1
EXHIBIT 4.1
BELMONT REGISTRATION RIGHTS AGREEMENT
THIS BELMONT REGISTRATION RIGHTS AGREEMENT ("Agreement") is
made and entered into as of this 1st day of March, 1997 by and among
PHARMACEUTICAL PRODUCT DEVELOPMENT, INC., a North Carolina corporation (the
"Company"), and XXXXXXXX X. XXXXXXX, XXXX XXXXXXXXX and XXXXXX POOL
(collectively, the "Holders").
RECITALS:
WHEREAS, the Holders own shares of Registrable Stock (as
defined below); and
WHEREAS, the Company and the Holders have agreed to enter into
this Agreement in order to set out certain rights of the Holders with respect to
the registration of Registrable Stock under the 1933 Act (as defined below).
NOW, THEREFORE, in consideration of the foregoing recitals,
the mutual promises and undertakings herein contained and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereby agree as follows:
1. Definitions and References. For purposes of this Agreement
and in addition to the definitions set forth above and elsewhere herein, the
following definitions shall apply:
"1933 Act" means the Securities Act of 1933, as amended, or
any similar federal statute, and the rules and regulations of the
Commission thereunder, all as the same shall be in effect at the time.
"Affiliate" of a Holder means a person who controls, is
controlled by or is under common control with such Holder, or the
spouse or children (or a trust exclusively for the benefit of a spouse
and/or children) of such Holder, or, in the case of a Holder which is a
partnership, its partners.
"Agreement" means this Registration Rights Agreement, dated as
of March 1, 1997, among the Company and the Holders, and all amendments
hereto made in accordance with the provisions of Section 17.
"Commission" means the United States Securities and
Exchange Commission and any successor agency.
"Common Stock" means the Common Stock, par value $0.10 per
share, of the Company, as constituted as of the date of this Agreement,
and as the same may be adjusted from time to
2
time for stock splits, stock dividends and other similar
events.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended, or any similar federal statute, and the rules and regulations
of the Commission thereunder, all as the same shall be in effect at the
time.
"First Year" means the twelve-month period ending on the first
anniversary date of this Agreement.
"Holders" has the meaning specified in the preamble to
this Agreement.
"Merger" means the merger of Belmont Research, Inc., a
Massachusetts corporation, with and into Subsidiary No. 1, a North
Carolina corporation and wholly-owned subsidiary of the Company,
pursuant to an Agreement and Plan of Reorganization dated February 11,
1997.
"Register," "registered" and "registration" refers to a
registration effected by preparing and filing a registration statement
or similar document on Form S-3 (or any successor form thereto) in
compliance with the 1933 Act and the declaration or ordering of
effectiveness of such registration statement or document.
"Registrable Stock" means the aggregate of 310,000 shares of
Common Stock owned by the Holders as of the date hereof and any shares
of Common Stock issued or issuable with respect to any such shares of
Registrable Stock by way of a stock dividend or stock split or in
connection with a combination of shares, recapitalization, merger,
consolidation or other reorganization or otherwise. As to any
particular shares of Registrable Stock that have been issued, such
securities shall cease to be Registrable Stock when (a) a registration
statement with respect to the sale of such securities shall have become
effective under the 1933 Act and such securities shall have been
disposed of under such registration statement, (b) they shall have been
distributed to the public pursuant to Rule 144, (c) the Holder of such
shares is able to dispose of all of the shares then held by such Holder
pursuant to Rule 144(k), (d) they shall have been otherwise transferred
or disposed of, and new certificates therefor not bearing a legend
required by Section 2 restricting further transfer shall have been
delivered by the Company, and subsequent transfer or disposition of
such securities shall not require their registration or qualification
under the 1933 Act or any similar state law then in force or
qualification under the 1933 Act or any similar state law then in
force, or (e) they shall have ceased to be outstanding.
2
3
"Rule 144" means Rule 144 (or any successor provision) under
the 1933 Act.
"Second Year" means the twelve-month period ending on the
second anniversary date of this Agreement.
