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As filed with the Securities and Exchange Commission on May 20, 1997
Registration No. 333-_________
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
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FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
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PAREXEL INTERNATIONAL CORPORATION
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C> <C>
MASSACHUSETTS 8731 04-2776269
(State or other Jurisdiction (Primary Standard Industrial (I.R.S. Employer
of incorporation organization) Classification Code Number) Identification Number)
</TABLE>
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195 WEST STREET
WALTHAM, MASSACHUSETTS 02154
(617) 487-9900 (Address, including zip code, and telephone number, including
area code, of registrant's principal executive offices)
JOSEF H. VON RICKENBACH
PRESIDENT, CHIEF EXECUTIVE OFFICER AND CHAIRMAN
PAREXEL INTERNATIONAL CORPORATION
195 WEST STREET
WALTHAM, MASSACHUSETTS 02154
(617) 487-9900
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
Copies to:
WILLIAM J. SCHNOOR, JR.
HEATHER M. STONE
TESTA, HURWITZ & THIBEAULT, LLP
HIGH STREET TOWER, 125 HIGH STREET
BOSTON, MASSACHUSETTS 02110
(617) 248-7000
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after this registration statement becomes effective.
If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]____
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]____
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
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CALCULATION OF REGISTRATION FEE
<CAPTION>
=====================================================================================================================
TITLE OF SHARES AMOUNT TO BE PROPOSED MAXIMUM PROPOSED MAXIMUM AMOUNT OF
TO BE REGISTERED REGISTERED OFFERING PRICE PER AGGREGATE OFFERING PRICE(1) REGISTRATION FEE(2)
SHARE(1)
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<S> <C> <C> <C> <C>
Common Stock, $.01 106,769 $27.31 $2,915,861.30 $883.59
par value per share
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</TABLE>
(1) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457 under the Securities Act of 1933.
(2) Pursuant to Rule 457(c) under the Securities Act of 1933, the registration
fee has been calculated based upon the average of the high and low prices per
share of Common Stock on the Nasdaq National Market on May 16, 1997.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE
OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.
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PROSPECTUS (SUBJECT TO COMPLETION)
DATED: MAY 20, 1997
106,769 SHARES
PAREXEL INTERNATIONAL CORPORATION
COMMON STOCK
This prospectus relates to the resale of up to 106,769 shares (the
"Shares") of common stock, par value $.01 per share (the "Common Stock"), of
PAREXEL International Corporation ("PAREXEL" or the "Company") by certain
selling stockholders of the Company (collectively, the "Selling Stockholders").
The Shares may be sold from time to time by any or all of the Selling
Stockholders in brokers' transactions, to market makers or in block placements
at market prices prevailing at the time of sale or at prices otherwise
negotiated. See "Selling Stockholders" and "Plan of Distribution." The Company
will not receive any of the proceeds from the resale of the Shares. The Company
has agreed to bear all of the expenses in connection with the registration and
resale of the Shares (other than selling commissions and the fees and expenses
of counsel or other advisors to the Selling Stockholders).
The Shares include (i) 69,747 shares of Common Stock issued to the
former stockholder of Rescon, Inc. ("Rescon") in connection with the merger of a
wholly-owned subsidiary of the Company with and into Rescon pursuant to an
Agreement and Plan of Reorganization and Merger dated February 28, 1997,
leaving Rescon a wholly-owned subsidiary of the Company (the "Rescon Merger");
and (ii) 37,022 shares of Common Stock issued to the former stockholders of
Sheffield Statistical Services Limited ("Sheffield") and its subsidiary
S-Cubed Clinical Limited ("S-Cubed") pursuant to Share Purchase Agreements
dated February 28, 1997, pursuant to which Sheffield and S-Cubed became direct
or indirect wholly-owned subsidiaries of the Company (the "S-Cubed
Acquisition"). The Company, upon written request delivered between February 28,
1998 and February 28, 1999, will register up to 102,768 additional shares of
Common Stock issued to certain of the Selling Stockholders in connection with
the Rescon Merger and the S-Cubed Acquisition.
The Common Stock of the Company is quoted on the Nasdaq National Market
under the symbol "PRXL". On May 16, 1997, the last reported sale price for the
Common Stock on the Nasdaq National Market was $26 1/2 per share.
SEE "RISK FACTORS," ON PAGE 6 FOR INFORMATION THAT SHOULD BE CONSIDERED BY
PROSPECTIVE INVESTORS.
----------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS
THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.
Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the registration statement becomes
effective. This prospectus shall not constitute an offer to sell or the
solicitation of an offer to buy nor shall there be any sale of these securities
in any State in which such offer, solicitation or sale would be unlawful prior
to registration or qualification under the securities laws of any such State.
THE DATE OF THIS PROSPECTUS IS 1997
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AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports, proxy statements and other information with the
Securities and Exchange Commission (the "Commission"). Reports, proxy statements
and other information filed by the Company may be inspected and copied at the
public reference facilities maintained by the Commission at 450 Fifth Street,
N.W., Washington, D.C. 20549 and at the Commission's regional offices located at
Seven World Trade Center, New York, New York 10048, and at Citicorp Center, 500
West Madison Street, Suite 1400, Chicago, Illinois 60661. Copies may also be
obtained from the Public Reference Section of the Commission at 450 Fifth
Street, N.W., Washington, D.C. 20549 at prescribed rates. In addition, the
Commission maintains a Worldwide Web site (http://www.sec.gov) that contains
reports, proxy and information statements and other information regarding
registrants that file electronically with the Commission. The Common Stock of
the Company is quoted on the Nasdaq National Market. Reports, proxy statements
and other information concerning the Company may be inspected at the offices of
the National Association of Securities Dealers, Inc. located at 1735 K Street,
N.W., Washington, D.C. 20006.
The Company has filed with the Commission a Registration Statement on Form S-3
(including all amendments thereto, the "Registration Statement") under the
Securities Act of 1933, as amended (the "Securities Act"), with respect to the
Common Stock offered hereby. This Prospectus does not contain all information
set forth in the Registration Statement, certain parts of which are omitted in
accordance with the rules and regulations of the Commission. For further
information regarding the Company and the Common Stock offered hereby, reference
is hereby made to the Registration Statement and to the exhibits and schedules
filed therewith. Statements contained in this Prospectus regarding the contents
of any agreement or other document filed as an exhibit to the Registration
Statement are not necessarily complete, and in each instance reference is made
to the copy of such document filed as an exhibit to the Registration Statement
for a more complete description of the matters involved. The Registration
Statement, including the exhibits and schedules thereto, may be inspected and
copied at the public reference facilities maintained by the Commission at 450
Fifth Street, N.W., Washington, D.C. 20549 or through its Worldwide Web site
(http://www.sec.gov).
The Company will provide without charge to each person to whom a Prospectus is
delivered, on the written or oral request of any such person, a copy of any or
all of the documents incorporated by reference herein (other than exhibits to
such documents unless such exhibits are specifically incorporated by reference
into such documents). Requests for such copies should be directed to PAREXEL
International Corporation, Attention: Investor Relations Department, 195 West
Street, Waltham, Massachusetts, 02154, telephone number (617) 487-9900.
PAREXEL is a registered service mark of the Company.
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INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
The following documents filed by the Company with the Commission pursuant to the
Exchange Act are incorporated in this Prospectus by reference (File No.
0-27058):
1. The Company's Annual Report on Form 10-K for the fiscal year ended
June 30, 1996.
2. The Company's Quarterly Report on Form 10-Q for the quarter ended
September 30, 1996.
3. The Company's Quarterly Report on Form 10-Q for the quarter ended
December 31, 1996.
4. The Company's Quarterly Report on Form 10-Q for the quarter ended
March 31, 1997.
5. The Company's Current Reports on Form 8-K dated January 28, 1997,
March 3, 1997 and April 23, 1997.
6. The description of the Company's Common Stock, $.01 par value per
share, contained in the Registration Statement on Form 8-A filed
under the Exchange Act and declared effective on November 21,
1995, including any amendment or report filed for the purpose of
updating such description.
All documents subsequently filed by the Company pursuant to Section 13(a),
13(c), 14 or 15(d) of the Exchange Act, prior to the termination of the offering
of the Shares, shall be deemed to be incorporated by reference in this
Prospectus and made a part hereof from the date of filing of such documents. Any
statement contained in a document incorporated or deemed to be incorporated by
reference in this Prospectus shall be deemed to be modified or superseded for
purposes of this Prospectus to the extent that a statement contained herein or
in any other subsequently filed document which also is or is deemed to be
incorporated by reference herein or in any Prospectus Supplement modifies or
supersedes such statement. Any such statement so modified or superseded shall
not be deemed, except as so modified or superseded, to constitute a part of this
Prospectus.
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SUMMARY
The following summary is qualified in its entirety by the more detailed
information appearing elsewhere or incorporated by reference in this Prospectus.
This Prospectus may contain certain "forward-looking" information, as that term
is defined by (i) the Private Securities Litigation Reform Act of 1995 (the
"Act") and (ii) releases made by the Securities and Exchange Commission. Such
information involves risks and uncertainties. The Company's actual results may
differ materially from the results discussed in the forward-looking statements.
Factors that might cause such a difference include, but are not limited to,
those discussed in "Risk Factors."
THE COMPANY
PAREXEL International Corporation ("PAREXEL" or the "Company") is a
leading contract research organization ("CRO"), providing clinical research and
development services to the worldwide pharmaceutical and biotechnology
industries. The Company believes it is the fourth largest CRO, based on
estimated annual net revenue, and one of only a few CROs capable of providing a
full range of clinical services on a global basis. The Company complements the
research and development departments of pharmaceutical and biotechnology
companies by offering high quality clinical research services to the client and
reducing drug development time and cost. In addition, the Company's integrated
services and extensive information technology capabilities, coupled with its
broad experience and expertise in global drug development, provide clients with
a variable cost alternative to the fixed costs associated with internal drug
development. The Company offers a full complement of clinical research and
development services, including designing, initiating and monitoring clinical
trials, managing and analyzing clinical data and consulting on regulatory
affairs.
PAREXEL's integrated information systems and worldwide network of
offices enable the Company to provide high-quality comprehensive services on a
global basis. The Company has provided clinical research and development
services in North America since 1985, in Europe since 1989, in Japan since May
1995 and in Australia since December 1995.
The CRO industry derives substantially all of its revenue from the
pharmaceutical and biotechnology industries. The Company believes that the
following trends will cause the CRO industry to continue to grow: (i) many
pharmaceutical companies, in response to margin pressures, are seeking to reduce
the high fixed costs associated with peak-load staffing for drug development by
relying on a combination of internal resources and CROs; (ii) pharmaceutical and
biotechnology companies increasingly are attempting to maximize profits from a
given drug by pursuing regulatory approvals in multiple countries in parallel,
rather than sequentially, by outsourcing to CROs with global capabilities; (iii)
as consolidation in the pharmaceutical industry continues, many pharmaceutical
companies aggressively manage costs by reducing jobs and outsourcing to
variable-cost CRO's in an effort to reduce the fixed costs associated with
internal drug development; (iv) as regulatory requirements in many jurisdictions
have become more complex, the pharmaceutical and biotechnology industries are
increasingly outsourcing to certain CROs to take advantage of their data
management expertise and global presence; (v) the worldwide research and
development expenditures for new drugs, including amounts spent on services of
the type provided by CROs, have experienced substantial growth in recent years
as a result of pressures to develop new drugs for an aging population and for
the treatment of life threatening diseases and chronic disorders; and (vi) the
growth of the biotechnology industry has increased the demand for expertise and
services provided by outside sources, including CROs. There can be no assurance,
however, that these trends will result in growth in the CRO industry.
PAREXEL's objective is to maintain and enhance its position as a
leading CRO by providing a full range of clinical services on a global basis.
The Company addresses all aspects of clinical research and development with a
flexible approach that allows its clients to use the Company's services on an
individual or bundled basis. The Company believes its expertise in conducting
scientifically demanding trials and its ability to coordinate
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complicated global trials are significant competitive strengths. PAREXEL
continues to devote significant resources developing information systems
designed to allow the Company to more effectively manage its business operations
and deliver services to its clients. The Company will continue to invest in
improvements in information technology and consider acquisitions of
complementary businesses in order to enhance its competitive position and its
level of service.
The Company was incorporated in The Commonwealth of Massachusetts in
1983. Unless the context otherwise requires, the terms "PAREXEL" and "the
Company" refer to PAREXEL International Corporation and its subsidiaries. The
Company's principal executive offices are located at 195 West Street, Waltham,
Massachusetts 02154, and its telephone number is (617) 487-9900.
RECENT DEVELOPMENTS
Rescon Merger. Pursuant to an Agreement and Plan of Reorganization and
Merger dated February 28, 1997 by and among the Company, Rescon, Inc., a
Virginia corporation ("Rescon"), Rescon Acquisition Corporation, a Massachusetts
corporation and a wholly-owned subsidiary of the Company, Walter Leroy Hill, as
Trustee of the Walter L. Hill Revocable Trust u/d/t dated June 29, 1994 (the
"Trust") and Walter L. Hill (the "Merger Agreement"), Rescon Acquisition
Corporation merged with and into Rescon and Rescon became a wholly-owned
subsidiary of the Company (the "Rescon Merger"). In connection with the Rescon
Merger, the Company issued an aggregate of 139,493 shares of Common Stock to the
Trust, the sole stockholder of Rescon, of which 69,747 shares are being offered
hereby. Pursuant to the terms and provisions of a Registration Rights Agreement
between the Company and the Trust, the Company has agreed to register the
remaining 69,746 shares of Common Stock issued to the Trust upon written request
of the Trust, delivered between February 28, 1998 and February 28, 1999. The
Merger has been accounted for as a pooling of interests for financial accounting
purposes.
Rescon is a medical marketing consulting business providing tactical
sales, marketing and reimbursement support services to the pharmaceutical and
biotechnology industries.
S-Cubed Acquisition. Pursuant to Share Purchase Agreements by and among
the former stockholders of Sheffield Statistical Services Limited ("Sheffield")
and its subsidiary S-Cubed Clinical Limited ("S-Cubed"), Sheffield and S-Cubed
became direct or indirect, wholly-owned subsidiaries of the Company (the
"S-Cubed Acquisition"). In connection with the S-Cubed Acquisition, the Company
issued an aggregate of 70,044 shares of Common Stock to the stockholders of
Sheffield and S-Cubed, of which 37,022 shares are being offered hereby. Pursuant
to the terms and provisions of a Registration Rights Agreement between the
Company and the former stockholders of Sheffield, the Company has agreed to
register the remaining 33,022 shares of Common Stock issued to the former
stockholders of Sheffield upon written request of such stockholders' delivered
between February 28, 1998 and February 28, 1999. The S-Cubed Acquisition has
been accounted for as a pooling of interests for financial accounting purposes.
Sheffield and S-Cubed are engaged in the CRO industry
in the United Kingdom and provide clinical trials management, data management
and biostatistical analysis services to the pharmaceutical, healthcare and
biotechnology industries.
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RISK FACTORS
In addition to the other information in this Prospectus, the following
risk factors should be considered carefully in evaluating the Company and its
business before purchasing the shares of Common Stock offered hereby.
LOSS OR DELAY OF LARGE CONTRACTS. Most of the Company's contracts are terminable
upon 60 to 90 days' notice by the client. Clients terminate or delay contracts
for a variety of reasons, including, among others, the failure of products being
tested to satisfy safety requirements, unexpected or undesired clinical results
of the product, the client's decision to forego a particular study, insufficient
patient enrollment or investigator recruitment or production problems resulting
in shortages of the drug. In addition, the Company believes that several
factors, including the potential adverse impact of health care reform, have
caused pharmaceutical companies to apply more stringent criteria to the decision
to proceed with clinical trials and therefore may result in a greater
willingness of these companies to cancel contracts with CROs. The loss or delay
of a large contract or the loss or delay of multiple contracts could have a
material adverse effect on the Company.
VARIABILITY OF QUARTERLY OPERATING RESULTS. The Company's quarterly operating
results have been subject to variation, and will continue to be subject to
variation, depending upon factors such as the initiation and progress of
significant projects, acquisitions, exchange rate fluctuations, the mix of
services offered, the opening of new offices and the start-up costs incurred in
connection with the introduction of new products and services. In addition,
during the third quarter of fiscal 1993 and 1995, the Company's results of
operations were affected by a non-cash restructuring charge and a non-cash
write-down due to the impairment of long-lived assets, respectively. Because a
high percentage of the Company's operating costs is relatively fixed, variations
in the initiation, completion, delay or loss of contracts, or in the progress of
clinical trials can cause material adverse variations in quarterly operating
results.
DEPENDENCE ON CERTAIN INDUSTRIES AND CLIENTS. The Company's revenues are highly
dependent on research and development expenditures by the pharmaceutical and
biotechnology industries. The Company's operations could be materially and
adversely affected by general economic downturns in its clients' industries, the
impact of the current trend toward consolidation in these industries or any
decrease in research and development expenditures. Furthermore, the Company has
benefited to date from the increasing tendency of pharmaceutical and
biotechnology companies to outsource large clinical research projects. A
reversal or slowing of this trend would have a material adverse effect on the
Company.
The Company believes that concentrations of business in the CRO
industry are not uncommon. The Company has experienced such concentration in the
past and may experience such concentration in future years. No client accounted
for 10% or more of consolidated net revenue in fiscal 1994, 1995 or 1996,
however one client accounted for 10.0% of consolidated net revenue for the nine
months ended March 31, 1997. In fiscal 1994, 1995, 1996 and the nine months
ended March 31, 1997, the Company's top five clients accounted for 29.8%, 25.2%,
32.0% and 41.0%, respectively, of the Company's consolidated net revenue. The
loss of business from a significant client could have a material adverse effect
on the Company.
MANAGEMENT OF BUSINESS EXPANSION; NEED FOR IMPROVED SYSTEMS; ASSIMILATION OF
FOREIGN OPERATIONS. The Company's business and operations have experienced
substantial expansion over the past 10 years. The Company believes that such
expansion places a strain on operational, human and financial resources. In
order to manage such expansion, the Company must continue to improve its
operating, administrative and information systems, accurately predict its future
personnel and resource needs to meet client contract commitments, track the
progress of ongoing client projects and attract and retain qualified management,
professional, scientific and
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technical operating personnel. Expansion of foreign operations also may involve
the additional risks of assimilating differences in foreign business practices,
hiring and retaining qualified personnel, and overcoming language barriers. In
the event that the operation of an acquired business does not live up to
expectations, the Company may be required to restructure the acquired business
or write-off the value of some or all of the assets of the acquired business. In
fiscal 1993 and 1995, the Company's results of operations were materially and
adversely affected by write-offs associated with the Company's acquired German
operations. Failure by the Company to meet the demands of and to manage
expansion of its business and operations could have a material adverse effect on
the Company's business.
RISKS ASSOCIATED WITH ACQUISITIONS. The Company has made a number of
acquisitions, including six since June 1, 1996, and will continue to review
future acquisition opportunities. No assurances can be given that acquisition
candidates will continue to be available on terms and conditions acceptable to
the Company. Acquisitions involve numerous risks, including, among other things,
difficulties and expenses incurred in connection with the acquisitions and the
subsequent assimilation of the operations and services or products of the
acquired companies, the difficulty of operating new (albeit related) businesses,
the diversion of management's attention from other business concerns and the
potential loss of key employees of the acquired company. Acquisitions of foreign
companies also may involve the additional risks of assimilating differences in
foreign business practices and overcoming language barriers. In the event that
the operations of an acquired business do not live up to expectations, the
Company may be required to restructure the acquired business or write-off the
value of some or all of the assets of the acquired business. In fiscal 1993 and
1995, the Company's results of operations were materially and adversely affected
by write-offs associated with the Company's acquired German operations. There
can be no assurance that any acquisition will be successfully integrated into
the Company's operations.
DEPENDENCE ON GOVERNMENT REGULATION. The Company's business depends on the
comprehensive government regulation of the drug development process. In the
United States, the general trend has been in the direction of continued or
increased regulation, although the FDA recently announced regulatory changes
intended to streamline the approval process for biotechnology products by
applying the same standards as are in effect for conventional drugs. In Europe,
the general trend has been toward coordination of common standards for clinical
testing of new drugs, leading to changes in the various requirements currently
imposed by each country. Changes in regulation, including a relaxation in
regulatory requirements or the introduction of simplified drug approval
procedures, as well as anticipated regulation, could materially and adversely
affect the demand for the services offered by the Company. In addition, failure
on the part of the Company to comply with applicable regulations could result in
the termination of ongoing research or the disqualification of data, either of
which could have a material adverse effect on the Company.
COMPETITION; CRO INDUSTRY CONSOLIDATION. The Company primarily competes against
in-house departments of pharmaceutical companies, full service CROs and, to a
lesser extent, universities and teaching hospitals. Some of these competitors
have substantially greater capital, technical and other resources than the
Company. CROs generally compete on the basis of previous experience, medical and
scientific expertise in specific therapeutic areas, the quality of contract
research, the ability to organize and manage large-scale trials on a global
basis, the ability to manage large and complex medical databases, the ability to
provide statistical and regulatory services, the ability to recruit
investigators, the ability to integrate information technology with systems to
improve the efficiency of contract research, an international presence with
strategically located facilities, financial viability and price. There can be no
assurance that the Company will be able to compete favorably in these areas.
The CRO industry is highly fragmented, with participants ranging from
several hundred small, limited-service providers to several large, full-service
CROs with global operations. The trend toward CRO industry consolidation has
resulted in heightened competition among the larger CROs for clients and
acquisition
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candidates. In addition, consolidation within the pharmaceutical industry as
well as a trend by pharmaceutical companies of outsourcing among fewer CROs has
led to heightened competition for CRO contracts.
VOLATILITY OF STOCK PRICE. The market price of the Company's Common Stock is
subject to wide fluctuations in response to quarter-to-quarter variations in
operating results, changes in earnings estimates by analysts, market conditions
in the industry, prospects of health care reform, changes in government
regulation and general economic conditions. In addition, the stock market has
from time to time experienced significant price and volume fluctuations that
have been unrelated to the operating performance of particular companies. These
market fluctuations may adversely affect the market price of the Company's
Common Stock. Because the Company's Common Stock currently trades at a
relatively high price-earnings multiple, due in part to analysts' expectations
of continued earnings growth, even a relatively small shortfall in earnings
from, or a change in, analysts' expectations may cause an immediate and
substantial decline in the Company's stock price. Investors in the Company's
Common Stock must be willing to bear the risk of such fluctuations in earnings
and stock price.
POTENTIAL ADVERSE IMPACT OF HEALTH CARE REFORM. Numerous governments have
recently undertaken efforts to control growing health care costs through
legislation, regulation and voluntary agreements with medical care providers and
pharmaceutical companies. In the last several years, several comprehensive
health care reform proposals were introduced in the U.S. Congress. The intent of
the proposals was, generally, to expand health care coverage for the uninsured
and reduce the growth of total health care expenditures. While none of the
proposals were adopted, health care reform may again be addressed by the U.S.
Congress. Implementation of government health care reform may adversely affect
research and development expenditures by pharmaceutical and biotechnology
companies, resulting in a decrease of the business opportunities available to
the Company. Management is unable to predict the likelihood of health care
reform proposals being enacted into law or the effect such law would have on the
Company.
Many European governments have also undertaken health care reform. For
example, German health care reform legislation, which was implemented on January
1, 1993, contributed to an estimated 15% decline in German pharmaceutical
industry sales in calendar 1993 and led several clients to cancel contracts with
the Company. Subsequent to these events, in the third quarter of fiscal 1993,
the Company restructured its German operations and incurred a restructuring
charge of approximately $3.3 million. In addition, in the third quarter of
fiscal 1995, the Company's results of operations were affected by a non-cash
write-down due to the impairment of long-lived assets of PAREXEL GmbH, the
Company's German subsidiary, of approximately $11.3 million. The Company cannot
predict the impact that any pending or future health care reform proposals may
have on the Company's business in Europe.
DEPENDENCE ON PERSONNEL. The Company relies on a number of key executives,
including Josef H. von Rickenbach, its President, Chief Executive Officer and
Chairman, upon whom the Company maintains key man life insurance. Although the
Company has entered into agreements containing non-competition restrictions with
its senior officers, the Company does not have employment agreements with most
of these persons and the loss of the services of any of the Company's key
executives could have a material adverse effect on the Company. The Company's
performance also depends on its ability to attract and retain qualified
professional, scientific and technical operating staff. The level of competition
among employers for skilled personnel, particularly those with M.D., Ph.D. or
equivalent degrees, is high. There can be no assurance the Company will be able
to continue to attract and retain qualified staff. In addition, the cost of
recruiting skilled personnel has increased and there can be no assurance that
such costs will not continue to rise.
POTENTIAL LIABILITY; POSSIBLE INSUFFICIENCY OF INSURANCE. Clinical research
services involve the testing of new drugs on human volunteers pursuant to a
study protocol. Such testing involves a risk of liability for personal injury or
death to patients due to, among other reasons, possible unforeseen adverse side
effects or improper
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administration of the new drug. Many of these patients are already seriously ill
and are at risk of further illness or death. The Company could be materially and
adversely affected if it were required to pay damages or incur defense costs in
connection with a claim that is outside the scope of an indemnity or insurance
coverage, or if the indemnity, although applicable, is not performed in
accordance with its terms or if the Company's liability exceeds the amount of
applicable insurance. In addition, there can be no assurance that such insurance
will continue to be available on terms acceptable to the Company.
ADVERSE EFFECT OF EXCHANGE RATE FLUCTUATIONS. Approximately 36.0%, 40.2%, 38.4%
and 35.3% of the Company's net revenue for fiscal 1994, 1995, 1996 and the nine
months ended March 31, 1997, respectively, were derived from the Company's
operations outside of North America. Since the revenue and expenses of the
Company's foreign operations are generally denominated in local currencies,
exchange rate fluctuations between local currencies and the United States dollar
will subject the Company to currency translation risk with respect to the
results of its foreign operations. To the extent the Company is unable to shift
to its clients the effects of currency fluctuations, these fluctuations could
have a material adverse effect on the Company's results of operations. The
Company does not currently hedge against the risk of exchange rate fluctuations.
