Exhibit 10.1

 

AMENDMENT TO THE AEHR TEST SYSTEMS

CONVERTIBLE NOTE PURCHASE AND CREDIT FACILITY AGREEMENT

AND 9.0% NOTES

 

This Amendment (this “Amendment”) to the Aehr Test Systems Convertible Note
Purchase and Credit Facility Agreement dated April 10, 2015 (the “Original
Purchase Agreement”) and each of the 9.0% Convertible Secured Notes Due 2017
issued or issuable thereunder (the “9.0% Notes”) is made as of August 22, 2016,
by and between Aehr Test Systems, a California corporation (the “Company”), and
the undersigned Purchasers (as defined under the Original Purchase Agreement),
who also are “Holders” (as defined under the 9.0% Notes). All references to
“Purchasers” in this Amendment shall also be references to “Holders” under the
9.0% Notes.

 

WHEREAS, the Company and the undersigned Purchasers wish to amend the Original
Purchase Agreement and the 9.0% Notes and the other Transaction Documents (as
defined under the Original Purchase Agreement), as set forth herein.

 

NOW THEREFORE, the parties agree as follows:

 

1.     The second sentence of Section 2(a) of the 9.0% Notes (whether already
issued or issuable in the future) is hereby amended and restated in its entirety
to read as follows:

 

“For the purposes hereof, “Maturity Date” means April 10, 2019.”

 

The definition of “Securities” found in Section 11 of the 9.0% Notes (whether
already issued or issuable in the future) is hereby amended by replacing “April
10, 2017” with “April 10, 2019”. Other references to the “9.0% Convertible
Secured Note Due 2017” and other references to the due date of the 9.0% Notes
throughout the Transaction Documents shall be adjusted in accordance with the
foregoing.

 

2.     Section 4(a) of the 9.0% Notes (whether already issued or issuable in the
future) is hereby amended and restated in its entirety to read as follows:

 

“(a)     The Company may, upon not more than sixty (60) days but not less than
fifteen (15) days’ notice (the date all of the holders of this Security received
such notice is referred to as the “Forced Conversion Notice Date”), subject to
the conditions set forth below, convert up to the principal amount of this
Security plus accrued and unpaid interest (although Holder may elect to have
accrued but unpaid interest paid in cash) to, but excluding, the Forced
Conversion Date (a “Forced Conversion”) on the date of Forced Conversion (the
“Forced Conversion Date”) at the then applicable Conversion Price if the
Weighted Average Price of the Common Stock on each Trading Day during the thirty
(30) consecutive Trading Days ending on the Trading Day prior to the date of
mailing of the notice of Forced Conversion (such date, the “Notice Date” and
such period, the “Measuring Period”) is no less than $6.51 (as adjusted for any
stock dividend, stock split, reverse stock split, stock combination,
reorganization, reclassification or similar transaction either after the
Subscription Date or during the Measuring Period), provided, that in no event
shall the Company effect any Forced Conversion if the number of shares to be
issued and issuable upon such forced conversion exceeds 25% of the arithmetic
average of the daily trading volume (as reported by

 

 
 

--------------------------------------------------------------------------------

 

 

Bloomberg) of the Company’s Common Stock during each Trading Day of the
Measuring Period.”

   

3.     The definition of “Conversion Price” found in Section 11 of the 9.0%
Notes (whether already issued or issuable in the future) is hereby amended and
restated in its entirety to read as follows:

 

““Conversion Price” means $2.30 per share of Common Stock, such amount being
subject to adjustment in all respects as provided in Section 3 of this Note.” 

