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Resale Registration Rights Agreement

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Exhibit 10.2


RESALE REGISTRATION RIGHTS AGREEMENT


among


RICHARDSON ELECTRONICS, LTD.


and


THE HOLDERS LISTED HEREIN


Dated November 21, 2005


RESALE REGISTRATION RIGHTS AGREEMENT


This Resale Registration Rights Agreement (this " Agreement" ), dated November 21, 2005, between Richardson Electronics, Ltd., a Delaware corporation (together with any successor entity, the " Issuer" ), and the holders listed on the Schedule of Holders attached hereto as Exhibit A (together with any successors, each a " Holder" and, collectively, the " Holders" ).


Pursuant to the Securities Purchase Agreement, dated the date hereof, between the Issuer and the Holders (the " Purchase Agreement" ), the Issuer has agreed to issue and sell to the Holders an aggregate of up to Twenty-Five Million United States Dollars ($25,000,000) of the Issuer' s 8% Convertible Senior Subordinated Notes due 2011 (such Convertible Senior Subordinated Notes, as the same may be amended, modified or supplemented from time to time in accordance with the terms thereof, the " Notes" ). The Notes will be convertible into fully paid, nonassessable common stock, par value $.05 per share, of the Issuer (the " Common Stock" ) on the terms, and subject to the conditions, set forth in the Indenture (as defined herein). In connection with the issuance of the Notes, the Issuer has agreed to provide the registration rights set forth in this Agreement pursuant to the Purchase Agreement.


The parties hereby agree as follows:


1. DEFINITIONS . As used in this Agreement, the following capitalized terms shall have the following meanings:


AGREEMENT: As defined in the preamble hereto.


APPLICABLE PERCENTAGE: As defined in Section 4(e) hereof.


BUSINESS DAY: A day other than a Saturday or Sunday or any day on which banks in New York, New York are required or permitted to be closed.


COMMISSION: Securities and Exchange Commission.


COMMON STOCK: As defined in the preamble hereto.


EFFECTIVENESS PERIOD: As defined in Section 2(a)(iii) hereof.


EFFECTIVENESS TARGET DATE: As defined in Section 2(a)(ii) hereof.


EXCHANGE ACT: Securities Exchange Act of 1934, as amended.


HOLDER: As defined in the preamble hereto.


INDENTURE: The Indenture, dated as of November 21, 2005 between the Issuer and J.P. Morgan Trust Company, National Association, as trustee, pursuant to which the Notes are to be issued, as such Indenture may be amended, modified or supplemented from time to time in accordance with the terms thereof.


INFORMATION: As defined in Section 4(b)(v) hereof.


ISSUER: As defined in the preamble hereto.


MAJORITY OF HOLDERS: Holders holding at least a majority of the shares of Common Stock issuable upon conversion of the Notes, determined as if all of the Notes held by Holders then outstanding have been converted into shares of Common Stock without regard to any limitations on conversion of the Notes.


NASD: NASD, Inc.


NOTES: As defined in the preamble hereto, provided that as used herein, the " Notes" shall only to such Notes as were originally issued pursuant to the Purchase Agreement.


PERMITTED SUSPENSION PERIOD: As defined in Section 4(b)(i) hereof.


PERSON: An individual, partnership, corporation, unincorporated organization, trust, joint venture or a government or agency or political subdivision thereof.


PROSPECTUS: The prospectus included in a Shelf Registration Statement, as amended or supplemented by any prospectus supplement and by all other amendments thereto, including post-effective amendments, and all material incorporated by reference into such Prospectus.


PURCHASE AGREEMENT: As defined in the preamble hereto.


REGISTRATION DELAY: As defined in Section 4(e) hereof.


REGISTRATION DELAY PAYMENTS: As defined in Section 4(e) hereof.


RULE 144: As defined in Section 7(a) hereof.


SECURITIES ACT: Securities Act of 1933, as amended.


