AEHR TEST SYSTEMS
Common Stock Purchase Agreement
February 26, 1990
INDEX
Page
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ARTICLE I - PURCHASE, SALE AND TERMS OF SHARES . . . . . . . . . . . . . . 1
1.1 Authorization of Shares. . . . . . . . . . . . . . . . . . . . . 1
1.2 Purchase and Sale of Shares . . . . . . . . . . . . . . . . . . 1
ARTICLE II - CONDITIONS TO CLOSING . . . . . . . . . . . . . . . . . . . . 2
2.1 Conditions to Purchasers' Obligations. . . . . . . . . . . . . . 2
2.2 Conditions to Company's Obligations. . . . . . . . . . . . . . . 3
ARTICLE III - REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . . . . . 3
3.1 Organization and Standing of the Company . . . . . . . . . . . . 3
3.2 Corporate Action . . . . . . . . . . . . . . . . . . . . . . . . 4
3.3 Governmental Approvals . . . . . . . . . . . . . . . . . . . . . 4
3.4 Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
3.5 Compliance with Other Instruments. . . . . . . . . . . . . . . . 5
3.6 Title to Assets, Patents . . . . . . . . . . . . . . . . . . . . 5
3.7 Financial Information. . . . . . . . . . . . . . . . . . . . . . 6
3.8 Taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
3.9 ERISA. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
3.10 Transactions with Affiliates . . . . . . . . . . . . . . . . . . 7
3.11 Other Matters. . . . . . . . . . . . . . . . . . . . . . . . . . 7
3.12 Securities Act of 1933 . . . . . . . . . . . . . . . . . . . . . 7
3.13 Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
3.14 No Brokers or Finders. . . . . . . . . . . . . . . . . . . . . . 8
3.15 Certain Agreements of Employees. . . . . . . . . . . . . . . . . 8
3.16 Capitalization; Status of Capital Stock. . . . . . . . . . . . . 8
3.17 Books and Records. . . . . . . . . . . . . . . . . . . . . . . . 9
3.18 Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . 9
3.19 Environmental Protection . . . . . . . . . . . . . . . . . . . . 9
ARTICLE IV - COVENANTS OF THE COMPANY. . . . . . . . . . . . . . . . . . . 10
4.1 Affirmative Covenants of the Company Other Than
Reporting Requirements . . . . . . . . . . . . . . . . . . . . 10
4.2 Negative Covenants of the Company. . . . . . . . . . . . . . . . 12
4.3 Reporting Requirements . . . . . . . . . . . . . . . . . . . . . 13
4.4 Confidentiality. . . . . . . . . . . . . . . . . . . . . . . . . 14
ARTICLE V - REGISTRATION RIGHTS. . . . . . . . . . . . . . . . . . . . . . 14
5.1 "Piggy-Back" Registration. . . . . . . . . . . . . . . . . . . . 14
5.2 Effectiveness. . . . . . . . . . . . . . . . . . . . . . . . . . 15
5.3 Indemnification of Holders of Registrable Shares . . . . . . . . 15
5.4 Indemnification of Company . . . . . . . . . . . . . . . . . . . 16
5.5 Exchange Act Registration. . . . . . . . . . . . . . . . . . . . 18
5.6 Damages. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
5.7 Further Obligations of the Company . . . . . . . . . . . . . . . 18
5.8 Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
5.9 Transfer of Registration Rights. . . . . . . . . . . . . . . . . 19
5.10 No Superior Rights . . . . . . . . . . . . . . . . . . . . . . . 20
ARTICLE VI - REPRESENTATIONS AND WARRANTIES OF PURCHASERS
AND RESTRICTIONS ON TRANSFER. . . . . . . . . . . . . . . . . 20
6.1 Representations and Warranties by Each Purchaser . . . . . . . . 20
6.2 Legends. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
6.3 Removal of Legends and Transfer Restrictions . . . . . . . . . . 21
6.4 Additional Purchases of Common Stock . . . . . . . . . . . . . . 22
ARTICLE VII - DEFINITIONS AND ACCOUNTING TERMS . . . . . . . . . . . . . . 22
7.1 Certain Defined Terms. . . . . . . . . . . . . . . . . . . . . . 22
7.2 Accounting Terms . . . . . . . . . . . . . . . . . . . . . . . . 24
ARTICLE VIII - MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . 24
8.1 No Waiver; Cumulative Remedies . . . . . . . . . . . . . . . . . 24
8.2 Amendments, Waivers and Consents . . . . . . . . . . . . . . . . 24
8.3 Addresses for Notices, etc.. . . . . . . . . . . . . . . . . . . 25
8.4 Costs, Expenses and Taxes. . . . . . . . . . . . . . . . . . . . 25
8.5 Binding Effect; Assignment . . . . . . . . . . . . . . . . . . . 25
8.6 Survival of Representations and Warranties . . . . . . . . . . . 26
8.7 Prior Agreements . . . . . . . . . . . . . . . . . . . . . . . . 26
8.8 Severability . . . . . . . . . . . . . . . . . . . . . . . . . . 26
8.9 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . 26
8.10 Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
8.11 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . 26
8.12 Further Assurances . . . . . . . . . . . . . . . . . . . . . . . 26
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EXHIBITS
1.1 List of Purchasers
2.1(b) Opinion Letter
2.1(c) Amendment to Registration Rights
3.0 Schedule of Exceptions and Other Matters
3.7 Financial Statements
3.15 Employee Invention and Nondisclosure Agreement
3.16 Schedule of Stock, Options and Other Rights
and Restrictions
4.1(k) Aehr Test Systems Japan Term Sheet
4.1(l) Conditional Waiver
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COMMON STOCK PURCHASE AGREEMENT
This Common Stock Purchase Agreement ("Agreement') is made as of February
26, 1990 among Aehr Test Systems, a California corporation (the "Company"), and
the persons identified on EXHIBIT 1.1 hereto (the "Purchasers").
In consideration of the mutual promises, covenants and conditions
hereinafter set forth, the parties hereto agree as follows:
ARTICLE I
PURCHASE, SALE AND TERMS OF SHARES
1.1 AUTHORIZATION OF SHARES. The Company has authorized the issuance and
sale of 385,715 shares (the "Shares") of the previously authorized but unissued
shares of its Capital Stock, without par value (the "Common Stock"), to the
Purchasers and in the respective amounts set forth in EXHIBIT 1.1 hereto.
1.2 PURCHASE AND SALE OF SHARES.
(a) THE CLOSING. Subject to and in reliance upon the
representations, warranties, terms and conditions of this Agreement, the Company
agrees to issue and sell to the Purchasers, and the Purchasers, severally but
not jointly, agree to purchase, the Shares for the aggregate purchase prices and
in the amounts set forth opposite their respective names in EXHIBIT 1.1 hereto.
Such purchase and sale shall take place at a closing (the "Closing") to be held
at the offices of Wilson, Sonsini, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇
▇▇▇▇, ▇▇ ▇▇▇▇▇ on February 26, 1990 at 10:00 a.m., or on such date and time as
may be mutually agreed upon. At the Closing the Company will issue and deliver
certificates evidencing the Shares to be sold to the Purchasers, in the amounts
set forth opposite their respective names in EXHIBIT 1.1 hereto and in such
denominations as each such Purchaser shall specify, against delivery of
cashier's or certified checks payable to, or wire transfer of funds to the
account of, the Company in payment of the full purchase price for the Shares.
(b) SUBSEQUENT SALES OF SHARES. At any time on or before the 60th
day following the Closing, the Company may sell up to the balance of the shares
of Common Stock authorized for issuance and sale and not sold at the Closing, to
such persons as may be approved by the Board of Directors of the Company. All
such sales shall be made on the terms and conditions set forth in this
Agreement. Any shares of Common Stock sold pursuant to this Section 1.2(b)
shall be deemed to be "Shares" for all purposes under this Agreement, and any
purchasers thereof shall be deemed to be
"Purchasers" for all purposes under this Agreement. Should any such sales be
made, the Company shall prepare and distribute to the Purchasers a list of
subsequent purchasers in the form of EXHIBIT 1.1 hereto reflecting such sales.
ARTICLE II
CONDITIONS TO CLOSING
2.1 CONDITIONS TO PURCHASERS' OBLIGATIONS. The obligation of each
purchaser to purchase and pay for the Shares at the Closing is subject to the
following conditions:
(a) Each of the representations and warranties of the Company set
forth in Article III hereof shall be true on the date of the Closing.
(b) The Purchasers shall have received prior to or at the Closing
all of the following, each in form and substance satisfactory to the Purchasers
and their special counsel, and all of the following events shall have occurred
prior to or simultaneous with the Closing hereunder:
(i) A copy of all charter documents of the Company certified
by the Secretary of State of California, a certified copy of the resolutions of
the Board of Directors and, if required, the stockholders of the Company
evidencing approval of this Agreement, the authorization for issuance of the
Shares and other matters contemplated hereby, a certified copy of the By-laws of
the Company, and certified copies of all documents evidencing other necessary
corporate or other action and governmental approvals, if any, with respect to
this Agreement and the Shares.
(ii) An opinion of Messrs. Wilson, Sonsini, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇,
counsel for the Company, in substantially the form attached hereto as EXHIBIT
2.1(b).
(iii) A certificate of the Secretary or an Assistant Secretary
of the Company stating the names of the officers of the Company authorized to
sign this Agreement, the certificates for the Shares, and the other documents or
certificates to be delivered pursuant to this Agreement by the Company or any of
its officers, together with the true signatures of such officers.
(iv) A certificate from a duly authorized officer of the
Company stating that the representations and warranties of the Company contained
in Article III hereof are true and correct and that all conditions required to
be performed by the Company prior to or at the Closing have been performed.
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(v) An amendment to the Company's existing registration
rights in the form attached hereto as Exhibit 2.1(c).
(c) Prior to the Closing, the Company shall have obtained all
consents or waivers, if any, necessary to execute and deliver this Agreement,
issue the Shares and carry out the transactions contemplated hereby and thereby,
and all such consents and waivers shall be in full force and effect. All
corporate and other action and governmental filings necessary to effectuate the
terms of this Agreement, the Shares and other agreements and instruments
executed and delivered by the Company in connection herewith shall have been
made or taken, except for any post-sale filing that may be required under
federal and state securities laws. In addition to the documents set forth
above, the Company shall have provided the Purchasers with any other information
or copies of documents that they may reasonably request.
2.2 CONDITIONS TO COMPANY'S OBLIGATIONS. The obligation of the Company
to sell the Shares at the Closing is subject to the following conditions:
(a) Each of the representations and warranties of each of the
Purchasers set forth in Article VI hereof shall be true on the date of the
Closing.
(b) The Company shall have obtained all consents, permits and
waivers necessary or appropriate for consummation of the transactions
contemplated by this Agreement.
(c) At the time of the Closing, the purchase of the Shares by the
Purchasers hereunder shall be legally permitted by all laws and regulations to
which the Purchasers and the Company are subject.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
Except as set forth in EXHIBIT 3.0, the Company represents and warrants as
follows:
3.1 ORGANIZATION AND STANDING OF THE COMPANY. The Company is a duly
organized and validly existing corporation in good standing under the laws of
the jurisdiction in which it is organized and has all requisite corporate power
and authority for the ownership and operation of its properties and for the
carrying on of its business as now conducted and as now proposed to be
conducted. The Company is duly licensed or qualified and in good standing as a
foreign
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corporation authorized to do business in all jurisdictions in which the
character of the property owned or leased, or the nature of the activities
conducted, by it makes such licensing or qualification necessary, or the failure
to be so qualified will not have a material adverse effect on the condition,
assets, liabilities, earnings or business of the Company.
3.2 CORPORATE ACTION. The Company has all necessary corporate power and
has taken all corporate action required to make all the provisions of this
Agreement, the Shares and any other agreements and instruments executed in
connection herewith and therewith the valid and enforceable obligations they
purport to be. The issuance of the Shares is not subject to preemptive or other
preferential rights, or similar statutory or contractual rights, either arising
pursuant to any agreement or instrument to which the Company is a party or which
are otherwise binding upon the Company.
3.3 GOVERNMENTAL APPROVALS. Except for filings required by federal or
state securities laws, no authorization, consent, approval, license, exemption
of or filing or registration with any court or governmental department,
commission, board, bureau, agency or instrumentality, domestic or foreign, is or
will be necessary for, or in connection with, the offer, issuance, sale,
execution or delivery by the Company, of the Shares or the performance by the
Company of its obligations under the Agreement.
3.4 LITIGATION. There is no litigation or governmental proceeding or
investigation pending or threatened against the Company or the Subsidiaries
affecting any of their properties or assets, or, to the knowledge of the
Company, against any officer, or Key Employee of the Company, that might result,
either in any case or in the aggregate, in any material adverse change in the
business, operations, affairs or conditions of the Company or the Subsidiaries
or any of their material properties or assets, or that might call into question
the validity of this Agreement, any of the Shares, or any action taken or to be
taken pursuant hereto or thereto, nor, to the knowledge of the Company, has
there occurred any event or does there exist any condition on the basis of which
any litigation, proceeding or investigation might properly be instituted that
might result, either in any case or in the aggregate, in any material adverse
change in the business, operations, affairs of the Company, the Subsidiaries or
any of their material properties and assets. Neither the Company, any
Subsidiary nor, to the knowledge of the Company, any officer of the Company or
the Subsidiaries, is in default with respect to any order, writ, injunction,
decree, ruling or decision of any court, commission, board or other government
agency that might result, either in any case or in the aggregate, in any
material adverse change in the business, operations, affairs or conditions of
the Company or any of their material properties or assets. The foregoing
sentences
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include, without limiting their generality, actions pending or, to the knowledge
of the Company, threatened (or any basis therefor known to the Company)
involving the prior employment of employees of the Company or, any of its
Subsidiaries in any of the Company's or any Subsidiary's business of any
information or techniques allegedly proprietary to any of their former
employers.
3.5 COMPLIANCE WITH OTHER INSTRUMENTS. The Company and the Subsidiaries
are in compliance in all respects with the terms and provisions of this
Agreement and of their charters and by-laws and in all material respects with
the terms and provisions of each mortgage, indenture, lease, agreement and other
instrument relating to obligations of the Company and the Subsidiaries in excess
of $50,000, individually or in the aggregate, and, of all judgments, decrees,
governmental orders, statutes, rules or regulations by which it is bound or to
which its properties or assets are subject the noncompliance with which would
have a material adverse effect on the business, operations, or affairs or
conditions of the Company. There is no term or provision in any of the
foregoing documents and instruments that materially adversely affects the
business, assets or financial condition of the Company or the Subsidiaries.
Neither the execution and delivery of this Agreement or the Shares, nor the
consummation of any transaction contemplated hereby or thereby, has constituted
or resulted in or will constitute or result in a default or violation of any
term or provision in any of the foregoing documents or instruments.
3.6 TITLE TO ASSETS, PATENTS.
(a) The Company and the Subsidiaries have good and marketable title
in fee to their fixed assets that are real property, and good and merchantable
title to all of their other significant assets, now carried on its books
including those reflected in the most recent balance sheet of the Company
contained in EXHIBIT 3.7 attached hereto, or acquired since the date of such
balance sheet (except personal property disposed of since said date in the
ordinary course of business), free of any mortgages, pledges, charges, liens,
security interests or other encumbrances. The Company enjoys peaceful and
undisturbed possession under all significant leases under which it is operating,
and all said leases are valid and subsisting and in full force and effect.
(b) The Company and the Subsidiaries own or have a valid right to
use all significant patents, patent rights, licenses, permits, trade secrets,
trademarks, trademark rights, trade names or trade name rights or franchises,
copyrights, inventions and intellectual property rights being used to conduct
their business as now operated and as now proposed to be operated; and, to the
best knowledge of the Company, the conduct of their businesses as now operated
and as now proposed to be operated does not and will not
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conflict in any respects material to the Company and its Subsidiaries considered
as a whole with valid patents, patent rights, licenses, permits, trade secrets,
trademarks, trademark rights, trade names or trade name rights or franchises,
copyrights, inventions and intellectual property rights of others. The Company
and the Subsidiaries have no obligation to compensate any Person for the use of
any such patents or such rights nor has the Company or any Subsidiary granted to
any Person any license or other rights to use in any manner any of such patents
or such rights of the Company and the Subsidiaries.
3.7 FINANCIAL INFORMATION. Attached hereto as EXHIBIT 3.7 are true and
complete copies of the Consolidated audited financial statements of the Company
and its Subsidiaries for the twelve months ended May 31, 1989 and the Company's
unaudited unconsolidated financial statements for the seven months ended
December 31, 1989 certified by the chief financial officer of the Company. Such
financial statements when read together, present fairly the financial position
of the Company and its Subsidiaries at the dates thereof and their results of
operations for the periods covered thereby and have been prepared in accordance
with generally accepted accounting principles consistently applied. The Company
and the Subsidiaries have no liability, contingent or otherwise, required to be
disclosed in a financial statement prepared in accordance with generally
accepted accounting principles which are not disclosed in the aforesaid
financial statements or in the notes thereto, that could, together with all such
other liabilities, materially affect the financial condition of the Company, nor
does the Company have any reasonable grounds to know of any such liability.
Except as set forth in the aforesaid audited financial statements or as
otherwise set forth in this Agreement since December 31, 1989 (i) there has been
no adverse event or occurrence affecting the business, assets or condition,
financial or otherwise, or operations of the Company and its Subsidiaries; (ii)
neither the business, condition, or operations of the Company, the Subsidiaries
nor any of their properties or assets has been adversely affected as the result
of any legislative or regulatory change, any revocation or change in any
franchise, license or right to do business, or any other event or occurrence,
whether or not insured against; and (iii) the Company has not entered into any
transaction with respect to, or made any distribution on, its capital stock.
