As filed with the Securities and Exchange Commission on December
10, 2018
Registration No. 333-
UNITED STATES
SECURITIES AND EXCHANGE
COMMISSION
WASHINGTON, D.C. 20549
FORM S-3
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
ACM
RESEARCH, INC.
(Exact name of registrant as specified in its charter)
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Delaware
(State or other jurisdiction of incorporation or
organization)
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94-3290283
(I.R.S. Employer Identification Number)
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42307 Osgood Road, Suite I, Fremont, California
(510) 445-3700
(Address, including zip code, and
telephone number, including
area code, of registrant’s principal executive
offices)
David H. Wang
Chief Executive Officer and President
ACM Research, Inc.
42307 Osgood Road, Suite I, Fremont, California
(510) 445-3700
(Name, address, including zip code, and telephone number, including
area code, of agent for service)
Copies to:
Mark L. Johnson
Bella Zaslavsky
K&L Gates LLP
One Lincoln Street, Boston, Massachusetts 02111
(617) 261-3100
Approximate date of commencement of proposed sale to the
public: From
time to time after this registration statement is declared
effective.
If the
only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check
the following box. ☐
If any
of the securities being registered on this Form are to be offered
on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, other than securities offered only in
connection with dividend or interest reinvestment plans, check the
following box. ☒
If this
Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the
following box and list the Securities Act registration statement
number of the earlier effective registration statement for the same
offering. ☐
If this
Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the
Securities Act registration statement number of the earlier
effective registration statement for the same offering.
☐
If this
Form is a registration statement pursuant to General Instruction
I.D. or a post-effective amendment thereto that shall become
effective on filing with the Commission pursuant to Rule 462(e)
under the Securities Act, check the following box.
☐
If this
Form is a post-effective amendment to a registration statement
filed pursuant to General Instruction I.D. filed to register
additional securities or additional classes of securities pursuant
to Rule 413(b) under the Securities Act, check the following
box. ☐
Indicate
by check mark whether the registrant is a large accelerated filer,
an accelerated filer, a non-accelerated filer, smaller reporting
company, or an emerging growth company. See the definitions of
“large accelerated filer,” “accelerated
filer,” “smaller reporting company” and
“emerging growth company” in Rule 12b-2 of the Exchange
Act.
Large accelerated
filer ☐
Accelerated filer
☐
Non-accelerated
filer ☐
Smaller reporting company
☒
Emerging growth
company ☒
If an
emerging growth company, indicate by check mark if the registrant
has elected not to use the extended transition period for complying
with any new or revised financial accounting standards provided
pursuant to Section 7(a)(2)(B) of the Securities
Act. ☐
CALCULATION OF REGISTRATION FEE
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Title of Each Class of Securities to be
Registered
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Amount to be Registered
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Proposed Maximum Offering Price Per Unit
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Proposed Maximum Aggregate Offering Price
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Amount of Registration Fee
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Class A
common stock, par value $0.0001 per share
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(1)
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(1)
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(1)
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Preferred
stock, par value $0.0001 per share
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(1)
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(1)
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(1)
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Debt
securities
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(1)
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(1)
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(1)
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Warrants
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(1)
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(1)
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(1)
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Units
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(1)
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(1)
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(1)
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Total
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$100,000,000.00(2)
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$12,120.00(3)
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(1)
Pursuant to General
Instruction II.D of Form S-3 under the Securities Act, this
information is not required to be specified. The securities being
registered consist of an indeterminate number or amount of each
class of identified securities that from time to time may be
(a) sold at indeterminate prices, (b) issued upon
conversion, exchange, exercise or settlement of other identified
securities, which may, but need not, be issued for separate
consideration, and (c) pursuant to Rule 416 under the
Securities Act, issued in connection with any stock split, stock
dividend or similar transaction with respect to, or pursuant to
anti-dilution provisions of, other identified
securities.
(2)
The proposed
maximum aggregate offering price has been estimated solely for the
purpose of calculating the registration fee.
(3)
The registration
fee has been calculated in accordance with Rule 457(o) under the
Securities Act.
The registrant hereby amends this registration statement on such
date or dates as may be necessary to delay its effective date until
the registrant shall file a further amendment which specifically
states that this registration statement shall thereafter become
effective in accordance with Section 8(a) of the Securities Act of
1933 or until the registration statement shall become effective on
such date as the Commission, acting pursuant to said Section 8(a),
may determine.
The information in this prospectus is not complete and may be
changed. The securities may not be sold until the registration
statement filed with the Securities and Exchange Commission is
declared effective. This prospectus is not an offer to sell these
securities and it is not soliciting an offer to buy these
securities in any state where the offer or sale is not
permitted.
Subject to Completion, dated December 10,
2018.
PROSPECTUS
$100,000,000
Class A Common Stock
Preferred Stock
Debt Securities
Warrants
Units
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We may
offer and sell up to $100,000,000 in the aggregate of the
securities identified above from time to time in one or more
offerings. This prospectus provides you with a general description
of the securities.
Each
time we offer and sell securities, we will provide a supplement to
this prospectus that contains specific information about the
offering and the amounts, prices and terms of the securities. The
supplement may also add, update or change information contained in
this prospectus with respect to that offering. You should carefully
read this prospectus and the applicable prospectus supplement
before you invest in any of our securities.
We may
offer and sell the securities described in this prospectus and any
prospectus supplement to or through one or more underwriters,
dealers and agents, or directly to purchasers, or through a
combination of these methods. If any underwriters, dealers or
agents are involved in the sale of any of the securities, their
names and any applicable purchase price, fee, commission or
discount arrangement between or among them will be set forth, or
will be calculable from the information set forth, in the
applicable prospectus supplement. For more information, please see
“About This Prospectus” and “Plan of
Distribution” in this prospectus. No securities may be sold
without delivery of this prospectus and the applicable prospectus
supplement describing the method and terms of the offering of the
securities.
Our
Class A common stock is listed on the Nasdaq Global Market
under the symbol “ACMR”.
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Investing in these securities involves significant risks. See
“Risk Factors” included in any accompanying prospectus
supplement and in the documents incorporated by reference in this
prospectus for a discussion of the factors you should carefully
consider before deciding to purchase these securities.
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Neither the Securities and Exchange Commission nor any state
securities commission has approved or disapproved of these
securities or passed upon the adequacy or accuracy of this
prospectus. Any representation to the contrary is a criminal
offense.
The
date of this prospectus is , 201 .
TABLE OF CONTENTS
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ABOUT THIS PROSPECTUS
This
prospectus is part of a registration statement that we filed with
the Securities and Exchange Commission, or SEC, using a
“shelf” registration process. By using a shelf
registration statement, we may sell securities from time to time in
one or more offerings of up to a total of $100,000,000, as
described in this prospectus. Each time that we offer and sell
securities, we will provide a prospectus supplement to this
prospectus that contains specific information about the securities
being offered and sold and the specific terms of that offering. We
may also authorize one or more free writing prospectuses to be
provided to you that may contain material information relating to
these offerings. The prospectus supplement or free writing
prospectus may also add, update or change information contained in
this prospectus with respect to that offering. If there is any
inconsistency between the information in this prospectus and the
applicable prospectus supplement or free writing prospectus, you
should rely on the prospectus supplement or free writing
prospectus, as applicable. Before purchasing any securities, you
should carefully read both this prospectus and the applicable
prospectus supplement (and any applicable free writing
prospectuses), together with the additional information described
under the heading “Where You Can Find More
Information.”
We have
not authorized anyone to provide you with any information or to
make any representations other than those contained in this
prospectus, any applicable prospectus supplement or any free
writing prospectuses prepared by or on behalf of us or to which we
have referred you. We take no responsibility for, and can provide
no assurance as to the reliability of, any other information that
others may give you. We will not make an offer to sell these
securities in any jurisdiction where the offer or sale is not
permitted. You should assume that the information appearing in this
prospectus and the applicable prospectus supplement to this
prospectus is accurate only as of the date on its respective cover,
that the information appearing in any applicable free writing
prospectus is accurate only as of the date of that free writing
prospectus, and that any information incorporated by reference is
accurate only as of the date of the document incorporated by
reference, unless we indicate otherwise. Our business, financial
condition, results of operations and prospects may have changed
since those dates. This prospectus incorporates by reference, and
any prospectus supplement or free writing prospectus may contain
and incorporate by reference, market data and industry statistics,
estimates and projections that are based on independent industry
publications and other publicly available information. Although we
believe these sources are reliable, we do not guarantee the
accuracy or completeness of this information and we have not
independently verified this information. In addition, the market
and industry data and forecasts that may be included or
incorporated by reference in this prospectus, any prospectus
supplement or any applicable free writing prospectus may involve
estimates, assumptions and other risks and uncertainties and are
subject to change based on various factors, including those
discussed under the heading “Risk Factors” contained in
this prospectus, the applicable prospectus supplement and any
applicable free writing prospectus, and under similar headings in
other documents that are incorporated by reference into this
prospectus. Accordingly, investors should not place undue reliance
on this information.
References
in this prospectus to “our company,” “our,”
“us,” “we” and similar terms refer to ACM
Research, Inc. (including its predecessor prior to its
redomestication from California to Delaware in November 2016)
and not, unless the context otherwise requires, subsidiaries of ACM
Research, Inc.
Our
logo design is one of our trademarks. This prospectus also includes
trademarks, tradenames, and service marks that are the property of
other organizations. For convenience, our logo appears in this
prospectus without the ™ symbol, but those uses are not
intended to indicate that we will not assert, to the fullest extent
under applicable law, our rights to this trademark.
1
WHERE YOU CAN FIND MORE
INFORMATION
Available Information
We file
reports, proxy statements and other information with the SEC.
Information filed with the SEC by us can be inspected and copied at
the Public Reference Room maintained by the SEC at 100 F Street,
N.E., Washington, D.C. 20549. You may also obtain copies of this
information by mail from the Public Reference Room of the SEC at
prescribed rates. Further information on the operation of the
SEC’s Public Reference Room in Washington, D.C. can be
obtained by calling the SEC at 1-800-SEC-0330. The SEC also
maintains a website at www.sec.gov that contains reports,
proxy and information statements and other information about
issuers, such as us, who file electronically with the
SEC.
Our
website address is www.acmrcsh.com. The information on our
website, however, is not, and should not be deemed to be, a part of
this prospectus or any prospectus supplement. We have included our
website address as an inactive textual reference only.
This
prospectus and any prospectus supplement are part of a registration
statement that we filed with the SEC and do not contain all of the
information in the registration statement. The full registration
statement may be obtained from the SEC or us, as provided below.
Forms of the indenture and other documents establishing the terms
of the offered securities are or may be filed as exhibits to the
registration statement or documents incorporated by reference in
the registration statement. Statements in this prospectus or any
prospectus supplement about these documents are summaries and each
statement is qualified in all respects by reference to the document
to which it refers. You should refer to the actual documents for a
more complete description of the relevant matters. You may inspect
a copy of the registration statement at the SEC’s Public
Reference Room in Washington, D.C. or through the SEC’s
website, as provided above.
Incorporation by Reference
The
SEC’s rules allow us to “incorporate by
reference” information into this prospectus, which means that
we can disclose important information to you by referring you to
another document filed separately with the SEC. The information
incorporated by reference is deemed to be part of this prospectus,
and subsequent information that we file with the SEC will
automatically update and supersede that information. Any statement
contained in this prospectus or a previously filed document
incorporated by reference will be deemed to be modified or
superseded for purposes of this prospectus to the extent that a
statement contained in this prospectus or a subsequently filed
document incorporated by reference modifies or replaces that
statement.
We
incorporate by reference our documents listed below and any future
filings made by us with the SEC under Section 13(a), 13(c), 14
or 15(d) of the Securities Exchange Act of 1934, or the Exchange
Act, between the date of this prospectus and the termination of the
offering of the securities described in this prospectus. We are
not, however, incorporating by reference any documents or portions
thereof, whether specifically listed below or filed in the future,
that are not deemed “filed” with the SEC, including any
Compensation Committee report and performance graph or any
information furnished pursuant to Item 2.02 or 7.01 of Form 8-K or
related exhibits furnished pursuant to Item 9.01 of Form
8-K.
This
prospectus and any accompanying prospectus supplement incorporate
by reference the documents set forth below that have previously
been filed with the SEC:
●
our Annual Report
on Form 10-K for the year ended December 31, 2017, filed with the
SEC on March 23, 2018.
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the information
specifically incorporated by reference into our Annual Report on
Form 10-K for the year ended December 31, 2017, from our Definitive
Proxy Statement on Schedule 14A, filed with the SEC on May 4,
2018.
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our Quarterly
Reports on Form 10-Q, as amended, for the quarters ended March 31,
2018, June 30, 2018 and September 30, 2018, filed with the SEC on
May 14, 2018 (as amended on October 15, 2018), August 9,
2018 (as amended on October 15, 2018) and November 14, 2018,
respectively. and
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●
our Current Reports
on Form 8-K filed with the SEC on January 16, 2018, January
22, 2018, May 1, 2018, June 20, 2018 and July 3,
2018.
All
reports and other documents we subsequently file pursuant to
Section 13(a), 13(c), 14 or 15(d) of the Exchange Act prior to the
termination of this offering, including all such documents we may
file with the SEC after the date of the initial registration
statement and prior to the effectiveness of the registration
statement, but excluding any information furnished to, rather than
filed with, the SEC, will also be incorporated by reference into
this prospectus and deemed to be part of this prospectus from the
date of the filing of such reports and documents.
You may
request a free copy of any of the documents incorporated by
reference in this prospectus by writing or telephoning us at the
following address:
ACM
Research, Inc.
42307 Osgood Road, Suite I
Fremont, California
(510) 445-3700
Attention: Investor Relations
Exhibits
to the filings will not be sent, unless those exhibits have been
specifically incorporated by reference in this prospectus or any
accompanying prospectus supplement.
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ABOUT OUR COMPANY
We, and
our subsidiaries, primarily develop, manufacture and sell
single-wafer wet cleaning equipment, which semiconductor
manufacturers can use in numerous manufacturing steps to remove
particles, contaminants and other random defects, and thereby
improve product yield, in fabricating advanced integrated
circuits.
We
incorporated in California in January 1998 and redomesticated in
Delaware in November 2016. Our headquarters are located at 42307
Osgood Road, Suite I, Fremont, California 94539, where our
telephone number is (510) 445-3700.
RISK FACTORS
Investment
in any securities offered pursuant to this prospectus and the
applicable prospectus supplement involves risks. Before acquiring
any of such securities, you should carefully consider the risk
factors incorporated by reference to our most recent Annual Report
on Form 10-K and any subsequent Quarterly Reports on Form 10-Q or
Current Reports on Form 8-K filed by us, and all other information
contained or incorporated by reference into this prospectus, as
updated by our filings under the Exchange Act, and the risk factors
and other information contained in the applicable prospectus
supplement and any applicable free writing prospectus. The
occurrence of any of these risks might cause you to lose all or
part of your investment in the offered securities.
USE OF PROCEEDS
We
intend to use the net proceeds from the sale of securities as set
forth in the applicable prospectus supplement.
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DESCRIPTION OF CAPITAL
STOCK
General
As of
December 1, 2018, our authorized capital stock consisted of
50,000,000 shares of Class A common stock, $0.0001 par value
per share, 2,409,738 shares of Class B common stock, $0.0001
par value per share, and 10,000,000 shares of preferred stock,
$0.0001 par value per share. Class A common stock and
Class B common stock are referred to collectively as common
stock.
The
following summary describes our capital stock, including material
provisions of our charter, our bylaws and Delaware law. Because the
following is only a summary, it does not contain all of the
information that may be important to you. For a complete
description, you should refer to our charter and bylaws, copies of
which are incorporated by reference as exhibits to the registration
statement of which this prospectus is a part.
Common Stock
Outstanding Shares and Options
As of
December 1, 2018, there were:
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14,085,315 shares
of Class A common stock outstanding, held of record by 88
stockholders;
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3,739,503 shares of
Class A common stock issuable upon exercise of outstanding
stock options; and
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1,918,423 shares
of Class B common stock outstanding, held of record by 35
stockholders.
Authorized
but unissued shares of Class B common stock are not available
for reissuance. The actual number of stockholders is greater than
the number of record holders and includes stockholders who are
beneficial owners but whose shares are held in street name by
brokers and other nominees. This number of holders of record also
does not include stockholders whose shares may be held in trust by
other entities.
Voting Rights
Except
as otherwise required by Delaware law, at every annual or special
meeting of stockholders, holders of Class B common stock are
entitled to 20 votes per share and holders of Class A common
stock are entitled to one vote per share. The holders of
Class A common stock and Class B common stock vote
together as a single class, unless otherwise required by law.
Delaware law could require either holders of Class A common
stock or Class B common stock to vote separately as a single
class in the following circumstances:
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if we were to seek
to amend our charter to increase the authorized number of shares of
a class of stock, or to increase or decrease the per share par
value of a class of stock, then that class would be required to
vote separately to approve the proposed amendment;
●
if we were to seek
to amend our charter in a manner that alters or changes the powers,
preferences or special rights of a class of stock in a manner that
affected its holders adversely, then that class would be required
to vote separately to approve the proposed amendment;
and
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if we were to seek
to declare a dividend or distribution that would be disparate as
between the two classes.
Stockholders
do not have the ability to cumulate votes for the election of
directors. Our charter and bylaws provide for a classified board of
directors consisting of three classes of approximately equal size,
each serving staggered three-year terms, when the outstanding
shares of Class B common stock represent less than a majority
of the combined voting power of the common stock. Our directors
will be assigned by the then-current board to a class when the
outstanding shares of Class B common stock represent less than
a majority of the combined voting power of the common
stock.
Dividends
Subject
to preferences that may be applicable to any then outstanding
preferred stock, the holders of our outstanding shares of common
stock are entitled to receive dividends, if any, as may be declared
from time to time by the board of directors out of legally
available funds. The holders of Class A common stock and
Class B common stock are entitled to share equally,
identically and ratably, on a per share basis, with respect to any
dividend or distribution unless different treatment of the shares
of each such class is approved by the affirmative vote of the
holders of a majority of the outstanding shares of Class A
common stock and Class B common stock, each voting separately
as a class. At present, we have no plans to issue
dividends.