SHELF FILING DEADLINE: As defined in Section 2(a)(i) hereof.


SHELF REGISTRATION STATEMENT: As defined in Section 2(a)(i) hereof; provided, that each reference to " Shelf Registration Statement" in this Agreement shall be deemed to include any additional registration statement filed pursuant to the terms of this Agreement, including, if applicable, pursuant to Section 2(d).


TIA: Trust Indenture Act of 1939, as in effect on the date the Indenture is qualified under the TIA.


TRANSFER RESTRICTED SECURITIES: Means (i) each Note, (ii) each share of Common Stock issued or issuable upon conversion of Notes (iii) any shares of capital stock issued or issuable with respect to such Common Stock as a result of any stock split, stock dividend, recapitalization, exchange or similar event or otherwise, without regard to any limitations on conversions of the Notes, and (iv) any shares of capital stock of any entity issued in respect of the securities referenced in the immediately preceding clauses (i), (ii) and (iii) as a result of a merger, consolidation, sale of assets, sale or exchange of capital stock or other similar transaction, until the earliest of:


(i) the date on which the resale of such Transfer Restricted Security has been effectively registered under the Securities Act and such Transfer Restricted Security is disposed of in accordance with the Shelf Registration Statement;


(ii) the date on which such Transfer Restricted Security is transferred in compliance with Rule 144 under the Securities Act or may be sold or transferred pursuant to Rule 144(k) under the Securities Act (or any other similar provision then in force); or


(iii) the date on which such Transfer Restricted Security ceases to be outstanding (whether as a result of redemption, repurchase and cancellation, conversion or otherwise).


2.

SHELF REGISTRATION.


(a)

The Issuer shall:


(i) use its reasonable best efforts to prepare and file, as soon as practicable but not later than 60 days after the date hereof (the " Shelf Filing Deadline" ), a registration statement pursuant to Rule 415 under the Securities Act (the " Shelf Registration Statement" ), which Shelf


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Registration Statement shall provide for resales of all Transfer Restricted Securities held by Holders that have provided the information required pursuant to the terms of Section 4(d) hereof, and the Shelf Registration Statement shall include at least 105% of the number of shares of Common Stock issuable upon conversion of the Notes by the Holders from time to time in accordance with Section 4(e) of the Purchase Agreement;


(ii) use its reasonable best efforts to cause the Shelf Registration Statement to be declared effective by the Commission as promptly as practicable, but in no event later than 90 days after the date hereof (the " Effectiveness Target Date" ); provided, however, that if the Commission reviews the Shelf Registration Statement and requires the Issuer to make modifications thereto, the Effectiveness Target Date shall be extended to 120 days after the date hereof; and


(iii) use its reasonable best efforts to keep the Shelf Registration Statement continuously effective, supplemented and amended as required by the provisions of Section 4(b) hereof to the extent necessary to ensure that (A) it is available for resales by the Holders of Transfer Restricted Securities entitled to the benefit of this Agreement and (B) conforms with the requirements of this Agreement and the Securities Act and the rules and regulations of the Commission promulgated thereunder as announced from time to time for a period (the " Effectiveness Period" ) of:


(1)

two years following the last date of original issuance of Notes; or


(2) such shorter period that will terminate when (W) all of the Holders of Transfer Restricted Securities (other than any Holders who are " affiliates" of the Issuer as such term is defined in Rule 144(k) promulgated under the Securities Act) are able to sell all Transfer Restricted Securities immediately without restriction pursuant to Rule 144(k) under the Securities Act or any successor rule thereto (provided, that the Company shall have delivered to its transfer agent instructions, together with an opinion of counsel, instructing the transfer agent to remove the restrictive legends from the Transfer Restricted Securities), (X) when all Transfer Restricted Securities have ceased to be outstanding (whether as a result of redemption, repurchase and cancellation, conversion or otherwise), (Y) when all Transfer Restricted Securities have been either (i) transferred under Rule 144 under circumstances in which any legend borne by such Transfer Restricted Securities relating to restrictions on transferability thereof, under the Securities Act or otherwise, is removed, or (ii) sold pursuant to a registration statement.


