EXHIBIT 2
ORDERLY MARKETING AGREEMENT
by and among
THE SHAREHOLDERS LISTED IN ANNEX A HERETO
______________________________
Dated as of November 29, 1996
______________________________
TABLE OF CONTENTS
Page
Section 1. Definitions, Inconsistent Agreements. . . 2
Section 2. Initial Secondary Offering. . . . . . . . 3
2.1 Allocation of Shares of Common Stock. . . 3
2.2 Priority . . . . . . . . . . . . . . . . . 4
Section 3. Control by HSBC . . . . . . . . . . . . . 4
3.1 Determination of the Terms . . . . . . . . 4
3.2 Meetings with Quintiles . . . . . . . . . 5
Section 4. Shelf Registration. . . . . . . . . . . . 5
4.1 Allocation. . . . . . . . . . . . . . . . 5
Section 5. Demand Rights and Piggyback Rights. . . . 6
5.1 Internal Priority Period. . . . . . . . . 6
5.2 Allocation. . . . . . . . . . . . . . . . 7
Section 6. Miscellaneous. . . . . . . . . . . . . . . 7
6.1 Governing Law. . . . . . . . . . . . . . . 7
6.2 Jurisdiction. . . . . . . . . . . . . . . 8
6.3 Remedies . . . . . . . . . . . . . . . . . 8
ANNEX A
ANNEX B
ORDERLY MARKETING AGREEMENT
This Orderly Marketing Agreement (this
"Agreement") is dated as of November 29, 1996, and is being
entered into by and among the persons listed in Annex A
hereto, each of which is sometimes referred to herein
individually as a "Holder" and collectively as the
"Holders." The entities listed in Annex A(1), including
HSBC Private Equity Europe Limited ("HSBC"), shall be
collectively referred to as the "HSBC Group", the persons
listed in Annex A(2), including Xxxxxx X. Xxxxx, shall be
collectively referred to as the "Xxxxx Group" and the
persons listed in Annex A(3) shall be collectively referred
to as the "Management Group."
RECITALS
WHEREAS, the Board of Directors of Quintiles
Transnational Corp., a North Carolina corporation
("Quintiles"), and Innovex Limited, a limited company
organized under the laws of England and Wales ("Innovex"),
have determined that it is in the best interests of their
respective companies and shareholders to combine their
businesses (the "Combination"); and
WHEREAS, Quintiles, Innovex and the Holders have
entered into a Share Exchange Agreement, dated as of
October 4, 1996 (the "Exchange Agreement") by and among
Quintiles, Innovex and the Shareholders of Innovex, pursuant
to which Quintiles, Innovex and the Holders have agreed to
exchange all of their issued and outstanding share capital
of Innovex for shares of Common Stock, par value $0.01 per
share, of Quintiles; and
WHEREAS, Quintiles and the Holders have entered
into a Registration Rights Agreement, dated the date hereof
(the "Registration Rights Agreement"), pursuant to which the
parties thereto have made certain covenants and agreements
concerning, among other things, the registration of the
shares of Common Stock of Quintiles under the Securities Act
of 1933, as amended; and
WHEREAS, the parties hereto wish to make certain
additional covenants and agreements including, among other
things, the assignment pursuant to Section 11(i) of the
Registration Rights Agreement of certain rights and
obligations under the Registration Rights Agreement;
NOW, THEREFORE, in consideration of the premises
and of the mutual covenants, representations, warranties and
agreements contained herein, the parties hereto agree as
follows:
SECTION 1. DEFINITIONS; INCONSISTENT AGREEMENTS.
(a) Capitalized terms used in this Agreement
shall, unless otherwise specified herein, have the meanings
assigned to them in the Registration Rights Agreement.
(b) For the avoidance of doubt, the parties agree
that (i) they will not enter into any agreements or
arrangements providing for rights that are inconsistent with
the rights and obligations set forth herein, and if any such
agreements or arrangements are entered into, the terms of
this Agreement shall control, and (ii) any references in the
Registration Rights Agreement to the allocation of rights
among the Holders on a "pro rata basis" as are inconsistent
with the allocations set forth in this Agreement shall be
superseded as among the parties hereto by the terms of this
Agreement.
SECTION 2. INITIAL SECONDARY OFFERING.