ANTI-TAKEOVER PROVISIONS; POSSIBLE ISSUANCE OF PREFERRED STOCK. The Company's
Restated Articles of Organization and Restated By-Laws contain provisions that
may make it more difficult for a third party to acquire, or may discourage a
third party from acquiring, the Company. These provisions could limit the price
that certain investors might be willing to pay in the future for shares of the
Company's Common Stock. In addition, shares of the Company's Preferred Stock may
be issued in the future without further stockholder approval and upon such terms
and conditions, and having such rights, privileges and preferences, as the Board
of Directors may determine. The rights of the holders of Common Stock will be
subject to, and may be adversely affected by, the rights of any holders of
Preferred Stock that may be issued in the future. The issuance of Preferred
Stock, while providing desirable flexibility in connection with possible
acquisitions and other corporate purposes, could adversely affect the market
price of the Common Stock and could have the effect of making it more difficult
for a third party to acquire, or discouraging a third party from acquiring, a
majority of the outstanding voting stock of the Company. The Company has no
present plans to issue any shares of Preferred Stock. See "Description of
Capital Stock."
USE OF PROCEEDS
The Company will not receive any proceeds from the resale of the Shares
of Common Stock by the Selling Stockholders hereunder. See "Selling
Stockholders" and "Plan of Distribution."
The principal purpose of this offering is to effect an orderly
disposition of the Selling Stockholders' Shares.
9
<PAGE> 11
SELLING STOCKHOLDERS
The following table sets forth certain information regarding beneficial
ownership of the Shares as of May 16, 1997 and the number of Shares which may be
offered for the account of the Selling Stockholders or their transferees or
distributees from time to time. The shares may be offered from time to time by
the Selling Stockholders. Because the Selling Stockholders may sell all or any
part of their Shares pursuant to this Prospectus, no estimate can be given as to
the number of Shares that will be held by the Selling Stockholders upon
termination of this offer. See "Plan of Distribution."
<TABLE>
<CAPTION>
SHARES SHARES OFFERED SHARES
------ -------------- ------
OWNED PURSUANT TO THIS OWNED
----- ---------------- -----
BEFORE OFFERING PROSPECTUS AFTER OFFERING(1)
--------------- ---------- -----------------
SELLING STOCKHOLDERS NUMBER PERCENT(2) NUMBER PERCENT(2) NUMBER PERCENT(2)
- -------------------- ------ ---------- ------ ---------- ------ ----------
<S> <C> <C> <C> <C> <C> <C>
Walter Leroy Hill, as Trustee of
the Walter L. Hill 139,493 * 69,747 * 0 *
Revocable Trust u/d/t Dated
June 29, 1994
Dr. Richard Kay (3) 66,044 * 33,022 * 0 *
Dr. Arfon Lloyd Jones 2,000 * 2,000 * 0 *
Dr. Diana Smith 2,000 * 2,000 * 0 *
---------------------------------------------------------------------------------
209,537 106,769 0
---------------------------------------------------------------------------------
</TABLE>
- -------------------
*Less than 1% of the outstanding Common Stock.
(1) Assuming all of the Shares owned by each Selling Stockholder and offered
pursuant to this Prospectus are sold.
(2) As of May 16, 1997, there were 19,838,614 shares of Common Stock
outstanding.
(3) Includes 892 shares beneficially owned by Janet Kay, Dr. Richard Kay's
spouse, but held in the name of Dr. Kay. Dr. Kay disclaims beneficial
ownership of such shares.
None of the Selling Stockholders has had any material relationship with
the Company or any of its affiliates within the past three years except as
described below.
Walter Leroy Hill, as Trustee of the Walter L. Hill Revocable Trust
u/d/t Dated June 29, 1994 (the "Trust") acquired its Shares in connection with
the merger of Rescon Acquisition Corporation, a Massachusetts corporation and
wholly-owned subsidiary of the Company, with and into Rescon, Inc., a Virginia
corporation ("Rescon") (the "Rescon Merger"), pursuant to an Agreement and Plan
of Reorganization and Merger dated February 28, 1997 by and among Rescon, the
Trust, Walter L. Hill, Rescon Acquisition Corporation and the Company (the
"Merger Agreement"). Pursuant to the terms of a Registration Rights Agreement
dated February 28, 1997 by and among the Trust, Mr. Hill and the Company, 69,747
of the 139,493 shares of Common Stock issued to the Trust in connection with the
Rescon Merger are being offered hereby. The Company has agreed to register the
remaining 69,746 shares of Common Stock issued to the Trust upon the written
request of the Trust delivered between February 28, 1998 and February
28, 1999.
Approximately 13,949 shares of Common Stock issued to the Trust are
being held in escrow until the earlier of (i) February 28, 1998 or (ii) the
delivery of the audit report relating to the Company's financial statements for
the fiscal year ended June 30, 1997. A portion of the Shares held in escrow may
be released earlier upon receipt by the Company of certain regulatory
determinations as set forth in the Merger Agreement. The Shares held in escrow
will be used to satisfy indemnification claims brought by the Company based upon
a breach of the representations or warranties of Rescon or the Trust as set
forth in the Merger Agreement. Mr. Hill, as Trustee of the Trust, has the sole
authority to hold or dispose of, and to vote all securities held by the Trust,
including those Shares held in escrow.
10
<PAGE> 12
Mr. Hill was President, Treasurer and a director of Rescon until he resigned
from such positions upon the closing of the Rescon Merger. Mr. Hill is currently
a Vice President of State and Federal Associates, Inc., a wholly-owned
subsidiary of the Company.
Dr. Richard Kay, Dr. Arfon Lloyd Jones and Dr. Diana Smith (the
"S-Cubed Stockholders") acquired their Shares in connection with the acquisition
by the Company of Sheffield Statistical Services Limited ("Sheffield") and its
subsidiary, S-Cubed Clinical Limited ("S-Cubed"), pursuant to Share Purchase
Agreements dated February 28, 1997 between the Company, S-Cubed and the S-Cubed
Stockholders (the "Share Purchase Agreements"). Pursuant to the Share Purchase
Agreements, Sheffield and S-Cubed became direct or indirect wholly-owned
subsidiaries of the Company (the "S-Cubed Acquisition"). Dr. Kay holds 892
shares of Common Stock in his name for the benefit of his spouse, Janet Kay.
Pursuant to the terms of Registration Rights Agreements dated February 28, 1997,
by and among Dr. and Ms. Kay, Dr. Jones, Dr. Smith and the Company, 37,022 of
the 70,044 shares of Common Stock issued in connection with the S-Cubed
Acquisition are being offered hereby. The Company has agreed to register the
remaining 33,022 shares of Common Stock issued to Dr. and Ms. Kay upon the
written request of Dr. and Ms. Kay delivered between February 28, 1998 and
February 28, 1999.
Pursuant to the Share Purchase Agreement between Dr. and Ms. Kay, the
Company and Sheffield, shares of Common Stock valued at [L]12,000 as of the
closing date of the S-Cubed Acquisition are being held in escrow until February
28, 1998. The Shares held in escrow will be used to satisfy tax liabilities
resulting from a breach by Sheffield or Dr. and Ms. Kay of the Tax Indemnities,
as set forth in the Share Purchase Agreement. Dr. and Ms. Kay were directors of
Sheffield until Ms. Kay resigned from such position upon the closing of the
S-Cubed Acquisition. Dr. Kay currently remains a director of Sheffield. Dr.
Jones, Dr. Smith and Dr. Kay were directors of S-Cubed until Dr. Kay resigned
from such position upon the closing of the S-Cubed Acquisition. Dr. Jones
and Dr. Smith currently remain directors of S-Cubed.
The Rescon Merger and the S-Cubed Acquisition were accounted for as
poolings of interests for financial accounting purposes.
Each of the Selling Stockholders represented to the Company, in
connection with the completion of the Rescon Merger and the S-Cubed Acquisition,
that he or she was acquiring the Shares from the Company without any present
intention of effecting a distribution of those Shares. In recognition of the
fact that the Selling Stockholders may want to be able to sell their shares when
they consider appropriate, the Company agreed to file with the Commission a
Registration Statement on Form S-3 (the "Registration Statement") (of which this
Prospectus is a part) to permit the public sale of the Shares by the Selling
Stockholders from time to time and to use its best efforts to keep the
Registration Statement effective until the earlier of the sale of all of the
Shares pursuant to the Registration Statement or February 28, 1999. The Company
will prepare and file such amendments and supplements to the Registration
Statement as may be necessary to keep it effective until the earlier of the sale
of all Shares pursuant to the registration statement or until February 28, 1999.
Pursuant to the Registration Rights Agreements by and between the
Company and each of the Selling Stockholders (collectively, the Registration
Rights Agreements"), the Company has agreed to bear all expenses in connection
with the registration and resale of the Shares (other than underwriting
discounts and selling commissions and the fees and expenses of counsel and other
advisors to the Selling Stockholders). See "Plan of Distribution." The
Registration Rights Agreements provide that the Company will indemnify the
Selling Stockholders for any losses incurred by them in connection with actions
arising from any untrue statement of a material fact in the Registration
Statement or any omission of a material fact required to be stated therein,
unless such statement or omission was made in reliance upon written information
furnished to the Company by the Selling Stockholders. Similarly, the
Registration Rights Agreements provide that each Selling Stockholder will
indemnify the Company and its officers and directors for any losses incurred by
them in connection with any
11
<PAGE> 13
action arising from any untrue statement of material fact in the Registration
Statement or any omission of a material fact required to be stated therein, if
such statement or omission was made in reliance on written information furnished
to the Company by such Selling Stockholders.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers or persons controlling the
registrant pursuant to the foregoing provisions, the Company has been informed
that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Act and is
therefore unenforceable.
12
<PAGE> 14
DESCRIPTION OF CAPITAL STOCK
The current authorized capital stock of the Company is 50,000,000
shares of Common Stock, par value $.01 per share, and 5,000,000 shares of
Preferred Stock, par value $.01 per share.
COMMON STOCK
As of May 16, 1997, there were 19,838,614 shares of Common Stock
outstanding and held of record by 79 stockholders.
Holders of Common Stock are entitled to one vote for each share held on
all matters submitted to a vote of stockholders. Holders of Common Stock do not
have cumulative voting rights. Accordingly, holders of a majority of the shares
of Common Stock entitled to vote in any election of directors may elect all of
the directors standing for election. Holders of Common Stock are entitled to
receive ratably such dividends, if any, as may be declared by the Board of
Directors out of funds legally available therefor, subject to any preferential
dividend rights of any outstanding Preferred Stock. Upon the liquidation,
dissolution or winding up of the Company, the holders of Common Stock are
entitled to receive ratably the net assets of the Company available after the
payment of all debts and other liabilities and subject to the prior rights of
any outstanding Preferred Stock. Holders of the Common Stock have no preemptive,
subscription, redemption or conversion rights. The outstanding shares of Common
Stock are, and the shares offered by the Company in this offering will be, when
issued and paid for, fully paid and nonassessable. The rights, preferences and
privileges of holders of Common Stock are subject to, and may be adversely
affected by, the rights of the holders of shares of any series of Preferred
Stock which the Company may designate and issue in the future. There are no
shares of Preferred Stock outstanding.
PREFERRED STOCK
The Board of Directors is authorized, subject to certain limitations
prescribed by law, without further stockholder approval, to issue from time to
time up to an aggregate of 5,000,000 shares of Preferred Stock in one or more
series and to fix or alter the designations, preferences, rights and any
qualifications, limitations or restrictions of the shares of each such series
thereof, including the dividend rights, dividend rates, conversion rights,
voting rights, terms of redemption (including sinking fund provisions),
redemption price or prices, liquidation preferences and the number of shares
constituting any series or designations of such series. The issuance of
Preferred Stock may have the effect of delaying, deferring or preventing a
change of control of the Company. The Company has no present plans to issue any
shares of Preferred Stock.
MASSACHUSETTS LAW AND CERTAIN PROVISIONS OF THE COMPANY'S RESTATED ARTICLES OF
ORGANIZATION AND BY-LAWS
The Company believes that it has more than 200 beneficial stockholders,
thus making it subject to Chapter 110F of the Massachusetts General Laws, an
anti-takeover law. In general, this statute prohibits a publicly held
Massachusetts corporation from engaging in a "business combination" with an
"interested stockholder" for a period of three years after the date of the
transaction in which the person becomes an interested stockholder, unless (i)
the interested stockholder obtains the approval of the board of directors prior
to becoming an interested stockholder, (ii) the interested stockholder acquires
90% of the outstanding voting stock of the corporation (excluding shares held by
certain affiliates of the corporation) at the time it becomes an interested
stockholder, or (iii) the business combination is approved by both the board of
directors and the holders of two-thirds of the outstanding voting stock of the
corporation (excluding shares held by the interested stockholder). An
"interested stockholder" is a person who, together with its affiliates and
associates, owns (or at
13
<PAGE> 15
any time within the prior three years did own) 5% or more of the outstanding
voting stock of the corporation. A "business combination" includes a merger, a
stock or asset sale, and certain other transactions resulting in a financial
benefit to the interested stockholder. The Company may at any time elect not to
be governed by Chapter 110F by vote of a majority of its stockholders, but such
an amendment would not be effective for twelve months and would not apply to a
business combination with any person who became an interested stockholder prior
to the adoption of the amendment.
The Massachusetts Business Corporation Law generally requires that
publicly-held Massachusetts corporations have a classified board of directors
consisting of three classes as nearly equal in size as possible, unless those
corporations elect to opt out of the statute's coverage. By vote of the Board of
Directors, the Company has elected to opt out of the classified board provisions
of this statute and has adopted separate classified Board provisions in its
Restated Articles of Organization.
The Company's By-Laws include a provision that excludes the Company
from the applicability of Massachusetts General Laws Chapter 110D, entitled
"Regulation of Control Share Acquisitions." In general, this statute provides
that any stockholder of a corporation subject to this statute who acquires 20%
or more of the outstanding voting stock of a corporation may not vote such stock
unless the stockholders of the corporation so authorize. The Board of Directors
may amend the Company's By-Laws at any time to subject the Company to this
statute prospectively.
The Company's By-Laws require that nominations for the Board of
Directors made by a stockholder comply with certain notice procedures. A notice
by a stockholder of a planned nomination must be given not less than 60 and not
more than 90 days prior to a scheduled meeting, provided that if less than 70
days' notice is given of the date of the meeting, a stockholder will have ten
days within which to give such notice. The stockholder's notice of nomination
must include particular information about the stockholder, the nominee and any
beneficial owner on whose behalf the nomination is made. The Company may require
any proposed nominee to provide such additional information as is reasonably
required to determine the eligibility of the proposed nominee.
The By-Laws also require that a stockholder seeking to have any
business conducted at a meeting of stockholders give notice to the Company not
less than 60 and not more than 90 days prior to the scheduled meeting, provided
that if less than 70 days' notice is given of the date of the meeting, a
stockholder will have ten days within which to give such notice. The notice from
the stockholder must describe the proposed business to be brought before the
meeting and include information about the stockholder making the proposal, any
beneficial owner on whose behalf the proposal is made, and any other stockholder
known to be supporting the proposal. The By-Laws require the Company to call a
special stockholders' meeting at the request of stockholders holding at least
33 1/3% of the voting power of the Company.
The Company's Restated Articles of Organization include provisions
eliminating the personal liability of the Company's directors for monetary
damages resulting from breaches of their fiduciary duty to the extent permitted
by the Massachusetts Business Corporation Law. Additionally, the Company's
Restated Articles of Organization provide that the Company shall indemnify each
person who is or was a director or officer of the Company, and each person who
is or was serving or has agreed to serve at the request of the Company as a
director or officer of, or in a similar capacity with, another organization or
in any capacity with respect to any employee benefit plan of the Company,
against all liabilities, costs and expenses reasonably incurred by any such
persons in connection with the defense or disposition of or otherwise in
connection with or resulting from any action, suit or other proceeding in which
they may be involved by reason of being or having been such a director or
officer, or by reason of any action taken or not taken in such capacity, except
with respect to any matter as to which such person shall have been finally
adjudicated by a court of competent jurisdiction not to have acted in good faith
in the reasonable belief that his or her action was in the best interests of the
Company or, to the extent
14
<PAGE> 16
such matter relates to service with respect to an employee benefit plan, in the
best interests of the participants or beneficiaries of such employee benefit
plan.
The Restated Articles of Organization provide that certain
transactions, such as the sale, lease or exchange of all or substantially all of
the Company's property and assets and the merger or consolidation of the Company
into or with any other corporation, may be authorized by the approval of the
holders of a majority of the shares of each class of stock entitled to vote
thereon, rather than by two-thirds as otherwise provided by statute, provided
that the transactions have been authorized by a majority of the members of the
Board of Directors and the requirements of any other applicable provisions of
the Restated Articles of Organization have been met.
Certain of the provisions of the Restated Articles of Organization and
By-Laws discussed above would discourage or make more difficult a proxy contest
or the assumption of control by a holder of a substantial block of the Company's
stock. Such provisions could also have the effect of discouraging a third party
from making a tender offer or otherwise attempting to obtain control of the
Company, even though such an attempt might be beneficial to the Company and its
stockholders. In addition, since the Restated Articles of Organization and
By-Laws are designed to discourage accumulations of large blocks of the
Company's stock by purchasers whose objective is to have stock repurchased by
the Company at a premium, such provisions could tend to reduce the temporary
fluctuations in the market price of the Company's stock which are caused by such
accumulations. Accordingly, stockholders could be deprived of certain
opportunities to sell their stock at a temporarily higher market price.
TRANSFER AGENT AND REGISTRAR
The Transfer Agent and Registrar for the Common Stock is The First
National Bank of Boston.
15
<PAGE> 17
PLAN OF DISTRIBUTION
The Shares offered hereby may be sold from time to time by the Selling
Stockholders for their own accounts. The Company will receive none of the
proceeds from this offering. The Selling Stockholders will pay or assume
brokerage commissions or other charges and expenses incurred in the resale of
the Shares.
Resales of the Shares by the Selling Stockholders are not subject to
any underwriting agreement. The Shares covered by this Prospectus may be sold by
the Selling Stockholders or by pledgees, donees, transferees or other successors
in interest. The Shares offered by each Selling Stockholder may be sold from
time to time at market prices prevailing at the time of sale, at prices relating
to such prevailing market prices or at negotiated prices. Such sales may be
effected in the over-the-counter market, on the National Association of
Securities Dealers Automated Quotation System, on the Nasdaq National Market, or
on any exchange on which the Shares may then be listed. The Shares may be sold
by one or more of the following: (a) one or more block trades in which a broker
or dealer so engaged will attempt to sell all or a portion of the Shares held by
the Selling Stockholders as agent but may position and resell a portion of the
block as principal to facilitate the transaction; (b) purchases by a broker or
dealer as principal and resale by such broker or dealer for its account pursuant
to this Prospectus; (c) ordinary brokerage transactions and transactions in
which the broker solicits purchasers; (d) in negotiated transactions, and (e)
through other means. The Selling Stockholders may effect such transactions by
selling Shares through customary brokerage channels, either through
broker-dealers acting as agents or brokers, or through broker-dealers acting as
principals, who may then resell the Shares, or at private sales or otherwise, at
market prices prevailing at the time of sale, at prices related to such
prevailing market prices or at negotiated prices. The Selling Stockholders may
effect such transactions by selling Shares to or through broker-dealers, and
such broker-dealers may receive compensation in the form of underwriting
discounts, concessions, commissions, or fees from the Selling Stockholders
and/or purchasers of the Shares for whom such broker-dealers may act as agent or
to whom they sell as principal, or both (which compensation to a particular
broker-dealer might be in excess of customary commissions). Any broker-dealers
that participate with the Selling Stockholders in the distribution of the Shares
may be deemed to be underwriters and any commissions received by them and any
profit on the resale of the Shares positioned by them might be deemed to be
underwriting compensation, within the meaning of the Securities Act, in
connection with such sales.
The Company intends to maintain the effectiveness of this Prospectus
for approximately twenty four months or such period as is required to satisfy
the Company's obligations under the Registration Rights Agreements by and among
the Selling Stockholders and the Company; provided, however, that the rights of
the Selling Stockholders to resell the Shares pursuant to this Registration
Statement may be suspended by the Company under certain circumstances, as set
forth in the Registration Rights Agreements.
The Company will inform the Selling Stockholders that the
antimanipulation rules under the Securities Exchange Act of 1934 (Regulation M -
Rule 102) may apply to sales in the market and will furnish the Selling
Stockholders upon request with a copy of these Rules. The Company will also
inform the Selling Stockholders of the need for delivery of copies of this
Prospectus.
Any Shares covered by the Prospectus that qualify for resale pursuant
to Rule 144 under the Securities Act may be sold under Rule 144 rather than
pursuant to this Prospectus.
The Common Stock is quoted on the Nasdaq National Market under the
symbol "PRXL."
16
<PAGE> 18
LEGAL MATTERS
Certain legal matters with respect to the issuance of the Shares are
being passed upon for the Company and the Selling Stockholders by Testa, Hurwitz
& Thibeault, LLP, Boston, Massachusetts.
EXPERTS
The financial statements incorporated in this Prospectus by reference
to the Annual Report on Form 10-K of PAREXEL International Corporation for the
year ended June 30, 1996, have been so incorporated in reliance on the report of
Price Waterhouse LLP, independent accountants, given on the authority of said
firm as experts in auditing and accounting.
17
<PAGE> 19
================================================================================
No dealer, sales representative or any other person has been authorized to give
any information or to make any representations in connection with this offering
other than those contained in this prospectus, and, if given or made, such
information or representations must not be relied upon as having been authorized
by the company, any of the selling stockholders or any of the underwriters. This
prospectus does not constitute an offer to sell, or a solicitation of an offer
to buy, any securities other than the registered securities to which it relates
or an offer to, or a solicitation of, any person in any jurisdiction where such
offer or solicitation would be unlawful. Neither the delivery of this prospectus
nor any sale made hereunder shall, under any circumstances, create any
implication that there has been no change in the affairs of the company since
the date hereof or that the information contained herein is correct as of any
time subsequent to the date hereof.
-------------------------
TABLE OF CONTENTS
PAGE
Available Information ................................................. 2
Incorporation of Certain Information by Reference ..................... 3
The Company ........................................................... 4
Risk Factors .......................................................... 6
Use of Proceeds ....................................................... 9
Selling Stockholders .................................................. 10
Description of Capital Stock .......................................... 13
Plan of Distribution .................................................. 16
Legal Matters ......................................................... 17
Experts ............................................................... 17
================================================================================
================================================================================
106,769 SHARES
PAREXEL INTERNATIONAL
CORPORATION
COMMON STOCK
-----------------------
PROSPECTUS
1997
------------------------
================================================================================
<PAGE> 20
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
Estimated expenses payable in connection with the sale of the Common
Stock offered hereby are as follows:
<TABLE>
<S> <C>
SEC Registration fee ............................. $ 884
Nasdaq Additional Listing fee .................... 4,191
Legal fees and expenses .......................... 20,000
Accounting fees and expenses ..................... 5,000
Total ................................... $30,075
</TABLE>
The Company will bear all expenses shown above. All amounts other than
the SEC Registration fee and the Nasdaq Additional Listing fee are estimated
solely for the purpose of this offering.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Article 6 of the Company's Restated Articles of Organization provides
that the Company shall indemnify each person who is or was a director or officer
of the Company, and each person who is or was serving or has agreed to serve at
the request of the Company as a director or officer of, or in a similar capacity
with, another organization against all liabilities, costs and expenses
reasonably incurred by any such persons in connection with the defense or
disposition of or otherwise in connection with or resulting from any action,
suit or other proceeding in which they may be involved by reason of being or
having been such a director or officer or by reason of any action taken or not
taken in such capacity, except with respect to any matter as to which such
person shall have been finally adjudicated by a court of competent jurisdiction
not to have acted in good faith in the reasonable belief that his or her action
was in the best interests of the Company. Section 67 of Chapter 156B of the
Massachusetts Business Corporation Law authorizes a corporation to indemnify its
directors, officers, employees and other agents unless such person shall have
been adjudicated in any proceeding not to have acted in good faith in the
reasonable belief that such action was in the best interests of the corporation.
Reference is hereby made to Section 11 of the Registration Rights
Agreements filed as Exhibit 4.3 and 4.5 and Section 10 of the Registration
Rights Agreement filed as Exhibit 4.7 to this Registration Statement, for a
description of indemnification arrangements between the Company and the Selling
Stockholders, pursuant to which the Selling Stockholders are obligated, under
certain circumstances, to indemnify directors, officers and controlling persons
of the Company against certain liabilities, including liabilities under the
Securities Act of 1933, as amended.
II-1
<PAGE> 21
ITEM 16. EXHIBITS.
Exhibits:
<TABLE>
<S> <C>
4.1 Specimen certificate representing the Common Stock (filed as Exhibit 4.1 to Registrant's
Registration Statement on Form S-1 (File No. 33-97406) and incorporated herein by reference).
4.2 Agreement and Plan of Reorganization and Merger dated as of February 28, 1997 among the
Company, Rescon, Inc., Rescon Acquisition Corporation, Walter Leroy Hill, as Trustee of the
Walter L. Hill Revocable Trust and Walter Leroy Hill.
4.3 Registration Rights Agreement dated as of February 28, 1997 among the Company, Walter Leroy
Hill and Walter Leroy Hill, as Trustee of the Walter L Hill Revocable Trust.
4.4 Share Purchase Agreement dated as of February 28, 1997 among the Company, Dr. Richard Kay and Janet
Kay.
4.5 Registration Rights Agreement dated as of February 28, 1997 among the Company, Dr. Richard Kay and
Janet Kay.
4.6 Share Purchase Agreement dated as of February 28, 1997 among the Company, Dr. Arfon Lloyd Jones and
Dr. Diana Smith.
4.7 Registration Right Agreement dated as of February 28, 1997 among the Company, Dr. Arfon Lloyd Jones
and Dr. Diana Smith.
5.1 Opinion of Testa, Hurwitz & Thibeault, LLP.
23.1 Consent of Price Waterhouse LLP.
23.2 Consent of Testa, Hurwitz & Thibeault, LLP (included in Exhibit 5.1).
24.1 Power of Attorney (included as part of the signature page to this Registration Statement).
</TABLE>
II-2
<PAGE> 22
ITEM 17. UNDERTAKINGS.
(a) The undersigned Registrant hereby undertakes:
(1) to file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement;
(i) to include any prospectus required by Section
10(a)(3) of the Securities Act of 1933;
(ii) to reflect in the prospectus any facts or events
arising after the effective date of the registration statement (or the
most recent post-effective amendment thereof) which, individually or in
the aggregate, represent a fundamental change in the information set forth
in the registration statement;
(iii) to include any material information with respect to
the plan of distribution not previously disclosed in the registration
statement or any material change to such information in the registration
statement;
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof.
(3) To remove from registration by means of post-effective
amendment any of the securities being registered which remain unsold at
the termination of the offering.