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Liquidation
In the
event of our liquidation, dissolution or winding up, holders of
common stock will be entitled to share ratably in the net assets
legally available for distribution to stockholders after the
payment of all of our debts and other liabilities, subject to the
satisfaction of any liquidation preference granted to the holders
of any outstanding shares of preferred stock.
Conversion
Each
outstanding share of Class B common stock is convertible into
one share of Class A common stock (a) at any time, at the
option of the holder, or (b) upon any transfer of such share
of Class B common stock, whether or not for value, except for
certain transfers described in our charter, including transfers to
family members, trusts solely for the benefit of the stockholder or
their family members, and partnerships, corporations, and other
entities exclusively owned by the stockholder or their family
members. In addition, on or after the date of this prospectus, all
outstanding shares of Class B common stock will convert
automatically into shares of Class A common stock, on a one
for one basis, upon (a) the election of the holders of a
majority of the then outstanding shares of Class B common
stock or (b) on the first December 31 that occurs more
than five years after the date of this prospectus if the October
Market Cap with respect to the month of October immediately
preceding such December 31 exceeds $1.0 billion, provided
that the conversion provided by this clause (b) shall not
apply and no automatic conversion of Class B common stock into
Class A common stock will ever occur pursuant to this clause
(b) if the October Market Cap for the month of October
immediately preceding a December 31 exceeds $1.0 billion
prior to the fifth anniversary of the date of this prospectus. For
purposes of this paragraph, “October Market Cap” means,
with respect to any October throughout which Class A common
stock is traded on a registered securities exchange, the product of
the average of the daily volume weighted average trading prices of
Class A common stock for each of the days in such month of
October multiplied by the number of shares of common stock
outstanding on the last trading day of such month of October. Once
converted or transferred and converted into Class A common
stock, shares of Class B common stock will not be
reissued.
Other Rights and Preferences
Other
than as described above, holders of common stock have no
preemptive, conversion or subscription rights, and there are no
redemption or sinking fund provisions applicable to common stock.
The rights, preferences and privileges of the holders of common
stock are subject to, and may be adversely affected by, the rights
of the holders of shares of any series of preferred stock that we
may designate and issue in the future.
Preferred Stock
Under the terms of our charter, the board of directors
is authorized to issue up to 10,000,000 shares of preferred stock
in one or more series, to establish the number of shares to be
included in each such series, and to fix the designation, powers,
preferences and rights of such shares and any qualifications,
limitations or restrictions thereof. These rights, preferences and
privileges could include dividend rights, conversion rights, voting
rights, terms of redemption, liquidation preferences, sinking fund
terms and other provisions, any or all of which may be greater than
the rights of common stock. The issuance of preferred stock with
voting and conversion rights may adversely affect the voting power
of the holders of common stock, including the loss of voting
control to others, and the likelihood that such holders will
receive dividend payments and payments upon our liquidation. In
addition, the issuance of preferred stock could have the effect of
delaying, deferring or preventing a change in control of our
company or other corporate action.
Registration Rights
Under
our registration rights agreement with certain of our stockholders,
based on the number of shares outstanding as of December 1, 2018,
stockholders, or their transferees, have the right, under specified
circumstances, to require us to register from time to time under
the Securities Act of 1933, or the Securities Act, up to 2,950,697
shares of Class A common stock.
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The
following description of the terms of the registration rights
agreement is intended as a summary only and is qualified in its
entirety by reference to the registration rights agreement filed
with the SEC on and is incorporated by reference as an exhibit to
the registration statement of which this prospectus is a
part.
●
Demand Registration Rights. Any time at
least 90 days after the date of this prospectus, on no more than
four occasions and no more than one occasion in any six-month
period, Xinxin (Hongkong) Capital Co., Limited and Victorious Way
Limited will have the right to request that we register with the
SEC (a) on a registration statement on Form S-1, (i) all or a
portion of the shares registrable under the registration rights
agreement reasonably anticipated to have an aggregate offering
price of at least $7,500,000 or (ii) all of the registrable shares
then held by Xinxin (Hongkong) Capital Co., Limited and Victorious
Way Limited or (b) on a registration statement on Form S-3, (i) all
or a portion of the shares registrable under the registration
rights agreement reasonably anticipated to have an aggregate
offering price of at least $3,750,000 or (ii) all of the
registrable shares then held by Xinxin (Hongkong) Capital Co.,
Limited and Victorious Way Limited. Following such a request, the
other holders of registrable shares will have the right to request
that we include in such registration statement all or a portion of
their registrable shares. Such demand registration rights are held
by Xinxin (Hongkong) Capital Co., Limited and Victorious Way
Limited and granting demand registration rights to any other
holders will require the consent of Xinxin (Hongkong) Capital Co.,
Limited and Victorious Way Limited.
●
Incidental Registration Rights. If we
propose to register shares of Class A common stock under the
Securities Act on a form that may be used for the registration of
eligible shares, the holders may request that we register all or a
portion of the eligible shares they held by them.
In the
event that any registration in which the holders of eligible shares
participate pursuant to the registration rights agreement is an
underwritten public offering, the number of eligible shares to be
included may, in specified circumstances, be limited due to market
conditions. If the underwriter determines that less than all of the
eligible shares proposed to be sold can be included in such
offering, then eligible shares held by executive officers shall
only be included in such offering if all the holders that are not
executive officers are able to register all of the eligible shares
proposed to be sold in such registration.
Under
the registration rights agreement, we generally are required to pay
all registration expenses other than underwriting discounts and
selling commissions and we are required to indemnify each
participating holder with respect to each registration of eligible
shares that is completed.
For
further information on our registration rights agreement, you
should refer to second amended and restated registration rights
agreement, a copy of which is incorporated by reference as an
exhibit to the registration statement of which this prospectus is a
part.
Anti-Takeover Provision
So long
as the outstanding shares of Class B common stock represent a
majority of the combined voting power of common stock, the holders
of Class B common stock will effectively control all matters
submitted to our stockholders for a vote, as well as the overall
management and direction of our company, which will have the effect
of delaying, deferring or discouraging another person from
acquiring control of our company.
After
such time as the shares of Class B common stock no longer
represent a majority of the combined voting power of common stock,
the provisions of Delaware law, and our charter and our bylaws may
have the effect of delaying, deferring or discouraging another
person from acquiring control of our company.
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Delaware Law
Section 203
of the Delaware General Corporation Law prevents some Delaware
corporations from engaging, under some circumstances, in a business
combination, which includes a merger or sale of at least 10% of the
corporation’s assets with any interested stockholder, meaning
a stockholder who, together with affiliates and associates, owns
or, within three years prior to the determination of interested
stockholder status, did own 15% or more of the corporation’s
outstanding voting stock, unless:
●
the transaction is
approved by the board of directors prior to the time that the
interested stockholder became an interested
stockholder;
●
upon consummation
of the transaction, which resulted in the stockholder’s
becoming an interested stockholder, the interested stockholder
owned at least 85% of the voting stock of the corporation
outstanding at the time the transaction commenced, excluding stock
owned by directors who are also officers of the
corporation; or
●
subsequent to such
time that the stockholder became an interested stockholder the
business combination is approved by the board and authorized at an
annual or special meeting of stockholders by at least two-thirds of
the outstanding voting stock that is not owned by the interested
stockholder.
A
Delaware corporation may “opt out” of these provisions
with an express provision in its original charter or an express
provision in its charter or bylaws resulting from a
stockholders’ amendment approved by at least a majority of
the outstanding voting shares. We have not opted out of these
provisions. As a result, mergers or other takeover or change in
control attempts of us may be discouraged or
prevented.
Charter and Bylaw Provisions
Our
charter and bylaws include a number of provisions that may have the
effect of deterring hostile takeovers or delaying or preventing
changes in control of our company, even after such time as the
shares of Class B common stock no longer represent a majority
of the combined voting power of common stock, including the
following:
●
Separate Class B Vote for Certain
Transactions. Until the first date on which the outstanding
shares of Class B common stock represent less than 35% of the
combined voting power of common stock, any transaction that would
result in a change in control of our company will require the
approval of a majority of our outstanding Class B common stock
voting as a separate class. This provision could delay or prevent
the approval of a change in control that might otherwise be
approved by a majority of outstanding shares of Class A and
Class B common stock, voting together on a combined
basis.
●
Dual Class Stock. As described
above in “—Common Stock—Voting Rights,” our
charter provides for a dual class common stock structure, which
provides certain members of our senior management with the ability
to control the outcome of matters requiring stockholder approval,
even if they collectively own significantly less than a majority of
the shares of our outstanding Class A and Class B common
stock, including the election of directors and significant
corporate transactions, such as a merger or other sale of our
company or its assets.
●
Supermajority Approvals. Our charter
and bylaws provide that when the outstanding shares of Class B
common stock represent less than a majority of the combined voting
power of common stock, certain amendments to our charter or bylaws
will require the approval of two-thirds of the combined vote of our
then-outstanding shares of Class A and Class B common
stock. This will have the effect of making it more difficult to
amend our charter or bylaws to remove or modify certain
provisions.
●
Board of Directors Vacancies. Our
charter and bylaws provide that stockholders may fill vacant
directorships. When the outstanding shares of Class B common
stock represent less than a majority of the combined voting power
of common stock, our charter and bylaws authorize only the board of
directors to fill vacant directorships. In addition, the number of
directors constituting the board is set only by resolution adopted
by a majority vote of our entire board. These provisions
restricting the filling of vacancies will prevent a stockholder
from increasing the size of the board and gaining control of the
board by filling the resulting vacancies with its own nominees. Our
charter provides that directors may be removed with or without
cause only by the affirmative vote of the holders of at least
two-thirds of the votes that all of the stockholders would be
entitled to cast in any annual election of directors.
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●
Classified Board. The board of
directors is not currently classified. Our charter and bylaws
provide that when outstanding shares of Class B common stock
represent less than a majority of the combined voting power of
common stock, the board will be classified into three classes of
directors, each of which will hold office for a three-year term. In
addition, thereafter, directors may be removed from the board with
or without cause only by the affirmative vote of the holders of at
least two-thirds of the voting power of the then-outstanding shares
of Class A and Class B common stock. The existence of a
classified board could delay a successful tender offeror from
obtaining majority control of the board, and the prospect of that
delay might deter a potential offeror.
●
Stockholder Action; Special Meeting of
Stockholders. Our charter provides that stockholders will be
able to take action by written consent. When the outstanding shares
of Class B common stock represent less than a majority of the
combined voting power of common stock, our stockholders will no
longer be able to take action by written consent, and will only be
able to take action at annual or special meetings of our
stockholders. Stockholders will not be permitted to cumulate their
votes for the election of directors. The absence of cumulative
voting may make it more difficult for stockholders who own less
than a majority in voting power to elect any directors to the board
of directors. Our bylaws further provide that special meetings of
our stockholders may be called only by the board, the chair of the
board or our chief executive officer. A stockholder may not call a
special meeting, which may delay the ability of our stockholders to
force consideration of a proposal or for holders controlling a
majority in voting power of our capital stock to take any action,
including the removal of director.
●
Advance Notice Requirements for Stockholder
Proposals and Director Nominations. Our bylaws provide
advance notice procedures for stockholders seeking to bring
business before our annual meeting of stockholders, or to nominate
candidates for election as directors at any meeting of
stockholders. Our bylaws also specify certain requirements
regarding the form and content of a stockholder’s notice.
These provisions may preclude our stockholders from bringing
matters before our annual meeting of stockholders or from making
nominations for directors at our meetings of
stockholders.
●
Issuance of Undesignated Preferred
Stock. The board of directors has the authority, without
further action by the stockholders, to issue shares of undesignated
preferred stock with rights and preferences, including voting
rights, designated from time to time by the board. The existence of
authorized but unissued shares of preferred stock enables the board
to render more difficult or to discourage an attempt to obtain
control of us by means of a merger, tender offer, proxy contest or
otherwise.
Choice of Forum
Our
charter provides that the Court of Chancery of the State of
Delaware will be the exclusive forum for: any derivative action or
proceeding brought on our behalf; any action asserting a breach of
fiduciary duty; any action asserting a claim against us arising
pursuant to the Delaware General Corporation Law, or our charter or
bylaws; any action to interpret, apply, enforce, or determine the
validity of our charter or bylaws; or any action asserting a claim
against us that is governed by the internal affairs doctrine. The
enforceability of similar choice of forum provisions in other
companies’ certificates of incorporation has been challenged
in legal proceedings, and it is possible that a court could find
these types of provisions to be inapplicable or
unenforceable.
Transfer Agent and Registrar
The
transfer agent and registrar for our common stock is Computershare
Trust Company, N.A.
Nasdaq Global Market
The
Class A common stock is listed on the Nasdaq Global Market
under the symbol “ACMR.”
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DESCRIPTION OF DEBT
SECURITIES
We may
offer debt securities that are senior or subordinated. We refer to
senior debt securities and subordinated debt securities
collectively as debt securities. The following description
summarizes the general terms and provisions of the debt securities.
We will describe the specific terms of the debt securities and the
extent, if any, to which the general provisions summarized below
apply to any series of debt securities in the prospectus supplement
relating to the series and any applicable free writing prospectus
that we authorize to be delivered.
We may
issue senior debt securities from time to time, in one or more
series, under a senior indenture to be entered into between us and
a senior trustee to be named in a prospectus supplement, which we
refer to as the senior trustee. We may issue subordinated debt
securities from time to time, in one or more series, under a
subordinated indenture to be entered into between us and a
subordinated trustee to be named in a prospectus supplement, which
we refer to as the subordinated trustee. The forms of senior
indenture and subordinated indenture will be either filed as
exhibits to the registration statement of which this prospectus
forms a part or filed as exhibits to a Current Report on Form 8-K
and incorporated by reference in such registration statement. The
senior indenture and the subordinated indenture are referred to
individually as an indenture and together as the indentures, and
the senior trustee and the subordinated trustee are referred to
individually as a trustee and together as the trustees. This
section summarizes some of the provisions of the indentures and is
qualified in its entirety by the specific text of the indentures,
including definitions of terms used in the indentures. Wherever we
refer to particular sections of, or defined terms in, the
indentures, those sections or defined terms are incorporated by
reference in this prospectus or the applicable prospectus
supplement. You should review the indentures that are filed as
exhibits to the registration statement of which this prospectus
forms a part for additional information.
Neither
indenture will limit the amount of debt securities that we may
issue. The applicable indenture will provide that debt securities
may be issued up to an aggregate principal amount authorized from
time to time by us and may be payable in any currency or currency
unit designated by us or in amounts determined by reference to an
index.
General
The
senior debt securities will constitute our unsecured and
unsubordinated general obligations and will rank equally in right
of payment with our other unsecured and unsubordinated obligations.
The subordinated debt securities will constitute our unsecured and
subordinated general obligations and will be junior in right of
payment to our senior indebtedness (including senior debt
securities), as described under the heading “—Certain
Terms of Subordinated Debt Securities—Subordination.”
The debt securities will be structurally subordinated to all
existing and future indebtedness and other liabilities of our
subsidiaries unless such subsidiaries expressly guarantee such debt
securities. Because the debt securities will be our unsecured
obligations, any secured debt or other secured obligations will be
effectively senior to the debt securities to the extent of the
value of the assets securing such debt or other
obligations.
The
applicable prospectus supplement and/or free writing prospectus
will include any additional or different terms of the debt
securities of any series being offered, including the following
terms:
●
the title and type
of the debt securities.
●
whether the debt
securities will be senior or subordinated debt securities, and,
with respect to any subordinated debt securities the terms on which
they are subordinated.
●
the initial
aggregate principal amount of the debt securities.
●
the price or prices
at which we will sell the debt securities.
●
the maturity date
or dates of the debt securities and the right, if any, to extend
such date or dates.
●
the rate or rates,
if any, at which the debt securities will bear interest, or the
method of determining such rate or rates.
●
the date or dates
from which such interest will accrue, the interest payment dates on
which such interest will be payable or the method of determination
of such dates.
10
●
the right, if any,
to extend the interest payment periods and the duration of that
extension.
●
the manner of
paying principal and interest and the place or places where
principal and interest will be payable.
●
provisions for a
sinking fund, purchase fund or other analogous fund, if
any.
●
any redemption
dates, prices, obligations and restrictions on the debt
securities.
●
the currency,
currencies or currency units in which the debt securities will be
denominated and the currency, currencies or currency units in which
principal and interest, if any, on the debt securities may be
payable.
●
any conversion or
exchange features of the debt securities.
●
whether the debt
securities will be subject to the defeasance provisions in the
indenture.
●
whether the debt
securities will be issued in definitive or global form or in
definitive form only upon satisfaction of certain
conditions.
●
whether the debt
securities will be guaranteed as to payment or
performance.
●
any special tax
implications of the debt securities.
●
any events of
default or covenants in addition to or in lieu of those set forth
in the indenture. and
●
any other material
terms of the debt securities.
When we
refer to “principal” in this section with reference to
debt securities, we are also referring to premium, if
any.
We may
from time to time, without notice to or the consent of the holders
of any series of debt securities, create and issue further debt
securities of any such series ranking equally with the debt
securities of such series in all respects (or in all respects other
than (1) the payment of interest accruing prior to the issue date
of such further debt securities or (2) the first payment of
interest following the issue date of such further debt securities).
Such further debt securities may be consolidated and form a single
series with the debt securities of such series and have the same
terms as to status, redemption or otherwise as the debt securities
of such series.
Holders
may present debt securities for exchange and may present debt
securities for transfer in the manner, at the places and subject to
the restrictions set forth in the debt securities and the
applicable prospectus supplement. We will provide those services
without charge, although a holder may have to pay any tax or other
governmental charge payable in connection with any exchange or
transfer, as set forth in the indenture.
Debt
securities may bear interest at a fixed rate or a floating rate.