2. Restrictive Legend. Each certificate representing
Registrable Stock shall, except as otherwise provided in this Section 2 or in
Section 3, be stamped or otherwise imprinted with a legend substantially in the
following form:
"THE SHARES OF STOCK EVIDENCED BY THIS CERTIFICATE HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT") AND MAY NOT BE SOLD,
OFFERED FOR SALE, ASSIGNED, MORTGAGED, PLEDGED,
HYPOTHECATED OR OTHERWISE TRANSFERRED WITHOUT AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES
ACT COVERING SUCH SHARES, COMPLIANCE WITH AN EXEMPTION
FROM REGISTRATION UNDER THE SECURITIES ACT, SUCH AS RULE
144 PROMULGATED UNDER THE SECURITIES ACT, OR AN OPINION
OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH
REGISTRATION IS NOT REQUIRED."
A certificate shall not bear such legend if in the opinion of counsel
satisfactory to the Company the securities being sold thereby may be publicly
sold without registration under the Securities Act. For purposes of Sections 2
and 3 hereof, X'Xxxxxx, Broude & Xxxxxxx shall be deemed to be counsel
satisfactory to the Company.
3. Notice of Proposed Transfer. Prior to any proposed transfer
of any Registrable Stock, the Holder thereof shall give written notice to the
Company of its intention to effect such transfer. Each such notice shall
describe the manner of the proposed transfer and, if requested by the Company in
writing, shall be accompanied by an opinion of counsel satisfactory to the
Company to the effect that the proposed transfer may be effected without
registration under the 1933 Act, whereupon the Holder of such Registrable Stock
shall be entitled to transfer such Registrable Stock in accordance with the
terms of its notice. Each certificate for Registrable Stock transferred as above
provided shall bear the legend set forth in Section 2, except that such
certificate shall not bear such legend if (i) such transfer is in accordance
with the provisions of Rule 144 (or any other rule permitting public sale
without registration under the 0000 Xxx) or (ii) the opinion of counsel referred
to above is to the further effect that the transferee and any subsequent
transferee (other than an Affiliate of the Company) would be entitled to
transfer such securities in a public sale without registration under the
Securities Act. The restrictions provided for in this Section 3
3
4
shall not apply to securities which are not required to bear the legend
prescribed by Section 2 in accordance with the provisions of that Section.
4. Registration on Form S-3. The Holders shall be entitled to
request the Company to file not more than two (2) registration statements on
Form S-3 (or any successor form thereto), subject to and upon all of the
following terms and conditions:
a. Any request to file a registration statement on
Form S-3 shall be made to the Company in writing and signed by all of the
Holders. Any shares of Registrable Stock covered by a registration statement
filed on Form S-3 shall be allocated among the Holders as they agree.
b. One request to file a registration statement on
Form S-3 may be made during the First Year and may include a request to register
up to 160,000 shares of Registrable Stock. The Company shall use its best
efforts to keep the registration statement filed during the First Year effective
for a period of sixty (60) days from the later of: (i) the date on which the
registration statement is first declared effective by the Commission, or (ii)
the date the Holders may sell shares of Registrable Stock without violating
applicable securities laws and regulations and without violating accounting
principles which permit the Company to account for the Merger as a "pooling of
interests".
c. One request to file a registration statement on
Form S-3 may be made during the Second Year and may include a request to
register up to 150,000 shares of Registrable Stock. The Company shall use its
best efforts to keep the registration statement filed during the Second Year
effective for a period of sixty (60) days from the date on which the
registration statement is first declared effective by the Commission.
d. The Company agrees to use its best efforts to
cause the filing of a registration statement on Form S-3 within thirty (30) days
after receipt by the Company of a request pursuant to this Section 4; provided,
however, that the Company shall not be required to request an acceleration of
the effectiveness of a registration statement on Form S-3 during the First Year
prior to the date when the Holders may sell shares of Registrable Stock without
violating applicable securities laws and regulations and without violating
accounting principles which permit the Company to account for the Merger as a
"poooling of interests".