(b) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the registrant pursuant to the foregoing provisions, or otherwise, the
registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the
Securities Act of 1933 and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment by
the registrant of expenses incurred or paid by a director, officer or
controlling person of the registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act of 1933 and will be governed by the final adjudication of such
issue.
II-3
<PAGE> 23
SIGNATURES
Pursuant to the requirements of the Securities Act of 1993, as amended,
the Registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-3 and has duly caused this
Registration Statement on Form S-3 to be signed on its behalf by the
undersigned, thereunto duly authorized in the City of Waltham, Commonwealth of
Massachusetts on May 20, 1997.
PAREXEL INTERNATIONAL CORPORATION
By: /s/ Josef H. von Rickenbach
-----------------------------------------------
Josef H. von Rickenbach
President, Chief Executive Officer and Chairman
POWER OF ATTORNEY AND SIGNATURES
We, the undersigned officers and directors of PAREXEL International
Corporation, hereby severally constitute and appoint Josef H. von Rickenbach,
William T. Sobo, Jr. and William J. Schnoor, Jr., and each of them singly, as
true and lawful attorneys, with full power to them and each of them singly, to
sign for us in our names in the capacities indicated below, any and all
pre-effective and post-effective amendments to this Registration Statement on
Form S-3, and generally to do all things in our names and on our behalf in such
capacities to enable PAREXEL International Corporation to comply with the
provisions of the Securities Act of 1933, as amended, and all requirements of
the Securities and Exchange Commission.
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed below by the following persons on
behalf of the Registrant and in the capacities and on the dates indicated.
<TABLE>
Signature Title(s) Date
- --------- -------- ----
<CAPTION>
<S> <C> <C>
/s/ Josef H. von Rickenbach President, Chief Executive Officer and May 20, 1997
- ---------------------------------- Chairman (principal executive officer)
Josef H. von Rickenbach
/s/ William T. Sobo, Jr. Senior Vice President and Treasurer May 20, 1997
- ---------------------------------- (principal financial and accounting officer)
William T. Sobo, Jr.
/s/ A. Dana Callow, Jr. Director May 20, 1997
- ----------------------------------
A. Dana Callow, Jr.
/s/ Patrick J. Fortune Director May 20, 1997
- ----------------------------------
Patrick J. Fortune
Director
- ----------------------------------
Werner M. Herrmann
/s/ Peter Barton Hutt Director May 20, 1997
- ----------------------------------
Peter Barton Hutt
/s/ James A. Saalfield Director May 20, 1997
- ----------------------------------
James A. Saalfield
</TABLE>
<PAGE> 24
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit No. Description of Exhibit
- ----------- ----------------------
<S> <C>
4.1 Specimen certificate representing the Common Stock (filed as Exhibit 4.1 to Registrant's
Registration Statement on Form S-1 (File No. 33-97406) and incorporated herein by reference).
4.2 Agreement and Plan of Reorganization and Merger dated as of February 28, 1997 among the
Company, Rescon, Inc., Rescon Acquisition Corporation, Walter Leroy Hill, as Trustee of the
Walter L. Hill Revocable Trust and Walter Leroy Hill.
4.3 Registration Rights Agreement dated as of February 28, 1997 among the Company, Walter Leroy
Hill, Walter Leroy Hill and as Trustee of the Walter L Hill Revocable Trust.
4.4 Share Purchase Agreement dated as of February 28, 1997 among the Company, Dr. Richard Kay and Janet
Kay.
4.5 Registration Rights Agreement dated as of February 28, 1997 among the Company, Dr. Richard Kay and
Janet Kay.
4.6 Share Purchase Agreement dated as of February 28, 1997 among the Company, Dr. Arfon Lloyd Jones and
Dr. Diana Smith.
4.7 Registration Right Agreement dated as of February 28, 1997 among the Company, Dr. Arfon Lloyd Jones
and Dr. Diana Smith.
5.1 Opinion of Testa, Hurwitz & Thibeault, LLP.
23.1 Consent of Price Waterhouse LLP.
23.2 Consent of Testa, Hurwitz & Thibeault, LLP (included in Exhibit 5.1).
24.1 Power of Attorney (included as part of the signature page to this Registration Statement).
</TABLE>
<PAGE> 1
EXHIBIT 4.2
AGREEMENT AND PLAN OF REORGANIZATION AND MERGER
BY AND AMONG
PAREXEL INTERNATIONAL CORPORATION,
RESCON ACQUISITION CORPORATION,
RESCON, INC.,
WALTER LEROY HILL, AS TRUSTEE OF THE WALTER L. HILL REVOCABLE TRUST U/D/T
DATED JUNE 29, 1994
AND
WALTER LEROY HILL
Dated as of February 28, 1997
<PAGE> 2
TABLE OF CONTENTS
PAGE
ARTICLE I....................................................................2
DEFINITIONS..................................................................2
1.01. Definitions.........................................................2
ARTICLE II...................................................................5
REORGANIZATION AND MERGER....................................................5
2.01. The Merger..........................................................5
2.02. Closing.............................................................6
2.03. Closing Balance Sheet...............................................6
2.04. Adjustment..........................................................7
2.05. Certificates for Parent Stock.......................................8
2.06. Transfer Taxes......................................................8
2.07. Books and Records...................................................8
2.08. Resignations........................................................8
2.09. No Fractional Shares................................................8
2.10. Dissenting Shares...................................................9
ARTICLE III..................................................................9
REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND STOCKHOLDER................9
3.01. Corporate Existence and Power.......................................9
3.02. Corporate Authorization............................................10
3.03. Governmental Authorization; Consents...............................10
3.04. Non-Contravention..................................................10
3.05. Capitalization.....................................................10
3.06. Subsidiaries.......................................................11
3.07. Financial Statements...............................................11
3.08. Absence of Certain Changes.........................................11
3.09. Property and Equipment.............................................13
3.10. No Undisclosed Material Liabilities................................13
3.11. Litigation.........................................................13
3.12. Material Contracts.................................................13
3.13. Insurance Coverage.................................................15
3.14. Compliance with Laws; No Defaults..................................15
3.15. Finders Fees.......................................................15
3.16. Intellectual Property..............................................15
3.17. Inventories........................................................17
3.18. Receivables........................................................17
3.19. Taxes..............................................................17
3.20. Environmental Compliance...........................................19
3.21. Customers..........................................................19
3.22. Transactions with Affiliates.......................................19
3.23. Other Information..................................................19
3.24. Intercompany Arrangements..........................................19
3.25. Employees..........................................................19
3.26. Representations....................................................20
ARTICLE IV..................................................................20
ADDITIONAL REPRESENTATIONS OF STOCKHOLDER...................................20
4.01. Title to and Validity of Shares....................................20
<PAGE> 3
-ii-
PAGE
----
4.02. Authority..........................................................20
4.03. Purchase for Investment............................................20
4.04. Power to Act as Trustee or Executor................................20
ARTICLE V...................................................................21
REPRESENTATIONS AND WARRANTIES OF PARENT AND SUB............................21
5.01. Organization and Existence.........................................21
5.02. Corporate Authorization............................................21
5.03. Governmental Authorization.........................................21
5.04. Litigation.........................................................21
5.05. Reports and Financial Statements...................................21
ARTICLE VI..................................................................22
COVENANTS OF THE COMPANY AND STOCKHOLDER....................................22
6.01. Confidentiality....................................................22
6.02. Affiliate Agreements...............................................22
ARTICLE VII.................................................................23
COVENANTS OF PARENT.........................................................23
7.01. Access.............................................................23
7.02. Quarterly Report on Form 10-Q......................................23
7.03. Pension Plan.......................................................23
7.04. Affiliate Agreements...............................................23
7.05. Reorganization Status..............................................24
7.06. Business Continuity................................................24
ARTICLE VIII................................................................24
COVENANTS OF ALL PARTIES....................................................24
8.01. Best Efforts.......................................................24
8.02. Certain Filings....................................................24
8.03. Public Announcements...............................................24
8.04. Pooling............................................................24
ARTICLE IX..................................................................25
EMPLOYEE BENEFITS...........................................................25
9.01. Employee Benefits Definitions......................................25
9.02. ERISA Representations..............................................25
9.03. No Third Party Beneficiaries.......................................27
ARTICLE X...................................................................28
CONDITIONS TO CLOSING.......................................................28
10.01. Conditions to the Obligations of Each Party.......................28
10.02. Conditions to Obligations of Parent and Sub.......................28
10.03. Conditions to Obligations of the Company..........................30
ARTICLE XI..................................................................30
SURVIVAL; INDEMNIFICATION...................................................30
11.01. Survival..........................................................30
11.02. Indemnification...................................................31
11.03. Procedures........................................................31
11.04. Holdback..........................................................32
11.05. Holdback Termination..............................................32
<PAGE> 4
-iii-
PAGE
----
ARTICLE XII.................................................................33
MISCELLANEOUS...............................................................33
12.01. Notices...........................................................33
12.02. Amendments; No Waivers............................................34
12.03. Expenses..........................................................34
12.04. Successors and Assigns............................................35
12.05. Further Assurances................................................35
12.06. Governing Law.....................................................35
12.07. Counterparts; Effectiveness.......................................35
12.08. Entire Agreement..................................................36
12.09. Captions..........................................................36
12.10. Jurisdiction......................................................36
Schedules
- ---------
Schedule 2.01 List of Stockholders
Schedule 3.03 Required Consents
Schedule 3.07 Financial Statements
Schedule 3.08 Absence of Changes
Schedule 3.11 Litigation
Schedule 3.12 Material Contracts
Schedule 3.14 Permits
Schedule 3.16 Intellectual Property
Schedule 3.18 Receivables
Schedule 3.19 Taxes and Audits
Schedule 3.21 Customers
Schedule 3.25 Employees
Schedule 5.03 Governmental Authorization
Schedule 9.02 Employee Plans and Benefit Arrangements
Schedule 10.02 Key Employees
Exhibits
- --------
Exhibit A Articles of Merger to be filed with the Secretary of State of
the Commonwealth of Massachusetts
Exhibit B Articles of Merger to be filed with the Secretary of State of
the Commonwealth of Virginia
Exhibit C Registration Rights Agreement
Exhibit D Letter Agreement between Parent and Walter Leroy Hill
Exhibit E Affiliate Agreement of the Company's Affiliates
Exhibit F The Virginia Stock Corporation Act
Exhibit G Company Counsel Opinion
Exhibit H Affiliate Agreement of Parent's Affiliates
<PAGE> 5
AGREEMENT AND PLAN OF REORGANIZATION AND MERGER
AGREEMENT dated as of February 28, 1997 by and among PAREXEL International
Corporation, a Massachusetts corporation ("PARENT"), Rescon Acquisition
Corporation, a Massachusetts corporation ("SUB"), Rescon, Inc., a Virginia
corporation (the "COMPANY"), Walter Leroy Hill, as Trustee of the Walter L. Hill
Revocable Trust u/d/t dated June 29, 1994, the sole stockholder of the Company
("the TRUST") and Walter Leroy Hill ("HILL").
W I T N E S S E T H :
WHEREAS, subject to and in accordance with the terms and conditions of
this Agreement and pursuant to the Massachusetts Articles of Merger attached
hereto as EXHIBIT A (the "MASSACHUSETTS ARTICLES OF MERGER") and the Virginia
Articles of Merger attached hereto as EXHIBIT B (the "VIRGINIA ARTICLES OF
MERGER"), the respective boards of directors of Parent, Sub and the Company, and
Parent as sole stockholder of Sub, have approved the merger of Sub with and into
the Company (the "MERGER"), whereby each issued and outstanding share of common
stock, no par value per share, of the Company (the "SHARES") will be converted
into the right to receive common stock, $.01 par value per share, of Parent as
provided herein;
WHEREAS, for federal income tax purposes, it is intended that (i) the
Merger shall qualify as a reorganization, and (ii) this Agreement (and the other
agreements entered into in connection herewith) shall qualify as a plan or
reorganization within the meaning of the regulations issued pursuant to Section
368 of the Internal Revenue Code of 1986, as amended;
WHEREAS, the Merger is intended to be treated as a "pooling of interests"
transaction for accounting purposes under generally accepted accounting
principles, and Price Waterhouse LLP has confirmed to Parent in writing that it
has reviewed to the extent it deemed necessary the terms and structure of the
Merger, that it has reviewed this Agreement, the Articles of Merger and such
other documents as it has requested as necessary for its review and that, as of
the date of this Agreement, it knows of nothing that will prohibit the Merger
from being treated as a "pooling of interests" transaction for accounting
purposes; and
WHEREAS, the parties hereto desire to set forth certain representations,
warranties and covenants made by each to the other as an inducement to the
consummation of the Merger.
NOW, THEREFORE, in reliance on the foregoing recitals and in and for the
consideration and mutual covenants set forth herein, and for other good and
valuable consideration the receipt and sufficiency of which are hereby
acknowledged, the parties agree as follows:
<PAGE> 6
-2-
ARTICLE I
DEFINITIONS
1.01. DEFINITIONS. (a) The following terms, as used herein, have the
following meanings:
"AFFILIATE" means, with respect to any Person, any Person directly
or indirectly controlling, controlled by, or under common control with such
Person.
"ANCILLARY AGREEMENTS" means the Registration Rights Agreement
attached hereto as EXHIBIT C, the Letter Agreement attached hereto as EXHIBIT D
and the Affiliate Agreement attached hereto as EXHIBIT E.
"BALANCE SHEET" means the balance sheet of the Company as of
December 31, 1996 referred to in Section 3.07.
"BALANCE SHEET DATE" means December 31, 1996.
"BASE WORKING CAPITAL " means $630,068.00.
"CLOSING BALANCE SHEET" means a balance sheet of the Company as at
the close of business on the Closing Date.
"CLOSING DATE" means the date of the Closing.
"CLOSING WORKING CAPITAL" means (i) the Working Capital of the
Company as of the close of business on the Closing Date determined in accordance
with generally accepted accounting principles and practices applied on the basis
to be used in the preparation of the Closing Balance Sheet plus (ii) the
"Company Fees" as defined in Section 10.02(h).
"COMPANY" means Rescon, Inc., a Virginia corporation.
"COMPANY COUNSEL" means the law firm of Michaels, Wishner & Bonner,
P.C.
"CONVERSION RATIO" means Parent Stock divided by the total number of
Shares outstanding on the Closing Date.
"DISSENTING SHARES" means those Shares which qualify as "dissenting
shares" under The Virginia Stock Corporation Act.
"FINAL WORKING CAPITAL" means Closing Working Capital (i) as shown
in Parent's calculation delivered pursuant to Section 2.03(a) if no notice of
disagreement with respect thereto is duly delivered pursuant to Section 2.03(b)
or (ii) if such a notice of disagreement is duly delivered, (A) as agreed by the
parties pursuant to Section 2.03(c) or (B) in the absence of such
<PAGE> 7
-3-
agreement, as shown in the independent accountant's calculation delivered
pursuant to Section 2.03(c); PROVIDED that Final Working Capital shall not in
any event be less than Parent's calculation of Closing Working Capital delivered
pursuant to Section 2.03(a) nor more than Seller's calculation of Closing
Working Capital delivered pursuant to Section 2.03(b).
"HILL" means Walter Leroy Hill.
"INTELLECTUAL PROPERTY RIGHT" means any trademark, trade name, trade
dress, service mark, service name, logo, and corporate name, registration
thereof or application for registration therefor; invention, patent, patent
application, patent disclosure and any related continuation,
continuation-in-part, divisional, reissue, re-examination, utility, model,
certificate of invention and design patent, patent application, registration and
application for registration; mask work and registration and application for
registration thereof; computer software, data and documentation; trade secret,
know-how, and confidential business information, whether patentable or
nonpatentable and whether or not reduced to practice, know-how, manufacturing
and product processes and techniques, research and development information,
copyrightable works, financial, marketing and business data, pricing and cost
information, business and marketing plans and customer and supplier lists and
information; copyright, copyright registration, application for copyright
registration; or any other similar type of proprietary intellectual property
right, (including without limitation associated goodwill and remedies against
infringements thereof and rights of protection of an interest therein under the
laws of all jurisdictions) in each case which is owned or licensed by the
Company, Stockholder or their respective Affiliates and used or held for use by
the Company.
"LIEN" means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest, restriction or encumbrance of any kind in respect of
such asset.
"MATERIAL ADVERSE CHANGE" means a material adverse change in the
business, assets, condition (financial or otherwise), results of operations or
prospects of the Company.
"MASSACHUSETTS ARTICLES OF MERGER" means the Articles of Merger to
be filed with the Secretary of State of the Commonwealth of Massachusetts on the
Closing Date, in the form set forth in EXHIBIT A.
"MATERIAL ADVERSE EFFECT" means a material adverse effect on the
business, assets, condition (financial or otherwise), results of operations or
prospects of the Company.
"MERGER" means the merger of Sub with and into the Company.
"1934 ACT" means the Securities Exchange Act of 1934, as amended,
and the rules and regulations promulgated thereunder.
"PARENT" means PAREXEL International Corporation, a Massachusetts
corporation.
<PAGE> 8
-4-
"PARENT STOCK" means the number of shares of Common Stock, $.01 par
value per share, of Parent as is determined by dividing $4,265,000 by $30.575
(the average of the last reported sale price of Parent's Common Stock on the
Nasdaq National Market on each of the ten business days up to and including the
second business day preceding the Closing Date (subject to appropriate
adjustment in the event of a stock split or reverse stock split)).
"PARENT'S COUNSEL" means the law firm of Testa, Hurwitz & Thibeault,
LLP, Boston, Massachusetts.
"PERSON" means an individual, corporation, partnership, association,
trust or other entity or organization, including a government or political
subdivision or an agency or instrumentality thereof.
"REGISTRATION RIGHTS AGREEMENT" means the Registration Rights
Agreement between Hill and Parent in the form set forth in EXHIBIT B.
"SHARES" means all outstanding capital stock of the Company.
"STOCKHOLDER" means Hill and the Trust, collectively.
"SUB" means Rescon Acquisition Corporation, a Massachusetts
corporation.
"SUBSIDIARY" means any entity of which securities or other ownership
interests having ordinary voting power to elect a majority of the board of
directors or other persons performing similar functions are owned directly or
indirectly by the Company.
"TRUST" means the Walter L. Hill Revocable Trust u/d/t dated June
29, 1994.
"VIRGINIA ARTICLES OF MERGER" means the Articles of Merger to be
filed with the Secretary of State of the Commonwealth of Virginia on the Closing
Date, in the form set forth in EXHIBIT B.
"WORKING CAPITAL" means cash and cash equivalents (on hand or in
bank accounts), plus accounts receivable (net of any allowance for doubtful
accounts), minus trade payables.
(b) Each of the following terms is defined in the Section set
forth opposite such term:
TERM SECTION
---- -------
Affiliate Agreements 6.02
Benefit Arrangement 8.01
Claims 10.02
Closing 2.02
<PAGE> 9
-5-
Code Preamble
Company Affiliate 6.02
Company Securities 3.05
Damages 10.02
Dissenting Stockholder 2.10
Effective Date 2.02
Employee Plans 8.01
Environmental Laws 3.22
Environmental Liabilities 3.22
ERISA 8.01
ERISA Affiliate 8.01
Financial Statements 3.07
Holdback Shares 10.04
Indemnified Party 10.02
Indemnifying Party 10.02
Parent Group 10.02
Multiemployer Plan 8.01
Permit 3.14
Reports 5.05
Return 3.19
Returns 3.19
Surviving Corporation 2.01
Tax 3.19
Taxes 3.19
ARTICLE II
REORGANIZATION AND MERGER
2.01. THE MERGER. Subject to the terms and conditions of this Agreement,
the Massachusetts Articles of Merger and the Virginia Articles of Merger, Sub
shall be merged with and into the Company in accordance with the applicable
provisions of the laws of the Commonwealth of Massachusetts and the Commonwealth
of Virginia and with the terms and conditions of this Agreement, the
Massachusetts Articles of Merger and the Virginia Articles of Merger so that:
(a) At the Effective Date, Sub shall be merged with and into the
Company. As a result of the Merger, the separate corporate existence of Sub
shall cease and the Company shall continue as the surviving corporation
(sometimes referred to herein as the "SURVIVING CORPORATION") and shall succeed
to and assume all of the rights and obligations of the Company in accordance
with the laws of the Commonwealth of Massachusetts and the Commonwealth of
Virginia.
(b) The articles of organization and bylaws of the Company in effect
immediately prior to the Effective Date shall be the articles of organization
and bylaws,
<PAGE> 10
-6-
respectively, of the Surviving Corporation after the Effective Date
unless and until further amended as provided by law.
(c) The directors and officers of Sub immediately prior to the
Effective Date shall be the directors and officers of the Surviving Corporation
after the Effective Date. Such directors and officers shall hold their position
until the election and qualification of their respective successors or until
their tenures are otherwise terminated in accordance with the bylaws of
Surviving Corporation.
The Shares that are issued and outstanding immediately prior to the
Effective Date will, by virtue of the Merger and at the Effective Date,
automatically and without further action on the part of Stockholder, be
converted into such number of shares of Parent Stock as is equal to the number
of Shares held by Stockholder (as set forth on SCHEDULE 2.01) multiplied by the
Conversion Ratio (rounded down to the largest whole number of Parent Shares
pursuant to Section 2.07 below).
2.02. CLOSING. The closing (the "CLOSING") of the transactions contemplated
hereunder shall take place at the offices of Parent's Counsel in Boston,
Massachusetts as soon as possible after satisfaction of the conditions set forth
in Article X, but in no event later than 11:59 p.m., Boston time, on February
28, 1997, or at such other time or place as Parent and the Company may agree.
Simultaneously with the Closing, the Massachusetts Articles of Merger shall be
filed in the office of the Secretary of State of the Commonwealth of
Massachusetts and the Virginia Articles of Merger shall be filed in the office
of the Secretary of State of the Commonwealth of Virginia. The Merger shall
become effective immediately upon the date stamped by the Massachusetts
Secretary of State on the Massachusetts Articles of Merger (such date is
referred to as the "EFFECTIVE DATE"). At the Closing, Parent shall deliver to
Hill certificates for such number of shares of Parent Stock, duly endorsed by
the Parent's transfer agent and registered in the name of Hill, as is determined
in accordance with Section 2.01.
2.03. CLOSING BALANCE SHEET.
(a) As promptly as practicable after the Closing Date, but no later
than thirty (30) days after the Closing Date, Parent will cause the Closing
Balance Sheet to be prepared and will prepare a certificate based on such
Closing Balance Sheet setting forth its calculation of Closing Working Capital
and the basis therefor. As promptly as practicable, but no later than thirty
(30) days after the Closing Date, Parent will cause the Closing Balance Sheet
together with its certificate to be delivered to Hill. The Closing Balance Sheet
shall (x) fairly present the financial position of the Company as at the close
of business on the Closing Date in accordance with generally accepted accounting
principles applied on a basis consistent with those used in the preparation of
the Balance Sheet, (y) include line items substantially consistent with those in
the Balance Sheet, and (z) be prepared in accordance with accounting policies
and practices consistent with those used in the preparation of the Balance
Sheet.
(b) If Hill disagrees with Parent's calculation of Closing Working
Capital delivered pursuant to Section 2.03(a), he may, within ten (10) days
after delivery of the
<PAGE> 11
-7-
documents referred to in Section 2.03(a), deliver a notice to Parent disagreeing
with such calculation and setting forth his calculation of such amount. Any such
notice of disagreement shall specify those items or amounts as to which Hill
disagrees, and Hill shall be deemed to have agreed with all other items and
amounts contained in the Closing Balance Sheet and the calculation of Closing
Working Capital delivered pursuant to Section 2.03(a).
(c) If a notice of disagreement shall be duly delivered pursuant to
Section 2.03(b), the parties shall, during the ten (10) days following such
delivery, use their best efforts to reach agreement on the disputed items or
amounts in order to determine, as may be required, the amount of Closing Working
Capital, which amount shall not be less than the amount thereof shown in
Parent's calculations delivered pursuant to Section 2.03(a) nor more than the
amount thereof shown in Hill's calculation delivered pursuant to Section
2.03(b). If, during such period, the parties are unable to reach such agreement,
they shall promptly thereafter cause independent accountants of nationally
recognized standing reasonably satisfactory to Hill and Parent (who shall not
have any material relationship with Hill or Parent), promptly to review this
Agreement and the disputed items or amounts for the purpose of calculating
Closing Working Capital. In making such calculation, such independent
accountants shall consider only those items or amounts in the Closing Balance
Sheet or Parent's calculation of Closing Working Capital as to which Hill has
disagreed. Such independent accountants shall deliver to Hill and Parent, as
promptly as practicable, a report setting forth such calculation. Such report
shall be final and binding upon the parties hereto. The cost of such review and
report shall be borne (i) by Parent if the difference between Final Working
Capital and Closing Working Capital as set forth in Parent's calculation of
Closing Working Capital delivered pursuant to Section 2.03(a) is greater than
the difference between Final Working Capital and Closing Working Capital as set
forth in Hill's calculation of Closing Working Capital delivered pursuant to
Section 2.03(b), (ii) by Hill if the first such difference is less than the
second such difference and (iii) otherwise equally by Hill and Parent.
(d) The parties hereto agree that they will, and agree to cause their
respective independent accountants and the Company to, cooperate and assist in
the preparation of the Closing Balance Sheet and the calculation of Closing
Working Capital and in the conduct of the audits and reviews referred to in this
Section 2.03, including without limitation the making available to the extent
necessary of books, records, work papers and personnel.
2.04. ADJUSTMENT
(a) If Final Working Capital is less than Base Working Capital by more
than 10% (subject to change by mutual written agreement of Parent and Hill) (the
full amount of such difference between Final Working Capital and Base Working
Capital being hereinafter referred to as the "Working Capital Deficiency"), Hill
shall return to Parent, as an adjustment to the Purchase Price, shares of Parent
Stock having a value equal to the Working Capital Deficiency in accordance with
subsection (b) below. Any such return of shares of Parent Stock pursuant to this
Section 2.04(a) shall be made at a mutually convenient time and place (i) within
30 days after Parent's delivery of the documents referred to in Section 2.03(a)
if no notice of disagreement with respect to Closing Working Capital is duly
delivered pursuant to Section 2.03(b) or (ii) if a
<PAGE> 12
-8-
notice of disagreement with respect to Closing Working Capital is duly delivered
pursuant to Section 2.03(b) then within 10 days after the earlier of (A)
agreement between Parent and Hill pursuant to Section 2.03(c) with respect to
Closing Working Capital and (B) delivery of the calculation of Closing Working
Capital referred to in Section 2.03(c).
