e424b3
As filed pursuant to Rule 424(b)(3)
Registration Statement No. 333-170526
PROSPECTUS
eResearchTechnology, Inc.
$150,000,000
Debt Securities
Common Stock
Preferred Stock
Depositary Shares
Warrants
Units
We may offer from time to time to sell debt securities, common stock, preferred stock,
depositary shares, warrants and units that include any of these securities. The debt securities may
be senior, senior subordinated or subordinated and may be secured or unsecured. We may also issue
any of the common stock, preferred stock, warrants or units upon the conversion, exchange or
exercise of any of the securities listed above. The aggregate initial offering price of the
securities that we offer will not exceed $150,000,000.
Shares of our common stock are traded on The Nasdaq Global Select Market under the symbol
ERES.
We may offer and sell these securities to or through one or more underwriters, dealers and
agents, or directly to purchasers, on a continuous or delayed basis.
This prospectus describes some of the general terms that may apply to these securities. We
will offer the securities in amounts, at prices and on terms determined in part by market
conditions at the time of the offering. The specific terms of any securities to be offered will be
described in a supplement to this prospectus.
You should refer to the risk factors that may be included in a prospectus supplement and in
our periodic reports and other information we file with the Securities and Exchange Commission and
carefully consider that information before investing in our securities.
Neither the Securities and Exchange Commission nor any state securities commission has
approved or disapproved of these securities or determined if this prospectus is truthful or
complete. Any representation to the contrary is a criminal offense.
The date of this prospectus is November 24, 2010
TABLE OF CONTENTS
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The registration statement containing this prospectus, including the exhibits to the
registration statement, provides additional information about us and the securities offered under
this prospectus. The registration statement, including the exhibits and the documents incorporated
herein by reference, can be read on the SEC website or at the SEC offices mentioned under the
heading Where You Can Find More Information.
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ABOUT THIS PROSPECTUS
We may from time to time sell the securities in one or more offerings. This prospectus
provides you with a general description of the securities. Each time we offer the securities, we
will provide a prospectus supplement that will contain specific information about the terms of that
offering. The prospectus supplement may also supplement, modify or supersede other information
contained in this prospectus. You should read both this prospectus and any prospectus supplement
together with the information incorporated by reference as described below under the heading
Incorporation by Reference.
You should rely only on the information provided in this prospectus and in any prospectus
supplement, including the information incorporated by reference. We have not authorized anyone to
provide you with different information. We are not offering the securities in any state where the
offer is not permitted. You should not assume that the information in this prospectus, or any
supplement to this prospectus, is accurate at any date other than the date indicated on the cover
page of these documents.
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and current reports, proxy statements and other information with the
Securities and Exchange Commission, or SEC. Our SEC filings are available to the public from the
SECs website at www.sec.gov or from our website at www.ert.com. You may also read and copy any
document we file at the SECs public reference room in Washington, D.C., located at 100 F Street,
N.E., Room 1580, Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 for further
information on the public reference room. Information about us is also available at our website at
www.ert.com. However, the information on our website is not part of this prospectus.
INCORPORATION BY REFERENCE
The SEC allows us to incorporate by reference in this prospectus the information in the
documents that we file with it, which means that we can disclose important information to you by
referring you to those documents. The information incorporated by reference is considered to be a
part of this prospectus. Any information that is part of this prospectus or any prospectus
supplement that speaks as of a later date than any other information that is part of this
prospectus or any prospectus supplement updates or supersedes such other information. We
incorporate by reference in this prospectus the documents listed below and any documents or
portions thereof that we file with the SEC after the date of this prospectus under Sections 13(a),
13(c), 14 or 15(d) of the Securities Exchange Act of 1934, or Exchange Act, until we sell, or
otherwise terminate the offering of, all of the securities that may be offered by this prospectus.
We do not, however, incorporate by reference in this prospectus any documents or portions thereof,
or any other information, that we furnish or are deemed to furnish, and not file, with the SEC in
accordance with the SEC rules.
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Our Annual Report on Form 10-K for the fiscal year ended December 31, 2009, filed on March
3, 2010; |
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Our Quarterly Reports on Form 10-Q for the fiscal quarters ended March 31, 2010, June 30,
2010 and September 30, 2010, filed on May 7, 2010, August 9, 2010 and November 9, 2010; |
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Our Current Reports on Form 8-K filed on February 25, 2010, March 1, 2010, March 19, 2010,
April 29, 2010, April 30, 2010, June 3, 2010 (as amended on August 5, 2010), August 9, 2010,
September 16, 2010 and November 4, 2010; and |
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The description of our common stock, par value $0.01 per share, as set forth under the
caption Description of Capital Stock presented on page 45 in the prospectus portion of our
Registration Statement on Form S-1 (SEC File No. 333-17001), filed with the SEC on January 31,
1997 and our prospectus dated February 3, 1997, filed with the Commission on February 4, 1997. |
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You may obtain, free of charge, a copy of any of these documents (other than exhibits to these
documents unless the exhibits specifically are incorporated by reference into these documents or
referred to in this prospectus) by writing or calling us at the following address and telephone
number:
Keith D. Schneck
Executive Vice President and
Chief Financial Officer
eResearchTechnology, Inc.
