1
2,400,000 SHARES
QUINTILES TRANSNATIONAL CORP.
COMMON STOCK
(PAR VALUE $0.01 PER SHARE)
UNDERWRITING AGREEMENT
December 4, 1997
2
December 4, 1997
Xxxxxx Xxxxxxx & Co. Incorporated
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs and Mesdames:
Certain shareholders (the "SELLING SHAREHOLDERS") of Quintiles
Transnational Corp., a North Carolina corporation (the "COMPANY"), named in
Schedule I hereto severally propose to sell to you, as underwriter (the
"UNDERWRITER"), an aggregate of 2,400,000 shares of the common stock (par value
$0.01 per share) of the Company (the "FIRM SHARES"), each Selling Shareholder
selling the amount set forth opposite such Selling Shareholder's name in
Schedule I hereto.
The Selling Shareholders also severally propose to sell to you not more
than an aggregate of an additional 360,000 shares of the common stock (par value
$0.01 per share) (the "ADDITIONAL SHARES") if and to the extent that you, as
Underwriter of the offering, shall have determined to exercise the right to
purchase such shares of common stock granted to you in Section 3 hereof. The
maximum number of Additional Shares to be sold by each Selling Shareholder is
set forth opposite such Selling Shareholder's name in Schedule I hereto. The
Firm Shares and the Additional Shares are hereinafter collectively referred to
as the "SHARES." The outstanding shares of common stock (par value $0.01 per
share) of the Company, including the Shares, are hereinafter referred to as the
"COMMON STOCK."
The Company has filed with the Securities and Exchange Commission (the
"COMMISSION") two registration statements, including a related prospectus,
relating to the registration of certain shares of Common Stock (the "SHELF
SECURITIES"), including the Shares, to be sold from time to time by certain
shareholders of the Company. The registration statements as amended at the date
of this Agreement that have been filed under the Securities Act of 1933, as
amended (the "SECURITIES ACT") are hereinafter referred to as the "REGISTRATION
STATEMENT" and the related prospectuses relating to the Shelf Securities, in the
form first used to confirm sales of the Shares, is hereinafter referred to as
the Basic Prospectus. The Basic Prospectus, as supplemented by the prospectus
1
3
supplement dated December 4, 1997 (the "PROSPECTUS SUPPLEMENT"), relating to the
Shares, in the form first used to confirm sales of the Shares is hereinafter
referred to as the "PROSPECTUS". Any reference to the term Registration
Statement, the Basic Prospectus or the Prospectus shall include the documents
incorporated therein by reference. The terms "SUPPLEMENT" and "AMENDMENT" or
"AMEND" as used in this Agreement shall include all documents subsequently filed
by the Company with the Commission pursuant to the Securities Exchange Act of
1934, as amended (the "EXCHANGE ACT"), that are deemed to be incorporated by
reference in the Prospectus.
1. Representations and Warranties of the Company. The Company
represents and warrants to and agrees with the Underwriter that:
(a) The Registration Statement has become effective; no stop
order suspending the effectiveness of the Registration Statement is in
effect, and no proceedings for such purpose are pending before or
threatened by the Commission.
(b) (i) Each document, if any, filed or to be filed pursuant
to the Exchange Act and incorporated by reference in the Prospectus
complied or will comply when so filed in all material respects with the
Exchange Act and the applicable rules and regulations of the Commission
thereunder, (ii) each part of the Registration Statement, when such
part became effective, did not contain and each such part, as amended
or supplemented, if applicable, will not contain any untrue statement
of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein not
misleading, (iii) the Registration Statement and the Prospectus comply
and, as amended or supplemented, if applicable, will comply in all
material respects with the Securities Act and the applicable rules and
regulations of the Commission thereunder and (iv) the Prospectus does
not contain and, as amended or supplemented, if applicable, will not
contain any untrue statement of a material fact or omit to state a
material fact necessary to make the statements therein, in the light of
the circumstances under which they were made, not misleading, except
that the representations and warranties set forth in this paragraph do
not apply to statements or omissions in the Registration Statement or
the Prospectus based upon information relating to the Underwriter
furnished to the Company in writing by the Underwriter expressly for
use therein.
(c) The Company has been duly incorporated, is validly
existing as a corporation in good standing under the laws of North
Carolina, has the corporate power and authority to own its property and
to conduct its business as described in the Prospectus and is duly
qualified to transact
2
4
business and is in good standing in each jurisdiction in which the
conduct of its business or its ownership or leasing of property
requires such qualification, except to the extent that the failure to
be so qualified or be in good standing would not have a material
adverse effect on the Company and its subsidiaries, taken as a whole.
(d) The authorized capital stock of the Company conforms as to
legal matters to the description thereof contained in the Prospectus.
(e) All of the outstanding shares of Common Stock (including
the Shares to be sold by the Selling Shareholders) have been duly
authorized and are validly issued, fully paid and non-assessable.
(f) This Agreement has been duly authorized, executed and
delivered by the Company.
(g) The execution and delivery by the Company of, and the
performance by the Company of its obligations under, this Agreement
will not contravene any provision of applicable law or the articles of
incorporation or by-laws of the Company or any agreement or other
instrument binding upon the Company or any of its subsidiaries that is
material to the Company and its subsidiaries, taken as a whole, or any
judgment, order or decree of any governmental body, agency or court
having jurisdiction over the Company or any subsidiary, and no consent,
approval, authorization or order of, or qualification with, any
governmental body or agency is required for the performance by the
Company of its obligations under this Agreement, except such as may be
required by the securities or Blue Sky laws of the various states in
connection with the offer and sale of the Shares.