(b) Any payments pursuant to this Section 2.04 shall be made by delivery
to Parent of shares of Parent Stock having a value as of the Closing Date
(including any fractional shares) equal to the amount due to Parent hereunder.
The value of a share of Parent Stock as of the Closing Date shall be equal to
$30.575 (the average of the last reported sale price of Parent's common stock on
the Nasdaq National Market on each of the ten business days up to and including
the second business day preceding the Closing Date (subject to appropriate
adjustment in the event of a stock split or reverse stock split)).
2.05. CERTIFICATES FOR PARENT STOCK. Each certificate for Parent Stock
issued to Stockholder as part of the Merger shall bear the following legend:
"The securities represented hereby have not been registered
under the Securities Act of 1933, as amended, and may not be sold,
transferred or otherwise disposed of except in accordance with the
terms thereof and unless registered with the Securities and Exchange
Commission of the United States and the securities regulatory
authorities of certain states or unless an exception from such
registration is available."
2.06. TRANSFER TAXES. Stockholder shall pay any and all sales, documentary,
use, filing, transfer and other taxes payable as a result of the Merger
(including any such state taxes that may be imposed on the Company by reason of
a deemed transfer of assets).
2.07. BOOKS AND RECORDS. On the Closing Date, the Company and Stockholder
shall deliver to Parent, or its representatives, where located, all minutes
books, stock record books and corporate seals of the Company, and the original
copies of all books of account, leases, other agreements, securities, customer
lists, files and other documents, instruments and papers of any kind or nature
belonging to or relating to the Company or its business.
2.08. RESIGNATIONS. The Company will deliver to Parent the resignations of
all officers and directors of the Company from their positions with the Company
at or prior to the Closing Date, unless otherwise specified by Parent.
2.09. NO FRACTIONAL SHARES. No certificates or scrip for fractional shares
of Parent Stock will be issued, no Parent stock split or dividend shall be paid
in respect of any fractional share interest, and no such fractional shares
interest shall entitle the owner thereof to vote or to any rights of or as a
stockholder of Parent. In lieu of such fractional shares, any holder of shares
of Common Stock of the Company who would otherwise be entitled to a fraction of
a share of Parent Stock (after aggregating all fractional shares of Parent Stock
to be received by such holder) will be paid the cash value of such fraction,
which shall be equal to the fraction
<PAGE> 13
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multiplied by $30.575 (the average of the last reported sale price of Parent's
Common Stock on the Nasdaq National Market on each of the ten business days up
to and including the second business day preceding the Closing Date (subject to
appropriate adjustment in the event of a stock split or reverse stock split)).
2.10. DISSENTING SHARES. Any Dissenting Shares shall not be converted into
a right to receive Parent Stock but shall be converted into the right to receive
such consideration as may be determined to be due with respect to such
Dissenting Shares pursuant to the laws of the Commonwealth of Virginia;
PROVIDED, HOWEVER, that if the status of any such shares as Dissenting Shares
shall not be perfected, or if any such shares shall lose their status as
Dissenting Shares, then, as of the later of the Effective Date or the time of
the failure to perfect, or loss of, such status, such shares shall automatically
be converted into and shall represent only the right to receive (upon the
surrender of the certificate or certificates representing such shares) Parent
Stock in accordance with Section 2.01 (and cash in lieu of fractional shares in
accordance with Section 2.09). The Company shall give Parent prompt notice of
any demand received by the Company for appraisal of Shares, and Parent shall
have the right to participate in all negotiations and proceedings with respect
to such demand. The Company and Stockholder each agrees that, except with the
prior written consent of Parent or as required under The Virginia Stock
Corporation Act, a copy of which is attached hereto as EXHIBIT F, it will not
voluntarily make any payment with respect to, or settle or offer to settle, any
such demand for appraisal. Each holder of Dissenting Shares ("DISSENTING
STOCKHOLDER") who, pursuant to the provisions of The Virginia Stock Corporation
Act, becomes entitled to payment of the value of Shares shall receive payment
therefore from the Company or, after the Closing, from Stockholder (but only
after the value therefor shall have been agreed upon or finally determined
pursuant to such provisions).
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF
THE COMPANY AND STOCKHOLDER
The Company and Stockholder hereby jointly and severally represent and
warrant to Parent and Sub as of the date hereof that:
3.01. CORPORATE EXISTENCE AND POWER. The Company is a corporation duly
incorporated, validly existing and in good standing under the laws of its
jurisdiction of incorporation, and has all corporate powers and all governmental
licenses, authorizations, consents and approvals required to carry on its
business as now conducted. The Company is duly qualified to do business as a
foreign corporation and is in good standing in each jurisdiction in the United
States where the character of the property owned or leased by it or the nature
of its activities make such qualification necessary, except for those
jurisdictions where failure to be so qualified would not, individually or in the
aggregate, have a Material Adverse Effect. The Company has heretofore delivered
to Parent true and complete copies of the corporate charter and bylaws, and all
amendments thereto, of the Company.
<PAGE> 14
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3.02. CORPORATE AUTHORIZATION. The execution, delivery and performance by
the Company of this Agreement and the consummation by the Company of the
transactions contemplated hereby are within the Company's corporate powers and
have been duly authorized by all necessary corporate action on the part of the
Company. This Agreement constitutes a valid and binding agreement of the
Company.
3.03. GOVERNMENTAL AUTHORIZATION; CONSENTS.
(a) The execution and delivery of this Agreement by the Company and
Stockholder, and the performance by the Company and Stockholder of their
obligations under this Agreement, require no action by or in respect of, or
filing with, any governmental body, agency, official or authority or any other
Person.
(b) Except as set forth on SCHEDULE 3.03, no consent, approval,
waiver or other action by any Person under any contract, agreement, indenture,
lease, instrument or other document to which the Company is a party or by which
it is bound is required or necessary for the execution and delivery of this
Agreement by the Company and Stockholder, the performance by the Company and
Stockholder of their obligations under this Agreement or the consummation of the
transactions contemplated hereby.
3.04. NON-CONTRAVENTION. The execution and delivery of this Agreement by
the Company and Stockholder, the performance by the Company and Stockholder of
their obligations under this Agreement and the consummation of the transactions
contemplated hereby do not and will not (i) contravene or conflict with the
corporate charter or bylaws of the Company, (ii) contravene or conflict with or
constitute a violation of any provision of any law, regulation, judgment,
injunction, order or decree binding upon or applicable to the Company; (iii)
constitute a default under or give rise to any right of termination,
cancellation or acceleration of any right or obligation of the Company or to a
loss of any benefit to which the Company is entitled under any provision of any
agreement, contract or other instrument binding upon the Company or any permit
held by the Company or (iv) assuming the receipt of all required consents,
result in the creation or imposition of any Lien on any asset of the Company.
3.05. CAPITALIZATION. The authorized capital stock of the Company consists
of 500 shares of common stock, no par value. As of the date hereof, there were
outstanding 300 shares of common stock. All outstanding shares of capital stock
of the Company have been duly authorized and validly issued and are fully paid
and are owned by the Trust as shown on SCHEDULE 2.01. Except as set forth in
this Section 3.05, there are no outstanding (i) shares of capital stock, other
securities or phantom or other equity interests of the Company, (ii) securities
of the Company convertible into or exchangeable for shares of capital stock or
other securities of the Company or (iii) options or other rights to acquire from
the Company any capital stock, other securities or phantom or other equity
interests of the Company (the items in clauses (i), (ii) and (iii) being
referred to collectively as the "COMPANY SECURITIES"). There are no outstanding
obligations of the Company, actual or contingent, to issue or deliver or to
repurchase, redeem or otherwise acquire any Company Securities.
<PAGE> 15
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3.06. SUBSIDIARIES. The Company does not have and never has had any
Subsidiaries or any ownership or equity interest in or control of (direct or
indirect) any other person.
3.07. FINANCIAL STATEMENTS. The Company has previously furnished Parent
with a true and complete copy of the balance sheets of the Company as of
December 31, 1994, 1995 and 1996 and the statements of operations, and changes
in stockholders' equity of the Company for the respective years then ended,
(collectively, the "FINANCIAL STATEMENTS"), which are attached hereto as
SCHEDULE 3.07. Each of the balance sheets included in the Financial Statements
fairly presents in all material respects the financial position of the Company
as of its date, and the other statements included in the Financial Statements
fairly present in all material respects the results of operations and
stockholders' equity, as the case may be, of the Company for the periods therein
set forth, in each case in accordance with generally accepted accounting
principles consistently applied during the periods involved.
3.08. ABSENCE OF CERTAIN CHANGES. Except as set forth in SCHEDULE 3.08,
since the Balance Sheet Date, the Company has conducted its business in the
ordinary course consistent with past practices and there has not been:
(a) any Material Adverse Change or any event, occurrence, development
or state of circumstances or facts which could reasonably be expected to result
in a Material Adverse Change;
(b) any declaration, setting aside or payment of any dividend or
other distribution with respect to any Company Securities or any repurchase,
redemption or other acquisition by the Company of any outstanding shares of
capital stock or other securities of, or other ownership interests in, the
Company;
(c) any amendment of any outstanding security of the Company;
(d) any incidence, assumption or guarantee by the Company of any
indebtedness for borrowed money other than in the ordinary course of business
and in amounts and on terms consistent with past practices;
(e) any creation or assumption by the Company of any Lien on any
asset;
(f) any making of any loan, advance or capital contributions to or
investment in any Person;
(g) any damage, destruction or other casualty loss (whether or not
covered by insurance) affecting the business or assets of the Company which,
individually or in the aggregate, has had or would reasonably be expected to
have a Material Adverse Effect;
(h) any transaction or commitment made, or any contract or agreement
entered into, by the Company relating to its assets or business (including the
acquisition or disposition of any assets) or any relinquishment by the Company
of any contract or other right, in
<PAGE> 16
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either case, material to the Company, other than transactions and commitments in
the ordinary course of business consistent with past practices and those
contemplated by this Agreement;
(i) any change in any method of accounting or accounting practice by
the Company;
(j) any (i) grant of any severance or termination pay to any
director, officer or employee of the Company, (ii) entering into of any
employment, deferred compensation or other similar agreement (or any amendment
to any such existing agreement) with any director, officer or employee of the
Company, (iii) change in benefits payable under existing severance or
termination pay policies or employment agreements or (iv) change in
compensation, bonus or other benefits payable to directors, officers or
employees of the Company;
(k) any change in the business or operations or in the manner of
conducting the business or operations of the Company other than changes in
ordinary course of business;
(l) except as reflected on the Balance Sheet, any mortgage, pledge or
subjection of any properties or assets to any claim, Lien or liability, except
claims, Liens or liabilities for taxes not yet due;
(m) any write-down of the value of any inventory, or write-off of any
notes or accounts receivable or any portion thereof as uncollectible, other than
valuation reserves established for inventory and receivables;
(n) any cancellation or release of any other debts or claims, or
waivers of any rights;
(o) any sale, transfer or conveyance of any property or assets,
except in the ordinary course of business consistent with past practice;
(p) any disposition of, or lapse, or other failure to preserve the
exclusive rights of the Company to any Intellectual Property Right;
(q) any payments, loans or advances of any amount to or in respect
of, or sale, transfer or lease of any properties or assets to, or the entering
into of any agreement, arrangement or transaction with Stockholder, any of the
officers or directors of the Company, any Affiliate or associate of Stockholder,
the Company or any officer or director of the Company, or any business or entity
in which Stockholder or the Company, or any Affiliate or associate of any such
person, has any direct or material indirect interest, except for compensation to
the officers and employees of the Company other than this Agreement;
(r) any lease of real or personal property or any capital
expenditures or commitments for additions to property, plant, equipment or
capital assets; or
<PAGE> 17
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(s) any agreement, whether in writing or otherwise, to take any
action described in this Section 3.08.
3.09. PROPERTY AND EQUIPMENT. The Company has good title to, or in the case
of leased property have valid leasehold interests in, all property and assets
(whether real or personal, tangible or intangible) reflected on the Balance
Sheet or acquired after the Balance Sheet Date. None of such properties or
assets is subject to any Liens, except Liens for taxes not yet due or being
contested in good faith (and for which adequate accruals or reserves have been
established on the Balance Sheet), Liens disclosed on the Balance Sheet or Liens
which do not materially detract from the value of such property or assets as now
used, or materially interfere with any present or intended use of such property
or assets.
3.10. NO UNDISCLOSED MATERIAL LIABILITIES. To the Company's or
Stockholder's knowledge, there are no liabilities of the Company of any kind
whatsoever, whether accrued, contingent, absolute, determined, determinable or
otherwise, and there is no existing condition, situation or set of circumstances
which could reasonably be expected to result in such a liability, other than:
(i) liabilities disclosed in any other Schedule hereto or provided
for in the Balance Sheet; and
(ii) liabilities incurred in the ordinary course of business
consistent with past practice since the Balance Sheet Date, which in the
aggregate are not material to the Company.
3.11. LITIGATION. Other than as disclosed on SCHEDULE 3.11, there is no
action, suit, investigation or proceeding pending against, or to the knowledge
of the Company and Stockholder threatened against or affecting, the Company or
any of its properties or the transactions contemplated hereby before any court
or arbitrator or any governmental body, agency, official or authority.
3.12. MATERIAL CONTRACTS.
(a) Except for agreements, contracts, plans, leases, arrangements or
commitments disclosed in SCHEDULE 3.12, the Company is not a party to or subject
to:
(i) any lease providing for annual rentals of $5,000 or more;
(ii) any contract for the purchase of materials, supplies, goods,
services, equipment or other assets in an amount exceeding $1,000;
(iii) any partnership, joint venture or other similar arrangement or
agreement or any license agreement under which the Company is the licensee, or
any agency, distributor, dealer, franchise, sales representative or other
similar contract or commitment;
<PAGE> 18
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(iv) except for trade indebtedness incurred in the ordinary course of
business, any loan or credit agreements or any instrument evidencing or related
in any way to indebtedness incurred in the acquisition of any asset, business,
company or other entity or indebtedness for borrowed money by way of direct
loan, sale of debt securities, purchase money obligation, conditional sale,
guarantee, or otherwise, or agreement relating to the mortgaging, pledging or
otherwise placing a lien on any assets of the Company or any guaranty of
indebtedness or performance of others by the Company;
(v) any contract or other document that limits the freedom of the
Company to compete in any line of business or with any Person or in any area or
which would so limit the freedom of the Company after the Closing Date;
(vi) any guarantees;
(vii) any contract for personal services or employment (including
without limitation contracts with directors, officers, employees, agents,
consultants, advisors, salesmen, sales representatives, distributors or
dealers);
(viii) any agreement or arrangement providing for the sale of any of
the assets, properties or rights of the Company (other than in the ordinary
course of business) or for the grant of a preferential right to purchase any of
the Company's assets, properties or rights or which required the consent of any
third party to the transfer and assignment of any of its assets, properties or
rights; and
(ix) any other agreements, contracts, leases, licenses or commitments
to which the Company is a party (or under which the Company may be obligated or
which the Company or any of its rights, properties or assets may be subject or
bound) and which is material to the financial condition, results of operations,
business, property or prospects of the Company or is not made in the ordinary
course of business that is material to the Company.
(x) any contract relating to indebtedness for borrowed money or the
deferred purchase price of property (whether incurred, assumed, guaranteed or
secured by any asset), except contracts relating to indebtedness incurred in the
ordinary course of business in an amount not exceeding $1,000;
(b) Each agreement, contract, plan, lease, arrangement and commitment
disclosed in any schedule to this Agreement or required to be disclosed pursuant
to Section 3.12(a) is a valid and binding agreement of the Company and is in
full force and effect, and neither the Company, nor, to the knowledge of the
Company and Stockholder, any other party thereto is in default in any material
respect under the terms of any such agreement, contract, plan, lease,
arrangement or commitment.
<PAGE> 19
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3.13. INSURANCE COVERAGE. The Company has furnished to Parent a list of,
and true and complete copies of, all insurance policies covering the assets,
business, equipment, properties, operations, employees, officers and directors
of the Company. There is no claim by the Company pending under any of such
policies as to which coverage has been questioned, denied or disputed by the
underwriters of such policies. All premiums payable under all such policies have
been paid and the Company is otherwise in full compliance with the terms and
conditions of all such policies. Such policies are of the type and in amounts
customarily carried by Persons conducting businesses similar to those of the
Company.
3.14. COMPLIANCE WITH LAWS; NO DEFAULTS.
(a) The Company is not currently in violation of, and since January
1, 1994 has not violated, any applicable provisions of any laws, statutes,
ordinances or regulations except for violations that have not had and would not
reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect.
(b) SCHEDULE 3.14 correctly describes each license and permit (a
"PERMIT") material to the business of the Company, together with the name of the
governmental agency or entity issuing such license or permit. Such licenses and
permits are valid and in full force in accordance with their terms and effect
and none of such licenses or permits will be terminated or impaired or become
terminable as a result of the transactions contemplated hereby.
(c) The Company is not in default under, and no condition exists
that with notice or lapse of time or both would constitute a default under, (i)
any mortgage, loan agreement, indenture or evidence of indebtedness for borrowed
money to which the Company is a party or by which the Company or any material
amount of its assets is bound or (ii) any judgment, order or injunction of any
court, arbitrator or governmental body, agency, official or authority which
defaults or potential defaults individually or in the aggregate would reasonably
be expected to have a Material Adverse Effect.
3.15. FINDERS FEES. There is no investment banker, broker, finder or other
intermediary which has been retained by or is authorized to act on behalf of
Stockholder or the Company who might be entitled to any fee or commission from
Parent, Sub, the Company or any of their respective Affiliates upon consummation
of the transactions contemplated by this Agreement.
3.16. INTELLECTUAL PROPERTY.
(a) SCHEDULE 3.16 includes a list of all Intellectual Property
Rights specifying as to each, as applicable: (i) the nature of such Intellectual
Property Right; (ii) the owner of such Intellectual Property Right; (iii) the
jurisdictions by or in which such Intellectual Property Right is recognized
without regard to registration or has been issued or registered or in which an
application for such issuance or registration has been filed, including the
respective registration or application numbers; and (iv) licenses, sublicenses
and other agreements as to which the Company or any of its Affiliates is a party
and pursuant to which any Person is authorized to use
<PAGE> 20
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such Intellectual Property Right, including the identity of all parties thereto,
a description of the nature and subject matter thereof, the applicable royalty
and the term thereof.
(b) The Company has not during the three years preceding the date of
this Agreement been charged in writing with or been a defendant in any claim,
suit, action or proceeding relating to its business that has not been finally
terminated prior to the date hereof and that involves a claim of infringement of
any patents, trademarks, service marks or copyrights. The Company and
Stockholder have no knowledge of any other claim or infringement by the Company,
or no knowledge of any continuing infringement by any other Person of any
Intellectual Property Rights. No Intellectual Property Right is subject to any
outstanding order, judgment, decree, stipulation or agreement restricting the
use thereof by the Company or restricting the licensing thereof by the Company
to any Person. The Company has not entered into any agreement to indemnify any
other Person against any charge of infringement of any patent, trademark,
service mark or copyright.
(c) None of the Intellectual Property Rights of the Company, the
value of which to the Company is contingent upon maintenance of the
confidentiality thereof, has been disclosed by the Company, any employee of the
Company or Stockholder to any Person other than Persons who are parties to
confidentiality agreements with the Company.
(d) To the knowledge of the Company and Stockholder, no third party
has asserted any claim, or has any reasonable basis to assert any valid claim,
against the Company with respect to (i) the continued employment by, or
association with, the Company of any of the present officers, employees of or
consultants to the Company or (ii) the use by the Company or any of such Persons
in connection with their activities for or on behalf of the Company of any
information which the Company or any of such Persons would be prohibited from
using under any prior agreements or arrangements or any laws applicable to
unfair competition, trade secrets or proprietary information.
(e) None of the former or present employees, officers, directors,
consultants or contractors of the Company holds any right, title or interest,
directly or indirectly, in whole or in part, in or to any of the Intellectual
Property Rights which the Company is currently using or the use of which is
necessary for the business of the Company as presently conducted or as proposed
to be conducted. To the knowledge of the Company and Stockholder, no employee of
the Company is in violation of any term of any employment contract, patent
disclosure agreement or any other contract or agreement relating to the
relationship of any such employee with the Company or any other party because of
the nature of the business conducted or to be conducted by the Company. No
person has any so-called "moral rights," including any right to identification
of authorship, rights of approval of modifications or limitations on subsequent
modifications, in or to any of the Intellectual Property Rights owned by the
Company. Nothing prohibits the Company from (i) modifying, changing, altering,
adapting, revising, translating, adding to or subtracting from any of the
Intellectual Property Rights owned by the Company, (ii) doing any of the
foregoing without obligation to name the author of any of the Intellectual
Property Rights owned by the Company or to give credit to any person in
connection therewith
<PAGE> 21
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or (iii) leasing, licensing, distributing or marketing any of the Intellectual
Property Rights owned by the Company without the consent of any person.
3.17. INVENTORIES. The Company has no inventories.
3.18. RECEIVABLES. Except as set forth on SCHEDULE 3.18, all accounts,
notes receivable and other receivables (other than receivables collected since
the Balance Sheet Date) reflected on the Balance Sheet are, and all accounts and
notes receivable of the Company at the Closing Date will be, valid, genuine and
fully collectible (using commercially reasonable collection efforts) within
ninety (90) days in the aggregate amount thereof, subject to normal and
customary trade discounts, less any reserves for doubtful accounts recorded on
the Balance Sheet. All accounts, notes receivable and other receivables of the
Company at the Balance Sheet Date have been included in the Balance Sheet.
3.19. TAXES.
(a) The term "TAXES" as used herein means all federal, state, local,
foreign and other net income, gross income, gross receipts, sales, use, ad
valorem, transfer, franchise, profits, license, lease, service, service use,
withholding, payroll, employment, excise, severance, stamp, occupation, premium,
property, windfall profits, customs duties, or other Taxes, fees, assessments or
other charges of any kind whatever, together with any interest and any
penalties, additions to Tax or additional amounts with respect thereto, and the
term "TAX" means any one of the foregoing taxes. The term "RETURNS" as used
herein, means all returns, declarations, reports, statements and other documents
required to be filed in respect of Taxes, and "RETURN" means any one of the
foregoing Returns. All citations to the Code, or the Treasury regulations
promulgated thereunder, shall include any amendments or any substitute or
successor provisions thereto.
(b) The Company has filed all Returns required to be filed by the due
date for such Return and has paid all Taxes owed (whether or not shown as due on
such returns), including, without limitation, all Taxes which the Company is
obligated to withhold for amounts owing to employees, creditors and third
parties. All such Returns were complete and correct in all material respects.
All Taxes with respect to which the Company has become obligated pursuant to
elections made by it in accordance with generally accepted practice have been
paid and adequate reserves have been established for all Taxes accrued but not
yet payable. No issues have been raised (and are currently pending) by any
taxing authority in connection with any of the Returns. No waivers of statutes
of limitation with respect to any of the Returns have been given by or requested
from the Company. All deficiencies asserted or assessments made as a result of
any examinations have been fully paid, or are fully reflected as a liability in
the financial statements of the Company, or are being contested and an adequate
reserve therefor has been established and is fully reflected in the financial
statements of the Company. There are no liens for Taxes (other than for current
Taxes not yet due and payable) upon the assets of the Company. All material
elections with respect to Taxes affecting the Company, as of the date hereof,
are set forth in the financial statements of the Company, or are set forth on
SCHEDULE 3.19. The Company has not agreed to make any adjustment under Section
481(a) of the Code by reason of
<PAGE> 22
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a change in accounting method or otherwise, and the Company will not be required
to make any such adjustment as a result of the transactions set forth in this
Agreement. The Company does not have and has not had a permanent establishment
in any foreign country, as defined in any applicable Tax treaty or convention
between the United States of America and such foreign country. The Company is
not a party to any agreement, contract, arrangement or plan that has resulted or
would result, separately or in the aggregate, in (i) the payment of any "excess
parachute payments" within the meaning of Section 280G of the Code (without
regard to the exception in Sections 280G(b)(4) and 280G(b)(5) of the Code) or
(ii) any payments or other transactions that would be, in whole or in part,
nondeductible under Sections 162 or 404 of the Code. The Company is not a party
to any tax sharing or similar agreement with any Person. The Company has never
been a member of an affiliated group (within the meaning of Section 1504 of the
Code) filing a consolidated federal Return (other than a group the common parent
of which was the Company). The Company does not have any liability for Taxes of
any Person (other than the Company) under Treasury Regulation Section 1.1502-6
(or any similar provision of state, local, or foreign law), as a transferree or
successor, by contract, or otherwise.
(c) The Company has never filed a consent pursuant to Section 341(f)
of the Code, relating to collapsible corporations. The Company and its
stockholders made a valid election for the Company to be treated as an "S
corporation", as that term is defined in Section 1361(a) of the Code. The
Company has been an S corporation since April 1, 1993 through the date hereof.
Neither the Company nor Stockholder has taken any action that would result in
the termination of the S corporation status of the Company, other than pursuant
to this Agreement.
(d) Stockholder has timely filed all Returns with respect to Taxes
required to be paid by him attributable to items of income, gain, deductions,
losses and credits of the Company, and have timely paid all such Taxes (whether
or not shown on such Returns). Other than as described on SCHEDULE 3.19, there
has not been any audit of any Return filed by Stockholder with respect to, or
which may relate to, items of income, gain, deduction, loss or credit of the
Company; and no such audit of Stockholder is in progress and Stockholder has not
received notice from any Tax authority that any such audit is contemplated or
pending.
3.20. ENVIRONMENTAL COMPLIANCE.
(i) Stockholder and the Company have complied with all federal, state
and local laws (including without limitation case law, rules, regulations,
orders, judgments, decrees, permits, licenses and governmental approvals)
which are intended to protect the environment and/or human health or safety
(collectively, "ENVIRONMENTAL LAWS");
(ii) neither Stockholder nor the Company have handled, generated,
used, stored, transported or disposed of any substance or waste which is
regulated by Environmental Laws, except for reasonable amounts of ordinary
office and/or office-cleaning supplies which have been used in compliance
with Environmental Laws; and
(iii) there are no "Environmental Liabilities". For purposes of this
Agreement, "ENVIRONMENTAL LIABILITIES" are any liabilities which (y) arise
out of or in any way relate
<PAGE> 23
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to the Company or any real estate at any time owned, used or leased by the
Company, or the Company's or Stockholder's use or ownership thereof,
whether vested or unvested, contingent or fixed, actual or potential, and
(z) arise from or relate to actions occurring (including any failure to
act) or conditions existing on or before the Closing Date.