1818 Market Street
Philadelphia, PA 19103
(215) 972-0420
FORWARD-LOOKING STATEMENTS
This prospectus contains or incorporates by reference forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act
of 1934 regarding our business, financial condition, results of operations and prospects. Words
such as expects, anticipates, intends, plans, believes, seeks, estimates, may,
will, should, predicts, outlook, potential and similar expressions or variations of such
words are intended to identify forward-looking statements herein. However, these are not the
exclusive means of identifying forward-looking statements herein. Although forward-looking
statements contained in this prospectus reflect our good faith judgment, such statements can only
be based on facts and factors currently known to us. Consequently, forward-looking statements are
inherently subject to risks and uncertainties and actual outcomes may differ materially from the
results and outcomes discussed in the forward-looking statements. Important factors that could
cause actual results to differ materially from the forward-looking statements include, but are not
limited to:
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unfavorable economic conditions; |
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our ability to obtain new contracts and accurately estimate net revenues due to variability
in size, scope and duration of projects and internal issues of the sponsoring client; |
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our ability to successfully integrate acquisitions; |
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competitive factors in the market for centralized cardiac safety and respiratory services; |
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changes in the pharmaceutical, biotechnology and medical device industries to which we sell
our solutions; |
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technological development; and |
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changes in market demand. |
You should not place undue reliance on forward-looking statements, which speak only as of the
date of this prospectus. We undertake no obligation to update publicly any forward-looking
statements in order to reflect any event or circumstance occurring after the date of this
prospectus or currently unknown facts or conditions or the occurrence of unanticipated events.
This list of factors is not exhaustive, and new factors may emerge or changes to these
factors, which would have an impact on our business, may occur. Additional information regarding
these and other factors may be contained in our filings with the SEC, especially on Forms 10-K,
10-Q and 8-K. All such factors are difficult to predict, contain material uncertainties that may
affect actual results and may be beyond our control.
RISK FACTORS
An investment in our securities involves a high degree of risk. Before making an investment
decision, you should carefully read and consider the risk factors incorporated by reference in this
prospectus, as well as those contained in the applicable prospectus supplement, as the same may be
updated from time to time by our future filings with the SEC under the Exchange Act. You should
also refer to other information contained in or incorporated by reference in this prospectus and
any applicable prospectus supplement, including our consolidated financial statements and the
related notes incorporated by reference herein. Additional risks and uncertainties not presently
known to us at this time or that we currently deem immaterial may also materially and adversely
affect our business and operations.
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DESCRIPTION OF DEBT SECURITIES
General
The debt securities that we may offer by this prospectus consist of notes, debentures or other
evidences of our indebtedness, which we refer to collectively as debt securities. We will set
forth the particular terms of the debt securities we offer in a prospectus supplement. The extent,
if any, to which the following general provisions apply to particular debt securities will be
described in the applicable prospectus supplement. The following description of general terms
relating to the debt securities and the indenture under which the debt securities will be issued
are summaries only and therefore are not complete. You should read the indenture and the prospectus
supplement regarding any particular issuance of debt securities.
The debt securities will be issued under an indenture between us and a trustee that will be
named in the applicable prospectus supplement, and may be supplemented or amended from time to time
following its execution. The indenture, and any supplemental indentures thereto, will be subject
to, and governed by, the Trust Indenture Act of 1939, as amended.
The applicable prospectus supplement will describe the following terms of any series of debt
securities that we may offer (to the extent applicable to the debt securities):
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the title of the debt securities |
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the extent, if any, to which the debt securities are subordinated in right of payment to
our other indebtedness; |
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any provisions relating to any security provided for the debt securities; |
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any limit on the aggregate principal amount of the debt securities; |
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any guarantees applicable to the debt securities, and any subordination provisions or other
limitations applicable to any such guarantees; |
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the persons to whom any interest on the debt securities will be payable, if other than the
registered holders thereof on the regular record date therefor; |
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the date or dates on which the principal of the debt securities will be payable; |
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the rate or rates at which the debt securities will bear interest, if any, and the date or
dates from which interest will accrue; |
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the dates on which interest will be payable and the regular record dates for interest
payment dates; |
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the place or places where the principal of and any premium, make-whole amount and interest
on the debt securities will be payable; |
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the period or periods, if any, within which, and the price or prices at which, the debt
securities may be redeemed, in whole or in part, at our option; |
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our obligation, if any, to redeem or purchase the debt securities pursuant to sinking fund
or similar provisions or at the option of a holder and the terms and conditions of any such
redemption or purchase; |
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the denominations in which the debt securities will be issuable, if other than
denominations of $1,000 and any integral multiple thereof; |
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the currency, currencies or currency units, if other than currency of the United States of
America, in which payment of the principal of and any premium, make-whole amount or interest
on the debt securities will be payable, and the terms and conditions of any elections that may
be made available with respect thereto; |
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any index or formula used to determine the amount of payments of principal of and any
premium, make-whole amount or interest on the debt securities; |
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whether the debt securities are to be issued in whole or in part in the form of one or more
global securities and, if so, the identity of the depositary, if any, for the global
securities; |
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the terms and conditions, if any, pursuant to which the debt securities are convertible
into or exchangeable for our common stock or other securities of us or any other person; |
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any events of default with respect to the debt securities, in addition to or in lieu of
those set forth in the indenture, and the remedies therefor; |
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the principal amount (or any portion of the principal amount) of the debt securities which
will be payable upon any declaration of acceleration of the maturity of the debt securities
pursuant to an event of default; and |
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the applicability to the debt securities of the provisions described in Defeasance
below. |
We may issue debt securities at a discount from their stated principal amount. Federal income
tax considerations and other special considerations applicable to any debt security issued with
original issue discount (an original issue discount security) may be described in an applicable
prospectus supplement.
If the purchase price of any series of the debt securities is payable in a foreign currency or
currency unit or if the principal of or any premium, make-whole amount or interest on any series of
the debt securities is payable in a foreign currency or currency unit, the restrictions, elections,
general tax considerations, specific terms and other information with respect to the debt
securities and the applicable foreign currency or currency unit will be set forth in an applicable
prospectus supplement.