e. The Company shall not be required to effect a
registration statement pursuant to this Section 4 during the period starting
with the date of filing by the Company of, and ending on a date ninety (90) days
following the effective date of, a
4
5
registration statement pertaining to a public offering of securities for the
account of the Company; provided that the Company in good faith shall use all
reasonable efforts to cause such registration statement to become effective as
soon as possible.
f. With respect to any request to file a registration
statement on Form S-3 which is made pursuant to this Section 4 and which is made
more than sixty (60) days after the closing of the Merger, if the Company shall
furnish to the Holders a certificate signed by the chief executive officer or
president of the Company stating that, in the good faith opinion of the board of
directors of the Company, the filing of any registration statement pursuant to
this Section 4 would interfere with any material transaction then being pursued
by the Company, then the Company's obligation to use its best efforts to file
such registration statement shall be deferred for a reasonable period solely so
as not to interfere with such material transaction, but in any event not to
exceed ninety (90) days.
g. The Company shall not be obligated to effect and
pay for more than a total of two (2) registrations pursuant to this Section 4;
provided that a registration requested pursuant to Section 4 shall not be deemed
to have been effected unless (i) it has been declared effective by the
Commission, (ii) it has remained effective for the period set forth in Section
5.a., and (iii) the offering of Registrable Stock pursuant to such registration
is not subject to any stop order, injunction or other order or requirement of
the Commission (other than any such stop order, injunction, or other requirement
of the Commission prompted by any act or omission of Holders of Registrable
Stock).
h. The Company shall use its best efforts to maintain
its eligibility to file a registration statement on Form S-3. If the Company
becomes ineligible to file a registration statement on Form S-3, the Company
shall be required to fulfill its registration obligations under this Agreement
using a registration statement on Form S-1.
i. The Holders will give to the Company written
notice, together with delivery of the Stock Sale Agreement and related documents
attached hereto as Exhibit A, prior to selling or disposing of any shares of
Registrable Stock during the effective period of any registration statement
filed on Form S-3 pursuant to this Section 4.
j. The Holders agree that they will not directly or
indirectly purchase, sell or otherwise deal in the securities of the Company in
any instance in which they are in possession of material, nonpublic information
regarding the Company or its business or in any instance which would result in
the Company not being able to account for the Merger as a pooling of interests
5
6
under applicable accounting principles.
5. Obligations of the Company. Whenever required under Section
4 to use its best efforts to effect the registration of any Registrable Stock,
the Company shall as expeditiously as possible:
a. Prepare and file with the Commission a
registration statement with respect to such Registrable Stock and cause such
registration statement to become and remain effective until the earlier of the
sale of all Registrable Stock covered thereby or sixty (60) days after the
effective date thereof;
b. Prepare and file with the Commission such
amendments and supplements to such registration statement and the prospectus
used in connection therewith as may be necessary to comply with the provisions
of the 1933 Act with respect to the disposition of all Registrable Stock
covered by such registration statement;
c. Promptly notify the Holders of the effectiveness
of the registration statement as soon as it is declared effective by the
Commission and furnish to Holders such numbers of copies of the registration
statement and the prospectus included therein (including each preliminary
prospectus and any amendments or supplements thereto in conformity with the
requirements of the 0000 Xxx) and such other documents and information as they
may reasonably request;
d. Register or qualify the Registrable Stock
covered by such registration statement under such other securities or blue sky
laws of such jurisdiction within the United States and Puerto Rico as shall be
reasonably appropriate for the distribution of the Registrable Stock covered by
the registration statement; provided, however, that the Company shall not be
required in connection therewith or as a condition thereto to qualify to do
business in or to file a general consent to service of process in any
jurisdiction wherein it would not but for the requirements of this paragraph
(d) be obligated to do so; and provided, further, that the Company shall not be
required to qualify such Registrable Stock in any jurisdiction in which the
securities regulatory authority requires that any Holder submit any shares of
its Registrable Stock to the terms, provisions and restrictions of any escrow,
lockup or similar agreement(s) for consent to sell Registrable Stock in such
jurisdiction unless such Holder agrees to do so;
e. Promptly notify each Holder for whom such
Registrable Stock is covered by such registration statement, at any time when a
prospectus relating thereto is required to be delivered under the 1933 Act, of
the happening of any event as a result of which the prospectus included in such
registration statement, as then in effect, includes an untrue statement of a
material fact or
6
7
omits to state any material fact required to be stated therein or necessary to
make the statements therein not misleading in light of the circumstances under
which they were made, and, if all the Registrable Stock covered by such
registration statement has not been sold, promptly prepare and file with the
Commission any required amendments to such registration statement and furnish to
such Holder a reasonable number of copies of a supplement to or an amendment of
such prospectus as may be necessary so that, as thereafter delivered to the
purchasers of such securities, such prospectus shall not include an untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein not misleading in
light of the circumstances under which they were made; and
f. Use its best efforts to comply with all
applicable rules and regulations of the Commission.