Debt securities bearing no interest or interest at a rate that at
the time of issuance is below the prevailing market rate (original
issue discount securities) may be sold at a discount below their
stated principal amount. U.S. federal income tax considerations
applicable to any such discounted debt securities or to certain
debt securities issued at par that are treated as having been
issued at a discount for U.S. federal income tax purposes will be
described in the applicable prospectus supplement.
We may
issue debt securities with the principal amount payable on any
principal payment date, or the amount of interest payable on any
interest payment date, to be determined by reference to one or more
currency exchange rates, securities or baskets of securities,
commodity prices or indices. You may receive a payment of principal
on any principal payment date, or a payment of interest on any
interest payment date, that is greater than or less than the amount
of principal or interest otherwise payable on such dates, depending
on the value on such dates of the applicable currency, security or
basket of securities, commodity or index. Information as to the
methods for determining the amount of principal or interest payable
on any date, the currencies, securities or baskets of securities,
commodities or indices to which the amount payable on such date is
linked and certain related tax considerations will be set forth in
the applicable prospectus supplement.
11
Certain Terms of Senior Debt Securities
Covenants
Unless
we indicate otherwise in a prospectus supplement with respect to a
particular series of senior debt securities, the senior debt
securities will not contain any financial or restrictive covenants,
including covenants restricting either us or any of our
subsidiaries from incurring, issuing, assuming or guaranteeing any
indebtedness secured by a lien on any of our or our
subsidiaries’ property or capital stock, or restricting
either us or any of our subsidiaries from entering into sale and
leaseback transactions.
Consolidation, Merger and Sale of Assets
Unless
we indicate otherwise in a prospectus supplement with respect to a
particular series of senior debt securities, we may not consolidate
with or merge into any other person, in a transaction in which we
are not the surviving corporation, or convey, transfer or lease our
properties and assets substantially as an entirety to any person,
in either case, unless:
●
the successor
entity, if any, is a U.S. corporation, limited liability company,
partnership or trust.
●
the successor
entity assumes our obligations on the senior debt securities and
under the senior indenture.
●
immediately after
giving effect to the transaction, no default or event of default
shall have occurred and be continuing. and
●
we have delivered
to the senior trustee an officer’s certificate and an opinion
of counsel, each stating that the consolidation, merger,
conveyance, transfer or lease and, if a supplemental indenture is
required in connection with such transaction, such supplemental
indenture, comply with the senior indenture and all conditions
precedent provided for in the senior indenture relating to such
transaction have been complied with.
The
restrictions described in the bullets above do not apply (1) to our
consolidation with or merging into one of our affiliates, if our
board of directors determines in good faith that the purpose of the
consolidation or merger is principally to change our state of
incorporation or our form of organization to another form or (2) if
we merge with or into a single direct or indirect wholly-owned
subsidiary of ours.
The
surviving business entity will succeed to, and be substituted for,
us under the senior indenture and the senior debt securities and,
except in the case of a lease, we shall be released from all
obligations under the senior indenture and the senior debt
securities.
No Protection in the Event of a Change in Control
Unless
we indicate otherwise in a prospectus supplement with respect to a
particular series of senior debt securities, the senior debt
securities will not contain any provisions that may afford holders
of the senior debt securities protection in the event we have a
change in control or in the event of a highly leveraged transaction
(whether or not such transaction results in a change in
control).
Events of Default
Unless
we indicate otherwise in a prospectus supplement with respect to a
particular series of senior debt securities, the following are
events of default under the senior indenture with respect to senior
debt securities of each series:
●
failure to pay
interest on any senior debt securities of such series when due and
payable, if that default continues for a period of 30 days (or such
other period as may be specified for such series).
●
failure to pay
principal on the senior debt securities of such series when due and
payable whether at maturity, upon redemption, by declaration or
otherwise (and, if specified for such series, the continuance of
such failure for a specified period).
12
●
default in the
performance of or breach of any of our covenants or agreements in
the senior indenture applicable to senior debt securities of such
series, other than a covenant breach that is specifically dealt
with elsewhere in the senior indenture, and that default or breach
continues for a period of 90 days after we receive written notice
from the trustee or from the holders of 25% or more in aggregate
principal amount of the senior debt securities of such
series.
●
certain events of
bankruptcy or insolvency, whether or not voluntary.
and
●
any other event of
default provided for in such series of senior debt securities as
may be specified in the applicable prospectus
supplement.
The
default by us under any other debt, including any other series of
debt securities, is not a default under the senior
indenture.
If an
event of default other than an event of default specified in the
fourth bullet point above occurs with respect to a series of senior
debt securities and is continuing under the senior indenture, then,
and in each such case, either the trustee or the holders of not
less than 25% in aggregate principal amount of such series then
outstanding under the senior indenture (each such series voting as
a separate class) by written notice to us and to the trustee, if
such notice is given by the holders, may, and the trustee at the
request of such holders shall, declare the principal amount of and
accrued interest on such series of senior debt securities to be
immediately due and payable, and upon this declaration, the same
shall become immediately due and payable.
If an
event of default specified in the fourth bullet point above occurs
and is continuing, the entire principal amount of and accrued
interest on each series of senior debt securities then outstanding
shall automatically become immediately due and
payable.
Unless
otherwise specified in the prospectus supplement relating to a
series of senior debt securities originally issued at a discount,
the amount due upon acceleration shall include only the original
issue price of the senior debt securities, the amount of original
issue discount accrued to the date of acceleration and accrued
interest, if any.
Upon
certain conditions, declarations of acceleration may be rescinded
and annulled and past defaults may be waived by the holders of a
majority in aggregate principal amount of all the senior debt
securities of such series affected by the default, each series
voting as a separate class. Furthermore, subject to various
provisions in the senior indenture, the holders of a majority in
aggregate principal amount of a series of senior debt securities,
by notice to the trustee, may waive a continuing default or event
of default with respect to such senior debt securities and its
consequences, except a default in the payment of principal of or
interest on such senior debt securities (other than any such
default in payment resulting solely from an acceleration of the
senior debt securities) or in respect of a covenant or provision of
the senior indenture that cannot be modified or amended without the
consent of the holders of each such senior debt security. Upon any
such waiver, such default shall cease to exist, and any event of
default with respect to such senior debt securities shall be deemed
to have been cured, for every purpose of the senior indenture. but
no such waiver shall extend to any subsequent or other default or
event of default or impair any right consequent
thereto.
The
holders of a majority in aggregate principal amount of a series of
senior debt securities may direct the time, method and place of
conducting any proceeding for any remedy available to the trustee
or exercising any trust or power conferred on the trustee with
respect to such senior debt securities. However, the trustee may
refuse to follow any direction that conflicts with law or the
senior indenture, that may involve the trustee in personal
liability or that the trustee determines in good faith may be
unduly prejudicial to the rights of holders of such series of
senior debt securities not joining in the giving of such direction
and may take any other action it deems proper that is not
inconsistent with any such direction received from holders of such
series of senior debt securities. A holder may not pursue any
remedy with respect to the senior indenture or any series of senior
debt securities unless:
●
the holder gives
the trustee written notice of a continuing event of
default.
●
the holders of at
least 25% in aggregate principal amount of such series of senior
debt securities make a written request to the trustee to pursue the
remedy in respect of such event of default.
13
●
the requesting
holder or holders offer the trustee indemnity satisfactory to the
trustee against any costs, liability or expense.
●
the trustee does
not comply with the request within 60 days after receipt of the
request and the offer of indemnity. and
●
during such 60-day
period, the holders of a majority in aggregate principal amount of
such series of senior debt securities do not give the trustee a
direction that is inconsistent with the request.
These
limitations, however, do not apply to the right of any holder of a
senior debt security of any affected series to receive payment of
the principal of and interest on such senior debt security in
accordance with the terms of such debt security, or to bring suit
for the enforcement of any such payment in accordance with the
terms of such debt security, on or after the due date for the
senior debt securities, which right shall not be impaired or
affected without the consent of the holder.
The
senior indenture requires certain of our officers to certify, on or
before a fixed date in each year in which any senior debt security
is outstanding, as to their knowledge of our compliance with all
covenants, agreements and conditions under the senior
indenture.
Satisfaction and Discharge
We can
satisfy and discharge our obligations to holders of any series of
debt securities if:
●
we have paid or
caused to be paid the principal of and interest on all senior debt
securities of such series (with certain limited exceptions) when
due and payable. or
●
we deliver to the
senior trustee for cancellation all senior debt securities of such
series theretofore authenticated under the senior indenture (with
certain limited exceptions). or
●
all senior debt
securities of such series have become due and payable or will
become due and payable within one year (or are to be called for
redemption within one year under arrangements satisfactory to the
senior trustee) and we deposit in trust an amount of cash or a
combination of cash and U.S. government or U.S. government agency
obligations (or in the case of senior debt securities denominated
in a foreign currency, foreign government securities or foreign
government agency securities) sufficient to make interest,
principal and any other payments on the debt securities of that
series on their various due dates. or
●
and if, in any such
case, we also pay or cause to be paid all other sums payable under
the senior indenture, as and when the same shall be due and
payable, and we deliver to the senior trustee an officer’s
certificate and an opinion of counsel, each stating that these
conditions have been satisfied.
Under
current U.S. federal income tax law, the deposit and our legal
release from the debt securities would be treated as though we took
back your debt securities and gave you your share of the cash and
debt securities or bonds deposited in trust. In that event, you
could recognize gain or loss on the debt securities you give back
to us. Purchasers of the debt securities should consult their own
advisers with respect to the tax consequences to them of such
deposit and discharge, including the applicability and effect of
tax laws other than the U.S. federal income tax law.
Defeasance
Unless
the applicable prospectus supplement provides otherwise, the
following discussion of legal defeasance and covenant defeasance
will apply to any series of debt securities issued under the
indentures.
Legal Defeasance. We can legally release ourselves from any
payment or other obligations on the debt securities of any series,
a procedure known as legal defeasance, if certain conditions are
met, including the following:
●
We deposit in trust
for your benefit and the benefit of all other direct holders of the
debt securities of the same series cash or a combination of cash
and U.S. government or U.S. government agency obligations (or, in
the case of senior debt securities denominated in a foreign
currency, foreign government or foreign government agency
obligations) that will generate enough cash to make interest,
principal and any other payments on the debt securities of that
series on their various due dates.
14
●
There is a change
in current U.S. federal income tax law or an IRS ruling that lets
us make the above deposit without causing you to be taxed on the
debt securities any differently than if we did not make the deposit
and instead repaid the debt securities ourselves when due. Under
current U.S. federal income tax law, the deposit and our legal
release from the debt securities would be treated as though we took
back your debt securities and gave you your share of the cash and
debt securities or bonds deposited in trust. In that event, you
could recognize gain or loss on the debt securities you give back
to us.
●
We deliver to the
trustee a legal opinion of our counsel confirming the tax law
change or ruling described above.
If we
accomplish legal defeasance, as described above, you would have to
rely solely on the trust deposit for repayment of the debt
securities. You could not look to us for repayment in the event of
any shortfall.
Covenant Defeasance. Without any change in current U.S.
federal tax law, we can make the same type of deposit described
above and be released from some of the covenants in the debt
securities, a procedure known as covenant defeasance. In that
event, you would lose the protection of those covenants but would
gain the protection of having money and securities set aside in
trust to repay the debt securities. In order to achieve covenant
defeasance, we must do the following (among other
things):
●
We must deposit in
trust for your benefit and the benefit of all other direct holders
of the debt securities of the same series cash or a combination of
cash and U.S. government or U.S. government agency obligations (or,
in the case of senior debt securities denominated in a foreign
currency, foreign government or foreign government agency
obligations) that will generate enough cash to make interest,
principal and any other payments on the debt securities of that
series on their various due dates.
●
We must deliver to
the trustee a legal opinion of our counsel confirming that under
current U.S. federal income tax law we may make the above deposit
without causing you to be taxed on the debt securities any
differently than if we did not make the deposit and instead repaid
the debt securities ourselves when due.
If we
accomplish covenant defeasance, you could still look to us for
repayment of the debt securities if there were a shortfall in the
trust deposit. In fact, if one of the events of default occurred
(such as our bankruptcy) and the debt securities become immediately
due and payable, there may be such a shortfall. Depending on the
events causing the default, you may not be able to obtain payment
of the shortfall.
Modification and Waiver
We and
the trustee may amend or supplement the senior indenture or the
senior debt securities of any series without the consent of any
holder to:
●
convey, transfer,
assign, mortgage or pledge any assets as security for the senior
debt securities of one or more series.
●
evidence the
succession of a corporation, limited liability company, partnership
or trust to us, and the assumption by such successor of our
covenants, agreements and obligations under the senior indenture or
to otherwise comply with the covenant relating to mergers,
consolidations and sales of assets.
●
comply with
requirements of the SEC in order to effect or maintain the
qualification of the senior indenture under the Trust Indenture Act
of 1939.
●
add to our
covenants such new covenants, restrictions, conditions or
provisions for the protection of the holders, and to make the
occurrence, or the occurrence and continuance, of a default in any
such additional covenants, restrictions, conditions or provisions
an event of default.
●
cure any ambiguity,
defect or inconsistency in the senior indenture or in any
supplemental indenture or to conform the senior indenture or the
senior debt securities to the description of senior debt securities
of such series set forth in this prospectus or any applicable
prospectus supplement.
●
provide for or add
guarantors with respect to the senior debt securities of any
series.
●
establish the forms
or terms of the senior debt securities as permitted by the senior
indenture.
15
●
evidence and
provide for the acceptance of appointment under the senior
indenture by a successor trustee, or to make such changes as shall
be necessary to provide for or facilitate the administration of the
trusts in the senior indenture by more than one
trustee.
●
add to, change or
eliminate any of the provisions of the senior indenture in respect
of one or more series of senior debt securities, provided that any such addition, change
or elimination shall (a) neither (1) apply to any senior debt
security of any series created prior to the execution of such
supplemental indenture and entitled to the benefit of such
provision nor (2) modify the rights of the holder of any such
senior debt security with respect to such provision or (b) become
effective only when there is no senior debt security described in
the preceding clause (a)(1) outstanding.
●
make any change to
the senior debt securities of any series so long as no senior debt
securities of such series are outstanding. or
●
make any change
that does not adversely affect the rights of any holder in any
material respect.
Other
amendments and modifications of the senior indenture or the senior
debt securities issued may be made, and our compliance with any
provision of the senior indenture with respect to any series of
senior debt securities may be waived, with the consent of the
holders of a majority of the aggregate principal amount of the
outstanding senior debt securities of each series affected by the
amendment or modification (voting as separate series). provided,
however, that each affected holder must consent to any
modification, amendment or waiver that:
●
extends the final
maturity of any senior debt securities of such series.
●
reduces the
principal amount of any senior debt securities of such
series.
●
reduces the rate,
or extends the time for payment of, interest on any senior debt
securities of such series.
●
reduces the amount
payable upon the redemption of any senior debt securities of such
series.
●
changes the
currency of payment of principal of or interest on any senior debt
securities of such series.
●
reduces the
principal amount of original issue discount securities payable upon
acceleration of maturity or the amount provable in
bankruptcy.
●
waives a continuing
default in the payment of principal of or interest on the senior
debt securities (other than any such default in payment resulting
solely from an acceleration of the senior debt
securities).
●
changes the
provisions relating to the waiver of past defaults or impairs the
right of holders to receive payment or to institute suit for the
enforcement of any payment or conversion of any senior debt
securities of such series on or after the due date
therefor.
●
modifies any of the
provisions of these restrictions on amendments and modifications,
except to increase any required percentage or to provide that
certain other provisions cannot be modified or waived without the
consent of the holder of each senior debt security of such series
affected by the modification.
●
adversely affects
the right to convert or exchange senior debt securities into
Class A common stock or other property in accordance with the
terms of the senior debt securities. or
●
reduces the
above-stated percentage of outstanding senior debt securities of
such series whose holders must consent to a supplemental indenture
or modifies or amends or waives certain provisions of or defaults
under the senior indenture.
It
shall not be necessary for the holders to approve the particular
form of any proposed amendment, supplement or waiver, but it shall
be sufficient if the holders’ consent approves the substance
thereof. After an amendment, supplement or waiver of the senior
indenture in accordance with the provisions described in this
section becomes effective, the trustee must give to the holders
affected thereby certain notice briefly describing the amendment,
supplement or waiver. Any failure by the trustee to give such
notice, or any defect therein, shall not, however, in any way
impair or affect the validity of any such amendment, supplemental
indenture or waiver.
16
No Personal Liability of Stockholders, Officers,
Directors
The
senior indenture provides that no recourse shall be had under any
obligation, covenant or agreement of ours in the senior indenture
or any supplemental indenture, or in any of the senior debt
securities or because of the creation of any indebtedness
represented thereby, against any of our stockholders, officers or
directors, past, present or future, or of any predecessor or
successor entity thereof under any law, statute or constitutional
provision or by the enforcement of any assessment or by any legal
or equitable proceeding or otherwise. Each holder, by accepting the
senior debt securities, waives and releases all such
liability.
Concerning the Trustee
The
senior indenture provides that, except during the continuance of an
event of default, the trustee will not be liable except for the
performance of such duties as are specifically set forth in the
senior indenture. If an event of default has occurred and is
continuing, the trustee will exercise such rights and powers vested
in it under the senior indenture and will use the same degree of
care and skill in its exercise as a prudent person would exercise
under the circumstances in the conduct of such person’s own
affairs.
The
senior indenture and the provisions of the Trust Indenture Act of
1939 incorporated by reference therein contain limitations on the
rights of the trustee thereunder, should it become a creditor of
ours or any of our subsidiaries, to obtain payment of claims in
certain cases or to realize on certain property received by it in
respect of any such claims, as security or otherwise. The trustee
is permitted to engage in other transactions, provided that if it
acquires any conflicting interest (as defined in the Trust
Indenture Act of 1939), it must eliminate such conflict or
resign.
We may
have normal banking relationships with the senior trustee in the
ordinary course of business.
Unclaimed Funds
All
funds deposited with the trustee or any paying agent for the
payment of principal, premium, interest or additional amounts in
respect of the senior debt securities that remain unclaimed for two
years after the date upon which such amounts became due and payable
will be repaid to us. Thereafter, any right of any holder of senior
debt securities to such funds shall be enforceable only against us,
and the trustee and paying agents will have no liability
therefor.