Unless otherwise indicated in an applicable prospectus supplement:
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the debt securities will be issued only in fully registered form (without coupons) in
denominations of $1,000 or integral multiples thereof; and |
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payment of principal, premium and make-whole amount, if any, and interest on the debt
securities will be payable, and the exchange, conversion and transfer of debt securities will
be registrable, at our office or agency maintained for those purposes and at any other office
or agency maintained for those purposes. No service charge will be made for any registration
of transfer or exchange of the debt securities, but we may require payment of a sum sufficient
to cover any tax or other governmental charge imposed in connection therewith. |
Global Securities
The debt securities of a series may be issued in whole or in part in the form of one or more
global securities that will be deposited with, or on behalf of, a depositary or its nominee
identified in an applicable prospectus supplement. Unless and until it is exchanged in whole or in
part for debt securities in registered form, a global security may not be registered for transfer
or exchange except:
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by the depositary to a nominee of the depositary; |
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by a nominee of the depositary to the depositary or another nominee of the depositary; |
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by the depositary or any nominee of the depositary to a successor depositary or a nominee
of the successor depositary; or |
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in any other circumstances described in an applicable prospectus supplement. |
The specific terms of the depositary arrangement with respect to any debt securities to be
represented by a global security will be described in an applicable prospectus supplement. We
expect that the following provisions will apply to depositary arrangements.
Unless otherwise specified in an applicable prospectus supplement, any global security that
represents debt securities will be registered in the name of the depositary or its nominee. Upon
the deposit of a global security with or on behalf of the depositary for the global security, the
depositary will credit, on its book-entry registration and transfer system, the respective
principal amounts of the debt securities represented by the global security to the accounts of
institutions that are participants in such system. The accounts to be credited will be designated
by the underwriters or agents of the debt securities or by us, if the debt securities are offered
and sold directly by us.
Ownership of beneficial interests in debt securities represented by a global security will be
limited to participants in the book-entry registration and transfer system of the applicable
depositary or persons that may hold interests through those participants. Ownership of those
beneficial interests by participants will be shown on, and the transfer of ownership will be
effected only through, records maintained by the depositary or its nominee for such global
security. Ownership of such beneficial interests by persons that hold through such participants
will be shown on, and the transfer of such ownership will be effected only through, records
maintained by the participants. The laws of some jurisdictions require that specified purchasers of
securities take physical delivery of their securities in definitive form. These laws may impair
your ability to transfer beneficial interests in a global security.
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So long as the depositary for a global security, or its nominee, is the registered owner of
the global security, the depositary or the nominee, as the case may be, will be considered the sole
owner or holder of the debt securities represented by the global security for all purposes under
the indenture. Unless otherwise specified in an applicable prospectus supplement, owners of
beneficial interests in the global security will not be entitled to have any of the debt securities
represented by the global security registered in their names, will not receive or be entitled to
receive physical delivery of any such debt securities in certificated form, and will not be
considered the owners or holders of the debt securities for any purpose under the indenture.
Accordingly, each person owning a beneficial interest in debt securities represented by a global
security must rely on the procedures of the applicable depositary and, if the person is not a
participant in the book-entry registration and transfer system of the applicable depositary, on the
procedures of the participant through which the person owns its interest, to exercise any rights of
an owner or holder of debt securities under the indenture.
We understand that, under existing industry practices, if an owner of a beneficial interest in
debt securities represented by a global security desires to give any notice or take any action that
an owner or holder of debt securities is entitled to give or take under the indenture:
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the applicable depositary would authorize its participants to give the notice or take the
action; and |
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the participants would authorize persons owning the beneficial interests through the
participants to give the notice or take the action or would otherwise act upon the
instructions of the persons owning the beneficial interests. |
Principal of and any premium, make-whole amount and interest on debt securities represented by
a global security will be payable in the manner described in an applicable prospectus supplement.
Payment of principal of, and any premium, make-whole amount or interest on, debt securities
represented by a global security will be made to the applicable depositary or its nominee, as the
case may be, as the registered owner or the holder of the global security. None of us, the trustee,
any paying agent or the registrar for debt securities represented by a global security will have
any responsibility or liability for any aspect of the records relating to or payments made on
account of beneficial ownership interests in those debt securities or for maintaining, supervising
or reviewing any records relating to those beneficial ownership interests.
Events of Default
The indenture with respect to debt securities of any series will contain events of default to
be specified in the applicable prospectus supplement, including, without limitation:
(1) default in the payment of any interest on any debt security of that series when due, which
default continues for 30 days;
(2) default in the payment when due of the principal of or premium or make-whole amount, if
any, on any debt security of that series when due;
(3) default in the deposit of any sinking fund payment when due;
(4) default in the performance, or breach, of our covenants or agreements in the indenture
with respect to the debt securities of such series, subject to any applicable notice and cure
provisions; and
(5) specified events of bankruptcy, insolvency or reorganization involving us or certain of
our subsidiaries.
Additional or different events of default applicable to a series of debt securities may be
described in a prospectus supplement. An event of default of one series of debt securities is not
necessarily an event of default for any other series of debt securities.
Pursuant to the Trust Indenture Act, the trustee is required, within 90 calendar days after
the occurrence of a default in respect of any series of debt securities, to give to the holders of
the debt securities of that series notice of all uncured defaults known to it, except that:
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in the case of a default in the performance of any covenant of the character contemplated
in clause (4) above, no notice will be given until at least 30 calendar days after the
occurrence of the default; and |
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other than in the case of a default of the character contemplated in clause (1), (2), or
(3) above, the trustee may withhold notice if and so long as it in good faith determines that
the withholding of notice is in the interests of the holders of the debt securities of that
series. |
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If an event of default described in clause (5) above occurs, the principal of, premium and
make-whole amount, if any, and accrued interest on the debt securities of that series will become
immediately due and payable without any declaration or other act on the part of the trustee or any
holder of the debt securities of that series. If any other event of default with respect to debt
securities of any series occurs and is continuing, either the trustee or the holders of at least
25% in principal amount of the debt securities of that series may declare the principal amount of
all debt securities of that series to be due and payable immediately. However, at any time after a
declaration of acceleration with respect to debt securities of any series has been made, but before
a judgment or decree based on such acceleration has been obtained, the holders of a majority in
principal amount of the debt securities of that series may, under specified circumstances, rescind
and annul such acceleration. See Modification and Waiver below.
