Exhibit 10.1

 

PURCHASE AGREEMENT

 

 

THIS PURCHASE AGREEMENT (“Agreement”) is made as of the 22nd day of September,
2016 by and among Aehr Test Systems, a California corporation (the “Company”),
and the Investors set forth on the signature pages affixed hereto (each an
“Investor” and collectively the “Investors”).

 

Recitals

 

A.     The Company and the Investors are executing and delivering this Agreement
in reliance upon the exemption from securities registration afforded by the
provisions of Regulation D (“Regulation D”), as promulgated by the U.S.
Securities and Exchange Commission (the “SEC”) under the Securities Act of 1933,
as amended; and

 

B.     The Investors wish to purchase, severally and not jointly, from the
Company, and the Company wishes to sell and issue to the Investors, upon the
terms and conditions stated in this Agreement, an aggregate of 2,721,540 shares
(the “Shares”) of the Company’s Common Stock, par value $0.01 per share
(together with any securities into which such shares may be reclassified,
whether by merger, charter amendment or otherwise, the “Common Stock”) at
purchase price of $2.15 per Share (the “Per Share Price”), for an aggregate
purchase price of up to Five Million Eight Hundred Fifty-One Thousand Three
Hundred Eleven Dollars ($5,851,311) (the “Purchase Price”); and

 

C.     Contemporaneous with the sale of the Shares, the parties hereto will
execute and deliver a Registration Rights Agreement, in the form attached hereto
as Exhibit A (the “Registration Rights Agreement”), pursuant to which the
Company will agree to provide certain registration rights under the Securities
Act of 1933, as amended, and the rules and regulations promulgated thereunder,
and applicable state securities laws.

 

In consideration of the mutual promises made herein and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:

 

1.              Definitions. In addition to those terms defined above and
elsewhere in this Agreement, for the purposes of this Agreement, the following
terms shall have the meanings set forth below:

 

“Affiliate” means, with respect to any Person, any other Person which directly
or indirectly through one or more intermediaries Controls, is controlled by, or
is under common Control with, such Person.

 

“Agent” means Craig-Hallum Capital Group LLC.

 

 
 

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“Agent Related Persons” means any of the Agent’s directors, executive officers,
general partners, managing members or other officers participating in the
offering of the Securities.

 

“Articles of Incorporation” means the Company’s Restated Articles of
Incorporation as in effect on the date hereof.

 

“Business Day” means a day, other than a Saturday or Sunday, on which banks in
New York City are open for the general transaction of business.

 

“Bylaws” means the Company’s Amended and Restated Bylaws as in effect on the
date hereof.

 

“Common Stock Equivalents” means any securities of the Company or the
Subsidiaries which would entitle the holder thereof to acquire at any time
Common Stock, including without limitation, any debt, preferred stock, rights,
options, warrants or other instrument that is at any time convertible into,
exercisable or exchangeable for, or otherwise entitles the holder thereof to
receive, Common Stock.

 

“Company’s Knowledge” means the actual knowledge of the executive officers (as
defined in Rule 405 under the 1933 Act) of the Company, after due inquiry.

 

“Confidential Information” means trade secrets, confidential information and
know-how (including but not limited to ideas, formulae, compositions, processes,
procedures and techniques, research and development information, computer
program code, performance specifications, support documentation, drawings,
specifications, designs, business and marketing plans, and customer and supplier
lists and related information).

 

“Control” (including the terms “controlling”, “controlled by” or “under common
control with”) means the possession, direct or indirect, of the power to direct
or cause the direction of the management and policies of a Person, whether
through the ownership of voting securities, by contract or otherwise.

 

“Effective Date” means the date on which the initial Registration Statement is
declared effective by the SEC.

 

“Effectiveness Deadline” means the date on which the initial Registration
Statement is required to be declared effective by the SEC under the terms of the
Registration Rights Agreement.

 

“Insider” means each director or executive officer of the Company, any other
officer of the Company participating in the offering, any beneficial owner of
20% or more of the Company’s outstanding voting equity securities, calculated on
the basis of voting power, and any promoter connected with the Company in any
capacity on the date hereof.

 

 
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“Intellectual Property” means all of the following: (i) patents, patent
applications, patent disclosures and inventions (whether or not patentable and
whether or not reduced to practice); (ii) trademarks, service marks, trade
dress, trade names, corporate names, logos, slogans and Internet domain names,
together with all goodwill associated with each of the foregoing; (iii)
copyrights and copyrightable works; (iv) registrations, applications and
renewals for any of the foregoing; and (v) proprietary computer software
(including but not limited to data, data bases and documentation).

 

“Material Adverse Effect” means a material adverse effect on (i) the assets,
liabilities, results of operations, condition (financial or otherwise),
business, or prospects of the Company and its Subsidiaries taken as a whole, or
(ii) the ability of the Company to perform its obligations under the Transaction
Documents.

 

“Material Contract” means any contract, instrument or other agreement to which
the Company or any Subsidiary is a party or by which it is bound which is
material to the business of the Company and its Subsidiaries, taken as a whole,
including those that have been filed or were required to have been filed as an
exhibit to the SEC Filings pursuant to Item 601(b)(4) or Item 601(b)(10) of
Regulation S-K.

 

“Nasdaq” means The Nasdaq Capital Market.

 

“Person” means an individual, corporation, partnership, limited liability
company, trust, business trust, association, joint stock company, joint venture,
sole proprietorship, unincorporated organization, governmental authority or any
other form of entity not specifically listed herein.

 

“Registration Statement” has the meaning set forth in the Registration Rights
Agreement.

 

“Required Investors” means (i) prior to Closing the Investors who, together with
their Affiliates, have agreed to purchase at least 662/3% of the Shares to be
sold hereunder and (ii) from and after the Closing the Investors beneficially
owning (calculated in accordance with Rule 13d-3 under the 1934 Act) at least
662/3% of the Shares.

 

“SEC Filings” has the meaning set forth in Section 4.6.

 

“SSF Investors” means the Investors that are Affiliates of AWM Investment
Company.

 

“Subsidiary” of any Person means another Person, an amount of the voting
securities, other voting ownership or voting partnership interests of which is
sufficient to elect at least a majority of its Board of Directors or other
governing body (or, if there are no such voting interests, 50% or more of the
equity interests of which) is owned directly or indirectly by such first Person.

 

 
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“Transaction Documents” means this Agreement and the Registration Rights
Agreement.

 

“1933 Act” means the Securities Act of 1933, as amended, or any successor
statute, and the rules and regulations promulgated thereunder.

 

“1934 Act” means the Securities Exchange Act of 1934, as amended, or any
successor statute, and the rules and regulations promulgated thereunder.

 

2.     Purchase and Sale of the Shares. Subject to the terms and conditions of
this Agreement, on the Closing Date, each of the Investors shall severally, and
not jointly, purchase, and the Company shall sell and issue to the Investors,
the Shares in the respective amounts set forth opposite the Investors’ names on
the signature pages attached hereto in exchange for the Purchase Price as
specified in Section 3 below.

 

3.     Closing. The closing of the purchase and sale of the Shares (the
“Closing”) shall take place at 9:00 a.m. (Pacific Time) as soon as practicable
following the satisfaction or waiver of the conditions set forth in Sections 6.1
and 6.2 (the “Closing Date”), remotely by facsimile or other electronic
transmission of documents or at such other time and place as the Company and the
Investors may mutually agree. At the Closing, subject to the terms and
conditions hereof, the Company will deliver to each Investor a stock certificate
or certificates, registered in such name or names as such Investor may
designate, representing the Shares purchased by such Investor, dated as of the
Closing Date, against payment of the Purchase Price therefor by cash in the form
of wire transfer, unless other means of payment shall have been agreed upon by
the Investors and the Company. For the avoidance of doubt, the Company
acknowledges that the SSF Investors shall not be required to pay the Purchase
Price for their Shares until certificates representing their Shares have been
delivered to the SSF Investors or their counsel to be held in escrow pending the
Closing.

 

4.     Representations and Warranties of the Company. The Company hereby
represents and warrants to the Investors that, except as disclosed in any SEC
Filing:

 

4.1      Organization, Good Standing and Qualification. Each of the Company and
its Subsidiaries is a corporation duly organized, validly existing and in good
standing under the laws of the jurisdiction of its incorporation and has all
requisite corporate power and authority to carry on its business as now
conducted and to own or lease its properties. Each of the Company and its
Subsidiaries is duly qualified to do business as a foreign corporation and is in
good standing in each jurisdiction in which the conduct of its business or its
ownership or leasing of property makes such qualification or leasing necessary
unless the failure to so qualify or to be in good standing has not had and could
not reasonably be expected to have a Material Adverse Effect.

 

4.2     Authorization. The Company has full power and authority and has taken
all requisite action on the part of the Company, its officers, directors and
stockholders necessary for (i) the authorization, execution and delivery of the
Transaction Documents, (ii) the authorization of the performance of all
obligations of the Company hereunder or thereunder, and

 

 
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(iii) the authorization, issuance (or reservation for issuance) and delivery of
the Shares. The Transaction Documents constitute, or upon the execution and
delivery thereof by the Company will constitute, the legal, valid and binding
obligations of the Company, enforceable against the Company in accordance with
their terms, subject to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar laws of general applicability, relating
to or affecting creditors’ rights generally and to general equitable principles.