 

4.     The definition of “Excluded Securities” found in Section 11 of the 9.0%
Notes (whether already issued or issuable in the future) is hereby amended and
restated in its entirety to read as follows:

 

““Excluded Securities” means any shares of Common Stock issued or issuable: (i)
in connection with any Approved Stock Plan not to exceed a maximum of an
aggregate of 900,000 shares of Common Stock (as adjusted for any stock dividend,
stock split, stock combination, reclassification or similar transaction
occurring after the Subscription Date) per calendar year relating to or arising
from grants of options or stock under all Approved Stock Plans; (ii) pursuant to
the terms of the Securities; provided that the terms of such Securities are not
amended, modified or changed on or after the Subscription Date; (iii) upon
conversion or exercise of any Options or Convertible Securities which are
outstanding on the day immediately preceding the Subscription Date, provided
that the terms of such Options or Convertible Securities are not amended,
modified or changed on or after the Subscription Date; (iv) to suppliers or
third party service providers in connection with the provisions of goods or
services pursuant to transaction approved by the Board of Directors; and (v) to
the venture capital arm of any one (but not more than one) customer of the
Company as may be approved by the Board of Directors of the Company (provided,
that such entity is in the regular business of making venture capital
investments); provided, however that any shares of Common Stock issued or
issuable pursuant to clause (iv) above shall not be considered "Excluded
Securities" if and to the extent such Common Stock issued or issuable upon such
event is in excess of 400,000 shares of Common Stock (as adjusted for any stock
dividend, stock split, stock combination, reclassification or similar
transaction occurring after the Subscription Date) when aggregated with any
other shares of Common Stock that have been issued or will be issuable in
connection with any event described in clause (iv) above, in each case as may be
appropriately adjusted for any stock dividend, stock split, stock combination,
reclassification or similar transaction.”

 

5.     The definition of “Securities” found in Section 11 of the 9.0% Notes
(whether already issued or issuable in the future) is hereby amended by
replacing “April 10, 2017” with “April 10, 2019”.

 

6.     The term “Due 2017” in Exhibit A of the Original Purchase Agreement and
the title of the 9.0% Notes shall be replaced with “Due 2019”; and the term “due
2017” in Section 1(a) of the Original Purchase Agreement and the first sentence
of the 9.0% Notes shall be replaced with “due 2019”.

 

 
2

--------------------------------------------------------------------------------

 

  

7.     The Company agrees and acknowledges that it cannot and will not borrow
any additional money or funds from the Purchasers (whether under the Original
Purchase Agreement, as amended, or otherwise), without the Purchasers’ further
express written agreement.

 

8.     The Company represents and warrants to the Purchasers that each of the
representations and warranties of the Company contained in Section 3 of the
Original Purchase Agreement or in any other Transaction Document is true and
correct in all material respects on and as of the date hereof (except for (i)
representations and warranties that are already qualified by a materiality
standard, which are true in all respects, and (ii) representations and
warranties that speak as of a specific date which shall be true and correct as
of such specified date). No Material Adverse Effect (as defined in the Original
Purchase Agreement) has occurred after April 10, 2015. The date hereof shall be
treated as a “Closing Date” for purposes of the Original Purchase Agreement.

 

9.     The Company hereby (i) affirms and confirms each of its pledges, grants
and other agreements under each Security Document, and (ii) agrees that,
notwithstanding the effectiveness of this Amendment, each Security Document, and
all pledges, grants and other agreements thereunder shall continue to be in full
force and effect in respect of, and to secure, the Obligations. The Company
hereby (a) affirms that the Liens granted in or pursuant to the Security
Agreement and any other Transaction Document are valid and subsisting and remain
perfected first priority security interests in favor of the Purchasers both
before and after giving effect to this Amendment, subject only to such
exceptions as expressly provided for under the Transaction Documents, and (b)
agrees that this Amendment and all documents executed in connection herewith
shall in no manner impair or otherwise adversely affect any of the Liens granted
in or pursuant to the Security Agreement or any other Transaction Document.

 

10.    The Company represents and warrants that there have been no changes to
the Perfection Certificate since the initial Closing Date other than as
expressly set forth in Schedule 1 to this Amendment. The Company covenants that
within 30 days after the date hereof, it shall take all actions reasonably
requested by the Purchasers to comply with the Company’s obligations under
Section 4 of the Security Agreement (including clauses (g) and (h) thereof) and
Section 5 of the Security Agreement.