3.8 TAXES. The Company and its Subsidiaries have accurately prepared and
timely filed all federal, state and other tax returns required by law to be
filed by them, and all taxes shown to be due and all additional assessments have
been paid or provision made therefor. To the Company's knowledge, none of the
federal income tax returns of the Company and the Subsidiaries have been audited
by the Internal Revenue Service. The Company knows of no
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significant additional assessments or adjustments pending or threatened
against the Company or any Subsidiary for any period, nor of any basis for
any such assessment or adjustment.
3.9 ERISA. Neither the Company nor any Subsidiary makes contributions to
any pension, defined benefit plans or defined contribution plans for its
employees that are subject to the federal Employee Retirement Income Security
Act of 1974, as amended ("ERISA").
3.10 TRANSACTIONS WITH AFFILIATES. Except as set forth in the audited
financial statements of the Company set forth in EXHIBIT 3.7, there are no
loans, leases, royalty agreements or other continuing transactions between the
Company and any of the Company's customers or suppliers, and any officer or
director of the Company.
3.11 OTHER MATTERS. Neither the Company nor any Subsidiary has (i) become
directly or contingently liable (including, without limitation, by way of
assumption or guaranty) on any Indebtedness of any other Person or (ii) made or
agreed to make any loan, advance or other investment to or in any other Person.
The Company and each Subsidiary is in compliance in all material respects with
all laws, rules and regulations applicable to them.
3.12 SECURITIES ACT OF 1933. The Company has complied and will comply
with all applicable federal or state securities laws in connection with the
issuance and sale of the Shares. Neither the Company nor anyone acting on its
behalf has offered or will offer to sell the Shares or similar securities to, or
solicit offers with respect thereto from, or enter into any preliminary
conversations or negotiations relating thereto with, any Person, so as to bring
the issuance and sale of the Shares under the registration provisions of the
Securities Act. Except as set forth in Article V hereof, no Person has demand
or other rights to cause the Company to file any registration statement under
the Securities Act relating to any securities of the Company or any right to
participate in any such registration statement.
3.13 DISCLOSURE. Neither this Agreement, the financial statements
incorporated herein as EXHIBIT 3.7, nor any other agreement, document,
certificate or written or oral statement furnished to the Purchasers or their
special counsel by or on behalf of the Company in connection with the
transactions contemplated hereby when taken as a whole contains any untrue
statement of a material fact or omits to state a material fact necessary in
order to make the statements contained herein or therein not misleading. There
is no fact within the special knowledge of the Company or any of its executive
officers that has not been disclosed herein by them to the Purchasers and that
materially adversely affects, or in the
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future in their opinion may, insofar as they can now foresee, materially
adversely affect the business, properties, assets or condition, financial or
otherwise, of the Company. Without limiting the foregoing, the Company has
disclosed to the Purchasers any knowledge that it has that there exists, or
there is pending or planned, any patent, invention, device, application or
principle or any statute, rule, law, regulation, standard or code that would
materially adversely affect the condition, financial or otherwise, or the
operations of the Company.
3.14 NO BROKERS OR FINDERS. No Person has or will have, as a result of
the transactions contemplated by this Agreement, any right, interest or valid
claim against or upon the Company for any commission, fee or other compensation
as a finder or broker because of any act or omission by the Company or any agent
of the Company; and the Company agrees to indemnify and hold the Purchasers
harmless against any such commissions, fees or other compensation.
3.15 CERTAIN AGREEMENTS OF EMPLOYEES.
(a) To the best knowledge of the Company, no Key Employee is a
party to or bound by any agreement, contract or commitment, or subject to any
restrictions, particularly but without limitation in connection with any
previous employment of any such person, which materially and adversely
affects, or in the future may (so far as the Company can reasonably foresee)
materially and adversely affect, the business or operations of the Company or
the right of any such person to participate in the affairs of the Company;
(b) Each Key Employee who has or had access to proprietary
information of the Company has executed an employee invention and non-disclosure
agreement to the effect and in substantially the form set forth in EXHIBIT 3.15.
To the best of the Company's knowledge, no Key Employee or former Key Employee
of the Company is, or to the Company's knowledge and belief is expected to be,
in violation of the terms of the aforesaid agreements or of any other obligation
relating to the use of confidential or proprietary information of the Company.
3.16 CAPITALIZATION; STATUS OF CAPITAL STOCK. As of the date hereof, the
Company has a total authorized capitalization consisting of 75,000,000 shares of
Common Stock of which 3,526,986 shares are issued and outstanding and 10,000,000
shares of Preferred Stock, none of which is issued or outstanding. In addition,
the Company has options exercisable for 299,300 shares of Common Stock issued
and outstanding and warrants exercisable for 9,333 shares of Common Stock issued
and outstanding. A complete list of the shares of capital stock currently
issued and outstanding and the names in which such shares are registered is set
forth in EXHIBIT 3.16
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hereto. All of the outstanding shares of capital stock of the Company have
been duly authorized, are validly issued and are fully paid and
nonassessable. All shares of capital stock issuable upon exercise of
outstanding options and warrants have been duly authorized and, when issued
in accordance with the terms of such options and warrants, will be validly
issued, and fully paid and nonassessable. The Shares when issued and
delivered in accordance with the terms hereof, will be duly authorized,
validly issued and fully paid and nonassessable. Except as set forth in
EXHIBIT 3.16 hereto, there are no options, warrants or rights to purchase
shares of capital stock or other securities authorized, issued or
outstanding, nor is the Company obligated in any other manner to issue shares
of its capital stock or other securities. There are no restrictions on the
transfer of shares of capital stock of the Company other than those imposed
by relevant state and federal securities laws. No holder of any security of
the Company is entitled to preemptive or similar statutory or contractual
rights, either arising pursuant to any agreement or instrument to which the
Company is a party or that are otherwise binding upon the Company. The offer
and sale of all shares of capital stock or other securities of the Company
issued before the Closing complied with or were exempt from registration or
qualification under all federal and state securities laws.
3.17 BOOKS AND RECORDS. The books of account, ledgers, order books,
records and documents of the Company and the Subsidiaries accurately and
completely reflect all material information relating to the businesses of the
Company and the Subsidiaries, the nature, acquisition, maintenance, location and
collection of the assets of the Company and the Subsidiaries, and the nature of
all transactions giving rise to the obligations or accounts receivable of the
Company and the Subsidiaries.
3.18 SUBSIDIARIES. Each of the Company's Subsidiaries is listed in
EXHIBIT 3.0 below and the Company has no other Subsidiaries. All issued and
outstanding shares of capital stock of each present Subsidiary are owned by the
Company and are the validly issued, fully paid and nonassessable shares of each
Subsidiary, respectively, and are owned by the Company free and clear of all
encumbrances. Except as set forth in the audited financial statements of the
Company set forth in EXHIBIT 3.7, there are no outstanding rights, options,
warrants, conversion rights or agreements for the purchase or acquisition of any
shares of any of the Subsidiaries' capital stock.
3.19 ENVIRONMENTAL PROTECTION. After reasonable inquiry, to its knowledge
the Company has obtained all material permits, licenses and other authorizations
which are required under federal, state and local laws relating to public health
and safety, worker health and safety and pollution or protection of the
environment,
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including laws relating to emissions, discharges, releases or threatened
releases of pollutants, contaminants or hazardous or toxic substances
(including petroleum) into ambient air, surface water, ground water or land,
or otherwise relating to the manufacture, processing, distribution, use,
treatment, storage, disposal, transport or handling of pollutants,
contaminants or hazardous or toxic substances (including petroleum). After
reasonable inquiry, to its knowledge the Company is in compliance with all
material terms and conditions of such required permits, licenses and
authorizations, and is also in compliance with all other material
limitations, restrictions, conditions, standards, prohibitions, requirements,
obligations, schedules and timetables contained in any federal, state or
local law or any regulation, code, plan, order, decree or judgment relating
to public health and safety, worker health and safety and pollution or
protection of the environment the non-compliance with which would have a
material adverse affect upon the Company. The Company has not received
notice of any claim or action, or threatened claim or action, or any common
law or legal liability under any law or regulation related to the
manufacture, processing, distribution, use, treatment, storage, disposal,
transport, or handling, or the emission, discharge, release or threatened
release into the environment, of any pollutant, contaminant or hazardous or
toxic substance (including petroleum) which, if adversely decided against or
imposed upon the Company, would have a material adverse affect upon the
Company.
ARTICLE IV
COVENANTS OF THE COMPANY
4.1 AFFIRMATIVE COVENANTS OF THE COMPANY OTHER THAN REPORTING
REQUIREMENTS. Without limiting any other covenants and provisions hereof, the
Company covenants and agrees that, until the completion of a Qualified Public
Offering, and so long as the Purchasers and/or their partners, own (of record or
beneficially) 50,000 shares of Common Stock (such number of shares to be
equitably adjusted whenever there shall occur a stock split, combination,
reclassification or other similar event affecting the Common Stock after the
date of this Agreement), it will perform and observe the following covenants and
provisions and will cause each Subsidiary to perform and observe such of the
following covenants and provisions as are applicable to such Subsidiary:
(a) PAYMENT OF TAXES AND TRADE DEBT. Pay and discharge, and cause
each Subsidiary to pay and discharge, all taxes, assessments and governmental
charges or levies imposed upon it or upon its income or profits or business, or
upon any properties belonging to it, prior to the date on which penalties attach
thereto, and all
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lawful claims, which, if unpaid, might become a lien or charge upon any
properties of the Company or any Subsidiary, provided that neither the
Company nor any Subsidiary shall be required to pay any such tax, assessment,
charge, levy or claim that is being contested in good faith and by
appropriate proceedings if the Company or Subsidiary concerned shall have set
aside on its books adequate reserves with respect thereto as shall be
determined by its Board of Directors. Pay and cause each Subsidiary to pay,
when due, or in conformity with customary trade terms, all lease obligations,
all trade debt, and all other Indebtedness incident to the operations of the
Company or its Subsidiaries, except such as are being contested in good faith
and by appropriate proceedings if the Company or Subsidiary concerned shall
have set abide on its books adequate reserves with respect thereto as shall
be determined by its Board of Directors.
(b) PRESERVATION OF CORPORATE EXISTENCE. Preserve and maintain,
and cause each Subsidiary to preserve and maintain, its corporate existence,
rights, franchises and privileges in the jurisdiction of its incorporation, and
qualify and remain qualified, and cause each Subsidiary to qualify and remain
qualified, as a foreign corporation in each jurisdiction in which the failure to
qualify will have a material adverse effect upon the condition, assets,
liabilities, earnings or business of the Company. Preserve and maintain, and
cause each Subsidiary to preserve and maintain, all material licenses and other
rights to use patents, processes, licenses, trademarks, trade names, inventions,
intellectual property rights or copyrights owned or possessed by it and
necessary to the conduct of its business.
(c) COMPLIANCE WITH LAWS. Comply, and cause each Subsidiary to
comply, in all material respects with all applicable laws, rules, regulations
and orders of any governmental authority, noncompliance with which could
materially adversely affect its business or condition, financial or otherwise,
except non-compliance being contested in good faith through appropriate
proceedings so long as the Company shall have set up sufficient reserves, if
any, required under generally accepted accounting principles with respect to
such items.
(d) KEEPING OF RECORDS AND BOOKS OF ACCOUNT. Keep, and cause each
Subsidiary to keep, adequate records and books of account, in which complete
entries will be made in accordance with generally accepted accounting principles
consistently applied, reflecting all financial transactions of the Company and
each Subsidiary, and in which, for each fiscal year, all proper reserves for
depreciation, depletion, obsolescence, amortization, taxes, bad debts and other
purposes in connection within its business shall be made.
-11-
(e) MAINTENANCE OF PROPERTIES. Maintain and preserve, and cause
each Subsidiary to maintain and preserve, all of its properties, necessary or
useful in the proper conduct of its business, in good repair, working order and
condition, ordinary wear and tear excepted.
(f) NEW DEVELOPMENTS. Use its best efforts to cause all Key
Employees of the Company and each Subsidiary to execute appropriate patent
assignment agreements to the Company and, where possible and appropriate, to
file and prosecute United States and foreign patent applications relating to and
protecting such developments on behalf of the Company or such subsidiary.
(g) EMPLOYEE INVENTION AND NON-DISCLOSURE AGREEMENT. Use its best
efforts to cause each Key Employee now or hereafter employed by the Company or
any Subsidiary promptly to execute an agreement substantially in the form of
EXHIBIT 3.15 hereto or in a form approved by the Board of Directors.
(h) BUDGETS AND BOARD APPROVAL. Within ninety (90) days of the
commencement of each fiscal year, prepare and submit to, and obtain the approval
of a majority of, the Board of Directors of a budget for the upcoming fiscal
year, including projections of capital and operating expenses, cash flow, and
profits and losses, all itemized in reasonable detail.
(i) FINANCINGS. Promptly, fully and in detail, inform the Board of
Directors in advance of any commitments or contracts relating to financing of
any nature for the Company or pledge of corporate assets.
(j) OBSERVER RIGHTS. Invite a representative of the Purchasers,
which representative shall be designated by the Purchasers, to attend all
meetings of its Board of Directors in a non-voting, observer capacity, and, in
connection therewith, give such representative copies of all notices, minutes,
consents and other materials, financial and otherwise, that it provides to its
board of directors.
(k) JAPANESE OFFERING. The Company shall cause Aehr Test Japan, a
subsidiary of the Company, to offer and sell equity securities to the Purchasers
upon the terms set forth in the Term Sheet attached hereto as Exhibit 4.1(k).
(l) DEBT REPAYMENT. As required pursuant to Exhibit 4.1(l), the
Company shall repay any overadvance outstanding with Union Bank upon receipt of
funds from the Purchasers at the Closing.
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4.2 NEGATIVE COVENANTS OF THE COMPANY. Without limiting any other
covenants and provisions hereof, the Company covenants and agrees that, until
the completion of a Qualified Public Offering, and so long as the Purchasers
and/or their partners, own (of record or beneficially) 50,000 shares of Common
Stock (such number of shares to be equitably adjusted whenever there shall occur
a stock split, combination, reclassification or other similar event affecting
the Common Stock after the date of this Agreement), it will comply with and
observe the following covenants and provisions, and will cause each Subsidiary
to comply with and observe such of the following covenants and provisions as are
applicable to such Subsidiary, and WILL NOT, without the approval of holders of
the Shares in accordance with Section 8.2:
(a) DEALINGS WITH AFFILIATES AND OTHERS. Enter into any
transaction, including, without limitation, any loans or extensions of credit or
royalty agreements, with any officer or director of the Company or any
Subsidiary or holder of any class of capital stock of the Company, or any member
of their respective immediate families or any corporation or other entity
directly or indirectly controlled by one or more of such officers, directors or
stockholders or members of their immediate families unless such transaction is
approved in advance by a majority of disinterested members of the Board of
Directors.
4.3 REPORTING REQUIREMENTS. Until the completion of a Qualified Public
Offering, and so long as the Purchasers and/or their partners, own (of record or
beneficially) 50,000 shares of Common Stock (such number of shares to be
equitably adjusted whenever there shall occur a stock split, combination,
reclassification or other similar event affecting the Common Stock after the
date of this Agreement), the Company will furnish the following to each
Purchaser:
(a) as soon as available and in any event within forty-five (45)
days after the end of each fiscal quarter of the Company, Consolidated balance
sheets of the Company and its Subsidiaries as of the end of such quarter and
Consolidated statements of income and retained earnings of the Company and its
Subsidiaries for the period ending with such quarter, setting forth in each case
in comparative form the corresponding figures for the corresponding period of
the prior fiscal year, all in reasonable detail and duly certified (subject to
year-end audit adjustments) by the chief financial officer of the Company as
having been prepared in accordance with generally accepted accounting principles
consistently applied, except for the absence of footnotes.
(b) as soon as available and in any event within ninety (90) days
after the end of each fiscal year of the Company, a copy of the annual audit
report for such year for the Company and its
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Subsidiaries, including therein Consolidated (and, to the extent otherwise
prepared by the Company, consolidating) balance sheets of the Company and its
Subsidiaries as of the end of such fiscal year and Consolidated (and, to the
extent otherwise prepared by the Company, consolidating) statements of income
and retained earnings and of changes in financial position of the Company and
its Subsidiaries for such fiscal year, setting forth in each case in
comparative form the corresponding figures for the preceding fiscal year, all
duly certified by an independent public accountant of national standing;
(c) promptly after sending, making available, or filing the same,
all reports and financial statements that the Company or any Subsidiary sends or
makes available to the stockholders of the Company or the Securities and
Exchange Commission; and
(d) all other information respecting the business, properties or
the condition or operations, financial or otherwise, of the Company or any of
its Subsidiaries that any Purchaser may from time to time reasonably request.
4.4 CONFIDENTIALITY. Any confidential information obtained by any holder
of the Shares pursuant to this Agreement shall be treated as confidential and
shall not be disclosed to a third party without the consent of the Board of
Directors, except that such information shall not be deemed confidential for the
purpose of enforcement of this Agreement or valuation of the Shares and except
that any such holder may otherwise disclose such information to its partners if
such partners agree to be bound by the restrictions contained in this
Section 4.4.