2.1 Allocation of Shares of Common Stock. In
connection with the offer and sale of Common Stock by the
Holders in the Initial Secondary Offering, the ratio of
shares of Common Stock to be offered and sold by each Holder
(or classes of Holder) shall be as indicated in Annex B;
provided, however, that in the event that the Maximum Number
is less than 4 million but greater than 2 million and the
number of shares of Common Stock to be sold by the Holders
is reduced pursuant to Section 2.1(b) of the Registration
Rights Agreement, the shares of Common Stock to be sold by
the Holders designated as the Management Group in Annex A(3)
will be 270,000 shares and the balance of such shares to be
sold by the Holders shall be offered in such ratio that the
shares of Common Stock to be sold by the HSBC Group
constitute 83 1/3% and those sold by the Xxxxx Group
constitute 16 2/3% of such balance of shares.
2.2 Priority. If (a) the size of the Initial
Secondary Offering contemplated by Section 2.1 of the
Registration Rights Agreement is increased such that more
than an aggregate of 4 million shares of Common Stock is
offered and sold pursuant thereto, (b) the number of shares
of Common Stock offered by Quintiles or its shareholders
(other than the Holders) in the Initial Secondary Offering
is reduced, or (c) additional shares of Common Stock are
included pursuant to an overallotment option, the effect of
which in any such case is to increase the number of shares
of Common Stock to be offered by the Holders in the Initial
Secondary Offering, then the additional shares of Common
Stock to be sold by the Holders shall be shares of Common
Stock held by the HSBC Group as may be agreed by members of
the HSBC Group, to the extent of their respective
shareholdings.
SECTION 3. CONTROL BY HSBC.
3.1 Determination of the Terms. To the extent
that it is within the control of Holders pursuant to the
Registration Rights Agreement, in connection with the
Initial Secondary Offering and any other offerings during
the Internal Priority Period (as defined below), the HSBC
Group shall have the right to determine the parameters of
the desired offerings, including, without limitation,
minimum price, maximum underwriter's commission and plan of
distribution, and shall have the power to determine whether
or not to consummate the offering upon the advice it
receives from the managing underwriter to the offering.
3.2 Meetings with Quintiles. A representative
from the HSBC Group shall be entitled to attend meetings to
be held between Quintiles and the Holders pursuant to
Section 2.6(m) of the Registration Rights Agreement.
SECTION 4. SHELF REGISTRATION.
4.1 Allocation. The shares of Common Stock to be
sold pursuant to any Shelf Registration will be allocated as
follows:
(a) During the Internal Priority Period (as
defined in Section 5.1 below), all shares will be sold by
the HSBC Group.
(b) Following the end of the Internal Priority
Period, the shares available to be sold will be allocated in
the following proportions: 50% to the HSBC Group on the one
hand and 50% to the Xxxxx Group and the Management Group on
the other hand; provided that if at any time following the
end of the Internal Priority Period, Xxxxxx X. Xxxxx shall
no longer be a director, executive officer, employee or
consultant of or to Quintiles, the shares available to be
sold will be allocated to the Xxxxx Group in priority to the
HSBC Group and the Management Group up to 85% of the Xxxxx
Group's shares; provided that any shares to be sold by the
HSBC Group and the Management Group shall be allocated in
the following proportions: 88.2% to the HSBC Group and
11.8% to the Management Group.
(c)(i) Notwithstanding the provisions set forth
in paragraphs (a) and (b) above, in the event that any
Holders elect not to sell some or all of the shares which
they would otherwise be entitled to sell pursuant to the
preceding two paragraphs, the number of shares not offered
and sold by any such Holder may be offered and sold by the
Holders who so elect to sell. The Holders agree to hold
periodic meetings with one another to discuss their
respective plans for selling Registrable Securities.
(ii) In the event that any Holder offers and
sells shares allocated to them pursuant to the preceding
clause (i) that exceed the shares otherwise allocated to
such Holder pursuant to paragraghs (a) and (b) above, such
number of shares so sold shall be available to be sold by
the other Holder or Holders in subsequent periods prior to
any allocation provided for in the preceding paragraphs (a)
and (b).
SECTION 5. DEMAND RIGHTS AND PIGGYBACK RIGHTS.
5.1 Internal Priority Period. For the duration
of the Internal Priority Period (defined below), the demand
rights provided to the Holders pursuant to Section 2 of the
Registration Rights Agreement may be exercised only by the
HSBC Group. For purposes of this Agreement, the term
"Internal Priority Period" means the period ending at the
time the HSBC Group collectively shall have disposed of 75%
of the shares of Common Stock collectively received by them
in connection with the Combination.
