Exhibit 10.6
AEHR TEST SYSTEMS
CAPITAL STOCK
INVESTMENT AGREEMENT
THIS AGREEMENT is made as of April 12, 1984 among AEHR TEST SYSTEMS (the "Company") and the persons listed on the Schedule of Purchasers attached hereto as Exhibit A (the "Purchasers").
1. PURCHASE AND SALE OF CAPITAL STOCK.
Subject to the terms hereof, the Company will issue and sell to the Purchasers, and the Purchasers will buy from the Company, the number of shares of the Company's Capital Stock specified opposite each Purchaser's name on the Schedule of Purchasers at a cash purchase price of $8.50 per share (the "Capital Stock") (hereinafter the shares of Capital Stock purchased and sold hereunder shall be referred to, in all and in part, as the "Shares").
2. CLOSING, DELIVERY.
2.1 CLOSING. The closing of the purchase and sale of the Capital Stock (the "Closing") shall be held at the law offices of Wilson, Sonsini, Goodrich & Rosati, P.C., Two Palo Alto Square, Suite 900, Palo Alto, California, at 10:00 A.M. on April 12, 1984, or at such other time and place upon which the Company and the Purchasers shall agree (the "Closing Date").
2.2 DELIVERY. At the Closing, the Company will deliver to each Purchaser a certificate representing the number of shares of Capital Stock to be purchased by each Purchaser against payment of the purchase price therefor, by check or wire transfer payable to the Company.
3. THE COMPANY'S REPRESENTATIONS AND WARRANTIES.
3.1 ORGANIZATION AND STANDING. The Company is a corporation duly organized and validly existing under the laws of the State of California and is in good standing as a domestic corporation under the laws of said state. The Company has all requisite corporate power and authority to own and lease property and to conduct its business as presently conducted and as proposed to be conducted in the AEHR TEST Financial Forecast, dated April 2, 1984 (the "Financial Forecast"). The Company is not qualified as a foreign corporation in any other jurisdiction and to the Company's best knowledge is not required to be so qualified.
3.2 SUBSIDIARIES. The Company has a 50% equity interest in Aehr Test Systems-Japan. The Company has a wholly-owned domestic
international sales corporation, Aehr Test Systems International. The Company has no other subsidiaries or affiliated companies and does not otherwise directly or indirectly control, or have any investment in, any other business entity.
3.3 CAPITALIZATION. The authorized capital stock of the Company consists of 10,000,000 shares of Capital Stock. 3,140,732 shares of Capital Stock were validly issued and outstanding as of the date hereof. The outstanding shares of Capital Stock are fully paid and nonassessable and were offered and sold in compliance with all applicable federal and state securities laws.
Except as set forth below, no subscriptions, warrants, options or other rights to purchase or acquire any shares of any class of capital stock of the Company or securities convertible into or exchangeable for such capital stock are authorized or outstanding.
No. of Shares Exercise Price
------------- ---------------
30,000 $0.40
20,000 $0.50
50,000 $1.80
10,000 $2.00
42,500 $4.00
59,500 $6.00
3.4 AUTHORIZATION. The execution, delivery and performance of this Agreement by the Company has been duly authorized by all requisite corporate action, and this Agreement constitutes the legal, valid and binding obligation of the Company enforceable in accordance with its terms, subject as to enforcement of remedies to applicable bankruptcy, insolvency, reorganization or similar laws relating to or affecting the enforcement of creditors' rights. The execution, delivery and performance of this Agreement and compliance with the provisions hereof by the Company does not conflict with, or result in a breach or violation of the terms, conditions or provisions of, or constitute a default (or an event with which the giving of notice or passage of time, or both could result in a default) under, or result in the creation or imposition of any lien pursuant to the terms of, the Articles of Incorporation, as amended, or the Bylaws of the Company, or any statute, law, rule or regulation or any order, judgment, decree, indenture, mortgage, lease or other agreement or instrument to which the Company, or any of its properties, is subject.