(h) There has not occurred any material adverse change, or any
development involving a prospective material adverse change, in the
condition, financial or otherwise, or in the earnings, business or
operations of the Company and its subsidiaries, taken as a whole, from
that set forth in the Prospectus (exclusive of any amendments or
supplements thereto subsequent to the date of this Agreement).
(i) There are no legal or governmental proceedings pending or
threatened to which the Company or any of its subsidiaries is a party
or to which any of the properties of the Company or any of its
subsidiaries is subject that are required to be described in the
Registration Statement or the Prospectus and are not so described or
any statutes, regulations, contracts or other documents that are
required to be described in the
3
5
Registration Statement or the Prospectus or to be filed as exhibits to
the Registration Statement that are not described or filed as required.
(j) Each preliminary prospectus filed as part of the
registration statement as originally filed or as part of any amendment
thereto, or filed pursuant to Rule 424 under the Securities Act,
complied when so filed in all material respects with the Securities Act
and the applicable rules and regulations of the Commission thereunder.
(k) There are no contracts, agreements or understandings
between the Company and any person granting such person the right to
require the Company to include any securities of the Company with the
Shelf Securities registered pursuant to the Registration Statement,
except any such right that has been effectively waived or satisfied by
the inclusion of securities therein.
2. Representations and Warranties of the Selling Shareholders. Each of
the Selling Shareholders represents and warrants to and agrees with the
Underwriter and the Company that:
(a) This Agreement has been duly authorized, executed and
delivered by or on behalf of such Selling Shareholder.
(b) The execution and delivery by such Selling Shareholder of,
and the performance by such Selling Shareholder of its obligations
under, this Agreement will not contravene any provision of applicable
law, or any organizational instrument establishing such Selling
Shareholder (if such Selling Shareholder is not a natural person), or
any agreement or other instrument binding upon such Selling Shareholder
or any judgment, order or decree of any governmental body, agency or
court having jurisdiction over such Selling Shareholder, and no
consent, approval, authorization or order of, or qualification with,
any governmental body or agency is required for the performance by such
Selling Shareholder of its obligations under this Agreement, except
such as may be required by the securities or Blue Sky laws of the
various states in connection with the offer and sale of the Shares.
(c) Such Selling Shareholder has, and on the Closing Date (as
defined below) or the Option Closing Date (as defined below), if
applicable, will have, valid title to the Shares to be sold by such
Selling Shareholder and the legal right and power, and all
authorization and approval required by law, to enter into this
Agreement and to sell, transfer and deliver the Shares to be sold by
such Selling Shareholder.
4
6
(d) Delivery of the Shares to be sold by such Selling
Shareholder pursuant to this Agreement will pass title to such Shares
free and clear of any security interests, claims, liens, equities and
other encumbrances.
(e) The information which relates specifically to such Selling
Shareholder, as set forth under the caption "Selling Stockholders"
(including the notes thereto) in the Prospectus (exclusive of any
amendments or supplements thereto subsequent to the date of this
Agreement) does not contain and, as amended or supplemented with any
information specifically furnished to the Company in writing by such
Selling Shareholder expressly for use in any amendments or supplements
to the Prospectus, if applicable, will not contain any untrue statement
of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein not
misleading.
(f) The representations and warranties made by such Selling
Shareholder in any certificate delivered to its counsel in connection
with the opinions to be rendered pursuant to Section 6(d) are true and
correct in all respects.
3. Agreements to Sell and Purchase. Each Selling Shareholder, severally
and not jointly, hereby agrees to sell to the Underwriter, and the Underwriter,
upon the basis of the representations and warranties herein contained, but
subject to the conditions hereinafter stated, agrees to purchase from such
Selling Shareholder at $36.135 a share (the "PURCHASE PRICE") the number of Firm
Shares to be sold by such Selling Shareholder set forth opposite its name in
Schedule I hereto.
On the basis of the representations and warranties contained in this
Agreement, and subject to its terms and conditions, certain of the Selling
Shareholders (as indicated on Schedule I hereto) agree, severally and not
jointly, to sell to the Underwriter, and the Underwriter shall have a one-time
right to purchase, up to 360,000 Additional Shares at the Purchase Price. If you
elect to exercise such option, you shall so notify the Selling Shareholders in
writing not later than 30 days after the date of this Agreement, which notice
shall specify the number of Additional Shares to be purchased by you and the
date on which such shares are to be purchased. Such date may be the same as the
Closing Date (as defined below), but not earlier than the Closing Date nor later
than ten business days after the date of such notice. Additional Shares may be
purchased as provided in Section 5 hereof solely for the purpose of covering
over-allotments made in connection with the offering of the Firm Shares. If any
Additional Shares are to be purchased, each Selling Shareholder agrees,
severally and not jointly, to
5
7
sell the number of Additional Shares (subject to such adjustments to eliminate
fractional shares as you may determine) that bears the same proportion to the
total number of Additional Shares to be purchased as the number of Additional
Shares set forth in Schedule I hereto opposite the name of such Selling
Shareholder bears to the total maximum number of Additional Shares available for
sale to the Underwriter under this Agreement.