Subject to the duty of the trustee to act with the required standard of care during an event
of default, the trustee will have no obligation to exercise any of its rights or powers under the
indenture at the request or direction of the holders of debt securities, unless holders of debt
securities shall have furnished to the trustee reasonable security or indemnity. Subject to the
provisions of the indenture, including those requiring security or indemnification of the trustee,
the holders of a majority in principal amount of the debt securities of any series will have the
right to 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 the debt
securities of that series.
No holder of a debt security of any series will have any right to institute any proceeding
with respect to the indenture or for any remedy thereunder unless:
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the holder has previously given to the trustee written notice of a continuing event of
default; |
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the holders of at least 25% in aggregate principal amount of the outstanding debt
securities of the same series have requested the trustee to institute a proceeding in respect
of the event of default; |
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the holder or holders have furnished reasonable indemnity to the trustee to institute the
proceeding as trustee; |
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the trustee has not received from the holders of a majority in principal amount of the
outstanding debt securities of the same series a direction inconsistent with the request; and |
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the trustee has failed to institute the proceeding within 60 calendar days. |
However, the limitations described above do not apply to a suit instituted by a holder of a
debt security for enforcement of payment of the principal of and interest on such debt security on
or after the applicable due dates for the payment of such principal and interest.
We will furnish to the trustee annually a statement as to our performance of our obligations
under the indenture and as to any default in our performance.
Modification and Waiver
In general, unless we otherwise indicate in a prospectus supplement, we and the applicable
trustee may make modifications and amendments of the indenture with the consent of the holders of
not less than a majority in principal amount of the debt securities of each series affected
thereby. However, no modification or amendment of the indenture may, without the consent of the
holder of each debt security affected thereby:
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change the stated maturity of, or any installment of principal of, or interest on, any debt
security; |
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reduce the principal amount of, the rate of interest on, or the make-whole amount or
premium, if any, payable upon the redemption of, any debt security; |
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reduce the amount of principal of an original issue discount security payable upon
acceleration of the maturity thereof; |
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change the place or currency of payment of principal of, or make-whole amount or premium,
if any, or interest on any debt security; |
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impair the right to institute suit for the enforcement of any payment on or with respect to
any debt security on or after the stated maturity or prepayment date thereof; or |
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reduce the percentage in principal amount of debt securities of any series required for
modification or amendment of the indenture or for waiver of compliance with certain provisions
of the indenture or for waiver of certain defaults. |
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We may also make modifications and amendments to the indenture for the benefit of holders
without their consent, for certain purposes including, but not limited to:
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providing for our successor to assume the covenants under the indenture; |
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adding covenants or events of default; |
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making certain changes to facilitate the issuance of the securities; |
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securing the securities; |
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providing for a successor trustee or additional trustees; |
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curing any ambiguities or inconsistencies; |
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providing for guaranties of, or additional obligors on, the securities; |
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permitting or facilitating the defeasance and discharge of the securities; and |
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other changes specified in the indenture. |
The holders of at least a majority in principal amount of the debt securities of any series
may, on behalf of the holders of all debt securities of that series, waive our compliance with
specified covenants of the indenture. The holders of at least a majority in principal amount of the
debt securities of any series may, on behalf of the holders of all debt securities of that series,
waive any past default under the indenture with respect to that series, except:
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a default in the payment of the principal of, or premium or make-whole amount, if any, or
interest on, any debt security of that series; or |
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a default of a provision of the indenture that cannot be modified or amended without the
consent of the holder of each debt security of that series. |
Defeasance
Unless otherwise specified in a prospectus supplement applicable to a particular series of
debt securities and except as described below, upon compliance with the applicable requirements
described below, we:
(1) will be deemed to have been discharged from our obligations with respect to the debt
securities of that series; or
(2) will be released from our obligations to comply with certain covenants in the indenture
with respect to the debt securities of that series, and the occurrence of an event described in any
of clauses (3), (4) and (5) under Events of Default above will no longer be an Event of
Default with respect to the debt securities of that series except to the limited extent described
below.
Following any defeasance described in clause (1) or (2) above, we will continue to have
specified obligations under the indenture, including obligations to register the transfer or
exchange of debt securities of the applicable series; replace destroyed, stolen, lost or mutilated
debt securities of the applicable series; maintain an office or agency in respect of the debt
securities of the applicable series; and hold funds for payment to holders of debt securities of
the applicable series in trust. In the case of any defeasance described in clause (2) above, any
failure by us to comply with our continuing obligations may constitute an event of default with
respect to the debt securities of the applicable series as described in clause (4) under Events
of Defaults above.
In order to effect any defeasance described in clause (1) or (2) above, we must irrevocably
deposit with the trustee, in trust, money or specified government obligations (or depositary
receipts therefor) that through the payment of principal and interest in accordance with their
terms will provide money in an amount sufficient to pay all of the principal of, premium and
make-whole amount, if any, and interest on the debt securities of such series on the dates such
payments are due in accordance with the terms of such debt securities. In addition:
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no event of default or event which with the giving of notice or lapse of time, or both,
would become an event of default under the indenture shall have occurred and be continuing on
the date of such deposit; |
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in the event of any defeasance described in clause (1) above, we shall have delivered an
opinion of counsel, stating that (a) we have received from, or there has been published by,
the Internal Revenue Service, or IRS, a ruling or (b) there has been a change in applicable
federal law, in either case to the effect that, among other things, the holders of the debt
securities of such series will not recognize gain or loss for United States federal |
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income tax purposes as a result of such deposit or defeasance and will be subject to United
States federal income tax in the same manner as if such defeasance had not occurred; and |
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in the event of any defeasance described in clause (2) above, we shall have delivered an
opinion of counsel to the effect that, among other things, the holders of the debt securities
of such series will not recognize gain or loss for United States federal income tax purposes
as a result of such deposit or defeasance and will be subject to United States federal income
tax in the same manner as if such defeasance had not occurred. |
If we fail to comply with our remaining obligations under the indenture with respect to the
debt securities of the applicable series following a defeasance described in clause (2) above and
the debt securities of that series are declared due and payable because of the occurrence of any
undefeased event of default, the amount of money and government obligations on deposit with the
trustee may be insufficient to pay amounts due on the debt securities of that series at the time of
the acceleration resulting from such event of default. However, we will remain liable in respect of
such payments.