 

4.3     Capitalization. As of the date of this Agreement, the authorized capital
stock of the Company consists of (i) 75,000,000 shares of Common Stock, of which
13,607,705 shares are issued and outstanding; and (ii) 10,000,000 shares of
preferred stock, none of which, as of the date of this Agreement, are
outstanding or reserved for issuance upon the exercise or conversion, as the
case may be, of outstanding options, warrants or other convertible securities.
All issued and outstanding shares of capital stock have been duly authorized and
validly issued, are fully paid and non-assessable, have been issued and sold in
compliance with the registration requirements of federal and state securities
laws, and were not issued in violation of any preemptive rights or similar
rights to subscribe for or purchase securities. Except as set forth herein or
the SEC Filings, there are no (i) outstanding rights (including, without
limitation, preemptive rights), warrants or options to acquire, or instruments
convertible into or exchangeable for, any unissued shares of capital stock or
other equity interest in the Company, or any contract, commitment, agreement,
understanding or arrangement of any kind to which the Company or any subsidiary
is a party and relating to the issuance or sale of any capital stock or
convertible or exchangeable security of the Company or any subsidiary, other
than options and restricted stock units granted to directors, employees,
consultants, and other service providers of the Company and its Subsidiaries
pursuant to its equity incentive plans and convertible secured promissory notes
issued by the Company pursuant to that certain Convertible Note Purchase and
Credit Facility Agreement dated April 10, 2015, as amended, in the principal
amount of $6,110,000 as of the date of this Agreement (the “Convertible Notes”);
(ii) obligations of the Company to purchase redeem or otherwise acquire any of
its outstanding capital stock or any interest therein or to pay any dividend or
make any other distribution in respect thereof, or (iii) there are no voting
agreements, buy-sell agreements, option or right of first purchase agreements or
other agreements of any kind among the Company and any of the securityholders of
the Company relating to the securities of the Company held by them. There are no
anti-dilution or price adjustment provisions, co-sale rights, registration
rights, rights of first refusal or other similar rights contained in the terms
governing any outstanding security of the Company that will be triggered by the
issuance of the Shares, except that an additional 23,303 shares of Common Stock
would become issuable upon the conversion of the Convertible Notes pursuant to
the antidilution adjustment provisions thereof but for the de minimus
limitations of such provisions (the “Dilution Shares”). No person has any right
to (i) cause the Company to effect the registration under the 1933 Act of any
securities of the Company or (ii) include securities in any Registration
Statement covering the Registrable Securities (as such term is defined in the
Registration Rights Agreement) other than pursuant to the terms of the
Registration Rights Agreement, except, in each case, pursuant to that certain
Registration Rights Agreement, dated April 10, 2015, by and among the Company,
QVT Fund LP and Quintessence Fund L.P. (the “Other Registration Rights
Agreement”). The Company will not satisfy its obligations under the Other
Registration Rights Agreement (including the registration of the Dilution
Shares) by including any securities, including, without limitation, the Dilution
Shares in any Registration

 

 
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Statement covering the Registrable Securities (as such term is defined in the
Registration Rights Agreement).

 

All of the issued and outstanding shares of capital stock of each Subsidiary
have been duly authorized and validly issued and are fully paid, nonassessable
and free of pre-emptive rights, were issued in full compliance with applicable
state and federal securities law and any rights of third parties and are owned
by the Company, beneficially and of record, subject to no lien, encumbrance or
other adverse claim.

 

The Company does not have outstanding stockholder purchase rights or “poison
pill” or any similar arrangement in effect giving any Person the right to
purchase any equity interest in the Company upon the occurrence of certain
events.

 

4.4     Valid Issuance. The Shares have been duly and validly authorized and,
when issued and paid for pursuant to this Agreement, will be validly issued,
fully paid and nonassessable, and shall be free and clear of all encumbrances
and restrictions (other than those created by the Investors), except for
restrictions on transfer set forth in the Transaction Documents or imposed by
applicable securities laws.

 

4.5     Consents. The execution, delivery and performance by the Company of the
Transaction Documents and the offer, issuance and sale of the Shares require no
consent of, action by or in respect of, or filing with, any Person, governmental
body, agency, or official other than filings that have been made pursuant to
applicable state securities laws and post-sale filings pursuant to applicable
state and federal securities laws which the Company undertakes to file within
the applicable time periods. Subject to the accuracy of the representations and
warranties of each Investor set forth in Section 5 hereof, the Company has taken
all action necessary to exempt (i) the issuance and sale of the Shares, and (ii)
the other transactions contemplated by the Transaction Documents from the
provisions of any stockholder rights plan or other “poison pill” arrangement,
any anti-takeover, business combination or control share law or statute binding
on the Company or to which the Company or any of its assets and properties may
be subject and any provision of the Company’s Articles of Incorporation or
Bylaws that is or could reasonably be expected to become applicable to the
Investors as a result of the transactions contemplated hereby, including without
limitation, the issuance of the Shares and the ownership, disposition or voting
of the Shares by the Investors or the exercise of any right granted to the
Investors pursuant to this Agreement or the other Transaction Documents.

 

4.6     Delivery of SEC Filings; Business. The Company has made available to the
Investors through the EDGAR system, true and complete copies of the Company’s
most recent Annual Report on Form 10-K for the fiscal year ended May 31, 2016
(the “10-K”), and all other reports filed by the Company pursuant to the 1934
Act since May 31, 2016 and prior to the date hereof (collectively, the “SEC
Filings”). The SEC Filings are the only filings required of the Company pursuant
to the 1934 Act for such period. The Company and its Subsidiaries are engaged in
all material respects only in the business described in the SEC Filings and the
SEC Filings contain a complete and accurate description in all material respects
of the business of the Company and its Subsidiaries, taken as a whole. Since the
filing of each of the SEC Filings, no

 

 
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event has occurred that would require an amendment or supplement to any such SEC
Filing and as to which such an amendment or supplement has not been filed prior
to the date hereof.

 

4.7     Use of Proceeds. The net proceeds of the sale of the Shares hereunder
shall be used by the Company for working capital and general corporate purposes.

 

4.8     No Material Adverse Change. Since May 31, 2016, except as identified and
described in the SEC Filings or as described on Schedule 4.8, there has not
been:

 

(i)     any change in the consolidated assets, liabilities, financial condition
or operating results of the Company from that reflected in the financial
statements included in the 10-K, except for changes in the ordinary course of
business which have not had and could not reasonably be expected to have a
Material Adverse Effect, individually or in the aggregate;

 

(ii)     any declaration or payment of any dividend, or any authorization or
payment of any distribution, on any of the capital stock of the Company, or any
redemption or repurchase of any securities of the Company;

 

(iii)     any material damage, destruction or loss, whether or not covered by
insurance to any assets or properties of the Company or its Subsidiaries;

 

(iv)     any waiver, not in the ordinary course of business, by the Company or
any Subsidiary of a material right or of a material debt owed to it;

 

(v)     any satisfaction or discharge of any lien, claim or encumbrance or
payment of any obligation by the Company or a Subsidiary, except in the ordinary
course of business and which is not material to the assets, properties,
financial condition, operating results or business of the Company and its
Subsidiaries taken as a whole (as such business is presently conducted and as it
is proposed to be conducted);

 

(vi)     any change or amendment to the Company's Articles of Incorporation or
Bylaws, or material change to any material contract or arrangement by which the
Company or any Subsidiary is bound or to which any of their respective assets or
properties is subject;

 

(vii)     any material labor difficulties or labor union organizing activities
with respect to employees of the Company or any Subsidiary;

 

(viii)     any material transaction entered into by the Company or a Subsidiary
other than in the ordinary course of business;

 

(ix)     the loss of the services of any executive officer, other key employee,
or material change in the composition or duties of the senior management of the
Company or any Subsidiary;

 

 
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(x)     the loss or threatened loss of any customer which has had or could
reasonably be expected to have a Material Adverse Effect; or

 

(xi)     any other event or condition of any character that has had or could
reasonably be expected to have a Material Adverse Effect.

 

4.9     SEC Filings; S-3 Eligibility.

 

(a)     At the time of filing thereof, the SEC Filings complied as to form in
all material respects with the requirements of the 1934 Act and did not contain
any untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary in order to make the statements made
therein, in the light of the circumstances under which they were made, not
misleading.

 

(b)     Each registration statement and any amendment thereto filed by the
Company since January 1, 2013 pursuant to the 1933 Act and the rules and
regulations thereunder, as of the date such statement or amendment became
effective, complied as to form in all material respects with the 1933 Act and
did not contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order to make the
statements made therein not misleading; and each prospectus filed pursuant to
Rule 424(b) under the 1933 Act, as of its issue date and as of the closing of
any sale of securities pursuant thereto did not contain any untrue statement of
a material fact or omit to state any material fact required to be stated therein
or necessary in order to make the statements made therein, in the light of the
circumstances under which they were made, not misleading.

 

(c)     The Company is eligible to use Form S-3 to register the Registrable
Securities (as such term is defined in the Registration Rights Agreement) for
sale or other disposition by the Investors as contemplated by the Registration
Rights Agreement.

