇▇▇▇▇.▇▇▇
11. Security Procedures. In the event funds transfer instructions are
given (other than in writing at the time of execution of this Escrow
Agreement), whether in writing, by facsimile or otherwise, the Escrow Agent
is authorized to seek confirmation of such instructions by telephone call-
back to the person or persons designated on schedule 1 hereto ("Schedule 1"),
and the Escrow Agent may rely upon the confirmation of anyone purporting to
be the person or persons so designated. Each funds transfer instruction
shall be executed by an authorized signatory, a list of such authorized
signatories is set forth on Schedule 1. The persons and telephone numbers
for call-backs may be changed only in a writing actually received and
acknowledged by the Escrow Agent. If the Escrow Agent is unable to contact
any of the authorized representatives identified in Schedule 1, the Escrow
Agent is hereby authorized to seek confirmation of such instructions by
telephone call-back to any one or more of Party A or Party B's executive
officers, ("Executive Officers"), as the case may be, which shall include (i)
in the case of Party A, a Portfolio Manager, Managing Principal, the Chief
Financial Officer or G.C. of Chicago Fundamental Investment Partners LLC
(Party A's Investment Manager), and in the case of Party B, the titles of
CEO, President and Vice President, as the Escrow Agent may select. Such
"Executive Officer" shall deliver to the Escrow Agent a fully executed
incumbency certificate, and the Escrow Agent may rely upon the confirmation
of anyone purporting to be any such officer. The Escrow Agent and the
beneficiary's bank in any funds transfer may rely solely upon any account
numbers or similar identifying numbers provided by Party A or Party B to
identify (a) the beneficiary, (b) the beneficiary's bank, or (c) an
intermediary bank. The Escrow Agent may apply any of the escrowed funds for
any payment order it executes using any such identifying number, even when
its use may result in a person other than the beneficiary being paid, or the
transfer of funds to a bank other than the beneficiary's bank or an
intermediary bank designated. The Parties acknowledge that these security
procedures are commercially reasonable.
12. Compliance with Court Orders. In the event that any escrow property
shall be attached, garnished or levied upon by any court order, or the
delivery thereof shall be stayed or enjoined by an order of a court, or any
order, judgment or decree shall be made or entered by any court order
affecting the property deposited under this Escrow Agreement, the Escrow
Agent is hereby expressly authorized, in its sole discretion, to obey and
comply with all writs, orders or decrees so entered or issued, which it is
advised by legal counsel of its own choosing is binding upon it, whether with
or without jurisdiction, and in the event that the Escrow Agent obeys or
complies with any such writ, order or decree it shall not be liable to any of
the parties hereto or to any other person, entity, firm or corporation, by
reason of such compliance notwithstanding such writ, order or decree be
subsequently reversed, modified, annulled, set aside or vacated.
13. Miscellaneous. The provisions of this Escrow Agreement may be
waived, altered, amended or supplemented, in whole or in part, only by a
writing signed by the Escrow Agent and the Parties. Neither this Escrow
Agreement nor any right or interest hereunder may be assigned in whole or in
part by the Escrow Agent or any Party, except as provided in Section 6,
without the prior consent of the Escrow Agent and the other parties. This
Escrow Agreement shall be governed by and construed under the laws of the
State of Illinois. Each Party irrevocably waives any objection on the
grounds of venue, forum non-conveniens or any similar grounds and irrevocably
consents to service of process by mail or in any other manner permitted by
applicable law and consents to the jurisdiction of the courts located in the
State of Illinois. The Parties further hereby waive any right to a trial by
jury with respect to any lawsuit or judicial proceeding arising or relating
to this Escrow Agreement. No party to this Escrow Agreement is liable to any
other party for losses due to, or if it is unable to perform its obligations
under the terms of this Escrow Agreement because of, acts of God, fire, war,
terrorism, floods, strikes, electrical outages, equipment or transmission
failure, or other causes reasonably beyond its control. This Escrow
Agreement may be executed in one or more counterparts, each of which shall be
deemed an original, but all of which together shall constitute one and the
same instrument. All signatures of the parties to this Escrow Agreement may
be transmitted by facsimile, and such facsimile will, for all purposes, be
deemed to be the original signature of such party whose signature it
reproduces, and will be binding upon such party. If any provision of this
Escrow Agreement is determined to be prohibited or unenforceable by reason of
any applicable law of a jurisdiction, then such provision shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions thereof, and
any such prohibition or unenforceability in such jurisdiction shall not
invalidate or render unenforceable such provisions in any other jurisdiction.