3.21. CUSTOMERS. Except as set forth on SCHEDULE 3.21, the Company and
Stockholder have not received notice from or otherwise have knowledge that any
group of customers who are under common ownership or control and who accounted
as a group for a material percentage of the aggregate products and services
furnished by the Company during the past 18 months has stopped or intends to
stop purchasing the Company's products or services.
3.22. TRANSACTIONS WITH AFFILIATES. There are no loans, leases, royalty
agreements or other continuing transactions between the Company and Stockholder,
any Affiliate of Stockholder, or any member of Hill's family. To the knowledge
of the Company and Stockholder, none of the officers or directors of the Company
or Stockholder (a) has any material direct or indirect interest in any entity
which does business with the Company; (b) has any direct or indirect interest in
any property, asset or right which is used by the Company in the conduct of its
business; or (c) has any contractual relationship with the Company other than
such relationships which occur from being an officer, director or stockholder of
the Company.
3.23. OTHER INFORMATION. None of the documents or information delivered to
Parent in connection with the transactions contemplated by this Agreement
contains any untrue statement of a material fact or omits to state a material
fact necessary in order to make the statements contained therein not misleading.
The 1997 budget and accompanying information relating to the projected future
performance of the Company delivered to Parent constitute the Company's and
Stockholder's best estimate of the information purported to be shown therein,
and the Company and Stockholder are not aware of any fact or information that
would lead him or it to believe that such projections are incorrect or
misleading in any material respect.
3.24. INTERCOMPANY ARRANGEMENTS. The Company does not own any note, bond,
debenture or other indebtedness, or is otherwise a creditor, of Stockholder or
any of his or its Affiliates. Since the Balance Sheet Date there has not been
any payment by the Company to Stockholder or any of his or its Affiliates,
charge by Stockholder or any of his or its Affiliates to the Company or other
transaction between the Company and Stockholder and any of his or its
Affiliates, except in any such case in the ordinary course of business of the
Company consistent with past practice.
3.25. EMPLOYEES. SCHEDULE 3.25 sets forth a true and complete list of (a)
the names, titles, annual salaries and other compensation of all employees of
the Company and (b) the wage rates for non-salaried employees of the Company (by
classification). None of such employees and no other employee of the Company has
indicated to the Company or Stockholder that he intends to resign, retire or
file a claim or otherwise bring an action against the Company, Parent or Sub as
a result of the transactions contemplated by this Agreement or otherwise.
<PAGE> 24
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3.26. REPRESENTATIONS. The joint representations and warranties of the
Company and Stockholder contained in this Agreement, disregarding all individual
qualifications and exceptions contained therein relating to materiality or
Material Adverse Effect, are true and correct with only such exceptions as would
not in the aggregate reasonably be expected to have a Material Adverse Effect.
ARTICLE IV
ADDITIONAL REPRESENTATIONS
AND WARRANTIES OF STOCKHOLDER
Stockholder represents and warrants to, and agrees with, Parent and Sub as
follows:
4.01. TITLE TO AND VALIDITY OF SHARES. The Trust now has, and on the
Closing Date will have, good and marketable title to and unrestricted power to
vote and sell the Shares designated as owned by the Trust opposite the Trust's
name on SCHEDULE 2.01, free and clear of any Lien. All Shares owned by the Trust
have been duly authorized and validly issued and are fully paid and
non-assessable.
4.02. AUTHORITY. Stockholder has the legal power, right and authority to
enter into and perform this Agreement and each of the Ancillary Agreements, and
to perform each of his or its obligations hereunder and thereunder. The
execution, delivery and performance of this Agreement and each of the Ancillary
Agreements by Stockholder does not contravene, or constitute a default under,
any provision of applicable law or regulation or of any agreement, judgment,
injunction, order, decree or any other instrument binding upon Stockholder. This
Agreement and each of the Ancillary Agreements have been duly executed and
delivered by Stockholder and constitute valid and binding obligations of
Stockholder, enforceable in accordance with their respective terms.
4.03. PURCHASE FOR INVESTMENT. Stockholder is acquiring the shares of
Parent Stock for investment for his or its own account and not with a view to,
or for sale in connection with, any distribution thereof. Stockholder agrees
that the shares of Parent Stock acquired by Stockholder may not be sold,
transferred or otherwise disposed of unless such shares are registered with the
Securities and Exchange Commission and the securities regulatory authorities of
certain states or unless an exemption from such registration is available.
4.04. POWER TO ACT AS TRUSTEE OR EXECUTOR. If Stockholder is serving as
trustee or executor with respect to its Shares, Stockholder is the only such
trustee or executor and is duly authorized and empowered by the instruments
creating such trust or trusts or by the will of which Stockholder is acting as
executor and under applicable law to enter into this Agreement with respect to
the Shares held by Stockholder and to consummate the transactions contemplated
herein.
<PAGE> 25
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ARTICLE V
REPRESENTATIONS AND WARRANTIES OF PARENT AND SUB
Parent and Sub jointly and severally represent and warrant to the Company
that:
5.01. ORGANIZATION AND EXISTENCE. Parent and Sub are corporations duly
incorporated, validly existing and in good standing under the laws of the
Commonwealth of Massachusetts and have all corporate powers and all material
governmental licenses, authorizations, consents and approvals required to carry
on their businesses as now conducted.
5.02. CORPORATE AUTHORIZATION. The execution, delivery and performance by
Parent and Sub of this Agreement and by Parent of the Registration Rights
Agreement and the consummation by Parent and Sub of the transactions
contemplated hereby and thereby are within the corporate powers of Parent and
Sub and have been duly authorized by all necessary corporate action on the part
of Parent and Sub. This Agreement constitutes a valid and binding agreement of
Parent and Sub and the Registration Rights Agreement constitutes a valid and
binding agreement of Parent.
5.03. GOVERNMENTAL AUTHORIZATION. Except as set forth on SCHEDULE 5.03, the
execution, delivery and performance by Parent and Sub of this Agreement require
no action by or in respect of, or filing with, any governmental body, agency,
official or authority.
5.04. LITIGATION. There is no action, suit, investigation or proceeding
pending against, or to the knowledge of Parent or Sub overtly threatened
against, Parent or Sub before any court or arbitrator or any governmental body,
agency or official which in any manner challenges or seeks to prevent, enjoin,
alter or materially delay the transactions contemplated hereby.
5.05. REPORTS AND FINANCIAL STATEMENTS. Parent has previously furnished to
the Company and Stockholder copies of its (i) Annual Report on Form 10-K for the
fiscal year ended June 30, 1996; (ii) 1996 Annual Report; (iii) Proxy Statement
dated October 8, 1996; (iv) Quarterly Report on Form 10-Q for the quarter ended
September 30, 1996; (v) Prospectus dated December 6, 1996; (vi) Current Report
on Form 8-K dated January 28, 1997 and (vii) Quarterly Report on Form 10-Q for
the quarter ended December 31, 1996 (collectively, the "REPORTS"). Taken
together, the reports do not contain any untrue statement of a material fact or
omit to state a material fact necessary in order to make the statements
contained therein, in light of the circumstances in which they were made, not
misleading.
<PAGE> 26
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ARTICLE VI
COVENANTS OF THE COMPANY AND STOCKHOLDER
The Company and Stockholder agree that:
6.01. CONFIDENTIALITY. The Company, Stockholder and their Affiliates will
hold, and will use their best efforts to cause their respective officers,
directors, employees, accountants, counsel, consultants, advisors and agents to
hold, in confidence, unless compelled to disclose by judicial or administrative
process or by other requirements of law, all confidential documents and
information concerning Parent or Sub furnished to the Company, Stockholder or
their Affiliates in connection with the transactions contemplated by this
Agreement, and (after the Closing Date) all confidential documents and
information concerning the Company, except to the extent that such information
can be shown to have been (i) previously known on a nonconfidential basis by
Stockholder, (ii) in the public domain through no fault of Stockholder or (iii)
later lawfully acquired by Stockholder from sources other than the Company,
Parent or Sub; PROVIDED that the Company and Stockholder may disclose such
information to their respective officers, directors, employees, accountants,
counsel, consultants, advisors and agents in connection with the transactions
contemplated by this Agreement so long as such persons are informed by the
Company and Stockholder of the confidential nature of such information and are
directed by the Company and Stockholder to treat such information
confidentially. The obligation of the Company, Stockholder and their Affiliates
to hold any such information in confidence shall be satisfied if they exercise
the same care with respect to such information as they would take to preserve
the confidentiality of their own similar information. If this Agreement is
terminated, the Company, Stockholder and their Affiliates will, and will use
their best efforts to cause their respective officers, directors, employees,
accountants, counsel, consultants, advisors and agents to, destroy or deliver to
Parent, upon request, all documents and other materials, and all copies thereof,
obtained by the Company, Stockholder or their Affiliates or on their behalf from
Parent or Sub in connection with this Agreement that are subject to such
confidence.
6.02. AFFILIATE AGREEMENTS. The Company shall deliver to Parent on or prior
to the date of this Agreement a letter from Company Counsel, satisfactory in
form and substance to Parent's Counsel, which, based upon discussion with the
Company and such inquiries as such firm deems necessary, shall identify all
persons who, at the date of this Agreement, such firm believes may be deemed to
be "affiliates" of the Company as such term is used in and for the purposes of
Accounting Series Releases 130 and 135, as amended, of the Securities and
Exchange Commission, and defined in Rule 144(a)(1) of the Securities Act of
1933, as amended, and who will become the beneficial owners of shares of Parent
Stock pursuant to the transactions contemplated by this Agreement (each such
person being referred to as a "COMPANY AFFILIATE"). The Company shall deliver to
Parent on or prior to the Closing Date a letter from Company Counsel,
satisfactory in form and substance to Parent's Counsel, which shall identify all
Company Affiliates as of the Closing Date. The Company shall cause each of the
Company Affiliates to execute and deliver to Parent (i) on the date of this
Agreement and (ii) on the Closing Date, a written agreement (the "AFFILIATE
AGREEMENT") satisfactory to Parent and substantially in the form of EXHIBIT E
hereto, including provisions indicating that such Company
<PAGE> 27
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Affiliate (i) has not offered to sell, sold or otherwise disposed of any Shares
in the 30 day period prior to the date hereof, (ii) will not offer to sell, sell
or otherwise dispose of any shares of Parent Stock, except pursuant to an
effective registration statement or in compliance with an available exemption
from the registration requirements of the Securities Act (for which Stockholder
shall provide Parent with an opinion of counsel satisfactory to Parent that the
securities being sold thereby may be publicly sold without registration under
the Securities Act), and (iii) will not offer to sell, sell or otherwise dispose
of any shares of Parent Stock until Parent shall have publicly released
financial results covering a period of at least 30 days of post-closing combined
operations of Parent and the Company.
ARTICLE VII
COVENANTS OF PARENT
Parent agrees that:
7.01. ACCESS. After the Closing Date, Parent agrees to give Stockholder
reasonable access to the books and records provided by the Company and
Stockholder pursuant to Section 2.07 hereof to enable Stockholder to make
required filings with, and respond to any inquiries from, state or federal tax
or other regulatory authorities.
7.02. QUARTERLY REPORT ON FORM 10-Q . Parent agrees to file in a timely
manner all reports and other documents required of Parent under the Securities
Exchange Act of 1934, including, without limitation, its Quarterly Report on
Form 10-Q for the fiscal quarter ended March 31, 1997.
7.03. PENSION PLAN. After the Closing Date, Parent agrees that it shall not
modify or amend the provisions of the Company's Defined Benefit Pension Plan
(the "Pension Plan") relating to the level of benefits provided under the
Pension Plan in the form of distribution, subject to such modifications or
amendments as may be reasonable in connection with the termination of the
Pension Plan, including but not limited to such modifications or amendments as
may be required in accordance with the terms of (i) the "IRS Determination
Letter" (as defined in Section 11.05(b) or (ii) the "PBGC Notice" (as defined in
Section 11.05(b)). Parent agrees to use reasonable efforts to obtain the IRS
Determination Letter and to complete notices and filings which are necessary to
receive a PBGC Notice (if any), promptly following the Closing Date, and in any
event shall initiate all such actions within 90 days of the Closing Date.
7.04. AFFILIATE AGREEMENTS. PARENT SHALL use its best efforts to cause each
person who, at the date of this Agreement, Parent believes may be deemed to be
"affiliates" of Parent as such term is used in and for the purposes of
Accounting Series Releases 130 and 135, as amended, of the Securities and
Exchange Commission, and defined in Rule 144(a)(1) of the Securities Act of
1933, as amended (each a "Parent Affiliate"), to execute and deliver on the
Closing Date, an Affiliate Agreement substantially in the form of EXHIBIT H
hereto.
<PAGE> 28
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7.05. REORGANIZATION STATUS. Parent shall consistently treat for all United
States federal income tax purposes the Merger as a reorganization, within the
meaning of Section 368(a) of the Code.
7.06. BUSINESS CONTINUITY. PARENT SHALL EITHER CONTINUE TO CONDUCT THE
HISTORIC BUSINESS OF THE COMPANY OR SHALL CONTINUE TO USE THE HISTORIC ASSETS OF
THE COMPANY IN A BUSINESS.
ARTICLE VIII
COVENANTS OF ALL PARTIES
The parties hereto agree that:
8.01. BEST EFFORTS. Subject to the terms and conditions of this Agreement,
each party will use commercially reasonable efforts to take, or cause to be
taken, all actions and to do, or cause to be done, all things necessary or
desirable under applicable laws and regulations to consummate the transactions
contemplated by this Agreement. Stockholder and Parent each agree, and
Stockholder, prior to the Closing, and Parent, after the Closing, agree to cause
the Company, to execute and deliver such other documents, certificates,
agreements and other writings and to take such other actions as may be necessary
or desirable in order to consummate or implement expeditiously the transactions
contemplated by this Agreement.
8.02. CERTAIN FILINGS. The Company, Hill and Parent shall cooperate with
each other (a) in determining whether any action by or in respect of, or filing
with, any governmental body, agency, official or authority is required, or any
actions, consents, approvals or waivers are required to be obtained from parties
to any material contracts, in connection with the consummation of the
transactions contemplated by this Agreement and (b) in taking such actions or
making any such filings, furnishing information required in connection therewith
and seeking timely to obtain any such actions, consents, approvals or waivers.
8.03. PUBLIC ANNOUNCEMENTS. The parties agree to consult with each other
before issuing any press release or making any public statement with respect to
this Agreement or the transactions contemplated hereby and, except as may be
required by applicable law or any listing agreement with any national securities
exchange, will not issue any such press release or make any such public
statement prior to such consultation.
8.04. POOLING. Stockholder, the Company and the Parent shall use
commercially reasonable efforts and shall cooperate fully to allow the
transactions contemplated by this Agreement to be accounted for as a "pooling of
interests" in accordance with generally accepted accounting principles which
shall be acceptable to the U.S. Securities and Exchange Commission.
<PAGE> 29
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ARTICLE IX
EMPLOYEE BENEFITS
9.01. EMPLOYEE BENEFITS DEFINITIONS. The following terms, as used herein,
having the following meanings:
"BENEFIT ARRANGEMENT" means each employment, severance or other
similar contract, arrangement or policy (written or oral) and each plan or
arrangement (written or oral) providing for severance benefits, insurance
coverage (including any self-insured arrangements), workers' compensation,
disability benefits, supplemental unemployment benefits, vacation benefits,
retirement benefits or for deferred compensation, profit-sharing, bonuses, stock
options, stock appreciation rights or other forms of incentive compensation or
post-retirement insurance, compensation or benefits which (i) is not an Employee
Plan, (ii) is entered into, maintained or contributed to, as the case may be, by
the Company, Stockholder or any of their Affiliates and (iii) covers any
employee or former employee of the Company.
"EMPLOYEE PLANS" means each "employee benefit plan", as such term is
defined in Section 3(3) of ERISA, that (i) is subject to any provision of ERISA
and (ii) is maintained or contributed to by the Company or any of its ERISA
Affiliates, as the case may be.
"ERISA" means the Employment Retirement Income Security Act of
1974, as amended.
"ERISA AFFILIATE" of any entity means any other entity that,
together with such entity, would be treated as a single employer under Section
414 of the Code.
"MULTIEMPLOYER PLAN" means each Employee Plan that is a
multiemployer plan, as defined in Section 3(37) of ERISA.
"PBGC" means the Pension Benefit Guaranty Corporation established
and maintained within the United States Department of Labor pursuant to Section
4002 of ERISA.
9.02. ERISA REPRESENTATIONS. The Company and Stockholder, jointly and
severally, hereby represent and warrant to Parent that:
(a) SCHEDULE 9.02 lists each Employee Plan that covers any employee
of the Company, copies and descriptions of all of which have previously been
made available or furnished to Parent. With respect to each Employee Plan, the
Company has provided the three most recently filed Forms 5500 and an accurate
summary description of such plan. The Company has provided Parent with complete
age, salary, service and related data as of the most recent practicable date for
employees of the Company.
<PAGE> 30
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(b) SCHEDULE 9.02 also includes a list of each Benefit Arrangement of
the Company, copies and descriptions of which have been made available or
furnished previously to Parent.
(c) None of the Employee Plans or other arrangements listed on
SCHEDULE 9.02 covers any non-United States employee or former employee of the
Company.
(d) No "prohibited transaction", as defined in Section 406 of ERISA
or Section 4975 of the Code, has occurred with respect to any Employee Plan.
(e) No plan or arrangement listed on Schedule 9.02 is a Multiemployer
Plan. Neither the Company nor any Subsidiary or ERISA Affiliate has ever
contributed to or had an obligation to contribute to any Multiemployer Plan.
(f) Each Employee Plan which is intended to be qualified under
Section 401(a) of the Code is so qualified and has been so qualified during the
period from its adoption to date, and each trust forming a part thereof is
exempt from tax pursuant to Section 501(a) of the Code. The Company has
furnished to Parent copies of the most recent Internal Revenue Service
determination letters with respect to each such plan. Each Employee Plan has
been maintained in compliance with its terms and with the requirements
prescribed by any and all statutes, orders, rules and regulations, including but
not limited to ERISA and the Code, which are applicable to such plan.
(g) Each Benefit Arrangement has been maintained in substantial
compliance with its terms and with the requirements prescribed by any and all
statutes, orders, rules and regulations which are applicable to such Benefit
Arrangement.
(h) With respect to the employees and former employees of the
Company, there are no employee post-retirement medical or health plans in
effect, except as required by Section 4980B of the Code.
(i) All contributions and payments accrued under each Employee Plan
and Benefit Arrangement, determined in accordance with prior funding and accrual
practices, as adjusted to include proportional accruals for the period ending on
the Closing Date, will be discharged and paid on or prior to the Closing Date.
Except as disclosed in writing to Parent prior to the date hereof, there has
been no amendment to, written interpretation of or announcement (whether or not
written) by the Company, Stockholder or any of their ERISA Affiliates relating
to, or change in employee participation or coverage under, any Employee Plan or
Benefit Arrangement that would increase materially the expense of maintaining
such Employee Plan or Benefit Arrangement above the level of the expense
incurred in respect thereof for the year ended prior to the date hereof.
(j) As of the Closing Date, the market value of assets under each
Employee Plan subject to Title IV of ERISA (a "Defined Benefit Plan"), other
than any Multiemployer Plan, equaled or exceeded the present value of benefit
liabilities thereunder as determined on a
<PAGE> 31
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termination basis using the assumptions established by the PBGC as in effect on
that date. No Defined Benefit Plan (other than the Rescon, Inc. Defined Benefit
Pension Plan and any Multiemployer Plan) has been completely or partially
terminated or been the subject of a Reportable Event as to which notices would
be required to be filed with the PBGC. No proceeding by the PBGC to terminate
any Defined Benefit Plan (other than any Multiemployer Plan) has been
instituted. The Company has not incurred, and does not reasonably expect to
incur, any liability to the PBGC (other than PBGC premium payments) or any other
liability under Title IV of ERISA (including any withdrawal liability) with
respect to any Defined Benefit Plan maintained by the Company or to which the
Company has contributed for the benefit of any current or former employee of the
Company or any ERISA Affiliate.
(k) No charge, complaint, action, suit, proceeding, hearing,
investigation, claim or demand with respect to the administration or the
investment of the assets of any Employee Plan maintained by the Company or to
which the Company has contributed or the benefit of any current or former
employee of the Company (other than routine claim for benefit) is pending.
(l) Neither the Company nor any entity considered under common
control with the Company (within the meaning of subsection (b), (c), (m) or (o)
of Section 414 of the Code) has incurred any liability in connection with the
termination of a pension plan subject to Title IV of ERISA, the complete or
partial withdrawal from a Multiemployer Plan subject to Title IV of ERISA, or
the failure to make contributions due under Section 412 of the Code or premiums
due to the PBGC under Title IV of ERISA, which liability will not have been
satisfied as of the Closing Date.
(m) There is no contract, agreement, plan or arrangement covering any
employee or former employee of the Company that, individually or collectively,
could give rise to the payment of any amount that would not be deductible
pursuant to the terms of Section 280G of the Code.
(n) No tax under Section 4980B of the Code has been incurred in
respect of any Employee Plan that is a group health plan, as defined in Section
5000(b)(1) of the Code.
(o) Except as set forth on SCHEDULE 9.02, no employee of the Company
will become entitled to any bonus, retirement, severance or similar benefit or
enhanced benefit solely as a result of the transactions contemplated hereby.
9.03. NO THIRD PARTY BENEFICIARIES. No provision of this Article IX shall
create any third party beneficiary or other rights in any employee or former
employee (including any beneficiary or dependent thereof) of the Company in
respect of continued employment (or resumed employment) with the Company and no
provision of this Article IX shall create any such rights in any such Persons in
respect of any benefits that may be provided, directly or indirectly, under any
Employee Plan or Benefit Arrangement or any plan or arrangement that may be
established by Parent or any of its Affiliates. No provision of this Agreement
shall constitute a limitation on
<PAGE> 32
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rights to amend, modify or terminate after the Closing Date any Employee Plan or
Benefit Arrangement.
ARTICLE X
CONDITIONS TO CLOSING
10.01. CONDITIONS TO THE OBLIGATIONS OF EACH PARTY. The obligations of
Parent, Sub, the Company and Stockholder to consummate the Closing are subject
to the satisfaction or waiver of the following conditions:
(a) No proceeding challenging this Agreement or the transactions
contemplated hereby or seeking to prohibit, alter, prevent or materially delay
the Closing shall have been instituted by any Person before any court,
arbitrator or governmental body, agency or official and be pending.
(b) All actions by or in respect of or filings with any governmental
body, agency, official or authority required to permit the consummation of the
Closing shall have been obtained.
10.02. CONDITIONS TO OBLIGATIONS OF PARENT AND SUB. The obligation of
Parent and Sub to consummate the Closing is subject to the satisfaction or
waiver of the following further conditions:
(a)(i) the Company and Stockholder shall have performed in all
material respects all of its or his obligations hereunder required to be
performed on or prior to the Closing Date, (ii) the representations and
warranties of the Company and Stockholder contained in this Agreement at the
time of its execution and delivery and in any certificate or other writing
delivered by the Company or Hill pursuant hereto, disregarding all
qualifications and exceptions contained therein relating to materiality or
Material Adverse Effect, shall be true at and as of the Closing Date, as if made
at and as of such date with only such exceptions as would not in the aggregate
reasonably be expected to have a Material Adverse Effect and (iii) Parent shall
have received a certificate signed by (A) the President of the Company and (B)
Stockholder to the foregoing effect.
(b) No court, arbitrator or governmental body, agency or official
shall have issued any order, and there shall not be any statute, rule or
regulation, restraining the effective operation by Parent of the business of the
Company after the Closing Date, and no proceeding challenging this Agreement or
the transactions contemplated hereby or seeking to prohibit, alter, prevent or
materially delay the Closing shall have been instituted by any Person before any
court, arbitrator or governmental body, agency or official and be pending.
(c) Parent shall have received an opinion of Company Counsel, dated
the Closing Date, to the effect specified on EXHIBIT G. In rendering such
opinion, such counsel may rely upon certificates of public officers, as to
matters governed by the laws of jurisdictions other
<PAGE> 33
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than the Commonwealth of Virginia or the federal laws of the United States of
America, upon opinions of counsel reasonably satisfactory to Parent, copies of
which shall be contemporaneously delivered to Parent, and as to matters of fact,
upon certificates of Stockholder and officers of the Company.
(d) Stockholder and the Company shall have executed and delivered
each of the Ancillary Agreements to be entered into by them or it at the
Closing, in each case substantially in the form attached as an exhibit to this
Agreement.
(e) Parent shall have received all other closing documents specified
in Section 2.02 of this Agreement and all other closing documents that it may
reasonably request, all in form and substance reasonably satisfactory to Parent.
(f) Price Waterhouse LLP shall have delivered to Parent its written
opinion that it has no basis for believing that the transactions contemplated by
this Agreement shall not be accounted for as a "pooling of interests" in
accordance with generally accepted accounting principles, and Parent shall have
no reason to believe that such accounting treatment will not be accepted by the
Securities and Exchange Commission.
(g) The Company shall deliver to Parent a properly executed statement
in a form reasonably requested by Parent for purposes of satisfying Parent's
obligations under Treasury Regulation sec.1.1445-2(c)(3).
(h) Parent shall have received evidence satisfactory to it of Hill's
payment of all costs and expenses incurred by the Company or Stockholder in
connection with this Agreement, other than up to an aggregate of $50,000 of
reasonable legal and accounting fees of the Company and Stockholder
(collectively referred to as the "Company Fees").
(i) Parent shall have received a written waiver of notice of issuance
from Smith Barney Inc. under the provisions of that certain Underwriting
Agreement dated as of December 6, 1996 between Parent and the other parties
named therein.
(j) Parent shall have received from the Company written evidence that
(i) the execution, delivery and performance of the Agreement have been duly and
validly approved and authorized by the Company's board of directors and by the
stockholders of the Company and (ii) no stockholders of the Company have, or
might be able to perfect, dissenters' or appraisal rights in connection with the
Merger.
(k) Each of the employees of the Company listed on SCHEDULE 10.02
shall have accepted employment with State and Federal Associates, Inc., a
wholly-owned subsidiary of Parent.
(l) The Company shall have received all of the consents and waivers
set forth on SCHEDULE 3.03.
<PAGE> 34
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(m) Karen Ioffredo (or her nominee) shall have completed an audit, to
Parent's satisfaction, of the balance sheet of the Company as of December 31,
1996 and the accompanying statements for the year then ended.
