Exhibit 2.3
STOCK OPTION AGREEMENT
STOCK OPTION AGREEMENT, dated as of December 14, 1998 (the
"Agreement"), by and between Pharmaceutical Marketing Services Inc., a Delaware
corporation ("Issuer"), and Quintiles Transnational Corp., a North Carolina
corporation ("Grantee").
WHEREAS, Grantee, Issuer and QTRN Acquisition Corp., a North Carolina
corporation and a wholly-owned subsidiary of Grantee ("Sub"), are concurrently
herewith entering into a Merger Agreement, dated as of the date hereof (the
"Merger Agreement"; capitalized terms not defined herein shall have the meanings
set forth in the Merger Agreement), providing for, among other things, the
merger of Issuer with and into Sub with Sub as the surviving corporation (the
"Merger"); and
WHEREAS, as a condition to Grantee's willingness to enter into the
Merger Agreement, Grantee has requested that Issuer agree, and Issuer has
agreed, to grant Grantee the Option (as defined below);
NOW, THEREFORE, in consideration of the foregoing and the respective
representations, warranties, covenants and agreements set forth herein and in
the Merger Agreement, Issuer and Grantee agree as follows:
1. Grant of Option. Subject to the terms and conditions set forth
herein, Issuer hereby grants to Grantee an irrevocable option (the "Option") to
purchase up to 2,466,947 (as adjusted as set forth herein) shares (the "Option
Shares") of Common Stock, par value $.01 per share, of Issuer (the "Issuer
Common Stock") at a cash purchase price per Option Share equal to $12.00 (the
"Purchase Price").
2. Exercise of Option.
(a) If not in material breach of the Merger Agreement, Grantee may
exercise the Option, in whole or in part, at any time or from time to time
following the occurrence of a Purchase Event (as defined below) provided that,
except as otherwise provided herein, the Option shall terminate and be of no
further force and effect upon the earliest to occur of (i) the Effective Time of
the Merger, (ii) 12 months after the first occurrence of a Purchase Event or
(iii) termination of the Merger Agreement prior to the occurrence of a Purchase
Event. Notwithstanding the termination of the Option, Grantee shall be entitled
to purchase those Option Shares with respect to which it has exercised the
Option pursuant to this Section 2(a) in accordance with the terms hereof prior
to the termination of the Option. The termination of the Option shall not affect
any rights hereunder which by their terms extend beyond the date of such
termination.
(b) As used herein, a "Purchase Event" means the termination of the
Merger Agreement under any circumstance which would entitle Grantee or Issuer to
receive any fee from Issuer pursuant to Section 8.02(a) of the Merger Agreement,
provided, however, that the termination of the Merger Agreement (except pursuant
to Section 7.01(b) thereof) after the occurrence of any event described in
Section 8.02(a)(i)(B)(x) thereof shall constitute a Purchase Event hereunder
whether or not any event described in Section 8.02(a)(i)(B)(y) of the Merger
Agreement shall have occurred.
(c) In the event Grantee wishes to exercise the Option, it shall send
to Issuer a written notice (the date of which being herein referred to as the
"Notice Date") specifying (i) the total number of Option Shares it intends to
purchase pursuant to such exercise and (ii) a place and date not earlier than
three business days nor later than 20 business days from the Notice Date for the
closing of such purchase (the "Closing"; and the date of such Closing, the
"Closing Date"); provided that the Closing shall be held only if (A) such
purchase would not otherwise violate or cause the violation of applicable law
(including the HSR Act) and (B) no statute, rule, regulation, decree, order or
injunction shall have been promulgated, enacted, entered into, or enforced by
any Governmental Entity which prohibits delivery of the Option Shares, whether
temporary, preliminary or permanent; provided, however, that the parties hereto
shall use their best efforts to have any such decree, order or injunction
vacated or reversed. If the Closing cannot be consummated by reason of a
restriction set forth in clause (A) or (B) above, notwithstanding the provisions
of Section 2(a), the Closing Date shall be within 20 business days following the
elimination of such restriction.
3. Payment and Delivery of Certificates.
(a) On each Closing Date, Grantee shall pay to Issuer in immediately
available funds by wire transfer to a bank account designated by Issuer an
amount equal to the Purchase Price multiplied by the Option Shares to be
purchased on such Closing Date.