A person who is not a party to this Agreement shall have no right to enforce
any term of this Agreement. The parties represent, warrant and covenant that
each document, notice, instruction or request provided by such Party to
Escrow Agent shall comply with applicable laws and regulations. Where,
however, the conflicting provisions of any such applicable law may be waived,
they are hereby irrevocably waived by the parties hereto to the fullest
extent permitted by law, to the end
Form Basic Three Party Escrow Agreement 5 ▇▇▇▇▇ ▇ ▇▇▇▇ (312) 954-0078
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that this Escrow Agreement shall be enforced as written. Except as expressly
provided in Section 8 above, nothing in this Escrow Agreement, whether
express or implied, shall be construed to give to any person or entity other
than the Escrow Agent and the Parties any legal or equitable right, remedy,
interest or claim under or in respect of this Escrow Agreement or any funds
escrowed hereunder.
Form Basic Three Party Escrow Agreement 6 ▇▇▇▇▇ ▇ ▇▇▇▇ (312) 954-0078
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IN WITNESS WHEREOF, the parties hereto have executed this Escrow Agreement as
of the date set forth above.
CFIP MASTER FUND, LTD.
By: Chicago Fundamental Investment Partners, LLC,
Its Investment Manager
By:
------------------------------
Name:
----------------------------
Title:
---------------------------
AEHR TEST SYSTEMS
By:
------------------------------
Name:
----------------------------
Title:
---------------------------
JPMORGAN CHASE BANK, NATIONAL ASSOCIATION
as Escrow Agent
By:
------------------------------
Name:
----------------------------
Title:
---------------------------
Form Basic Three Party Escrow Agreement 7 ▇▇▇▇▇ ▇ ▇▇▇▇ (312) 954-0078
May 2008 ▇▇▇▇▇.▇.▇▇▇▇@▇▇▇▇▇▇▇▇.▇▇▇
SCHEDULE 1
Telephone Number(s) and authorized signature(s) for
Person(s) Designated to Give Funds Transfer Instructions
If to Party A: [SEE ATTACHED]
Name Telephone Number Signature
1.
-------------------- ------------------ --------------------
2.
-------------------- ------------------ --------------------
3.
-------------------- ------------------ --------------------
If to Party B:
Name Telephone Number Signature
1.
-------------------- ------------------ --------------------
2.
-------------------- ------------------ --------------------
3.
-------------------- ------------------ --------------------
Telephone Number(s) for Call-Backs and
Person(s) Designated to Confirm Funds Transfer Instructions
If to Party A:
Name Telephone Number
1.
-------------------- ------------------
2.
-------------------- ------------------
3.
-------------------- ------------------
If to Party B:
Name Telephone Number
1.
-------------------- ------------------
2.
-------------------- ------------------
3.
-------------------- ------------------
All funds transfer instructions must include the signature of the person(s)
authorizing said funds transfer and must not be the same person confirming
said transfer.
Form Basic Three Party Escrow Agreement 8 ▇▇▇▇▇ ▇ ▇▇▇▇ (312) 954-0078
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[LOGO]JPMorgan
Schedule 2
Escrow Agent's Compensation:
New Account Acceptance Fee . .. . . . . . . . . $TBD
One-time fee payable upon Account Opening
A New Account Acceptance Fee will be charged for the Bank's review of
the Escrow Agreement along with any related account documentation.
Annual Administrative Fee . . . . . . . . . . . $2,500
Payable upon Account Opening and in Advance
of each year of service as Escrow Agent
The Annual Administrative Fee will cover the Bank's standard Escrow
services including, but not limited to, account setup, safekeeping of
assets, investment of funds, collection of income and other receipts,
preparation of statements comprising account activity and asset
listing, and distribution of assets in accordance with the specific
terms of the Escrow Agreement. These fees cover a full year, or any
part thereof, and thus are not prorated in the year of termination. The
account will be invoiced in the month in which the account is opened
and annually thereafter. Payment of the invoice is due 30 days
following receipt.