 

11.    The Company represents and warrants to the Purchasers that the Company
has (a) delivered to the Purchasers duly authorized and executed 9% Notes in the
principal amount of $6,110,000 (including a principal amount of $2,000,000
issued upon conversion of 5% Notes) and (b) performed and complied in all
material respects with all agreements, obligations and conditions contained in
the Original Purchase Agreement and the other Transaction Documents (as defined
in the Original Purchase Agreement) that are or were required to be performed or
complied with by it on or before the date hereof, and the Company has obtained
all approvals, consents and qualifications necessary to issue all 5% Notes and
9% Notes and all Common Stock and other Convertible Securities issuable upon
conversion of the 9% Notes.

 

12.    To date, there has been no Event of Default (as defined in either the 5%
Notes and/or 9% Notes), or event which, with the giving notice or passage of
time or both, would become an Event of Default.

   

13.    The Company represents and warrants to the Purchasers that the Company
has a sufficient number of duly authorized and unissued shares of Common Stock
reserved solely for the

 

 
3

--------------------------------------------------------------------------------

 

 

issuance of Common Stock issuable upon conversion of the 9% Notes, including any
shares of Common Stock issuable following the effectiveness of this Amendment.
The Company covenants and agrees with the Purchasers that it shall always
reserve and keep available a sufficient number of duly authorized and unissued
shares of Common Stock solely for the issuance of Common Stock issuable upon
conversion of the 9% Notes.

 

14.    The Company covenants and agrees with the Purchasers that it shall
promptly file and/or amend its registration statement on Form S-3 (and keep it
effective) so that the Purchasers will be able to sell under such Form S-3
registration statement any and all of the shares of Common Stock issuable upon
conversion of any and all of the 9% Notes, including any shares of Common Stock
issuable following the effectiveness of this Amendment.

 

15.    The Company on behalf of itself and each of itself, its Affiliates,
successors and assigns, each of their past and present officers, directors,
employees, shareholders, advisers, agents and representatives (the “Releasing
Persons”), hereby releases and forever discharges the Purchasers and all of
their Affiliates (as defined in the 9% Notes) and each of their officers,
directors, employees, partners, advisors and representatives (the “Released
Persons”), from all possible claims, demands, actions, causes of action,
damages, costs, expenses and liabilities whatsoever, known or unknown, at law or
in equity, which such Releasing Person may now have or may hereafter have
against a Purchaser or any other Released Person, for any action or inaction
taken on or prior to the date hereof with respect to or relating to the Original
Purchase Agreement, the 5.0% and 9.0% Notes or any other Transaction Documents.
The Company hereby acknowledges and agrees that it does not (and each Releasing
Person does not) have any defenses, counterclaims, offsets, cross-claims, claims
or demands of any kind or nature whatsoever that can be asserted to reduce or
eliminate all or any part of the liability of the Company to repay the
Purchasers as provided in the Original Purchase Agreement, the 9.0% Notes or any
other Transaction Document or to seek affirmative relief or damages of any kind
or nature from the Purchasers.

 

16.    This Amendment may be executed in one or more counterparts, each of which
shall for all purposes be deemed to be an original and all of which shall
constitute the same instrument. This Amendment may be executed and exchanged by
facsimile or .pdf signature, all of which shall be deemed to be effective.

 

17.    The Company represents and warrants to the Purchasers that this Amendment
has been duly authorized and duly and validly executed and delivered by the
Company and constitutes its legal, valid and binding obligation, enforceable
against it in accordance with its terms, except as enforceability may be limited
by applicable insolvency, bankruptcy or other laws affecting creditors' rights
generally, or general principles of equity, whether such enforceability is
considered in a proceeding in equity or at law.