10.03. CONDITIONS TO OBLIGATIONS OF THE COMPANY. The obligation of the
Company to consummate the Closing is subject to the satisfaction of the
following further conditions:
(a)(i) Parent and Sub shall have performed in all material respects
all of their obligations hereunder required to be performed by them at or prior
to the Closing Date, (ii) the representations and warranties of Parent and Sub
contained in this Agreement at the time of its execution and delivery and in any
certificate or other writing delivered by Parent or Sub pursuant hereto shall be
true in all material respects at and as of the Closing Date, as if made at and
as of such date and (iii) the Company shall have received a certificate signed
by the Chief Financial Officer of Parent and the President of Sub to the
foregoing effect.
(b) No proceeding challenging this Agreement or the transactions
contemplated hereby or seeking to prohibit, alter, prevent or materially delay
the Closing shall have been instituted by any Person before any court,
arbitrator or governmental body, agency or official and be pending.
(c) The Company shall have received an opinion of Parent's Counsel,
dated the Closing Date, to the effect specified in Sections 5.01 through 5.04.
In rendering such opinion, such counsel may rely upon certificates of public
officers, as to matters governed by the laws of jurisdictions other than the
Commonwealth of Massachusetts or the federal laws of the United States of
America, upon opinions of counsel reasonably satisfactory to the Company, copies
of which shall be contemporaneously delivered to the Company, and as to matters
of fact, upon certificates of officers of Parent and Sub.
(d) Parent and Sub shall have executed and delivered each of the
Ancillary Agreements to be entered into by them at the Closing, in each case
substantially in the form attached as an exhibit to this Agreement.
(e) The Company and Stockholder shall have received all items
specified in Section 2.02 of this Agreement and all other closing documents that
they may reasonably request, all in form and substance reasonably satisfactory
to them.
ARTICLE XI
SURVIVAL; INDEMNIFICATION
11.01. SURVIVAL. The covenants contained in this Agreement shall survive
the Closing and continue until the date set forth in each such covenant. The
agreements, representations and warranties contained in this Agreement shall
survive the Closing until the earlier of (i) the delivery by Price Waterhouse
LLP of its report on Parent's financial statements for the fiscal year ended
June 30, 1997 or (ii) February 28, 1998.
<PAGE> 35
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11.02. INDEMNIFICATION
(a) Stockholder hereby indemnifies Parent, Sub, and their respective
subsidiaries, directors, officers, agents and affiliates and, effective at the
Closing, without duplication, the Company (collectively, the "PARENT GROUP")
against and agrees to defend and hold them harmless from any and all damage,
loss, liability and expense (including without limitation reasonable expenses of
investigation and reasonable attorneys' fees and expenses in connection with any
action, suit or proceeding) ("DAMAGES") incurred or suffered by Parent, Sub or
the Company arising out of (i) any inaccuracy in or breach or alleged breach of
any agreement, representation or warranty of the Company or Stockholder
contained in or made pursuant to this Agreement or any certificate or other
writing delivered pursuant hereto or in connection herewith, (ii) any failure by
Stockholder or the Company to perform any of their obligations or covenants as
set forth in this Agreement or any certificate or other writing delivered
pursuant hereto or in connection herewith and (iii) any and all actions, suits,
litigation, arbitrations, proceedings, investigations or claims arising out of
any of the foregoing and based on facts that have occurred on or prior to the
Closing Date even though such action, suit, litigation, arbitration, proceeding,
investigation or claim may not be filed or come to light until after the Closing
Date (collectively, the "CLAIMS"); provided that Stockholder shall not be liable
under this Section 11.02(a) unless the aggregate amount of Damages with respect
to all matters referred to in this Section 11.02(a) exceeds $25,000; provided,
however, that (i) once the Damages exceed $25,000, the Parent Group shall be
entitled to indemnification for the full amount of such Damages and (ii) such
indemnity obligations shall be satisfied by Stockholder by transferring to
Parent shares of Parent's common stock owned by Stockholder having a value, as
of the Closing Date, equal to the amount of such Damages (any deficiency to be
paid by Stockholder in cash). The maximum liability of Stockholder pursuant to
this SECTION 11.02(a) shall be $1,500,000.
(b) Stockholder shall have no right of indemnification, contribution
or subrogation against the Company with respect to any indemnification by
Stockholder under this Section 10.02 if the transactions contemplated by this
Agreement are consummated.
(c) Parent hereby indemnifies Stockholder, his agents and affiliates
(the "Selling Group") against and agrees to defend and hold them harmless from
any and all Damages incurred or suffered by the Selling Group arising out of any
misrepresentation or breach of warranty, covenant or agreement made or to be
performed by Parent pursuant to this Agreement, such indemnity obligations to be
satisfied by Parent by issuing shares of its common stock having a value, as of
the Closing Date, equal to the amount of such Damages, provided, however, that
such amount shall in no event exceed $250,000.
(d) Under no circumstances shall Stockholder be required to
compensate the Parent Group with respect to any Damages incurred by the Parent
Group in excess of $1,500,000.
11.03. Procedures.The party seeking indemnification under Section 10.02
(the "INDEMNIFIED PARTY") agrees to give prompt notice to the party against whom
indemnity is sought (the "INDEMNIFYING PARTY") of the assertion of any claim, or
the commencement of any suit,
<PAGE> 36
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action or proceeding in respect of which indemnity may be sought under such
Section. The Indemnifying Party may, and at the request of the Indemnified Party
shall, participate in and control the defense of any third party suit, action or
proceeding at its own expense. The Indemnifying Party shall not be liable under
Section 10.02 for any settlement effected without its consent (which may not be
unreasonably withheld or delayed) of any claim, litigation or proceeding in
respect of which indemnity may be sought hereunder.
11.04. HOLDBACK. At the Closing, Stockholder shall be deemed to have
directed Parent to withhold from delivery ten percent (10%) of the shares of
Parent Stock issued to Stockholder. The shares of Parent Stock withheld are
herein referred to as the "HOLDBACK SHARES." The Holdback Shares shall be issued
to Stockholder but held in escrow by Parent subject to the terms and conditions
hereinafter set forth. Holdback Shares shall be considered issued and
outstanding shares of capital stock of Parent and Stockholder shall be entitled
to vote such shares and receive any and all dividends or distributions payable
with respect to such shares.
11.05. HOLDBACK TERMINATION. The Holdback Shares shall be distributed to
Stockholder as follows:
(a) Promptly after the earlier to occur of (i) the delivery by Price
Waterhouse LLP of its report on Parent's financial statements for the fiscal
year ended June 30, 1997 or (ii) February 28, 1998, the Holdback Shares shall be
distributed to Stockholder, except that (A) the portion of the Holdback Shares
having a value as of the Closing Date most nearly equal to the Damages incurred
by Parent as to which a Claim shall have been previously and duly delivered to
Stockholder and (B) the portion of the Holdback Shares which constitute the
"Plan Holdback Shares" (as hereinafter defined and to the extent not included in
the Holdback Shares described in the preceding clause (A)), shall continue to be
withheld in escrow.
(b) "Plan Holdback Shares" shall be deemed to be that portion of the
Holdback Shares having a value as of the Closing Date equal to $300,000.
Promptly after the later to occur (but in no event later than the one year
anniversary of the Closing Date) of (i) the Parent's receipt of favorable
determination letters from the Internal Revenue Service (the "IRS Determination
Letter") regarding the tax qualification and the termination of the Company's
Defined Benefit Pension Plan (the "Pension Plan") and the Company's Age Weighted
Profit Sharing Plan (the "Profit Sharing Plan") or (ii) the expiration of the
period for issuance by Pension Benefit Guaranty Corp. of a "notice of
noncompliance" (the "PBGC Notice"), following Parent's completion of required
notices and filings with respect to the termination of the Pension Plan, the
Plan Holdback Shares shall be distributed to the Stockholder, except that the
portion of the Plan Holdback Shares having a value as of the Closing Date most
nearly equal to the Damages incurred by the Parent for Claims relating to the
Pension Plan or the Profit Sharing Plan as to which a Claim shall have been
previously and duly delivered to Stockholder, shall continue to be withheld in
escrow.
(c) The value of a Holdback Share as of the Closing Date shall be
equal to $30.575 (the average of the last reported sale price of Parent's Common
Stock on the Nasdaq National Market on each of the ten business days up to and
including the second business day preceding
<PAGE> 37
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the Closing Date (subject to appropriate adjustment in the event of a stock
split or reverse stock split)). The amount of such Damages shall be based upon a
written certification of the Chief Executive Officer of Parent to Stockholder as
to the amount of Damages incurred, together with supporting documentation. If
Stockholder disagrees with the amount of Damages set forth in such certificate,
and if Stockholder and Parent cannot reach mutually satisfactory understanding
with regard to the amount of Damages within five (5) business days after
delivery of the certificate to Stockholder, the matter shall be promptly
submitted to binding arbitration in Boston, Massachusetts in accordance with the
rules of the American Arbitration Association. The balance of the Holdback
Shares not so withheld shall be distributed to Stockholder.
(d) The Holdback Shares not so distributed to Stockholder pursuant to
subsection 11.05(a) through 11.05(c) shall be retained by Parent in escrow until
such pending Claims are resolved; provided, however, that upon the disposition
of any such Claim prior to the disposition of all such Claims, Parent shall
distribute to Stockholder that amount of the Holdback Shares having a value as
of the Closing Date in excess of 100% of the aggregate amounts of the remaining
Damages incurred as determined above.
ARTICLE XII
MISCELLANEOUS
12.01. NOTICES. All notices and other communications which by any provision
of this Agreement are required or permitted to be given shall be given in
writing and shall be (a) mailed by first-class or express mail, postage prepaid,
(b) sent by telex, telegram, telecopy or other form of rapid transmission,
confirmed by mailing (by first class or express mail, postage prepaid) written
confirmation at substantially the same time as such rapid transmission, or (c)
personally delivered to the receiving party (which if other than an individual
shall be an officer or other responsible party of the receiving party). All such
notices and communications shall be mailed, sent or delivered as follows:
if to Parent, Sub, or the Company to:
PAREXEL International Corporation
195 West Street
Waltham, MA 02154
Attn: William T. Sobo, Jr.
Senior Vice President and Chief Financial Officer
Telecopy: (617) 487-9931
<PAGE> 38
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with a copy to:
William J. Schnoor, Jr.
Testa, Hurwitz & Thibeault, LLP
High Street Tower
125 High Street
Boston, MA 02110
Telecopy: (617) 248-7100
if to Stockholder to:
Walter Leroy Hill
2521 Hunter Mill Road
Oakton, VA 22124
with a copy to:
Scott Meza
Michaels, Wishner & Bonner, P.C.
Suite 900
1140 Connecticut Avenue, N.W.
Washington, DC 20036
Telecopy: (202) 857-0634
Notices shall be deemed duly delivered three business days after being
sent by first class mail, postage prepaid, or one business day after being sent
via a reputable nationwide express mail service. Notices delivered via any other
means shall be deemed duly delivered upon actual receipt by the individual for
whom such notice is intended. Any notice sent to a party hereto shall be sent
simultaneously, by the same means, to such party's counsel, as set forth above.
12.02. AMENDMENTS; NO WAIVERS.
(a) Any provision of this Agreement may be amended or waived prior to
the Closing Date if, and only if, such amendment or waiver is in writing and
signed by Parent, Sub and the Company.
(b) No failure or delay by either party in exercising any right,
power or privilege hereunder shall operate as a waiver thereof nor shall any
single or partial exercise thereof preclude any other or further exercise
thereof or the exercise of any other right, power or privilege. The rights and
remedies herein provided shall be cumulative and not exclusive of any rights or
remedies provided by law.
12.03. EXPENSES. All costs and expenses incurred in connection with this
Agreement shall be paid by the party incurring such cost or expense; provided,
however, that if the Closing shall occur all such costs and expenses incurred by
the Company and Stockholder, other than up
<PAGE> 39
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to an aggregate of $50,000 of reasonable legal and accounting fees incurred by
the Company or Stockholder, shall be paid or reimbursed by Hill.
12.04. SUCCESSORS AND ASSIGNS. The provisions of this Agreement shall be
binding upon and inure to the benefit of the parties hereto and their respective
successors and assigns; PROVIDED that no party may assign, delegate or otherwise
transfer any of his or its rights or obligations under this Agreement without
the consent of the other parties hereto.
12.05. FURTHER ASSURANCES. From time to time after the Closing, at the
request of Parent and without further consideration, Hill will execute and
deliver to Parent such other documents, and take such other action, at Parent's
cost and expense, as Parent may reasonably request in order to consummate more
effectively the transactions contemplated hereby.
12.06. GOVERNING LAW. This Agreement shall be construed in accordance with
and governed by the law of the Commonwealth of Massachusetts, without regard to
the conflicts of law rules of such state.
12.07. COUNTERPARTS; EFFECTIVENESS. This Agreement may be signed in any
number of counterparts, each of which shall be an original, with the same effect
as if the signatures thereto and hereto were upon the same instrument. This
Agreement shall become effective when each party hereto shall have received a
counterpart hereof signed by the other parties hereto.
12.08. ENTIRE AGREEMENT. This Agreement (including the exhibits and
schedules hereto) constitutes the entire agreement between the parties with
respect to the subject matter hereof and supersedes all prior agreements,
understandings and negotiations, whether written or oral, between the parties
with respect to the subject matter hereof. No representation, inducement,
promise, understanding, condition or warranty not set forth herein has been made
or relied upon by either party hereto. Neither this Agreement nor any provision
hereof is intended to confer upon any Person other than the parties hereto any
rights or remedies hereunder.
12.09. CAPTIONS. The captions herein are included for convenience of
reference only and shall be ignored in the construction or interpretation
hereof.
12.10. JURISDICTION. Any action or proceeding seeking to enforce any
provision of, or based on any right arising out of, this Agreement may be
brought against any of the parties in the courts of the Commonwealth of
Massachusetts, and each of the parties hereby consents to the jurisdiction of
such courts (and of the appropriate appellate courts) in any such action or
proceeding and waives any obligation to venue laid therein. Process in any such
action or proceeding may be served on any party anywhere in the world, whether
within or without the Commonwealth of Massachusetts.
<PAGE> 40
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as
of the day and year first above written.
PAREXEL INTERNATIONAL CORPORATION
By: /s/ William T. Sobo, Jr.
---------------------------------------
Name: William T. Sobo, Jr.
-------------------------------------
Title: Senior Vice President, CFO
------------------------------------
RESCON ACQUISITION CORPORATION
By: /s/ William T. Sobo, Jr.
---------------------------------------
Name: William T. Sobo, Jr.
-------------------------------------
Title: President
------------------------------------
RESCON, INC.
By: /s/ Walter Leroy Hill
---------------------------------------
Name: Walter Leroy Hill
-------------------------------------
Title: President
------------------------------------
WALTER L. HILL REVOCABLE TRUST U/D/T DATED
JUNE 29, 1994
By: /s/ Walter Leroy Hill
---------------------------------------
Name: Walter Leroy Hill
-------------------------------------
Title: Trustee
-------------------------------------
/s/ Walter Leroy Hill
-------------------------------------------
Walter Leroy Hill
<PAGE> 1
EXHIBIT 4.3
REGISTRATION RIGHTS AGREEMENT
AGREEMENT dated as of February 28, 1997 among PAREXEL International
Corporation, a Massachusetts corporation (the "COMPANY") and Walter Leroy Hill
and Walter Leroy Hill as Trustee of the Walter L. Hill Revocable Trust u/d/t
Dated June 29, 1994 (collectively, the "STOCKHOLDER").
W I T N E S S E T H :
WHEREAS, pursuant to the Agreement and Plan of Reorganization and Merger
dated as of the date hereof (the "MERGER AGREEMENT") among the Company, Rescon
Acquisition Corporation, a Massachusetts corporation ("SUB"), Rescon, Inc., a
Virginia corporation ("RESCON") and the other parties named therein, Sub will be
merged with and into Rescon and Rescon will become a wholly-owned subsidiary of
the Company;
WHEREAS, in connection therewith, the Stockholder will receive
unregistered shares of Common Stock of the Company (the "SHARES"); and
WHEREAS, the Company and the Stockholder wish to set forth certain rights
and obligations with regard to the registration of the Shares;
NOW, THEREFORE, the parties hereto agree as follows:
1. CERTAIN DEFINITIONS. As used in this Agreement, the following
terms shall have the following respective meanings:
"COMMISSION" shall mean the Securities and Exchange Commission, or any
other federal agency at the time administering the Securities Act.
"SHARES" shall mean the shares of Common Stock of the Company issued to
the Stockholder on even date herewith pursuant to the Merger Agreement.
"COMMON STOCK" shall mean the Common Stock, $.01 par value, of the
Company, as constituted as of the date of this Agreement.
"EXCHANGE ACT" shall mean the Securities Exchange Act of 1934, as
amended, or any similar federal statute, and the rules and regulations of
the Commission thereunder, all as the same shall be in effect at the time.
"REGISTRATION EXPENSES" shall mean the expenses so described in
Section 10.
<PAGE> 2
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"SECURITIES ACT" shall mean the Securities Act of 1933, as amended, or
any similar federal statute, and the rules and regulations of the
Commission thereunder, all as the same shall be in effect at the time.
"SELLING EXPENSES" shall mean the expenses so described in Section 10.
2. COMPLIANCE WITH SECURITIES LAWS. The Stockholder represents
and warrants that he:
(a) has paid no brokerage or similar commissions in
connection with the acquisition of the Shares.
(b) is acquiring such Shares solely for his own account.
(c) has provided such information as may reasonably have
been requested by the Company in order for the Company or its counsel to
evaluate the availability of an exemption under the Securities Act for the
issuance of the Shares to the Stockholder.
3. SECURITIES ACT MATTERS. The Stockholder acknowledges and
agrees that the Shares have not been registered under the Securities Act or
under the securities laws of any state, in reliance upon certain exemptive
provisions of such statutes. The Stockholder recognizes and acknowledges that
such claims of exemption are based, in part, upon the Stockholder's
representations contained in this Agreement. The Stockholder further recognizes
and acknowledges that, because the Shares are unregistered under federal and
state laws, they are not presently eligible for public resale, and may only be
resold in the future pursuant to an effective registration statement under the
Securities Act and any applicable state securities laws, or pursuant to a valid
exemption from such registration requirements. The Stockholder recognizes and
acknowledges that Rule 144 or any other exemption promulgated under the
Securities Act (which facilitates routine sales of securities in accordance with
the terms and conditions of that Rule, including a holding period requirement)
is not now available for resale of the Shares, and the Stockholder recognizes
and acknowledges that, in the absence of the availability of Rule 144 or any
other exemption under the Securities Act, a sale pursuant to a claim of
exemption from registration under the Securities Act would require compliance
with some other exemption under the Securities Act, none of which may be
available for resale of the Shares. The Stockholder recognizes and acknowledges
that, except as set forth in this Agreement, the Company is under no obligation
to register the Shares, either pursuant to the Securities Act or the securities
laws of any state.
4. RESTRICTIVE LEGEND. Each certificate representing Shares
shall, except as otherwise provided in this Section 4 or in Section 5, be
stamped or otherwise imprinted with a legend substantially in the following
form:
"The Securities represented hereby have not been registered
under the Securities Act of 1933, as amended, and may not be sold,
transferred or otherwise disposed of except in accordance with the
terms thereof and unless registered with
<PAGE> 3
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the Securities and Exchange Commission of the United States and the
securities regulatory authorities of certain states or unless an
exemption from such registration is available."
Such certificates shall not bear such legend if in the opinion of
counsel satisfactory to the Company the securities being sold thereby may be
publicly sold without registration under the Securities Act or if such
securities have been sold pursuant to Rule 144, any other exemption under the
Securities Act or an effective registration statement.
5. NOTICE OF PROPOSED TRANSFER. Prior to any proposed transfer of any
Shares, the Stockholder shall give written notice to the Company of his
intention to effect such transfer. Prior to any registration statement described
in Section 6 or Section 7 becoming effective, each such notice shall describe
the manner of the proposed transfer and, if requested by the Company, shall be
accompanied by an opinion of counsel satisfactory to the Company to the effect
that the proposed transfer may be effected without registration under the
Securities Act, whereupon the Stockholder shall be entitled to transfer such
security in accordance with the terms of his notice. Each certificate for Shares
transferred as above provided shall bear the legend set forth in Section 4,
except that such certificate shall not bear such legend if (i) such transfer is
in accordance with the provisions of Rule 144 (or any other rule permitting
public sale without registration under the Securities Act) or (ii) the opinion
of counsel referred to above is to the further effect that the transferee and
any subsequent transferee (other than an affiliate of the Company) would be
entitled to transfer such securities in a public sale without registration under
the Securities Act.
6. REQUIRED REGISTRATION. The Company agrees to use commercially
reasonable efforts to (i) cause a registration statement on Form S-3 or any
successor from thereto under the Securities Act relating to the resale of up to
an aggregate of fifty percent (50%) of the Shares to be filed no later than the
90th day following the Closing Date (as defined in the Merger Agreement); and
(ii) cause such registration statement to become effective as soon as
practicable after the Pooling Restricted Period (as defined below) and
thereafter remain effective until the earlier of (A) two years after the Closing
Date (as defined in the Merger Agreement) or (B) the sale of all Shares covered
thereby. Anything to the contrary herein notwithstanding, the Company shall not
be required to take any action to cause any registration statement to be
declared effective by the Commission at any time prior to the publication by the
Company of financial results including at least thirty (30) days' post-closing
combined operating results of the Company and Rescon (the "POOLING RESTRICTED
PERIOD"), and the Company may suspend sales in accordance with Section 9 at any
time under any registration statement immediately upon notice to the Stockholder
at his last known address, for any of the reasons and for the time periods set
forth in Section 9.
7. REQUESTED REGISTRATION. At any time following twelve months after
the Closing Date, the Stockholder may request in writing that the Company file a
registration statement on Form S-3 or any successor thereto relating to the
resale of the remainder of the Shares then held by the Stockholder. Provided
that the Company is a registrant entitled to use Form S-3 or any successor
thereto to register such Shares, upon receipt of such notice the Company shall
use
<PAGE> 4
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commercially reasonable efforts to promptly register under the Securities Act on
Form S-3 or any successor thereto, for public sale in accordance with the method
of disposition specified in such notice, the remainder of the Shares then held
by the Stockholder and not covered by the registration statement referenced in
Section 6 hereof. The Company will use commercially reasonable efforts to cause
such registration statement to remain effective until the earlier of (i) two
years after the Closing Date or (ii) the sale of all Shares covered thereby.
Anything to the contrary herein notwithstanding, the Company may suspend sales
in accordance with Section 9 at any time under any registration statement
immediately upon notice to the Stockholder at his last known address, for any of
the reasons and for the time periods set forth in Section 9.
8. REGISTRATION PROCEDURES. If and whenever the Company is
required by the provisions of Sections 6 or 7 to use commercially reasonable
efforts to effect the registration of any Shares under the Securities Act, the
Company will, as expeditiously as possible:
(a) prepare and file with the Commission such amendments and
supplements to the applicable registration statement, and the prospectus used in
connection therewith, as may be necessary to comply with the Securities Act;
(b) furnish to the Stockholder such number of copies of the
relevant registration statement and each amendment and supplement thereto (in
each case including exhibits) and the prospectus included therein (including
each preliminary prospectus) as he reasonably may request in order to facilitate
the public sale or other disposition of the Shares covered by such registration
statement;
(c) register or qualify the Shares covered by the applicable
registration statement under the securities or "blue sky" laws of the
jurisdictions where the Company is currently registered or qualified, provided,
however, that the Company shall not for any such purpose be required to qualify
generally to transact business as a foreign corporation in any jurisdiction
where it is not so qualified or to consent to general service of process in any
such jurisdiction;
(d) have the Shares covered by the applicable registration
statement subject to quotation on the Nasdaq National Market; and
(e) promptly notify the Stockholder (at his last known
address) (i) of the effective date of the applicable registration statement and
the date when any post-effective amendment to such registration statement
becomes effective, (ii) of any stop order or notification from the Commission or
any other jurisdiction as to the suspension of the effectiveness of such
registration statement, or (iii) of the end of any suspension under Section 9.
9. SUSPENSION.
(a) The rights of the Stockholder to resell the Shares
pursuant to this Agreement and the applicable registration statement may be
suspended by the Company on the occurrence of any of the following events:
<PAGE> 5
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(i) the Company has made a determination to
conduct a public offering;
(ii) the Company is about to make a disclosure of
information of a material nature;
(iii) there then exists material, non-public
information relating to the Company which, in the good faith
determination of its Board of Directors, the disclosure of which would
not be in the interests of the Company or its stockholders during that
time; or
(iv) the Company is engaged in any activity at
any time that, in the good faith determination of its Board of
Directors, would be adversely affected by the continued compliance with
this Agreement or the continued distribution of the Shares by the
Stockholders.
(b) The Company shall use commercially reasonable efforts
to minimize the length of any suspension:
(i) under Section 9(a)(i), to a period of
thirty (30) days, beginning on the day that notice of a suspension is given to
the Stockholder and ending on the earlier of: (A) the date of disclosure of the
public offering, or (B) the date which is 30 days after the beginning of the
suspension, provided that during such suspension, the Company will proceed with
commercially reasonable efforts to file the appropriate documentation in respect
of, and otherwise complete, such public offering as expeditiously as
practicable;
(ii) under Section 9(a)(ii), to a period of
three (3) business days;
(iii) under Section 9(a)(iii) or 9(a)(iv), if the
activity is a prospective acquisition by the Company, to a period beginning when
the notice of suspension is given to the Stockholder and ending on the earlier
of: (A) the closing of the transaction and the making of all required filings
under the Securities Act or Exchange Act, or (B) the date on which discussions
regarding the acquisition are terminated; and
(iv) under Section 9(a)(iii) or 9(a)(iv), for any
reason other than a prospective acquisition by the Company, to a period
beginning when the notice of suspension is given to the Stockholder and ending
on the earlier of: (A) the disclosure of the activity, or (B) the reason is no
longer operative (provided, however, that the Company shall not avail itself of
the suspension rights contained in Section 9(a)(iv) more than once in every six
(6) month period commencing on the date of effectiveness of the Registration
Statement).
10. EXPENSES. All expenses incurred by the Company in complying with
Sections 6 and 7, including, without limitation, all registration and filing
fees, printing expenses, fees and disbursements of counsel and independent
public accountants for the Company, fees and expenses incurred in connection
with complying with state securities or "blue sky" laws, fees of
<PAGE> 6
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the National Association of Securities Dealers, Inc., transfer taxes, fees of
transfer agents and registrars, and costs of issuance, but excluding any Selling
Expenses, are called "REGISTRATION EXPENSES". All underwriting discounts (if
any) and selling commissions applicable to the sale of the Shares covered by any
registration statement, as well as all professional service fees incurred by the
Stockholder, are called "SELLING EXPENSES".