 

4.10     No Conflict, Breach, Violation or Default. The execution, delivery and
performance of the Transaction Documents by the Company and the issuance and
sale of the Shares will not (i) conflict with or result in a breach or violation
of (a) any of the terms and provisions of, or constitute a default under the
Company’s Articles of Incorporation or the Company’s Bylaws, or (b) any statute,
rule, regulation or order of any governmental agency or body or any court,
domestic or foreign, having jurisdiction over the Company, any Subsidiary or any
of their respective assets or properties, except for such conflicts, breaches or
violations as have not had and could not reasonably be expected to have a
Material Adverse Effect, individually or in the aggregate, or (ii) conflict
with, or constitute a default (or an event that with notice or lapse of time or
both would become a default) under, result in the creation of any lien,
encumbrance or other adverse claim upon any of the properties or assets of the
Company or any Subsidiary or give to others any rights of termination,
amendment, acceleration or cancellation (with or without notice, lapse of time
or both) of, any Material Contract, except for such as have not had and could
not reasonably be expected to have a Material Adverse Effect, individually or in
the aggregate.

 

 
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4.11     Tax Matters. The Company and each Subsidiary has timely prepared and
filed all tax returns required to have been filed by the Company or such
Subsidiary with all appropriate governmental agencies and timely paid all taxes
shown thereon or otherwise owed by it, other than taxes being contested in good
faith and for which adequate reserves have been made on the Company’s financial
statements included in the SEC Filings. The charges, accruals and reserves on
the books of the Company in respect of taxes for all fiscal periods are adequate
in all material respects, and there are no material unpaid assessments against
the Company or any Subsidiary nor, to the Company’s Knowledge, any basis for the
assessment of any additional taxes, penalties or interest for any fiscal period
or audits by any federal, state or local taxing authority except for any
assessment which is not material to the Company and its Subsidiaries, taken as a
whole. All taxes and other assessments and levies that the Company or any
Subsidiary is required to withhold or to collect for payment have been duly
withheld and collected and paid to the proper governmental entity or third party
when due, other than taxes being contested in good faith and for which adequate
reserves have been made on the Company’s financial statements included in the
SEC Filings. There are no tax liens or claims pending or, to the Company’s
Knowledge, threatened against the Company or any Subsidiary or any of their
respective assets or property. Except as disclosed in the SEC Filings, there are
no outstanding tax sharing agreements or other such arrangements between the
Company and any Subsidiary or other corporation or entity.

 

4.12     Title to Properties. Except as disclosed in the SEC Filings, the
Company and each Subsidiary has good and marketable title to all real properties
and all other properties and assets owned by it, in each case free from liens,
encumbrances and defects that would materially affect the value thereof or
materially interfere with the use made or currently planned to be made thereof
by them; and except as disclosed in the SEC Filings, the Company and each
Subsidiary holds any leased real or personal property under valid and
enforceable leases with no exceptions that would materially interfere with the
use made or currently planned to be made thereof by them.

 

4.13     Certificates, Authorities and Permits. The Company and each Subsidiary
possess adequate certificates, authorities or permits issued by appropriate
governmental agencies or bodies necessary to conduct the business now operated
by it, except where the failure to so possess has not had and could not
reasonably be expected to have a Material Adverse Effect, individually or in the
aggregate, and neither the Company nor any Subsidiary has received any notice of
proceedings relating to the revocation or modification of any such certificate,
authority or permit that, if determined adversely to the Company or such
Subsidiary, could reasonably be expected to have a Material Adverse Effect,
individually or in the aggregate.

 

4.14     Labor Matters.

 

(a)     Except as disclosed in the SEC Filings, the Company is not a party to or
bound by any collective bargaining agreements or other agreements with labor
organizations. The Company has not violated in any material respect any laws,
regulations, orders or contract terms, affecting the collective bargaining
rights of employees, labor organizations or any laws, regulations or orders
affecting employment discrimination, equal opportunity employment, or employees’
health, safety, welfare, wages and hours.

 

 
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(b)     (i) There are no labor disputes existing, or to the Company's Knowledge,
threatened, involving strikes, slow-downs, work stoppages, job actions,
disputes, lockouts or any other disruptions of or by the Company's employees,
(ii) there are no unfair labor practices or petitions for election pending or,
to the Company's Knowledge, threatened before the National Labor Relations Board
or any other federal, state or local labor commission relating to the Company's
employees, (iii) no demand for recognition or certification heretofore made by
any labor organization or group of employees is pending with respect to the
Company and (iv) to the Company's Knowledge, the Company enjoys good labor and
employee relations with its employees and labor organizations.

 

(c)     The Company is, and at all times has been, in compliance with all
applicable laws respecting employment (including laws relating to classification
of employees and independent contractors) and employment practices, terms and
conditions of employment, wages and hours, and immigration and naturalization,
except for such instances of non-compliance as have not had and could not
reasonably be expected to have a Material Adverse Effect, individually or in the
aggregate. There are no claims pending against the Company before the Equal
Employment Opportunity Commission or any other administrative body or in any
court asserting any violation of Title VII of the Civil Rights Act of 1964, the
Age Discrimination Act of 1967, 42 U.S.C. §§ 1981 or 1983 or any other federal,
state or local Law, statute or ordinance barring discrimination in employment.

 

(d)     Except as disclosed in the SEC Filings, the Company is not a party to,
or bound by, any employment or other contract or agreement that contains any
severance, termination pay or change of control liability or obligation that
would constitute an “excess parachute payment,” as defined in Section 280G(b) of
the Internal Revenue Code.

 

4.15     Intellectual Property.

 

(a)     All Intellectual Property of the Company and its Subsidiaries is
currently in compliance in all material respects with all legal requirements
(including timely filings, proofs and payments of fees) and is valid and
enforceable. No Intellectual Property of the Company or its Subsidiaries which
is necessary for the conduct of Company’s and each of its Subsidiaries’
respective businesses as currently conducted or as currently proposed to be
conducted is currently involved in any cancellation, dispute or litigation, and,
to the Company’s Knowledge, no such action is threatened. No patent of the
Company or its Subsidiaries is currently involved in any interference, reissue,
re-examination or opposition proceeding, and, to the Company’s Knowledge, no
such action is threatened.

 

(b)     All of the licenses and sublicenses and consent, royalty or other
agreements concerning Intellectual Property which are necessary for the conduct
of the Company’s and each of its Subsidiaries’ respective businesses as
currently conducted or as currently proposed to be conducted to which the
Company or any Subsidiary is a party or by which any of their assets are bound
(other than  generally commercially available, non-custom, off-the-shelf
software application programs having a retail acquisition price of less than
$10,000 per license) (collectively, “License Agreements”) are valid and binding
obligations of the

 

 
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Company or its Subsidiaries that are parties thereto and, to the Company’s
Knowledge, the other parties thereto, enforceable in accordance with their
terms, except to the extent that enforcement thereof may be limited by
bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance or
other similar laws affecting the enforcement of creditors’ rights generally, and
there exists no event or condition which will result in a violation or breach of
or constitute (with or without due notice or lapse of time or both) a default by
the Company or any of its Subsidiaries under any such License Agreement, except
for such violations, breaches and defaults as have not had and could not
reasonably be expected to have a Material Adverse Effect, individually or in the
aggregate.

 

(c)     The Company and its Subsidiaries own or have the valid right to use all
of the Intellectual Property that is necessary for the conduct of the Company’s
and each of its Subsidiaries’ respective businesses as currently conducted or as
currently proposed to be conducted and for the ownership, maintenance and
operation of the Company’s and its Subsidiaries’ properties and assets, free and
clear of all liens, encumbrances, adverse claims or obligations to license all
such owned Intellectual Property and Confidential Information, other than
licenses entered into in the ordinary course of the Company’s and its
Subsidiaries’ businesses. To the Company’s Knowledge, the Company and its
Subsidiaries have a valid and enforceable right to use all third party
Intellectual Property and Confidential Information used or held for use in the
respective businesses of the Company and its Subsidiaries.

 

(d)     To the Company’s Knowledge, (i) the conduct of the Company’s and its
Subsidiaries’ businesses as currently conducted does not infringe or otherwise
impair or conflict with (collectively, “Infringe”) any Intellectual Property
rights of any third party or any confidentiality obligation owed to a third
party, and (ii) the Intellectual Property and Confidential Information of the
Company and its Subsidiaries which are necessary for the conduct of Company’s
and each of its Subsidiaries’ respective businesses as currently conducted or as
currently proposed to be conducted are not being Infringed by any third party.
There is no litigation or order pending or outstanding or, to the Company’s
Knowledge, threatened or imminent, that seeks to limit or challenge or that
concerns the ownership, use, validity or enforceability of any Intellectual
Property or Confidential Information of the Company and its Subsidiaries and the
Company’s and its Subsidiaries’ use of any Intellectual Property or Confidential
Information owned by a third party, and, to the Company’s Knowledge, there is no
valid basis for the same.

 

(e)     The consummation of the transactions contemplated hereby and by the
other Transaction Documents will not result in the alteration, loss, impairment
of or restriction on the Company’s or any of its Subsidiaries’ ownership or
right to use any of the Intellectual Property or Confidential Information which
is necessary for the conduct of Company’s and each of its Subsidiaries’
respective businesses as currently conducted or as currently proposed to be
conducted.

 

(f)     The Company and its Subsidiaries have taken reasonable steps to protect
the Company’s and its Subsidiaries’ rights in their Intellectual Property and
Confidential Information. To the Company’s Knowledge, except under
confidentiality obligations, there has

 

 
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been no material disclosure of any of the Company’s or its Subsidiaries’
Confidential Information to any third party.