Each Selling Shareholder hereby agrees that, without the prior written
consent of Xxxxxx Xxxxxxx & Co. Incorporated, it will not, during the period
ending 90 days after the date of this Agreement, (i) offer, pledge, sell,
contract to sell, sell any option or contract to purchase, purchase any option
or contract to sell, grant any option, right or warrant to purchase, lend, or
otherwise transfer or dispose of, directly or indirectly, any shares of Common
Stock or any securities convertible into or exercisable or exchangeable for
Common Stock (whether such shares or any such securities are then owned by such
Selling Shareholder or are thereafter acquired directly from the Company), or
(ii) enter into any swap or other arrangement that transfers to another, in
whole or in part, any of the economic consequences of ownership of the Common
Stock, whether any such transaction described in clause (i) or (ii) above is to
be settled by delivery of Common Stock or such other securities, in cash or
otherwise. The foregoing sentence shall not apply to (i) the sale of the Shares
under this Agreement or (ii) transactions relating to shares of Common Stock or
other securities acquired in open market transactions after completion of the
offering of the Shares. In addition, each Selling Shareholder agrees that,
without the prior written consent of Xxxxxx Xxxxxxx & Co. Incorporated and the
Company, it will not, during the period ending 90 days after the date of this
Agreement, make any demand for, or exercise any right with respect to, the
registration of any shares of Common Stock or any security convertible into or
exercisable or exchangeable for Common Stock.
4. Terms of Public Offering. The Selling Shareholders are advised by
you that you propose to make a public offering of the Shares as soon after this
Agreement has become effective as in your judgment is advisable. The Selling
Shareholders are further advised by you that the Shares are to be offered to the
public initially at $36.875 a share (the "PUBLIC OFFERING PRICE") and to certain
dealers selected by you at a price that represents a concession not in excess of
$.37 a share under the Public Offering Price.
5. Payment and Delivery. Payment for the Firm Shares to be sold by each
Selling Shareholder shall be made to such Selling Shareholder in Federal or
other funds immediately available in New York City against delivery of such Firm
Shares for the account of the Underwriter at 10:00 a.m., New York City time, on
December 9, 1997, or at such other time on the same or such other date,
6
8
not later than December 16, 1997, as shall be designated in writing by you. The
time and date of such payment are hereinafter referred to as the "CLOSING DATE."
The expenses payable by the Selling Shareholders to the Company under Section 8
of this Agreement shall be deducted from the payment due to the Selling
Shareholders under this Section and paid directly to the Company. The Company
shall notify the Selling Shareholders and the Underwriter of the amount, if any,
to be deducted from the payment to be made under this Section at least one
business day prior to the Closing Date.
Payment for any Additional Shares to be sold by each Selling
Shareholder shall be made to such Selling Shareholder in Federal or other funds
immediately available in New York City against delivery of such Additional
Shares for the account of the Underwriter at 10:00 a.m., New York City time, on
the date specified in the notice described in Section 3 or at such other time on
the same or on such other date, in any event not later than January 23, 1998, as
shall be designated in writing by you. The time and date of such payment are
hereinafter referred to as the "OPTION CLOSING DATE."
The Selling Shareholders agree that certificates for the Firm Shares
and Additional Shares shall be in definitive form and registered in such names
and in such denominations as you shall request in writing not later than one
full business day prior to the Closing Date or the Option Closing Date, as the
case may be. The certificates evidencing the Firm Shares and Additional Shares
shall be delivered to you on the Closing Date or the Option Closing Date, as the
case may be, for the account of the Underwriter against payment of the Purchase
Price therefor.
6. Conditions to the Underwriter's Obligations. The obligations of the
Selling Shareholders to sell the Shares to the Underwriter and the obligations
of the Underwriter to purchase and pay for the Shares on the Closing Date are
subject to the condition that the Registration Statement shall have become
effective not later than 10:00 A.M. (New York City time) on the date hereof.
The obligations of the Underwriter are subject to the following further
conditions:
(a) Subsequent to the execution and delivery of this Agreement
and prior to the Closing Date:
(i) there shall not have occurred any downgrading,
nor shall any notice have been given of any intended or
potential downgrading or of any review for a possible change
that does not indicate the direction of the possible change,
in the rating accorded any of the Company's securities by any
"nationally recognized
7
9
statistical rating organization," as such term is defined for
purposes of Rule 436(g)(2) under the Securities Act; and
(ii) there shall not have occurred any change, or any
development involving a prospective change, in the condition,
financial or otherwise, or in the earnings, business or
operations of the Company and its subsidiaries, taken as a
whole, from that set forth in the Prospectus (exclusive of any
amendments or supplements thereto subsequent to the date of
this Agreement) that, in your judgment, is material and
adverse and that makes it, in your judgment, impracticable to
market the Shares on the terms and in the manner contemplated
in the Prospectus.
(b) The Underwriter shall have received on the Closing Date a
certificate, dated the Closing Date and signed by an executive officer
of the Company, to the effect set forth in Section 6(a)(i) above and to
the effect that the representations and warranties of the Company
contained in this Agreement are true and correct as of the Closing Date
and that the Company has complied with all of the agreements and
satisfied all of the conditions on its part to be performed or
satisfied hereunder on or before the Closing Date. The officer of the
Company signing and delivering such certificate may rely upon the best
of his or her knowledge as to proceedings threatened.
The Underwriter shall have also received on the Closing Date a
certificate, dated the Closing Date and signed by each Selling
Shareholder to the effect that the representations and warranties of
such Selling Shareholder contained in this Agreement are true and
correct as of the Closing Date and that such Selling Shareholder has
complied with all of the agreements and satisfied all of the conditions
on its part to be performed or satisfied hereunder on or before the
Closing Date.