All Selling Expenses shall be borne by the Stockholder. The Company
will pay all Registration Expenses in connection with the preparation and filing
of each registration statement. The Company shall not be obligated to pay any
Registration Expenses in connection with the preparation and filing of any
registration statement if such registration statement is withdrawn, delayed or
abandoned for any reason by the Stockholder.
11. INDEMNIFICATION AND CONTRIBUTION.
(a) In connection with the registration of the Shares under
the Securities Act pursuant to Section 6 or Section 7, the Company will
indemnify and hold harmless the Stockholder, each underwriter of such Shares
thereunder and each other person, if any, who controls such underwriter within
the meaning of the Securities Act, against any losses, claims, damages or
liabilities, joint or several, to which such Stockholder, underwriter or
controlling person may become subject under the Securities Act, Exchange Act,
state securities laws or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon (i)
any untrue statement or alleged untrue statement of material fact contained in
the registration statement under which such Shares were registered under the
Securities Act pursuant to Section 6 or Section 7, any preliminary prospectus or
final prospectus contained therein, or any amendment or supplement thereto, (ii)
the omission or alleged omission of a material fact required to be stated
therein or necessary to make the statements therein not misleading or (iii) any
violation by the Company or its agents of any rule or regulation promulgated
under the Securities Act, Exchange Act or state securities laws applicable to
the Company or its agents and relating to action or inaction required of the
Company in connection with such registration, and the Company will reimburse the
Stockholder, each such underwriter and each such controlling person for any
legal or other expenses reasonably incurred by them in connection with
investigating or defending any such loss, claim, damage, liability or action,
PROVIDED, HOWEVER, that the Company will not be liable in any such case if any
to the extent that any such loss, claim, damage or liability arises out of or is
based upon an untrue statement or alleged untrue statement or omission or
alleged omission so made based upon information furnished by the Stockholder,
any such underwriter or any such controlling person.
(b) In connection with the registration of the Shares under
the Securities Act pursuant to Section 6 or Section 7, the Stockholder will
indemnify and hold harmless the Company, each person, if any, who controls the
Company within the meaning of the Securities Act, each officer of the Company
who signs such registration statement, each director of the Company, each
underwriter and each person who controls any underwriter within the meaning of
the Securities Act, against all losses, claims, damages or liabilities, joint or
several, to which the Company or such officer, director, underwriter or
controlling person may become subject under the Securities Act or otherwise,
insofar as such losses, claims, damages or liabilities (or actions
<PAGE> 7
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in respect thereof) arise out of or are based upon (i) the failure of the
Stockholder to comply with the provisions of Section 14 herein or (ii) any
untrue statement or alleged untrue statement of any material fact contained in
the registration statement, any preliminary prospectus or final prospectus
contained therein, or any amendment or supplement thereto, or arise out of or
are based upon the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, and will reimburse the Company and each such officer, director,
underwriter and controlling person for any legal or other expenses reasonably
incurred by them in connection with investigating or defending any such loss,
claim, damage, liability or action, PROVIDED, HOWEVER, that the Stockholder will
be liable hereunder in any such case if and only to the extent that any such
loss, claim, damage or liability arises out of or is based upon an untrue
statement or alleged untrue statement or omission or alleged omission made in
reliance upon and based upon information pertaining to the Stockholder,
furnished by or for the Stockholder.
(c) Promptly after receipt by an indemnified party hereunder
of notice of the commencement of any action, such indemnified party shall, if a
claim in respect thereof is to be made against the indemnifying party hereunder,
notify the indemnifying party in writing thereof, but the omission so to notify
the indemnifying party shall not relieve it from any liability which it may have
to such indemnified party other than under this Section 11 and shall only
relieve it from any liability which it may have to such indemnified party under
this Section 11 if and to the extent the indemnifying party is prejudiced by
such omission. In case any such action shall be brought against any indemnified
party and it shall notify the indemnifying party of the commencement thereof,
the indemnifying party shall be entitled to participate in and, to the extent it
shall wish, to assume and undertake the defense thereof with counsel
satisfactory to such indemnified party, and, after notice from the indemnifying
party to such indemnified party of its election so to assume and undertake the
defense thereof and the approval by the indemnified party of the counsel chosen
by the indemnifying party, the indemnifying party shall not be liable to such
indemnified party under this Section 11 for any legal expenses subsequently
incurred by such indemnified party in connection with the defense thereof other
than reasonable costs of investigation and of liaison with counsel so selected,
PROVIDED, HOWEVER, that, if the defendants in any such action include both the
indemnified party and the indemnifying party and if the interests of the
indemnified party reasonably may be deemed to conflict with the interests of the
indemnifying party, the indemnified party shall have the right to select a
separate counsel and to assume such legal defenses and otherwise to participate
in the defense of such action, with the expenses and fees of such separate
counsel and other expenses related to such participation to be reimbursed by the
indemnifying party as incurred.
(d) In order to provide for just and equitable contribution to
joint liability in any case in which either (i) the Stockholder exercises rights
under this Agreement and makes a claim for indemnification pursuant to this
Section 11 but it is judicially determined (by the entry of a final judgment or
decree by a court of competent jurisdiction and the expiration of time to appeal
or the denial of the last right of appeal) that such indemnification may not be
enforced in such case notwithstanding the fact that this Section 11 provides for
indemnification in such case, or (ii) contribution under the Securities Act may
be required on the part of the Stockholder in circumstances for which
indemnification is provided under this Section 11; then, and in each
<PAGE> 8
-8-
such case, the Company and the Stockholder will contribute to the aggregate
losses, claims, damages or liabilities to which they may be subject (after
contribution from others) in proportion to the relative fault of the Company, on
the one hand, and the Stockholder, on the other hand; PROVIDED, HOWEVER, that,
in any such case, no person or entity guilty of fraudulent misrepresentation
(within the meaning of Section 10(f) of the Securities Act) will be entitled to
contribution from any person or entity who was not guilty of such fraudulent
misrepresentation.
(e) The indemnities provided in this Section 11 shall
survive the transfer of any Shares by the Stockholder.
12. REPORTS UNDER SECURITIES EXCHANGE ACT OF 1934. With a view to
making available to the Stockholder the benefits of Rule 144 promulgated under
the Securities Act and any other rule or regulation thereunder that may at any
time permit the Stockholder to sell securities of the Company to the public
without registration, the Company agrees to:
(a) make and keep public information available, as those
terms are understood and defined in Rule 144;
(b) maintain registration of its Common Stock under
Section 12 of the Exchange Act;
(c) file in a timely manner all reports and other
documents required of the Company under the Securities Act and the Exchange Act;
and
(d) furnish to the Stockholder, so long as the
Stockholder owns any Shares, forthwith upon request: (i) a written statement by
the Company that it has complied with the reporting requirements of Rule 144,
(ii) a copy of the most recent annual or quarterly report of the Company and
such other reports and documents so filed by the Company; and (iii) such other
information as may be reasonably requested in availing the Stockholder of any
rule or regulation under the Securities Act which permits the selling of any
such securities without registration or pursuant to such form.
13. CHANGES IN COMMON STOCK. If, and as often as, there is any
change in the Common Stock by way of a stock split, stock dividend, combination
or reclassification, or through a merger, consolidation, reorganization or
recapitalization, or by any other means, appropriate adjustment shall be made in
the provisions hereof so that the rights and privileges granted hereby shall
continue with respect to the Shares as so changed.
14. STOCKHOLDER'S CONDUCT. With respect to any sale of Shares
covered by a registration statement, the Stockholder understands and agrees as
follows:
(a) The Stockholder will carefully review the information
concerning him contained in any registration statement and will promptly notify
the Company if such information is not complete and accurate in all respects,
including having properly disclosed any
<PAGE> 9
-9-
position, office or other material relationship within the past three years with
the Company or its affiliates;
(b) The Stockholder agrees to sell Shares only in the manner
set forth in (i) the applicable registration statement (or in compliance with
Section 5 hereof), (ii) the Affiliate Agreement (as defined in the Merger
Agreement) and (iii) Section 15;
(c) The Stockholder agrees to comply with the
anti-manipulation rules under the Exchange Act in connection with purchases and
sales of securities of the Company during the time any registration statement
remains effective;
(d) The Stockholder agrees to only sell Shares in a
jurisdiction after counsel for the Company has advised that such sale is
permissible under the applicable state securities or "Blue Sky" laws;
(e) The Stockholder agrees to comply with the prospectus
delivery requirements of the Exchange Act;
(f) The Stockholder agrees to promptly notify the Company of
any and all planned sales and completed sales of Shares; and
(g) The Stockholder agrees to suspend sales during the periods
when sales are to be suspended pursuant to Section 9.
(h) In connection with the registration of the Shares, the
Stockholder will furnish to the Company in writing such information requested by
the Company with respect to himself and the proposed distribution by him as
shall be necessary in order to assure compliance with federal and applicable
state securities laws.
(i) The Stockholder hereby agrees that he will not sell,
exchange, transfer, pledge, dispose or otherwise reduce his or her risk relative
to any Shares owned by him during the period which begins on the date hereof and
ends at such time as the Company publicly announces financial results covering
at least thirty days of combined operations of the Company and Rescon. The
Company, at its discretion, may cause stop transfer orders to be placed with its
transfer agent with respect to the certificates representing the Shares,
provided that such stop transfer orders are consistent with the other provisions
of this Agreement.
15. SELLING PROCEDURES.
(a) The Stockholder will notify the Company of his intention
to sell Shares under any registration statement not less than five (5) business
days prior to the expected date of such sale by faxing the "Takedown Request"
attached hereto as EXHIBIT A to:
Testa, Hurwitz & Thibeault, LLP
125 High Street
<PAGE> 10
-10-
High Street Tower
Boston, Massachusetts 02110
Attn: William J. Schnoor, Jr.
Phone: (617) 248-7278
Facsimile: (617) 248-7100
During this period, the Company will review the prospectus to determine if a
suspension pursuant to Section 9 is necessary or appropriate. If the Company
does not notify the Stockholder of a suspension pursuant to Section 9, the
Stockholder may conclude the proposed sale, on the proposed date of sale,
strictly in accordance with the Takedown Request.
(b) The Stockholder will notify the Company of each sale under
any registration statement in accordance with the Takedown Request within 24
hours of the sale by faxing the "Notification of Sale" attached hereto as
EXHIBIT B to:
Testa, Hurwitz & Thibeault, LLP
125 High Street
High Street Tower
Boston, Massachusetts 02110
Attn: William J. Schnoor, Jr.
Phone: (617) 248-7278
Facsimile: (617) 248-7100
Based on the information set forth on the Notification of Sale, the Company will
prepare or cause to be prepared the appropriate notifications to its Transfer
Agent to remove the legend described in Section 4 from the Shares so sold.
16. REPRESENTATIONS AND COVENANTS. The Stockholder hereby
represents and warrants to the Company as follows:
(a) THE STOCKHOLDER UNDERSTANDS THAT HIS INVESTMENT IN THE
SHARES INVOLVES RISK.
(b) THE STOCKHOLDER HAS CONSULTED HIS OWN ATTORNEY, ACCOUNTANT
OR INVESTMENT ADVISOR WITH RESPECT TO THE INVESTMENT CONTEMPLATED HEREBY AND ITS
SUITABILITY FOR THE STOCKHOLDER. ANY SPECIFIC ACKNOWLEDGMENT SET FORTH BELOW
WITH RESPECT TO ANY STATEMENT OR INFORMATION FURNISHED TO THE STOCKHOLDER SHALL
NOT BE DEEMED TO LIMIT THE GENERALITY OF THIS REPRESENTATION AND WARRANTY.
(c) The Stockholder understands that he must bear the economic
risk of this investment until such time as the Shares are registered; that the
Shares are not currently registered under the Securities Act, and, therefore,
cannot be resold unless they are subsequently registered under the Securities
Act or unless an exemption from such registration is available;
<PAGE> 11
-11-
that the Stockholder is purchasing the Shares with no present view toward resale
or other distribution thereof; and that the Stockholder agrees not to resell or
otherwise dispose of all or any part of the Shares, except as permitted by law,
including, without limitation, any and all applicable provisions of the Merger
Agreement and this Agreement and any regulations under the Securities Act and
applicable state securities laws.
(d) The Stockholder has adequate means of providing for his
current needs and personal contingencies and has no need for liquidity in
connection with this investment in the Shares.
(e) The Stockholder has reviewed the representations and
warranties of the Company set forth in the Merger Agreement, as well as the
information provided to the Stockholder by the Company pursuant to Section 5.07
of the Merger Agreement and has consulted with his or her personal legal and
financial advisors in evaluating the merits and risks of the investment in the
Shares.
(f) The Stockholder received an offer concerning the Shares
and first learned of this investment in the state or other jurisdiction listed
in the Stockholder's residence address on the signature page hereto, and intend
that the state securities laws of that state or other jurisdiction alone govern
this transaction.
(g) The Stockholder hereby acknowledges receipt of the
documents described in Section 5.07 of the Merger Agreement, which documents
each Stockholder has reviewed. The Stockholder further acknowledges and warrants
that, prior to the execution of this Agreement, he has had the opportunity to
ask questions and receive answers from the Company and Rescon concerning the
terms and conditions of the transactions contemplated by the Merger Agreement
and the issuance of the Shares, and concerning any of the documents identified
above, and to obtain such additional further information from the Company and
Rescon as he has deemed necessary to verify the accuracy of the information
contained in the documents identified above or any other information furnished
to the Stockholder.
(h) The Stockholder has been advised that, as of the date
hereof, he may be deemed to be an "affiliate" of Rescon, as the term "affiliate"
is used in and for purposes of Accounting Series Releases 130 and 135, as
amended, of the Commission.
(i) The Stockholder understands that the representations,
warranties and covenants set forth herein will be relied upon by Rescon, the
Company, the stockholders of the Company and their respective counsel and
accounting firms.
(j) The Stockholder hereby represents and warrants that he has
not sold, exchanged, transferred, pledged, disposed or otherwise reduced his or
her risk relative to any shares of Rescon common stock owned by him during the
30 day period preceding the date hereof.
17. MISCELLANEOUS.
<PAGE> 12
-12-
(a) All covenants and agreements contained in this Agreement
by or on behalf of any of the parties hereto shall bind and inure to the benefit
of the respective successors and assigns of the parties hereto (including
without limitation transferees of any Shares, PROVIDED, that such transferee
executes a counterpart signature page to this Agreement), whether so expressed
or not.
(b) All notices and other communications which by any
provision of this Agreement are required or permitted to be given shall be given
in writing and shall be (a) mailed by first-class or express mail, postage
prepaid, (b) sent by telex, telegram, telecopy or other form of rapid
transmission, confirmed by mailing (by first class or express mail, postage
prepaid) written confirmation at substantially the same time as such rapid
transmission, or (c) personally delivered to the receiving party (which if other
than an individual shall be an officer or other responsible party of the
receiving party). All such notices and communications shall be mailed, sent or
delivered as follows:
if to the Company, to:
PAREXEL International Corporation
195 West Street
Waltham, MA 02154
Attn: William T. Sobo, Jr.
Senior Vice President and Chief Financial Officer
Telecopy: (617) 487-9931
with a copy to:
William J. Schnoor, Jr.
Testa, Hurwitz & Thibeault, LLP
125 High Street
High Street Tower
Boston, MA 02110
Telecopy: (617) 248-7100
<PAGE> 13
-13-
if to the Stockholder, to:
Walter Leroy Hill
2521 Hunter Mill Road
Oakton, VA 22124
with a copy to:
Scott Meza
Michaels, Wishner & Bonner, P.C.
Suite 900
Washington, DC 20036
Telecopy: (202) 857-0634
if to any subsequent Stockholder of Shares, to it at such address
as may have been furnished to the Company in writing by such
Stockholder;
or, in any case, at such other address or addresses as shall have been furnished
in writing to the Company (in the case of a Stockholder) or to the Stockholder
(in the case of the Company) in accordance with the provisions of this
paragraph. Notices shall be deemed duly delivered three business days after
being sent by first class mail, postage prepaid, or one business day after being
sent via a reputable nationwide express mail service. Notices delivered via any
other means shall be deemed duly delivered upon actual receipt by the individual
for whom such notice is intended. Any notice delivered to a party hereunder
shall be sent simultaneously, by the same means, to such party's counsel as set
forth above.
(c) This Agreement shall be governed by and construed in
accordance with the laws of the Commonwealth of Massachusetts.
(d) This Agreement may be amended or modified, and provisions
hereof may be waived, with the written consent of the Company and the holders of
at least a majority of the outstanding Shares.
(e) This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
(f) If any provision of this Agreement shall be held to be
illegal, invalid or unenforceable, such illegality, invalidity or
unenforceability shall attach only to such provision and shall not in any manner
affect or render illegal, invalid or unenforceable any other provision of this
Agreement, and this Agreement shall be carried out as if any such illegal,
invalid or unenforceable provision were not contained herein.
<PAGE> 14
-14-
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement
as of the day and year first above written.
PAREXEL INTERNATIONAL CORPORATION
By: /s/ William T. Sobo, Jr.
------------------------------------------------
Name: William T. Sobo, Jr.
----------------------------------------------
Title: Senior Vice President/Chief Financial Officer
---------------------------------------------
WALTER L. HILL REVOCABLE TRUST u/d/t
DATED JUNE 29, 1994
By: /s/ Walter Leroy Hill
------------------------------------------------
Name: Walter L. Hill
----------------------------------------------
Title: Trustee
---------------------------------------------
/s/ Walter Leroy Hill
----------------------------------------------------
WALTER LEROY HILL
[You MUST complete pages 15-16 of this Agreement]
<PAGE> 1
EXHIBIT 4.4
DATED 28th February 1997
- --------------------------------------------------------------------------------
SHARE PURCHASE AGREEMENT
DR RICHARD KAY (1)
AND
JANET KAY
PAREXEL INTERNATIONAL CORPORATION (2)
SHEFFIELD STATISTICAL SERVICES LIMITED
LAWRENCE GRAHAM
190 Strand
London WC2R 1JN
Tel: 0171-379 0000
Fax: 0171-379 6854
Ref: 0436403.01
<PAGE> 2
CONTENTS
--------
No. Heading Page
- --- ------- ----
1. DEFINITIONS 1
2. THE SHARES 9
3. REPAYMENT BY VENDORS AND THE COMPANY 10
4. COMPLETION 10
5. WARRANTIES 12
6. TAX INDEMNITIES 14
7. COMPLIANCE WITH US LAW 14
8. RESTRICTIVE COVENANTS 16
9. PENSION SCHEME 18
10. GENERAL PROVISIONS 18
11. ANNOUNCEMENTS 18
12. NOTICES 19
13. GOVERNING LAW AND JURISDICTION 19
THE FIRST SCHEDULE PARTICULARS OF THE VENDORS 20
THE SECOND SCHEDULE BASIC INFORMATION CONCERNING THE COMPANY 21
THE THIRD SCHEDULE PARTICULARS OF SUBSIDIARIES 22
THE FOURTH SCHEDULE PROPERTY 23
THE FIFTH SCHEDULE PROVISIONS AFFECTING THE PENSION SCHEME 24
THE SIXTH SCHEDULE WARRANTIES AND REPRESENTATIONS CLAUSE: 6 25
SEVENTH SCHEDULE TAX INDEMNITIES: CLAUSE 7 66
NINTH SCHEDULE 71
<PAGE> 3
THIS AGREEMENT is made the 28th day of February 1997
BETWEEN:
(1) THE SEVERAL PERSONS whose names and addresses are set out in Column (1) of
the First Schedule hereto ("the Vendors")
(2) PAREXEL INTERNATIONAL CORPORATION whose principal place of business is at
195 West Street, Waltham, Massachusetts 02154, USA ("the Purchaser")
WHEREAS
(A) Sheffield Statistical Services Limited ("the Company") has an authorised
and issued share capital particulars whereof together with other details
are set out in the Second Schedule hereto.
(B) The Vendors are the beneficial owners of or are otherwise able to procure
the transfer of the numbers of shares of the Company specified in Column
(2) of the First Schedule hereto opposite their respective names such
numbers of shares together comprising all the issued and allotted shares of
the Company.
(C) The Vendors are desirous of selling and the Purchaser is willing to
purchase the Shares (as hereinafter defined) on the terms and subject to
the conditions hereinafter contained.
(D) Particulars of the companies which at the date hereof are subsidiaries of
the Company are set out in the Third Schedule.
NOW IT IS HEREBY AGREED as follows:-
1. DEFINITIONS
1.1 In this Agreement and the Schedules hereto the following expressions shall
unless the context otherwise requires have the meanings following:-
<PAGE> 4
-2-
"the Accounts" the audited balance sheet as at the
Balance Sheet Date and audited profit
and loss account for the year ended on
the Balance Sheet Date of the Company
and the directors report and notes in
relation thereto;
"Associate" any person or company who is a connected
person as that expression is defined by
Section 839 of the ICTA;
"the Balance Sheet Date 30 June 1996
"Business day" a day on which banks shall be open in
London for the conduct of generally
banking business (excluding Saturdays);
"Claim" in the Seventh and Ninth Schedule hereto
shall mean any claim assessment notice
demand letter or other document issued
or action taken by or on behalf of any
Taxation Authority whereby it appears
that the Company or the Purchaser is to
be or is sought to be made subject to a
Liability to Taxation;
"the Consideration Shares" means such Common Stock of US$0.01 each
of the Purchaser issued to the Vendors
as Consideration hereunder;
"the Companies Acts" the Companies Acts 1985 and 1989, the
Insolvency Act 1986, the Business Names
Act 1985, the Companies Securities
(Insider Dealing) Act 1985 and every
statutory modification or re-enactment
thereof for the time being in force;
"Completion" completion of the obligations of the
parties hereunder in accordance with the
provisions of Clause 5 hereof;
<PAGE> 5
-3-
"the Disclosure Letter" the letter of even date herewith from
the Vendors' to the Purchaser a copy of
which is annexed hereto;
"Encumbrance" includes any interest or equity of any
person (including, without prejudice to
the generality of the foregoing, any
right to acquire, option or right of
pre-emption), or any mortgage, charge,
pledge, lien, assignment, hypothecation,
security interest, title retention or
any other security agreement or
arrangement;
"the Effective Date" the date of Completion;
"Event" includes (without limitation) any act
omission, transaction or shortfall in
distributions whether or not the Company
is a party thereto and includes
Completion;
"Independent Accountant" means such person who shall be nominated
by either party upon agreement or
failing agreement by the President for
the time being of the Institute of
Chartered Accountants;
"Industrial Property Rights" patents, trade marks, registered
designs, pending application for any of
the foregoing, trade or business names
and copyright and all other similar
industrial, intellectual or commercial
rights;
"Liability to Taxation" means not only a liability to make an
actual payment of or in respect of
Taxation (whether the same has been the
subject of any assessment or demand at
Completion or otherwise) and whether
satisfied or unsatisfied at Completion
but shall also include:-
<PAGE> 6
-4-
(a) the loss, counteraction,
nullification, disallowance or
claw-back of any Relief granted by
or pursuant to any Taxation Statute
or otherwise for taxation purposes
which would (were it not for the
Liability to Taxation in question)
have been available to the Company
or the Purchaser; and
(b) the nullification cancellation or
set-off of a right to repayment of
Taxation which would (were it not
for the Liability to Taxation in
question) have been so available to
the Company or the Purchaser
and in the case of a relief allowance or
credit so lost, the amount of the relief
allowance or credit so lost, or if such
relief allowance or credit is a
deduction from or is offset against
gross income or profits, the amount of
Taxation which would (in the case of a
lost relief allowance or credit and on
the basis of tax rates current at the
date of such loss) have been saved
thereby but for such loss shall be
treated as an amount of Taxation for
which a liability on the Company or the
Purchaser (as appropriate) has arisen
and fallen due, and in the case of a
nullification cancellation or set-off of
a right to repayment of Taxation the
amount of the repayment which would
otherwise have been obtained shall be
treated as an amount of Taxation for
which a liability on the Company or the
Purchaser as appropriate has arisen and
fallen due;
"Management Accounts 31st January 1997;
Date"
<PAGE> 7
-5-
"Nasdaq" National Association of Securities
Dealers Automated Quotation System;
"the Property" the property or properties short
particulars whereof are set out in the
Fourth Schedule hereto and includes any
part or parts thereof;
"the Purchaser's means Messrs. Price Waterhouse of Thames
Accountants" Court, 1 Victoria Street, Windsor
SL4 1HB;
"the Purchaser's Solicitors" Lawrence Graham of 190 Strand, London
WC2R 1JN
"Reliefs" in the Seventh Schedule hereto means all
amounts available to reduce either
profits or Taxation and includes
(without limitations) all losses
allowances exemptions set-offs
deductions credits and repayments;
"the Service Agreement" the agreement in the format set out in
the Eighth Schedule between the Company
and Dr Richard Kay respectively to be
entered into at Completion;
"the Shares" the shares of the Company specified in
Column (2) of the First Schedule hereto;
"Taxation" means:-
<PAGE> 8
-6-
(a) any charge, tax, duty, levy or
liability imposed by national or
local government or any other
person pursuant to any statute or
statutory provision including
orders, regulations, instruments,
bye-laws or other subordinate
legislation made under the relevant
statute or statutory provision and
includes (without limitation)
corporation tax, advance
corporation tax, income tax,
capital gains tax, development land
tax, value added tax, customs and
other import duties, national
insurance contributions, stamp
duty, capital duty, stamp duty
reserve tax, estate duty, capital
transfer tax, inheritance tax and
any amount which the Company is
liable to account for by way of
deduction or withholding, amounts
equivalent to the foregoing and any
payment whatsoever chargeable in
the United Kingdom or elsewhere
which the Company may be or become
bound to make to any person as a
result of the operation of any
enactment relating to Taxation;
(b) any capital transfer tax or
inheritance tax which:-
(i) is at the date hereof a charge
over any of the shares of the
Company; or
(ii) at the date hereof gives
rise to a power of sale over
the shares of the Company; or
<PAGE> 9
-7-
(iii) after the date hereof becomes
a charge on or gives rise to a
power of sale over any of the
shares of the Company being a
liability in respect of
additional capital transfer
tax or inheritance tax payable
on the death of any person
within three years or seven
years after a transfer of
value or gift and in deciding
whether a charge on or power
of sale over any of the shares
exists at any time the fact
that any capital transfer tax
or inheritance tax is not yet
payable or may be paid by
instalments shall be
disregarded and such tax shall
be treated as becoming due and
a charge or power of sale as
arising on the date of the
transfer of value or capital
distribution in respect of
which it becomes payable or
arises and the provisions of
IHTA S213 shall not apply
thereto;
(c) any Taxation assessed on the
Vendors under ICTA S776 which is
recoverable from the Purchaser
and/or the Company pursuant to the
provisions of S777(8) of that Act
to the extent the Vendors make a
claim for recovery from the
Purchaser and/or the Company;
(d) any penalties fines costs charges
interest or damages payable in
connection with any Taxation;
<PAGE> 10
-8-
(e) any payment made or liability
incurred in connection with any
reasonable settlement of any Claim
for Taxation;
(f) all costs and expenses incurred
by the Company or the Purchaser in
connection with any Claim for
Taxation to which the Tax
Indemnities relate;
"Taxation Authority" any national or local government,
authority or body whatsoever whether of
the United Kingdom or elsewhere
empowered to impose collect or
administer Taxation;
"Tax Indemnities" the indemnities provided by Clause 7 and
the Seventh Schedule hereto;
"Taxation Statute" any statute enactment law regulation or
practice enacted or issued or coming
into force providing for or imposing any
Taxation;
"the Vendors' Solicitors" Wake Smith of 68 Clarkehouse Road,
Sheffield S10 2LJ;
"the Vendors Accountants" Grant Thornton of 28 Kenwood Park Road,
Sheffield S7 1NG;
"Warranty Claim" in relation to the Ninth Schedule shall
mean any claim made by the Purchaser
against the Vendors in respect of a
claim for breach of the Warranties in
the Sixth Schedule;
"Warranties" those representations and warranties
made to the Purchaser contained or
referred to in Clause 5 and the Sixth
Schedule hereto;
"ICTA" the Income and Corporation Taxes Act
1988;
<PAGE> 11
-9-
"CAA" the Capital Allowances Act 1990;
"IHTA" the Inheritance Tax Act 1984;
"FA" Finance Act;
"TCGA" the Taxation of Chargeable Gains Act
1992;
"VATA" the Value Added Tax Act 1994;
"TMA" the Taxes Management Act 1970.