 

4.16     Environmental Matters. Neither the Company nor any Subsidiary is in
violation of any statute, rule, regulation, decision or order of any
governmental agency or body or any court, domestic or foreign, relating to the
use, disposal or release of hazardous or toxic substances or relating to the
protection or restoration of the environment or human exposure to hazardous or
toxic substances (collectively, “Environmental Laws”), owns or operates any real
property contaminated with any substance that is subject to any Environmental
Laws, is liable for any off-site disposal or contamination pursuant to any
Environmental Laws, or is subject to any claim relating to any Environmental
Laws, which violation, contamination, liability or claim has had or could
reasonably be expected to have a Material Adverse Effect, individually or in the
aggregate; and there is no pending or, to the Company’s Knowledge, threatened
investigation that might lead to such a claim.

 

4.17     Litigation. Except as disclosed in the SEC Filings, there are no
pending actions, suits or proceedings against or affecting the Company, its
Subsidiaries or any of its or their properties; and to the Company’s Knowledge,
no such actions, suits or proceedings are threatened or contemplated. Neither
the Company nor any Subsidiary, nor any director or officer thereof, is or since
January 1, 2011 has been the subject of any action involving a claim of
violation of or liability under federal or state securities laws or a claim of
breach of fiduciary duty. There has not been, and to the Company’s Knowledge,
there is not pending or contemplated, any investigation by the SEC involving the
Company or any current or former director or officer of the Company. The SEC has
not issued any stop order or other order suspending the effectiveness of any
registration statement filed by the Company or any Subsidiary under the 1933 Act
or the 1934 Act.

 

4.18     Financial Statements. The financial statements included in each SEC
Filing comply in all material respects with applicable accounting requirements
and the rules and regulations of the SEC with respect thereto as in effect at
the time of filing (or to the extent corrected by a subsequent restatement) and
present fairly, in all material respects, the consolidated financial position of
the Company and its Subsidiaries as of the dates shown and their consolidated
results of operations and cash flows for the periods shown, and such financial
statements have been prepared in conformity with United States generally
accepted accounting principles applied on a consistent basis (“GAAP”) (except as
may be disclosed therein or in the notes thereto, and, in the case of quarterly
financial statements, as permitted by Form 10-Q under the 1934 Act). Except as
set forth in the financial statements of the Company included in the SEC
Filings, neither the Company nor any of its Subsidiaries has incurred any
liabilities, contingent or otherwise, except those incurred in the ordinary
course of business, consistent (as to amount and nature) with past practices
since the date of such financial statements, none of which, individually or in
the aggregate, have had or could reasonably be expected to have a Material
Adverse Effect.

 

4.19     Insurance Coverage. The Company and each Subsidiary maintains in full
force and effect insurance coverage that is customary for comparably situated
companies for the business being conducted and properties owned or leased by the
Company and each Subsidiary,

 

 
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and the Company reasonably believes such insurance coverage to be adequate
against all liabilities, claims and risks against which it is customary for
comparably situated companies to insure.

 

4.20     Compliance with Nasdaq Continued Listing Requirements. Except as
disclosed in the SEC Filings, the Company is in compliance with applicable
Nasdaq continued listing requirements. Except as disclosed in the SEC Filings,
there are no proceedings pending or, to the Company’s Knowledge, threatened
against the Company relating to the continued listing of the Common Stock on
Nasdaq and the Company has not received any notice of, nor to the Company’s
Knowledge is there any basis for, the delisting of the Common Stock from Nasdaq.

 

4.21     Brokers and Finders. Except for the fees payable to the Agent (which
have been disclosed to the Investors), no Person will have, as a result of the
transactions contemplated by the Transaction Documents, any valid right,
interest or claim against or upon the Company, any Subsidiary or an Investor for
any commission, fee or other compensation pursuant to any agreement, arrangement
or understanding entered into by or on behalf of the Company.

 

4.22     No General Solicitation. Neither the Company nor any Person acting on
its behalf has conducted any general solicitation or general advertising (as
those terms are used in Regulation D) in connection with the offer or sale of
any of the Shares.

 

4.23     No Integrated Offering. Neither the Company nor any of its Affiliates,
nor any Person acting on its or their behalf has, directly or indirectly, made
any offers or sales of any Company security or solicited any offers to buy any
security, under circumstances that would adversely affect reliance by the
Company on Section 4(a)(2) for the exemption from registration for the
transactions contemplated hereby or would require registration of the Shares
under the 1933 Act.

 

4.24     Rule 506 Compliance. To the Company's Knowledge, neither the Company
nor any Insider, the Agent or any Agent Related Person is subject to any of the
“Bad Actor” disqualifications described in Rule 506(d)(1)(i) to (viii) under the
1933 Act (a “Disqualification Event”), except for a Disqualification Event
covered by Rule 506(d)(2)(i) or (d)(3) of the 1933 Act. The Company is not
disqualified from relying on Rule 506 of Regulation D under the 1933 Act (“Rule
506”) for any of the reasons stated in Rule 506(d) in connection with the
issuance and sale of the Shares to the Investors pursuant to this Agreement. The
Company has exercised reasonable care, including without limitation, conducting
a factual inquiry that is appropriate in light of the circumstances, into
whether any such disqualification under Rule 506(d) exists. The Company has
furnished to each Investor, a reasonable time prior to the date hereof, a
description in writing of any matters relating to the Company, the Insiders, the
Agent and the Agent Related Persons that would have triggered disqualification
under Rule 506(d) but which occurred before September 23, 2013, in each case, in
compliance with the disclosure requirements of Rule 506(e). The Company has
exercised reasonable care, including without limitation, conducting a factual
inquiry that is appropriate in light of the circumstances, into whether any such
disqualification under Rule 506(d) would have existed and whether any

 

 
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disclosure is required to be made to Investor under Rule 506(e). Any outstanding
securities of the Company (of any kind or nature) that were issued in reliance
on Rule 506 at any time on or after September 23, 2013 have been issued in
compliance with Rule 506(d) and (e).

 

4.25     Private Placement. Based in part upon the representations of the
Investors set forth in Section 5 of this Agreement, the offer and sale of the
Shares to the Investors as contemplated hereby is exempt from the registration
requirements of the 1933 Act.

 

4.26     Shell Company Status. The Company is not, and has never been, an issuer
identified in Rule 144(i)(1).

 

4.27     Questionable Payments. Neither the Company nor any of its Subsidiaries
nor, to the Company’s Knowledge, any of their respective directors, officers,
employees, agents or other Persons acting on behalf of the Company or any
Subsidiary, has on behalf of the Company or any Subsidiary or in connection with
the respective businesses of the Company or any Subsidiary: (a) used any
corporate funds for unlawful contributions, gifts, entertainment or other
unlawful expenses relating to political activity; (b) made any direct or
indirect unlawful payments to any governmental officials or employees from
corporate funds; (c) established or maintained any unlawful or unrecorded fund
of corporate monies or other assets; (d) made any false or fictitious entries on
the books and records of the Company or any Subsidiary; or (e) made any unlawful
bribe, rebate, payoff, influence payment, kickback or other unlawful payment of
any nature.

 

4.28     Transactions with Affiliates. Except as disclosed in the SEC Filings,
none of the officers or directors of the Company and, to the Company’s
Knowledge, none of the employees of the Company, is presently a party to any
transaction with the Company or any Subsidiary (other than as holders of stock
options and/or warrants, and for services as employees, officers and directors),
including any contract, agreement or other arrangement providing for the
furnishing of services to or by, providing for rental of real or personal
property to or from, or otherwise requiring payments to or from any officer,
director or such employee or, to the Company’s Knowledge, any entity in which
any officer, director, or any such employee has a substantial interest or is an
officer, director, trustee or partner.

  

4.29     Internal Controls. The Company is in material compliance with the
provisions of the Sarbanes-Oxley Act of 2002 currently applicable to the
Company. The Company and the Subsidiaries maintain a system of internal
accounting controls sufficient to provide reasonable assurance that (i)
transactions are executed in accordance with management's general or specific
authorizations, (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with GAAP and to maintain
asset accountability, (iii) access to assets is permitted only in accordance
with management's general or specific authorization, and (iv) the recorded
accountability for assets and liabilities is compared with the existing assets
and liabilities at reasonable intervals and appropriate action is taken with
respect to any differences. The Company has established disclosure controls and
procedures (as defined in 1934 Act Rules 13a-15(e) and 15d-15(e)) for the
Company and designed such disclosure controls and procedures to ensure that
material information relating to the Company, including the Subsidiaries, is
made known to the certifying officers by others

 

 
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within those entities, particularly during the period in which the Company’s
most recently filed periodic report under the 1934 Act, as the case may be, is
being prepared. The Company has established internal control over financial
reporting (as defined in 1934 Act Rules 13a-15(f) and 15d-15(f)) to provide
reasonable assurance regarding the reliability of financial reporting and the
preparation of financial statements for external purposes in accordance with
GAAP. The Company's certifying officers have evaluated the effectiveness of the
Company's disclosure controls and procedures and the Company’s internal control
over financial reporting (collectively, “internal controls”) as of the end of
the period covered by the most recently filed periodic report under the 1934 Act
(such date, the “Evaluation Date”). The Company presented in its most recently
filed periodic report under the 1934 Act the conclusions of the certifying
officers about the effectiveness of such internal controls based on their
evaluations as of the Evaluation Date. Since the Evaluation Date, there have
been no significant changes in the Company's internal controls or, to the
Company's Knowledge, in other factors that could significantly affect the
Company's internal controls. The Company maintains and will continue to maintain
a standard system of accounting established and administered in accordance with
GAAP and the applicable requirements of the 1934 Act.