(b) At each Closing, simultaneously with the delivery of immediately
available funds as provided in Section 3(a), Issuer shall deliver to Grantee a
certificate or certificates representing the Option Shares to be purchased at
such Closing, which Option Shares shall be free and clear of all Liens, and
Grantee shall deliver to Issuer a letter agreeing that Grantee shall not offer
to sell or otherwise dispose of such Option Shares in violation of applicable
law or the provisions of this Agreement. If at the time of issuance of any
Option Shares pursuant to an exercise of all or part of the Option hereunder,
Issuer shall not have redeemed the Rights, or shall have issued any similar
securities, then each Option Share issued pursuant to such exercise shall also
represent a corresponding Right or new rights with terms substantially the same
as and at least as favorable to Grantee as are provided under the Rights
Agreement or any similar agreement then in effect.
(c) Certificates for the Option Shares delivered at each Closing shall
be endorsed with a restrictive legend which shall read substantially as follows:
THE TRANSFER OF THE STOCK REPRESENTED BY THIS CERTIFICATE IS SUBJECT
TO RESTRICTIONS ARISING UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND
PURSUANT TO THE TERMS OF A STOCK OPTION AGREEMENT DATED AS OF DECEMBER 14, 1998.
A COPY OF SUCH AGREEMENT WILL BE PROVIDED TO THE HOLDER HEREOF WITHOUT CHARGE
UPON RECEIPT BY THE ISSUER OF A WRITTEN REQUEST THEREFOR.
It is understood and agreed that (i) the reference to restrictions
arising under the Securities Act in the above legend shall be removed by
delivery of substitute certificate(s) without such reference if Grantee shall
have delivered to Issuer a copy of a letter from the staff of the SEC, or an
opinion of counsel in form and substance reasonably satisfactory to Issuer and
its counsel, to the effect that such legend is not required for purposes of the
Securities Act; (ii) the reference to restrictions pursuant to this Agreement in
the above legend shall be removed by delivery of substitute certificate(s)
without such reference if the Option Shares evidenced by certificate(s)
containing such reference have been sold or transferred in compliance with the
provisions of this Agreement under circumstances that do not require the
retention of such reference; and (iii) the legend shall be removed in its
entirety if the conditions in the preceding clauses (i) and (ii) are both
satisfied.
4. Authorized Stock. Issuer hereby represents and warrants to Grantee
that Issuer has taken all necessary corporate and other action to authorize and
reserve and to permit it to issue, and, at all times from the date hereof until
the obligation to deliver Issuer Common Stock upon the exercise of the Option
terminates, will have reserved for issuance, upon exercise of the Option, shares
of Issuer Common Stock necessary for Grantee to exercise the Option, and Issuer
will take all necessary corporate action to authorize and reserve for issuance
all additional shares of Issuer Common Stock or other securities which may be
issued pursuant to Section 6 upon exercise of the Option. The shares of Issuer
Common Stock to be issued upon due exercise of the Option, including all
additional shares of Issuer Common Stock or other securities which may be
issuable upon exercise of the Option pursuant to Section 6, upon issuance
pursuant hereto, shall be duly and validly issued, fully paid and nonassessable,
and shall be delivered free and clear of all Liens, including any preemptive
rights of any stockholder of Issuer.
5. Purchase Not for Distribution. Grantee hereby represents and
warrants to Issuer that any Option Shares or other securities acquired by
Grantee upon exercise of the Option or Substitute Option (as defined below) will
not be taken with a view to the public distribution thereof and will not be
transferred or otherwise disposed of except in a transaction registered or
exempt from registration under the Securities Act.
6. Adjustment upon Changes in Capitalization, etc.
(a) In the event of any change in Issuer Common Stock by reason of a
stock dividend, split-up, recapitalization, combination, exchange of shares or
similar transaction, the type and number of shares or securities subject to the
Option, and the Purchase Price therefor, shall be adjusted appropriately, and
proper provision shall be made in the agreements governing such transaction, so
that Grantee shall receive upon exercise of the Option the number and class of
shares or other securities or property that Grantee would have received in
respect of Issuer Common Stock if the Option had been exercised immediately
prior to such event or the record date therefor, as applicable. If any
additional shares of Issuer Common Stock are issued after the date of this
Agreement, the number of shares of Issuer Common Stock subject to the Option
shall be adjusted so that, after such issuance, it equals 19.9% of the number of
shares of Issuer Common Stock then issued and outstanding, without giving effect
to any shares subject to or issued pursuant to the Option.