(c) The Underwriter shall have received on the Closing Date an
opinion of Smith, Anderson, Blount, Dorsett, Xxxxxxxx & Xxxxxxxx,
L.L.P. ("XXXXX, XXXXXXXX"), outside counsel for the Company, dated the
Closing Date, to the effect and subject to limitations, qualifications
and assumptions reasonably acceptable to the Underwriter, that:
(i) the Company has been duly incorporated, is
validly existing as a corporation under the laws of North
Carolina, has the corporate power and authority to own its
property and to conduct its business as described in the
Prospectus;
8
10
(ii) the authorized capital stock of the Company
conforms as to legal matters to the description thereof
incorporated by reference in the Prospectus;
(iii) the outstanding shares of Common Stock to be
sold by the Selling Shareholders have been duly authorized and
are validly issued, fully paid and non-assessable;
(iv) this Agreement has been duly authorized,
executed and delivered by the Company;
(v) the execution and delivery by the Company of, and
the performance by the Company of its obligations under, this
Agreement will not contravene (A) any provision of applicable
federal or North Carolina law which in such counsel's
experience is normally applicable to transactions of the type
contemplated by this Agreement and the contravention of which
would have a material adverse effect on the business of the
Company and its subsidiaries, taken as a whole, (B) the
articles of incorporation or by-laws of the Company, (C) any
agreement or other instrument filed as an exhibit to or
incorporated by reference in the Registration Statement, or
(D) to the best of such counsel's knowledge, any judgment,
order or decree of any governmental body, agency or court
having jurisdiction over the Company or any subsidiary, and no
consent, approval, authorization or order of, or qualification
with, any governmental body or agency is required for the
performance by the Company of its obligations under this
Agreement, except such as may be required by the securities or
Blue Sky laws of the various states in connection with the
offer and sale of the Shares;
(vi) the statements in the Registration Statement of
the Company on Form 8-A in "Item 1 -- Description of
Registrant's Securities to be Registered" insofar as such
statements constitute summaries of the legal matters or
documents referred to therein, fairly present the information
called for with respect to such legal matters or documents and
fairly summarize the matters referred to therein;
(vii) to such counsel's knowledge, there are no legal
or governmental proceedings pending or threatened to which the
Company or any of its subsidiaries is a party or to which any
of the properties of the Company or any of its subsidiaries is
subject that
9
11
are required to be described in the Registration Statement or
the Prospectus and are not so described or any statutes,
regulations, contracts or other documents that are required to
be described in the Registration Statement or the Prospectus
or to be filed as exhibits to the Registration Statement that
are not described or filed as required;
(viii) (A) such counsel is of the opinion that each
document, if any, filed pursuant to the Exchange Act and
incorporated by reference in the Registration Statement and
the Prospectus (except for financial statements and schedules
and other financial and statistical data, as to which such
counsel need not express any opinion) complied when so filed
as to form in all material respects with the Exchange Act and
the rules and regulations of the Commission thereunder, (B)
such counsel is of the opinion that the Registration Statement
and Prospectus (except for financial statements and schedules
and other financial and statistical data included or
incorporated by reference therein as to which such counsel
need not express any opinion) comply as to form in all
material respects with the Securities Act and the applicable
rules and regulations of the Commission thereunder, (C) no
facts have come to the attention of such counsel which would
lead them to believe that (except for financial statements and
schedules and other financial and statistical data as to which
such counsel need not express any belief) the Registration
Statement and the prospectus included therein at the time the
Registration Statement became effective or the Registration
Statement, as supplemented by the Prospectus Supplement or the
Prospectus on the date of this Agreement contained any untrue
statement of a material fact or omitted to state a material
fact required to be stated therein or necessary to make the
statements therein not misleading and (D) no facts have come
to the attention of such counsel which would lead them to
believe that (except for financial statements and schedules
and other financial and statistical data as to which such
counsel need not express any belief) the Prospectus contains
any untrue statement of a material fact or omits to state a
material fact necessary in order to make the statements
therein, in the light of the circumstances under which they
were made, not misleading.
In rendering such opinion, such counsel may rely as to matters
involving the application of laws other than the laws of the United
States and the State of North Carolina to the extent such counsel deems
proper and to the extent specified in such opinion, upon an opinion or
opinions
10
12
(satisfactory to Underwriter's counsel) of other counsel acceptable to
the Underwriter's counsel, familiar with the applicable laws. The
opinion of such counsel shall state that the opinion of any such other
counsel is in form satisfactory to such counsel and, in such counsel's
opinion, the Underwriter and they are justified in relying thereon.
Such counsel may state that their opinion and belief set forth in
Section 6(c)(viii) are based upon their participation in the
preparation of the Registration Statement and the Prospectus (including
the documents incorporated by reference therein) and in their
participation in conferences with officers and other representatives of
the Company, representatives of the independent public accountants for
the Company and representatives of the Underwriter at which the
contents of the Registration Statement and the Prospectus and any
amendments or supplements thereto and related matters were discussed
and that they are not passing upon and they do not assume any
responsibility for the accuracy, completeness, or fairness of the
statements contained in the Registration Statement and Prospectus and
any amendments or supplements thereto.