(b)

[Reserved.]


(c) The initial number of shares of Common Stock issuable upon conversion of the Notes included in the Shelf Registration Statement and each increase in the number of such shares included therein shall be allocated pro rata among the Holders based on the number of such shares (determined as if all of the Notes held by Holders then outstanding have been converted into shares of Common Stock without regard to any limitations on conversion of the Notes) held by each Holder at the time the Shelf Registration Statement covering such initial number of shares of Common Stock or increase thereof is declared effective by the Commission. In the event that a Holder sells or otherwise transfers any of such Holder' s Transfer Restricted Securities, each transferee shall be allocated the portion of the then remaining number of Transfer Restricted Securities included in such Shelf Registration Statement allocable to the transferor. In no event shall the Issuer include any securities other than Transfer Restricted Securities on any Registration Statement without the prior written consent of the Majority of Holders.


(d) In the event the number of shares of Common Stock registered under the Shelf Registration Statement filed pursuant to Section 2(a) of this Agreement is insufficient to cover all of the shares of Common Stock issuable upon conversion of the Notes or all of a Holder' s allocated portion of the such shares pursuant to Section 2(c) of this Agreement, the Issuer shall amend the Shelf Registration Statement, or file a new registration statement (on the short form available therefor, if applicable), or both, so as to cover at least one


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hundred five percent (105%) of the number of such shares of Common Stock as of the trading day immediately preceding the date of the filing of such amendment and/or new registration statement, in each case, as soon as practicable, but in no event later than fifteen (15) Business Days after the necessity therefor arises. The Issuer shall use its reasonable best efforts to cause such amendment and/or new registration statement to become effective as soon as practicable following the filing thereof. The calculation of the number of shares sufficient to cover all of the shares of Common Stock issuable upon conversion of the Notes shall be made without regard to any limitations on the conversion of the Notes, and such calculation shall assume that all of the Notes are then convertible into shares of Common Stock at the then prevailing Conversion Price (as defined in the Notes). Notwithstanding anything herein to the contrary, if the amendment to the Shelf Registration Statement or new registration statement required by this Section 2(d) relates to a number of shares of Common Stock issuable upon conversion of the Notes equal to or greater than ten percent (10%) of the number of such shares as of the trading day immediately preceding the date of the filing of such amendment and/or new registration statement, such amendment or new registration statement shall be declared effective by the Commission not later than 30 calendar days after the filing date thereof; provided, however, that if the Commission reviews such amendment or new registration statement and requires the Issuer to make modifications thereto, then this deadline shall be extended to 90 calendar days after the filing date.


(e) The Issuer shall submit to the Commission, within two (2) business days after the Issuer learns that no review of the Shelf Registration Statement will be made by the staff of the Commission or that the staff has no further comments on the Shelf Registration Statement, as the case may be, a request for acceleration of effectiveness of the Shelf Registration Statement to a time and date not later than 48 hours after the submission of such request; provided however, the Issuer may delay the submission of the request for acceleration (or delay the effectiveness of the Shelf Registration Statement) for up to ten (10) days if the Issuer has material non-public information concerning the Issuer if the disclosure of such information at the time is not, in the good faith judgment of the Board of Directors of the Issuer, in the best interests of the Issuer; provided, further however, that the Issuer shall promptly notify the Holders in writing of the existence of material non-public information giving rise to a delay in effectiveness (provided that the Issuer shall not disclose the content of such material non-public information to the Holders); and provided further that any delay by the Issuer in accordance with this sentence shall not affect the entitlement of a holder to any Registration Delay Payment determined in accordance with Section 4(e).


3.

[RESERVED]


4.