(b) In the event that Issuer shall enter into an agreement (i) to
consolidate with or merge into any person, other than Grantee or one of its
subsidiaries, and shall not be the continuing or surviving corporation of such
consolidation or merger, (ii) to permit any person, other than Grantee or one of
its subsidiaries, to merge into Issuer and Issuer shall be the continuing or
surviving corporation, but, in connection with such merger, the shares of Issuer
Common Stock outstanding immediately prior to the consummation of such merger
shall be changed into or exchanged for stock or other securities of Issuer or
any other person or cash or any other property, or the shares of Issuer Common
Stock outstanding immediately prior to the consummation of such merger shall
after such merger represent less than 50% of the outstanding voting securities
of the merged company, or (iii) to sell or otherwise transfer all or
substantially all of its assets to any person, other than Grantee or one of its
subsidiaries, then, and in each such case, the agreement governing such
transaction shall make proper provisions so that the Option shall, upon the
consummation of any such transaction and upon the terms and conditions set forth
herein, be converted into, or exchanged for, an option (the "Substitute
Option"), at the election of Grantee, of either (I) the Acquiring Corporation
(as defined below) or (II) any person that controls the Acquiring Corporation
(any such person specified in clause (I) or (II) being referred to as
"Substitute Option Issuer").
(c) The Substitute Option shall have the same terms as the Option;
provided that the exercise price therefor and number of shares subject thereto
shall be as set forth in this Section 6; provided, further, that the Substitute
Option shall be exercisable immediately upon issuance without the occurrence of
a Purchase Event with respect to the Substitute Option; and provided, further,
that if the terms of the Substitute Option cannot, for legal reasons, be the
same as the Option (subject to the variations described in the foregoing
provisos), such terms shall be as similar as possible and in no event less
advantageous to Grantee. Substitute Option Issuer shall also enter into an
agreement with Grantee in substantially the same form as this Agreement (subject
to the variations described in the foregoing provisos), which shall be
applicable to the Substitute Option.
(d) The Substitute Option shall be exercisable for such number of
shares of Substitute Common Stock (as defined below) as is equal to the Assigned
Value (as defined below) multiplied by the number of shares of Issuer Common
Stock for which the Option was theretofore exercisable, divided by the Average
Price (as defined below), rounded up to the nearest whole share. The exercise
price per share of Substitute Common Stock of the Substitute Option (the
"Substitute Option Price") shall then be equal to the Purchase Price multiplied
by a fraction in which the numerator is the number of shares of Issuer Common
Stock for which the Option was theretofore exercisable and the denominator is
the number of shares of Substitute Common Stock for which the Substitute Option
is exercisable.
(e) In no event, pursuant to any of the foregoing paragraphs, shall
the Substitute Option be exercisable for more than 19.9% of the aggregate of the
shares of Substitute Common Stock outstanding prior to exercise of the
Substitute Option. In the event that the Substitute Option would be exercisable
for more than 19.9% of the aggregate of the shares of outstanding Substitute
Common Stock but for the limitation in the first sentence of this Section 6(e),
Substitute Option Issuer shall make a cash payment to Grantee equal to the
excess of (i) the value of the Substitute Option without giving effect to the
limitation in the first sentence of this Section 6(e) over (ii) the value of the
Substitute Option after giving effect to the limitation in the first sentence of
this Section 6(e). This difference in value shall be determined by a nationally
recognized investment banking firm selected by Grantee.
(f) Issuer shall not enter into any transaction described in Section
6(b) unless the Acquiring Corporation and any person that controls the Acquiring
Corporation assume in writing all the obligations of Issuer hereunder and take
all other actions that may be necessary so that the provisions of this Agreement
are given full force and effect (including, without limitation, any action that
may be necessary so that the holders of the other shares of common stock issued
by Substitute Option Issuer are not entitled to exercise any rights comparable
to the Rights by reason of the issuance or exercise of the Substitute Option and
the shares of Substitute Common Stock are otherwise in no way distinguishable
from or have lesser economic value than other shares of common stock issued by
Substitute Option Issuer (other than any diminution in value resulting from the
fact, if applicable, that the shares of Substitute Common Stock are restricted
securities, as defined in Rule 144 under the Securities Act or any successor
provision)).