 

4.30     Disclosures. Neither the Company nor any Person acting on its behalf
has provided the Investors or their agents or counsel with any information that
constitutes or might constitute material, non-public information, other than the
terms of the transactions contemplated hereby. The written materials delivered
to the Investors in connection with the transactions contemplated by the
Transaction Documents do not contain any untrue statement of a material fact or
omit to state a material fact necessary in order to make the statements
contained therein, in light of the circumstances under which they were made, not
misleading.

 

4.31     Investment Company. The Company is not required to be registered as,
and is not an Affiliate of, and immediately following the Closing will not be
required to register as, an “investment company” within the meaning of the
Investment Company Act of 1940, as amended.

 

4.32.     No Fiduciary. The Company acknowledges that none of the Investors is
acting as a financial advisor or fiduciary of the Company (or in any similar
capacity) with respect to this Agreement, the other Transaction Documents and
the transactions contemplated hereby and thereby, and any advice or other
guidance provided by any Investor or any of its representatives and agents with
respect to this Agreement, the other Transaction Documents and the transactions
contemplated hereby and thereby is merely incidental to such Investor’s entry
into such transactions. The Company’s decision to enter into this Agreement and
the other Transaction Documents has been based solely on the independent
evaluation by the Company and its representatives and agents.

 

5.     Representations and Warranties of the Investors. Each of the Investors
hereby severally, and not jointly, represents and warrants to the Company that:

 

5.1     Organization and Existence. Such Investor is a validly existing
corporation, limited partnership or limited liability company and has all
requisite corporate,

 

 
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partnership or limited liability company power and authority to invest in the
Shares pursuant to this Agreement.

 

5.2     Authorization. The execution, delivery and performance by such Investor
of the Transaction Documents to which such Investor is a party have been duly
authorized and each will constitute the valid and legally binding obligation of
such Investor, enforceable against such Investor in accordance with their
respective terms, subject to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar laws of general applicability, relating
to or affecting creditors’ rights generally and to general equity principles.

 

5.3     Purchase Entirely for Own Account. The Shares to be received by such
Investor hereunder will be acquired for such Investor’s own account, not as
nominee or agent, and not with a view to the resale or distribution of any part
thereof in violation of the 1933 Act, and such Investor has no present intention
of selling, granting any participation in, or otherwise distributing the same in
violation of the 1933 Act without prejudice, however, to such Investor’s right
at all times to sell or otherwise dispose of all or any part of such Shares in
compliance with applicable federal and state securities laws. Nothing contained
herein shall be deemed a representation or warranty by such Investor to hold the
Shares for any period of time. Such Investor is not a broker-dealer registered
with the SEC under the 1934 Act or an entity engaged in a business that would
require it to be so registered.

 

5.4     Investment Experience. Such Investor acknowledges that it can bear the
economic risk and complete loss of its investment in the Shares and has such
knowledge and experience in financial or business matters that it is capable of
evaluating the merits and risks of the investment contemplated hereby.

 

5.5     Disclosure of Information. Such Investor has had an opportunity to
receive all information related to the Company requested by it and to ask
questions of and receive answers from the Company regarding the Company, its
business and the terms and conditions of the offering of the Shares. Such
Investor acknowledges receipt of copies of the SEC Filings. Neither such
inquiries nor any other due diligence investigation conducted by such Investor
shall modify, limit or otherwise affect such Investor’s right to rely on the
Company’s representations and warranties contained in this Agreement.

 

5.6     Restricted Securities. Such Investor understands that the Shares are
characterized as “restricted securities” under the U.S. federal securities laws
inasmuch as they are being acquired from the Company in a transaction not
involving a public offering and that under such laws and applicable regulations
such securities may be resold without registration under the 1933 Act only in
certain limited circumstances.

 

5.7     Legends. It is understood that, except as provided below, certificates
evidencing the Shares may bear the following or any similar legend:

 

(a)     “The securities represented hereby have not been registered with the
Securities and Exchange Commission or the securities commission of any state in
reliance upon an exemption from registration under the Securities Act of 1933,
as amended, and,

 

 
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accordingly, may not be transferred unless (i) such securities have been
registered for sale pursuant to the Securities Act of 1933, as amended, (ii)
such securities may be sold pursuant to Rule 144, or (iii) the Company has
received an opinion of counsel reasonably satisfactory to it that such transfer
may lawfully be made without registration under the Securities Act of 1933, as
amended.”

 

(b)     If required by the authorities of any state in connection with the
issuance of sale of the Shares, the legend required by such state authority.

 

5.8     Investor Status. At the time such Investor was offered the Shares, it
was, and at the date hereof it is, (i) an “accredited investor” as defined in
Rule 501(a) under the 1933 Act and (ii) an “institutional investor” as defined
in Financial Industry Regulatory Authority Rule 5110(d)(4)(B). Such Investor is
not a registered broker dealer registered under Section 15(a) of the Exchange
Act, or a member of the Financial Industry Regulatory Authority, Inc. (“FINRA”)
or an entity engaged in the business of being a broker dealer. Except as
otherwise disclosed in writing to the Company on or prior to the date of this
Agreement, such Investor is not affiliated with any broker dealer registered
under Section 15(a) of the 1934 Act, or a member of FINRA or an entity engaged
in the business of being a broker dealer. After giving effect to the purchase of
the Shares hereunder, such Investor, together with its Affiliates, will not
beneficially own more than 19.9% of the Company’s outstanding Common Stock or
voting power. Such Investor maintains his or her principal residence (in the
case of an individual) or its principal executive office (in the case of an
entity) at the location specified on its signature page hereto.

 

5.9     No General Solicitation. Such Investor did not learn of the investment
in the Shares as a result of any general solicitation or general advertising.

 

5.10     Brokers and Finders. No Person will have, as a result of the
transactions contemplated by the Transaction Documents, any valid right,
interest or claim against or upon the Company, any Subsidiary or an Investor for
any commission, fee or other compensation pursuant to any agreement, arrangement
or understanding entered into by or on behalf of such Investor.

 

5.11     Prohibited Transactions. Since the earlier of (a) such time as such
Investor was first contacted by the Company or any other Person acting on behalf
of the Company regarding the transactions contemplated hereby or (b) thirty (30)
days prior to the date hereof, neither such Investor nor any Affiliate of such
Investor which (x) had knowledge of the transactions contemplated hereby, (y)
has or shares discretion relating to such Investor’s investments or trading or
information concerning such Investor’s investments, including in respect of the
Shares, or (z) is subject to such Investor’s review or input concerning such
Affiliate’s investments or trading (collectively, “Trading Affiliates”) has,
directly or indirectly, effected or agreed to effect any short sale, whether or
not against the box, established any “put equivalent position” (as defined in
Rule 16a-1(h) under the 1934 Act) with respect to the Common Stock, granted any
other right (including, without limitation, any put or call option) with respect
to the Common Stock or with respect to any security that includes, relates to or
derived any significant part of its value from the Common Stock or otherwise
sought to hedge its

 

 
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position in the Shares (each, a “Prohibited Transaction”). Prior to the earliest
to occur of (i) the termination of this Agreement, (ii) the Effective Date or
(iii) the Effectiveness Deadline, such Investor shall not, and shall cause its
Trading Affiliates not to, engage, directly or indirectly, in a Prohibited
Transaction. Such Investor acknowledges that the representations, warranties and
covenants contained in this Section 5.11 are being made for the benefit of the
Investors as well as the Company and that each of the other Investors shall have
an independent right to assert any claims against such Investor arising out of
any breach or violation of the provisions of this Section 5.11.

 

5.12     The Agent. Such Investor understands that the Agent has acted solely as
the agent of the Company in the placement of the Shares, and that the Agent
makes no representation or warranty with regard to the merits of this
transaction or as to the accuracy of any information such Investor may have
received in connection therewith. Such Investor acknowledges that it has not
relied on any information or advice furnished by or on behalf of the Agent.

 

6. Conditions to Closing.

 

6.1     Conditions to the Investors’ Obligations. The obligation of each
Investor to purchase Shares at the Closing is subject to the satisfaction, on or
prior to the Closing Date, of the following conditions, any of which may be
waived by such Investor (as to itself only):

 

(a)     The representations and warranties made by the Company in Section 4
hereof qualified as to materiality shall be true and correct at all times prior
to and on the Closing Date, except to the extent any such representation or
warranty expressly speaks as of an earlier date, in which case such
representation or warranty shall be true and correct as of such earlier date,
and, the representations and warranties made by the Company in Section 4 hereof
not qualified as to materiality shall be true and correct in all material
respects at all times prior to and on the Closing Date, except to the extent any
such representation or warranty expressly speaks as of an earlier date, in which
case such representation or warranty shall be true and correct in all material
respects as of such earlier date. The Company shall have performed in all
material respects all obligations and covenants herein required to be performed
by it on or prior to the Closing Date.

 

(b)     The Company shall have obtained any and all consents, permits,
approvals, registrations and waivers necessary or appropriate for consummation
of the purchase and sale of the Shares and the consummation of the other
transactions contemplated by the Transaction Documents, all of which shall be in
full force and effect.

 

(c)     The Company shall have executed and delivered the Registration Rights
Agreement.

 

(d)     The Company shall have filed with Nasdaq a Notification Form: Listing of
Additional Shares for the listing of the Shares on Nasdaq, and Nasdaq shall not
have raised any unresolved objection thereto.

 

 
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(e)     The Company shall have received gross proceeds from the sale of the
Shares as contemplated hereby of at least Five Million Eight Hundred Fifty-One
Thousand Three Hundred Eleven Dollars ($5,851,311).