Governing Law
The
senior indenture and the senior debt securities will be governed
by, and construed in accordance with, the internal laws of the
State of New York.
Certain Terms of Subordinated Debt Securities
Similarity to Certain Terms of Senior Debt Securities
Other
than the terms of the subordinated indenture and subordinated debt
securities relating to subordination or otherwise as described in
the prospectus supplement relating to a particular series of
subordinated debt securities, the terms of the subordinated
indenture and subordinated debt securities are identical in all
material respects to the terms of the senior indenture and senior
debt securities. Additional or different subordination terms may be
specified in the prospectus supplement applicable to a particular
series.
17
Subordination
The
indebtedness evidenced by the subordinated debt securities is
subordinate to the prior payment in full of all of our senior
indebtedness, as defined in the subordinated indenture. During the
continuance beyond any applicable grace period of any default in
the payment of principal, premium, interest or any other payment
due on any of our senior indebtedness, we may not make any payment
of principal of or interest on the subordinated debt securities
(except for certain sinking fund payments). In addition, upon any
payment or distribution of our assets upon any dissolution,
winding-up, liquidation or reorganization, the payment of the
principal of and interest on the subordinated debt securities will
be subordinated to the extent provided in the subordinated
indenture in right of payment to the prior payment in full of all
our senior indebtedness. Because of this subordination, if we
dissolve or otherwise liquidate, holders of our subordinated debt
securities may receive less, ratably, than holders of our senior
indebtedness. The subordination provisions do not prevent the
occurrence of an event of default under the subordinated
indenture.
The
term “senior indebtedness” of a person means with
respect to such person the principal of, premium, if any, interest
on, and any other payment due pursuant to any of the following,
whether outstanding on the date of the subordinated indenture or
incurred by that person in the future:
●
all of the
indebtedness of that person for money borrowed.
●
all of the
indebtedness of that person evidenced by notes, debentures, bonds
or other securities sold by that person for money.
●
all of the lease
obligations that are capitalized on the books of that person in
accordance with generally accepted accounting
principles.
●
all indebtedness of
others of the kinds described in the first two bullet points above
and all lease obligations of others of the kind described in the
third bullet point above that the person, in any manner, assumes or
guarantees or that the person in effect guarantees through an
agreement to purchase, whether that agreement is contingent or
otherwise. and
●
all renewals,
extensions or refunding of indebtedness of the kinds described in
the first, second or fourth bullet point above and all renewals or
extensions of leases of the kinds described in the third or fourth
bullet point above.
unless,
in the case of any particular indebtedness, renewal, extension or
refunding, the instrument creating or evidencing it or the
assumption or guarantee relating to it expressly provides that such
indebtedness, renewal, extension or refunding is not superior in
right of payment to the subordinated debt securities. Our senior
debt securities constitute senior indebtedness for purposes of the
subordinated indenture.
18
DESCRIPTION OF
WARRANTS
We may
issue warrants for the purchase of shares of Class A common
stock, shares of preferred stock or debt securities. We may issue
warrants independently or together with other securities, and the
warrants may be attached to or separate from any offered
securities. Each series of warrants will be issued under a separate
warrant agreement to be entered into between us and the investors
or a warrant agent. The following summary of material provisions of
the warrants and warrant agreements are subject to, and qualified
in their entirety by reference to, all the provisions of the
warrant agreement and warrant certificate applicable to a
particular series of warrants. The terms of any warrants offered
under a prospectus supplement may differ from the terms described
below. We urge you to read the applicable prospectus supplement and
any related free writing prospectus, as well as the complete
warrant agreements and warrant certificates that contain the terms
of the warrants.
The
particular terms of any issue of warrants will be described in the
prospectus supplement relating to the issue. Those terms may
include:
●
the number of
shares of Class A common stock or preferred stock purchasable
upon the exercise of warrants to purchase such shares and the price
at which such number of shares may be purchased upon such
exercise.
●
the designation,
stated value and terms (including liquidation, dividend, conversion
and voting rights) of the series of preferred stock purchasable
upon exercise of warrants to purchase preferred stock.
●
the principal
amount of debt securities that may be purchased upon exercise of a
debt warrant and the exercise price for the warrants, which may be
payable in cash, securities or other property.
●
the date, if any,
on and after which the warrants and the related debt securities,
preferred stock or Class A common stock will be separately
transferable.
●
the terms of any
rights to redeem or call the warrants.
●
the date on which
the right to exercise the warrants will commence and the date on
which the right will expire.
●
U.S. federal income
tax consequences applicable to the warrants. and
●
any additional
terms of the warrants, including terms, procedures and limitations
relating to the exchange, exercise and settlement of the
warrants.
Holders
of equity warrants will not be entitled to:
●
vote, consent or
receive dividends.
●
receive notice as
stockholders with respect to any meeting of stockholders for the
election of our directors or any other matter. or
●
exercise any rights
as stockholders of Sienna.
Each
warrant will entitle its holder to purchase the principal amount of
debt securities or the number of shares of preferred stock or
Class A common stock at the exercise price set forth in, or
calculable as set forth in, the applicable prospectus supplement.
Unless we otherwise specify in the applicable prospectus
supplement, holders of the warrants may exercise the warrants at
any time up to the specified time on the expiration date that we
set forth in the applicable prospectus supplement. After the close
of business on the expiration date, unexercised warrants will
become void.
A
holder of warrant certificates may exchange them for new warrant
certificates of different denominations, present them for
registration of transfer and exercise them at the corporate trust
office of the warrant agent or any other
office indicated in the applicable prospectus supplement. Until any
warrants to purchase debt securities are exercised, the holder of
the warrants will not have any rights of holders of the debt
securities that can be purchased upon exercise, including any
rights to receive payments of principal, premium or interest on the
underlying debt securities or to enforce covenants in the
applicable indenture. Until any warrants to purchase Class A
common stock or preferred stock are exercised, the holders of the
warrants will not have any rights of holders of the underlying
Class A common stock or preferred stock, including any rights
to receive dividends or payments upon any liquidation, dissolution
or winding up of the Class A common stock or preferred stock,
if any.
19
DESCRIPTION OF UNITS
We may
issue units consisting of any combination of the other types of
securities offered under this prospectus in one or more series. We
may evidence each series of units by unit certificates that we will
issue under a separate agreement. We may enter into unit agreements
with a unit agent. Each unit agent will be a bank or trust company
that we select. We will indicate the name and address of the unit
agent in the applicable prospectus supplement relating to a
particular series of units.
The
following description, together with the additional information
included in any applicable prospectus supplement, summarizes the
general features of the units that we may offer under this
prospectus. You should read any prospectus supplement and any free
writing prospectus that we may authorize to be provided to you
related to the series of units being offered, as well as the
complete unit agreements that contain the terms of the units.
Specific unit agreements will contain additional important terms
and provisions and we will file as an exhibit to the registration
statement of which this prospectus is a part, or will incorporate
by reference from another report that we file with the SEC, the
form of each unit agreement relating to units offered under this
prospectus.
If we
offer any units, certain terms of that series of units will be
described in the applicable prospectus supplement, including the
following, as applicable:
●
the title of the
series of units.
●
identification and
description of the separate constituent securities comprising the
units.
●
the price or prices
at which the units will be issued.
●
the date, if any,
on and after which the constituent securities comprising the units
will be separately transferable.
●
a discussion of
certain U.S. federal income tax considerations applicable to the
units. and
●
any other terms of
the units and their constituent securities.
20
GLOBAL SECURITIES
Book-Entry, Delivery and Form
Unless
we indicate differently in any applicable prospectus supplement or
free writing prospectus, the securities initially will be issued in
book-entry form and represented by one or more global notes or
global securities, or, collectively, global securities. The global
securities will be deposited with, or on behalf of, The Depository
Trust Company, New York, New York, as depositary, or DTC, and
registered in the name of Cede & Co., the nominee of DTC.
Unless and until it is exchanged for individual certificates
evidencing securities under the limited circumstances described
below, a global security may not be transferred except as a whole
by the depositary to its nominee or by the nominee to the
depositary, or by the depositary or its nominee to a successor
depositary or to a nominee of the successor
depositary.
DTC has
advised us that it is:
●
a limited-purpose
trust company organized under the New York Banking
Law.
●
a “banking
organization” within the meaning of the New York Banking
Law.
●
a member of the
Federal Reserve System.
●
a “clearing
corporation” within the meaning of the New York Uniform
Commercial Code. and
●
a “clearing
agency” registered pursuant to the provisions of Section 17A
of the Exchange Act.
DTC
holds securities that its participants deposit with DTC. DTC also
facilitates the settlement among its participants of securities
transactions, such as transfers and pledges, in deposited
securities through electronic computerized book-entry changes in
participants’ accounts, thereby eliminating the need for
physical movement of securities certificates. “Direct
participants” in DTC include securities brokers and dealers,
including underwriters, banks, trust companies, clearing
corporations and other organizations. DTC is a wholly-owned
subsidiary of The Depository Trust & Clearing Corporation, or
DTCC. DTCC is the holding company for DTC, National Securities
Clearing Corporation and Fixed Income Clearing Corporation, all of
which are registered clearing agencies. DTCC is owned by the users
of its regulated subsidiaries. Access to the DTC system is also
available to others, which we sometimes refer to as indirect
participants, that clear through or maintain a custodial
relationship with a direct participant, either directly or
indirectly. The rules applicable to DTC and its participants are on
file with the SEC.
Purchases
of securities under the DTC system must be made by or through
direct participants, which will receive a credit for the securities
on DTC’s records. The ownership interest of the actual
purchaser of a security, whom we sometimes refer to as a beneficial
owner, is in turn recorded on the direct and indirect
participants’ records. Beneficial owners of securities will
not receive written confirmation from DTC of their purchases.
However, beneficial owners are expected to receive written
confirmations providing details of their transactions, as well as
periodic statements of their holdings, from the direct or indirect
participants through which they purchased securities. Transfers of
ownership interests in global securities are to be accomplished by
entries made on the books of participants acting on behalf of
beneficial owners. Beneficial owners will not receive certificates
representing their ownership interests in the global securities,
except under the limited circumstances described
below.
To
facilitate subsequent transfers, all global securities deposited by
direct participants with DTC will be registered in the name of
DTC’s partnership nominee, Cede & Co., or such other name
as may be requested by an authorized representative of DTC. The
deposit of securities with DTC and their registration in the name
of Cede & Co. or such other nominee will not change the
beneficial ownership of the securities. DTC has no knowledge of the
actual beneficial owners of the securities. DTC’s records
reflect only the identity of the direct participants to whose
accounts the securities are credited, which may or may not be the
beneficial owners. The participants are responsible for keeping
account of their holdings on behalf of their
customers.
So long
as the securities are in book-entry form, you will receive payments
and may transfer securities only through the facilities of the
depositary and its direct and indirect participants. We will
maintain an office or agency in the location specified in the
prospectus supplement for the applicable securities, where notices
and demands in respect of the securities and the indenture may be
delivered to us and where certificated securities may be
surrendered for payment, registration of transfer or
exchange.
21
Conveyance
of notices and other communications by DTC to direct participants,
by direct participants to indirect participants and by direct
participants and indirect participants to beneficial owners will be
governed by arrangements among them, subject to any legal
requirements in effect from time to time.
Redemption
notices will be sent to DTC. If less than all of the securities of
a particular series are being redeemed, DTC’s practice is to
determine by lot the amount of the interest of each direct
participant in the securities of such series to be
redeemed.
Neither
DTC nor Cede & Co. (or such other DTC nominee) will consent or
vote with respect to the securities. Under its usual procedures,
DTC will mail an omnibus proxy to us as soon as possible after the
record date. The omnibus proxy assigns the consenting or voting
rights of Cede & Co. to those direct participants to whose
accounts the securities of such series are credited on the record
date, identified in a listing attached to the omnibus
proxy.
So long
as securities are in book-entry form, we will make payments on
those securities to the depositary or its nominee, as the
registered owner of such securities, by wire transfer of
immediately available funds. If securities are issued in definitive
certificated form under the limited circumstances described below
and if not otherwise provided in the description of the applicable
securities herein or in the applicable prospectus supplement, we
will have the option of making payments by check mailed to the
addresses of the persons entitled to payment or by wire transfer to
bank accounts in the United States designated in writing to the
applicable trustee or other designated party at least 15 days
before the applicable payment date by the persons entitled to
payment, unless a shorter period is satisfactory to the applicable
trustee or other designated party.
Redemption
proceeds, distributions and dividend payments on the securities
will be made to Cede & Co., or such other nominee as may be
requested by an authorized representative of DTC. DTC’s
practice is to credit direct participants’ accounts upon
DTC’s receipt of funds and corresponding detail information
from us on the payment date in accordance with their respective
holdings shown on DTC records. Payments by participants to
beneficial owners will be governed by standing instructions and
customary practices, as is the case with securities held for the
account of customers in bearer form or registered in “street
name.” Those payments will be the responsibility of
participants and not of DTC or us, subject to any statutory or
regulatory requirements in effect from time to time. Payment of
redemption proceeds, distributions and dividend payments to Cede
& Co., or such other nominee as may be requested by an
authorized representative of DTC, is our responsibility,
disbursement of payments to direct participants is the
responsibility of DTC, and disbursement of payments to the
beneficial owners is the responsibility of direct and indirect
participants.
Except
under the limited circumstances described below, purchasers of
securities will not be entitled to have securities registered in
their names and will not receive physical delivery of securities.
Accordingly, each beneficial owner must rely on the procedures of
DTC and its participants to exercise any rights under the
securities and the indenture.
The
laws of some jurisdictions may require that some purchasers of
securities take physical delivery of securities in definitive form.
Those laws may impair the ability to transfer or pledge beneficial
interests in securities.
DTC may
discontinue providing its services as securities depositary with
respect to the securities at any time by giving reasonable notice
to us. Under such circumstances, in the event that a successor
depositary is not obtained, securities certificates are required to
be printed and delivered.
As
noted above, beneficial owners of a particular series of securities
generally will not receive certificates representing their
ownership interests in those securities. However, if:
●
DTC notifies us
that it is unwilling or unable to continue as a depositary for the
global security or securities representing such series of
securities or if DTC ceases to be a clearing agency registered
under the Exchange Act at a time when it is required to be
registered and a successor depositary is not appointed within 90
days of the notification to us or of our becoming aware of
DTC’s ceasing to be so registered, as the case may
be.
22
●
we determine, in
our sole discretion, not to have such securities represented by one
or more global securities. or
●
an Event of Default
has occurred and is continuing with respect to such series of
securities,
then we
will prepare and deliver certificates for such securities in
exchange for beneficial interests in the global securities. Any
beneficial interest in a global security that is exchangeable under
the circumstances described in the preceding sentence will be
exchangeable for securities in definitive certificated form
registered in the names that the depositary directs. It is expected
that these directions will be based upon directions received by the
depositary from its participants with respect to ownership of
beneficial interests in the global securities.
Euroclear and Clearstream
If so
provided in the applicable prospectus supplement, you may hold
interests in a global security through Clearstream Banking S.A.,
which we refer to as Clearstream, or Euroclear Bank S.A./N.V., as
operator of the Euroclear System, which we refer to as Euroclear,
either directly if you are a participant in Clearstream or
Euroclear or indirectly through organizations that are participants
in Clearstream or Euroclear. Clearstream and Euroclear will hold
interests on behalf of their respective participants through
customers’ securities accounts in the names of Clearstream
and Euroclear, respectively, on the books of their respective U.S.
depositaries, which in turn will hold such interests in
customers’ securities accounts in such depositaries’
names on DTC’s books.
Clearstream
and Euroclear are securities clearance systems in Europe.
Clearstream and Euroclear hold securities for their respective
participating organizations and facilitate the clearance and
settlement of securities transactions between those participants
through electronic book-entry changes in their accounts, thereby
eliminating the need for physical movement of
certificates.
Payments,
deliveries, transfers, exchanges, notices and other matters
relating to beneficial interests in global securities owned through
Euroclear or Clearstream must comply with the rules and procedures
of those systems. Transactions between participants in Euroclear or
Clearstream, on one hand, and other participants in DTC, on the
other hand, are also subject to DTC’s rules and
procedures.
Investors
will be able to make and receive through Euroclear and Clearstream
payments, deliveries, transfers and other transactions involving
any beneficial interests in global securities held through those
systems only on days when those systems are open for business.
Those systems may not be open for business on days when banks,
brokers and other institutions are open for business in the United
States.
Cross-market
transfers between participants in DTC, on the one hand, and
participants in Euroclear or Clearstream, on the other hand, will
be effected through DTC in accordance with the DTC’s rules on
behalf of Euroclear or Clearstream, as the case may be, by their
respective U.S. depositaries. however, such cross-market
transactions will require delivery of instructions to Euroclear or
Clearstream, as the case may be, by the counterparty in such system
in accordance with the rules and procedures and within the
established deadlines (European time) of such system. Euroclear or
Clearstream, as the case may be, will, if the transaction meets its
settlement requirements, deliver instructions to its U.S.
depositary to take action to effect final settlement on its behalf
by delivering or receiving interests in the global securities
through DTC, and making or receiving payment in accordance with
normal procedures for same-day fund settlement. Participants in
Euroclear or Clearstream may not deliver instructions directly to
their respective U.S. depositaries.
Due to
time zone differences, the securities accounts of a participant in
Euroclear or Clearstream purchasing an interest in a global
security from a direct participant in DTC will be credited, and any
such crediting will be reported to the relevant participant in
Euroclear or Clearstream, during the securities settlement
processing day (which must be a business day for Euroclear or
Clearstream) immediately following the settlement date of DTC. Cash
received in Euroclear or Clearstream as a result of sales of
interests in a global security by or through a participant in
Euroclear or Clearstream to a direct participant in DTC will be
received with value on the settlement date of DTC but will be
available in the relevant Euroclear or Clearstream cash account
only as of the business day for Euroclear or Clearstream following
DTC’s settlement date.