(d) The Underwriter shall have received on the Closing Date
opinions of Xxxxxxxx Chance, New York and English counsel for the
Selling Shareholders, dated the Closing Date, to the effect and subject
to limitations, qualifications and assumptions reasonably acceptable to
the Underwriter that:
(i) (A) in the case of a Selling Shareholder who is
selling Shares in his or her personal capacity, this Agreement
has been duly executed and delivered by or on behalf of each
such Selling Shareholder and such Selling Shareholder has the
legal right and power to enter into this Agreement and to
sell, transfer and deliver the Shares to be sold by such
Selling Shareholder and (B) in the case of a Selling
Shareholder that is a trustee, each such trustee has the power
and authority under the terms of the settlements of which he
or she is a trustee to enter into this Agreement and to sell,
transfer and deliver the Shares to be sold by such trustee,
and this Agreement has been duly executed and delivered by or
on behalf of each such trustee;
(ii) the execution and delivery by each Selling
Shareholder of, and the performance by such Selling
Shareholder of its obligations under, this Agreement will not
contravene any provision of English, United States or New York
law, which in such counsel's view is customarily applicable to
transactions of the type contemplated by this Agreement, or
the terms of the
11
13
settlement of which the trustee Selling Shareholder is a
trustee, or any agreement or other instrument identified to
such counsel by such Selling Shareholder as affecting in any
way such Selling Shareholder's interest in the Shares being
sold by such Selling Shareholder, or any judgment, order or
decree of any governmental body, agency or court having
jurisdiction over such Selling Shareholder identified to such
counsel by such Selling Shareholder as affecting in any way
such Selling Shareholder's interest in the Shares being sold
by such Selling Shareholder, and no consent, approval,
authorization or order of, or qualification with, any English,
United States or New York governmental body or agency is
required for the execution, delivery and performance by such
Selling Shareholder of its obligations under this Agreement,
except such as may be required by the securities or Blue Sky
laws of the various states in connection with offer and sale
of the Shares; and
(iii) assuming that the Underwriter acquires the
Shares without notice of an adverse claim thereto, as such
term is used in the New York Uniform Commercial Code, Article
8, as in effect in the State of New York, the Underwriter
will, upon payment for the Shares, acquire its interest in the
Shares free of any adverse claim.
(e) The Underwriter shall have received on the Closing Date an
opinion of Xxxxx Xxxx & Xxxxxxxx, counsel for the Underwriter, dated
the Closing Date, covering the matters referred to in Sections 6(c)(iv)
and to the effect that the statements in the Prospectus under the
caption "The Underwriter", insofar as such statements constitute a
summary of the documents referred to therein, fairly present the
information called for with respect to such documents.
In rendering such opinion, such counsel shall also state that
such counsel (A) is of the opinion that the Registration Statement and
Prospectus (except for financial statements and schedules and other
financial and statistical data included therein as to which such
counsel need not express any opinion) comply as to form in all material
respects with the Securities Act and the applicable rules and
regulations of the Commission thereunder, (B) has no reason to believe
that (except for financial statements and schedules and other financial
and statistical data as to which such counsel need not express any
belief) on the date of this Agreement, the Registration Statement as
supplemented by the Prospectus Supplement or the Prospectus contained
any untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary to make the statements
therein not misleading and (C) has no reason to believe that
12
14
(except for financial statements and schedules and other financial and
statistical data as to which such counsel need not express any belief)
the Prospectus contains any untrue statement of a material fact or
omits to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they
were made, not misleading. Such counsel may state that their opinion
and belief are based upon their review of the Registration Statement
and Prospectus and discussion of the contents thereof (including
documents incorporated by reference therein), but are without
independent check or verification, except as specified. Xxxxx Xxxx &
Xxxxxxxx may rely with respect to matters of North Carolina law on the
opinion of Xxxxx, Xxxxxxxx described in Section 6(c) above.
The opinions of Xxxxx, Xxxxxxxx and Xxxxxxxx Chance described
in Sections 6(c) and 6(d) above shall be rendered to the Underwriter at
the request of the Company or one or more of the Selling Shareholders,
as the case may be, and shall so state therein.
(f) The Underwriter shall have received, on each of the date
hereof and the Closing Date, a letter dated the date hereof or the
Closing Date, as the case may be, in form and substance satisfactory to
the Underwriter, from Ernst & Young LLP, independent public accountants
for the Company, containing statements and information of the type
ordinarily included in accountants' "comfort letters" to underwriters
with respect to the financial statements and certain financial
information contained in or incorporated by reference into the
Registration Statement and the Prospectus; provided that the letter
delivered on the Closing Date shall use a "cut-off date" not earlier
than the date hereof.
The obligations of the Underwriter to purchase Additional Shares
hereunder are subject to the delivery to you on the Option Closing Date of such
documents as you may reasonably request with respect to the good standing of the
Company, the due authorization and issuance of the Additional Shares and other
matters related to the sale of the Additional Shares.
7. Covenants of the Company. In further consideration of the agreements
of the Underwriter herein contained, the Company covenants with each Underwriter
as follows:
(a) Before amending or supplementing the Registration
Statement or the Prospectus, to furnish to you a copy of each such
proposed amendment or supplement and not to file any such proposed
amendment or supplement to which you reasonably object, and to file
with the
13
15
Commission within the applicable period specified in Rule 424(b) under
the Securities Act any prospectus required to be filed pursuant to such
Rule.
(b) If, during such period after the first date of the public
offering of the Shares as in the opinion of counsel for the
Underwriters the Prospectus is required by law to be delivered in
connection with sales by an Underwriter or dealer, any event shall
occur or condition exist as a result of which it is necessary to amend
or supplement the Prospectus in order to make the statements therein,
in the light of the circumstances when the Prospectus is delivered to a
purchaser, not misleading, or if, in the opinion of counsel for the
Underwriter, it is necessary to amend or supplement the Prospectus to
comply with applicable law, forthwith to prepare, file with the
Commission and furnish, at its own expense, to the Underwriter and to
the dealers (whose names and addresses you will furnish to the Company)
to which Shares may have been sold by you and to any other dealers upon
request, either amendments or supplements to the Prospectus so that the
statements in the Prospectus as so amended or supplemented will not, in
the light of the circumstances when the Prospectus is delivered to a
purchaser, be misleading or so that the Prospectus, as amended or
supplemented, will comply with law.
(c) To endeavor to qualify the Shares for offer and sale under
the securities or Blue Sky laws of such jurisdictions as you shall
reasonably request.
(d) To make generally available to the Company's security
holders and to you as soon as practicable an earning statement covering
the twelve-month period ending December 31, 1998 that satisfies the
provisions of Section 11(a) of the Securities Act and the rules and
regulations of the Commission thereunder.