 

(f)     No judgment, writ, order, injunction, award or decree of or by any
court, or judge, justice or magistrate, including any bankruptcy court or judge,
or any order of or by any governmental authority, shall have been issued, and no
action or proceeding shall have been instituted by any governmental authority,
enjoining or preventing the consummation of the transactions contemplated hereby
or in the other Transaction Documents.

 

(g)     The Company shall have delivered a Certificate, executed on behalf of
the Company by its Chief Executive Officer or its Chief Financial Officer, dated
as of the Closing Date, certifying to the fulfillment of the conditions
specified in subsections (a), (b), (e), (f) and (j) of this Section 6.1.

 

(h)     The Company shall have delivered a Certificate, executed on behalf of
the Company by its Secretary, dated as of the Closing Date, certifying the
resolutions adopted by the Board of Directors of the Company, or a duly
appointed committee thereof, approving the transactions contemplated by this
Agreement and the other Transaction Documents and the issuance of the Shares,
certifying the current versions of the Articles of Incorporation and Bylaws of
the Company and certifying as to the signatures and authority of persons signing
the Transaction Documents and related documents on behalf of the Company.

 

(i)     The Investors shall have received an opinion from Wilson Sonsini
Goodrich & Rosati, Professional Corporation, the Company's counsel, dated as of
the Closing Date, in form and substance reasonably acceptable to the Investors
and addressing such legal matters as the Investors may reasonably request.

 

(j)     No stop order or suspension of trading shall have been imposed by
Nasdaq, the SEC or any other governmental or regulatory body with respect to
public trading in the Common Stock.

 

6.2     Conditions to Obligations of the Company. The Company's obligation to
sell and issue the Shares at the Closing is subject to the satisfaction on or
prior to the Closing Date of the following conditions, any of which may be
waived by the Company:

 

(a)     The representations and warranties made by the Investors in Section 5
hereof, other than the representations and warranties contained in Sections 5.3,
5.4, 5.5, 5.6, 5.7, 5.8 and 5.9 (the “Investment Representations”), shall be
true and correct in all material respects when made, and shall be true and
correct in all material respects on the Closing Date with the same force and
effect as if they had been made on and as of said date. The Investment
Representations shall be true and correct in all respects when made, and shall
be true and correct in all respects on the Closing Date with the same force and
effect as if they had been made on and as of said date. The Investors shall have
performed in all material respects all obligations and covenants herein required
to be performed by them on or prior to the Closing Date.

 

 
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(b)     The Investors shall have executed and delivered the Registration Rights
Agreement.

 

(c)     The Investors shall have delivered the Purchase Price to the Company.

 

6.3     Termination of Obligations to Effect Closing; Effects.

 

(a)     The obligations of the Company, on the one hand, and the Investors, on
the other hand, to effect the Closing shall terminate as follows:

 

(i)     Upon the mutual written consent of the Company and the Investors;

 

(ii)     By the Company if any of the conditions set forth in Section 6.2 shall
have become incapable of fulfillment, and shall not have been waived by the
Company;

 

(iii)     By an Investor (with respect to itself only) if any of the conditions
set forth in Section 6.1 shall have become incapable of fulfillment, and shall
not have been waived by the Investor; or

 

(iv)     By either the Company or any Investor (with respect to itself only) if
the Closing has not occurred on or prior to September 30, 2016;

 

provided, however, that, except in the case of clause (i) above, the party
seeking to terminate its obligation to effect the Closing shall not then be in
breach of any of its representations, warranties, covenants or agreements
contained in this Agreement or the other Transaction Documents if such breach
has resulted in the circumstances giving rise to such party’s seeking to
terminate its obligation to effect the Closing.

 

(b)     In the event of termination by the Company or any Investor of its
obligations to effect the Closing pursuant to this Section 6.3, written notice
thereof shall forthwith be given to the other Investors by the Company and the
other Investors shall have the right to terminate their obligations to effect
the Closing upon written notice to the Company and the other Investors. Nothing
in this Section 6.3 shall be deemed to release any party from any liability for
any breach by such party of the terms and provisions of this Agreement or the
other Transaction Documents or to impair the right of any party to compel
specific performance by any other party of its obligations under this Agreement
or the other Transaction Documents.

 

7.     Covenants and Agreements of the Company.

 

7.1     Reports. The Company will furnish to the Investors and/or their
assignees such information relating to the Company and its Subsidiaries as from
time to time may reasonably be requested by the Investors and/or their
assignees; provided, however, that the

 

 
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Company shall not disclose material nonpublic information to the Investors, or
to advisors to or representatives of the Investors, unless prior to disclosure
of such information the Company identifies such information as being material
nonpublic information and provides the Investors, such advisors and
representatives with the opportunity to accept or refuse to accept such material
nonpublic information for review and any Investor wishing to obtain such
information enters into an appropriate confidentiality agreement with the
Company with respect thereto.

 

7.2     No Conflicting Agreements. The Company will not take any action, enter
into any agreement or make any commitment that would conflict or interfere in
any material respect with the Company’s obligations to the Investors under the
Transaction Documents.

 

7.3     Compliance with Laws. The Company will comply in all material respects
with all applicable laws, rules, regulations, orders and decrees of all
governmental authorities.

 

7.4     Listing of Underlying Shares and Related Matters. Promptly following the
date hereof, the Company shall take all necessary action to cause the Shares to
be listed on Nasdaq no later than the Closing Date. Further, if the Company
applies to have its Common Stock or other securities traded on any other
principal stock exchange or market, it shall include in such application the
Shares and will take such other action as is necessary to cause such Common
Stock to be so listed. The Company will use commercially reasonable efforts to
continue the listing and trading of its Common Stock on Nasdaq and, in
accordance, therewith, will use commercially reasonable efforts to comply in all
respects with the Company’s reporting, filing and other obligations under the
bylaws or rules of such market or exchange, as applicable.

 

7.5     Termination of Covenants. The provisions of Sections 7.1 through 7.4
shall terminate and be of no further force and effect on the date on which the
Company’s obligations under the Registration Rights Agreement to register or
maintain the effectiveness of any registration covering the Registrable
Securities (as such term is defined in the Registration Rights Agreement) shall
terminate.

 

7.6     Removal of Legends. In connection with any sale or disposition of the
Shares by an Investor pursuant to Rule 144 or pursuant to any other exemption
under the 1933 Act such that the purchaser acquires freely tradable shares and
upon compliance by the Investor with the requirements of this Agreement, the
Company shall or, in the case of Common Stock, shall cause the transfer agent
for the Common Stock (the “Transfer Agent”) to issue replacement certificates
representing the Shares sold or disposed of without restrictive legends. Upon
the earlier of (i) registration for resale pursuant to the Registration Rights
Agreement or (ii) the Shares becoming freely tradable by a non-affiliate
pursuant to Rule 144 the Company shall (A) deliver to the Transfer Agent
irrevocable instructions that the Transfer Agent shall reissue a certificate
representing shares of Common Stock without legends upon receipt by such
Transfer Agent of the legended certificates for such shares, together with
either (1) a customary representation by the Investor that Rule 144 applies to
the shares of Common Stock represented thereby or (2) a statement by the
Investor that such Investor will sell (or, in the case of any Affiliate of the
Company has sold) the shares of Common Stock represented thereby in accordance
with the Plan of Distribution contained in the Registration Statement, and (B)
cause

 

 
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its counsel to deliver to the Transfer Agent one or more blanket opinions to the
effect that the removal of such legends in such circumstances may be effected
under the 1933 Act. From and after the earlier of such dates, upon an Investor’s
written request, the Company shall promptly cause certificates evidencing the
Investor’s Shares to be replaced with certificates which do not bear such
restrictive legends. When the Company is required to cause an unlegended
certificate to replace a previously issued legended certificate, if: (1) the
unlegended certificate is not delivered to an Investor within three (3) Business
Days of submission by that Investor of a legended certificate and supporting
documentation to the Transfer Agent as provided above and (2) prior to the time
such unlegended certificate is received by the Investor, the Investor, or any
third party on behalf of such Investor or for the Investor’s account, purchases
(in an open market transaction or otherwise) shares of Common Stock to deliver
in satisfaction of a sale by the Investor of shares represented by such
certificate (a “Buy-In”), then the Company shall pay in cash to the Investor
(for costs incurred either directly by such Investor or on behalf of a third
party) the amount by which the total purchase price paid for Common Stock as a
result of the Buy-In (including brokerage commissions, if any) exceeds the
proceeds received by such Investor as a result of the sale to which such Buy-In
relates. The Investor shall provide the Company written notice indicating the
amounts payable to the Investor in respect of the Buy-In.

 

7.7     Subsequent Equity Sales; Registration Statements.

 

(a)     From the date hereof until ninety (90) days after the Closing Date,
without the consent of the Required Investors, neither the Company nor any
Subsidiary shall issue shares of Common Stock or Common Stock Equivalents.
Notwithstanding the foregoing, the provisions of this Section 7.8(a) shall not
apply to (i) the issuance of the Shares, (ii) the issuance of Common Stock or
Common Stock Equivalents upon the conversion or exercise of any securities of
the Company or a Subsidiary outstanding on the date hereof, provided that the
terms of such security are not amended after the date hereof to decrease the
exercise price or increase the Common Stock or Common Stock Equivalents
receivable upon the exercise, conversion or exchange thereof or (iii) the
issuance of any Common Stock or Common Stock Equivalents pursuant to any Company
equity incentive plan approved by the Company’s stockholders.