(g) For purposes of this Agreement, the following terms have the
following meanings:
(1) "Acquiring Corporation" means (i) the continuing or surviving
corporation of a consolidation or merger with Issuer (if other than Issuer),
(ii) Issuer in a merger in which Issuer is the continuing or surviving
corporation and (iii) the transferee of all or substantially all of Issuer's
assets.
(2) "Assigned Value" means the highest of (w) the price per share
of Issuer Common Stock at which a tender offer or exchange offer for Issuer
Common Stock has been made after the date hereof and prior to the consummation
of the consolidation, merger or sale referred to in Section 6(b), (x) the price
per share to be paid by any third party or the consideration per share to
received by holders of Issuer Common Stock, in each case pursuant to the
agreement with Issuer with respect to the consolidation, merger or sale referred
to in Section 6(b), (y) the highest bid price per share for Issuer Common Stock
quoted on the Nasdaq National Market (or if such Issuer Common Stock is not
quoted thereon, the highest bid price per share as quoted on the principal
trading market on which such shares are traded as reported by a recognized
source) during the 12-month period immediately preceding the consolidation,
merger or sale referred to in Section 6(b) and (z) in the event the transaction
referred to in Section 6(b) is a sale of all or substantially all of Issuer's
assets, an amount equal to (i) the sum of the price paid in such sale for such
assets (including assumed liabilities) and the current market value of the
remaining assets of Issuer, as determined by a nationally recognized investment
banking firm selected by Grantee divided by (ii) the number of shares of Issuer
Common Stock outstanding at such time. In the event that a tender offer or
exchange offer is made for Issuer Common Stock or an agreement is entered into
for a merger or consolidation involving consideration other than cash, the value
of the securities or other property issuable or deliverable in exchange for
Issuer Common Stock shall be determined by a nationally recognized investment
banking firm selected by Grantee.
(3) "Average Price" means the average closing sales price per
share of a share of Substitute Common Stock quoted on the New York Stock
Exchange ("NYSE") (or if such Substitute Common Stock is not quoted on the NYSE,
the highest bid price per share as quoted on the Nasdaq National Market or, if
the shares of Substitute Common Stock are not quoted thereon, on the principal
trading market on which such shares are traded as reported by a recognized
source) for the twenty trading days immediately preceding the fifth business day
prior to the consolidation, merger or sale in question, but in no event higher
than the closing price of the shares of Substitute Common Stock on the day
preceding such consolidation, merger or sale; provided that if Substitute Option
Issuer is Issuer, the Average Price shall be computed with respect to a share of
common stock issued by Issuer, the person merging into Issuer or by any company
which controls such person, as Grantee may elect.
(4) "Substitute Common Stock" means the shares of capital stock
(or similar equity interest) with the greatest voting power in respect of the
election of directors (or persons similarly responsible for the direction of the
business and affairs) of the Substitute Option Issuer.
7. Registration Rights.
(a) Issuer shall, if requested by Grantee or any owner of Option
Shares (collectively with Grantee, the "Owners") at any time and from time to
time within three years of the first exercise of the Option, as expeditiously as
possible prepare and file up to two registration statements under the Securities
Act if such registration is necessary in order to permit the sale or other
disposition of any or all shares of securities that have been acquired by or are
issuable to such Owners upon exercise of the Option in accordance with the
intended method of sale or other disposition stated by such Owners, including a
"shelf" registration statement under Rule 415 under the Securities Act or any
successor provision, and Issuer shall use its best efforts to qualify such
shares or other securities under any applicable state securities laws. Issuer
shall use all reasonable efforts to cause each such registration statement to
become effective, to obtain all consents or waivers of other parties which are
required therefor and to keep such registration statement effective for such
period not in excess of 180 days from the day such registration statement first
becomes effective as may be reasonably necessary to effect such sale or other
disposition. The obligations of Issuer hereunder to file a registration
statement and to maintain its effectiveness may be suspended for one or more
periods of time not exceeding 30 days in the aggregate if the Board of Directors
of Issuer shall have determined that the filing of such registration statement
or the maintenance of its effectiveness would require disclosure of nonpublic
information that would materially and adversely affect Issuer. Any registration
statement prepared and filed under this Section 7, and any sale covered thereby,
shall be at Issuer's expense except for underwriting discounts or commissions,
brokers' fees and the fees and disbursements of Owners' counsel related thereto.
The Owners shall provide all information reasonably requested by Issuer for
inclusion in any registration statement to be filed hereunder.