3.5 SHARES. The Shares when issued pursuant to the terms of the Agreement will be validly issued, fully paid and nonassess-
able, and will be free of any liens or encumbrances caused or created by the Company; provided, however, that the Shares shall be subject to restrictions on transfer under state or federal securities laws as set forth in the Agreement or otherwise required at the time a transfer is proposed.
3.6 LITIGATION. There is no action, proceeding or investigation pending or, to the knowledge of the Company, threatened against the Company or any of its properties or assets which alone or in the aggregate might result in any material and adverse change in the property, assets or financial condition of the Company, nor, to the knowledge of the Company, is there any basis for any such action, proceeding or investigation. To the best knowledge of the Company, the Company is in compliance in all material respects with all laws and regulations applicable to it, its properties and its business as presently conducted or proposed to be conducted in the Financial Forecast.
3.7 TITLE. The Company has good title to its properties and assets. Such properties and assets are not subject to any liens, mortgages, pledges, encumbrances or charges of any kind except liens under the Company's commercial line of credit with the Bank of America. All leases pursuant to which the Company leases real or personal property are in good standing and are valid and effective in accordance with their respective terms, and, to the Company's knowledge, there exists no default or other occurrence or condition which could result in a material default or termination of any thereof.
3.8 TAX RETURNS. The Company has filed all federal, state and other tax returns which are required to be filed and has paid all taxes which have become due and payable. The Company has not been advised that any of its returns, federal, state, or other, have been or are being audited as of the date hereof. The Company will pay any stamp or issuance taxes required or levied in connection with the issuance of the Shares.
3.9 INFRINGEMENTS. The Company to its knowledge is not infringing, and is not aware of any claimed infringement of, any third party's patent, trademark, trade secret, trade name or copyright and has not since its incorporation, received any notice of any claimed infringement.
3.10 CONTRACTS, NONE BURDENSOME. The Company is not a party to any contract, agreement or instrument or to its knowledge subject to any judgment, order, writ, injunction, rule or regulation which, in opinion of the Company, either is unduly burdensome and substantially and adversely affects its business, operations or conditions (financial or other) or is presently antici-
pated to be unduly burdensome and to substantially and adversely affect its business, operations or condition (financial or other).
3.11 MATERIAL BREACH. The Company is not in violation or breach in any material respect of any of the terms, conditions or provisions of its Articles of Incorporation, as amended, its Bylaws, or any indenture, mortgage, deed of trust or other material agreement, instrument, court order, judgment or decree to which it is a party.
3.12 CONFLICT OF INTEREST. The Company and its officers have no interest (other than as holders of securities of a publicly-traded company), either directly or indirectly, in any entity, including without limitation thereto any corporation, partnership, joint venture, proprietorship, firm, person, licensee, business or association (whether as an employee, officer, director, shareholder, agent, independent contractor, security holder, creditor, consultant or otherwise) that presently (i) provides any services, or designs, produces and/or sells any products or product lines, or engages in any activity which is the same, similar to or competitive with any activity or business in which the Company is now engaged; (ii) is a supplier, customer, creditor or has an existing contractual relationship with any of the Company's managing employees; (iii) has any direct or indirect interest in any asset or property, real or personal, tangible or intangible, of the Company or any property, real or personal, tangible or intangible, that is necessary or desirable for the conduct of the Company's business.
3.13 REPRESENTATIONS. This Agreement, the Financial Forecast, the Financial Statements, and any document, statement, certificate or schedule furnished or to be furnished by the Company pursuant hereto, or in connection with transactions contemplated hereby, do not or will not contain any untrue statement of a material fact or omit to state a fact necessary to make the statements or facts contained therein not misleading. There is, to the best of the Company's knowledge, no fact which materially adversely affects the business, prospects, conditions, affairs or operations of the Company or any of its properties or assets which has not been set forth in this Agreement, including the Exhibits hereto, the Financial Forecast or otherwise disclosed to me. To the best of the Company's knowledge, the Company has provided to me all information which the Company reasonably believes in necessary or appropriate to enable me to make an informed investment decision. The Company warrants the correct computation of the projections contained in the Financial Forecast but does not warrant the accuracy of the assumptions or guarantee that such projections will be achieved.