 

(b)     From the date hereof until the earlier of (i) three years from the
Closing Date or (ii) such time as no Investor holds any of the Shares, the
Company shall be prohibited from effecting or entering into an agreement to
effect any “Variable Rate Transaction”. The term “Variable Rate Transaction”
shall mean a transaction in which the Company issues or sells (i) any debt or
equity securities that are convertible into, exchangeable or exercisable for, or
include the right to receive additional shares of Common Stock either (A) at a
conversion, exercise or exchange rate or other price that is based upon and/or
varies with the trading prices of or quotations for the shares of Common Stock
at any time after the initial issuance of such debt or equity securities, or (B)
with a conversion, exercise or exchange price that is subject to being reset at
some future date after the initial issuance of such debt or equity security or
upon the occurrence of specified or contingent events directly or indirectly
related to the business of the Company or the market for the Common Stock or
(ii) enters into any agreement, including, but not limited to, an equity line of
credit, whereby the Company may sell securities at a future determined price.
For the avoidance of doubt, the issuance of a security which is subject to
customary anti-dilution protections, including where the conversion, exercise or
exchange price

 

 
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is subject to adjustment as a result of stock splits, reverse stock splits and
other similar recapitalization or reclassification events, shall not be deemed
to be a “Variable Rate Transaction.”

 

(c)     The Company shall not, and shall use its commercially reasonable efforts
to ensure that no Affiliate of the Company shall, sell, offer for sale or
solicit offers to buy or otherwise negotiate in respect of any security (as
defined in Section 2 of the 1933 Act) that will be integrated with the offer or
sale of the Shares in a manner that would require the registration under the
1933 Act of the sale of the Shares to the Investors, or that will be integrated
with the offer or sale of the Shares for purposes of the rules and regulations
of any trading market such that it would require stockholder approval prior to
the closing of such other transaction unless stockholder approval is obtained
before the closing of such subsequent transaction.

 

(d)     The Company shall not, from the date hereof until ninety (90) days after
the Effective Date, prepare and file with the SEC a registration statement
relating to an offering for its own account or the account of others under the
1933 Act of any of its equity securities, other than (i) a Registration
Statement pursuant to the Registration Rights Agreement, (ii) with respect to
the Company’s obligations pursuant to the Other Registration Rights Agreement,
or (iii) any registration statement or post-effective amendment to a
registration statement (or supplement thereto) relating to the Company’s
employee benefit plans registered on Form S-8 or, in connection with an
acquisition, on Form S-4.

 

7.9     Equal Treatment of Investors. No consideration shall be offered or paid
to any Person to amend or consent to a waiver or modification of any provision
of any of the Transaction Documents unless the same consideration is also
offered to all of the parties to the Transaction Documents. For clarification
purposes, this provision constitutes a separate right granted to each Investor
by the Company and negotiated separately by each Investor, and is intended for
the Company to treat the Investors as a class and shall not in any way be
construed as the Investors acting in concert or as a group with respect to the
purchase, disposition or voting of Shares or otherwise.

 

8.     Survival and Indemnification.

 

8.1     Survival. The representations, warranties, covenants and agreements
contained in this Agreement shall survive the Closing of the transactions
contemplated by this Agreement.

 

8.2     Indemnification. The Company agrees to indemnify and hold harmless each
Investor and its Affiliates and their respective directors, officers, trustees,
partners, members, managers, employees and agents, and their respective
successors and assigns, from and against any and all losses, claims, damages,
liabilities and expenses (including without limitation reasonable attorney fees
and disbursements and other expenses incurred in connection with investigating,
preparing or defending any action, claim or proceeding, pending or threatened
and the costs of enforcement thereof) (collectively, “Losses”) to which such
Person may become subject as a result of any breach of representation, warranty,
covenant or agreement made by or

 

 
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to be performed on the part of the Company under the Transaction Documents, and
will reimburse any such Person for all such amounts as they are incurred by such
Person.

 

8.3     Conduct of Indemnification Proceedings. Any person entitled to
indemnification hereunder shall (i) give prompt notice to the indemnifying party
of any claim with respect to which it seeks indemnification and (ii) permit such
indemnifying party to assume the defense of such claim with counsel reasonably
satisfactory to the indemnified party; provided that any person entitled to
indemnification hereunder shall have the right to employ separate counsel and to
participate in the defense of such claim, but the fees and expenses of such
counsel shall be at the expense of such person unless (a) the indemnifying party
has agreed to pay such fees or expenses, or (b) the indemnifying party shall
have failed to assume the defense of such claim and employ counsel reasonably
satisfactory to such person or (c) in the reasonable judgment of any such
person, based upon written advice of its counsel, a conflict of interest exists
between such person and the indemnifying party with respect to such claims (in
which case, if the person notifies the indemnifying party in writing that such
person elects to employ separate counsel at the expense of the indemnifying
party, the indemnifying party shall not have the right to assume the defense of
such claim on behalf of such person); and provided, further, that the failure of
any indemnified party to give notice as provided herein shall not relieve the
indemnifying party of its obligations hereunder, except to the extent that such
failure to give notice shall materially adversely affect the indemnifying party
in the defense of any such claim or litigation. It is understood that the
indemnifying party shall not, in connection with any proceeding in the same
jurisdiction, be liable for fees or expenses of more than one separate firm of
attorneys at any time for all such indemnified parties. No indemnifying party
will, except with the consent of the indemnified party, 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 such indemnified party
of a release from all liability in respect of such claim or litigation.

 

9.     Miscellaneous.

 

9.1     Successors and Assigns. This Agreement may not be assigned by a party
hereto without the prior written consent of the Company or the Investors, as
applicable, provided, however, that an Investor may assign its rights and
delegate its duties hereunder in whole or in part to an Affiliate or to a third
party acquiring some or all of its Shares in a transaction complying with
applicable securities laws without the prior written consent of the Company or
the other Investors. The provisions of this Agreement shall inure to the benefit
of and be binding upon the respective permitted successors and assigns of the
parties. Without limiting the generality of the foregoing, in the event that the
Company is a party to a merger, consolidation, share exchange or similar
business combination transaction in which the Common Stock is converted into the
equity securities of another Person, from and after the effective time of such
transaction, such Person shall, by virtue of such transaction, be deemed to have
assumed the obligations of the Company hereunder, the term “Company” shall be
deemed to refer to such Person and the term “Shares” shall be deemed to refer to
the securities received by the Investors in connection with such transaction.
Nothing in this Agreement, express or implied, is intended to confer upon any
party other than the parties hereto or their respective successors and assigns

 

 
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any rights, remedies, obligations, or liabilities under or by reason of this
Agreement, except as expressly provided in this Agreement.

 

9.2     Counterparts; Faxes. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument. This Agreement may be
delivered by facsimile or other form of electronic transmission, which shall be
deemed an original.

 

9.3     Titles and Subtitles. The titles and subtitles used in this Agreement
are used for convenience only and are not to be considered in construing or
interpreting this Agreement.

 

9.4     Notices. Unless otherwise provided, any notice required or permitted
under this Agreement shall be given in writing and shall be deemed effectively
given as hereinafter described (i) if given by personal delivery, then such
notice shall be deemed given upon such delivery, (ii) if given by telex or
telecopier, then such notice shall be deemed given upon receipt of confirmation
of complete transmittal, (iii) if given by mail, then such notice shall be
deemed given upon the earlier of (A) receipt of such notice by the recipient or
(B) three days after such notice is deposited in first class mail, postage
prepaid, and (iv) if given by an internationally recognized overnight air
courier, then such notice shall be deemed given one Business Day after delivery
to such carrier. All notices shall be addressed to the party to be notified at
the address as follows, or at such other address as such party may designate by
ten days’ advance written notice to the other party:

 

If to the Company:

 

Aehr Test Systems

400 Kato Terrace

Fremont, CA 94539

Attention: Chief Financial Officer

Fax: (510) 623-9686

 

With a copy to:

 

Wilson Sonsini Goodrich & Rosati, Professional Corporation

650 Page Mill Road

Palo Alto, CA 94304-1050

Attention: Mark L. Reinstra

Fax: (650) 493-6811

 

If to the Investors:

 

to the addresses set forth on the signature pages hereto.

 

9.5     Expenses. The parties hereto shall pay their own costs and expenses in
connection herewith, except that the Company shall pay the reasonable fees and
expenses of

 

 
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Lowenstein Sandler LLP not to exceed $25,000, regardless of whether the
transactions contemplated hereby are consummated; it being understood that
Lowenstein Sandler LLP has only rendered legal advice to the SSF Investors and
not to the Company or any other Investor in connection with the transactions
contemplated hereby, and that each of the Company and each Investor has relied
for such matters on the advice of its own respective counsel. Such expenses
shall be paid at the Closing or, if the Closing does not occur, within five (5)
Business Days of the termination of this Agreement. The Company shall reimburse
the Investors upon demand for all reasonable out-of-pocket expenses incurred by
the Investors, including without limitation reimbursement of attorneys’ fees and
disbursements, in connection with any amendment, modification or waiver of this
Agreement or the other Transaction Documents requested by the Company. In the
event that legal proceedings are commenced by any party to this Agreement
against another party to this Agreement in connection with this Agreement or the
other Transaction Documents, the party or parties which do not prevail in such
proceedings shall severally, but not jointly, pay their pro rata share of the
reasonable attorneys’ fees and other reasonable out-of-pocket costs and expenses
incurred by the prevailing party in such proceedings.