ARTICLE V
REGISTRATION RIGHTS
5.1 "PIGGY-BACK" REGISTRATION. If at any time the Company shall
determine to register under the Securities Act (including pursuant to a demand
of any stockholder of the Company exercising registration rights) any of its
Common Stock (except shares to be issued solely in connection with any
acquisition of any entity or business, shares issuable solely upon exercise of
stock options, or shares issuable solely pursuant to employee benefit plans), it
shall send to each holder of Registrable Shares, written notice of such
determination and, if within thirty (30) days after receipt of such notice, such
holder shall so request in writing, the Company shall use its best efforts to
include in such registration statement all or any part of the Registrable Shares
that such holder requests to be registered, except that if, in connection with
any offering involving an underwriting of Common Stock to be issued by
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the Company, the managing underwriter shall impose a limitation on the number
of shares of such Common Stock included in any such registration statement
because, in its judgment, such limitation is necessary to effect an orderly
public distribution, and such limitation is imposed among all holders of
Common Stock exercising their contractual incidental ("piggy back") right to
include such Common Stock in the registration statement as provided below on
a PRO RATA basis (according to the number of shares of Common Stock held by
such holders that are entitled to such "piggy-back" registration rights). In
the event of any such limitation, the Company may include in such
registration statement only (i) shares of Common Stock to be sold for the
Company's account; (ii) Registrable Shares; and (iii) shares of Common Stock
the holders of which are entitled to registration pursuant to an agreement
with the Company approved by the Board of Directors; provided, that, in the
case of clauses (ii) and (iii) of the preceding sentence, such inclusion
shall be on the PRO RATA basis hereinabove described. Notwithstanding the
foregoing, no such reduction shall be made with respect to securities being
offered by the Company for its own account. If any holder of Registrable
Shares disapproves of the terms of such underwriting, he may elect to
withdraw therefrom by written notice to the Company and the managing
underwriter.
5.2 EFFECTIVENESS. The Company will use its best efforts to maintain the
effectiveness for up to ninety (90) days of any registration statement pursuant
to which any of the Registrable Shares are being offered, and from time to time
will amend or supplement such registration statement and the prospectus
contained therein as and to the extent necessary to comply with the Securities
Act and any applicable state securities statute or regulation.
5.3 INDEMNIFICATION OF HOLDERS OF REGISTRABLE SHARES. In the event that
the Company registers any of the Registrable Shares under the Securities Act,
the Company will indemnify and hold harmless each holder and each underwriter of
the Registrable Shares so registered (including any broker or dealer through
whom such shares may be sold) and each person, if any, who controls such holder
or any such underwriter within the meaning of Section 15 of the Securities Act
from and against any and all losses, claims, damages, expenses or liabilities,
joint or several, to which they or any of them become subject under the
Securities Act or under any other statute or at common law or otherwise, and,
except as hereinafter provided, will reimburse each such holder, each such
underwriter and each such controlling person, for any legal or other expenses
reasonably incurred by them or any of them in connection with investigating or
defending any actions whether or not resulting in any liability, insofar as such
losses, claims, damages, expenses, liabilities or actions arise out of or are
based upon any untrue statement or alleged untrue statement of a material fact
contained in the registration statement, in any preliminary or amended
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preliminary prospectus or in the prospectus (or the registration statement or
prospectus as from time to time amended or supplemented by the Company) 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 in order to make the
statements therein not misleading or any violation by the Company of any rule or
regulation promulgated under the Securities Act applicable to the Company and
relating to action or inaction required of the Company in connection with such
registration, unless such untrue statement or omission was made in such
registration statement, preliminary or amended, preliminary prospectus or
prospectus in reliance upon and in conformity with information furnished in
writing to the Company in connection therewith by such holder of Registrable
Shares, any such underwriter or any such controlling person expressly for use
therein. Promptly after receipt by any holder of Registrable Shares, any
underwriter or any controlling person of notice of the commencement of any
action in respect of which indemnity may be sought against the Company, such
holder of Registrable Shares, or such underwriter or such controlling person, as
the case may be, will notify the Company in writing of the commencement thereof,
and, subject to the provisions hereinafter stated, the Company shall assume the
defense of such action (including the employment of counsel, who shall be
counsel satisfactory to such holder of Registrable Shares, such underwriter or
such controlling person, as the case may be) and the payment of expenses insofar
as such action shall relate to any alleged liability in respect of which
indemnity may be sought against the Company. Such holder of Registrable Shares,
any such underwriter or any such controlling person shall have the right to
employ separate counsel in any such action and to participate in the defense
thereof but the fees and expenses of such counsel shall not be at the expense of
the Company unless the employment of such counsel has been specifically
authorized by the Company. The Company shall not be liable to indemnify any
person for any settlement of any such action effected without the Company's
consent. The Company shall not, except with the approval of each party being
indemnified under this Section 5.3, consent to entry of any judgment or enter
into any settlement that does not include as an unconditional term thereof the
giving by the claimant or plaintiff to the parties being so indemnified of a
release from all liability in respect to such claim or litigation.
5.4 INDEMNIFICATION OF COMPANY. In the event that the Company registers
any of the Registrable Shares under the Securities Act, each holder of the
Registrable Shares so registered will indemnify and hold harmless the Company,
each of its directors, each of its officers who have signed the registration
statement, each underwriter of the Registrable Shares so registered (including
any broker or dealer through whom such of the shares may be sold) and each
person, if any, who controls the Company within the
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meaning of Section 15 of the Securities Act from and against any and all
losses, claims, damages, expenses or liabilities, joint or several, to which
they or any of them may become subject under the Securities Act or under any
other statute or at common law or otherwise, and, except as hereinafter
provided, will reimburse the Company and each such director, officer,
underwriter or controlling person for any legal or other expenses reasonably
incurred by them or any of them in connection with investigating or defending
any actions whether or not resulting in any liability, insofar as such
losses, claims, damages, expenses, liabilities or actions arise out of or are
based upon any untrue statement or alleged untrue statement of a material
fact contained in the registration statement, in any preliminary or amended
preliminary prospectus or in the prospectus (or the registration statement or
prospectus as from time to time amended or supplemented) 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 in order to make the
statements therein not misleading, but only insofar as any such statement or
omission was made in reliance upon and in conformity with information
furnished in writing to the Company in connection therewith by such holder of
Registrable Shares expressly for use therein; PROVIDED, HOWEVER, that such
holder's obligations hereunder shall be limited to an amount equal to the
proceeds to such holder of the Registrable Shares sold in such registration.
Promptly after receipt of notice of the commencement of any action in respect
of which indemnity may be sought against such holder of Registrable Shares,
the Company will notify such holder of Registrable Shares in writing of the
commencement thereof, and such holder of Registrable Shares shall, subject to
the provisions hereinafter stated, assume the defense of such action
(including the employment of counsel, who shall be counsel satisfactory to
the Company) and the payment of expenses insofar as such action shall relate
to the alleged liability in respect of which indemnity may be sought against
such holder of Registrable Shares. The Company and each such director,
officer, underwriter or controlling person shall have the right to employ
separate counsel in any such action and to participate in the defense thereof
but the fees and expenses of such counsel shall not be at the expense of such
holder of Registrable Shares unless employment of such counsel has been
specifically authorized by such holder of Registrable Shares.
Notwithstanding the two preceding sentences, if the action is one in which
the Company may be obligated to indemnify any holder of Registrable Shares
pursuant to Section 5.3, the Company shall have the right to assume the
defense of such action, subject to the right of such holders to participate
therein as permitted by Section 5.3. Such holder of Registrable Shares shall
not be liable to indemnify any person for any settlement of any such action
effected without such holder's consent. Such holder shall not, except with
the approval of the Company, consent to entry of any judgment or enter into
any settlement that does not include as an unconditional term thereof
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the giving by the claimant or plaintiff to the party being so indemnified of
a release from all liability in respect to such claim or litigation.
5.5 EXCHANGE ACT REGISTRATION. The Company will use its best efforts to
file on a timely basis with the Securities and Exchange Commission all
information that the Commission may require under either of Section 13 or
Section 15(d) of the Exchange Act and shall use its best efforts to take all
action that may be required as a condition to the availability of Rule 144 under
the Securities Act (or any successor exemptive rule hereinafter in effect) with
respect to the Company's Common Stock. The Company shall furnish to any holder
of Registrable Shares forthwith upon request (i) a written statement by the
Company as to its compliance with the reporting requirements of Rule 144, (ii) a
copy of the most recent annual or quarterly report of the Company as filed with
the Securities and Exchange Commission, and (iii) any other reports and
documents that a holder may reasonably request in availing itself of any rule or
regulation of the Securities and Exchange Commission allowing a holder to sell
any such Registrable Securities without registration.
5.6 DAMAGES. The Company recognizes and agrees that the holder of
Registrable Shares will not have an adequate remedy if the Company fails to
comply with this Article V and that damage will not be readily ascertainable,
and the Company expressly agrees that, in the event of such failure, it shall
not oppose an application by the holder of Registrable Shares or any other
person entitled to the benefits of this Article V requiring specific performance
of any and all provisions hereof or enjoining the Company from continuing to
commit any such breach of this Article V.
5.7 FURTHER OBLIGATIONS OF THE COMPANY. Whenever under the preceding
Sections of this Article V, the Company is required hereunder to register
Registrable Shares, it agrees that it shall also do the following:
(a) Furnish to each selling holder of Registrable Shares such
copies of each preliminary and final prospectus and any other documents that
such holder may reasonably request to facilitate the public offering of its
Registrable Shares;
(b) Use its best efforts to register or qualify the Registrable
Shares to be registered pursuant to this Article V under the applicable
securities or "blue sky" laws of such jurisdictions as any selling holder may
reasonably request; PROVIDED, HOWEVER, that the Company shall not be obligated
to qualify to do business in any jurisdiction where it is not then so qualified
or to take any action that would subject it to the service of process
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in suits other than those arising out of the offer or sale of the securities
covered by the registration statement in any jurisdiction where it is not
then so subject;
(c) Furnish to each selling holder a signed counterpart of
(i) an opinion of counsel for the Company, dated the
effective date of the registration statement, and
(ii) "comfort" letters signed by the Company's independent
public accountants who have examined and reported on the Company's
financial statements included in the registration statement, to the extent
permitted by the standards of the American Institute of Certified Public
Accountants,
covering substantially the same matters with respect to the registration
statement (and the prospectus included therein) and (in the case of the
accountants' "comfort" letters) with respect to events subsequent to the date of
the financial statements, as are customarily covered in opinions of issuer's
counsel and in accountants' "comfort" letters delivered to the underwriters in
underwritten public offerings of securities, to the extent that the Company is
required to deliver or cause the delivery of such opinion or "comfort" letters
to the underwriters in an underwritten public offering of securities;
(d) Permit each selling holder of Registrable Shares or his counsel
or other representatives to inspect and copy such corporate documents and
records as may reasonably be requested by them; and
(e) Furnish to each selling holder, upon request, a copy of all
documents filed and all correspondence from or to the Securities and Exchange
Commission in connection with any such offering.
5.8 EXPENSES. In the case of a registration under Section 5.1, the
Company shall bear all costs and expenses of each such registration, including,
but not limited to, printing, legal and accounting expenses, Securities and
Exchange Commission filing fees and "blue sky" fees and expenses; PROVIDED,
HOWEVER, that the Company shall have no obligation to pay or otherwise bear
(i) any portion of the fees or disbursements of counsel (other than counsel for
the Company) for the selling holders of Registrable Shares in connection with
the registration of their Registrable Shares, or (ii) any portion of the
underwriters' commissions or discounts attributable to the Registrable Shares
being offered and sold by the holders of Registrable Shares.
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5.9 TRANSFER OF REGISTRATION RIGHTS. The registration rights of the
holders of Registrable Shares under this Article V may be transferred without
the consent of the Company to any transferee of Registrable Shares that (i) is a
partner of a Purchaser, (ii) acquires all of the Registrable Shares held by a
Purchaser or (iii) holds 29,000 Registrable Shares (such number to be equitably
adjusted whenever there shall occur a stock split, combination, reclassification
or other similar event affecting the Common Stock after the date of this
Agreement).
5.10 NO SUPERIOR RIGHTS. The Company will not grant registration rights
to any Person that are superior to the rights granted hereunder without the
prior consent of Purchasers holding at least fifty-one percent (51%) of the
Registrable Shares unless the holders of Registrable Shares are also granted
such superior rights.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF PURCHASERS
AND RESTRICTIONS ON TRANSFER
6.1 REPRESENTATIONS AND WARRANTIES BY EACH PURCHASER. Each Purchaser,
for that Purchaser alone, represents and warrants to the Company with respect to
this purchase as follows:
(a) This Agreement constitutes the Purchaser's valid and legally
binding obligation, enforceable in accordance with its terms.
(b) It is experienced in evaluating and investing in high
technology companies such as the Company.
(c) It is acquiring the Shares for investment for its own account
and not with a view to, or for resale in connection with, any distribution
thereof. It understands that the Shares to be purchased have not been
registered under the Securities Act by reason of a specific exemption from the
registration provisions of the Securities Act that depends upon, among other
things, the bona fide nature of the investment intent as expressed herein.
(d) It acknowledges that the Shares must be held indefinitely
unless subsequently registered under the Securities Act, or unless an exemption
from such registration is available. It is aware of the provisions of Rule 144
promulgated under the Securities Act that permit limited resale of Shares
purchased in a private placement subject to the satisfaction of certain
conditions.
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(e) It understands that no public market now exists for any of the
securities issued by the Company, and that it is unlikely that a public market
will ever exist for the Shares.
(f) It has had an opportunity to discuss the Company's business,
management, and financial affairs with the Company's management and to review
the Company's facilities. It understands that such discussions, as well as the
written information issued by the Company, were intended to describe the aspects
of the Company's business and prospects that the Company believes to be
material, but that these descriptions were not necessarily thorough or
exhaustive.
6.2 LEGENDS. Each certificate representing the Shares shall be endorsed
with the following legend:
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933 OR ANY STATE SECURITIES LAWS. THEY MAY NOT BE SOLD OR OFFERED
FOR SALE IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT AS TO
THE SECURITIES UNDER SAID ACT AND ANY APPLICABLE STATE SECURITIES LAW
OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH
REGISTRATION IS NOT REQUIRED.
and if imposed by the California Department of Corporations, the following
legend:
IT IS UNLAWFUL TO CONSUMMATE A SALE OR TRANSFER OF THIS SECURITY, OR
ANY INTEREST THEREIN, OR TO RECEIVE ANY CONSIDERATION THEREFOR,
WITHOUT THE PRIOR WRITTEN CONSENT OF THE COMMISSIONER OF CORPORATIONS
OF THE STATE OF CALIFORNIA, EXCEPT AS PERMITTED IN THE COMMISSIONER'S
RULES.
The Company need not register a transfer of Shares, unless the conditions
specified in the foregoing legends are satisfied. The Company may also instruct
its transfer agent not to register the transfer of any of the Shares unless the
conditions specified in the foregoing legends are satisfied.
6.3 REMOVAL OF LEGENDS AND TRANSFER RESTRICTIONS. The legend relating to
the Securities Act endorsed on a stock certificate pursuant to Section 6.2 of
this Agreement and the stop transfer instructions with respect to the Shares
represented by such certificate shall be removed and the Company shall issue a
certificate without such legend to the holder of such Shares if such Shares are
registered under the Securities Act and a prospectus meeting the requirements of
Section 10 of the Securities Act is available or if such holder provides to the
Company an opinion of counsel for such holder of the Shares reasonably
satisfactory to the Company, or a
-21-
no-action letter or interpretive opinion of the staff of the Securities and
Exchange Commission (the "Commission") to the effect that a public sale,
transfer or assignment of such Shares may be made without registration and
without compliance with any restriction such as Rule 144. The California
Commissioner of Corporations legend (if required) will be removed if the
Commissioner of Corporations of the State of California has consented to the
removal of such legend.
6.4 ADDITIONAL PURCHASES OF COMMON STOCK. The Purchasers covenant and
agree that they shall not acquire any additional shares of Common Stock or other
equity securities of the Company (other than shares acquired by way of stock
splits, stock dividends and the like) from the Company or from other
stockholders of the Company without the prior approval of the Board of
Directors. This Section 6.4 shall terminate automatically upon the closing of a
Qualified Public Offering.
ARTICLE VII
DEFINITIONS AND ACCOUNTING TERMS
7.1 CERTAIN DEFINED TERMS. As used in this Agreement, the following
terms shall have the following meanings (such meanings to be equally applicable
to both the singular and plural forms of the terms defined):
"Agreement" means this Common Stock Purchase Agreement as from time
to time amended and in effect between the parties.
"Board of Directors" shall mean the then present members of the Board
of Directors of the Company.
"Company" means and shall include Aehr Test Systems and its
successors and assigns.
"Consolidated" when used with reference to any term defined herein
means that term as applied to the accounts of the Company and its Subsidiaries
consolidated in accordance with generally accepted accounting principles after
eliminating intercompany items and minority interests.
"ERISA" shall have the meaning assigned to that term in Section 3.9.
"Exchange Act" means the Securities Exchange Act of 1934, or any
similar federal statute, and the rules and regulations of the Securities and
Exchange Commission (or of any other Federal
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Agency then administering the Exchange Act) thereunder, all as the same shall
be in effect at the time.
"Indebtedness" means all obligations, contingent and otherwise, which
should, in accordance with generally accepted accounting principles consistently
applied, be classified upon the obligor's balance sheet as liabilities,
excluding any liabilities in respect of deferred federal or state income taxes,
but in any event including, without limitation, liabilities secured by any
mortgage on property owned or acquired subject to such mortgage, whether or not
the liability secured thereby shall have been assumed, and also including,
without limitation, (i) all guaranties, endorsements and other contingent
obligations, in respect of Indebtedness of others, whether or not the same are
or should be so reflected in said balance sheet, except guaranties by
endorsement of negotiable instruments for deposit or collection or similar
transactions in the ordinary course of business and (ii) the present value of
any lease payments due under leases required to be capitalized in accordance
with applicable Statements of Financial Accounting Standards, determined by
discounting all such payments at the interest rate determined in accordance with
applicable Statements of Financial Accounting Standards.