6. Furnish Information. It shall be a condition precedent to
the obligations of the Company to take any action pursuant to this Agreement
that the Holders shall furnish to the Company such information regarding
themselves, the Registrable Stock held by them, and the intended method of
disposition of such securities as the Company shall reasonably request and as
shall be required in connection with the action to be taken by the Company.
7. Expenses of Registration. All expenses incurred in
connection with each registration pursuant to Section 4 of this Agreement,
excluding brokers' commissions, shall be paid by the Company. The Holders shall
bear and pay the brokers' commissions applicable to securities offered for their
account in connection with any registrations, filings and qualifications made
pursuant to this Agreement.
8. Representations of the Company. As of the date of this
Agreement:
a. The Company meets all requirements for filing a
registration statement on Form S-3 under the rules and regulations of the 1933
Act.
b. The Company has no present plan to file a
registration statement covering any of its securities prior to July 1, 1997.
9. Indemnification. In the event any Registrable Stock is
included in a registration statement under this Agreement:
a. The Company shall indemnify and hold harmless each
Holder, each person who participates in the offering of such Registrable Stock,
including underwriters (as defined in the 1933 Act), and each person, if any,
who controls such Holder or participating person within the meaning of the 1933
Act, against
7
8
any losses, claims, damages or liabilities, joint or several, to which they may
become subject under the 1933 Act or otherwise, insofar as such losses, claims,
damages or liabilities (or proceedings in respect thereof) arise out of or are
based on any untrue or alleged untrue statement of any material fact contained
in such registration statement on the effective date thereof (including any
prospectus filed under Rule 424 under the 1933 Act or any amendments or
supplements thereto) or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, and shall reimburse
each such Holder, such participating person or controlling person for any legal
or other expenses reasonably incurred by them (but not in excess of expenses
incurred in respect of one counsel for all of them unless there is an actual
conflict of interest between any indemnified parties, which indemnified parties
may be represented by separate counsel) in connection with investigating or
defending any such loss, claim, damage, liability or action; provided, however,
that the indemnity agreement contained in this Section 8.a. shall not apply to
amounts paid in settlement of any such loss, claim, damage, liability or action
if such settlement is effected without the consent of the Company (which consent
shall not be unreasonably withheld); provided, further, that the Company shall
not be liable to any Holder, participating person or controlling person in any
such case for any such loss, claim, damage, liability or action to the extent
that it arises out of or is based upon an untrue statement or alleged untrue
statement or omission or alleged omission made in connection with such
registration statement, preliminary prospectus, final prospectus or amendments
or supplements thereto, in reliance upon and in conformity with written
information furnished expressly for use in connection with such registration by
any such Holder, participating person or controlling person. Such indemnity
shall remain in full force and effect regardless of any investigation made by or
on behalf of any such Holder, participating person or controlling person, and
shall survive the transfer of such securities by such Holder.