Other
The
information in this section of this prospectus concerning DTC,
Clearstream, Euroclear and their respective book-entry systems has
been obtained from sources that we believe to be reliable, but we
do not take responsibility for this information. This information
has been provided solely as a matter of convenience. The rules and
procedures of DTC, Clearstream and Euroclear are solely within the
control of those organizations and could change at any time.
Neither we nor the trustee nor any agent of ours or of the trustee
has any control over those entities and none of us takes any
responsibility for their activities. You are urged to contact DTC,
Clearstream and Euroclear or their respective participants directly
to discuss those matters. In addition, although we expect that DTC,
Clearstream and Euroclear will perform the foregoing procedures,
none of them is under any obligation to perform or continue to
perform such procedures and such procedures may be discontinued at
any time. Neither we nor any agent of ours will have any
responsibility for the performance or nonperformance by DTC,
Clearstream and Euroclear or their respective participants of these
or any other rules or procedures governing their respective
operations.
23
PLAN OF DISTRIBUTION
We may
sell the securities from time to time pursuant to underwritten
public offerings, negotiated transactions, block trades or a
combination of these methods or through underwriters or dealers,
through agents and/or directly to one or more purchasers. The
securities may be distributed from time to time in one or more
transactions:
●
at fixed prices,
which may be changed.
●
at market prices
prevailing at the time of sale.
●
at prices related
to such prevailing market prices. or
●
at negotiated
prices.
Each
time that we sell securities covered by this prospectus, we will
provide a prospectus supplement or supplements that will describe
the method of distribution and set forth the terms and conditions
of the offering of such securities, including the offering price of
the securities and the proceeds to us, if applicable.
Offers
to purchase the securities being offered by this prospectus may be
solicited directly. Agents may also be designated to solicit offers
to purchase the securities from time to time. Any agent involved in
the offer or sale of our securities will be identified in a
prospectus supplement.
If a
dealer is utilized in the sale of the securities being offered by
this prospectus, the securities will be sold to the dealer, as
principal. The dealer may then resell the securities to the public
at varying prices to be determined by the dealer at the time of
resale.
If an
underwriter is utilized in the sale of the securities being offered
by this prospectus, an underwriting agreement will be executed with
the underwriter at the time of sale and the name of any underwriter
will be provided in the prospectus supplement that the underwriter
will use to make resales of the securities to the public. In
connection with the sale of the securities, we or the purchasers of
securities for whom the underwriter may act as agent, may
compensate the underwriter in the form of underwriting discounts or
commissions. The underwriter may sell the securities to or through
dealers, and those dealers may receive compensation in the form of
discounts, concessions or commissions from the underwriters and/or
commissions from the purchasers for which they may act as agent.
Unless otherwise indicated in a prospectus supplement, an agent
will be acting on a best efforts basis and a dealer will purchase
securities as a principal, and may then resell the securities at
varying prices to be determined by the dealer.
Any
compensation paid to underwriters, dealers or agents in connection
with the offering of the securities, and any discounts, concessions
or commissions allowed by underwriters to participating dealers
will be provided in the applicable prospectus supplement.
Underwriters, dealers and agents participating in the distribution
of the securities may be deemed to be underwriters within the
meaning of the Securities Act, and any discounts and commissions
received by them and any profit realized by them on resale of the
securities may be deemed to be underwriting discounts and
commissions. We may enter into agreements to indemnify
underwriters, dealers and agents against civil liabilities,
including liabilities under the Securities Act, or to contribute to
payments they may be required to make in respect thereof and to
reimburse those persons for certain expenses.
Any
Class A common stock that we issue and sell will be listed on
the Nasdaq Global Market, but any other securities may or may not
be listed on a national securities exchange. To facilitate the
offering of securities, certain persons participating in the
offering may engage in transactions that stabilize, maintain or
otherwise affect the price of the securities. This may include
over-allotments or short sales of the securities, which involve the
sale by persons participating in the offering of more securities
than were sold to them. In these circumstances, these persons would
cover such over-allotments or short positions by making purchases
in the open market or by exercising their over-allotment option, if
any. In addition, these persons may stabilize or maintain the price
of the securities by bidding for or purchasing securities in the
open market or by imposing penalty bids, whereby selling
concessions allowed to dealers participating in the offering may be
reclaimed if securities sold by them are repurchased in connection
with stabilization transactions. The effect of these transactions
may be to stabilize or maintain the market price of the securities
at a level above that which might otherwise prevail in the open
market. These transactions may be discontinued at any
time.
24
We may
engage in at the market offerings into an existing trading market
in accordance with Rule 415(a)(4) under the Securities Act. In
addition, we may enter into derivative transactions with third
parties, or sell securities not covered by this prospectus to third
parties in privately negotiated transactions. If the applicable
prospectus supplement so indicates, in connection with those
derivatives, the third parties may sell securities covered by this
prospectus and the applicable prospectus supplement, including in
short sale transactions. If so, the third party may use securities
pledged by us or borrowed from us or others to settle those sales
or to close out any related open borrowings of stock, and may use
securities received from us in settlement of those derivatives to
close out any related open borrowings of stock. The third party in
such sale transactions will be an underwriter and, if not
identified in this prospectus, will be named in the applicable
prospectus supplement (or a post-effective amendment). In addition,
we may otherwise loan or pledge securities to a financial
institution or other third party that in turn may sell the
securities short using this prospectus and an applicable prospectus
supplement. Such financial institution or other third party may
transfer its economic short position to investors in our securities
or in connection with a concurrent offering of other
securities.
The
specific terms of any lock-up provisions in respect of any given
offering will be described in the applicable prospectus
supplement.
The
underwriters, dealers and agents may engage in transactions with
us, or perform services for us, in the ordinary course of business
for which they receive compensation.
25
LEGAL MATTERS
K&L
Gates LLP, Boston, Massachusetts, will pass upon certain legal
matters relating to the issuance and sale of the securities offered
hereby on our behalf. Additional legal matters may be passed upon
for us or any underwriters, dealers or agents, by counsel that we
will name in the applicable prospectus supplement.
EXPERTS
BDO
China Shu Lun Pan Certified Public Accountants LLP, our independent
registered public accounting firm in the People’s Republic of
China, has audited our consolidated financial statements at, and
for the years ended, December 31, 2017 and 2016, as set forth in
their report incorporated by reference herein. We have incorporated
by reference herein the consolidated financial statements in
reliance on said firm’s report, given on their authority as
experts in accounting and auditing.
26
PART II
INFORMATION NOT REQUIRED
IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution
The
following (other than the fees of the Securities and Exchange
Commission, or SEC, and the Financial Industry Regulatory
Authority, or FINRA) are estimates of the expenses that the
registrant may incur in connection with the offering and sale of
the securities being registered hereby. All such expenses are to be
paid by the registrant.
|
SEC registration
fee
|
$12,120
|
|
FINRA filing
fee
|
15,500
|
|
Accounting fees and
expenses
|
*
|
|
Exchange listing
fee
|
*
|
|
Legal fees and
expenses
|
*
|
|
Printing
expenses
|
*
|
|
Transfer agent fees
and expenses
|
*
|
|
Trustee fees and
expenses
|
*
|
|
Warrant agent fees
and expenses
|
*
|
|
Miscellaneous
|
*
|
|
Total
|
*
|
*
Because these
amounts are based on the securities offered and the number of
issuances, they cannot be estimated at this time and will be
reflected in the applicable prospectus supplements.
Item 15. Indemnification of Directors and Officers
Sections
145 and 102(b)(7) of the General Corporation Law of the State of
Delaware provide that a corporation may indemnify any person made a
party to an action by reason of the fact that the person was a
director, officer, employee or agent of the corporation or is or
was serving at the request of a corporation against expenses
(including attorneys’ fees), judgments, fines and amounts
paid in settlement actually and reasonably incurred by the person
in connection with such action if the person acted in good faith
and in a manner the person reasonably believed to be in, or not
opposed to, the best interests of the corporation and, with respect
to any criminal action or proceeding, had no reasonable cause to
believe the person’s conduct was unlawful, except that, in
the case of an action by or in right of the corporation, no
indemnification may generally be made in respect of any claim as to
which the person is adjudged to be liable to the
corporation.
The
registrant’s charter contains provisions that eliminate, to
the maximum extent permitted by the General Corporation Law of the
State of Delaware, the personal liability of the registrant’s
directors for monetary damages for breach of their fiduciary duties
as directors. The registrant’s bylaws provide that the
registrant must indemnify its directors and officers and may
indemnify its employees and other agents to the fullest extent
permitted by the General Corporation Law of the State of
Delaware.
The
registrant has entered into indemnification agreements with its
directors and executive officers, in addition to the
indemnification provided by its bylaws, and intends to enter into
indemnification agreements with any new directors and executive
officers in the future.
The
registrant has purchased and intends to maintain insurance on
behalf of any person who is or was a director or officer of the
registrant against any loss arising from any claim asserted against
the person and incurred by the person in any such capacity, subject
to certain exclusions.
In any
underwriting agreement the registrant enters into in connection
with the offering of securities being registered hereby, the
underwriters may agree to indemnify, under certain conditions, the
registrant’s directors and officers (as well as certain other
persons) against certain liabilities arising in connection with
such offering.
27
Item 16. Exhibits
|
Exhibit No.
|
|
Description
|
|
1.01*
|
|
Form of
Underwriting Agreement
|
|
|
Restated
Certificate of Incorporation of ACM Research, Inc., as
amended
|
|
|
|
Restated
Bylaws of ACM Research, Inc.
|
|
|
|
Restated
Certificate of Incorporation of ACM Research, Inc., as
amended
|
|
|
|
Restated
Bylaws of ACM Research, Inc.
|
|
|
|
Second
Amended and Restated Registration Rights Agreement between ACM
Research, Inc. and certain of its stockholders
|
|
|
|
Form of
Class A Common Stock Certificate
|
|
|
4.05*
|
|
Form of
Preferred Stock Certificate
|
|
4.06*
|
|
Form of
Senior Indenture
|
|
4.07*
|
|
Form of
Subordinated Indenture
|
|
4.08*
|
|
Form of
Senior Note
|
|
4.09*
|
|
Form of
Subordinated Note
|
|
4.10*
|
|
Form of
Warrant
|
|
4.11*
|
|
Form of
Warrant Agreement
|
|
4.12*
|
|
Form of
Unit Agreement
|
|
5.01*
|
|
Opinion
of K&L Gates LLP
|
|
|
Consent
of BDO China Shu Lun Pan Certified Public Accountants
LLP
|
|
|
23.02*
|
|
Consent
of K&L Gates LLP (included in Exhibit 5.01)
|
|
24.01
|
|
Powers
of Attorney (included on the signature page of the Registration
Statement)
|
|
25.01*
|
|
Statement
of Eligibility on Form T‑1 under the Trust
Indenture Act of 1939 of the Trustee under the Senior
Indenture
|
|
25.02*
|
|
Statement
of Eligibility on Form T‑1 under the Trust
Indenture Act of 1939 of the Trustee under the Subordinated
Indenture
|
*
To be filed by
amendment or incorporated by reference in connection with an
offering of securities.
Item 17. Undertakings
(a)
The undersigned
registrant hereby undertakes:
(1)
To file, during any
period in which offers or sales are being made, a post-effective
amendment to this registration statement:
(i)
to include any
prospectus required by Section 10(a)(3) of the Securities Act of
1933.
(ii)
to reflect in the
prospectus any facts or events arising after the effective date of
the registration statement (or the most recent post- effective
amendment thereof) that, individually or in the aggregate,
represent a fundamental change in the information set forth in the
registration statement. Notwithstanding the foregoing, any increase
or decrease in the volume of securities offered (if the total
dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the
estimated maximum offering range may be reflected in the form of
prospectus filed with the SEC pursuant to Rule 424(b) if, in the
aggregate, the changes in volume and price represent no more than
20 percent change in the maximum aggregate offering price set forth
in the “Calculation of Registration Fee” table in the
effective registration statement. and
(iii)
to include any
material information with respect to the plan of distribution not
previously disclosed in the registration statement or any material
change to such information in the registration
statement.
provided, however, that paragraphs (a)(1)(i),
(a)(1)(ii), and (a)(1)(iii) above do not apply if the information
required to be included in a post-effective amendment by those
paragraphs is contained in reports filed with or furnished to the
SEC by the registrant pursuant to Section 13 or Section 15(d) of
the Securities Exchange Act of 1934 that are incorporated by
reference in the registration statement, or is contained in a form
of prospectus filed pursuant to Rule 424(b) that is a part of the
registration statement.
28
(2)
That, for the
purpose of determining any liability under the Securities Act of
1933, each such post-effective amendment shall be deemed to be a
new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
(3)
To remove from
registration by means of a post-effective amendment any of the
securities being registered that remain unsold at the termination
of the offering.
(4)
That, for the
purpose of determining liability under the Securities Act of 1933
to any purchaser:
(A)
each prospectus
filed by the registrant pursuant to Rule 424(b)(3) shall be deemed
to be part of the registration statement as of the date the filed
prospectus was deemed part of and included in the registration
statement. and
(B)
each prospectus
required to be filed pursuant to Rule 424(b)(2), (b)(5), or (b)(7)
as part of a registration statement in reliance on Rule 430B
relating to an offering made pursuant to Rule 415(a)(1)(i),
(vii), or (x) for the purpose of providing the information required
by Section 10(a) of the Securities Act of 1933 shall be deemed to
be part of and included in the registration statement as of the
earlier of the date such form of prospectus is first used after
effectiveness or the date of the first contract of sale of
securities in the offering described in the prospectus. As provided
in Rule 430B, for liability purposes of the issuer and any person
that is at that date an underwriter, such date shall be deemed to
be a new effective date of the registration statement relating to
the securities in the registration statement to which that
prospectus relates, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering thereof.
Provided, however, that no statement made in a registration
statement or prospectus that is part of the registration statement
or made in a document incorporated or deemed incorporated by
reference into the registration statement or prospectus that is
part of the registration statement will, as to a purchaser with a
time of contract of sale prior to such effective date, supersede or
modify any statement that was made in the registration statement or
prospectus that was part of the registration statement or made in
any such document immediately prior to such effective
date.
(5)
That, for the
purpose of determining liability of the registrant under the
Securities Act of 1933 to any purchaser in the initial distribution
of the securities:
The
undersigned registrant undertakes that in a primary offering of
securities of the undersigned registrant pursuant to this
registration statement, regardless of the underwriting method used
to sell the securities to the purchaser, if the securities are
offered or sold to such purchaser by means of any of the following
communications, the undersigned registrant will be a seller to the
purchaser and will be considered to offer or sell such securities
to such purchaser:
(i)
any preliminary
prospectus or prospectus of the undersigned registrant relating to
the offering required to be filed pursuant to Rule
424.
(ii)
any free writing
prospectus relating to the offering prepared by or on behalf of the
undersigned registrant or used or referred to by the undersigned
registrant.
(iii)
the portion of any
other free writing prospectus relating to the offering containing
material information about the undersigned registrant or its
securities provided by or on behalf of the undersigned registrant.
and
(iv)
any other
communication that is an offer in the offering made by the
undersigned registrant to the purchaser.
(b)
The undersigned
registrant hereby undertakes that, for purposes of determining any
liability under the Securities Act of 1933, each filing of the
registrant’s annual report pursuant to Section 13(a) or
Section 15(d) of the Securities Exchange Act of 1934 (and, where
applicable, each filing of an employee benefit plan’s annual
report pursuant to Section 15(d) of the Securities Exchange Act of
1934) that is incorporated by reference in the registration
statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of
such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(c)
Insofar as
indemnification for liabilities arising under the Securities Act of
1933 may be permitted to directors, officers and controlling
persons of the registrant pursuant to the foregoing provisions, or
otherwise, the registrant has been advised that in the opinion of
the SEC such indemnification is against public policy as expressed
in the Securities Act and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities
(other than the payment by the registrant of expenses incurred or
paid by a director, officer or controlling person of the registrant
in the successful defense of any action, suit or proceeding) is
asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant
will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Securities Act and will
be governed by the final adjudication of such issue.
(d)
The undersigned
registrant hereby undertakes to file an application for the purpose
of determining the eligibility of the trustee to act under
subsection (a) of Section 310 of the Trust Indenture Act of 1939 in
accordance with the rules and regulations prescribed by the SEC
under Section 305(b)(2) of the Trust Indenture Act of
1939.
29
SIGNATURES
Pursuant
to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-3 and has duly caused
this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Fremont,
State of California, on December 10, 2018.
|
|
ACM RESEARCH,
INC.
|
|
|
|
|
|
|
|
|
|
By:
|
/s/ David H.
Wang
|
|
|
|
|
David H. Wang |
|
|
|
|
Chief
Executive Officer and President
|
|
Power of Attorney
KNOW
ALL PERSONS BY THESE PRESENTS that each person whose signature
appears below constitutes and appoints David H. Wang, Lisa Feng and
Mark McKechnie, or any of them, as his or her true and lawful
attorneys-in-fact and agents, with full power of substitution and
resubstitution, for him or her and in his or her name, place and
stead, in any and all capacities, to file and sign any and all
amendments, including post-effective amendments and any
registration statement for the same offering that is to be
effective under Rule 462(b) of the Securities Act of 1933 to this
registration statement, with the Securities and Exchange
Commission, granting unto said attorneys-in-fact and agents, full
power and authority to do and perform each and every act and thing
requisite and necessary to be done in connection therewith as fully
to all intents and purposes as he or she might or could do in
person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or their substitute or substitutes
may lawfully do or cause to be done by virtue hereof. This power of
attorney shall be governed by and construed with the laws of the
State of Delaware and applicable federal securities
laws.
Pursuant
to the requirements of the Securities Act of 1933, this
registration statement has been signed below by the following
persons on behalf of the registrant in the capacities and on the
dates indicated.
|
Signature
|
|
Title
|
|
Date
|
|
|
|
|
|
|
|
/s/
David H.