Satisfaction and Discharge
We, at our option, may satisfy and discharge the indenture (except for specified obligations
of us and the trustee, including, among others, the obligations to apply money held in trust) when:
(1) all of our debt securities previously authenticated and delivered under the indenture
(subject to specified exceptions relating to debt securities that have otherwise been satisfied or
provided for) have been delivered to the trustee for cancellation; or
(2) all of our debt securities not previously delivered to the trustee for cancellation have
become due and payable, will become due and payable at their stated maturity within one year, or
are to be called for redemption within one year under arrangements satisfactory to the trustee for
the giving of notice of redemption by the trustee, and we have deposited or caused to be deposited
with the trustee as trust funds for such purpose an amount sufficient to pay and discharge the
entire indebtedness on such debt securities, for principal and any premium, make-whole amount and
interest to the date of such deposit (in the case of debt securities which have become due and
payable) or to the stated maturity or redemption date, as the case may be;
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we have paid or caused to be paid all other sums payable by us under the indenture; and |
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we have delivered to the trustee an officers certificate and an opinion of counsel, each
to the effect that all conditions precedent relating to the satisfaction and discharge of the
indenture have been satisfied. |
Governing Law
The indenture and the debt securities will be governed by, and construed in accordance with,
the laws of the State of New York.
Regarding the Trustee
We will provide the name of the trustee in any prospectus supplement relating to the issuance
of debt securities and we will also provide certain other information related to the trustee,
including describing any relationship we have with the trustee, in such prospectus supplement. The
indenture will contain specified limitations on the right of the trustee, should it become our
creditor within three months of, or subsequent to, a default by us to make payment in full of
principal of or interest on any series of debt securities issued pursuant to the indenture when and
as the same becomes due and payable, to obtain payment of claims, or to realize for its own account
on property received in respect of any such claim as security or otherwise, unless and until such
default is cured.
The indenture will not prohibit the trustee from serving as trustee under any other indenture
to which we may be a party from time to time or from engaging in other transactions with us. If the
trustee acquires any conflicting interest within the meaning of the Trust Indenture Act of 1939 and
there is an event of default with respect to any series of debt securities, the trustee must
eliminate the conflict or resign.
DESCRIPTION OF CAPITAL STOCK
Our authorized capital stock consists of 175,000,000 shares of common stock, par value $0.01
per share, and 500,000 shares of preferred stock, par value $10.00 per share.
10
Common Stock
Subject to the restrictions described below, the holders of our common stock are entitled to
receive dividends from funds legally available when, as and if declared by our board of directors,
and are entitled upon our liquidation, dissolution or winding up to receive pro rata our net assets
after satisfaction in full of the prior rights of our creditors and holders of any preferred stock.
Except as otherwise provided by law and subject to the voting rights of any class or series of
our preferred stock that may be outstanding from time to time, the holders of common stock are
entitled to one vote for each share held on all matters as to which stockholders are entitled to
vote. The holders of common stock do not have cumulative voting rights. The holders of common stock
do not have any preferential, subscriptive or preemptive rights to subscribe to or purchase any new
or additional issue of shares of any class of stock or of securities convertible into our stock or
any conversion rights with respect to any of our securities. Our common stock is not subject to
redemption. All of our issued and outstanding common stock is fully paid and non-assessable.
Preferred Stock
Our certificate of incorporation authorizes our board of directors to establish one or more
classes or series of preferred stock and to determine, with respect to any class or series of
preferred stock, the terms and rights of the series, including the following:
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the designation of and number of shares constituting the class or series; |
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the rate and time of, and conditions and preferences with respect to, dividends, and
whether the dividends will be cumulative; |
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the voting rights, if any, of shares of the class or series; |
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the price, timing and conditions regarding any redemption of shares of the class or series; |
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the rights and preferences of shares of the class or series in the event of voluntary or
involuntary dissolution, liquidation or winding up of our affairs; and |
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the right, if any, to convert or exchange shares of the class or series into or for stock
or securities of any other series or class. |
Provisions of Our Certificate of Incorporation and Bylaws and Delaware Law That May Have an
Anti-Takeover Effect
Our certificate of incorporation and bylaws contain certain provisions, some of which are
intended to enhance the likelihood of continuity and stability in the composition of our board of
directors and the policies formulated by our board of directors, and to discourage certain types of
coercive takeover practices. However, these provisions, as well as certain provisions of Delaware
law, may deter, hinder or delay a change of control of us. These provisions could discourage
attempts to acquire us or remove incumbent management even if some or a majority of our
stockholders believe that action is in their best interest.
Certificate of Incorporation and Bylaws. The provisions in our certificate of incorporation
and bylaws with the intent described above include:
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Board of Directors. Our board of directors is divided into three classes of directors
serving staggered three-year terms, with one-third of the board of directors being elected
each year. In addition, our directors may only be removed for cause. The certificate of
incorporation and bylaws provide that the exact number of directors shall be fixed from time
to time by the board of directors, but shall consist of not less than two nor more than
fifteen directors. The classification of our board of directors means that, unless directors
are removed for cause by stockholders, it could require at least two annual meetings of
stockholders for a majority of stockholders to make a change of control of the board of
directors, because only a portion of the directors will be elected at each meeting. A
significant effect of a classified board of directors may be to deter hostile takeover
attempts, because an acquiror could experience delay in replacing a majority of the directors.