b. Each Holder requesting or joining in a
registration, severally and not jointly, shall indemnify and hold harmless the
Company, each of its directors and officers, each person, if any, who controls
the Company within the meaning of the 1933 Act, and each agent and any
underwriter for the Company (within the meaning of the 0000 Xxx) against any
losses, claims, damages or liabilities, joint or several, to which the Company
or any such director, officer, controlling person, agent or underwriter may
become subject, under the 1933 Act or otherwise, insofar as such losses, claims,
damages or liabilities (or proceedings in respect thereof) arise out of or are
based upon any untrue statement or alleged untrue statement of any material fact
contained in such registration statement on the effective date thereof
(including any prospectus filed under Rule 424 under the
8
9
1933 Act or any amendments or supplements thereto) or arise out of or are based
upon the omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not misleading,
in each case to the extent, but only to the extent, that such untrue statement
or alleged untrue statement or omission or alleged omission was made in such
registration statement, preliminary or final prospectus, or amendments or
supplements thereto, in reliance upon and in conformity with written information
furnished by or on behalf of such Holder expressly for use in connection with
such registration; and each such Holder shall reimburse any legal or other
expenses reasonably incurred by the Company or any such director, officer,
controlling person, agent or underwriter (but not in excess of expenses incurred
in respect of one counsel for all of them unless there is an actual conflict of
interest between any indemnified parties, which indemnified parties may be
represented by separate counsel) in connection with investigating or defending
any such loss, claim, damage, liability or action; provided, however, that the
indemnity agreement contained in this Section 8.b. shall not apply to amounts
paid in settlement of any such loss, claim, damage, liability or action if such
settlement is effected without the consent of such Holder (which consent shall
not be unreasonably withheld), and provided, further, that the liability of each
Holder hereunder shall be limited to the proportion of any such loss, claim,
damage, liability or expense which is equal to the proportion that the net
proceeds from the sale of the shares sold by such Holder under such registration
statement bears to the total net proceeds from the sale of all securities sold
thereunder, but not in any event to exceed the net proceeds received by such
Holder form the sale of Registrable Stock covered by such registration
statement.
c. Promptly after receipt by an indemnified party
under this Section of notice of the commencement of any action, such indemnified
party shall, if a claim in respect thereof is to be made against any
indemnifying party under this Section, notify the indemnifying party in writing
of the commencement thereof and the indemnifying party shall have the right to
participate in and assume the defense thereof with counsel selected by the
indemnifying party and reasonably satisfactory to the indemnified party;
provided, however, that an indemnified party shall have the right to retain its
own counsel, with all fees and expenses thereof to be paid by such indemnified
party, and to be apprised of all progress in any proceeding the defense of which
has been assumed by the indemnifying party. The failure to notify an
indemnifying party promptly of the commencement of any such action, if and to
the extent prejudicial to its ability to defend such action, shall relieve such
indemnifying party of any liability to the indemnified party under this Section,
but the omission so to notify the indemnifying party will not relieve it of any
liability that it may have to any indemnified party otherwise than under this
Section.
9
10
d. To the extent any indemnification by an
indemnifying party is prohibited or limited by law, the indemnifying party, in
lieu of indemnifying such indemnified party, shall contribute to the amount paid
or payable by such indemnified party as a result of such losses, claims, damages
or liabilities in such proportion as is appropriate to reflect the relative
fault of the indemnifying party and indemnified party in connection with the
actions which resulted in such losses, claims, damages or liabilities, as well
as any other relevant equitable considerations. The relative fault of such
indemnifying party and indemnified party shall be determined by reference to,
among other things, whether any action in question, including any untrue or
alleged untrue statement of material fact or omission or alleged omission to
state a material fact, has been made by, or relates to information supplied by,
such indemnifying party or indemnified party, and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
action. The amount paid or payable by a party as a result of the losses, claims,
damages or liabilities referred to above shall be deemed to include any legal or
other fees or expenses reasonably incurred by such party in connection with any
investigation or proceeding.
The parties hereto agree that it would not be just
and equitable if contribution pursuant to this Section 8.d. were determined by
pro rata allocation or by any other method of allocation which does not take
account of the equitable considerations referred to in the immediately preceding
paragraph. No person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the 0000 Xxx) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation.