(b) If during the time period referred to in the first sentence of
subsection (a) of this Section 7 Issuer effects a registration under the
Securities Act of Issuer Common Stock for its own account or for any other
stockholders of Issuer (other than on Form S-4 or Form S-8, or any successor
form), it shall allow the Owners the right to participate in such registration,
and such participation shall not affect the obligation of Issuer to effect two
registration statements for the Owners under this Section 7; provided that, if
the managing underwriters of such offering advise Issuer in writing that in
their opinion the number of shares of Issuer Common Stock requested to be
included in such registration exceeds the number which can be sold in such
offering, Issuer shall include the shares requested to be included therein by
the Owners pro rata with the shares intended to be included therein by Issuer.
(c) In connection with any registration pursuant to this Section 7,
Issuer and the Owners shall provide each other and any underwriter of the
offering with customary representations, warranties, covenants, indemnification
and contribution in connection with such registration. Issuer shall indemnify
and hold harmless (i) Owner, its affiliates and its officers and directors and
(ii) each underwriter and each person who controls any underwriter
(collectively, the "Underwriters") within the meaning of the Securities Act or
the Exchange Act ((i) and (ii) being referred to as "Indemnified Parties")
against any losses, claims, damages, liabilities or expenses to which the
Indemnified Parties may become subject, insofar as such losses, claims, damages,
liabilities (or actions in respect thereof) and expenses arise out of or are
based upon any untrue statement or alleged untrue statement of any material fact
contained or incorporated by reference in any registration statement filed
pursuant to this paragraph, 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; provided, however,
that the Issuer shall not be liable in any such case to the extent that any such
loss, liability, claim, damage or expense arises out of or is based upon an
untrue statement or alleged untrue statement in or omission or alleged omission
from any such documents in reliance upon and in conformity with written
information furnished to the Issuer by the Indemnified Parties expressly for use
or incorporation by reference therein. As used in this Agreement, "person" shall
have the meaning specified in Sections 3(a)(9) and 13(d)(3) of the Exchange Act.
Owner and the Underwriters shall indemnify and hold harmless the Issuer, its
affiliates and its officers and directors against any losses, claims, damages,
liabilities or expenses to which the Company, its affiliates and its officers
and directors may become subject, insofar as such losses, claims, damages,
liabilities (or actions in respect thereof) and expenses arise out of or are
based upon any untrue statement of any material fact contained or incorporated
by reference in any registration statement filed pursuant to this paragraph, or
arise our 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 reliance upon and in conformity with written
information furnished to the Issuer by Owner or the Underwriters, as applicable,
specifically for use or incorporation by reference therein.
8. Listing. If Issuer Common Stock or any other securities to be
acquired upon exercise of the Option are then listed on the Nasdaq National
Market or other securities market, Issuer, upon the request of any Owner, will
promptly make any filing necessary to list the shares of Issuer Common Stock or
other securities to be acquired upon exercise of the Option on such system or
market and will use its best efforts to obtain approval of such listing as soon
as practicable.
9. Limitation of Grantee Profit.
(a) Notwithstanding any other provision herein, in no event shall
Grantee's Total Profit (as defined below) exceed $9,000,000, and, if it
otherwise would exceed such amount, Grantee, at its sole discretion, shall
either (i) reduce the number of shares subject to the Option, (ii) deliver to
Issuer for cancellation shares of Issuer Common Stock (or other securities into
which such Option Shares are converted or exchanged), (iii) pay cash to Issuer,
or (iv) any combination of the foregoing, so that Grantee's actually realized
Total Profit shall not exceed $9,000,000 after taking into account the foregoing
actions.
(b) For purposes of this Agreement, "Total Profit" shall mean: (i) the
aggregate amount of (A) Net Proceeds, plus (B) all amounts received by Grantee
on the transfer of the Option, plus (C) all equivalent amounts with respect to
the Substitute Option, plus (D) all amounts received by Grantee pursuant to
Section 8.02(a) and (b) of the Merger Agreement, minus (ii) the aggregate of (A)
all amounts of cash previously paid to Issuer pursuant to this Section 9 and (B)
the value of the Option Shares (or other securities) previously delivered to
Issuer for cancellation pursuant to this Section 9. "Net Proceeds" shall mean
the aggregate proceeds of such sale or disposition in excess of the product of
the Purchase Price multiplied by the number of such Option Shares (or securities
into which such shares are converted or exchanged) included in such sale or
disposition.