A classified board of directors also makes it more difficult for stockholders to effect a
change of control of the board of directors, even if such a change of control were to be
sought due to dissatisfaction with the performance of our companys directors. |
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Vacancies Filled by the Board. Vacancies may be filled by a majority of the remaining
directors (including vacancies resulting from an increase in the number of directors), or by a
sole remaining director. |
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Supermajority Approval of Business Combinations. In addition to any vote required by law
or our certificate of incorporation, the holders of at least 80% of each class of our capital
stock must approve any business combination (as defined below) unless the business
combination is approved by a majority of continuing directors (as defined below) or all of
the following conditions are satisfied: (i) certain minimum price requirements are satisfied;
(ii) the consideration paid on the business combination is either cash or the form used by the
interested stockholder (as defined below) to acquire the greatest number of shares; (iii)
the interested stockholder has not received any financial assistance, tax credits or other
benefits from the Company and (iv) a proxy or information statement describing the proposed
business combination and meeting the requirements of the Exchange Act is mailed to our public
stockholders at least 30 days before consummation of the proposed transaction. An interested
stockholder generally is a holder of more than 20% of our stock and its affiliates. A business
combination generally means: (i) any merger with an interested stockholder or a corporation
that is or would, as a result of the transaction, be an affiliate of an interested
stockholder; (ii) any sale or other disposition of assets or issuance of securities to an
interested stockholder with a value of at least $1.0 million; (iii) the adoption of any plan
for our liquidation or dissolution proposed by an interested stockholder and (iv) any
reclassification of securities or other recapitalization or reorganization of the Company
where the effect is to increase an interested stockholders proportionate share ownership of
the Company. A continuing director is a director who is not affiliated with an interested
stockholder and either was a director prior to the interested stockholder becoming an
interested stockholder or is a successor to such a director and is elected or recommended by a
majority of the continuing directors. |
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No Cumulative Voting. There is no cumulative voting in the election of directors. |
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Blank Check Preferred Stock. We believe that the availability of the preferred stock
under our certificate of incorporation will provide us with flexibility in structuring
possible future financings and acquisitions and in meeting other corporate needs which might
arise. Having these authorized shares available for issuance will allow us to issue shares of
preferred stock without the expense and delay of a special stockholders meeting. The
authorized shares of preferred stock, as well as shares of common stock, will be available for
issuance without further action by our stockholders, unless action is required by applicable
law or the rules of any stock exchange on which our securities may be listed. Our board of
directors has the power, subject to applicable law, to issue classes or series of preferred
stock that could, depending on the terms of the class or series, impede the completion of a
merger, tender offer or other takeover attempt. For instance, a class or series of preferred
stock might impede a business combination by including class voting rights which would enable
the holder or holders of such class or series to block a proposed transaction. Our board of
directors will make any determination to issue shares based on its judgment as to our and our
stockholders best interests. Our board of directors, in so acting, could issue preferred
stock having terms which could discourage an acquisition attempt or other transaction that
some, or a majority, of the stockholders might believe to be in their best interests or in
which stockholders might receive a premium for their stock over the then prevailing market
price of the stock. |
Delaware Takeover Statute. We are subject to Section 203 of the DGCL, which, subject to
certain exceptions, prohibits a Delaware corporation from engaging in any business combination
with any interested stockholder (both as defined below) for a period of three years following
the date that such stockholder became an interested stockholder, unless: (i) prior to such date,
the board of directors of the corporation approved either the business combination or the
transaction that resulted in the stockholder becoming an interested stockholder, (ii) on
consummation of the transaction that resulted in the stockholder 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 for purposes of determining the voting
stock outstanding those shares owned (x) by persons who are directors and also officers and (y) by
employee stock plans in which employee participants do not have the right to determine
confidentially whether shares held subject to the plan will be tendered in a tender or exchange
offer; or (iii) on or subsequent to such date, the business combination is approved by the board of
directors and authorized at an annual or special meeting of stockholders, and not by written
consent, by the affirmative vote of at least 662/3% of the outstanding voting stock that is not owned
by the interested stockholder.
Section 203 of the DGCL defines generally business combination to include: (i) any merger or
consolidation involving the corporation and the interested stockholder; (ii) any sale, transfer,
pledge or other disposition of 10% or more of the assets of the corporation involving the
interested stockholder; (iii) subject to certain exceptions, any transaction that results in the
issuance or transfer by the corporation of any stock of the corporation to the interested
stockholder; (iv) any transaction involving the corporation that has the effect of increasing the
proportionate share of the stock of any class or series of the corporation beneficially owned by
the interested stockholder; or (v) the receipt by the interested stockholder of the benefit of any
loans, advances, guarantees, pledges or other financial benefits provided by or through the
corporation. In general, Section 203 defines an interested stockholder as any entity or
12
person beneficially owning 15% or more of the outstanding voting stock of the corporation and
any entity or person affiliated with or controlling or controlled by such entity or person.
Limitation of Director Liability
Our certificate of incorporation limits the liability of directors to us and our stockholders
to the fullest extent permitted by Delaware law. Specifically, a director will not be personally
liable for monetary damages for breach of his or her fiduciary duty as a director, except for
liability for:
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any breach of the directors duty of loyalty to us or our stockholders; |
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acts or omissions which involve intentional misconduct, fraud or a knowing violation of
law; |
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violations under Section 174 of the Delaware General Corporation Law, which relates to
unlawful distributions to stockholders or unlawful stock repurchases or redemptions; or |
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any transaction from which the director derived an improper personal benefit. |
These provisions in our certificate of incorporation may have the effect of reducing the
likelihood of derivative litigation against our directors and officers and may discourage or deter
stockholders or management from bringing a lawsuit against our directors or officers for breach of
their duty of care, even though such an action, if successful, might otherwise have benefited our
company and its stockholders. These provisions do not limit or affect a stockholders ability to
seek and obtain relief under federal securities laws.