5.2 Allocation. The following provisions shall
govern the allocation among Holders of the registration
rights provided by the Registration Rights Agreement.
Registrations made pursuant to Sections 2.3, 2.4 and 2.5 of
the Registration Rights Agreement (or any other agreement or
arrangement) during the Internal Priority Period shall be
allocated among the Holders in proportion to the number of
shares of Common Stock set forth opposite each Holder's name
in Annex B. After the end of the Internal Priority Period
piggyback registrations made pursuant to Sections 2.4 and
2.5 of the Registration Rights Agreement shall be allocated
among the Holders such that up to 66 2/3% of the shares of
Common Stock registered are shares owned by the Xxxxx Group
and/or the Management Group and at least 33 1/3% of the
shares of Common Stock so registered are shares owned by the
HSBC Group.
SECTION 6. MISCELLANEOUS.
6.1 GOVERNING LAW. THIS AGREEMENT SHALL BE
GOVERNED AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEW YORK, USA, WITHOUT REGARD TO PRINCIPLES OF
CONFLICTS OF LAWS.
6.2 Jurisdiction. Any suit, action or proceeding
seeking to enforce any provision of, or based on any matter
arising out of or in connection with, this Agreement or the
transactions contemplated hereby shall be brought only in
the United Stated District Court for the Southern District
of New York or any New York State court sitting in New York
City, and each of the parties hereby consents to the
jurisdiction of such courts (and of the appropriate
appellate courts therefrom) in any such suit, action or
proceeding and irrevocably waives, to the fullest extent
permitted by law, any objection which it may now or
hereafter have to the laying of the venue of any such suit,
action or proceeding in any such court or that any such
suit, action or proceeding which is brought in any such
court has been brought in an inconvenient forum. Process in
any such suit, action or proceeding may be served on any
party anywhere in the world, whether within or without the
jurisdiction of any such court. Without limiting the
foregoing, each party agrees that service of process on such
party as provided in this Section 6.2 shall be deemed
effective service of process on such party.
6.3 Remedies. In the event of breach by any
party of any of its obligations under this Agreement, each
other party, in addition to being entitled to exercise all
rights provided herein or granted by law, including recovery
of damages, will be entitled to specific performance of its
rights under this Agreement. Each of the parties agrees
that monetary damages would not be adequate compensation for
any loss incurred by reason of a breach by it of any of the
provisions of this Agreement and hereby further agrees that,
in the event of any action for specific performance in
respect of such breach, it shall waive the defense that a
remedy at law would be adequate. No failure or delay on the
part of any party in exercising any right, power or remedy
hereunder shall operate as a waiver thereof; nor shall any
single or partial exercise of any such right, power or
remedy preclude any other or further exercise thereof or the
exercise of any other right, power or remedy.
IN WITNESS WHEREOF, the parties have executed this