Wang
|
|
Chief
Executive Officer, President
|
|
December
10, 2018
|
|
David H
Wang
|
|
and
Chair of the Board (Principal
Executive Officer)
|
|
|
|
|
|
|
|
|
|
/s/
Lisa
Feng
|
|
Interim
Chief Financial Officer,
|
|
December
10, 2018
|
|
Lisa
Feng
|
|
Chief
Accounting Officer and Treasurer (Principal Financial and Accounting
Officer)
|
|
|
|
|
|
|
|
|
|
/s/
Haiping
Dun
|
|
Director
|
|
December
10, 2018
|
|
Haiping
Dun
|
|
|
|
|
|
|
|
|
|
|
|
/s/
Chenming
Hu
|
|
Director
|
|
December
10, 2018
|
|
Chenming
Hu
|
|
|
|
|
|
|
|
|
|
|
|
/s/
Tracy
Liu
|
|
Director
|
|
December
10, 2018
|
|
Tracy
Liu
|
|
|
|
|
|
|
|
|
|
|
|
/s/
Yinan
Xiang
|
|
Director
|
|
December
10, 2018
|
|
Yinan
Xiang
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Director
|
|
|
|
Zhengfan
Yang
|
|
|
|
|
30
Exhibit 4.03
SECOND AMENDED AND RESTATED
REGISTRATION RIGHTS AGREEMENT
TABLE
OF CONTENTS
|
|
|
|
|||||||||
|
|
|
PAGE
|
|||||||||
|
1.
|
Definitions
|
3
|
|||||||||
|
|
|
|
|||||||||
|
2.
|
Registration
Rights
|
6
|
|||||||||
|
|
|
|
|||||||||
|
3.
|
Underwriting
Requirements
|
7
|
|||||||||
|
|
|
|
|||||||||
|
4.
|
Obligations
of the Company
|
8
|
|||||||||
|
|
|
|
|||||||||
|
5.
|
Furnish
Information
|
9
|
|||||||||
|
|
|
|
|||||||||
|
6.
|
Expenses
of Registration
|
9
|
|||||||||
|
|
|
|
|||||||||
|
7.
|
Delay
of Registration
|
9
|
|||||||||
|
|
|
|
|||||||||
|
8.
|
Indemnification
|
9
|
|||||||||
|
|
|
|
|||||||||
|
9.
|
Reports
Under Exchange Act
|
10
|
|||||||||
|
|
|
|
|||||||||
|
10.
|
Limitations
on Subsequent Registration Rights
|
11
|
|||||||||
|
|
|
|
|||||||||
|
11.
|
Termination
of Registration Rights
|
11
|
|||||||||
|
|
|
|
|||||||||
|
12.
|
Changes
in Holders and Updating of Schedules.
|
11
|
|||||||||
|
|
|
|
|||||||||
|
13.
|
Miscellaneous
|
12
|
|||||||||
|
|
|||||||||||
|
SCHEDULE I
-
Schedule of
Incidental Rights Holders
|
|||||||||||
|
|
|||||||||||
|
SCHEDULE II
-
Schedule of
Comprehensive Rights Holders
|
|||||||||||
|
|
|||||||||||
|
EXHIBIT A
-
Form of
Adoption Agreement
|
|||||||||||
THIS
SECOND AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT (this
“Agreement”) is made as of October 16, 2017, by
and among ACM Research, Inc., a Delaware corporation (the
“Company”), Shengxin (Shanghai) Management
Consulting Limited Partnership (“SMC”), Xinxin (Hongkong) Capital Co.,
Limited and Victorious Way Limited. Certain capitalized terms used
herein are defined in Section
1.
RECITALS
A. The
Company and SMC previously entered into a Registration Rights
Agreement dated as of March 10, 2017, pursuant to which the Company
provided SMC with certain registration rights with respect to
SMC’s equity interests in
the Company, which agreement was subsequently amended and restated
persuant to the Amended and Restated Registration Rights Agreement
dated as of September 24, 2017 (the “Original
Agreement”).
B.
Contemporaneously herewith, each of Xinxin (Hongkong) Capital Co.,
Limited and Victorious Way Limited is entering into a Stock
Purchase Agreement dated as of the date hereof, pursuant to which
it proposes to purchase Class A Shares subject to the respective
terms and conditions set forth therein, which conditions include
the execution and delivery of this Agreement.
C. In
order to facilitate such purchases of Class A Shares, the Company
and SMC desire to amend and restate the Original Agreement in its
entirety as provided herein.
The
parties hereto agree as follows:
1. Definitions. For
purposes of this Agreement:
(a) “Adoption
Agreement” means an agreement in the form attached as
EXHIBIT A or in such other form as the Company may require from time to time.
(b) “Affiliate”
means, with respect to any specified Person, any other Person who,
directly or indirectly, controls, is controlled by, or is under
common control with such Person, including any general partner,
managing member, officer or director of such Person or any venture
capital fund now or hereafter existing that is controlled by one or
more general partners or managing members of, or shares the same
management company with, such Person.
(c)
“Class A
Shares” means shares of
Class A Common Stock of the Company.
(d)
“Comprehensive Rights
Holder” means a party
listed on SCHEDULE II.
(e) “Damages”
means any loss, damage, claim or liability (joint or several) to
which a party to this Agreement may become subject under the
Securities Act, the Exchange Act, or other federal or state law,
insofar as such loss, damage, claim or liability (or any action in
respect to this Agreement) arises out of or is based upon: (i) any
untrue statement or alleged untrue statement of a material fact
contained in any registration statement of the Company, including
any preliminary prospectus or final prospectus contained therein or
any amendments or supplements to this Agreement; (ii) an omission
or alleged omission to state therein a material fact required to be
stated therein, or necessary to make the statements therein not
misleading; or (iii) any violation or alleged violation by the
indemnifying party (or any of its agents or Affiliates) of the
Securities Act, the Exchange Act, any state securities law, or any
rule or regulation promulgated under the Securities Act, the
Exchange Act, or any state securities law.
3
(f) “Demand
Registrable Securities”
means Class A Shares that are held by the Comprehensive Rights
Holders and listed across from a Comprehensive Rights
Holder’s name on SCHEDULE II.
(g) “Exchange
Act” means the U.S.
Securities Exchange Act of 1934, as amended, and the rules and
regulations promulgated thereunder.
(h) “Excluded
Registration” means: (i)
a registration relating to the sale of securities to employees of
the Company or a subsidiary pursuant to a stock option, stock
purchase, or similar plan; (ii) a registration relating to an SEC
Rule 145 transaction; (iii) a registration on any form that does
not include substantially the same information as would be required
to be included in a registration statement covering the sale of the
Registrable Securities; or (iv) a registration in which the only
Class A Shares being registered are Class A Shares issuable upon
conversion of debt securities that are also being
registered.
(i) “Form
S-1” means such form
under the Securities Act as in effect on the date hereof or any
successor registration form under the Securities Act subsequently
adopted by the SEC.
(j) “Form
S-3” means such form
under the Securities Act as in effect on the date of this Agreement
or any registration form under the Securities Act subsequently
adopted by the SEC that permits incorporation of substantial
information by reference to other documents filed by the Company
with the SEC.
(k) “Holder”
means an Incidental Rights Holder or Comprehensive Rights
Holder.
(l) “Immediate
Family Member” means a
child, stepchild, grandchild, parent, stepparent, grandparent,
spouse, sibling, mother-in-law, father-in-law, son-in-law,
daughter-in-law, brother-in-law, or sister-in-law, including
adoptive relationships, of a natural person referred to
herein.
(m) “Incidental
Rights Holders” a
party listed on SCHEDULE I from time to time, including any
subsequent securities holders, or transferees, who become parties
hereto as “Incidental
Rights Holders” pursuant
to Sections 12(a)
and 12(b).
(n) “Initiating
Holders” means any
Holder or Holders of a majority of the then-outstanding Demand
Registrable Securities.
(o) “IPO”
means the Company’s first
underwritten public offering of its Class A Shares under the
Securities Act.
(p) “Original
Agreement” has the
meaning set forth in Recital A.
(q) “Person”
means any individual, corporation, partnership, trust, limited
liability company, association or other entity.
(r) “Preferred
Series” means
Series A Preferred Stock, Series B Preferred Stock, Series C
Preferred Stock, Series D Preferred Stock or Series F Preferred
Stock of the Company.
4
(s) “Registrable
Securities”
means:
(i)
Class A Shares that
are held by the Incidental Rights Holders and listed across from an
Incidental Rights Holder’s name on SCHEDULE I;
(ii)
Demand Registrable
Securities;
(iii)
any Class A Shares
that are issued or issuable (directly or indirectly) upon
conversion or exercise of any other securities of the Company and
that are held by the Incidental Rights Holders and listed across
from an Incidental Rights Holder’s name on SCHEDULE I;
and
(iv)
any Class A Shares
that are issued as (or issuable upon the conversion or exercise of
any warrant, right or other security that is issued as) a dividend
or other distribution with respect to, or in exchange for or in
replacement of, the securities referenced in clauses (i), (ii) and
(iii) above;
excluding, however,
any Registrable Securities sold by a Person in a transaction in
which the applicable rights under this
Agreement are not assigned pursuant to Section 12(a)
and any shares for which registration rights have terminated
pursuant to Section
11.
(t) “Registrable
Securities then outstanding” means the sum of (i) the number of
outstanding Class A Shares that are Registrable Securities
(including the Demand Registrable Securities) and (ii) the number
of Class A Shares issuable (directly or indirectly) pursuant to
then exercisable or convertible securities that are Registrable
Securities.
(u) “SEC”
means the U.S. Securities and Exchange Commission.
(v) “SEC
Rule 144” means
Rule 144 promulgated by the SEC under the Securities
Act.
(w) “SEC
Rule 145” means
Rule 145 promulgated by the SEC under the Securities
Act.
(x) “Securities
Act” means the
U.S. Securities Act of 1933, as amended, and the rules and
regulations promulgated thereunder.
(y) “Selling
Expenses” means
all underwriting discounts, selling commissions, stock transfer
taxes applicable to the sale of Registrable Securities, and fees
and disbursements of counsel for any Holder, except for the fees
and disbursements of the Selling Holder Counsel borne and paid by
the Company as provided in Section
6.
5
2. Registration
Rights. The Company covenants
and agrees as follows:
(a)
Demand
Registration.
(i) If, at any time at
least 180 days after the closing date of the IPO, the Company
receives a request from the Initiating Holders that the Company
file a Form S-1 registration statement covering either (x) the
potential sale of all or a portion of the Registrable Securities
then outstanding with an anticipated aggregate offering price
(excluding the offering price of any shares subject to an
over-allotment option) of at least $7,500,000 or (y) all of the
Registrable Securities then held by a Comprehensive Rights Holder
whose rights under this Agreement have not terminated pursuant to
Section 11, then
the Company shall: (A) within ten days after the date such request
is given, give notice thereof (the “Demand Notice”) to all Holders
other than the Initiating Holders; and (B) as soon as practicable,
and in any event within sixty days after the date such request is
given by the Initiating Holders, use its reasonable best efforts to
file and make effective a Form S-1 registration statement under the
Securities Act covering all Registrable Securities that the
Initiating Holders requested to be registered and any additional
Registrable Securities requested to be included in such
registration by any other Holders, as specified by notice given by
each such Holder to the Company within twenty days of the date the
Demand Notice is given, and in each case, subject to the
limitations of Section
2(a)(iii) and Section 3.
(ii) If
at any time when it is eligible to use a Form S-3 registration
statement, the Company receives a request from the Initiating
Holders that the Company file a Form S-3 registration statement
covering either (x) the potential sale of all or a portion of the
Registrable Securities then outstanding with an anticipated
aggregate offering price (excluding the offering price of any
shares subject to an over-allotment option) of at least $3,750,000
or (y) all of the Registrable Securities then held by a
Comprehensive Rights Holder whose rights under this Agreement have
not terminated pursuant to Section 11,
then the Company shall: (A) within ten days after the date such
request is given, give a Demand Notice to all Holders other than
the Initiating Holders; and (B) as soon as practicable, and in any
event within 45 days after the date such request is given by the
Initiating Holders, file and make effective a Form S-3 registration
statement under the Securities Act covering all Registrable
Securities that the Initiating Holders requested to be registered
and any additional Registrable Securities requested to be included
in such registration by any other Holders, as specified by notice
given by each such Holder to the Company within twenty days of the
date the Demand Notice is given, and in each case, subject to the
limitations of Section
2(a)(iii) and Section
3.
(iii) Notwithstanding
the foregoing obligations, if the Company furnishes to Initiating
Holders requesting a registration pursuant to this Section 2(a) a
certificate signed by the Company’s Chief Executive Officer stating
that in the good faith judgment of the Board of Directors of the
Company it would be materially detrimental to the Company and its
stockholders for such registration statement to either become
effective or remain effective for as long as such registration
statement otherwise would be required to remain effective, because
such action would (A) materially interfere with a significant
acquisition, corporate reorganization, or other similar transaction
involving the Company, (B) require premature disclosure of material
information that the Company has a bona fide business purpose for
preserving as confidential, or (C) render the Company unable to
comply with requirements under the Securities Act or Exchange Act,
then the Company shall have the right to defer taking action with
respect to such filing, and any time periods with respect to filing
or effectiveness thereof shall be tolled correspondingly, for a
period of not more than 120 days after the request of the
Initiating Holders is given; provided, however, that the
Company may not invoke this right more than once in any consecutive
twelve-month period; and provided further that the
Company shall not register any securities for its own account or
that of any other stockholder during such 120-day period other than
Excluded Registrations.
(iv) The
Company shall not be obligated to effect, or to take any action to
effect, any registration pursuant to Section 2(a)
(A) after the Company has effected a total of four registrations
pursuant thereto, or (B) if the Company has effected a registration
pursuant to Section 2(a)
within the six-month period immediately preceding the date of such
request. The Company shall not be obligated to effect, or to take
any action to effect, any registration pursuant to Section 2(a)(i)
(A) during the period that is sixty days before the
Company’s good faith
estimate of the date of filing of, and ending on a date that is 180
days after the effective date of, a Company-initiated registration,
provided
that the Company is actively employing in good faith commercially
reasonable efforts to cause such registration statement to become
effective, or (B) if the Initiating Holders propose to dispose of
Registrable Securities that may be immediately registered on Form
S-3 pursuant to a request made pursuant to Section
2(a)(ii). The Company shall not be obligated to effect, or
to take any action to effect, any registration pursuant to
Section
2(a)(ii) during the period that is thirty days before the
Company’s good faith
estimate of the date of filing of, and ending on a date that is
ninety days after the effective date of, a Company-initiated
registration, provided that the
Company is actively employing in good faith commercially reasonable
efforts to cause such registration statement to become effective. A
registration shall not be counted as “effected” for purposes of this Section
2(a)(iv) until such time as the applicable registration
statement has been declared effective by the SEC, unless the
Initiating Holders withdraw their request for such registration,
elect not to pay the registration expenses therefor, and forfeit
their right to one demand registration statement pursuant to
Section
6, in which case such withdrawn registration statement shall
be counted as “effected” for purposes of this Section
2(a)(iv).
6
(b) Company
Registration. If the Company
proposes to register (including, for this purpose, a registration
effected by the Company for stockholders other than the Holders)
any of its Class A Shares under the Securities Act in connection
with the public offering of such securities solely for cash (other
than in: (A) the IPO or (B) an Excluded Registration), the Company
shall, at such time, promptly give each Holder notice of such
registration. Upon the request of each Holder given within twenty
days after such notice is given by the Company, the Company shall,
subject to the provisions of Section
3, cause to be registered all
of the Registrable Securities that each such Holder has requested
to be included in such registration. The Company shall have the
right to terminate or withdraw any registration initiated by it
under this Section 2(b)
before the effective date of such
registration, whether or not any Holder has elected to include
Registrable Securities in such registration. The expenses (other
than Selling Expenses) of such withdrawn registration shall be
borne by the Company in accordance with Section
6.
3. Underwriting
Requirements.
(a) If, pursuant to
Section
2(a), the Initiating Holders intend to
distribute the Registrable Securities covered by their request by
means of an underwriting, they shall so advise the Company as a
part of their request made pursuant to Section 2(a),
and the Company shall include such information in the Demand
Notice. The underwriter(s) will be selected by the Company and
shall be reasonably acceptable to a majority in interest of the
Initiating Holders. In such event, the right of any Holder to
include such Holder’s
Registrable Securities in such registration shall be conditioned
upon such Holder’s
participation in such underwriting and the inclusion of such
Holder’s Registrable
Securities in the underwriting to the extent provided herein. All
Holders proposing to distribute their Registrable Securities
through such underwriting shall (together with the Company as
provided in Section 4(e))
enter into an underwriting agreement in customary form with the
underwriter(s) selected for such underwriting. Notwithstanding any
other provision of this Section 3(a),
if the managing underwriter advises the Initiating Holders in
writing that marketing factors require a limitation on the number
of Class A Shares to be underwritten, then the Initiating Holders
shall so advise all Holders that otherwise would be underwritten
pursuant hereto and the number of Registrable Securities that may
be included in the underwriting shall be allocated among such
Holders, including the Initiating Holders, in proportion (as nearly
as practicable) to the number of Registrable Securities owned by
each Holder or in such other proportion as shall mutually be agreed
to by all such selling Holders; provided, however, that the number
of Registrable Securities to be included in such underwriting shall
not be reduced unless all other Class A Shares are first entirely
excluded from the underwriting. To facilitate the allocation of
Class A Shares in accordance with the above provisions, the Company
or the underwriters may round the number of shares allocated for
sale by any Holder to the nearest 100 Registrable
Securities.