"Key Employee" means and includes the Chairman of the Board of
Directors, the President, any Vice-President and the Treasurer of the Company or
any Subsidiary, or any person who is not an officer of the Company or any
Subsidiary and is in charge of one or more of the following functions: sales,
marketing, production, or engineering and technical development or any other
position or employee so designated by the Board of Directors of the Company.
"Ownership percentage" means and includes, with respect to each
holder of Registrable Shares for purposes of Section 5.1, the number of
Registrable Shares held by such holder divided by the aggregate of the then-
outstanding shares of Common Stock of the Company.
"Purchaser" means and shall include the persons listed on
EXHIBIT 1.1.
"Person" means an individual, corporation, partnership, joint
venture, trust, or unincorporated organization, or a government or any agency or
political subdivision thereof.
"Qualified Public Offering" means and includes the closing of an
underwritten public offering pursuant to an effective registration statement
under the Securities Act of 1933, as amended, covering the offer and sale of
Common Stock for the account of the Company.
-23-
"Registrable Shares" means and includes (i) the Shares, (ii) any
other shares of Common Stock acquired by the Purchasers within sixty (60) days
of the Closing and (iii) any shares of Common Stock issued on or with respect to
the foregoing by way of stock split, stock dividend, recapitalization or the
like.
"Securities Act" means the Securities Act of 1933, or any similar
Federal statute, and the rules and regulations of the Securities and Exchange
Commission (or of any other Federal agency then administering The Securities
Act) thereunder, all as the same shall be in effect at the time.
"Shares" shall have the meaning assigned to that term in Section 1.1.
"Subsidiary" or "Subsidiaries" means any corporation, 50% or more of
the outstanding voting stock of which shall at the time be owned by the Company
or by one or more Subsidiaries, or any other entity or enterprise, 50% or more
of the equity of which shall at the time be owned by the Company or by one or
more Subsidiaries.
7.2 ACCOUNTING TERMS. All accounting terms not specifically defined
herein shall be construed in accordance with generally accepted accounting
principles consistent with those applied in preparation of the financial
statements set forth in EXHIBIT 3.7; and all other financial data submitted
pursuant to this Agreement and all financial tests to be calculated in
accordance with this Agreement shall be prepared and calculated in accordance
with such principles.
ARTICLE VIII
MISCELLANEOUS
8.1 NO WAIVER; CUMULATIVE REMEDIES. No failure or delay on the part of
any Purchaser, or any other holder of the Shares in exercising any right, power
or remedy hereunder shall operate as a waiver thereof; nor shall any single or
partial exercise of any such right, power or remedy preclude any other or
further exercise thereof or the exercise of any other right, power or remedy
hereunder. The remedies herein provided are cumulative and not exclusive of any
remedies provided by law.
8.2 AMENDMENTS, WAIVERS AND CONSENTS. Any provision in this Agreement or
the Shares to the contrary notwithstanding, changes in or additions to this
Agreement or the Shares may be made, and compliance with any covenant or
provision herein or therein set
-24-
forth may be omitted or waived, if the Company, (i) shall obtain consent
thereto in writing from Persons holding an aggregate of at least sixty
percent of the Shares, and (ii) shall, in each such case, deliver copies of
such consent in writing to any holders who did not execute the same. Any
waiver or consent may be given subject to satisfaction of conditions stated
therein and any waiver or consent shall be effective only in the specific
instance and for the specific purpose for which given.
8.3 ADDRESSES FOR NOTICES, ETC. All notices, requests, demands and other
communications provided for hereunder shall be in writing (including telegraphic
communication) and mailed or telegraphed or delivered to the applicable party at
the addresses indicated below or at such other address as shall be designated by
such Person in a written notice to the other party complying as to delivery with
the terms of this Section.
If to the Company:
Aehr Test Systems
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: President
with a copy to:
▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Wilson, Sonsini, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
If to the Purchaser: at the addresses set forth under their respective
names on EXHIBIT 1.1 hereto.
If to any other holder of the Shares: at such holder's address for notice
as set forth in the register maintained by the Company.
All such notices, requests, demands and other communications shall, when
mailed or telegraphed, respectively, be effective when deposited in the mails or
delivered to the telegraph company, respectively, addressed as aforesaid.
8.4 COSTS, EXPENSES AND TAXES. The Company shall pay any and all stamp
and other taxes payable or determined to be payable in connection with the
execution and delivery of this Agreement, the Shares, and other instruments and
documents to be delivered hereunder or thereunder and agrees to hold the
Purchaser harmless from and against any and all liabilities with respect to or
resulting from any delay in paying or omission to pay such taxes and filing
fees.
-25-
8.5 BINDING EFFECT; ASSIGNMENT. This Agreement shall be binding upon and
inure to the benefit of the Company and the Purchasers and their respective
successors and assigns, except that the Company shall not have the right to
assign its rights hereunder or any interest herein without the prior written
consent of the Purchasers obtained in accordance with Section 8.2 hereof.
8.6 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All representations and
warranties made in this Agreement, the Shares, or any other instrument or
document delivered in connection herewith or therewith, shall survive the
execution and delivery hereof or thereof.
8.7 PRIOR AGREEMENTS. With the exception of any applicable
confidentiality agreement, this Agreement constitutes the entire agreement
between the parties and supersedes any prior understandings or agreements
concerning the subject matter hereof.
8.8 SEVERABILITY. The invalidity or unenforceability of any provision
hereof shall in no way affect the validity or enforceability of any other
provision.
8.9 GOVERNING LAW. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of California.
8.10 HEADINGS. Article, Section and subsection headings in this Agreement
are included herein for convenience of reference only and shall not constitute a
part of this Agreement for any other purpose.
8.11 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, all of which taken together shall constitute one and the same
instrument, and any of the parties hereto may execute this Agreement by signing
any such counterpart.
8.12 FURTHER ASSURANCES. From and after the date of this Agreement, upon
the request of the Purchasers, the Company and each Subsidiary shall execute and
deliver such instruments, documents and other writings as may be necessary or
desirable to confirm and carry out and to effectuate fully the intent and
purposes of this Agreement and the Shares.
-26-
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective officers thereunto duly authorized, as of the date
first above written.
AEHR TEST SYSTEMS
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-----------------------------------
President
JAPAN ASSOCIATED FINANCE CO., LTD.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇
-----------------------------------
▇▇▇▇▇ ▇▇▇▇▇, President
Toshiba Building
▇▇▇▇ ▇▇▇▇▇
▇-▇-▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇-▇▇
▇▇▇▇▇, ▇▇▇▇▇ 105
JAFCO G-2(A) INVESTMENT
ENTERPRISE PARTNERSHIP
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇
-----------------------------------
▇▇▇▇▇ ▇▇▇▇▇, President
Japan Associated Finance Co., Ltd.
Executive Partner
JAFCO G-2(B) INVESTMENT
ENTERPRISE PARTNERSHIP
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇
-----------------------------------
▇▇▇▇▇ ▇▇▇▇▇, President
Japan Associated Finance Co., Ltd.
Executive Partner
JAFCO No. 5 INVESTMENT
ENTERPRISE PARTNERSHIP
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇
-----------------------------------
▇▇▇▇▇ ▇▇▇▇▇, President
Japan Associated Finance Co., Ltd.
Executive Partner
-27-
JAFCO No. 6 INVESTMENT
ENTERPRISE PARTNERSHIP
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇
-----------------------------------
▇▇▇▇▇ ▇▇▇▇▇, President
Japan Associated Finance Co., Ltd.
Executive Partner
JAFCO G-3 INVESTMENT
ENTERPRISE PARTNERSHIP
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇
-----------------------------------
▇▇▇▇▇ ▇▇▇▇▇, President
Japan Associated Finance Co., Ltd.
Executive Partner
NIKKO VENTURE CAPITAL CO., LTD.
By: /s/ [illegible]
-----------------------------------
Title: Attorney-in-Fact
--------------------------------
THE CENTRAL CAPITAL LIMITED
By: /s/ [illegible]
-----------------------------------
Title: Attorney-in-Fact
--------------------------------
-28-
EXHIBIT 1.1
LIST OF PURCHASERS
NUMBER AGGREGATE
NAME AND ADDRESS OF SHARES PURCHASE PRICE
---------------- --------- --------------
Japan Associated Finance Co., Ltd. 57,715 $ 404,005.00
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇-▇-▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇-▇▇
▇▇▇▇▇, ▇▇▇▇▇ 105
JAFCO G-2(A) Investment 29,000 $ 203,000.00
Enterprise Partnership
Toshiba Building, 10th Floor
1-1-1 Shibaura, Minato-ku
Tokyo, Japan 105
JAFCO G-2(B) Investment 29,000 $ 203,000.00
Enterprise Partnership
Toshiba Building, ▇▇▇▇ ▇▇▇▇▇
▇-▇-▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇-▇▇
▇▇▇▇▇, ▇▇▇▇▇ 105
JAFCO No. 5 Investment 43,000 $ 301,000.00
Enterprise Partnership
Toshiba Building, ▇▇▇▇ ▇▇▇▇▇
▇-▇-▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇-▇▇
▇▇▇▇▇, ▇▇▇▇▇ 105
JAFCO No. 6 Investment 43,000 $ 301,000.00
Enterprise Partnership
Toshiba Building, 10th Floor
1-1-1 Shibaura, Minato-ku
Tokyo, Japan 105
JAFCO G-3 Investment 84,000 $ 588,000.00
Enterprise Partnership
Toshiba Building, 10th Floor
1-1-1 Shibaura, Minato-ku
Tokyo, Japan 105
Nikko Venture Capital Co., Ltd. 50,000 $ 350,000.00
▇-▇-▇ ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇-▇▇, ▇▇▇▇▇
▇▇▇▇▇
The Central Capital Ltd. 50,000 $ 350,000.00
▇-▇-▇▇ ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇-▇▇, ▇▇▇▇▇
▇▇▇▇▇
------- -------------
TOTAL: 385,715 $2,700,005.00
EXHIBIT 2.1(b)
[Legal Opinion of Wilson, Sonsini, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, P.C.]
February __, 1990
To the Purchasers Listed in
Exhibit 1.1 to the Aehr Test Systems
Common Stock Purchase Agreement
Dated as of February __, 1990
Ladies and Gentlemen:
Reference is made to the Common Stock Purchase Agreement, complete with
all listed exhibits thereto, dated as of February __, 1990 (the "Agreement"),
by and among Aehr Test Systems, a California corporation (the "Company"), and
the persons and entities listed in Exhibit 1.1 to the Agreement (the
"Purchasers"), which provides for the issuance by the Company to the
Purchasers of shares of Common Stock of the Company, without par value (the
"Shares"). This opinion is rendered to you pursuant to Section 2.1(b)(ii) of
the Agreement, and all terms used herein have the meanings defined for them
in the Agreement unless otherwise defined herein.
We have acted as counsel for the Company in connection with the
negotiation of the Agreement and the issuance of the Shares. As such counsel,
we have made such legal and factual examinations and inquiries as we have
deemed advisable or necessary for the purpose of rendering this opinion. In
addition, we have examined originals or copies of documents, corporate
records and other writings which we consider relevant for the purposes of
this opinion. In such examination we have assumed the genuineness of all
signatures on original documents, the conformity to original documents of all
copies submitted to us and the due execution and delivery of all documents
where due execution and delivery are a prerequisite to the effectiveness
thereof.
As used in this opinion, the expression "to our knowledge" with
reference to matters of fact means that, after an examination of documents in
our files and documents made available to us by the Company and after
inquiries of officers of the Company, we find no reason to believe that the
opinions expressed herein are factually incorrect; but beyond that we have
made no independent factual investigation for the purpose of rendering this
opinion.
For purposes of this opinion, we are assuming that you have all
requisite power and authority, and have taken any and all necessary corporate
or partnership action, to execute and deliver the Agreement, and we are
assuming that the representations and warranties made by the Purchasers and
the Company under the Agreement are true and correct.
The opinions hereinafter expressed are subject to the following
qualifications:
(a) We express no opinion as to the effect of applicable
bankruptcy and other similar laws affecting the rights of creditors generally;
(b) We express no opinion as to the effect of rules of law
governing specific performance, injunctive relief or other equitable remedies;
(c) We express no opinion as to compliance with applicable
anti-fraud provisions of federal or state securities laws;
(d) We express no opinion as to the enforceability of the
indemnification provisions set forth in Section 5.3 of the Agreement to the
extent the provisions thereof may be subject to limitations of public policy;
and
(e) We are members of the Bar of the State of California and,
except as set forth in paragraph 7 below with respect to the securities laws
of other states, we are not expressing any opinion as to any matter relating
to the laws of any jurisdiction other than the laws of the United States of
America and the laws of the State of California. To the extent this opinion
addresses applicable securities laws of states other than the State of
California, we have not retained nor relied on the opinion of counsel
admitted to the bar of such states, but rather have relied on compilations of
the securities laws of such states contained in looseleaf reporting services
presently available to us.
Based upon and subject to the foregoing, we are of the opinion that:
1. The Company is a corporation duly organized and validly existing
under, and by virtue of, the laws of the State of California and is in good
standing under such laws. The Company has requisite corporate power to own
and operate its properties and assets, and to carry on its business as
presently conducted. The Company is qualified to do business as a foreign
corporation in each jurisdiction where such qualification is presently
required and the failure to so qualify would have a material adverse effect
on the Company.
-2-
2. The Company has all requisite legal and corporate power to execute
and deliver the Agreement, to sell and issue the Shares thereunder and to
carry out and perform its obligations under the terms of the Agreement.
3. The authorized capital stock of the Company consists of 75,000,000
shares of Common Stock and 10,000,000 shares of Preferred Stock. Immediately
prior to the Closing, 3,526,986 shares of Common Stock and no shares of
Preferred Stock were outstanding. All such issued and outstanding shares of
Common Stock have been duly authorized and validly issued, are fully paid and
nonassessable, and are free of any preemptive or similar rights contained in
the Articles of Incorporation or Bylaws of the Company. As of the date
hereof the Company has outstanding options exercisable for 299,300 shares of
Common Stock and warrants exercisable for 9,333 shares of Common Stock. The
Shares issued under the Agreement are validly issued, fully paid and
nonassessable and free of any liens, encumbrances and preemptive or similar
rights except as specifically provided in the Agreement; provided, however,
that the Shares may be subject to restrictions on transfer under state and/or
federal securities laws as set forth in the Agreement. To our knowledge,
except for rights described in the Agreement and the Exhibits thereto, there
are no other options, warrants, conversion privileges or other rights
presently outstanding to purchase or otherwise acquire any authorized but
unissued shares of capital stock or other securities of the Company, or any
other agreements to issue any such securities or rights.
4. All corporate action on the part of the Company, its directors and
shareholders necessary for the authorization, execution, delivery and
performance of the Agreement by the Company, the authorization, sale,
issuance and delivery of the Shares and the performance of the Company's
obligations under the Agreement has been taken. The Agreement has been duly
and validly executed and delivered by the Company and constitutes a valid and
binding obligation of the Company, enforceable in accordance with its terms.
5. The Company is not in violation of any term of its Articles of
Incorporation or Bylaws, or, to our knowledge and except as set forth in the
Agreement, in any material respect of any term or provision of any material
contract, agreement, instrument, judgment or decree binding upon the Company.
The execution, delivery and performance of and compliance with the terms of
the Agreement, and the issuance of the Shares, do not violate any provision
of the Articles of Incorporation or Bylaws, or, to our knowledge, any
provision of any applicable federal, state or local law, rule or regulation.
To our knowledge, the execution, delivery and performance of and compliance
with the Agreement, and the issuance of the Shares have not resulted and will
not result in any violation of,
-3-
or conflict with, or constitute a default under, any material contract,
agreement, instrument, judgment or decree binding upon the Company.
6. Except as identified in the Agreement, to our knowledge, there are
no actions, suits, proceedings or investigations pending against the Company
or its properties before any court or governmental agency (nor, to our
knowledge, is there any written threat thereof), which, either in any case or
in the aggregate, might result in any material adverse change in the business
or financial condition of the Company or any of its properties, or in any
material impairment of the right or ability of the Company to carry on its
business as now conducted or in any material liability on the part of the
Company, or which questions the validity of the Agreement or any action taken
or to be taken by the Company in connection therewith.
7. No consent, approval or authorization of or designation,
declaration or filing with any governmental authority on the part of the
Company is required in connection with the valid execution and delivery of
the Agreement, or the offer, sale or issuance of the Shares or the
consummation of any other transaction contemplated thereby, except
qualification (or taking such action as may be necessary to secure an
exemption from qualification, if available) of the offer and sale of the
Shares under the California Corporate Securities Laws and other applicable
securities laws (but excluding jurisdictions outside of the United States),
filings for which have been accomplished and are effective, except filings
which may be made after the date hereof and which the Company has agreed to
make in a timely manner.
8. Subject to the accuracy of the Purchasers' representations in
Section 6.1 of the Agreement and their responses (if any) to the Company's
inquiries, the offer, sale and issuance of the Shares to be issued in
conformity with the terms of the Agreement constitute transactions exempt
from the registration requirements of Section 5 of the Securities Act of
1933, as amended.
This opinion is furnished to the Purchasers solely for their benefit in
connection with the purchase of the Shares, and may not be relied upon by any
other person without prior written consent.