10. Limitation on Registration Rights. Notwithstanding any
other provisions of this Agreement to the contrary, the Company shall not be
required to register any Registrable Stock under this Agreement with respect to
any request or requests made by any Holder after February 28, 1999.
11. Successors and Assigns. Except as otherwise expressly
provided herein, the terms and conditions of this Agreement shall inure to the
benefit of and be binding upon the respective successors and assigns of the
parties hereto. Except as expressly provided in this Agreement, nothing in this
Agreement, express or implied, is intended to confer upon any person other than
the parties hereto or their respective successors and assigns any rights,
remedies, obligations, or liabilities under or by reason of this Agreement.
12. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of North Carolina.
10
11
13. Arbitration. Any dispute, controversy or claim arising out
of or relating to this Agreement, including but not limited to any breach, or as
to its existence, validity, interpretation, performance or non-performance,
breach or damages, including claims in tort, shall be decided by a single
neutral arbitrator, at a location agreed upon in writing, in binding arbitration
pursuant to the commercial Arbitration Rules of the American Arbitration
Association then in effect. The parties to any such arbitration shall be limited
to the parties to this Agreement or any successor thereof. The arbitration shall
be conducted in accordance with the procedural laws of the United States Federal
Arbitration Act, as amended. The written decision of the arbitrator shall be
final and binding, and may be entered and enforced in any court of competent
jurisdiction and each party specifically acknowledges and agrees to waive any
right to a jury trial in any such forum. Each party to the arbitration shall pay
its fees and expenses, unless otherwise determined by the arbitrator.
14. Counterparts. This Agreement may be executed in two or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
15. Titles. The titles of the Sections of this Agreement are
used for convenience only and are not to be considered in construing or
interpreting this Agreement.
16. Notices. Any notice required or permitted under this
Agreement shall be in writing and shall be delivered in person or mailed by
certified or registered mail, return receipt requested, directed to (a) the
Company at the address set forth below its signature hereof or (b) to a Holder
at the address therefor as set forth in the Company's records or, in any such
case, at such other address or addresses as shall have been furnished in writing
by such party to the others. The giving of any notice required hereunder may be
waived in writing by the parties hereto. Every notice or other communication
hereunder shall be deemed to have been duly given or served on the date on which
personally delivered, or on the date actually received, if sent by mail or
telex, with receipt acknowledged.
17. Amendments and Waivers. Any provision of this Agreement
may be amended and the observance of any provision 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
at least a majority of the Registrable Stock then outstanding. Any amendment or
waiver effected in accordance with this Section 17 shall be binding upon each
Holder of any securities subject to this Agreement at the time outstanding
(including securities into which such securities are convertible), each future
Holder and all such
11
12
securities, and the Company.
18. Severability. If one or more provisions of this Agreement
are held to be unenforceable under applicable law, such provisions shall be
excluded from this Agreement and the balance of this Agreement shall be
interpreted as if such provisions were so excluded and shall be enforceable in
accordance with its terms.
19. Entire Agreement. All prior agreements of the parties
concerning the subject matter of this Agreement are expressly superseded by this
Agreement. This Agreement and the Second Amendment to Registration Rights
Agreement, dated March 1, 1997, by and among the Company and the persons listed
on Schedules 1 and 2 thereof, contains the entire Agreement of the parties
concerning the subject matter hereof. Any oral representations or modifications
of this Agreement shall be of no effect.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the date first above written.
PHARMACEUTICAL PRODUCT DEVELOPMENT,
INC.
BY: _______________________________
[CORPORATE SEAL] Name: _________________________
Title: ________________________
ATTEST:
0000 X. 00xx Xxxxxx Extension
_________________________ Xxxxxxxxxx, XX 00000
______________ Secretary
_____________________________(SEAL)
Xxxxxxxx X. Xxxxxxx
_____________________________(SEAL)
Xxxx Xxxxxxxxx
_____________________________(SEAL)
Xxxxxx Pool
12