8. Expenses. Whether or not the transactions contemplated in this
Agreement are consummated or this Agreement is terminated,
(a) the Selling Shareholders agree to pay or cause to be paid,
ratably in proportion to the number of Firm Shares to be sold by each
Selling Shareholder, all expenses and fees of the Selling Shareholders
in connection with this Agreement including without limitation (i) the
fees, disbursements and expenses of counsel for the Selling
Shareholders in connection with the offering of the Shares and matters
contemplated hereby, (ii) all costs and expenses related to the
transfer and delivery of the Shares to the Underwriter, including any
transfer or other taxes payable thereon, and (iii) all other costs and
expenses incident to the performance of
14
16
the obligations of the Selling Shareholders hereunder for which
provision is not otherwise made in this Section; provided that in
connection with Section 8(a)(ii) the Underwriter agrees to pay the New
York State stock transfer tax and the Selling Shareholder agrees to
reimburse the Underwriter for associated carrying costs if such tax is
not rebated on the day of payment and for any portion of such tax not
rebated;
(b) in addition to expenses set forth in Section 8(a), the
Selling Shareholders agree to pay or cause to be paid, ratably in
proportion to the number of Firm Shares to be sold by each Selling
Shareholder, up to $50,000 of the expenses, fees, printing costs, third
party fees and expenses of the Company in connection with this
Agreement (except as provided in Section 8(c)), including without
limitation (i) the fees, disbursements and expenses of the Company's
counsel in connection with the offering of the Shares and matters
contemplated hereby, (ii) all fees, disbursements and expenses of the
Company's accountants in connection with the offering of the Shares and
matters contemplated hereby and in issuing the comfort letters required
by Section 6(f), (iii) all costs and expenses incurred in connection
with the preparation of any supplement or amendment to the Prospectus
pursuant to Section 7(b), and (iv) all other out-of-pocket costs and
expenses incident to the performance of the obligations of the Company
hereunder for which provision is not otherwise made in this Section;
(c) except as otherwise agreed among any of the parties
hereto, the Company agrees to pay or cause to be paid (i) all
Commission filing fees in connection with filing of the Registration
Statement, (ii) the cost of the initial preparation and filing of the
Registration Statement and any preliminary prospectus, the Prospectus
and amendments and supplements to any of the foregoing which were
incurred prior to the effective date of the Registration Statements and
(iii) any expenses set forth in Section 8(b) to the extent they exceed
$50,000; and
(d) notwithstanding anything to the contrary contained herein,
it is understood the Company shall have no obligation to pay or
reimburse the expenses of the Underwriter except as set forth in
Section 9 hereof and that this Agreement does not create any new
obligation on the part of the Company to pay or reimburse the Selling
Shareholders.
It is understood, however, that except as provided in this Section,
Section 9 entitled "Indemnity and Contribution", and the last paragraph of
Section 11 below, the Underwriter will pay all of its costs and expenses,
including fees and
15
17
disbursements of its counsel, stock transfer taxes payable on resale of any of
the Shares by it, and any advertising expenses connected with any offers it may
make.
9. Indemnity and Contribution. (a) The Company agrees to indemnify and
hold harmless the Underwriter and each person, if any, who controls the
Underwriter within the meaning of either Section 15 of the Securities Act or
Section 20 of the Exchange Act, from and against any and all losses, claims,
damages and liabilities (including, without limitation, any legal or other
expenses reasonably incurred in connection with defending or investigating any
such action or claim) caused by any untrue statement or alleged untrue statement
of a material fact contained in the Registration Statement or any amendment
thereof, any preliminary prospectus or the Prospectus (as amended or
supplemented if the Company shall have furnished any amendments or supplements
thereto), or caused by any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, except insofar as such losses, claims, damages or
liabilities are caused by any such untrue statement or omission or alleged
untrue statement or omission based upon information relating to the Underwriter
furnished to the Company in writing by the Underwriter expressly for use
therein; provided that the foregoing indemnity agreement shall not inure to the
benefit of the Underwriter or any person controlling the Underwriter, if the
Prospectus shall have been amended or supplemented after the date of this
agreement (and the Company shall have furnished such amendments or supplements
to the Underwriter), and a copy of the Prospectus (as then amended or
supplemented) was not sent or given by or on behalf of the Underwriter to any
person asserting any such losses, claims, damages or liabilities who purchased
Shares from the Underwriter, if required by law so to have been delivered, at or
prior to the written confirmation of the sale of the Shares to such person, and
if the Prospectus (as so amended or supplemented) would have cured the defect
giving rise to such losses, claims, damages or liabilities.
(b) Each Selling Shareholder agrees, severally and not jointly, to
indemnify and hold harmless the Underwriter and each person, if any, who
controls the Underwriter within the meaning of either Section 15 of the
Securities Act or Section 20 of the Exchange Act, from and against any and all
losses, claims, damages and liabilities (including, without limitation, any
legal or other expenses reasonably incurred in connection with defending or
investigating any such action or claim) caused by any untrue statement or
alleged untrue statement of a material fact contained in the Registration
Statement or any amendment thereof, any preliminary prospectus or the Prospectus
(as amended or supplemented if the Company shall have furnished any amendments
or supplements thereto), or caused by any omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, but only with reference to information
relating specifically to such Selling Shareholder, as
16
18
set forth under the caption "Selling Stockholders" (including the notes thereto)
in the Prospectus (exclusive of any amendments or supplements thereto subsequent
to the date of this Agreement), or otherwise specifically furnished in writing
by or on behalf of such Selling Shareholder expressly for use in any amendments
or supplements to the Prospectus; provided that the aggregate liability of each
Selling Shareholder under this Section 9(b) shall not exceed the amount of the
net proceeds received by such Selling Shareholder (before deducting expenses)
from the sale of Shares pursuant to this Agreement.