Very truly yours,
WILSON, SONSINI, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇
Professional Corporation
-4-
EXHIBIT 2.1(c)
AEHR TEST SYSTEMS
AMENDMENT TO REGISTRATION RIGHTS
Aehr Test Systems (the "Company") intends to enter into a common stock
purchase agreement (the "Jafco Agreement") with Jafco America Ventures, Inc.,
and certain other entities (the "Purchasers") providing for the issuance and
sale by the Company of shares of Common Stock of the Company to the
Purchasers. The representative of the Purchasers has made it a condition to
the execution of the Agreement by the Purchasers that this Amendment to
Registration Rights ("Amendment") be duly executed.
Pursuant to Section 6.8 of the Capital Stock Investment Agreement dated
April 12, 1984 (the "1984 Agreement"), the Company and the undersigned holder
of a majority of the Restricted Securities (as defined in the 1984 Agreement)
agrees to the amendment of paragraph 5.3 of the 1984 Agreement, to read in
full as set forth in Exhibit I hereto.
This Amendment shall be conditioned and effective upon the closing of
the Jafco Agreement.
AEHR TEST SYSTEMS ▇▇▇▇▇▇▇▇ III
By By
---------------------------- ------------------------------
Executive Officer General Partner
EXHIBIT I
5.3 REQUESTED REGISTRATION.
(a) If at any time 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). However, if the offering
of the Restricted Securities is proposed to be underwritten on a firm
commitment basis (i) the Company (if it is including shares in the
registration for its own account) and the holders of any other shares
proposed to be included in the registration ("Other Shares") must agree to
include such shares in the underwriting on the same terms and conditions as
the holders of Restricted Securities, and (ii) if the managing underwriter(s)
determines that marketing considerations require a limitation of the total
number of shares to be included in the registration, the managing
underwriter(s) will determine the number of shares to be included in the
registration for the account of the Company (if any) and the total number of
shares to be included in the registration for the account of all others
(including the holders of Restricted Securities), which total number shall
then be allocated pro rata among such shareholders according to the number of
shares owned by each of them. All other shares shall be excluded from the
registration.
(b) In addition to the registration rights granted in paragraph
5.3(a), if a registration may be effected by the Company 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 notice, underwriting and cut-back provisions set forth in paragraph
5.3(a) shall also apply to any registration pursuant to this paragraph 5.3(b).
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.
2.
EXHIBIT 3.0
SCHEDULE OF EXCEPTIONS
This Schedule of Exceptions, dated as of February 8, 1990, is made and
given pursuant to Article 3 of the Aehr Test Systems Common Stock Purchase
Agreement dated February 8, 1990 (the "Agreement"). The section numbers in
this Schedule of Exceptions correspond to the section numbers in the
Agreement; however, any information disclosed herein under any section number
shall be deemed to be disclosed and incorporated into any other section
number under the Agreement where such disclosure would be appropriate. Any
terms defined in the Agreement shall have the same meaning when used in this
Schedule of Exceptions as when used in the Agreement unless the context
otherwise requires.
3.5 COMPLIANCE WITH OTHER INSTRUMENTS.
Both the agreement with ▇▇▇▇ Commercial Credit and Equitable Lomas
Leasing referenced below contain provisions of default including a cross
default clause. If the Company's default on its line of credit with Union
Bank caused Union Bank to accelerate such line of credit (see "Line of
Credit" below), the Company would be in default of both agreements.
3.6 TITLE TO ASSETS, PATENTS.
All of the Company's property and equipment in the U.S. is pledged
as collateral under term debt agreements with Equitable Lomas Leasing, ▇▇▇▇
Commercial Credit and various leasing companies under capital lease
obligations. The Company's outstanding principle balance due Equitable Lomas
Leasing at December 31, 1989 was $1,432,213 and is evidenced by a promissory
note bearing interest at 12.8% per year. This loan is payable in equal
monthly installments of $48,146 through December 1992. The outstanding
principle balance due ▇▇▇▇ Commercial Credit at December 31, 1989 was
$750,882 and is evidenced by a promissory note bearing interest at 12.55% per
year. The loan is payable in equal monthly installments of $17,119 through
December 1994.
Capital lease obligations as of December 31, 1989 of $513,000
consist of various leases payable in installments through fiscal 1994 at a
weighted average interest rate of 11.3% per year.
3.12 SECURITIES ACT OF 1933. The holders of Restricted Securities, as
defined in the Capital Stock Investment Agreement dated April 12, 1984, as
amended, have the registration rights set forth in paragraph 5 thereof. The
holders of Registrable Shares, as defined in the Stock Purchase Agreement
dated September 18, 1985, have the registration rights set forth in Article V
thereof.
3.13 DISCLOSURE
PROJECTIONS
No representation or warranty is made concerning the financial
projections provided to Purchasers, except that they were prepared in good
faith based on assumptions which the Company believes to be reasonable.
Projections of future financial results for a company in the semiconductor
industry are inherently subject to substantial risks of inaccuracy. No
assurance can be given that the assumptions on which projections are based
will prove to be correct. Variations from the projections could be
substantial and adverse.
The Company's projections depend on a number of factors including
present backlog, expected future orders and shipment of new burn-in test
equipment being developed and built by the Company under contract with IBM
(the "Wide I/0"). (See "Contract with IBM" below.) The Company has
experienced declining order rates and declining backlog over the last four
quarters as shown below:
In Millions
-----------
Quarter Ended Orders Backlog
------------------------------------------------------------------
November 30, 1988 $10.1 $20.0
February 28, 1989 $12.8 $20.8
May 31, 1989 $12.3 $20.9
August 31, 1989 $ 6.5 $15.9
November 30, 1989 $ 6.3 $13.9
The Company includes in backlog orders to which a purchase order
number has been assigned by the customer and which are expected to be shipped
within one year. Orders are subject to cancellation by the customer with
limited charges. Included in the backlog are orders from IBM for Wide I/O
systems totaling approximately $4 Million.
The Company's projections contain revenues for which purchase
orders have not yet been received by the Company. Also included in the
Company's projection for the six month period ending May 31, 1990 are the
revenues expected from the shipment of two Wide I/O systems to IBM totaling
$2,400,000. The Company has experienced delays in completing this project.
Further delays in completing the Wide I/O project and delays in receiving
purchase orders for other shipments in the projection would result in
significantly lower revenues and could lead to a material loss in each of the
quarters ending February 28, 1990 and May 31, 1990, and possibly result in a
loss for the fiscal year ending May 31, 1990.
CONTRACT WITH IBM
Included in work-in-process at May 31, 1989 and November 30, 1989
are deferred costs of $1,673,000 and $2,360,389 respectively, related to the
Wide I/O project with IBM. Deferred costs primarily include manufacturing
direct material, direct labor
-2-
and overhead and tooling, and exclude research and development that is
expensed as incurred. This production contract is accounted for under the
units of delivery method. Development problems have been experienced, which
have delayed shipment of the equipment. The latest scheduled delivery date
was August 15, 1989. Additional development problems could be encountered in
the future, which could further delay shipment and possibly lead to order
cancellations. Initial product acceptance procedures were expected to
commence in December 1989 but have been delayed until February 1990. The
contract is subject to cancellation by the customer for noncompliance and the
Company may incur a material loss if the contract is canceled. Related
progress payments received under the contract of $197,000 included in
customer deposits as of May 31, 1989, and $874,000 received during June 1989,
might be refundable in the event of the customer's cancellation of the
contract.
QUARTERLY LOSSES
The Company incurred an after tax loss of $245,000 in its quarter
ended November 30, 1989 and is projecting a loss in its quarter ending
February 28, 1990. For the seven month period ended December 31, 1989 the
Company incurred an after tax loss of $449,000. The Company could incur
losses in the future.
LINE OF CREDIT
On September 20, 1989, the Company renewed its line of credit
agreement with Union Bank. This agreement, renewable again on September 15,
1990, provides for maximum borrowings of up to the lesser of $5,000,000 or
80% of eligible accounts receivable (borrowing base formula), including a
maximum of $500,000 in standby letters of credit. Borrowings under the
agreement bear interest at 0.75% in excess of the bank's reference rate and
are collateralized by accounts receivable, inventories, certain property and
equipment and other assets of the Company. Under this agreement, the Company
is required to maintain certain financial ratios, profitability on a
quarterly basis and an average compensating balance of $200,000.
The Company is currently in default of the profitability covenant
because it incurred an after tax loss of $241,000 in its U.S. operations for
the quarter ended November 30, 1989. The Company is forecasting an after tax
loss of over $400,000 in its U.S. operations for the quarter ending February
28, 1990 and will remain in default of the profitability covenant. In
addition, the Company is currently in default of its borrowing base
limitation. As of December 31, 1989, the Company's borrowings under its line
of credit were $2,425,000 which was in excess of the amount available under
the borrowing base formula by approximately $500,000. The Company's target
cash balance in the United States is approximately $1,000,000. In order to
maintain this target balance, the Company is forecasting that its borrowings
will remain in excess of the amount permitted by the formula through May 31,
1990 and that the excess amount will exceed $1,300,000 during that period.
The Company has negotiated with the Bank a conditional waiver of the
profitability covenant, the current default and the borrowing base
-3-
limit, a copy of which is attached as Exhibit 4.1(l) to the Agreement.
The proceeds from the sale of stock offered hereby will be used to
repay the Company's bank line of credit to cure the default of the borrowing
base. The Company believes it will be able to maintain its line of credit
under its current terms. However, loss of the line of credit with Union Bank
may require the Company to raise additional equity capital if a bank line of
credit could not be obtained from alternative sources. There is no assurance
that the Company could raise such equity capital on favorable terms.
SOLE SOURCE COMPONENTS
The Company is dependent on several vendors as sole suppliers. One
of these suppliers, Texas Instruments, has informed the Company that it will
no longer manufacture two integrated circuits which are used in large
quantities in all of the Company's older model dynamic and test burn-in
systems. In 1989, the Company entered into an agreement with Arrow Kierrulff
(acting as Texas Instruments distributor) to purchase a two to three year
supply of these circuits amounting to a total purchase order commitment of
$717,000. The Company has taken partial delivery on the contract and as of
December 31, 1989 had an excess supply of parts over current demand of
$343,000 in inventory. The Company is currently negotiating deferral of
shipments of the balance of the contract of $404,000 in excess parts
scheduled for delivery monthly through June of 1990.
These integrated circuits are no longer used in the industry and
the Company is the only major customer for these parts. No reserve for loss
or obsolescence has been recorded in the Company's financial statements for
this contract or for the excess inventory because the Company believes it
will use all of the parts in its burn-in systems sold in future years, and in
support of its installed base of over 1,000 systems.
3.18 SUBSIDIARIES. The Company holds 78.6% of the outstanding stock and
has rights to purchase all of the minority interest of Aehr Test Systems,
Japan, a Japanese corporation.
-4-
EXHIBIT 3.7
CERTIFICATE OF CHIEF FINANCIAL OFFICER
OF
AEHR TEST SYSTEMS
The undersigned Acting Chief Financial Officer hereby certifies to the
items below. Capitalized terms shall have the meanings assigned to them in the
Common Stock Purchase Agreement dated February 26, 1990, between Aehr Test
Systems and certain Purchasers (the "Agreement").
1. She is the Acting Chief Financial Officer of Aehr Test Systems, a
California corporation.
2. Attached hereto are true and complete copies of the Consolidated
audited financial statements of the Company and its Subsidiaries for the twelve
months ended May 31, 1989 and the Company's unaudited unconsolidated financial
statements for the seven months ended December 31, 1989.
IN WITNESS WHEREOF, the undersigned has executed this certificate this 26th
day of February, 1990.
------------------------------
▇▇▇▇▇ ▇▇▇▇▇,
Acting Chief Financial Officer
LIST OF PURCHASERS
NUMBER AGGREGATE
NAME AND ADDRESS OF SHARES PURCHASE PRICE
---------------- --------- --------------
Jafco American Ventures, Inc. 12,000 Y42,000,000
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Nikko Venture Capital Co., Ltd. 2,000 Y 7,000,000
▇-▇-▇ ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇-▇▇, ▇▇▇▇▇
Japan
The Central Capital Ltd. 2,000 Y 7,000,000
▇-▇-▇▇ ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇-▇▇, ▇▇▇▇▇
▇▇▇▇▇
-------- -----------
TOTAL: 16,000 Y56,000,000
AEHR TEST SYSTEMS
CONSOLIDATED BALANCE SHEET
DECEMBER 31, 1989
(UNAUDITED)
($ in '000s)
ASSETS
CURRENT ASSETS:
CASH $4,267
ACCOUNTS RECEIVABLE 9,075
INVENTORY 13,444
OTHER CURRENT ASSETS 1,342
--------
TOTAL CURRENT ASSETS 28,128
FIXED ASSETS 3,674
OTHER ASSETS 1,270
--------
TOTAL ASSETS $33,072
--------
--------
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
NOTES PAYABLE $7,813
ACCOUNTS PAYABLE 5,957
ACCRUED EXPENSES 1,617
CUSTOMER DEPOSITS 1,129
ACCRUED INCOME TAXES 150
--------
TOTAL CURRENT LIABILITIES 16,666
LONG TERM LIABILITIES 2,922
MINORITY INTEREST 821
--------
TOTAL LIABILITIES 20,409
--------
STOCKHOLDERS' EQUITY:
CAPITAL STOCK 3,530
RETAINED EARNINGS (PRIOR) 8,625
RETAINED EARNINGS (CURRENT) (449)
TRANSLATION ADJUSTMENT 957
--------
TOTAL STOCKHOLDERS' EQUITY 12,663
--------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $33,072
--------
--------
AEHR TEST SYSTEMS
CONSOLIDATED STATEMENT OF OPERATIONS
SEVEN MONTHS ENDED DECEMBER 31, 1989
(UNAUDITED)
($ in '000s)
ACTUAL %
-------- ----
REVENUE $21,082 100%
COST OF GOODS SOLD 11,843 56%
-------- ----
GROSS PROFIT 9,239 44%
OPERATING EXPENSES:
RESEARCH & DEVELOPMENT 3,586 17%
SELLING, GENERAL & ADMIN 5,602 27%
-------- ----
TOTAL OPERATING EXPENSES 9,188 44%
-------- ----
OPERATING PROFIT (LOSS) 51 0%
INTEREST, NET 392 2%
OTHER (INCOME) EXPENSE 69 0%
-------- ----
TOTAL OTHER (INCOME) EXPENSE 461 2%
-------- ----
PROFIT BEFORE TAXES AND
MINORITY INTEREST (410) -2%
TAX PROVISION 6 0%
-------- ----
PROFIT BEFORE MINORITY INTEREST (416) -2%
MINORITY INTEREST 33 0%
-------- ----
NET INCOME (LOSS) ($449) -2%
-------- ----
-------- ----
AEHR TEST SYSTEMS AND SUBSIDIARIES
----------
REPORT ON CONSOLIDATED FINANCIAL STATEMENTS
as of May 31, 1988 and 1989
and for each of the three years
in the period ended May 31, 1989
[Letterhead of Coopers & ▇▇▇▇▇▇▇, Certified Public Accountants]
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors
and Stockholders
Aehr Test Systems:
We have audited the accompanying consolidated balance sheets of Aehr Test
Systems and Subsidiaries as of May 31, 1988 and 1989 and the related
consolidated statements of operations, stockholders' equity and cash flows for
each of the three years in the period ended May 31, 1989. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Aehr Test Systems and
Subsidiaries as of May 31, 1988 and 1939, and the results of their operations
and their cash flows for each of the three years in the period ended May 31,
1989, in conformity with generally accepted accounting principles.
/s/ COOPERS & ▇▇▇▇▇▇▇
San Jose, California
July 7, 1989, except for Notes 2 and 15,
for which the dates are September 30, 1989
and September 20, 1989, respectively
AEHR TEST SYSTEMS AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS, May 31, 1988 and 1989
----------
ASSETS 1988 1989
---- ----
(in thousands,
except share data)
Current assets:
Cash and cash equivalents $ 2,877 $ 2,826
Short-term cash deposits 1,237 211
Accounts receivable (less allowance for doubtful
accounts of $127 and $136 at 1988 and 1989,
respectively) 8,972 13,367
Inventories 8,786 11,560
Refundable income taxes 582 133
Deferred income taxes 671
Other 184 250
------- -------
Total current assets 22,638 29,018
Property and equipment, net 3,917 3,985
Other assets, net 792 1,326
------- -------
Total assets $27,347 $34,329
------- -------
------- -------
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Notes payable -- banks 7,357 7,275
Current portion of long-term debt and capital lease
obligations 555
Accounts payable 4,321 6,615
Accrued expenses 1,472 2,050
Customer deposits 1,478 389
Income taxes payable 1,216
------- -------
Total current liabilities 14,628 18,100
Long-term debt and capital lease obligations, net of
current portion 1,679
Deferred income taxes 576 825
Minority interest in subsidiary 983 797
------- -------
Total liabilities 16,187 21,401
------- -------
Contingencies and commitments (Notes 2, 7 and 9).
Stockholders' equity:
Preferred stock, $.01 par value:
Authorized: 10,000,000 shares:
Issued and outstanding: none
Common stock, $.01 par value:
Authorized: 75,000,000 shares;
Issued and outstanding: 3,513,077 shares and
3,526,986 shares at 1988 and 1989,
respectively 35 35
Additional paid-in capital 3,411 3,595
Notes receivable for capital stock (150)
Retained earnings 6,768 8,525
Translation adjustment 1,096 773
------- -------
Total stockholders' equity 11,160 12,928
------- -------
Total liabilities and stockholders' equity $27,347 $34,329
------- -------
------- -------
The accompanying notes are an integral part
of these consolidated financial statements.