Agreement as of the date first written above.
/s/Xxxxxx X. Xxxxx
Xxxxxx X. Xxxxx
/s/Xxxxxx X. Xxxxxxx
Xxxxxx X. Xxxxxxx
TRUSTEES OF THE XXXXXX X. XXXXX
CHILDREN'S SETTLEMENT NO. 1
By: /s/Xxxxxx X. Xxxxx
Name:
Title:
TRUSTEES OF THE XXXXXX X. XXXXX
CHILDREN'S SETTLEMENT NO. 2
By: /s/Xxxxxx X. Xxxxx
Title:
HSBC PRIVATE EQUITY INVESTMENTS LIMITED
By: /s/ X. Xxxxxxxxx
Name:
Title:
LLOYDS DEVELOPMENT CAPITAL LIMITED
By: /s/X. Xxxxxxxxx
Name:
Title:
MSS NOMINEES LIMITED
(ACCOUNT 758170)
By: /s/X. Xxxxxxxxx
Name:
Title:
MSS NOMINEES LIMITED
(ACCOUNT 758979)
By: /s/X. Xxxxxxxxx
Name:
Title:
MSS NOMINEES LIMITED
(ACCOUNT 757549)
By: /s/X. Xxxxxxxxx
Name:
Title:
MSS NOMINEES LIMITED
(ACCOUNT 778392)
By: /s/X. Xxxxxxxxx
Name:
Title:
GENERAL ACCIDENT EXECUTOR AND
TRUSTEE COMPANY LIMITED (ACCOUNT H715)
By: /s/X. Xxxxxxxxx
Name:
Title:
GENERAL ACCIDENT EXECUTOR AND
TRUSTEE COMPANY LIMITED (ACCOUNT H716)
By: /s/X. Xxxxxxxxx
Name:
Title:
/s/Xxxx Xxxxx
Xxxxx X. Xxxxxxxxx
/s/Xxxx Xxxxx
Xxxxxx Xxxxxx
/s/Xxxx Xxxxx
Xxxxx X. Xxxxx
/s/Xxxx Xxxxx
Xxxxx X. Fleet
/s/Xxxx Xxxxx
Xxxxx X. Xxxxxx
/s/Xxxx Xxxxx
Xxxxxxxx X. Xxxxxx
/s/Xxxx Xxxxx
Xxxx X. Xxxxx
/s/Xxxx Xxxxx
Xxxxx X. Xxxxx
/s/Xxxx Xxxxx
Xxxxxxxx X. McCooke
/s/Xxxx Xxxxx
Xxxxxxx X. Xxxxx-Xxxxxxxx
TRUSTEES OF THE No. 1 TRUST CREATED
BY XXXX XXXXX AND DATED OCTOBER 4, 1996
By: /s/Xxxx Xxxxx
Name:
Title:
TRUSTEES OF THE No. 2 TRUST CREATED
BY XXXX XXXXX AND DATED OCTOBER 4, 1996
By:
/s/Xxxx Xxxxx
Name:
Title:
TRUSTEES OF THE No. 1 TRUST CREATED
BY XXXXXXXX XXXX MCCOOKE AND DATED
OCTOBER 4, 1996
By:
/s/Xxxx Xxxxx
Name:
Title:
TRUSTEES OF THE No. 2 TRUST CREATED
BY XXXXXXXX XXXX MCCOOKE AND DATED
OCTOBER 4, 1996
By:
/s/Xxxx Xxxxx
Name:
Title:
TRUSTEES OF THE TRUST CREATED BY
XXXXXXXX XXXXXXX XXXXXX AND DATED
OCTOBER 4, 1996
By:
/s/Xxxx Xxxxx
Name:
Title:
TRUSTEES OF THE TRUST CREATED BY
XXXXXX XXXXXX AND DATED OCTOBER 4, 1996
By:
/s/Xxxx Xxxxx
Name:
Title:
TRUSTEES OF THE TRUST CREATED BY
XXXXX XXXXX AND DATED OCTOBER 4,
1996
By:
/s/Xxxx Xxxxx
Name:
Title:
TRUSTEES OF THE TRUST CREATED BY
XXXXXXXXXXX X. XXXXXX AND DATED
OCTOBER 4, 1996
By:
/s/Xxxx Xxxxx
Name:
Title:
ANNEX A
Identity of Holders
Name Address
(1) HSBC Group
HSBC Private Equity c/o HSBC Private Equity
Investments Limited Europe Ltd.
Vintner's Place
00 Xxxxx Xxxxxx Xxxxxx
Xxxxxx XX0X 0XX
Xxxxxxx
Lloyds Development 00 Xxxxxxxx Xxxxxx
Xxxxxxx Xxxxxxx Xxxxxx XX0X 0XX
England
MSS Nominees Limited Midland Securities
(Account 758170) Services Client Delivery
Midland Bank plc
Xxxxxxx Xxxxx
Xxxxx Xxxxxx
Xxxxxx XX0X 0XX
Xxxxxxx
MSS Nominees Limited Midland Securities
(Account 758979) Services Client Delivery
Midland Bank plc
Xxxxxxx Xxxxx
Xxxxx Xxxxxx
Xxxxxx XX0X 0XX
Xxxxxxx
MSS Nominees Limited Midland Securities
(Account 757549) Services Client Delivery
Midland Bank plc
Xxxxxxx Xxxxx
Xxxxx Xxxxxx
Xxxxxx XX0X 0XX
Xxxxxxx
MSS Nominees Limited Midland Securities
(Account 778392) Services Client Delivery
Midland Bank plc
Xxxxxxx Xxxxx
Xxxxx Xxxxxx
Xxxxxx XX0X 0XX
Xxxxxxx
General Accident Ibex House
Executor and Trustee 42/47 Minories
Company Limited Xxxxxx XX0X 0XX
(Account H716) England
General Accident Ibex House
Executor and Trustee 42/47 Minories
Company Limited Xxxxxx XX0X 0XX
(Account H715) England
The Venture Catalysts c/o HSBC Private Equity
Ltd. Europe Ltd.