(b) In connection with
any offering involving an underwriting of shares of the
Company’s capital stock
pursuant to Section 2(b),
the Company shall not be required to include any of the
Holders’ Registrable
Securities in such underwriting unless the Holders accept the terms
of the underwriting as agreed upon between the Company and its
underwriters, and then only in such quantity as the underwriters in
their sole discretion determine will not jeopardize the success of
the offering by the Company. If the total number of securities,
including Registrable Securities, requested by stockholders to be
included in such offering exceeds the number of securities to be
sold (other than by the Company) that the underwriters in their
reasonable discretion determine is compatible with the success of
the offering, then the Company shall be required to include in the
offering only that number of such securities, including Registrable
Securities, that the underwriters and the Company in their sole
discretion determine will not jeopardize the success of the
offering. If the underwriters determine that less than all of the
Registrable Securities requested to be registered can be included
in such offering, then the Registrable Securities that are included
in such offering shall be allocated among the selling Holders in
proportion (as nearly as practicable to) the number of Registrable
Securities owned by each selling Holder or in such other
proportions as shall mutually be agreed to by all such selling
Holders. To facilitate the allocation of shares in accordance with
the above provisions, the Company or the underwriters may round the
number of shares allocated to any Holder to the nearest 100 shares.
Notwithstanding the foregoing, in no event shall (i) the number of
Registrable Securities included in the offering be reduced unless
all other securities (other than securities to be sold by the
Company) are first entirely excluded from the offering, or (ii) the
number of Registrable Securities included in the offering be
reduced below thirty percent of the total number of securities
included in such offering. For purposes of this Section 3(b)
concerning apportionment, for any selling Holder that is a
partnership, limited liability company, or corporation, the
partners, members, retired partners, retired members, stockholders
and Affiliates of such Holder, or the estates and Immediate Family
Members of any such partners, retired partners, members, retired
members and any trusts for the benefit of any of the foregoing
Persons, shall be deemed to be a single “selling Holder,” and any pro rata reduction with
respect to such “selling
Holder” shall be based
upon the aggregate number of Registrable Securities owned by all
Persons included in such “selling Holder,” as defined in this
sentence.
7
4. Obligations
of the Company. Whenever
required under this Agreement to effect the registration of any
Registrable Securities, the Company shall, as expeditiously as
reasonably possible:
(a) prepare and file
with the SEC a registration statement with respect to such
Registrable Securities and use its commercially reasonable efforts
to cause such registration statement to become effective and, upon
the request of the Holders of a majority of the Registrable
Securities registered thereunder, keep such registration statement
effective for a period of up to 180 days, in the case of a
registration statement pursuant to clause (y) of Section 2(a)(i) (regardless of
whether such registration also complies with clause (x) of Section 2(a)(i)) or
clause (y) of
Section 2(a)(ii)
(regardless of whether such registration also complies with
clause (x) of
Section 2(a)(ii)),
or otherwise 120 days or, if earlier, until the distribution
contemplated in the registration statement has been completed,
provided that such 180-day or 120-day period (as the case may be)
shall be extended for a period of time equal to the period the
Holder refrains, at the request of an underwriter of Class A Shares
(or other securities) of the Company, from selling any securities
included in such registration;
(b) prepare and file
with the SEC such amendments and supplements to such registration
statement, and the prospectus used in connection with such
registration statement, as may be necessary to comply with the
Securities Act in order to enable the disposition of all securities
covered by such registration statement;
(c) furnish to the
selling Holders such numbers of copies of a prospectus, including a
preliminary prospectus, as required by the Securities Act, and such
other documents as the Holders may reasonably request in order to
facilitate their disposition of their Registrable
Securities;
(d) use its
commercially reasonable efforts to register and qualify the
securities covered by such registration statement under such other
securities or blue-sky laws of such jurisdictions as shall be
reasonably requested by the selling Holders, provided that the Company shall not be
required to qualify to do business or to file a general consent to
service of process in any such states or jurisdictions, unless the
Company is already subject to service in such jurisdiction and
except as may be required by the Securities Act;
(e) in the event of any
underwritten public offering, enter into and perform its
obligations under an underwriting agreement, in usual and customary
form, with the underwriter(s) of such offering;
(f) use its
commercially reasonable efforts to cause all such Registrable
Securities covered by such registration statement to be listed on a
national securities exchange or trading system and each securities
exchange and trading system (if any) on which similar securities
issued by the Company are then listed;
(g) promptly make
available for inspection by the selling Holders, any managing
underwriter(s) participating in any disposition pursuant to such
registration statement, and any attorney or accountant or other
agent retained by any such underwriter or selected by the selling
Holders, all financial and other records, pertinent corporate
documents, and properties of the Company, and cause the
Company’s officers, directors, employees and independent
accountants to supply all information reasonably requested by any
such seller, underwriter, attorney, accountant, or agent, in each
case, as necessary or advisable to verify the accuracy of the
information in such registration statement and to conduct
appropriate due diligence in connection therewith;
(h) notify each selling
Holder, promptly after the Company receives notice of this
Agreement, of the time when such registration statement has been
declared effective or a supplement to any prospectus forming a part
of such registration statement has been filed; and
(i) after such
registration statement becomes effective, notify each selling
Holder of any request by the SEC that the Company amend or
supplement such registration statement or prospectus.
In
addition, the Company shall ensure that, at all times after any
registration statement covering a public offering of securities of
the Company under the Securities Act shall have become effective,
its insider trading policy shall provide that the
Company’s directors may
implement a trading program under Rule 10b5-1 of the Exchange
Act.
8
5. Furnish
Information. It shall be a
condition precedent to the obligations of the Company to take any
action pursuant to this Agreement, with respect to the Registrable
Securities of any selling Holder that such Holder shall furnish to
the Company such information regarding itself, the Registrable
Securities held by it, and the intended method of disposition of
such securities as is reasonably required to effect the
registration of such Holder’s Registrable
Securities.
6. Expenses of
Registration. All expenses (other than Selling Expenses)
incurred in connection with registrations, filings, or
qualifications pursuant to this Agreement, including all
registration, filing, and qualification fees; printers’ and accounting fees; fees and
disbursements of counsel for the Company; and the reasonable fees
and disbursements, not to exceed $50,000, of one counsel for the
selling Holders (“Selling Holder
Counsel”), shall
be borne and paid by the Company; provided, however, that
the Company shall not be required to pay for any expenses of any
registration proceeding begun pursuant to Section 2(a) if
the registration request is subsequently withdrawn at the request
of the Holders of a majority of the Registrable Securities to be
registered (in which case all selling Holders shall bear such
expenses pro rata based upon the number of Registrable Securities
that were to be included in the withdrawn registration), unless the
Holders of a majority of the Registrable Securities agree to
forfeit their right to one registration pursuant to Section 2(a);
provided
further that if, at the time of such withdrawal, the Holders
shall have learned of a material adverse change in the condition,
business, or prospects of the Company from that known to the
Holders at the time of their request and have withdrawn the request
with reasonable promptness after learning of such information then
the Holders shall not be required to pay any of such expenses and
shall not forfeit their right to one registration pursuant to
Section
2(a). All Selling Expenses relating to Registrable
Securities registered pursuant to this Section 6 shall
be borne and paid by the Holders pro rata on the basis of the
number of Registrable Securities registered on their
behalf.
7. Delay
of Registration. No Holder shall have any right to obtain or
seek an injunction restraining or otherwise delaying any
registration pursuant to this Agreement as the result of any
controversy that might arise with respect to the interpretation or
implementation of this Agreement.
8. Indemnification.
If any Registrable Securities are included in a registration
statement under this Agreement:
(a) To the extent
permitted by law, the Company will indemnify and hold harmless each
selling Holder, and the partners, members, officers, directors and
stockholders of each such Holder; legal counsel and accountants for
each such Holder; any underwriter (as defined in the Securities
Act) for each such Holder, and each Person, if any, that controls
such Holder or underwriter within the meaning of the Securities Act
or the Exchange Act, against any Damages, and the Company will pay
to each such Holder, underwriter, controlling Person, or other
aforementioned Person any legal or other expenses reasonably
incurred thereby in connection with investigating or defending any
claim or proceeding from which Damages may result, as such expenses
are incurred, provided that the indemnity agreement contained in
this Section 8(a)
shall not apply to amounts paid in settlement of any such claim or
proceeding if such settlement is effected without the consent of
the Company, which consent shall not be unreasonably withheld, nor
shall the Company be liable for any Damages to the extent that they
arise out of or are based upon actions or omissions made in
reliance upon and in conformity with written information furnished
by or on behalf of any such Holder, underwriter, controlling
Person, or other aforementioned Person expressly for use in
connection with such registration.
(b) To the extent
permitted by law, each selling Holder, severally and not jointly,
will indemnify and hold harmless the Company, and each of its
directors, each of its officers who has signed the registration
statement, each Person (if any), who controls the Company within
the meaning of the Securities Act, legal counsel and accountants
for the Company, any underwriter (as defined in the Securities
Act), any other Holder selling securities in such registration
statement, and any controlling Person of any such underwriter or
other Holder, against any Damages, in each case only to the extent
that such Damages arise out of or are based upon actions or
omissions made in reliance upon and in conformity with written
information furnished by or on behalf of such selling Holder
expressly for use in connection with such registration; and each
such selling Holder will pay to the Company and each other
aforementioned Person any legal or other expenses reasonably
incurred thereby in connection with investigating or defending any
claim or proceeding from which Damages may result, as such expenses
are incurred, provided that the indemnity agreement contained in
this Section 8(b)
shall not apply to amounts paid in settlement of any such claim or
proceeding if such settlement is effected without the consent of
the Holder, which consent shall not be unreasonably withheld and
provided further that in no event shall the aggregate amounts
payable by any Holder by way of indemnity or contribution under
Sections
8(b) and (d) exceed the
proceeds from the offering received by such Holder (net of any
Selling Expenses paid by such Holder), except in the case of fraud
or willful misconduct by such Holder.
(c) Promptly after
receipt by an indemnified party under this Section
8 of notice of the
commencement of any action (including any governmental action) for
which a party may be entitled to indemnification hereunder, such
indemnified party will, if a claim in respect to this Agreement is
to be made against any indemnifying party under this Section 8, give
the indemnifying party notice of the commencement of this
Agreement. The indemnifying party shall have the right to
participate in such action and, to the extent the indemnifying
party so desires, participate jointly with any other indemnifying
party to which notice has been given, and to assume the defense of
this Agreement with counsel mutually satisfactory to the parties,
provided that an indemnified party (together with all other
indemnified parties that may be represented without conflict by one
counsel) shall have the right to retain one separate counsel, with
the fees and expenses to be paid by the indemnifying party, if
representation of such indemnified party by the counsel retained by
the indemnifying party would be inappropriate due to actual or
potential differing interests between such indemnified party and
any other party represented by such counsel in such action. The
failure to give notice to the indemnifying party within a
reasonable time of the commencement of any such action shall
relieve such indemnifying party of any liability to the indemnified
party under this Section 8, to
the extent that such failure materially prejudices the indemnifying
party’s ability to defend
such action. The failure to give notice to the indemnifying party
will not relieve it of any liability that it may have to any
indemnified party otherwise than under this Section
8.
9
(d) To provide for just
and equitable contribution to joint liability under the Securities
Act in any case in which either: (i) any party otherwise entitled
to indemnification hereunder makes a claim for indemnification
pursuant to this Section 8 but
it is judicially determined (by the entry of a final judgment or
decree by a court of competent jurisdiction and the expiration of
time to appeal or the denial of the last right of appeal) that such
indemnification may not be enforced in such case, notwithstanding
the fact that this Section 8
provides for indemnification in such case, or (ii) contribution
under the Securities Act may be required on the part of any party
to this Agreement for which indemnification is provided under this
Section
8, then, and in each such case, such parties will contribute
to the aggregate losses, claims, damages, liabilities, or expenses
to which they may be subject (after contribution from others) in
such proportion as is appropriate to reflect the relative fault of
each of the indemnifying party and the indemnified party in
connection with the statements, omissions, or other actions that
resulted in such loss, claim, damage, liability, or expense, as
well as to reflect any other relevant equitable considerations. The
relative fault of the indemnifying party and of the indemnified
party shall be determined by reference to, among other things,
whether the untrue or allegedly untrue statement of a material
fact, or the omission or alleged omission of a material fact,
relates to information supplied by the indemnifying party or by the
indemnified party and the parties’ relative intent, knowledge, access
to information, and opportunity to correct or prevent such
statement or omission, provided that, in any such case (x) no
Holder will be required to contribute any amount in excess of the
public offering price of all such Registrable Securities offered
and sold by such Holder pursuant to such registration statement,
and (y) no Person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the Securities Act) will be
entitled to contribution from any Person who was not guilty of such
fraudulent misrepresentation and provided further that in no event
shall a Holder’s
liability pursuant to this Section 8(d),
when combined with the amounts paid or payable by such Holder
pursuant to Section 8(b),
exceed the proceeds from the offering received by such Holder (net
of any Selling Expenses paid by such Holder), except in the case of
willful misconduct or fraud by such Holder.
(e) Notwithstanding the
foregoing, to the extent that the provisions on indemnification and
contribution contained in the underwriting agreement entered into
in connection with the underwritten public offering are in conflict
with the foregoing provisions, the provisions in the underwriting
agreement shall control.
(f) Unless otherwise
superseded by an underwriting agreement entered into in connection
with the underwritten public offering, the obligations of the
Company and Holders under this Section 8 shall
survive the completion of any offering of Registrable Securities in
a registration under this Agreement, and otherwise shall survive
the termination of this Agreement.
9. Reports
Under Exchange Act. With a view
to making available to the Holders the benefits of SEC Rule 144 and
any other rule or regulation of the SEC that may at any time permit
a Holder to sell securities of the Company to the public without
registration or pursuant to a registration on Form S-3, the Company
shall:
(a) make and keep
available adequate current public information, as those terms are
understood and defined in SEC Rule 144, at all times after the
effective date of the registration statement filed by the Company
for the IPO;
(b) use commercially
reasonable efforts to file with the SEC in a timely manner all
reports and other documents required of the Company under the
Securities Act and the Exchange Act (at any time after the Company
has become subject to such reporting requirements);
and
(c) furnish to any
Holder, so long as the Holder owns any Registrable Securities,
forthwith upon request (i) to the extent accurate, a written
statement by the Company that it has complied with the reporting
requirements of SEC Rule 144 (at any time after ninety days after
the effective date of the registration statement filed by the
Company for the IPO), the Securities Act, and the Exchange Act (at
any time after the Company has become subject to such reporting
requirements), or that it qualifies as a registrant whose
securities may be resold pursuant to Form S-3 (at any time after
the Company so qualifies) and (ii) such other information as may be
reasonably requested in availing any Holder of any rule or
regulation of the SEC that permits the selling of any such
securities without registration (at any time after the Company has
become subject to the reporting requirements under the Exchange
Act) or pursuant to Form S-3 (at any time after the Company so
qualifies to use such form).
10
10. Limitations
on Subsequent Registration Rights. From and after the date of this Agreement, the
Company shall not, without the prior written consent of the Holders
of a majority of the Registrable Securities then outstanding, enter
into any agreement with any holder or prospective holder of any
securities of the Company that would (a) provide to such holder the
right to include securities in any registration on other than
either a pro rata basis with respect to the Registrable Securities
or on a subordinate basis after all Holders have had the
opportunity to include in the registration and offering all shares
of Registrable Securities they wish to so include or (b) allow such
holder or prospective holder to initiate a demand for registration
of any securities held by such holder or prospective
holder.
11. Termination
of Registration Rights. The right of any Holder to request
registration or inclusion of Registrable Securities in any
registration pursuant to Section 2(a) or
2(b) shall
terminate upon the earliest to occur of:
(a)
such time as Rule
144 or another similar exemption under the Securities Act is
available for the sale of all of such Holder’s Registrable
Securities shares without restriction by volume limitations;
and
(b) the fifth
anniversary of the closing of the IPO.
12. Changes
in Holders and Updating of Schedules.
(a) Successors and Assigns. The
rights of a Holder, either as an Incidental Rights Holder or a
Comprehensive Rights Holder, under this Agreement may be assigned
(but only with all related obligations) by such Holder to a
transferee of Registrable Securities that is (i) an Affiliate of
such Holder or (ii) an Immediate Family Member of such Holder or a
trust for the benefit of such individual Holder or one or more of
such Holder’s Immediate Family Members, provided that (A) the
Company is, within a reasonable time after such transfer, furnished
with written notice of the name and address of such transferee and
the Registrable Securities with respect to which such rights are
being transferred and (B) such transferee agrees, by executing and
delivering an Adoption Agreement to the Company, to be bound by and
subject to the terms and conditions of this Agreement. Upon such
execution and delivery of an Adoption Agreement by such transferee
and the Company, such transferee shall be deemed to be a party to
this Agreement and an Incidental Rights Holder or a Comprehensive
Rights Holder, to the same extent as the transferring Holder, as if
such transferee’s signature appeared on the signature page of
this Agreement. The terms and conditions of this Agreement inure to
the benefit of and are binding upon the respective successors and
permitted assignees of the parties. Nothing in this Agreement,
express or implied, is intended to confer upon any party other than
the parties to this Agreement or their respective successors and
permitted assignees any rights, remedies, obligations or
liabilities under or by reason of this Agreement, except as
expressly provided in Section 12(b)(i), Section 12(b)(ii) or elsewhere
herein.
(b)
Additional Holders.
(i) Each of Ninebell
Co., Ltd. (with respect to 133,334 Class A Shares purchased from
the Company as of September 11, 2017), Pudong Science and
Technology (Cayman) Co., Ltd. (with respect to 1,119,576 Class A
Shares purchased from the Company as of September 8, 2017),
Shanghai Science and Technology Venture Capital Co., Ltd. (with
respect to 4,998,508 shares of Series E Preferred Stock of the
Company purchased from the Company as of August 31, 2017), and
Zhangjiang AJ Company Limited (with respect to 787,098 Class A
Shares purchased from the Company as of September 8, 2017) may, at
its election, become subject to the terms of this Agreement as an
Incidental Rights Holder by executing and delivering an Adoption
Agreement. Upon the execution and delivery of an Adoption Agreement
to the Company by any such Person (with respect to the securities
referenced above), the Company shall countersign such Adoption
Agreement and (A) such Person shall be deemed to be a party to this
Agreement as if such Person’s signature appeared on the
signature pages of this Agreement and shall be deemed to be an
Incidental Rights Holder and (B) such Person shall be added to
SCHEDULE I in accordance with Section 12(c).