2
AEHR TEST SYSTEMS AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
for the years ended May 31, 1987, 1988 and 1989
----------
1987 1988 1989
---- ---- ----
(in thousands, except per share data)
Net sales $24,547 $26,323 $41,828
------- ------- -------
Costs and expenses:
Cost of goods sold 15,938 15,185 21,774
Research and development 5,141 5,303 7,533
Selling, general and administrative 6,774 6,780 8,259
------- ------- -------
27,853 27,268 37,566
------- ------- -------
Income (loss) from operations (3,306) (945) 4,262
Interest expense (351) (485) (730)
Interest income 210 272 84
------- ------- -------
Income (loss) before income taxes,
minority interest in subsidiary
and extraordinary credit (3,447) (1,158) 3,616
Provision (benefit) for income taxes (1,388) (445) 1,812
------- ------- -------
Income (loss) before minority
interest in subsidiary and
extraordinary credit (2,059) (713) 1,804
Minority interest in net income (loss)
of subsidiary (277) 113 238
------- ------- -------
Income (loss) before extraordinary
credit (1,782) (826) 1,566
Extraordinary credit -- tax benefit
from utilization of operating
loss carryforwards 208 291
------- ------- -------
Net income (loss) $(1,782) $ (618) $ 1,857
------- ------- -------
------- ------- -------
Net income (loss) per common and common
equivalent share:
Before extraordinary credit $(.51) $(.23) $.45
Extraordinary credit .06 .8
------- ------- -------
$(.51) $(.17) $.53
------- ------- -------
------- ------- -------
Weighted average number of common and common
equivalent shares used in per share
calculations 3,508 3,531 3,528
------- ------- -------
------- ------- -------
The accompanying notes are an integral part
of these consolidated financial statements.
3
AEHR TEST SYSTEMS AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
for the years ended May 31, 1987, 1988 and 1989
----------
Notes
Common Stock Additional Receivable
------------ Paid-in for Capital Retained Translation
Shares Amount Capital Stock Earnings Adjustment Total
------ ------ ---------- ----------- -------- ----------- -----
(in thousands, except share data)
Balances, June 1, 1986 3,489,680 $ 35 $ 3,194 $ (242) $ 9,168 $ 444 $ 12,599
Issuance of common stock:
Fiscal 1986 contribution to employee stock
bonus plan 18,965 190 190
To employees 500 5 5
Repurchase of common stock from employees (550) (8) (8)
Issuance of warrants 9 9
Net loss (1,782) (1,782)
Translation adjustment 323 323
--------- ---- ------- ------ ------- ----- --------
Balances, May 31, 1987 3,508,595 35 3,390 (242) 7,386 767 11,336
Issuance of common stock to employees 30,003 170 170
Repurchase of common stock:
From employee stock bonus plan (13,321) (76) (76)
From employees (12,200) (73) 73 --
Repayment of notes receivable 19 19
Net loss (618) (618)
Translation adjustment 329 329
--------- ---- ------- ------ ------- ----- --------
Balances, May 31, 1988 3,513,077 35 3,411 (150) 6,768 1,096 11,160
Issuance of common stock to employees 49,909 300 300
Repurchases of common stock from employee
stock bonus plan (11,000) (66) (66)
Surrender of common stock and cancellation of
related note receivable (25,000) (50) 150 (100) --
Net income 1,857 1,857
Translation adjustment (323) (323)
--------- ---- ------- ------ ------- ----- --------
Balances, May 31, 1989 3,526,986 $35 $ 3,595 $ -- $8,525 $773 $12,928
--------- ---- ------- ------ ------- ----- --------
--------- ---- ------- ------ ------- ----- --------
The accompanying notes are an integral part
of these consolidated financial statements.
4
AEHR TEST SYSTEMS AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
for the years ended May 31, 1987, 1988 and 1989
----------
1987 1988 1989
---- ---- ----
(in thousands)
Cash flows from operating activities:
Net income (loss) $(1,782) $ (618) $1,857
Adjustments to reconcile net income (loss)
to net cash provided by (used in) operating
activities:
Minor interest in subsidiary (277) 113 238
Depreciation and amortization 956 1,276 1,324
Decrease (increase) in accounts receivable 1,800 (2,314) (5,407)
Decrease (increase) in inventories 2,585 (2,600) (3,111)
Decrease (increase) in recoverable income
taxes and other current assets (1,023) 599 312
Increase in accounts payable 272 1,102 2,824
Increase in accrued expenses, income taxes
payable and customer deposits 208 1,240 764
Decrease in deferred income taxes (291) (240) (397)
------- ------ ------
Net cash provided by (used in)
operating activities 2,448 (1,442) (1,596)
------- ------ ------
Cash flows from investing activities:
Decrease (increase) in short-term cash
deposits (1,921) 863 960
Additions to property and equipment (1,490) (1,266) (729)
Decrease (increase) in other assets 2 (103) (609)
------- ------ ------
Net cash used in investing activities (3,409) (506) (378)
------- ------ ------
Cash flows from financing activities:
Increase (decrease) in notes payable - banks 1,708 (622) 495
Borrowings under long-term debt 1,800
Long-term debt and capital lease principal
payments (249)
Proceeds from issuance of capital stock,
exercise of stock options and issuance
of warrants 204 170 300
Repurchase of common stock (8) (76) (66)
Repayment of notes receivable from
shareholders 19
------- ------ ------
Net cash provided by (used in)
financing activities 1,904 (509) 2,280
------- ------ ------
Effect of exchange rates on cash 373 655 357
------- ------ ------
Net increase (decrease) in cash and
cash equivalents 1,316 (1,802) (51)
Cash and cash equivalents, beginning of year 3,363 4,679 2,877
------- ------ ------
Cash and cash equivalents, end of year $ 4,679 $2,877 $2,826
------- ------ ------
------- ------ ------
Supplemental cash flow information:
Cash paid during the year for:
Interest $257 $505 $732
Income taxes 4 660
The accompanying notes are an integral part
of these consolidated financial statements.
5
AEHR TEST SYSTEMS AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
-----------
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
CONSOLIDATION:
The financial statements include the accounts of the Company, its wholly
owned foreign sales corporation (FSC) and both its wholly owned and
majority owned foreign subsidiaries. All intercompany accounts and
transactions have been eliminated.
FOREIGN CURRENCY TRANSLATION AND TRANSACTIONS:
Assets and liabilities of the Company's foreign subsidiaries are translated
into U.S. dollars using the exchange rate in effect at the balance sheet
date. Additionally, their revenues and expenses are translated using
exchange rates approximating average rates prevailing during the fiscal
year. Translation adjustments that arise from translating their financial
statements from their local currencies to U.S. dollars are accumulated and
reflected as a separate component of stockholders' equity.
Transaction gains and losses that arise from exchange rate changes
denominated in currencies other than the local currency are included in the
statements of operations as incurred and are not significant.
CASH EQUIVALENTS AND SHORT-TERM CASH DEPOSITS:
All highly liquid debt instruments purchased with a maturity of three
months or less are considered to be cash equivalents.
Short-term cash deposits represent interest bearing tine deposits with a
maturity greater than three months.
INVENTORIES:
Inventories are stated at the lower of cost (first-in, first-out method) or
market.
Continued
6
AEHR TEST SYSTEMS AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, Continued
-----------
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, continued:
PROPERTY AND EQUIPMENT:
Property and equipment are stated at cost. Leasehold improvements are
amortized over the lesser of their estimated useful lives or the terms of
the related lease. Furniture, fixtures and equipment are depreciated on a
straight-line basis over their estimated useful lives. The range of
estimated useful lives is as follow:
Leasehold improvements Life of lease
Furniture and fixtures 3 to 15 years
Machinery and equipment 2 to 11 years
REVENUE RECOGNITION:
Revenue related to systems is recognized upon shipment. A provision for
the estimated future cost of warranty is recorded upon shipment.
PRODUCT DEVELOPMENT COSTS AND CAPITALIZED SOFTWARE:
Costs incurred in the research and development of new products or systems
are charged to operations as incurred.
Costs incurred in the development of software programs for the Company's
products are charged to operations as incurred until technological
feasibility of the software has been established. After technological
feasibility is established, any additional costs are capitalized.
Capitalized costs of approximately $168,000 and $265,000 are included in
inventory at May 31, 1988 and 1989. No software development Costs were
capitalized prior to 1988.
Continued
7
AEHR TEST SYSTEMS AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, Continued
-----------
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, continued:
INCOME TAXES:
Deferred income taxes are recorded to reflect the tax effects of timing
differences in reporting certain items for financial statement and income
tax purposes. The differences relate primarily to installment sales,
inventory and warranty reserves, reserve for doubtful accounts and
depreciation.
The Company intends to reinvest its share of the undistributed earnings of
its majority owned foreign subsidiaries. Therefore, it makes no provision
for additional U.S. taxes, which might result from distribution of such
earnings unless they are actually repatriated. At May 31, 1989, the
cumulative amount of earnings from subsidiaries on which the Company has
not provided U.S. income taxes was approximately $2,400,000.
Statement of Financial Accounting Standards No. 96, "Accounting for Income
Taxes" (FAS No. 96), was issued in December 1987. The Company is required
to adopt the statement for its fiscal year ending May 31, 1991, although
early adoption is allowed. The change in accounting required by the
statement is not expected to have a material effect on the Company's
financial position or results of operations.
NET INCOME (LOSS) PER SHARE:
Net income per share has been computed using the treasury stock method
after considering the dilutive effect of stock options and warrants. Net
loss per share has been computed using the weighted average shares of
Common Stock outstanding as the affect of stock options and warrants is
antidilutive.
Continued
8
AEHR TEST SYSTEMS AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, Continued
-----------
2. INVENTORIES:
Inventories at May 31 comprise:
1988 1989
------ -------
(in thousands)
Raw materials and subassemblies $3,590 $3,028
Work in process 3,581 7,559
Finished product 1,615 973
------ -------
$8,786 $11,560
------ -------
------ -------
Included in work-in-process at May 31, 1989 and September 30, 1989 are
deferred Costs of $1,673,000 and $2,361,000, respectively, related to new
burn-in test equipment being developed and built by the Company under
contract. Deferred costs primarily include manufacturing direct material,
direct labor and overhead and tooling, and exclude research and development
that is expensed as incurred. This production contract is accounted for
under the units of delivery method. The latest scheduled delivery date
was August 15, 1989. Development problems have been experienced, which have
delayed shipment of the equipment. Additional development problems could
be encountered in the future, which could further delay shipment and
possibly lead to order cancellations. Initial product acceptance procedures
are expected to commence in December 1989. Management believes it will
meet its obligations under the contract. Currently, the contract may be
canceled by the customer in the event of noncompliance with the required
delivery schedule and the Company may incur a significant loss if the
contract. is canceled. Related progress payments received under the
contract of $197,000 included in customer deposits as of May 31, 1989, and
$874,000 received during June 1989, might be refundable in the event of the
customer's cancellation of the contract.
Continued
9
AEHR TEST SYSTEMS AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, Continued
-----------
3. PROPERTY AND EQUIPMENT:
Property and equipment as of May 31, at cost, including equipment under
capital leases entered into during fiscal 1989 (cost of $683,000, less
accumulated amortization of $84,000 at May 31, 1989), comprises:
1988 1989
------ ------
(in thousands)
Leasehold Improvements $ 896 $ 982
Furniture and fixtures 2,117 2,395
Machinery and equipment 2,718 3,096
Test equipment 1,861 2,285
------ ------
7,592 8,758
Less accumulated deprecation and
amortization 3,675 4,773
------ ------
$3,917 $3,985
------ ------
------ ------
4. OPTION TO PURCHASE MINORITY INTEREST IN SUBSIDIARY:
In fiscal 1982, the Company and an individual formed a Japanese corporate
joint venture to manufacture, import, export and sell the Company's
products. The Company his an option to purchase the individual's initial
50% interest through March 1, 1997 at specified prices based on the
joint venture's future earnings. Joint venture interests acquired. by
the Company upon formation and subsequent exercises of its option are as
follows:
Interest Cost
-------- ------
(in thousands)
Formation 50.0% $ 242
Fiscal 1987 13.9 695
Fiscal 1988 4.9 147
Fiscal 1989 9.8 295
---- ------
Balances, May 31, 1989 78.6% $1,379
---- ------
---- ------
Continued
10
AEHR TEST SYSTEMS AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, Continued
-----------
4. OPTION TO PURCHASE MINORITY INTEREST IN SUBSIDIARY, continued:
Prior to the Company's initial exercise of its option in fiscal
1987, the Company accounted for its investment using the equity
method. Subsequently, the joint venture has been consolidated with the
Company and each purchase under the option has been accounted for as a
step purchase. The cost in excess of the fair value of the net
assets acquired of $692,000 is being amortized on a straight-line
basis over 20 years and is included in other assets, net of
accumulated amortization of $117,000 at May 31, 1989.
5. JOINT VENTURE:
In June 1989, the Company's majority owned Japanese subsidiary formed a
joint venture with a U.S. company for the purpose of marketing certain
products and technology in Japan and to develop and manufacture
products particular to the Japanese market. The joint venture
corporation is equally owned by the two corporate partners with each
contributing 50,000,000 yen of capital (approximately $350,000), which
was contributed on May 29, 1989 and is included in other assets as of
May 31, 1989.
6. NOTES PAYABLE:
At May 31, 1988 and 1989 short-term bank borrowings totaled $7,357,000
and $7,275,000, respectively. These outstanding borrowings at May 31, 1989
were comprised of short-term bank loans to the Company's majority
owned subsidiary totaling $4,270,000 at a weighted average interest
rate of 5.2%, secured by inventories, and $3,005,000 under the
Company's revolving line of credit (see below) at prime plus 2% (13.5%
at May 31, 1989).
Continued
11
AEHR TEST SYSTEMS AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, Continued
-----------
6. NOTES PAYABLE, Continued:
As of May 31, 1989 and through September 19, 1989, the Company's
revolving line of credit provided for maximum borrowings of up to the
lesser of $3,500,000 or 60% of eligible accounts receivable. Borrowings
under this agreement, renewed on September 20, 1989 (see Note 15), bore
interest at 2.0% in excess of the bank's reference rate (a total of
13.5% as of May 31, 1989) and were collateralized by accounts
receivable, inventories, certain property and equipment and other assets
of the Company. Under this agreement, the Company was required to
maintain certain financial ratios, profitability on a quarterly basis
and an average compensating balance of $200,000. The compensating
balance did not constitute a legal restriction on the Company's cash and
to the extent it was not maintained, the bank would charge a fee based
on an interest formula contained within the agreement.
7. LONG-TERM DEBT AND CAPITAL LEASE OBLIGATIONS:
Long-term debt as of May 31, 1989 of $1,651,000 consists of an equipment
loan, evidenced by a promissory note, payable to a financing company
bearing interest at 12.8% per annum. The loan is payable in equal
monthly principal and interest installments of $48,146 through December
1992 and is collateralized by the Company's property and equipment. Under
the loan agreement, the Company must pay a prepayment penalty of
approximately 4% to 5% of the outstanding principal balance in the
event of full prepayment between January 1990 and December 1992.
Capital lease obligations as of May 31, 1989 of $583,000 consist of
various leases payable in installments through fiscal 1994 at a
weighted average interest rate of 11.3% per annum.
Principal payments under long-term debt and capital lease obligations for
each of the next five years as of May 31, 1989 are as follows:
1990 $555
1991 632
1992 646
1993 387
1994 14
Continued
12
AEHR TEST SYSTEMS AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, Continued
-----------
8. ACCRUED EXPENSES:
Accrued expenses at May 31 comprise:
1988 1989
------ ------
(in thousands)
Commissions $ 274 $ 203
Warranty 147 93
Payroll 554 899
Vacation 284 286
Other 213 569
------ ------
$1,472 $2,050
------ ------
------ ------
9. COMMITMENTS:
The Company leases most of its present manufacturing and office space under
operating leases which expire between fiscal 1990 and 1992. Under the
terms of certain leases, the rentals will be adjusted upward every
two years based on the Consumer Price Index but with increases not to
exceed 14% for any adjustment. The leases contain renewal options whereby
the Company may extend the lease term for up to an additional five years.
In addition, the Company is required to pay for insurance, taxes and
maintenance of the property. The Company is subleasing a portion of this
space under noncancelable subleases expiring in 1991.
Minimum annual rentals payable under operating leases in each of the next
five fiscal years (in thousands) are as follows:
1990 $1,307
1991 1,226
1992 338
1993 15
1994 9
------
2,895
Less rentals receivable under subleases 118
------
$2,777
------
------
Rent expense for the years ended May 31, 1987, 1988 and 1989 was
approximately $1,229,000, $1,303,000 and $1,405,000, respectively.
Continued
13
AEHR TEST SYSTEMS AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, Continued
-----------
9. COMMITMENTS, Continued:
The Company's Japanese subsidiary discounts notes receivable at banks in
the ordinary course of business. The proceeds of such discounting for
the years ended May 31, 1987, 1988 and 1989 were approximately
$4,533,000, $4,524,000 and $3,507,000, respectively. As of May 31, 1989
there were no trade notes receivable discounted at banks.
10. SHAREHOLDERS' EQUITY:
In September 1988, the Company amended its Articles of Incorporation to
authorize the issuance of 10,000,000 shares of preferred stock, and
75,000,000 shares of common stock, and to assign a par value of $.01
to each share. The Board of Directors is authorized to determine the
rights of the preferred stockholders.
The financial statements have been restated to reflect this change.
11. COMMON STOCK:
Approximately 925,000 shares of common stock outstanding at May 31, 1989
have certain registration rights which are exercisable.