Transfer Agent
The transfer agent for our common stock is American Stock Transfer & Trust Company.
DESCRIPTION OF DEPOSITARY SHARES
We may offer depositary shares (either separately or together with other securities)
representing fractional shares of preferred stock of any series. In connection with the issuance of
any depositary shares, we will enter into a deposit agreement with a bank or trust company, as
depositary, which will be named in the applicable prospectus supplement. Depositary shares will be
evidenced by depositary receipts issued pursuant to the related deposit agreement. Immediately
following our issuance of the security related to the depositary shares, we will deposit the shares
of preferred stock with the relevant depositary and will cause the depositary to issue, on our
behalf, the related depositary receipts. Subject to the terms of the deposit agreement, each owner
of a depositary receipt will be entitled, in proportion to the fraction of a share of preferred
stock represented by the related depositary share, to all the rights, preferences and privileges
of, and will be subject to all of the limitations and restrictions on, the preferred stock
represented by the depositary receipt (including, if applicable, dividend, voting, conversion,
exchange, redemption, sinking fund, repayment at maturity, subscription and liquidation rights).
DESCRIPTION OF WARRANTS
We may issue warrants for the purchase of debt securities, common stock, preferred stock,
depository shares or any combination thereof. We may issue warrants independently or together with
any other securities offered by a prospectus supplement. Warrants may be attached to or separate
from such securities. Each series of warrants will be issued under a separate warrant agreement we
will enter into with a warrant agent specified in the applicable prospectus supplement. The warrant
agent will act solely as our agent in connection with the warrants of a particular series and will
not assume any obligation or relationship of agency or trust for or with any holders or beneficial
owners of warrants.
The applicable prospectus supplement will describe the terms of the warrants in respect of
which this prospectus is being delivered, including, to the extent applicable, the following:
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the title of the warrants; |
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the aggregate number of the warrants; |
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the price or prices at which the warrants will be issued; |
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the designation, number or principal amount and terms of the debt securities, common stock,
preferred stock and/or depository shares purchasable upon exercise of the warrants; |
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the designation and terms of the other securities, if any, with which the warrants are
issued and the number of warrants issued with each security; |
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the date, if any, on and after which the warrants and the related underlying securities
will be separately transferable; |
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whether the warrants will be issued in registered form or bearer form; |
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the price at which each underlying security purchasable upon exercise of the warrants may
be purchased; |
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the date on which the right to exercise the warrants will commence and the date on which
that right will expire; |
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the identity of the warrant agent; |
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the maximum or minimum number of the warrants that may be exercised at any one time; |
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information with respect to book-entry procedures, if any; |
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a discussion of any material federal income tax considerations; and |
any other terms of the warrants, including terms, procedures, and limitations relating to the
transferability, exchange, and exercise of the warrants.
DESCRIPTION OF UNITS
We may issue units comprising one or more securities described in this prospectus in any
combination. Each unit will be issued so that the holder of the unit also is the holder of each
security included in the unit. Thus, the holder of each unit will have the rights and obligations
of a holder of each included security. The unit agreement under which a unit is issued may provide
that the securities included in the unit may not be held or transferred separately at any time or
at any time before a specified date.
The applicable prospectus supplement will describe the terms of any units in respect of which
this prospectus is being delivered, including, to the extent applicable, the following:
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the designation and terms of the units and the securities comprising the units, including
whether and under what circumstances those securities may be held or transferred separately; |
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any provision for the issuance, payment, settlement, transfer or exchange of the units or
of the securities comprising the units; and |
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whether the units will be issued in fully registered or global form. |
RATIO OF EARNINGS TO FIXED CHARGES
The following table shows our historical ratio of earnings to fixed charges for each of the
five fiscal years ended December 31, 2005, 2006, 2007, 2008 and 2009 and for the nine months ended
September 30, 2010.
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Nine |
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Months |
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Ended |
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Year Ended December 31, |
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2005 |
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2006 |
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2007 |
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2008 |
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2009 |
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2010 |
Ratio of earnings
to fixed
charges1 |
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15.38 |
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8.12 |
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20.64 |
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37.95 |
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19.32 |
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10.19 |
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1 |
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In computing the ratio of earnings to fixed charges: (i) earnings were
our income before income taxes plus fixed charges and (ii) fixed charges were the
sum of our interest expense and the estimated interest component included in our rental
expense. We do not present ratios of earnings to combined fixed charges and preferred
stock dividend requirements because we did not have any outstanding preferred stock in any
of the periods indicated. |
USE OF PROCEEDS
We intend to use the net proceeds from the sales of the securities as set forth in the
applicable prospectus supplement.
14
PLAN OF DISTRIBUTION
We may sell the securities described in this prospectus to or through one or more agents,
underwriters, dealers or directly to purchasers on a continuous or delayed basis.
The distribution of the securities may be effected from time to time in one or more
transactions at a fixed price or prices, which may be changed from time to time, at market prices
prevailing at the times of sale, at prices related to such prevailing market prices or at
negotiated prices.
Each time that we use this prospectus to sell our securities, we will also provide a
prospectus supplement. For each series of securities, the applicable prospectus supplement will set
forth the terms of the offering including:
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the public offering price; |
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the name or names of any underwriters, dealers or agents; |
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the purchase price of the securities; |
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the proceeds from the sale of the securities to us; |
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any underwriting discounts, agency fees or other compensation payable to underwriters or
agents; |
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any discounts or concessions allowed or reallowed or repaid to dealers; and |
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the securities exchange on which the securities will be listed, if any. |
If we use underwriters in the sale of securities, the securities will be acquired by the
underwriters for their own account. The underwriters may then resell the securities in one or more
transactions at a fixed public offering price or at varying prices determined at the time of sale
or thereafter. The securities may be either offered to the public through underwriting syndicates
represented by managing underwriters, or directly by underwriters. The obligations of the
underwriters to purchase the securities will be subject to certain conditions. The underwriters
will be obligated to purchase all the securities offered if they purchase any securities. The
public offering price and any discounts or concessions allowed or re-allowed or paid to dealers may
be changed from time to time.