(c) Notwithstanding any other provision of this Agreement, nothing in
this Agreement shall affect the ability of Grantee to receive, nor relieve
Issuer's obligation to pay, any payment provided for in Section 8.02(a) or (b)
of the Merger Agreement; provided that if and to the extent the Total Profit
received by Grantee would exceed $9,000,000, following receipt of such payment,
Grantee shall be obligated to comply with the terms of Section 9(a) within 30
days of the latest of (i) the date of receipt of such payment, (ii) the date of
receipt of the Net Proceeds, (iii) the date of receipt of net cash from
disposition of the Option and (iv) the date of receipt of equivalent amounts
pursuant to the sale of the Substitute Option or shares of Substitute Common
Stock (or other securities into which such Substitute Common Stock is converted
or exchanged).
(d) For purposes of Section 9(a) and clause (ii) of Section 9(b), the
value of any Option Shares delivered to Issuer shall be the Assigned Value of
such Option Shares and the value of any Substitute Common Stock delivered to
Issuer shall be the Highest Closing Price of such Substitute Common Stock.
"Highest Closing Price" means the highest closing sales price for shares of
Substitute Common Stock quoted on the NYSE (or if the Substitute Common Stock is
not quoted on the NYSE, the highest bid price per share as quoted on the
National Association of Securities Dealers Automated Quotations System or, if
the shares of Substitute Common Stock are not quoted thereon, on the principal
trading market on which such shares are traded as reported by a recognized)
during the six-month period preceding the issuance of the Substitute Option.
(e) Notwithstanding anything in this Agreement or the Merger Agreement
to the contrary, if a court shall finally adjudicate that Grantee's Total Profit
is unenforceable, then Net Proceeds shall be limited to the largest amount
enforceable, whether such amount is $9,000,000, $7,000,000, $5,000,000,
$4,000,000, $3,000,000 or $2,000,000. All Net Proceeds in excess of such
limitation shall be remitted to Issuer upon receipt.
10. Loss, Theft, Etc. of Agreement. This Agreement (and the Option
granted hereby) are exchangeable, without expense, at the option of Grantee,
upon presentation and surrender of this Agreement at the principal office of
Issuer for other Agreements providing for Options of different denominations
entitling the holder thereof to purchase in the aggregate the same number of
shares of Issuer Common Stock purchasable hereunder. The terms "Agreement" and
"Option" as used herein include any other Agreements and related Options for
which this Agreement (and the Option granted hereby) may be exchanged. Upon
receipt by Issuer of evidence reasonably satisfactory to it of the loss, theft,
destruction or mutilation of this Agreement, and (in the case of loss, theft or
destruction) of reasonably satisfactory indemnification, and upon surrender and
cancellation of this Agreement, if mutilated, Issuer will execute and deliver a
new Agreement of like tenor and date. Any such new Agreement executed and
delivered shall constitute an additional contractual obligation on the part of
Issuer, whether or not the Agreement so lost, stolen, destroyed or mutilated
shall at any time be enforceable by anyone.
11. Miscellaneous.
(a) Expenses. Except as otherwise provided in Section 7 hereof or in
the Merger Agreement, each of the parties hereto shall bear and pay all costs
and expenses incurred by it or on its behalf in connection with the transactions
contemplated hereunder, including fees and expenses of its own financial
consultants, investment bankers, accountants and counsel.
(b) Waiver and Amendment. Any provision of this Agreement may be
waived at any time by the party that is entitled to the benefits of such
provision. This Agreement may not be modified, amended, altered or supplemented
except upon the execution and delivery of a written agreement executed by the
parties hereto.
(c) Entire Agreement; No Third-Party Beneficiary; Severability. Except
as otherwise set forth in the Merger Agreement, this Agreement, together with
the Merger Agreement, (a) constitutes the entire agreement and supersedes all
prior agreements and understandings, both written and oral, between the parties
with respect to the subject matter hereof and (b) is not intended to confer upon
any person other than the parties hereto any rights or remedies hereunder. If
any term, provision, covenant or restriction of this Agreement is held by a
court of competent jurisdiction or a federal or state regulatory agency to be
invalid, void or unenforceable, the remainder of the terms, provisions,
covenants and restrictions of this Agreement shall remain in full force and
effect and shall in no way be affected, impaired or invalidated. If for any
reason such court or regulatory agency determines that the Option does not
permit Grantee to acquire the full number of shares of Issuer Common Stock (or
Substitute Common Stock) as provided in Section 2, as adjusted pursuant to
Section 6, it is the express intention of Issuer to allow Grantee to acquire
such lesser number of shares as may be permissible without any amendment or
modification hereof.