REGISTRATION PROCEDURES.


(a) In connection with the Shelf Registration Statement, the Issuer shall comply with all the provisions of Section 4(b) hereof and shall use its reasonable best efforts to effect such registration to permit the sale of the Transfer Restricted Securities being sold in accordance with the intended method or methods of distribution thereof, and pursuant thereto, shall as expeditiously as possible prepare and file with the Commission a Shelf Registration Statement relating to the registration on any appropriate form under the Securities Act.


(b) In connection with the Shelf Registration Statement and any Prospectus required by this Agreement to permit the sale or resale of Transfer Restricted Securities, except as otherwise provided herein, the Issuer shall:


(i) Subject to any notice by the Issuer in accordance with this Section 4(b) of the existence of any fact or event of the kind described in Section 4(b)(iii)(D) or 4(b)(iii)(E), and except as otherwise provided herein, use its reasonable best efforts to keep the Shelf Registration Statement continuously effective during the Effectiveness Period. Upon the occurrence of any event that would cause the Shelf Registration Statement or the Prospectus contained therein (A) to contain a material misstatement or omission or (B) not be effective and usable for resale of Transfer Restricted Securities during the Effectiveness Period, except as otherwise provided herein, the Issuer shall file promptly an appropriate amendment to the Shelf Registration Statement, or an amendment or supplement to the Prospectus, or a report filed with the Commission pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act, in the case of clause (A), correcting any such misstatement or omission, and, in the case of either clause (A) or (B), use its reasonable best efforts to cause any such amendment to be declared effective and the Shelf Registration Statement and the related Prospectus to become usable for their intended


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purposes as soon as practicable thereafter. Notwithstanding any other provision of this Agreement, the Issuer may suspend the effectiveness of the Shelf Registration Statement by written notice to the Holders for a period not to exceed thirty (30) consecutive days, and during any three hundred sixty-five (365) day period, the aggregate of all of such suspension periods shall not exceed an aggregate of sixty (60) days (each such period, a " Permitted Suspension Period" ) if an event occurs and is continuing as a result of which the Shelf Registration Statement would, in the Issuer' s reasonable judgment, contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading.


If the Issuer so notifies the Holders of the suspension of the Shelf Registration Statement, then each Holder shall suspend the use of the Prospectus and keep such notification confidential. The Holders shall not resume any offers or sales of any Transfer Restricted Securities until the Holders are so advised in writing by the Issuer that the use of the applicable Prospectus may be resumed, and they have received copies of any additional or supplemental filings that are incorporated or deemed incorporated by reference in such Prospectus thereto. The existence of a Suspension Period shall be confidential information subject to the restrictions on disclosure and use described in Section 4(b)(v) hereof.


In the case of amendments and supplements to a Shelf Registration Statement and the Prospectus used in connection with such Shelf Registration Statement which are required to be filed pursuant to this Agreement (including pursuant to this Section 4(b)(i)) by reason of the Issuer filing a report on Form 10-K, Form 10-Q or Form 8-K or any analogous report under the Exchange Act, the Issuer shall have incorporated such report by reference into such Shelf Registration Statement, if applicable, or shall file such amendments or supplements with the Commission on the same day on which the Exchange Act report is filed which created the requirement for the Issuer to amend or supplement the Shelf Registration Statement and Prospectus.


(ii) Subject to any notice by the Issuer in accordance with this Section 4(b) of the existence of any fact or event of the kind described in Section 4(b)(iii)(D) or 4(b)(iii)(E) and except as otherwise provided herein, prepare and file with the Commission such amendments and post-effective amendments to the Shelf Registration Statement as may be necessary to keep the Shelf Registration Statement effective during the Effectiveness Period; cause the Prospectus to be supplemented by any required Prospectus supplement, and as so supplemented to be filed pursuant to Rule 424 under the Securities Act, and to comply fully with the applicable provisions of Rules 424 and 430A under the Securities Act in a timely manner; and comply with the provisions of the Securities Act with respect to the disposition of all securities covered by the Shelf Registration Statement during the applicable period in accordance with the intended method or methods of distribution by the sellers thereof set forth in the Shelf Registration Statement or Prospectus supplement.