 

18.    Upon the execution of this Amendment by the Company and each of the
Purchasers, this Amendment shall be binding upon all parties to the Original
Purchase Agreement and the 9.0% Notes.

   

19.    Except as set forth herein, the Original Purchase Agreement, the 9.0%
Notes and the other Transaction Documents shall remain in full force and effect
and shall be binding on all parties thereto. All terms not otherwise defined
herein shall have the meanings prescribed to them in the Original Purchase
Agreement, the 9.0% Notes and the other Transaction Documents. This

 

 
4

--------------------------------------------------------------------------------

 

 

Amendment shall be deemed to be a Transaction Document for purposes of the
Original Purchase Agreement, the 9.0% Notes and any other Transaction Document.
All references to “Transaction Document(s)” (whether the Original Purchase
Agreement, the 9% Notes, the 5% Notes, the Security Agreement or any other
Transaction Documents) herein and in any and all Transaction Documents shall
also include the terms of this Amendment, so that each Transaction Document is
deemed amended by this Amendment for all purposes, and this Amendment is hereby
incorporated by reference into each Transaction Document.

 

20.    Except as expressly set forth above, this Amendment shall not by
implication or otherwise alter, limit, impair, constitute a waiver of, or
otherwise affect the rights and remedies of the Purchasers, or any terms,
conditions or obligations of the Company, under Original Purchase Agreement and
the 9.0% Notes or any other Transaction Document, each of which shall remain in
full force and effect. Nothing contained in this Amendment shall, or shall be
deemed to, constitute a waiver of any past, present or future violation of any
provision of the Original Purchase Agreement, the 9.0% Notes or any other
Transaction Document, or constitute a course of dealing or other basis for
altering any provision thereof. Except as expressly set forth herein, nothing
herein shall be deemed to entitle the Company to a consent to, or a waiver,
amendment, modification or other change of, any of the terms, conditions,
obligations, covenants or agreements contained in the Original Purchase
Agreement, 9.0% Note or any other Transaction Document in similar or different
circumstances. The Purchasers reserve all of their rights and remedies under the
Original Purchase Agreement, 9.0% Note or any other Transaction Document. This
Amendment shall be governed by and construed in accordance with the laws of New
York State, without giving effect to conflict of laws provisions.

 

* * *

 

 
5

--------------------------------------------------------------------------------

 

  

IN WITNESS WHEREOF, the parties have duly executed this Amendment as of the date
set forth above.

 

 

COMPANY:

 

        AEHR TEST SYSTEMS  

 

 

 

 

       

 

 

 

 

 

By:

/s/ Gayn Erickson

 

 

Name: GAYN ERICKSON

 

 

Title: CEO, AEHR TEST

 

 

 

 [Signature Page to the Amendment to the Aehr Test Systems Convertible Note
Purchase and Credit Facility Agreement and 9.0% Notes]

 

--------------------------------------------------------------------------------

 

  

IN WITNESS WHEREOF, the parties have duly executed this Amendment as of the date
set forth above.

 

 

PURCHASER:

 

        QUINTESSENCE FUND L.P.           By: QVT Associates GP LLC, its general
partner  

 

 

 

 

 

 

 

 

 

By:

/s/ Tracy Fu

 

 

Name:  Tracy Fu

 

 

Title:    Managing Member

 

 

 
[Signature Page to the Amendment to the Aehr Test Systems Convertible Note
Purchase and Credit Facility Agreement and 9.0% Notes] 

--------------------------------------------------------------------------------

 

  

IN WITNESS WHEREOF, the parties have duly executed this Amendment as of the date
set forth above.

 

 

PURCHASER:

 

        QVT FUND V LP           By: QVT Associates GP LLC, its general partner  

 

 

 

 

 

 

 

 

 

By:

/s/ Tracy Fu

 

 

Name:  Tracy Fu

 

 

Title:     Managing Member

 

 

[Signature Page to the Amendment to the Aehr Test Systems Convertible Note
Purchase and Credit Facility Agreement and 9.0% Notes]