(ii) Each
Person who holds shares of any Preferred Series shall,
automatically without the need to execute or deliver an adoption or
joinder agreement, become subject to the terms of this Agreement as
an Incidental Rights Holder with respect to such shares upon the
receipt by ACM of a waiver and/or consent, executed by the holders
of a majority of the outstanding shares of such Preferred Series,
terminating all of the registration rights currently set forth in
one or more purchase agreements with respect to shares of such
Preferred Series, all satisfactory to the Company in form and
substance. Upon delivery of such a waiver and/or consent with
respect to shares of a Preferred Series, (A) each Person who is a
holder of record of shares of such Preferred Series as of the date
of such delivery shall be deemed to be a party to this Agreement as
if such Person’s signature appeared on the signature pages of
this Agreement and shall be deemed to be an Incidental Rights
Holder and (B) such Person shall be added to SCHEDULE I in
accordance with Section
12(c), it being understood that for such purpose the initial
address of such Person shall be its record address in the stock
register for such Preferred Series.
(iii) At
the election of the Company, any Person may become subject to the
terms of this Agreement as an Incidental Rights Holder at any time
after the date hereof by executing and delivering an Adoption
Agreement. Upon the execution and delivery of an Adoption Agreement
by such Person and the Company, (A) such Person shall be deemed to
be a party to this Agreement as if such Person’s signature
appeared on the signature pages of this Agreement and shall be
deemed to be an Incidental Rights Holder and (B) such Person shall
be added to SCHEDULE I in accordance with Section 12(c).
11
(c)
The Company shall
maintain each of SCHEDULE I and SCHEDULE II, which shall set
forth:
(i)
in SCHEDULE I, the
names of all Incidental Rights Holders from time to time, including
Incidental Rights Holders who become party to this Agreement in
accordance with Section
12(a) or clause
(i), (ii) or
(iii) of
Section 12(b), and
in SCHEDULE II, the names of all Comprehensive Rights Holders from
time to time, including Comprehensive Rights Holders who become
party to this Agreement in accordance with Section 12(a);
(ii)
the respective
contact address of each Holder, as provided to the Company by such
Holder at the time such Holder becomes party to this Agreement,
becomes subject to this Agreement or as subsequently provided to
the Company in accordance with Section 13(d); and
(iii)
the numbers and
types of securities of the Company held by each Holder that
constitute Registrable Securities or that are convertible or
exercisable for Registrable Securities.
The
Company shall update SCHEDULE I or SCHEDULE II, as the case may be,
upon any change in, or addition of, a Holder in accordance with
Section
12(a) or Section 12(b),
any change in the contact address of a Holder delivered to the
Company in accordance with Section 13(d),
or any other change or event that the Company determines, in good
faith, is necessary or desirable to fulfill the purposes of
SCHEDULE I or SCHEDULE II. Upon request of any Holder from time to
time, the Company shall promptly deliver to such Holder, in
accordance with Section 13(d),
a copy of the then-current versions of SCHEDULE I and SCHEDULE
II.
13. Miscellaneous.
(a)
Governing Law. This Agreement shall be
governed by the internal law of the State of Delaware.
(b) Counterparts. This
Agreement may be executed in counterparts, each of which shall be
deemed an original, but all of which together shall constitute one
and the same instrument. Counterparts may be delivered via
facsimile, electronic mail (including pdf or any electronic
signature complying with the U.S. Electronic Signatures in Global
and National Commerce Act, e.g., www.docusign.com)
or other transmission method and any counterpart so delivered shall
be deemed to have been duly and validly delivered and be valid and
effective for all purposes.
(c)
Construction. As used
in this Agreement:
(i)
headings used in
this Agreement are for convenience of reference only and shall not,
for any purpose, be deemed a part of this Agreement;
(ii)
any references
herein to a Section or Exhibit refer to a Section of, or Exhibit
attached to, this Agreement, unless specified
otherwise;
(iii)
the words
“herein,” “hereof,” “hereby,”
“hereto” and “hereunder” refer to this
Agreement as a whole;
(iv)
the words
“include,” “includes” and
“including” as used herein shall not be construed so as
to exclude any other thing not referred to or
described;
(v)
the word
“or” is not exclusive;
(vi)
the definition
given for any term in this Agreement shall apply equally to both
the singular and plural forms of the term defined;
(vii)
whenever the
context may require, any pronoun shall include the corresponding
masculine, feminine and neuter forms;
(viii)
unless the context
otherwise requires, (A) references herein to an agreement,
instrument or other document mean such agreement, instrument or
other document as amended, supplemented and modified from time to
time to the extent permitted by the provisions thereof and (B)
references herein to a statute means such statute as amended from
time to time and includes any successor legislation thereto and any
rules and regulations promulgated thereunder; and
(ix)
this Agreement
shall be construed without regard to any presumption or rule
requiring construction or interpretation against the party drafting
an instrument or causing any instrument to be drafted.
12
(d) Notices. All notices
and other communications given or made pursuant to this Agreement
shall be in writing and shall be deemed effectively given upon (i)
personal delivery to the party to be notified, (ii) if sent by
electronic mail, then (A) when sent, if sent between 9 a.m. and 5
p.m., Pacific time, on a Business Day or (B) as of 9 a.m. Pacific
time on the next Business Day, if sent at any other time, (iii) if
sent by U.S. registered or certified mail, return receipt
requested, postage prepaid, the earlier of actual receipt and the
fifth Business Day after having been deposited with the U.S. Postal
Service, or (iv) if sent via an internationally recognized
overnight courier, freight prepaid, specifying next or two Business
Day delivery, with written verification of receipt, two Business
Days after deposit with such courier. “Business
Day” means any day
other than (i) a Saturday or Sunday or (ii) a day on which the
Federal Reserve Bank of San Francisco is closed. All communications
shall be sent to the respective Holders at their addresses as set
forth on Schedule I or
Schedule
II, as applicable, or to the Company at its principal
office, to the attention of the Chief Executive Officer, or by
email to dwang@acmrcsh.com, or to such other street or email
address as subsequently modified by written notice given in
accordance with this Section 13(d).
If notice is given to the Company, a copy shall also be sent to
Mark L. Johnson at K&L Gates LLP, State Street Financial
Center, One Lincoln Street, Boston, Massachusetts
02111.
(e) 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 holders of a
majority of the Registrable Securities then outstanding,
provided
that any provision of this Agreement may be waived by any waiving
party on such party’s own
behalf, without the consent of any other party. Notwithstanding the
foregoing, this Agreement may not be amended or terminated and the
observance of any term of this Agreement may not be waived with
respect to any Holder without the written consent of such Holder,
unless such amendment, termination, or waiver applies to all
Holders in the same fashion (it being agreed that a waiver of the
provisions of this Agreement with respect to a particular
transaction shall be deemed to apply to all Holders in the same
fashion if such waiver does so by its terms, notwithstanding the
fact that certain Holders may nonetheless, by agreement with the
Company, purchase securities in such transaction). Further, this
Agreement may not be amended, and no provision hereof may be
waived, in each case, in any way that would adversely affect the
rights of the Comprehensive Rights Holders hereunder in a manner
disproportionate to any adverse effect such amendment or waiver
would have on the rights of the Holders hereunder (it being agreed
that any modification of the terms of Section 2(a) in
any fashion shall be deemed to be disproportionate for such
purposes), without the written consent of the holders of at least a
majority of the Demand Registrable Securities then outstanding. The
Company shall give prompt notice of any amendment or termination of
this Agreement or waiver hereunder to any party to this Agreement
that did not consent in writing to such amendment, termination, or
waiver. Any amendment, termination, or waiver effected in
accordance with this Section 13(e)
shall be binding on all parties to this Agreement, regardless of
whether any such party has consented to this Agreement. No waivers
of or exceptions to any term, condition, or provision of this
Agreement, in any one or more instances, shall be deemed to be or
construed as a further or continuing waiver of any such term,
condition, or provision.
(f) Severability. In case
any one or more of the provisions contained in this Agreement is
for any reason held to be invalid, illegal or unenforceable in any
respect, such invalidity, illegality, or unenforceability shall not
affect any other provision of this Agreement, and such invalid,
illegal, or unenforceable provision shall be reformed and construed
so that it will be valid, legal, and enforceable to the maximum
extent permitted by law.
(g) Aggregation of Stock.
All shares of Registrable Securities held or acquired by Affiliates
shall be aggregated together for the purpose of determining the
availability of any rights under this Agreement and such Affiliated
persons may apportion such rights as among themselves in any manner
they deem appropriate.
(h) Entire Agreement. This
Agreement (including any Schedules and Exhibits to this Agreement)
constitutes the full and entire understanding and agreement among
the parties with respect to the subject matter of this Agreement,
and any other written or oral agreement relating to the subject
matter of this Agreement existing between the parties is expressly
canceled.
13
(i) Dispute Resolution. The
parties (a) hereby irrevocably and unconditionally submit to the
jurisdiction of the state courts of Delaware and any federal court
located in the State of Delaware for the purpose of any suit,
action or other proceeding arising out of or based upon this
Agreement, (b) agree not to commence any suit, action or other
proceeding arising out of or based upon this Agreement except in
the state courts of Delaware or any federal court located in the
State of Delaware, and (c) hereby waive, and agree not to assert,
by way of motion, as a defense, or otherwise, in any such suit,
action or proceeding, any claim that it is not subject personally
to the jurisdiction of the above-named courts, that its property is
exempt or immune from attachment or execution, that the suit,
action or proceeding is brought in an inconvenient forum, that the
venue of the suit, action or proceeding is improper or that this
Agreement or the subject matter of this Agreement may not be
enforced in or by such court. Each party will bear its own costs in
respect of any disputes arising under this Agreement.
(j) Waiver of Jury Trial.
EACH PARTY HEREBY WAIVES ITS RIGHTS TO A JURY TRIAL OF ANY CLAIM OR
CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT, THE
OTHER TRANSACTION DOCUMENTS, THE SECURITIES OR THE SUBJECT MATTER
HEREOF OR THEREOF. THE SCOPE OF THIS WAIVER IS INTENDED TO BE
ALL-ENCOMPASSING OF ANY AND ALL DISPUTES THAT MAY BE FILED IN ANY
COURT AND THAT RELATE TO THE SUBJECT MATTER OF THIS TRANSACTION,
INCLUDING CONTRACT CLAIMS, TORT CLAIMS (INCLUDING NEGLIGENCE),
BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW AND STATUTORY
CLAIMS. THIS SECTION HAS BEEN FULLY DISCUSSED BY EACH OF THE
PARTIES HERETO AND THESE PROVISIONS WILL NOT BE SUBJECT TO ANY
EXCEPTIONS. EACH PARTY HERETO HEREBY FURTHER WARRANTS AND
REPRESENTS THAT SUCH PARTY HAS REVIEWED THIS WAIVER WITH ITS LEGAL
COUNSEL, AND THAT SUCH PARTY KNOWINGLY AND VOLUNTARILY WAIVES ITS
JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL
COUNSEL.
(k) Delays or Omissions. No
delay or omission to exercise any right, power, or remedy accruing
to any party under this Agreement, upon any breach or default of
any other party under this Agreement, shall impair any such right,
power, or remedy of such nonbreaching or nondefaulting party, nor
shall it be construed to be a waiver of or acquiescence to any such
breach or default, or to any similar breach or default thereafter
occurring, nor shall any waiver of any single breach or default be
deemed a waiver of any other breach or default heretofore or
thereafter occurring. All remedies, whether under this Agreement or
by law or otherwise afforded to any party, shall be cumulative and
not alternative.
(l) Amendment and Restatement of
the Original Agreement. The Original Agreement is hereby
amended in its entirety and restated herein. Upon such execution
and delivery, all provisions of, rights granted and covenants made
in the Original Agreement are hereby waived, released and
superseded in their entirety and shall have no further force or
effect.
(m) Additional Registration
Rights. While Xinxin (Hongkong) Capital Co., Limited or
Victorious Way Limited continues to be a Comprehensive Rights
Holder under this Agreement whose rights have not terminated
pursuant to Section 11, the
Company shall not, without the prior written consent of each such
Comprehensive Rights Holder, enter into any arrangement (other than
pursuant to this Agreement) with any holder or prospective holder
of securities of the Company under which such Person shall have the
right to request or demand that the Company file a registration
statement covering the potential sale of all or a portion of such
securities under the Securities Act.
[Remainder of Page Intentionally Left Blank]
14
IN
WITNESS WHEREOF, each of the parties has executed this Agreement or
caused the same to be executed by its duly authorized
representative as of the date first written above.
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ACM
RESEARCH, INC.
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By: |
/s/ David H. Wang
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David H.
Wang
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President and Chief
Executive Officer
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SHENGXIN
(SHANGHAI) MANAGEMENT
CONSULTING
LIMITED PARTNERSHIP
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| By: |
/s/ Jian
Wang
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Jian
Wang
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General
Partner
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Address:
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Rm. 210-32, 2nd
Fl., Building 1 38 Debao Rd.
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Pilot Free Trade
Zone
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Shanghai,
China
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Email:
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XINXIN
(HONGKONG) CAPITAL CO., LIMITED
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| By: |
/s/ Xinxin
(Hongkong) Capital Co., Limited
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Name:
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Title:
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Address:
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3rd Floor North,
No. 7 Financial Street
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Xicheng District,
Beijing 100033, P. R. China
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Email:
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VICTORIOUS
WAY LIMITED
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| By: |
/s/ Victorious Way
Limited
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Name:
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Title:
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Address:
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Vistra Corporate
Services Centre,
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Wickhams Cay II,
Road Town
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Tortola, VG1110,
British Virgin Islands
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Email:
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Signature Page To Second Amended And Restated Registration Rights
Agreement
15
SCHEDULE I
Incidental Rights Holders
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Name
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Securities
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SHENGXIN
(SHANGHAI) MANAGEMENT CONSULTING LIMITED PARTNERSHIP
Rm.
210-32, 2nd Fl., Building 1
38
Debao Rd.
Pilot
Free Trade Zone
Shanghai,
China
Email:
jian.wang@acmrcsh.com
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Warrant
dated March 14, 2017 issued by ACM Research, Inc. with respect to
397,502 Class A Shares (after giving effect to post-reverse split
effected on September 13, 2017)
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16
SCHEDULE II
Comprehensive Rights Holders
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Name
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Securities
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XINXIN
(HONGKONG) CAPITAL CO., LIMITED
3rd
Floor North, No. 7 Financial Street
Xicheng
District, Beijing 100033, P. R. China
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833,334
Class A Shares
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VICTORIOUS
WAY LIMITED
Vistra
Corporate Services Centre,
Wickhams Cay II,
Road Town
Tortola, VG1110,
British Virgin Islands
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500,000
Class A Shares
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17
EXHIBIT A
Adoption Agreement
This
Adoption Agreement (this “Adoption
Agreement”) is
executed on _____________, 20__, by the undersigned (“Acquirer”) pursuant to the terms of the
Second Amended and Restated Registration Rights Agreement dated as
of _____________, 2017 (the “Agreement”), by and among ACM Research, Inc.
and certain of its security holders, as such Agreement may be
further amended or restated. Capitalized terms used but not defined
in this Adoption Agreement shall have the respective meanings
ascribed to such terms in the Agreement. By the execution of this
Adoption Agreement, Acquirer agrees as follows.
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1.
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Acknowledgement.
Acquirer acknowledges that Acquirer is acquiring certain
Registrable Securities (which term, for purposes of this Adoption
Agreement, shall include securities convertible or exercisable for
Registrable Securities) for one of the following reasons
(check the correct
box):
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as a
transferee of Registrable Securities from a party in such
party’s capacity as an
“Incidental Rights
Holder,” bound by the
Agreement in accordance with Section
12(a), and after such transfer, Acquirer shall be
considered an “Incidental
Rights Holder” for all
purposes of the Agreement;
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as a
transferee of Registrable Securities from a party in such
party’s capacity as a
“Comprehensive Rights
Holder,” bound by the
Agreement in accordance with Section
12(a), and after such transfer, Acquirer shall be
considered a “Comprehensive Rights
Holder” for all purposes
of the Agreement;
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as a
purchaser of Registrable Securities from the Company in accordance
with Section 12(b)(i), after
which Acquirer shall be considered an “Incidental Rights Holder” for all purposes of the
Agreement;
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as a
holder of shares of a Preferred Series in accordance with
Section
12(b)(ii), after which Acquirer shall be
considered an “Incidental
Rights Holder” for all
purposes of the Agreement; or
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as a
holder of securities of the Company in accordance with Section
12(b)(iii), after which Acquirer shall be considered
an “Incidental Rights
Holder” for all purposes
of the Agreement.
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2.
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Agreement. Acquirer
adopts the Agreement with the same force and effect as if Acquirer
were originally a party to this Agreement.
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3.
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Conflicts.
In the event that the terms of the Agreement conflict with any
other agreement pursuant to which Acquirer is bound, Acquirer
expressly acknowledges and agrees that the terms of the Agreement
shall govern.
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4.
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Notice. Any
notice required or permitted by the Agreement shall be given to
Acquirer at the address or email address listed below
Acquirer’s signature to
this Agreement.
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ACQUIRER:
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ACCEPTED
AND AGREED:
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By:
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ACM RESEARCH, INC.
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Name:
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Title:
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Address:
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By:
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Name:
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Title:
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Email:
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18
Exhibit 23.01
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING
FIRM
ACM
Research, Inc.
42307
Osgood Road, Suite I
Fremont,
California 94539
United
States
We
hereby consent to the incorporation by reference in the Prospectus
constituting a part of this Registration Statement on Form S-3 of
ACM Research, Inc. (the “Company”) of our report dated
March 22, 2018, relating to the consolidated financial statements
of the Company appearing in the Company’s Annual Report on
Form 10-K for the year ended December 31, 2017.
We also
consent to the reference to us under the caption
“Experts” in the Prospectus.
/s/ BDO
China Shu Lun Pan Certified Public Accountants LLP
BDO
China Shu Lun Pan Certified Public Accountants LLP
Shenzhen,
The People’s Republic of China
December
10, 2018