(iii) Advise the selling Holders that have furnished information pursuant to Section 4(d) hereof, and Legal Counsel promptly (but in any event within five Business Days) and, if requested by such Persons, confirm such advice in writing:


(A) with respect to the Shelf Registration Statement or any post-effective amendment thereto, when the same has become effective, and when the Prospectus or any Prospectus supplement or post-effective amendment has been filed,


(B) of any request by the Commission for amendments to the Shelf Registration Statement or amendments or supplements to the Prospectus or for additional information relating thereto,


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(C) of the issuance by the Commission of any stop order suspending the effectiveness of the Shelf Registration Statement under the Securities Act or of the suspension by any state securities commission of the qualification of the Transfer Restricted Securities for offering or sale in any jurisdiction, or the initiation of any proceeding for any of the preceding purposes,


(D) of the existence of any fact or the happening of any event, during the Effectiveness Period, that makes any statement of a material fact made in the Shelf Registration Statement or the Prospectus, any amendment or supplement thereto, or any document incorporated by reference therein untrue, or that requires the making of any additions to or changes in the Shelf Registration Statement or the Prospectus in order to make the statements therein, in the light of the circumstances under which they were made, not misleading, or


(E) the Issuer' s determination that any amendment (including a post-effective amendment) to the Shelf Registration Statement may be appropriate;


provided , that in any such notice the Issuer may, in any case, in its discretion, state that it constitutes an exercise of its right to declare a Permitted Suspension Period pursuant to Section 4(b)(i).


The Issuer shall use reasonable best efforts to prevent the issuance of any stop order or other suspension of effectiveness of a Shelf Registration Statement or the suspension or qualification of any of the Transfer Restricted Securities for sale in any jurisdiction. If at any time the Commission shall issue any stop order suspending the effectiveness of the Shelf Registration Statement, or any state securities commission or other regulatory authority shall issue an order suspending the qualification or exemption from qualification of the Transfer Restricted Securities under state securities or Blue Sky laws, the Issuer shall use its reasonable best efforts to obtain the withdrawal or lifting of such order at the earliest possible time. Any confidential information provided pursuant to this Section 4(b)(iii) shall be subject to the restrictions on disclosure and use described in Section 4(b)(v) hereof.


(iv) Furnish to each of the selling Holders that has furnished information pursuant to Section 4(d) hereof and to Legal Counsel, or if no Legal Counsel shall have been chosen pursuant to Section 4(f) hereof, to the respective legal counsel of such Holders at least five Business Days before filing with the Commission, a copy of the Plan of Distribution and Selling Shareholder sections of the Prospectus included in the Shelf Registration Statement or any amendments or supplements to such sections, and the Issuer will (i) consider in good faith any comments or objections from Legal Counsel, or if no Legal Counsel shall have been selected, the Holders and their respective legal counsel, as to the form or content of such sections and all amendments or supplements thereto or any written communications with the Commission or the staff of the Commission concerning such sections or any amendment or supplement thereto and (ii) not file any Shelf Registration Statement or Prospectus or any amendment or supplement to the Shelf Registration Statement or Prospectus (other than documents incorporated by reference) to which a Holder of Transfer Restricted Securities covered by the Shelf Registration Statement or Legal Counsel shall reasonably object in writing after review of the Plan of Distribution or Selling Shareholder sections of the Prospectus included in the Registration Statement and provided to such Holder or Legal Counsel. A Holder shall be deemed to have reasonably objected to such filing if such sections of the Shelf Registration Statement, amendment, Prospectus or supplement, as applicable, as proposed to be filed, contains a material misstatement or omission. Notwithstanding the foregoing, the Issuer shall not be required to furnish the Holders with any amendment or supplement to such sections of the Prospectus filed solely to reflect changes to the amount of Notes held by any particular Holder at the request of such Holder or immaterial revisions to the information contained therein. Any confidential information provided pursuant to this Section 4(b)(iv) shall be subject to the restrictions on disclosure and use described in Section 4(b)(v) hereof.