(c) The Underwriter agrees to indemnify and hold harmless the Company,
the Selling Shareholders, the directors of the Company, the officers of the
Company who sign the Registration Statement and each person, if any, who
controls the Company or any Selling Shareholder within the meaning of either
Section 15 of the Securities Act or Section 20 of the Exchange Act from and
against any and all losses, claims, damages and liabilities (including, without
limitation, any legal or other expenses reasonably incurred in connection with
defending or investigating any such action or claim) caused by any untrue
statement or alleged untrue statement of a material fact contained in the
Registration Statement or any amendment thereof, any preliminary prospectus or
the Prospectus (as amended or supplemented if the Company shall have furnished
any amendments or supplements thereto), or caused by any omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, but only with reference
to information relating to the Underwriter furnished to the Company in writing
by the Underwriter expressly for use in the Registration Statement, any
preliminary prospectus, the Prospectus or any amendments or supplements thereto.
(d) In case any proceeding (including any governmental investigation)
shall be instituted involving any person in respect of which indemnity may be
sought pursuant to Section 9(a), 9(b) or 9(c), such person (the "INDEMNIFIED
PARTY") shall promptly notify the person against whom such indemnity may be
sought (the "INDEMNIFYING PARTY") in writing and the indemnifying party, upon
request of the indemnified party, shall retain counsel reasonably satisfactory
to the indemnified party to represent the indemnified party and any others the
indemnifying party may designate in such proceeding and shall pay the fees and
disbursements of such counsel related to such proceeding. In any such
proceeding, any indemnified party shall have the right to retain its own
counsel, but the fees and expenses of such counsel shall be at the expense of
such indemnified party unless (i) the indemnifying party and the indemnified
party shall have mutually agreed to the retention of such counsel or (ii) the
named parties to any such proceeding (including any impleaded parties) include
both the indemnifying party and the indemnified party and representation of both
parties by the same counsel would be inappropriate due to actual or potential
differing interests between them.
17
19
It is understood that the indemnifying party shall not, in respect of the legal
expenses of any indemnified party in connection with any proceeding or related
proceedings in the same jurisdiction, be liable for (a) the fees and expenses of
more than one separate firm (in addition to any local counsel) for the
Underwriter and all persons, if any, who control the Underwriter within the
meaning of either Section 15 of the Securities Act or Section 20 of the Exchange
Act, (b) the fees and expenses of more than one separate firm (in addition to
any local counsel) for the Company, its directors, its officers who sign the
Registration Statement and each person, if any, who controls the Company within
the meaning of either such Section and (c) the fees and expenses of more than
one separate firm (in addition to any local counsel) for all Selling
Shareholders and all persons, if any, who control any Selling Shareholder within
the meaning of either such Section, and that all such fees and expenses shall be
reimbursed as they are incurred. In the case of any such separate firm for the
Underwriter and such control persons of the Underwriter, such firm shall be
designated in writing by Xxxxxx Xxxxxxx & Co. Incorporated. In the case of any
such separate firm for the Company, and such directors, officers and control
persons of the Company, such firm shall be designated in writing by the Company.
In the case of any such separate firm for the Selling Shareholders and such
control persons of any Selling Shareholders, such firm shall be designated in
writing by Xx. Xxxxxx Xxxxx. The indemnifying party shall not be liable for any
settlement of any proceeding effected without its written consent, but if
settled with such consent or if there be a final judgment for the plaintiff, the
indemnifying party agrees to indemnify the indemnified party from and against
any loss or liability by reason of such settlement or judgment. Notwithstanding
the foregoing sentence, if at any time an indemnified party shall have requested
an indemnifying party to reimburse the indemnified party for fees and expenses
of counsel as contemplated by the second and third sentences of this paragraph,
the indemnifying party agrees that it shall be liable for any settlement of any
proceeding effected without its written consent if (i) such settlement is
entered into more than 30 days after receipt by such indemnifying party of the
aforesaid request and (ii) such indemnifying party shall not have reimbursed the
indemnified party in accordance with such request prior to the date of such
settlement. No indemnifying party shall, without the prior written consent of
the indemnified party, effect any settlement of any pending or threatened
proceeding in respect of which any indemnified party is or could have been a
party and indemnity could have been sought hereunder by such indemnified party,
unless such settlement includes an unconditional release of such indemnified
party from all liability on claims that are the subject matter of such
proceeding.
(e) To the extent the indemnification provided for in Section 9(a),
9(b) or 9(c) is unavailable to an indemnified party or insufficient in respect
of any losses, claims, damages or liabilities referred to therein, then each
indemnifying party under such paragraph, in lieu of indemnifying such
indemnified party thereunder,
18
20
shall contribute to the amount paid or payable by such indemnified party as a
result of such losses, claims, damages or liabilities (i) in such proportion as
is appropriate to reflect the relative benefits received by the indemnifying
party or parties on the one hand and the indemnified party or parties on the
other hand from the offering of the Shares or (ii) if the allocation provided by
clause 9(e)(i) above is not permitted by applicable law, in such proportion as
is appropriate to reflect not only the relative benefits referred to in clause
9(e)(i) above but also the relative fault of the indemnifying party or parties
on the one hand and of the indemnified party or parties on the other hand in
connection with the statements or omissions that resulted in such losses,
claims, damages or liabilities, as well as any other relevant equitable
considerations. The relative benefits received by the Company and the Selling
Shareholders on the one hand and the Underwriter on the other hand in connection
with the offering of the Shares shall be deemed to be in the same respective
proportions as the net proceeds from the offering of the Shares (before
deducting expenses) received by the Company and the Selling Shareholders on the
one hand and the total underwriting discounts and commissions received by the
Underwriter on the other hand, in each case as set forth in the table on the
cover of the Prospectus, bear to the aggregate Public Offering Price of the
Shares. The relative fault of the Company and the Selling Shareholders on the
one hand and the Underwriter on the other hand shall be determined by reference
to, among other things, whether the untrue or alleged untrue statement of a
material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Company or the Selling Shareholders on
the one hand or by the Underwriter on the other hand and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission.