 

9.6     Amendments and Waivers. Any term of this Agreement may be amended and
the observance of any term of this Agreement may be waived (either generally or
in a particular instance and either retroactively or prospectively), only with
the written consent of the Company and the Required Investors. Any amendment or
waiver effected in accordance with this paragraph shall be binding upon each
holder of any Shares purchased under this Agreement at the time outstanding,
each future holder of all such Shares, and the Company.

 

9.7     Publicity. Except as set forth below, no public release or announcement
concerning the transactions contemplated hereby shall be issued by the Company
or the Investors without the prior consent of the Company (in the case of a
release or announcement by the Investors) or the Investors (in the case of a
release or announcement by the Company) (which consents shall not be
unreasonably withheld), except as such release or announcement may be required
by law or the applicable rules or regulations of any securities exchange or
securities market, in which case the Company or the Investors, as the case may
be, shall allow the Investors or the Company, as applicable, to the extent
reasonably practicable in the circumstances, reasonable time to comment on such
release or announcement in advance of such issuance. By 8:30 a.m. (New York City
time) on the trading day immediately following the execution and delivery of
this Agreement, the Company shall (i) issue a press release disclosing the
execution of this Agreement and describing the transactions contemplated hereby
and by the other Transaction Documents and (ii) file a Current Report on Form
8-K attaching the press release described in the foregoing sentence. In
addition, the Company will make such other filings and notices in the manner and
time required by the SEC or Nasdaq.

 

9.8     Severability. Any provision of this Agreement that is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof but shall be interpreted as if it were written so as
to be enforceable to the maximum extent permitted by applicable law, and any
such prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction. To the extent

 

 
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permitted by applicable law, the parties hereby waive any provision of law which
renders any provision hereof prohibited or unenforceable in any respect.

 

9.9     Entire Agreement. This Agreement, including the Exhibits, and the other
Transaction Documents constitute the entire agreement among the parties hereof
with respect to the subject matter hereof and thereof and supersede all prior
agreements and understandings, both oral and written, between the parties with
respect to the subject matter hereof and thereof.

 

9.10     Further Assurances. The parties shall execute and deliver all such
further instruments and documents and take all such other actions as may
reasonably be required to carry out the transactions contemplated hereby and to
evidence the fulfillment of the agreements herein contained.

 

9.11     Construction. The parties agree that they and/or their respective
counsel have reviewed and had an opportunity to revise the Transaction Documents
and, therefore, the normal rule of construction to the effect that any
ambiguities are to be resolved against the drafting party shall not be employed
in the interpretation of the Transaction Documents or any amendments thereto.

 

9.12     Governing Law; Consent to Jurisdiction; Waiver of Jury Trial. This
Agreement shall be governed by, and construed in accordance with, the internal
laws of the State of New York without regard to the choice of law principles
thereof. Each of the parties hereto irrevocably submits to the exclusive
jurisdiction of the courts of the State of New York located in New York County
and the United States District Court for the Southern District of New York for
the purpose of any suit, action, proceeding or judgment relating to or arising
out of this Agreement and the transactions contemplated hereby. Service of
process in connection with any such suit, action or proceeding may be served on
each party hereto anywhere in the world by the same methods as are specified for
the giving of notices under this Agreement. Each of the parties hereto
irrevocably consents to the jurisdiction of any such court in any such suit,
action or proceeding and to the laying of venue in such court. Each party hereto
irrevocably waives any objection to the laying of venue of any such suit, action
or proceeding brought in such courts and irrevocably waives any claim that any
such suit, action or proceeding brought in any such court has been brought in an
inconvenient forum. EACH OF THE PARTIES HERETO WAIVES ANY RIGHT TO REQUEST A
TRIAL BY JURY IN ANY LITIGATION WITH RESPECT TO THIS AGREEMENT AND THE OTHER
TRANSACTION DOCUMENTS OR ARISING OUT OF THE TRANSACTIONS CONTEMPLATED HEREBY AND
THEREBY AND REPRESENTS THAT COUNSEL HAS BEEN CONSULTED SPECIFICALLY AS TO THIS
WAIVER.

 

9.13     Independent Nature of Investors' Obligations and Rights. The
obligations of each Investor under any Transaction Document are several and not
joint with the obligations of any other Investor, and no Investor shall be
responsible in any way for the performance of the obligations of any other
Investor under any Transaction Document. The decision of each Investor to
purchase Shares pursuant to the Transaction Documents has been made by such
Investor independently of any other Investor. Nothing contained herein or in any
Transaction Document, and no action taken by any Investor pursuant thereto,
shall be deemed to constitute

 

 
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the Investors as a partnership, an association, a joint venture or any other
kind of entity, or create a presumption that the Investors are in any way acting
in concert or as a group with respect to such obligations or the transactions
contemplated by the Transaction Documents. Each Investor acknowledges that no
other Investor has acted as agent for such Investor in connection with making
its investment hereunder and that no Investor will be acting as agent of such
Investor in connection with monitoring its investment in the Shares or enforcing
its rights under the Transaction Documents. Each Investor shall be entitled to
independently protect and enforce its rights, including, without limitation, the
rights arising out of this Agreement or out of the other Transaction Documents,
and it shall not be necessary for any other Investor to be joined as an
additional party in any proceeding for such purpose. The Company acknowledges
that each of the Investors has been provided with the same Transaction Documents
for the purpose of closing a transaction with multiple Investors and not because
it was required or requested to do so by any Investor.

[signature page follows]

 

 
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IN WITNESS WHEREOF, the parties have executed this Agreement or caused their
duly authorized officers to execute this Agreement as of the date first above
written.

 

The Company: 

AEHR TEST SYSTEMS  

 

 

 

 

 

 

 

 

 

 

 

 

 

By:

/s/ Gayn Erickson 

 

 

Name:

 Gayn Erickson

 

 

Title:

 Chief Executive Officer

 

  

 
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The Investors: 

SPECIAL SITUATIONS TECHNOLOGY FUND, L.P.

 

 

(Name of Investor)  

 

 

 

 

 

 

 

 

 

By:

/s/ Adam Stettner

 

 

Name:

 Adam Stettner

 

 

Title:

 General Partner

 

 

Aggregate Purchase Price: $356,900

Number of Shares: 166,000

  

 
-30-

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SPECIAL SITUATIONS TECHNOLOGY FUND II, L.P.

 

 

(Name of Investor)  

 

 

 

 

 

 

 

 

 

By:

/s/ Adam Stettner

 

 

Name:

 Adam Stettner

 

 

Title:

 General Partner

 

 

Aggregate Purchase Price: $1,900,600

Number of Shares: 884,000

 

 
-31-

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KETTLE HILL PARTNERS, LP

 

 

(Name of Investor)  

 

 

 

 

 

 

 

 

 

By:

/s/ Bryan Kiss

 

 

Name:

  Bryan Kiss

 

 

Title:

  Chief Financial Officer

 

 

Aggregate Purchase Price: $286,758.40

Number of Shares: 133,376

 

 
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KETTLE HILL PARTNERS II, LP

 

 

(Name of Investor)  

 

 

 

 

 

 

 

 

 

By:

/s/ Bryan Kiss

 

 

Name:

  Bryan Kiss

 

 

Title:

  Chief Financial Officer

 

 

Aggregate Purchase Price: $114,302.60

Number of Shares: 53,164

 

 
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JON D AND LINDA W GRUBER TRUST

 

 

(Name of Investor)  

 

 

 

 

 

 

 

 

 

By:

/s/ Jon D. Gruber

 

 

Name:

Jon D. Gruber

 

 

Title:

Trustee

 

 

Aggregate Purchase Price: $559,000

Number of Shares: 260,000

  

 
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GEOFFREY G. SCOTT

 

 

(Name of Investor)  

 

 

 

 

 

 

 

 

 

By:

/s/ Geoffrey G. Scott

 

 

Name:

Geoffrey G. Scott

 

 

Aggregate Purchase Price: $107,500

Number of Shares: 50,000

 

 
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COLUMBUS CAPITAL QP PARTNERS, L.P.

 

 

(Name of Investor)  

 

 

 

 

 

 

 

 

 

By:

/s/ Matthew D. Ockner, Managing Member

 

 

Name:

Matthew D. Ockner, Managing Member

 

 

Title:

Columbus Capital Management, LLC

General Partner

 

 

Aggregate Purchase Price: $268,750

Number of Shares: 125,000

 

 
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COLUMBUS CAPITAL PARTNERS, L.P.

 

 

(Name of Investor)  

 

 

 

 

 

 

 

 

 

By:

/s/ Matthew D. Ockner, Managing Member

 

 

Name:

Matthew D. Ockner, Managing Member

 

 

Title:

Columbus Capital Management, LLC

General Partner

 

 

Aggregate Purchase Price: $860,000

Number of Shares: 400,000

  

 
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AIGH INVESTMENT PARTNERS LP

 

 

(Name of Investor)  

 

 

 

 

 

 

 

 

 

By:

/s/ Orin Hirschman

 

 

Name:

Orin Hirschman

 

 

Title:

General Partner

 

  

Aggregate Purchase Price: $1,290,000

Number of Shares: 600,000

  

 
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PENNINGTON CAPITAL

 

 

(Name of Investor)  

 

 

 

 

 

 

 

 

 

By:

/s/ Robert J. Evans

 

 

Name:

Robert J. Evans

 

 

Title:

Managing Partner

 

  

Aggregate Purchase Price: $107,500

Number of Shares: 50,000

 

 

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