If we use dealers in the sale of securities, we will sell securities to such dealers as
principals. The dealers may then resell the securities to the public at varying prices to be
determined by such dealers at the time of resale. We may solicit offers to purchase the securities
directly, and we may sell the securities directly to institutional or other investors, who may be
deemed underwriters within the meaning of the Securities Act with respect to any resales of those
securities. The terms of these sales will be described in the applicable prospectus supplement. If
we use agents in the sale of securities, unless otherwise indicated in the prospectus supplement,
they will use their reasonable best efforts to solicit purchases for the period of their
appointment. Unless otherwise indicated in a prospectus supplement, if we sell directly, no
underwriters, dealers or agents would be involved. We will not make an offer of securities in any
jurisdiction that does not permit such an offer.
We may grant underwriters who participate in the distribution of securities an option to
purchase additional securities to cover overallotments, if any, in connection with the
distribution. Any underwriter may engage in overallotment, stabilizing transactions, short covering
transactions and penalty bids in accordance with SEC orders, rules and regulations and applicable
law. To the extent permitted by applicable law and SEC orders, rules and regulations, an
overallotment involves sales in excess of the offering size, which create a short position.
Stabilizing transactions permit bids to purchase the underlying security so long as the stabilizing
bids do not exceed a specified maximum. To the extent permitted by applicable law and SEC orders,
rules and regulations, short covering transactions involve purchases of the common stock in the
open market after the distribution is completed to cover short positions. Penalty bids permit the
underwriters to reclaim a selling concession from a dealer when the common stock originally sold by
the dealer is purchased in a covering transaction to cover short positions. Those activities may
cause the price of the common stock to be higher than it would otherwise be. If commenced, the
underwriters may discontinue any of the activities at any time.
Any underwriters who are qualified market makers on the Nasdaq Stock Market may engage in
passive market making transactions in the common stock on the Nasdaq Stock Market in accordance
with Rule 103 of Regulation M, during the business day prior to the pricing of the offering, before
the commencement of offers or sales of the common stock. Passive market makers must comply with the
applicable volume and price limitations and must be identified as passive market makers. In general
a passive market maker must display its bid at a price not in excess of the highest independent bid
for such security; if all independent bids are lowered below the passive
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market makers bid, however, the passive market makers bid must then be lowered when certain
purchase limits are exceeded.
Underwriters, dealers and agents that participate in any distribution of securities may be
deemed to be underwriters as defined in the Securities Act. Any discounts, commissions or profit
they receive when they resell the securities may be treated as underwriting discounts and
commissions under the Securities Act. Only underwriters named in the prospectus supplement are
underwriters of the securities offered in the prospectus supplement. We may have agreements with
underwriters, dealers and agents to indemnify them against certain civil liabilities, including
certain liabilities under the Securities Act, or to contribute with respect to payments that they
may be required to make.
We may authorize underwriters, dealers or agents to solicit offers from certain institutions
whereby the institution contractually agrees to purchase the securities from us on a future date at
a specific price. This type of contract may be made only with institutions that we specifically
approve. Such institutions could include banks, insurance companies, pension funds, investment
companies and educational and charitable institutions. The underwriters, dealers or agents will not
be responsible for the validity or performance of these contracts.
Each series of securities will be a new issue of securities and will have no established
trading market, other than our common stock, which is listed on the Nasdaq Global Select Market.
Unless otherwise specified in the applicable prospectus supplement, the securities will not be
listed on any exchange. It has not presently been established whether the underwriters, if any, of
the securities will make a market in the securities. If the underwriters make a market in the
securities, such market making may be discontinued at any time without notice. No assurance can be
given as to the liquidity of the trading market for the securities.
Agents, dealers and underwriters may be entitled to indemnification by us against certain
civil liabilities, including liabilities under the Securities Act, or to contribution with respect
to payments which the agents, dealers or underwriters may be required to make in respect thereof.
Agents, dealers or underwriters may be customers of, engage in transactions with, or perform
services for us and our subsidiaries in the ordinary course of business.
CERTAIN LEGAL MATTERS
In connection with particular offerings of the securities in the future, and if stated in the
applicable prospectus supplements, the validity of those securities may be passed upon for us by
Duane Morris LLP, and for any underwriters or agents by counsel named in the applicable prospectus
supplement.
EXPERTS
The consolidated financial statements and schedule of eResearchTechnology, Inc. and
subsidiaries as of December 31, 2009 and 2008, and for each of the years in the three-year period
ended December 31, 2009, and managements assessment of the effectiveness of internal control over
financial reporting as of December 31, 2009, have been incorporated by reference herein and in the
registration statement in reliance upon the reports of KPMG LLP, independent registered public
accounting firm, incorporated by reference herein, and upon the authority of said firm as experts
in accounting and auditing.
The combined financial statements of Research Services (a division of CareFusion Corporation
comprised of the research services division of CareFusion Germany 234 GmbH and certain operations
of CareFusion Corporation) for the years ended December 31, 2009 and 2008 have been incorporated by
reference herein and in the registration statement in reliance upon the report of Ernst & Young
GmbH, independent auditors, incorporated by reference herein, and upon the authority of said firm
as experts in accounting and auditing.
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eResearchTechnology, Inc.
$150,000,000
Debt Securities
Common Stock
Preferred Stock
Depositary Shares
Warrants
Units
PROSPECTUS
November 24, 2010