Vintner's Place
00 Xxxxx Xxxxxx Xxxxxx
Xxxxxx, XX0X 0XX
Xxxxxxx
[?] c/o HSBC Private Equity
Europe Ltd.
Vintner's Place
00 Xxxxx Xxxxxx Xxxxxx
Xxxxxx, XX0X 0XX
Xxxxxxx
(2) Xxxxx Group
Xxxxxx Xxxxxxx Xxxxx Chimneys
Xxxxxx Xxxx
Xxxxxxx Xxxx
Xxxxx XX0 0XX
Xxxxxx Xxxxxxx Chimneys
Xxxxxx Xxxx
Xxxxxxx Xxxx
Xxxxx XX0 0XX
Trustees of the Barrie Chimneys
Xxxxx Children's Winter Hill
Settlement No. 1 Cookham Xxxx
Xxxxx SL6 9TN
Trustees of the Barrie Chimneys
Xxxxx Children's Xxxxxx Xxxx
Xxxxxxxxxx Xx. 0 Xxxxxxx Xxxx
Xxxxx XX0 0XX
(3) Management Group
Xxxxx Xxxx Xxxxxxxxx Xxxx Xxxxx
Xxxxxxx Xxxx
Xxxxxxxxx XX0 0XX
Xxxxxx Xxxxxx 0 Xxxxxxxxx Xxx
Xxxxxxxxx XX00 0XX
Xxxxx Xxxxxxx White Little Barlows
Frieth
Xxxxxx on Xxxxxx
Xxxx XX0 0XX
Xxxxx Xxxxxx Fleet 00 Xxxxxxxx Xxxxxxx
Xxxxxxxx
Xxxxxxxxx
Xxxxxxxxx
Xxxxx Xxxxxx Xxxxxx The Old Barn
Harpsden
Xxxxxx on Xxxxxx
Xxxx XX0 0XX
Xxxxxxxx Xxxxxxx Xxxxxx Xxxxx Xxxxxxx
00 Xxxx Xxxx
Xxxxxx
Xxxxxx XX00 0XX
Xxxx X. Xxxxx Silver Copse
00 Xxxxxxxx
Xxxxxxxxx
Xxxxxxxxx XX0 0XX
Xxxxx Xxxxx 0 Xxxxx Xxxxx
Xxx Xxxxx
XX 00000
XXX
Xxxxxxxx Xxxx McCooke 00 Xxxxxxxxx Xxxxxxx
Xxxxxxxx
Xxxxxx X0 0XX
Xxxxxxx X. Xxxxx- Fleet View
Xxxxxxxx The Pound
Xxxxxxx Xxxxxxx
Xxxxxxxxx XX0 0XX
Xxxx Xxxxx and Xxxxxxx The Gables
Xxxx Xxxxx Elvendon Road
Goring on Xxxxxx
Xxxx XX0 0XX
Xxxx Xxxxx and Xxxxxxx The Gables
Xxxx Xxxxx Elvendon Road
Goring on Xxxxxx
Xxxx XX0 0XX
Xxxxxxxx X. McCooke and 00 Xxxxxxxxx Xxxxxxx
Xxxxx XxXxxxx Xxxxxxxx
Xxxxxx X0 0XX
Xxxxxxxx X. McCooke and 00 Xxxxxxxxx Xxxxxxx
Xxxxx XxXxxxx Xxxxxxxx
Xxxxxx X0 0XX
Xxxxxxxx X. Xxxxxx and Xxxxx Cottage
Xxx. Xxxxx Xxx Xxxxxx 00 Xxxx Xxxx
Xxxxxx
Xxxxxx XX00 0XX
Xxxxxx Xxxxxx and Xxxx 0 Xxxxxxxxx Xxx
Xxxx Xxxxxxx Xxxxxx Xxxxxxxxx
XX00 0XX
Xxxxx Xxxxx and Xxxxx Xxxxxx Barlows
White Frieth
Xxxxxx on Xxxxxx
Xxxx XX0 0XX
Xxxxxxxxxxx X. Xxxxxx 0 Xxxxxxxxxx Xxxxx
and Xxx. Xxxxxx Xxxxxx Xxxxxxxxx Xxxxxx
Xxxxxxxxxxxxxxx
XX00 0XX
ANNEX B
Initial Secondary Offering: Allocation
Number of shares of
Common Stock to be offered
and sold in the Initial
Name Secondary Offering
HSBC Group 2,025,000 (75%)
Xxxxx Group 405,000 (15%)
Management Group 270,000 (10%)