Out-of-Pocket Expenses:
Any reasonable out-of-pocket expenses including attorney's fees will be
considered extraordinary services for which related costs, transaction
charges, and additional fees will be billed at cost.
Modification of Fees:
Circumstances may arise necessitating a change in the foregoing fee schedule.
The Bank will maintain the fees at a level that is fair and reasonable in
relation to the responsibilities assumed and the duties performed.
Disclosure & Assumptions:
The fees quoted in this schedule assume that the escrow deposit will be
continuously invested in the JPMorgan Chase Bank Money Market Account.
Disbursements, receipts, investments or tax reporting exceeding 25 items
per year may be treated as extraordinary services thereby incurring
additional charges.
U.S. law permits the parties to make up to six (6) pre-authorized
withdrawals from an MMDA per calendar month or statement cycle or similar
period. If the MMDA can be accessed by checks, drafts, bills of
exchange, notes and other financial instruments ("Items"), then no more
than three (3) of these six (6) transfers may be made by an Item. The
Escrow Agent is required by U.S. law to reserve the right to require at
least seven (7) days notice prior to a withdrawal from an MMDA. The
Escrow Agent does not presently exercise this right.
Form Basic Three Party Escrow Agreement 9 ▇▇▇▇▇ ▇ ▇▇▇▇ (312) 954-0078
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EXHIBIT E
EVIDENCE OF TRANSFER
(See attached.)
21
EVIDENCE OF TRANSFER OF CLAIM
Aehr Test Systems, with an address at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇ ("Seller") transfers unto APS Capital Corp., its successors and
assigns ("Buyer"), pursuant to the terms of that certain Purchase and Sale
Agreement for Certain Claims1, of even date herewith (the "Agreement"), all
of its right, title and interest in and to those claims in the amount of
$7,116,665 represented by Claim No. 182 described as the "Aehr Claims" in the
Stipulation Between the Debtors, Aehr Test Systems and Aehr Test Systems
Japan Ltd. To Compromise Claim No. 182 Filed By Aehr Test Systems, as
approved by that certain Order Granting Debtor's Motion for Order Approving
Stipulation Between the Debtors, Aehr Test Systems and Aehr Test Systems
Japan Ltd. To Compromise Claim No. 182 Filed By Aehr Test Systems entered
January 19, 2010 (the "Stipulation"), against Spansion LLC and its
affiliates, subsidiaries and/or assigns (the "Debtor"), in proceedings for
reorganization (the "Proceedings") in the United States Bankruptcy Court for
the District of Delaware ("Court"), which cases are administered under In re
Spansion Inc., et al., Chapter 11 Case No. 09- 10690 (KJC).
Seller hereby waives to the fullest extent permitted by law any
right to a hearing as may be imposed by Rule 3001 of the Federal Rules of
Bankruptcy Procedure, the Bankruptcy Code, applicable local bankruptcy rules
or applicable law. Seller acknowledges and understands, and hereby
stipulates, that an order of the Bankruptcy Court may be entered without
further notice to Seller transferring to Buyer the foregoing Claims and
recognizing the Buyer as the sole owner and holder of the Claims. Seller
further directs the Debtor, the Bankruptcy Court and all other interested
parties that all further notices relating to the Claims, and all payments or
distributions of money or property in respect of the Claims, shall be
delivered or made to the Buyer.
________________________________
1 Capitalized terms not otherwise defined herein, have those meaning ascribed
to such terms in the Agreement.
22
IN WITNESS WHEREOF, the Seller and the Buyer have caused this
Evidence of Transfer to be duly executed as of January 25, 2010.
SELLER:
AEHR TEST SYSTEMS
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------
Title: VP, CFO
------------------------
BUYER:
APS Capital Corp.
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇
-------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇▇
------------------------
Title: President
------------------------
23
EXHIBIT F
FORM OF SUBSCRIPTION AGREEMENT
(See attached.)
24
EXHIBIT G
FORM OF ACKNOWLEDGMENT
(See attached.)
25
Schedule 1
HELD DEBTOR PROPERTY
(See attached.)
26