EXHIBIT 1
Conformed Copy
ORDERLY MARKETING AGREEMENT
by and among
THE SHAREHOLDERS LISTED IN ANNEX A HERETO
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Dated as of November 29, 1996
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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
A-i
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.
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(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
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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
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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
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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).
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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.
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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.
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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.
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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
Name:
Title:
HSBC PRIVATE EQUITY INVESTMENTS LIMITED
By: /s/ X. Xxxxxxxxx
Name:
Title:
LLOYDS DEVELOPMENT CAPITAL LIMITED
By: /s/X. Xxxxxxxxx
Name:
Title:
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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:
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/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
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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:
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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:
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ANNEX A
Identity of Holders
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Name Address
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(1) HSBC Group
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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 Executor Ibex House
and Trustee Company 42/47 Minories
Limited (Account H716) Xxxxxx XX0X 0XX
Xxxxxxx
----------------------------------------------------------------------------
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General Accident Executor Ibex House
and Trustee Company 42/47 Minories
Limited (Account H715) Xxxxxx XX0X 0XX
Xxxxxxx
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The Venture Catalysts c/o HSBC Private Equity
Ltd. Europe Ltd.
Vintner's Place
00 Xxxxx Xxxxxx Xxxxxx
Xxxxxx, XX0X 0XX
Xxxxxxx
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[?] c/o HSBC Private Equity
Europe Ltd.
Vintner's Place
00 Xxxxx Xxxxxx Xxxxxx
Xxxxxx, XX0X 0XX
Xxxxxxx
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(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
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Trustees of the Barrie Chimneys
Xxxxx Children's Winter Hill
Settlement No. 2 Cookham Xxxx
Xxxxx SL6 9TN
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(3) Management Group
----------------------------------------------------------------------------
Xxxxx Xxxx Xxxxxxxxx Xxxx Xxxxx
Xxxxxxx Xxxx
Xxxxxxxxx XX0 0XX
----------------------------------------------------------------------------
Xxxxxx Xxxxxx 0 Xxxxxxxxx Xxx
Xxxxxxxxx XX00 0XX
----------------------------------------------------------------------------
A-2
----------------------------------------------------------------------------
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-Xxxxxxxx Fleet View
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
----------------------------------------------------------------------------
A-3
----------------------------------------------------------------------------
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 Xxxxx Little Barlows
Frieth
Xxxxxx on Xxxxxx
Xxxx XX0 0XX
----------------------------------------------------------------------------
Xxxxxxxxxxx X. Xxxxxx and 9 Cherrytree Close
Xxx. Xxxxxx Xxxxxx Xxxxxxxxx Xxxxxx
Xxxxxxxxxxxxxxx
XX00 0XX
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A-4
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%)
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Xxxxx Group 405,000 (15%)
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Management Group 270,000 (10%)
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