During fiscal 1987, the Company issued warrants to purchase 16,000 shares
of common stock at $6.00 per share to members of the Company's Board of
Directors. These transferable warrants, valued at $.60 each, are
exercisable at any time and expire five years from date of issuance. As of
May 31, 1989, the Company has reserved 16,000 shares of its common stock
for issuance upon exercise of these warrants.
Continued
14
AEHR TEST SYSTEMS AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, Continued
-----------
12. STOCK OPTIONS:
The Company has reserved 1,025,000 shares of common stock for issuance to
employees and paid consultants under its three stock option plans. All
three plans provide that qualified options be granted at an exercise price
equal to the fair market value at the date of grant, as determined by
the Board of Directors (85% of fair market value in the case of
nonstatutory options and purchase rights and 110% of fair market value in
certain circumstances). Qualified options expire five years from date
of grant, nonqualified options ten years from date of grant, and stock
purchase rights six months from date of grant. Most options become
exercisable in increments over a four-year period from the date of grant.
Options to purchase approximately 121,000 shares were exercisable at
May 31, 1989.
Activity under the three plans was as follows:
Optioned Shares
Reserved But --------------------------
Unoptioned Number of Price
Shares Shares Per Share Total
------------ --------- --------- -----
(in thousands, except per share data)
Balances
June 1, 1986 77 166 $4.00 to $10.00 $1,151
Increase in
options available
under plans 250
Options granted (115) 115 $6.00 to $10.00 736
Options terminated 110 (110) $6.00 to $10.00 (891)
---- ---- ------
Balances,
May 31, 1987 322 171 $4.00 to $10.00 996
Options granted (113) 113 $6.00 682
Options exercised (5) $4.00 (20)
Options terminated 19 (19) $6.00 to $10.00 (124)
---- ---- ------
Balances,
May 31, 1988 228 260 $4.00 to $10.00 1,534
Options granted (84) 84 $6.00 504
Options exercised (1) $6.00 (5)
Options terminated 100 (100) $4.00 to $10.00 (552)
---- ---- ------
Balances,
May 31, 1989 244 243 $4.00 to $6.00 $1,471
---- ---- ------
---- ---- ------
Continued
15
AEHR TEST SYSTEMS AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, Continued
-----------
13. EMPLOYEE STOCK BONUS PLAN:
The Company has a noncontributory, trusteed employee stock bonus plan for
full-time employees. The intent of the Company is to contribute shares of
the Company's stock to the plan, although the plan also allows cash
contributions. The contribution is determined annually by the Company and
cannot exceed 15% of the annual aggregate salaries of those employees
eligible for participation in the plan. Individuals' account balances vest
at a rate of 25% per year commencing upon completion of three years of
service. Nonvested balances which are forfeited are allocated to the
remaining employees in the plan.
No contribution to the plan was authorized for the years ended May 31,
1987, 1988 and 1989.
14. PROVISION (BENEFIT) FOR INCOME TAXES:
The provision benefit for income taxes consists of the following:
May 31,
---------------------------
1987 1988 1989
------- ----- ------
(in thousands)
Federal income taxes:
Current $(1,047) $(400) $ 547
Deferred (18) (269) (125)
State income taxes:
Current 151
Deferred (63)
Foreign income taxes:
Current 224 1,303
Deferred (323) (1)
------- ----- ------
$(1,388) $(445) $1,812
------- ----- ------
------- ----- ------
The Company's effective tax (benefit) rate differs from the U.S. federal
statutory tax (benefit) rate as follows:
May 31,
---------------------------
1987 1988 1989
------- ----- ------
(in thousands)
Maximum statutory income tax (benefit)
rate (46.0)% (46.0)% 34.0%
Foreign income (loss) taxed
(benefited) at a higher (lower) rate (5.5) (4.4) 15.3
State taxes, net of federal tax effect 5.2
FSC earnings exempt from
federal taxes (6.6)
Other 0.2 3.2 2.2
----- ----- ----
Effective tax (benefit) rate (40.3)% (38.4)% 50.1%
----- ----- ----
----- ----- ----
Continued
16
AEHR TEST SYSTEMS AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, Continued
-----------
15. SUBSEQUENT EVENT:
On September 20, 1989, the Company renewed its line of credit agreement
(see Note 6). The renewed agreement, renewable again on September 15,
1990, provides for maximum borrowings of up to the lesser of $5,000,000 or
80% of eligible accounts receivable, including a maximum of $500,000 in
standby letters of credit. Borrowings under the renewed agreement bear
interest at 0.75% in excess of the bank's reference rate. Other
provisions of the renewed agreement are similar to those of the previous
agreement.
Continued
17
EXHIBIT 3.15
EMPLOYMENT AGREEMENT
REGARDING PROPRIETARY DEVELOPMENTS
AND CONFIDENTIAL INFORMATION
Name:
------------------
(Type or Print)
1. I am a paid employee of Aehr Test Systems (the "Company").
2. This Agreement concerns inventions, improvements, data, processes, computer
software programs and discoveries (hereinafter called "Proprietary
Developments") that are conceived or made by me alone or with others while
I am employed by the Company; and that relate to the research and
development or the business of the Company, or result form tasks assigned
to me by the Company. Such Proprietary Developments are the sole property
of the Company, and I agree:
a. To disclose them promptly to the Company;
b. To assign them to the Company; and
c. To execute all documents and do all things necessary to assist
the Company in obtaining patent, copyright and/or trade secret
protection in all countries, the Company to pay the expenses.
3. This Agreement also concerns trade secrets, confidential business and
technical information, and know-how not generally known to the public, that
are acquired or produced by me in connection with my employment by the
Company. As to these, I agree:
a. To use them only in the performance of the Company's duties; and
b. To hold them in confidence and trust, and to use all reasonable
precautions to assure that they are not disclosed to unauthorized
persons or used in an authorized manner, both during and after my
employment with the Company.
4. Upon termination of employment, I will not take with me any documents or
materials of any nature relating to the subject matter described in
paragraphs 2 and 3 above.
5. This Agreement does not relate to any information which qualifies fully for
protection under Section 2870 of the California Labor Code. A copy of
Section 2870 of the California Labor Code is attached hereto as Exhibit A.
6. The above provisions shall be separately construed. If any of them is
held to be unenforceable, the remaining provisions shall not be affected.
-----------------------------
(Signature)
-----------------------------
(Date)
WITNESS:
-----------------------------
EXHIBIT A
CALIFORNIA LABOR CODE SECTION 2870
EMPLOYMENT AGREEMENTS; ASSIGNMENT OF RIGHTS
"Any provision in an employment agreement which provides that an employee
shall assign or offer to assign any of his or her rights in an invention to his
or her employer shall not apply to an invention for which no equipment,
supplies, facility, or trade secret information of the employer was used and
which was developed entirely on the employee's own time, and (a) which does not
relate (1) to the business of the employer or (2) to the employer's actual or
demonstrably anticipated research or development, or (b) which does not result
from any work performed by the employee for the employer. Any provision which
purports to apply to such an invention is to that extent against the public
policy of this state and is to that extent void and unenforceable."
EXHIBIT 3.16
AEHR TEST SYSTEMS
SHAREHOLDERS LIST
February 2, 1990
Cert Total
Name No. Date Shares Shares
---------------------------------- -------- -------- -------- ---------
Aehr Test Systems
Employee Stock Bonus Plan 273 08/15/95 23,800
155 Constitution Dr. 327 03/03/86 27,751
▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇ 355 09/22/86 11,124
357 06/26/86 18,965
358 10/10/86 3,055
394 11/09/87 4,677
445 02/01/89 20,428
465 11/13/89 2,333 112,133
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ and 80 04/21/82 4,000 4,000
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, JTWROS
▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
A.T. Venture Investments 343 05/12/86 3,000 3,000
c/o ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇-▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Hasamichi Ariga 330 03/07/86 4,455
c/o ATS Japan 383 09/01/87 4,455
19-25, 1-Chome 431 08/23/88 4,455
Shimura, Itabashi-ku 454 04/05/89 4,455 17,820
Tokyo, ▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇ 216 11/12/84 1,000 1,000
▇▇▇ ▇▇. ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇ Palm ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ 40 08/10/79 500 500
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇ 391 11/09/87 134 134
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Cert Total
Name No. Date Shares Shares
---------------------------------- -------- -------- -------- ---------
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ and 222 12/03/84 1,100 1,100
Biogio ▇. ▇▇▇▇▇▇▇▇▇,
Joint Tenants
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ and ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ 306 11/21/85 200 200
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇., #▇▇
▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇ 29 08/10/79 1,500
▇▇▇ ▇▇▇▇▇▇ ▇▇., ▇▇▇. ▇▇ 335 03/03/86 1,000
▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇ 336 03/03/86 1,000
337 03/03/86 1,000
338 03/03/86 1,000 5,550
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ 138 03/07/83 3,130 3,130
▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇ 389 11/09/87 624 624
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ 30 08/10/79 1,000
3091 Chardonnay 217 11/12/84 3,000 4,000
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇ and ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ 305 11/21/85 1,000
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ 364 12/09/86 1,000 2,000
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ and ▇▇▇▇▇ 225 12/03/84 555 555
▇▇▇▇▇▇, Joint Tenants
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇ and
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, his wife, 315 11/21/85 100,000
as their Community Property 317 11/21/85 5,000
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, #▇▇▇▇ 318 11/21/85 5,000
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ 322 11/21/85 1,704
365 12/09/86 13
470 11/24/89 2,980 114,697
Cert Total
Name No. Date Shares Shares
---------------------------------- -------- -------- -------- ---------
▇▇▇▇ ▇▇▇▇▇▇, ▇▇. 172 08/04/83 1,660
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇ 440 12/06/88 835
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ 469 11/24/89 505 3,000
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇. 171 08/04/83 1,660
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ 439 12/06/88 835
▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇ 468 11/24/89 505 3,000
▇▇▇▇▇▇ ▇. ▇▇▇▇ 231 12/05/84 9,500 9,500
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ 393 11/09/87 61 61
▇▇▇ ▇▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇ 201 04/18/84 5,000 5,000
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇ Trustee 282 09/27/85 154,900 154,900
▇▇▇▇▇ ▇. ▇▇▇▇▇ Trust
U/D/T dated May 20, 1983
▇▇▇ ▇▇▇▇▇▇ ▇▇▇.
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ 285 09/27/85 5,000 5,000
▇▇▇▇ ▇▇▇▇▇ ▇▇▇.
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇ Bremond, 159 05/30/83 3,750 3,750
Trustee of the ▇▇▇▇ ▇▇▇▇▇▇▇▇
Bremond Separate Property Trust
U/D/T January 6, 1983
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ 145 03/08/83 3,750 3,750
▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
J. ▇▇▇▇▇ ▇▇▇▇▇▇ 187 10/07/83 2,114 2,114
▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Cert Total
Name No. Date Shares Shares
---------------------------------- -------- -------- -------- ---------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ 151 05/27/83 400 400
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
T. ▇▇▇▇▇▇ ▇▇▇▇▇ and 20 07/20/79 5,000
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ JTWROS 86 04/21/82 20,000 25,000
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, #▇▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇ ▇. ▇▇▇▇ 232 12/28/84 1,000 1,000
Aehr Test Systems
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇ 233 12/28/84 500 500
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ 32 08/10/79 1,000
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇. 87 04/21/82 64,000
▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇ 158 05/30/83 6,000
202 04/18/84 6,500
239 12/28/84 30,000
367 12/18/86 3,000 110,500
▇▇▇▇ ▇▇▇▇ 236 12/28/84 2,000 2,000
The Case Companies
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
(Dr.) ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ and 420 09/19/88 5,000
▇▇▇▇▇ ▇▇▇▇▇▇▇, Trustees of the 422 09/19/88 4,125
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ Family 424 09/19/88 1,104
Trust U/T/A dated 10/2/75 426 09/19/88 4,561 14,790
▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇. ▇▇▇▇▇▇▇ 344 07/17/86 175 175
27855 ▇▇▇ ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Continental Trust Company 385 11/09/87 3,000 3,000
Trustee FBO ▇▇▇▇ ▇. ▇▇▇▇▇▇▇, IRAR
▇.▇. ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Cert. Total
Name No. Date Shares Shares
---------------------------------- -------- -------- -------- ---------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇ 428 09/19/88 1,905 1,905
▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ 78 04/15/82 3,000
▇▇▇▇ ▇▇▇▇▇▇▇▇ 88 04/21/82 12,000 15,000
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇ and ▇▇▇▇▇ 226 12/03/84 277 277
▇▇▇▇▇, Joint Tenants
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇ 152 05/27/83 250
▇.▇. ▇▇▇ ▇▇▇ 243 01/07/85 5,000 5,250
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇ Edge 366 12/18/86 2,000 2,000
▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇.▇. ▇▇▇▇▇, Trustee of 430 09/19/88 2,500 2,500
the ▇▇▇▇▇▇▇ ▇.▇. ▇▇▇▇▇ Separate
Property Trust, U/D/T dated
April 18, 1983
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇. ▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ 168 07/26/83 100 100
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇ Fadimen 129 09/20/82 3,375
▇▇▇▇ ▇▇▇▇▇ ▇▇▇. 130 09/21/82 6,000 9,375
▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇, Trustee 26 07/20/79 5,000
UAD 6/1/68 f/b/o ▇▇▇▇▇▇▇▇▇ ▇. 283 09/27/85 7,500 12,500
▇▇▇▇▇▇ TRUST #2
▇.▇. ▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Cert. Total
Name No. Date Shares Shares
---------------------------------- -------- -------- -------- ---------
▇▇▇▇▇ ▇▇▇▇▇▇▇, Trustee 27 07/20/79 5,000
UAD 3/1/79 f/b/o ▇▇▇▇▇▇ ▇. 284 09/27/85 7,500 12,500
▇▇▇▇▇▇ TRUST #2
▇.▇. ▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ 340 03/03/86 1,500
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ 449 04/30/89 6,000 7,500
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Ferlic Investments, Ltd. 182 10/12/83 1,000 1,000
c/o ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ 326 03/03/86 369 369
▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ and 93 04/21/82 30,000
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, JTWROS 253 02/20/85 4,500 34,500
▇.▇. ▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ 252 02/20/85 1,000 1,000
▇.▇. ▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇ Garaviglia 463 11/13/89 202 202
----------------------------------
----------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇ and 24 07/20/79 10,000
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ 36 08/10/79 1,000
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇. 94 04/21/82 44,000 55,000
▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ and 37 08/10/79 1,500
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, JTWROS 95 04/21/82 6,000 7,500
▇▇▇▇ ▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇ 300 10/08/85 93 93
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Cert. Total
Name No. Date Shares Shares
---------------------------------- -------- -------- -------- ---------
▇▇▇▇ ▇▇▇▇▇▇▇▇ 241 12/28/84 4,687 4,687
▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ 240 12/28/84 4,688 4,688
▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇ 442 11/17/88 35 35
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇.
▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ 96 04/21/82 76,000
c/o ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ 134 02/17/83 3,000
▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ 286 09/27/85 1,000
▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇ 402 01/28/88 400
409 08/12/88 800 81,200
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ 267 08/12/85 7,800
c/o ATS Japan 328 03/07/86 12,028
19-25, 1-Chome 384 09/01/87 12,028
Shimura, Itabashi - Ku 432 08/23/88 12,028
Tokyo, ▇▇▇ ▇▇▇▇▇ 455 04/05/89 12,028 55,912
▇▇▇▇▇▇ ▇. Held, Trustee of 453 06/14/89 500 500
▇.▇. Held & Associates,
Incorporated Profit Sharing Trust
IQ #68-007184
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ 166 07/05/83 30,000
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇., #▇▇▇ 404 03/16/88 12,500 42,500
▇▇. ▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ 410 08/12/88 800 800
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ 397 12/01/87 500 500
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇ and ▇▇▇▇▇▇▇ ▇▇▇▇▇ 394 11/16/87 150 150
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Cert Total
Name No. Date Shares Shares
---------------------------------- -------- -------- -------- ---------
▇▇▇▇▇ ▇▇▇▇ 234 12/28/84 1,000 1,000
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇ 301 10/08/85 93 93
▇▇▇▇ ▇▇▇▇▇▇▇▇, #▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇ 57 03/26/80 1,200
Post Office Box 420 100 04/21/82 4,800 6,000
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇ 299 10/08/85 9,800
c/o ATS Japan 329 03/07/86 5,346
19-25, 1-Chome 382 09/01/87 5,346
Shimura, Habashi-Ku 433 08/23/88 5,346
Tokyo, ▇▇▇ ▇▇▇▇▇ 456 04/05/89 5,346 31,184
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ 77 04/18/82 1,000
▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇ 101 04/21/82 4,000
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ 126 06/16/82 2,500
135 03/04/83 1,000 8,500
▇▇▇▇▇▇ ▇▇▇ 332 04/10/86 77,780 77,780
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇, Trustee 160 05/30/83 5,000
of the ▇▇▇▇▇ ▇▇▇▇▇ 411 08/23/88 1,800 6,800
Torresdal Trust I
U/T/A dated 5/30/83
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇, Trustee 161 05/30/83 5,000
of the ▇▇▇▇▇▇▇ ▇▇▇ 412 08/23/88 1,800 6,800
Torresdal Trust I
U/T/A dated 5/30/83
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇, Trustee 162 05/30/83 5,000
of the ▇▇▇▇▇ ▇▇▇▇▇ 413 08/23/88 1,800 6,800
Torresdal Trust I
U/T/A dated 5/30/83
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Cert Total
Name No. Date Shares Shares
---------------------------------- -------- -------- -------- ---------
▇▇▇▇▇▇▇ ▇▇▇▇, Trustee 163 05/30/83 5,000
of the ▇▇▇▇ ▇▇▇▇ 414 08/23/88 1,800 6,800
Torresdal Trust I
U/T/A dated 5/30/83
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇, Trustee 164 05/30/83 5,000
of the ▇▇▇▇▇ ▇▇▇▇▇ 415 08/23/88 1,800 6,800
Torresdal Trust I
U/T/A dated 5/30/83
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇ and ▇▇▇▇▇▇▇ 228 12/03/84 1,200 1,200
Long, Joint Tenants
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇ and ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ 196 03/27/84 3,750 3,750
▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ 251 02/20/85 1,000 1,000
▇.▇. ▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇ 41 08/10/79 5,000
▇.▇. ▇▇▇ ▇▇▇▇ ▇▇▇ 04/21/82 20,000 25,000
▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ and 223 12/03/84 775 775
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇, Joint Tenants
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇
▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ 464 11/13/89 24 24
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ 76 04/15/82 1,000
▇▇ ▇▇▇▇▇▇ ▇▇▇▇ 103 04/21/82 4,000
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ 127 06/16/82 2,500 7,500
Cert Total
Name No. Date Shares Shares
---------------------------------- -------- -------- -------- ---------
▇▇▇▇▇▇▇▇ III 50 09/11/79 20,000
▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇ 61 07/21/80 18,000
▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇ 73 08/11/81 5,000
104 04/21/82 172,000
132 11/23/82 10,000
197 04/12/84 58,824 283,824
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ as 63 07/24/80 25
Custodian for ▇▇▇▇▇▇▇▇ 105 04/21/82 100 125
▇▇▇ ▇▇▇▇▇▇▇ (UGMA)
▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Alexandria ▇▇▇▇ ▇▇▇▇▇▇ 125 05/27/82 12,000
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, #▇▇▇ 369 12/31/86 2,000 14,000
▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇ 124 05/27/82 12,000
c/o MACS Corp. 191 11/04/83 3,000
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇. 368 12/31/86 1,000 16,000
▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇ 249 02/15/85 1,000 1,000
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ 446 03/01/89 437 437
2-22-11 Kamisho Kujiicho
Berima-ku, Tokyo
▇▇▇▇▇▇ ▇▇▇▇ 437 12/06/88 2,495
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ 466 11/24/89 505 3,000
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇ 392 11/09/87 79 79
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ and ▇▇▇▇▇▇▇ 175 08/30/83 50,000
▇▇▇▇ ▇▇▇▇▇, Trustees of the 260 04/16/85 3,000
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ and 362 11/14/86 1,643 54,643
▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ Trusts,
U/D/T dated December 23, 1982
▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Cert. Total
Name No. Date Shares Shares
---------------------------------- -------- -------- -------- ---------
▇▇▇▇▇▇▇ ▇. and ▇▇▇▇ ▇▇▇▇ 321 11/21/85 300 300
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇. ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ 153 05/27/83 300
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ 242 01/04/85 10,000 10,300
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ and ▇▇▇▇▇ 53 01/02/79 500 500
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ TEN WROS
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇'▇▇▇▇▇ and Pearl 363 12/09/86 300 300
O'Brien, as Community Property
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇.▇. ▇▇▇▇▇▇▇ 14 07/20/79 25,000
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ 48 08/20/79 2,500
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇ 110 04/21/82 110,000 137,500
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ and 52 11/02/79 1,000
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ 111 04/21/82 4,000 5,000
JT TEN WROS
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇, Trustee for 459 08/04/89 2,000 2,000
▇▇▇▇▇▇▇ ▇▇▇▇ Search Consultants
Profit Sharing Plan
▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇-▇▇▇
▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇ 4 07/20/79 5,000
1736 Terrace 112 04/21/82 20,000
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ 181 09/21/83 15,000 40,000
▇▇▇▇▇ ▇. ▇▇▇▇▇▇ 460 08/11/89 100,000 100,000
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Cert. Total
Name No. Date Shares Shares
---------------------------------- -------- -------- -------- ---------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Trustee 67 05/07/81 2,375
of the ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ and 114 04/21/82 9,500 11,875
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ Trusts U/D/T
dated 1/12/77
c/o Rollins, Burdick, Hunter
▇.▇. ▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇ and ▇▇▇▇▇ ▇▇▇▇▇, ▇▇. 307 11/21/85 500 500
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇, ▇▇., Custodian 309 11/21/85 50 50
for ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ under
the California Uniform
Transfers to Minors Act
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇, ▇▇., Custodian 308 11/21/85 50 50
for ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ under
the California Uniform
Transfers to Minors Act
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ 441 10/27/88 50 50
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇, #▇▇
▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇ ▇. ▇▇▇▇▇▇▇ 1 07/20/79 125,000
1736 Terrace 25 07/20/79 2,500
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ 58 04/17/80 2,500
62 07/21/80 32,000
65 06/24/80 5,000
115 04/21/82 668,000
200 04/18/84 25,000
342 05/12/86 27,000 887,000
▇▇▇▇▇ ▇. ▇▇▇▇▇▇ 154 05/27/83 300 300
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇.
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ 408 08/02/88 416 416
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇.
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Cert. Total
Name No. Date Shares Shares
---------------------------------- -------- -------- -------- ---------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Roedder 190 10/21/83 15,000 15,000
▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇. ▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇
▇.▇. ▇▇▇▇▇▇ & ▇. ▇. ▇▇▇▇▇▇▇ 264 05/15/85 5,000
Trustees FBO ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ 333 03/03/86 2,000
Wilson, Sonsini, ▇▇▇▇▇▇▇▇ & 341 03/03/86 1,000
▇▇▇▇▇▇ 374 05/14/87 2,343
Two Palo Alto Square, Ste. 900 378 07/28/87 7,657
▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇ 450 04/30/89 2,000 20,000
▇▇▇▇▇ ▇. ▇▇▇▇▇▇ & ▇▇▇▇▇ ▇. 407 05/29/88 4,722
▇▇▇▇▇▇, Trustees of the 417 09/19/88 333
▇▇▇▇▇ ▇. & ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ 419 09/19/88 3,000
Trust, UDT 9/30/76, as amended 421 09/19/88 4,125
Wilson, Sonsini, ▇▇▇▇▇▇▇▇ & 423 09/19/88 1,104
▇▇▇▇▇▇ 425 09/19/88 4,561
Two ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇ ▇▇▇ 09/19/88 1,903
▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇ 429 09/19/88 2,500
451 04/30/89 2,000
452 01/13/89 667 26,917
Rutven Associates I, L.P. 198 04/16/84 8,824 8,824
c/o Cornerstone Management
▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇, #▇▇▇
▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Rutven Associates II, L.P. 199 04/16/84 5,882 5,882
c/o Cornerstone Management
▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇, #▇▇▇
▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ and 117 04/21/82 20,000 20,000
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, JTWROS
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ 250 02/20/85 1,000 1,000
▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇. ▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇ 155 05/27/83 500 500
▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, #▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Cert Total
Name No. Date Shares Shares
------------------------- -------- -------- --------- -------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ 271 08/12/85 1,000
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇/▇▇/▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ 390 11/09/87 296
406 04/12/88 3,200 4,996
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ 401 01/05/88 4,000
▇▇▇ ▇▇▇▇▇ ▇▇▇▇ 458 05/31/89 35,000 39,000
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇. 244 01/11/85 500 500
or ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇ WROS
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Trustee of 347 07/11/86 2,000
the ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ 399 12/31/87 3,000
1986 Trust, U/T/A dated 400 01/05/88 3,000 8,000
7/11/86
▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Trustee 218 11/13/84 2,300
of the ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, 263 05/13/85 2,300
Trust I UTA dated July 25, 1984 346 07/11/86 2,000
▇▇▇ ▇▇▇▇ ▇▇▇▇▇ 398 12/31/87 1,400 8,000
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ 269 08/12/85 4,900
c/o ATS Japan 331 03/07/86 2,674
19-25, 1-Chome 381 09/01/87 2,674
Shimura, Itabashi-Ku 434 08/23/88 2,674
Tokyo, ▇▇▇ ▇▇▇▇▇ 457 04/05/89 2,674 15,596
▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, Trustee 462 09/12/89 1,000 1,000
U/D/T dated 10-26-82
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇ 435 09/29/88 1,000 1,000
▇▇▇▇ ▇▇ ▇▇▇▇ #▇
▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇▇▇ 220 11/30/84 250 250
▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Cert Total
Name No. Date Shares Shares
------------------------- -------- -------- --------- -------
Summit Investors, L.P. 280 09/19/85 223
c/o Summit Partners, L.P. 296 09/27/85 1,013 1,238
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Summit Ventures, L.P. 278 09/19/85 30,002
One Boston Place 294 09/27/85 150,455 180,457
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
SV Eurofund C.V. 279 09/19/85 19,773
▇/▇ ▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇ ▇▇/▇▇/▇▇ 99,157 118,930
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇ 174 08/08/83 1,250 1,250
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ 120 04/21/82 263,000
and ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ 210 10/05/84 5,000
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇ 229 12/03/84 800
▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇ 287 09/27/85 5,000 273,800
▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇ 443 11/17/88 54 54
▇▇▇ ▇. ▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇ 170 08/04/83 1,660
▇▇▇ ▇▇ ▇▇▇▇ Via 438 12/06/88 835
▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇ 467 11/24/89 505 3,000
▇▇▇▇▇ and ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇. 310 11/21/85 366 366
▇▇▇ ▇▇ ▇▇▇▇ ▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇ and ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇. 313 11/21/85 55 55
Custodians for ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ under the
Uniform Transfers to Minors Act
▇▇▇ ▇▇ ▇▇▇▇ ▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Cert Total
Name No. Date Shares Shares
------------------------- -------- -------- --------- -------
▇▇▇▇▇ and ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇. 312 11/21/85 110 110
Custodians for Bonwyn ▇▇▇▇▇▇
▇▇▇▇▇▇ under the California
Uniform Transfers to Minors Act
▇▇▇ ▇▇ ▇▇▇▇ ▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇ and ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇. 314 11/21/85 165 165
Custodians for ▇▇▇▇▇ ▇▇▇▇▇▇▇
Tullus
▇▇▇ ▇▇ ▇▇▇▇ ▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇ and 224 12/03/84 1,000 1,000
▇▇▇▇▇ ▇▇▇▇▇▇▇ Tullus,
Community Property
▇▇▇ ▇▇ ▇▇▇▇ ▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇ 304 11/21/85 500 500
▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇ ▇. ▇▇▇▇▇▇ and ▇▇▇▇▇ ▇. 405 03/28/88 10,625 10,625
▇▇▇▇▇▇, Trustees of the
▇▇▇▇▇ ▇. and ▇▇▇▇ ▇. ▇▇▇▇▇▇
Family Trust U/D/T dated
October 27, 1987
2 ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇ Trust 290 09/27/85 9,000 9,000
Trust FBO ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇ ▇▇.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
WS Investment Company 87A 371 05/14/87 3,040 3,040
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇ and ▇▇▇▇▇▇▇▇ 370 04/20/87 2,500 2,500
▇▇▇▇, Trustees of the ▇▇▇▇
Family Trust u/d/t dated 08/31/87
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇.
▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
TOTAL OUTSTANDING 3,526,986
---------
---------
AEHR TEST SYSTEMS
CAPITAL STOCK PURCHASE WARRANT HOLDERS
July 10, 1989
Exercise
No. of Price Expiration
Name Shares Per Share Date
---------------------------------- -------- --------- ----------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ 3,333 $ 6.00 12/31/92
KLA Instruments Corp.
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇.
▇.▇. ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ 3,000 $ 6.00 05/06/92
c/o ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇.
▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ 3,000 $ 6.00 05/06/92
c/o Davtron
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Page 21
Outstanding Options, Warrants and Other Rights
to Purchase Shares of Common Stock
Exercise
Price Number
Description Per Share of Shares
---------------------------------- --------- ---------
Warrants $6.00 9,333
Amended 1978 Stock Option Plan $6.02(1) 61,250
Amended 1983 Incentive Stock Plan $6.00(1) 83,100
Amended 1986 Incentive Stock Plan $6.00 154,950
(1) Weighted Average
EXHIBIT 4.1(k)
AEHR TEST SYSTEMS-JAPAN
FEBRUARY 9, 1990
MEMORANDUM OF TERMS FOR PRIVATE PLACEMENT OF COMMON STOCK
Aehr Test Systems-Japan, a corporation organized under the laws of Japan
("ATS-Japan") presently has 400,000 authorized shares of Common Stock, par value
Y500 per share. Before the closing of the Common Stock sale described below,
ATS-Japan will have 220,000 shares of Common Stock outstanding. No other shares
of stock, or options or warrants to purchase stock from ATS-Japan, will be
outstanding at the time of the closing.
ATS-Japan proposes a private placement of shares of Common Stock on the
following terms:
Aggregate Purchase Price: Y56,000,000
Number of Shares: 16,000 (see attached list
of purchasers)
Price Per Share: Y3,500
Information Rights: Until ATS-Japan completes a public offering
of shares in Japan ("Public Offering") and so
long as a purchaser holds all shares of
Common Stock initially purchased, ATS-Japan
will provide to the purchaser (i) an
unaudited semi-annual balance sheet and
income statement, (ii) an audited annual
balance sheet and income statement and
(iii) all other information concerning ATS-
Japan's finances or operations reasonably
requested by the purchaser. Any information
provided to a purchaser shall be subject to
standard confidentiality provisions.
Transferability: Until a Public Offering, each share shall be
subject to ATS-Japan's right of first refusal
on any transfer, except a transfer pursuant
to a merger or sale of assets of the
purchaser, or a transfer among affiliated
entities.
Standoff: Each purchaser shall not purchase any more
shares of ATS-Japan, either from ATS-Japan or
its shareholders, without the prior consent
of ATS-Japan's board of directors.
Forced Sale: In the event of a Public Offering, if the
Company is required by law to sell such
number of shares as would result in Aehr Test
Systems, a California corporation, holding
less than 70% of the stock of ATS-Japan after
the completion of the Public Offering, then
ATS-Japan may require the purchasers, on a
pro rata basis, to sell their shares in the
Public Offering.
Purchase Agreement: The investment shall be made pursuant to a
Stock Purchase Agreement reasonably
acceptable to ATS-Japan and the purchasers.
The agreement shall contain appropriate
representations and warranties of ATS-Japan
and the purchasers and conditions of closing.
Closing: May 1, 1990
-2-
EXHIBIT 4.1(l)
[letterhead of Union Bank]
January 29, 1990
▇▇. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Chief Financial Officer
Aehr Test Systems
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Dear ▇▇. ▇▇▇▇▇▇▇▇▇▇:
Aehr Test Systems is currently in default of certain terms and conditions of the
Letter Agreement ("Agreement") dated September 20, 1989 between Union Bank
("Bank") and Aehr Test Systems ("Borrower") regarding a Line of Credit ("Line")
in the amount of $5 Million.
You have requested waivers with regard to the following conditions of the
Agreement:
"Advances shall be limited to $5,000,000, or 80% of eligible accounts
receivable, whichever is less. Eligible accounts receivable is defined as total
accounts receivable less those accounts which are over 90 days past due from
invoice date, and those accounts due from Aehr Test-Japan."
Advances exceed eligible accounts receivable by $499,000 as of December 31,
1989.
"7. To be profitable on a pretax basis for the quarters ending August 1989,
November 1989, February 1990, May 1990 and August 1990."
The actual profitability on a pretax basis for the quarter ending August 1989,
November 1989, February 1990, May 1990 and August 1990."
The actual profitability on a pretax basis for the quarter ending November 1989
was a loss of $403,000.
Additionally, you have informed us that you will not be in compliance
with the borrowing base formula for the periods ending January 31, 1990 and
February 28, 1990. You have also stated that you will not be in compliance
with the requirement for quarterly profitability for the quarter ending
February 28, 1990. You have indicated you are anticipating a loss before tax
of $648,000 for the quarter ending February 1990.
The Bank agrees to forbear from taking action on the defaults occurring on or
before December 31, 1989, as you have indicated that the Company will be
receiving cash in the amount of $2 Million in the form of equity from JAFCO
("JAFCO") America Ventures, Inc. You have advised us that this cash will be
used to pay off over advance on the Company's Line. Over advance is defined as
funds borrowed by the Company in excess of the agreed upon advance rate of 80%
of eligible accounts receivable, as determined by the Company's submissions of
monthly borrower base certificates. Bank agrees to allow over advances in the
following amounts as noted below.
For the period: 1/3/90 through 1/31/90: $500,000
For the period: 2/1/90 through 2/28/90: $1,500,000
For the period: after 2/28/90: 0
Over advances shall bear interest at the rate of 3.0% above the Bank's Reference
Rate and shall be charged on February 28, 1990 to Borrower's account for the
period February 6, 1990 through February 28, 1990.
The Bank agrees to waive the anticipated default for quarterly profitability
expected to occur upon receipt of the Borrower's February 28, 1990 financial
statements, providing the following:
1. Borrower has received $2 Million in cash from JAFCO in the form of equity.
2. Borrower pays off any over advance outstanding upon receipt of $2 Million
in cash from JAFCO which is anticipated prior to February 28, 1990.
3. Borrower is in compliance with all other covenants per the Letter Agreement
dated September 20, 1989 between Borrower and Bank.
4. Borrower's pretax loss for the quarter ending February 1990 is not to
exceed $950,000.
5. Bank to receive by February 19, 1990 commitment letter from JAFCO
indicating $2 Million purchase of stock.
This letter will not be a waiver of an existing or future default unless
specified herein.
Sincerely,
UNION BANK
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇
Vice President & SAE
Acknowledged and Accepted by:
AEHR TEST SYSTEMS
By: /s/ ▇.▇. ▇▇▇▇▇▇▇▇▇▇
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Title: Chief Financial Officer
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Date: 2-8-90
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