(d) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NORTH CAROLINA WITHOUT REGARD TO ANY
APPLICABLE CONFLICTS OF LAW RULES.
(e) Descriptive Headings. The descriptive headings contained herein
are for convenience of reference only and shall not affect in any way the
meaning or interpretation of this Agreement.
(f) Notices. All notices and other communications hereunder shall be
in writing and shall be deemed given if delivered personally, telecopied (with
confirmation) or mailed by registered or certified mail (return receipt
requested) to the parties at the following addresses (or at such other address
for a party as shall be specified by like notice):
If to Grantee to:
Quintiles Transnational Corp.
0000 Xxxxxxxxxx Xxxxx
Xxxxxxxxxx Xxxxxxxx, Xxxxx 000
Xxxxxx, XX 00000
Attention: General Counsel
Telecopier No.: (000) 000-0000
with a copy to:
Smith, Anderson, Blount, Dorsett,
Xxxxxxxx & Xxxxxxxx, L.L.P.
0000 Xxxxx Xxxxx Xxxxxxx Xxxxxx
Xxxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxx, Esq.
Telecopier No.: (000) 000-0000
If to Issuer to:
Pharmaceutical Marketing Services Inc.
00 Xxxxxxxxxxx Xxxxx, Xxxxx 000
Xxx Xxxx, XX 00000
Attention: General Counsel
Telecopier No.: (000) 000-0000
with a copy to:
Reboul, MacMurray, Xxxxxx, Xxxxxxx & Kristol
00 Xxxxxxxxxxx Xxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxx X. Xxxxxx, Esq.
Telecopier No.: (000) 000-0000
(g) Counterparts. This Agreement and any amendments hereto may be
executed in two counterparts, each of which shall be considered one and the same
agreement and shall become effective when both counterparts have been signed by
each of the parties and delivered to the other party, it being understood that
both parties need not sign the same counterpart.
(h) Assignment. Grantee may assign this Agreement in whole to any
affiliate of Grantee at any time. Except as provided in the next sentence,
Grantee may not, without the prior written consent of Issuer (which shall not be
unreasonably withheld), assign this Agreement to any other person. Upon the
occurrence of a Purchase Event, Grantee may sell, transfer, assign or otherwise
dispose of, in whole at any time, its rights and obligations hereunder. In the
case of any sale, transfer, assignment or disposition of this Option, Issuer
shall do all things reasonably necessary to facilitate such transaction. This
Agreement shall not be assignable by Issuer except by operation of law. Subject
to the preceding sentence, this Agreement shall be binding upon, inure to the
benefit of and be enforceable by the parties and their respective successors and
assigns.
(i) Representations and Warranties. The representations and warranties
contained in Sections 3.01(a) and 3.02(a) of the Merger Agreement, and, to the
extent they relate to this Stock Option Agreement, in Sections 3.01(c),(d), (p),
(q) and (t) and 3.02(c) of the Merger Agreement, are incorporated herein by
reference.
(j) Further Assurances. In the event of any exercise of the Option by
Grantee, Issuer and Grantee shall execute and deliver all other documents and
instruments and take all other action that may be reasonably necessary in order
to consummate the transactions provided for by such exercise.
(k) Specific Performance. The parties hereto agree that this Agreement
may be enforced by either party through specific performance, injunctive relief
and other equitable relief. Both parties further agree to waive any requirement
for the securing or posting of any bond in connection with the obtaining of any
such equitable relief and that this provision is without prejudice to any other
rights that the parties hereto may have for any failure to perform this
Agreement.
IN WITNESS WHEREOF, Issuer and Grantee have caused this Stock Option
Agreement to be signed by their respective officers thereunto duly authorized as
of the day and year first written above.
PHARMACEUTICAL MARKETING SERVICES INC.
By: /s/Xxxxxx X. Hauser_________________
Name: Xxxxxx X. Xxxxxx
Title: Vice President
QUINTILES TRANSNATIONAL CORP.
By: /s/Xxxxx X. Bierman_________________
Name: Xxxxx X. Xxxxxxx
Title: Senior Vice President