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(v) Make available at reasonable times for inspection by one or more representatives of the selling Holders, Legal Counsel and any other attorney or accountant retained by such selling Holders , all financial and other records, pertinent corporate documents and properties of the Issuer as shall be reasonably necessary to enable them to exercise any applicable due diligence responsibilities, and cause the Issuer' s officers, directors, managers and employees to supply all information reasonably requested by any such representative or representatives of the selling Holders, Legal Counsel, other attorney or accountant in connection with the Shelf Registration Statement after the filing thereof and before its effectiveness (collectively, the " Information" ); provided , however , that the Issuer shall have no obligation to provide any such information prior to the execution by the party receiving such information of a confidentiality agreement in a form reasonably acceptable to the Issuer. Information that the Issuer determines, in good faith, to be confidential and any Information that it notifies the inspectors are confidential shall not be used for any purpose other than satisfying " due diligence" obligations under the Securities Act and exercising rights under this Agreement and shall not be disclosed by any recipient unless (i) the disclosure of such Information is necessary to avoid or correct a material misstatement or material omission in such Registration Statement, (ii) the release of such Information is ordered pursuant to a subpoena or other order from a court of competent jurisdiction, (iii) disclosure of such information is, in the reasonable opinion of counsel for the selling Holder, necessary or advisable in connection with any action, claim, suit or proceeding, directly involving or potentially involving such selling Holder and arising out of, based upon, relating to, or involving this Agreement or any transactions contemplated hereby or arising hereunder or (iv) the Information has been made generally available to the public other than through the acts of such recipient in breach of this Agreement; provided that prior notice shall be provided as soon as practicable to the Issuer of the potential disclosure of any information by such recipient pursuant to clauses (ii) or (iii) of this sentence to permit the Issuer to obtain a protective order (or waive the provisions of this provision). Each recipient shall take such actions as are reasonably necessary to protect the confidentiality of such Information (if practicable) to the extent such actions are otherwise not inconsistent with, an impairment of or in derogation of the rights and interests of the Holder , unless and until such Information has been made generally available to the public other than as a result of a breach of this Agreement (it being understood that " reasonably necessary" for the purposes of this sentence will be defined by reference to those actions taken by such recipient in protecting the confidentiality of its own information).


(vi) If requested by any Holder promptly incorporate in the Shelf Registration Statement or Prospectus, pursuant to a supplement or post-effective amendment if necessary, such information as such Holder may reasonably request to have included therein, including, without limitation: (1) information relating to the " Plan of Distribution" of the Transfer Restricted Securities, (2) the purchase price being paid therefor and (3) any other terms of the offering of the Transfer Restricted Securities to be sold in such offering; and make all required filings of such Prospectus supplement or post-effective amendment as soon as reasonably practicable after the Issuer is notified of the matters to be incorporated in such Prospectus supplement or post-effective amendment.


(vii) Furnish to Legal Counsel and each Holder , without charge, at least one copy of the Shelf Registration Statement, as first filed with the Commission, and of each amendment thereto (and any documents incorporated by reference therein or exhibits thereto (or exhibits incorporated in such exhibits by reference) as such Person may request) unless available on the Commission website.


(viii) Deliver to Legal Counsel and each Holder without charge, as many copies of the Prospectus (including each preliminary prospectus) and any amendment or supplement thereto as such Persons reasonably may request and such other documents as Holders or Legal Counsel may reasonably request; subject to any notice by the Issuer in accordance with this Section 4(b) of the existence of any fact or ev
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