(f) The Company, the Selling Shareholders and the Underwriter agree
that it would not be just or equitable if contribution pursuant to this Section
9 were determined by pro rata allocation or by any other method of allocation
that does not take account of the equitable considerations referred to in
Section 9(e). The amount paid or payable by an indemnified party as a result of
the losses, claims, damages and liabilities referred to in the immediately
preceding paragraph shall be deemed to include, subject to the limitations set
forth above, any legal or other expenses reasonably incurred by such indemnified
party in connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 9, the Underwriter shall not be
required to contribute any amount in excess of the amount by which the total
price at which the Shares underwritten by it and distributed to the public were
offered to the public exceeds the amount of any damages that the Underwriter has
otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The remedies
19
21
provided for in this Section 9 are not exclusive and shall not limit any rights
or remedies which may otherwise be available to any indemnified party at law or
in equity.
(g) The indemnity and contribution provisions contained in this Section
9 and the representations, warranties and other statements of the Company and
the Selling Shareholders contained in this Agreement shall remain operative and
in full force and effect regardless of (i) any termination of this Agreement,
(ii) any investigation made by or on behalf of the Underwriter or any person
controlling the Underwriter, any Selling Shareholder or any person controlling
any Selling Shareholder, or the Company, its officers or directors or any person
controlling the Company and (iii) acceptance of and payment for any of the
Shares.
10. Termination. This Agreement shall be subject to termination by
notice given by you to the Company and the Selling Shareholder, if (a) after the
execution and delivery of this Agreement and prior to the Closing Date (i)
trading generally shall have been suspended or materially limited on or by, as
the case may be, any of the New York Stock Exchange, the American Stock
Exchange, the National Association of Securities Dealers, Inc., the Chicago
Board of Options Exchange, the Chicago Mercantile Exchange or the Chicago Board
of Trade, (ii) trading of any securities of the Company shall have been
suspended on any exchange or in any over-the-counter market, (iii) a general
moratorium on commercial banking activities in New York shall have been declared
by either Federal or New York State authorities or (iv) there shall have
occurred any outbreak or escalation of hostilities or any change in financial
markets or any calamity or crisis that, in your judgment, is material and
adverse and (b) in the case of any of the events specified in clauses 10(a)(i)
through 10(a)(iv), such event, singly or together with any other such event,
makes it, in your judgment, impracticable to market the Shares on the terms and
in the manner contemplated in the Prospectus.
11. Effectiveness. This Agreement shall become effective upon the
execution and delivery hereof by the parties hereto.
If this Agreement shall be terminated by the Underwriter, because of
any failure or refusal on the part of the Company or any Selling Shareholder to
comply with the terms or to fulfill any of the conditions of this Agreement, or
if for any reason the Company or any Selling Shareholder shall be unable to
perform its obligations under this Agreement, the Selling Shareholders, jointly
and not severally, will reimburse the Underwriter for all out-of-pocket expenses
(including the fees and disbursements of their counsel) reasonably incurred by
the Underwriter in connection with this Agreement or the offering contemplated
20
22
hereunder; provided that the Selling Shareholders shall be responsible only for
the first $200,000 in out-of-pocket expenses under this Section 11.
12. Counterparts. This Agreement may be signed in two or more
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument.
13. Applicable Law. This Agreement shall be governed by and construed
in accordance with the internal laws of the State of New York.
14. Headings. The headings of the sections of this Agreement have been
inserted for convenience of reference only and shall not be deemed a part of
this Agreement.
21
23
Very truly yours,
QUINTILES TRANSNATIONAL CORP.
By: /s/ Xxxxxx X. Xxxxxxxx
-----------------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: Executive Vice President and
Chief Financial Officer
/s/ Xxxxxx Xxxxx
-----------------------------------
Xxxxxx Xxxxx
/s/ Xxxxxx Xxxxx
-----------------------------------
Xxxxxx Xxxxx
Trustees of Children's Settlement No. 1
(1991)
By: /s/ Xxxxxx Xxxxx
-----------------------------------
Name: Xxxxxx Xxxxx
Title: Trustee
By: /s/ Xxxxxx Xxxxx
-----------------------------------
Name: Xxxxxx Xxxxx
Title: Attorney for Xxxxxxxxx Xxxxxx
By: /s/ Xxxxxx Xxxxx
-----------------------------------
Name: Xxxxxx Xxxxx
Title: Trustee
Trustees of Children's Settlement No. 2
(1993)
By: /s/ Xxxxxx Xxxxx
-----------------------------------
Name: Xxxxxx Xxxxx
Title: Trustee
By: /s/ Xxxxxx Xxxxx
-----------------------------------
Name: Xxxxxx Xxxxx
Title: Attorney for Xxxxxxxxx Xxxxxx
By: /s/ Xxxxxx Xxxxx
-----------------------------------
Name: Xxxxxx Xxxxx
Title: Trustee
22
24
Accepted as of the date hereof
XXXXXX XXXXXXX & CO.
INCORPORATED
By: /s/ Xxxxxx X. Xxxxxx
----------------------------
Name: Xxxxxx X. Xxxxxx
Title: Vice President
23