3.14 INTANGIBLE PROPERTY. The Company, to its knowledge and that of its officers after due inquiry, has all right, title
and interest in and to all intangible property and technology or is able to obtain on reasonable terms, all permits, licenses and other authority necessary to conduct its business as presently conducted and as proposed to be conducted in the Financial Forecast. To the best knowledge of the Company, the Company, its officers and employees have not improperly used and are not making improper use of any confidential information or trade secrets of others, including those of any former employer of an officer or employee. The Company has not sold or granted a license with respect to any technology necessary or useful in connection with its business as described in the Financial Forecast.
3.15 INSURANCE. The Company has fire and casualty insurance policies, with extended coverage, sufficient in amount to allow it to replace any of its properties which might be damaged or destroyed.
3.16 USE OF PROCEEDS. It is the Company's present intention to use the proceeds obtained in this offering for the purchase of capital equipment, for working capital and for debt repayment.
3.17 REGISTRATION RIGHTS. The Company has granted no registration rights to any holders of Capital Stock other than those granted pursuant to paragraph 5 of this Agreement.
3.18 SECURITIES LAWS. The offer, sale and issuance of the Shares as provided in this Agreement are exempt from the registration and prospectus delivery requirements of the Act, and have been registered or qualified (or are exempt from registration or qualification) under the registration or qualification requirements of the California Corporate Securities Law of 1968, as amended.
4. REPRESENTATIONS, WARRANTIES OF PURCHASERS AND RESTRICTIONS ON TRANSFER
IMPOSED BY THE SECURITIES ACT OF 1933.
4.1 REPRESENTATIONS AND WARRANTIES BY PURCHASER. Each Purchaser, for that Purchaser alone, represents and warrants to the Company with respect to the purchase of the Shares as follows:
(a) This Agreement constitutes his valid and legally binding obligation, enforceable in accordance with its terms.
(b) He is experienced in evaluating and investing in new, high technology companies such as the Company.
(c) He is acquiring the Shares for investment for his own account and not with a view to, or for resale in connection with, any distribution thereof. He understands that the Shares to be purchased have not been registered under the Act by reason of a
specific exemption from the registration provisions of the Act which depends upon, among other things, the bona fide nature of the investment intent as expressed herein.
(d) He acknowledges that the Shares must be held indefinitely unless subsequently registered under the Act or an exemption from such registration is available. He is aware of the provisions of Rule 144 promulgated under the Act which permit limited resale of securities purchased in a private placement subject to the satisfaction of certain conditions, including, among other things, the existence of a public market for the securities, the availability of certain current public information about the Company, the resale occurring not less than two years after a party has purchased and paid for the security to be sold, the sale being made through a "broker's transaction" or in transactions made directly with a "market maker" (except as provided by Rule 144(k)), and the number of securities being sold during any three-month period not exceeding specified limitations (except as provided by Rule 144(k)).
(e) He 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) He has had an opportunity to discuss the Company's business, management and financial affairs with its management and an opportunity to review the Company's facilities. He understands that such discussions, as well as to he written information issued by the Company, were intended to describe the aspects of the Company's business and prospects which it believes to be material but were not necessarily a thorough or exhaustive description.
4.2 LEGENDS. Each certificate representing the Shares shall be endorsed with the following legend:
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR
INVESTMENT AND NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE SALE OR
DISTRIBUTION THEREOF. NO SUCH SALE OR DISPOSITION MAY BE EFFECTED WITHOUT
AN EFFECTIVE REGISTRATION STATEMENT RELATED THERETO OR AN OPINION OF
COUNSEL REASONABLY SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS
NOT REQUIRED UNDER THE SECURITIES ACT OF 1933.
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 COMMIS-
SIONER OF CORPORATIONS OF THE STATE OF CALIFORNIA, EXCEPT AS PERMITTED IN
THE COMMISSIONER'S RULES.
The Company need not register a transfer of the 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.
4.3 REMOVAL OF LEGENDS AND TRANSFER RESTRICTIONS. The legend relating to the Act endorsed on a stock certificate pursuant to paragraph 4.2 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 Act and a prospectus meeting the requirements of Section 10 of the 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 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 ...
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