1.2 References to the consequences of acts or transactions effected prior to
Completion shall include the combined effect of two or more acts or
transactions the first of which shall have taken place or be deemed to
have taken place on or before the date of Completion. Reference to the
result of Events on or before Completion shall include the combined
result of two or more Events the first of which shall have taken place
or is deemed to have taken place on or before Completion.
1.3 The expression "the Vendors" includes their respective personal
representatives.
1.4 Any document expressed to be "in the approved terms" means in a form
approved and for the purpose of identification signed by or on behalf of
the parties hereto.
1.5 Where any Warranty or matter disclosed in the Disclosure Letter refers
to the knowledge information awareness or belief of a Vendor, each of
the Vendors shall be deemed to have made all reasonable enquiries into
the subject matter of that Warranty or Disclosure.
1.6 The expression "Subsidiary" shall mean any subsidiary (as defined by
Section 736 of the Companies Act 1985 (as amended by the Companies Act
1989)) for the time being of the Company.
1.7 Save where the context otherwise precludes the expression "the Company"
where used in clauses 4, 6 and 8 and in the Sixth Schedule to this
Agreement shall mean each of the Company and each of its Subsidiaries.
1.8 References to Clauses, Sub-clauses and Schedules are references to
Clauses and Sub-clauses of this Agreement and Schedules to this
Agreement.
<PAGE> 12
-10-
1.9 In this Agreement and the Schedules hereto the masculine gender shall
include the feminine and neuter, the singular number shall include the
plural and vice versa, and references to persons shall include bodies
corporate, unincorporated associations and partnerships.
1.10 In this Agreement words and phrases the definition of which is contained
or referred to in Part XXVI of the Companies Act 1985 shall be construed
as defined therein.
1.11 References in this Agreement to any statute or statutory provision shall
include (except where the context otherwise requires) any statute or
statutory provision which amends extends consolidates or replaces the
same and any statute or statutory provision which has been amended,
extended, consolidated or replaced by the same and shall include any
order, regulation, instrument or other subordinate legislation made
under the relevant statute or statutory provision.
1.12 The headings in this Agreement are inserted for convenience only and
shall not affect the construction hereof.
1.13 Reference to income or profits or gains earned accrued or received shall
include income or profits or gains deemed to have been or treated as or
regarded as earned accrued or received for the purposes of any Taxation
Statute.
2. THE SHARES
2.1 The Vendors shall sell and the Purchaser shall purchase with effect from
the Effective Date the Shares free from any Encumbrance and together
with all accrued benefits and rights for the consideration described in
sub-clause 2.2 below ("the Consideration").
2.2 The Consideration shall be satisfied by the allotment and issue to the
Vendors credited as fully paid of 66,044 Common Stock of US$0.01 each of
the Purchaser ranking pari passu with the existing issued Common Stock
of US$0.01 each in the capital of the Purchaser;
3. REPAYMENT BY VENDORS AND THE COMPANY
3.1 The Vendors will prior to or simultaneously with Completion repay to the
Company any sums due by the Vendors, any Associate of the Vendors or any
of them (or by any person to whom they or any of them are or is a
trustee or personal representative) to the Company at Completion and
shall at Completion procure that neither they nor any
<PAGE> 13
-11-
such person as aforesaid has any claim or right of action against the
Company (other than in respect of current remuneration as directors or
executives) and that the Company is not in any way obliged or indebted
(other than as aforesaid) to them or any such person and at Completion
the Vendors will confirm in writing to the Purchaser that they have so
procured
3.2 At Completion the Purchaser shall procure that the Company shall repay
(subject to Clause 4 below) to the Vendors certain amounts owing to them
as specified in the Disclosure Letter.
3.3 The sum of (pound)12,000 due from the Company to the Vendors may be
withheld by the Company and/or the Purchaser against any liability of
the Vendors under the Tax Indemnities (with particular references to
penalties for late filing etc.) for a period of twelve months from the
date hereof and the sum of (pound)12,000 may be applied by the Company
and/or Purchaser against such liability. Thereafter any balance shall be
paid to the Vendors.
3.4 The Purchaser shall use its reasonable endeavours to secure the release
of the Vendors from any guarantees and other contingent liabilities
listed in the Disclosure Letter and the Purchaser shall until it has
obtained a release indemnify and keep indemnified the Vendors against
any liability (including costs, damages and expenses) thereunder or
which may be incurred in relation thereto.
4. COMPLETION
4.1 Completion shall take place on 28 February 1997 at the offices of the
Purchaser's Solicitors or such other offices as the parties may
subsequently agree when:-
4.1.1 the Vendors shall deliver or cause to be delivered to the
Purchaser:-
(a) duly executed Transfers together with the relative share
certificates in respect of the Shares;
(b) the certificate of incorporation, all certificates on
change of name, the seal and statutory books of the
Company made up to the date of Completion;
(c) the Leases to the Property;
<PAGE> 14
-12-
(d) if the Purchaser so requires an effective waiver by each
of the members of the Company of any rights which he may
have under the Articles of Association of the Company to
have the Shares or any of them offered to him for
purchase and any other documents necessary to
substantiate the right of the transferors of the Shares
pursuant to this Agreement to transfer the same;
(e) written confirmation pursuant to Clause 3.1;
(f) written resignation letters executed under seal by such
of the directors and secretaries of the Company and the
Subsidiaries as the Purchaser may nominate, each such
letter incorporating an acknowledgement that the party
resigning has no claims (whether for compensation for
loss of office or termination of employment, unpaid
remuneration or otherwise howsoever) against the Company
or any of the Subsidiaries; and
4.1.2 the Vendors shall procure that the Directors shall hold a
meeting of the Board of the Company at which
(a) the Directors shall appoint such persons as the
Purchaser may nominate as directors of the Company and
procure the resignation without compensation of any
nature whatsoever of such of the Directors and Secretary
of the Company as the Purchaser may nominate;
(b) the Directors shall vote in favour of the registration
of the Purchaser or its nominees as members of the
Company subject to the production of duly stamped and
completed Transfers;
(c) there shall be presented the written resignation of the
present Auditors which shall contain a statement that
there are no circumstances connected with such
resignation which they consider should be brought to the
attention of the shareholders or creditors of the
Company and a statement of the amount of their
outstanding fees and costs;
(d) Messrs Price Waterhouse shall be appointed Auditors;
<PAGE> 15
-13-
4.1.3 the Vendors shall procure the convening of an extraordinary
general meeting of the Company and the passing of a special
resolution to adopt new articles of association in the approved
terms;
4.1.4 the Vendors shall procure that the Company will and the other
persons and parties thereto shall enter into the Service
Agreements;
4.1.5 Subject to the performance by the Vendors of their obligations
in accordance with the foregoing provisions of this Clause 5,
the Purchaser shall allot to each of the Vendors the number of
the Consideration Shares of the Purchaser to which he is
entitled hereunder and deliver the relative documents of title.
4.2 If in any respect the provisions of sub-clauses 4.1.1, 4.1.2, 4.1.3 and
4.1.4 are not complied with on the date for Completion set by clause 4.1
the Purchaser and/or the Vendors if appropriate may:-
4.2.1 defer Completion to a date not more than 10 days after the date
set out above (and so that the provisions of this sub-clause
shall apply to Completion as so deferred); or
4.2.2 proceed to Completion so far as practicable (without prejudice
to its rights hereunder); or
4.2.3 rescind this Agreement.
5. WARRANTIES
5.1 The Purchaser has entered into this Agreement and proposes to acquire
the Shares on the faith of the Warranties.
5.2 In particular and without prejudice to the generality of sub-clause 5.1
the Vendors hereby warrant and represent to the Purchaser that the
recitals to this Agreement and the Warranties are at the date hereof and
will at Completion be true and accurate in all respects.
5.3 The Purchaser shall not be entitled to claim that any fact renders any
of the Warranties untrue or misleading or caused them to be breached if
it has been fully fairly and accurately disclosed to the Purchaser in
the Disclosure Letter.
<PAGE> 16
-14-
5.4 The Vendors hereby covenant and undertake to the Purchaser that, if
after the date hereof it shall be found that any matter the subject of a
Warranty was not as warranted then, notwithstanding any further right of
the Purchaser hereunder in respect of such breach of Warranty, if the
effect thereof is that:-
5.4.1 the value of any asset belonging to the Company is less than its
value would have been had there been no breach of Warranty; or
5.4.2 any asset represented as belonging to the Company does not so
belong; or
5.4.3 the Company has incurred or is under any liability or contingent
liability which it would not have incurred or been under had
there been no breach of Warranty;
then the Vendors shall on demand pay to the Purchaser (or, if so
requested by the Purchaser, to the Company) an amount equal to the
amount by which the value of the net assets of the Company is less than
it would have been had there been no such breach of Warranty and any
such payment made by the Vendors shall be taken into account in
assessing the damages of the Purchaser in connection with, arising out
of or resulting from any such breach of Warranty.
5.5 No claim by the Purchaser under the provisions of this Clause 5 shall be
prejudiced nor shall the amount of any such claim be reduced in
consequence of any information relating to the Company which may at any
time have come to the knowledge of the Purchaser or any of its advisers
(other than information contained in the Disclosure Letter and any
annexure thereto) and it shall not be a defence to any claim against the
Vendors that the Purchaser knew or ought to have known or had
constructive knowledge of any information (other than information
contained or supplied as aforesaid) relating to the circumstances giving
rise to such claim.
5.6 The Warranties are separate and independent and save as expressly
provided in this Agreement or in the Disclosure Letter shall not be
limited by reference to any other paragraph or anything in this
Agreement and such Warranties shall remain in full force and effect
notwithstanding Completion.
5.7 The Vendors shall procure that prior to Completion the Purchaser, its
agents, accountants and solicitors are given promptly on request all
such facilities and information regarding the business, assets,
liabilities, contracts and affairs of the
<PAGE> 17
-15-
Company and of the documents of title and other evidence of ownership of
its assets as the Purchaser may reasonably require.
5.8 The Vendors undertake (in the event of any claim being made against any
of them in connection with the sale of the Shares to the Purchaser) not
to make any claim against the Company, or a director or an employee of
the Company, on whom any of them may have relied before agreeing to any
term of this Agreement or authorising any statement in the Disclosure
Letter but so that this shall not preclude any Vendor from claiming
against:-
5.8.1 any other Vendor under any right of contribution or indemnity to
which he may be entitled; and
5.8.2 any employee of the Company on whom they may have relied if they
have been fraudulent; and
(each Vendor hereby agrees to consent to the grant of injunctive relief
to restrain a breach of the undertaking contained in this sub-paragraph
if requested by the Purchaser so to do.
6. TAX INDEMNITIES
The Vendors hereby indemnify the Purchaser in the terms of the Seventh
Schedule hereto.
7. COMPLIANCE WITH US LAW
The Vendor:
7.1 warrants and represents to the Purchaser that the Vendor:-
7.1.1 is not a US person, as that term is defined under Regulation S
of the Securities Act 1933 as amended ("the Act") and as at 15
May 1996 the Vendor was outside the United States (as that term
is defined under Regulation S) and is outside of the United
States as of the date of the execution and delivery of this
Agreement.
7.1.2 is acquiring the Consideration Shares for his own account and
not on behalf of any US person or any other person, and the
transaction has not been pre-
<PAGE> 18
-16-
arranged with a purchaser in the United States and the Vendor is
acquiring the Consideration Shares for investment purposes and
not with a view towards distribution and has no present
arrangement to sell the Consideration Shares.
7.1.3 is not an officer or director of any affiliate of the Purchaser.
7.2 acknowledges and agrees that the Consideration Shares have not been
registered under the Act, and may not be offered or sold in the United
States or to US persons unless the Consideration Shares are registered
under the Act or an exemption from the registration requirements of the
Act is available.
7.3 acknowledges that the Consideration Shares are being offered and sold to
him in reliance on specific exemptions from the registration
requirements of the United States Federal and State securities laws and
that the Purchaser is relying upon the truth and accuracy of the
representations, warranties, agreements, acknowledgements and
understandings of the Vendor set forth herein in order to determine the
applicability of such exemptions and the suitability of Vendor to
acquire the Consideration Shares.
7.4 acknowledges that it is his responsibility to satisfy himself as to the
full observance by this transaction and the sale of the Consideration
Shares to him of the laws of any jurisdiction outside the United States
and that he has done so.
7.5 acknowledges that in view of the United States Securities and Exchange
Commission, the statutory basis for the exemption claimed for the
transactions would not be present if the offer and sale of the
Consideration Shares to the Vendor although in technical compliance with
Regulation S, is part of a plan or scheme to evade, the registration
provisions of the Act and the Vendor confirms that this transaction is
not part of any such plan or scheme.
7.6 has received and carefully reviewed the Purchaser's Prospectus dated
March 1, 1996 and Quarterly Report on Form 10-Q for the Quarter Ended
March 31, 1996 (collectively, the "SEC Reports") and has had a
reasonable opportunity to ask questions of and receive answers from the
Purchaser concerning the Purchaser, and all such questions, if any, have
been answered to the full satisfaction of the Vendor.
7.7 acknowledges that no representations or warranties have been made to him
by the Purchaser or any agent, employee or affiliate of the Purchaser
and in entering into this
<PAGE> 19
-17-
transaction the Vendor is not relying upon any information, other than
that contained in this Agreement, the SEC Reports and the results of
independent investigations by the Vendor.
7.8 has not sold, exchanged, transferred, pledged, disposed or otherwise
reduced his risk relative to the Consideration Shares during the 30 day
period preceding the date hereof.
7.9 acknowledges and agrees that this transaction is intended to be
accounted for as a pooling of interests for financial accounting
purposes, and, in that regard the Vendor hereby agrees with the
Purchaser that the Vendor will not sell, exchange, transfer, pledge,
dispose or otherwise reduce his risk to the Consideration Shares during
the period which begins on the date hereof and ends at such time as the
Purchaser publicly announces financial results covering at least thirty
days of post-closing combined operations of the Purchaser and the
company (the "Pooling Lock-up Period") and the Purchaser at its
discretion, may cause stop transfer orders to be placed with its
transfer agent with respect to the Consideration Shares during the
Pooling Lock-up Period.
7.10 acknowledges and agrees that all offers and sales of the Consideration
Shares prior to the expiration of the period commencing on the date
hereof and ending 40 days thereafter (the "Restricted Period") shall
only be made in compliance with (i) the Pooling Lock-up Period and (ii)
the safe harbour provisions contained in Regulation S, with which the
Vendor is familiar, or pursuant to an exemption from registration under
the Act, and the Vendor shall not take a short position directly or
indirectly with respect to the Purchaser's during the Restricted Period,
and that all offers and sales after the expiration of the Restricted
Period in the United States or to the US persons shall be made only
pursuant to such a registration or to such exemption from registration.
8. RESTRICTIVE COVENANTS
8.1 For the purpose of assuring to the Purchaser the full benefit of the
businesses and goodwill of the Company each of the Vendors hereby
undertakes by way of further consideration for the obligations of the
Purchaser under this agreement as separate and independent agreements
that:-
8.1.1 he will not at any time after Completion disclose to any person
or himself use for any purpose and shall use his best endeavours
to prevent the
<PAGE> 20
-18-
publication or disclosure of, any information concerning the
business, accounts or finances of the Company or its
subsidiaries or any of its clients or customers transactions or
affairs, which may, or may have, come to his knowledge;
8.1.2 for a period of 4 years after Completion he will not except as
hereinafter mentioned either on his own account or in
conjunction with or on behalf of any person firm or company
carry on or be engaged concerned or interested in any trade or
business conducted in or from any member State of the European
Union which is similar to or competitive with any trade or
business carried on by the Company within the period of two
years prior to the date of Completion;
8.1.3 for a period of 4 years after Completion he will not (save with
the prior written consent of the Purchaser) either on his own
account or in conjunction with or on behalf of any other person
firm or company directly or indirectly:
(a) solicit or entice away from the Company or employ any
officer manager or servant whether or not such person
would commit a breach of his contract of employment by
reason of leaving the service of the Company; nor
(b) solicit or accept the custom of any person firm or
corporation which during the one year prior to the date
of Completion shall have been a customer of the Company.
Provided that nothing in this sub-clause shall preclude or inhibit any
Vendor from carrying out his duties pursuant to a service agreement or
contract of employment between himself and the Company.
8.2 The restrictions contained in sub-clause 8.1 are considered reasonable
by the parties but in the event that any such restriction shall be found
to be void but would be valid if some part thereof were deleted or the
period or area of application reduced such restriction shall apply with
such modification as may be necessary to make it valid and effective.
<PAGE> 21
-19-
9. PENSION SCHEME
The provisions set out in the Fifth Schedule shall apply.
10. GENERAL PROVISIONS
10.1 The Vendors shall (and shall procure that any other necessary party
shall) execute and do all such documents acts and things as may be
reasonably required by the Purchaser for securing to or vesting in the
Purchaser the legal and beneficial ownership of the Shares forthwith
upon Completion in accordance with the terms and conditions of this
Agreement.
10.2 This Agreement shall not be assignable by any party hereto without the
prior written consent of the others save by the Purchaser to any
Subsidiary of the Purchaser to which the Shares shall be transferred.
10.3 The obligations of the Vendors are joint and several and such
obligations and undertakings shall be enforceable accordingly.
10.4 This Agreement (together with any document annexed hereto and signed by
or on behalf of the parties hereto) constitutes the whole Agreement
between the parties hereto and no variations hereof shall be effective
unless made in writing.
10.5 The provisions of this Agreement in so far as the same shall not have
been performed at Completion shall remain in full force and effect.
10.6 The Purchaser may release or compromise the liability of any of the
Vendors hereunder or grant to any Vendor time or other indulgence
without affecting the liability of any other Vendor hereunder.
10.7 None of the provisions of this Agreement which are relevant restrictions
as that term is defined by the Restrictive Trade Practices Act 1976
shall come into effect until the day following the day on which full
particulars of this Agreement have been furnished to the Office of Fair
Trading in accordance with the said Act.
11. ANNOUNCEMENTS
No party to this Agreement shall make any statement or announcement in
connection with this transaction except with the prior approval of the
other party save as may be
<PAGE> 22
-20-
required by law or save to the extent necessary to comply with the
requirements of the NASDAQ and the Securities and Exchange Commission.
12. NOTICES
Any notice required to be given by any party hereto to any other shall
be in writing and may be served personally or by post and if served by
post shall be served by prepaid registered letter sent through the post
to the address of the party to be served as shown in this Agreement or
such other address as may from time to time be notified for this purpose
and any notice so served shall be deemed to have been served 48 hours
after the time on which it is posted and in proving such service it
shall be sufficient to prove that the notice was properly addressed and
posted.
13. COSTS
Each party shall pay its own costs in connection with this Agreement.
14. GOVERNING LAW AND JURISDICTION
This Agreement shall be governed by English law and the parties hereby
submit to the non-exclusive jurisdiction of the English Courts.
AS WITNESS whereof this Agreement has been entered into the day and year first
above written.
<PAGE> 23
-21-
THE FIRST SCHEDULE
------------------
PARTICULARS OF THE VENDORS THEIR SHAREHOLDINGS
AND THE CONSIDERATION
(1) (2) (3)
Names and Addresses No. of Ordinary Shares No. of Common Stock
Shares of the Purchaser
allotted to the Vendors
- --------------------------------------------------------------------------------
(pound)
DR RICHARD KAY
St Giles View 73 65,152*
off Main Road
Great Longstone
Bakewell
Derbyshire
DE45 1TZ
JANET ANN KAY 892*
St Giles View 1
off Main Road
Great Longstone
Bakewell
Derbyshire
DE45 1TZ
* the share certificate will
be issued in the name of Dr.
Richard Kay for and on
behalf of both Vendors.
<PAGE> 24
-22-
THE SECOND SCHEDULE
-------------------
BASIC INFORMATION CONCERNING THE COMPANY
A. The Company
1. Registered Number : 2375867
2. Date of incorporation : 25th April 1989
3. Address of registered office : 12 Turners Lane, Sheffield S10 1BP
4. Authorised share capital : P100 in Ordinary Shares of P1.00 each
5. Issued share capital : P74 in Ordinary Shares of P1.00 each
6. Directors:
Full Names Addresses
DR RICHARD KAY St Giles View
off Main Road
Great Longstone
Bakewell
Derbyshire
DE45 1TZ
JANET ANN KAY St Giles View
off Main Road
Great Longstone
Bakewell
Derbyshire
DE45 1TZ
7. Secretary:
Full Name
NIGEL KEITH RAWLINGS 18 Hollin Lane
Styal
Cheshire
SK9 4JH
<PAGE> 25
-23-
THE THIRD SCHEDULE
------------------
<TABLE>
PARTICULARS OF SUBSIDIARIES AND INVESTMENTS
<CAPTION>
Name Date and Place of Issued Share Held by
Incorporation and Capital
Registered Number
- -------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
(1) S-Cubed Clinical 23rd May 1994 P1,110 Sheffield Statistical Services
Services Limited Cardiff comprising Limited
(Dormant) 2932048 1,110 ordinary
P1 shares
(2) Capital Clinical 4 March 1994 P2 comprising S-Cubed Clinical Services
Research Services Cardiff 2 ordinary (P)1 Limited
Limited 2904685 shares
(Dormant)
(3) S-Cubed Clinical 5th October 1995 P100 50 held by Sheffield
Limited Cardiff comprising Statistical Services
(Trading) 3110213 100 ordinary Limited
P1 shares
</TABLE>
<PAGE> 26
-24-
THE FOURTH SCHEDULE
-------------------
<TABLE>
PROPERTY
<CAPTION>
Short Description of Property Tenure Date and Term of Lease if Owner
Leasehold
- ------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
(1) 12A + 12B Turners Lane, Leasehold 15th June 1992 Ian Sargent
Broomhill, Sheffield 6 years from 15th June
1992
(2) 10A Turners Lane, Leasehold 15th June 1992 Giltfast
Broomhill, Sheffield 6 years from 15th June Property
1992 Limited
(3) Part 1st Floor Unit 6 Leasehold 18th December 1996 CNC Grand
The Grand Union Office Park 3 years from 18th October Union Limited
Packet Boat Lane 1996
Cowley
Uxbridge
Middlesex
</TABLE>
<PAGE> 27
-25-
THE FIFTH SCHEDULE
------------------
PROVISIONS AFFECTING THE PENSION SCHEME
NONE
<PAGE> 28
-26-
THE SIXTH SCHEDULE
------------------
WARRANTIES AND REPRESENTATIONS: CLAUSE 5
In this Schedule (save where the context otherwise requires) the expression "the
Company" shall mean each of the Company and each of its Subsidiaries (including
5-Cubed Clinical Limited).
The warranties and representations referred to in Clause 6 of the foregoing
Agreement are that:-
1. CONSTITUTION OF THE COMPANY
1.1 Share Capital
-------------
The Company has an authorised and issued share capital as set out in the
Second Schedule and all its issued shares are beneficially owned by the
Vendors in the numbers set opposite their respective names in the second
column of the First Schedule to the foregoing agreement free from all
liens charges and encumbrances or interests in favour of any other
person.
1.2 Memorandum and Articles
-----------------------
The copy of the Memorandum and Articles of Association of the Company
annexed to the Disclosure Letter is true and complete and has embodied
therein or annexed thereto a copy of every such resolution or agreement
as is referred to in Section 380 of the Companies Act 1985.
1.3 Company Resolutions
-------------------
Neither the Company nor any class of its members has passed any
resolution (other than resolutions relating to business at Annual
General Meetings which was not special business).
1.4 Options etc.
------------
No person has the right (whether exerciseable now or in the future and
whether contingent or not) to call for the issue of any share or loan
capital of the Company under any option or other agreement (including
conversion rights and rights of pre-emption) and no claim has been made
by any person to be entitled to any such right.
<PAGE> 29
-27-
1.5 Returns and compliance with Company Law etc.
--------------------------------------------
The Company has to the Vendors knowledge information and belief complied
with the provisions of the Companies Acts The Financial Services Act
1986 and the European Communities Act 1972 and all returns particulars
resolutions and other documents required under any legislation to be
delivered on behalf of the Company to the Registrar of Companies or to
any other authority whatsoever have been properly made and delivered.
1.6 Statutory Books
---------------
The register of members and other statutory books of the Company have
been properly kept and contain a true and complete record of the matters
which should be dealt with therein; no notice or allegation that any of
the same is incorrect or should be rectified has been received.
1.7 Insolvency
----------
No order has been made or petition presented or resolution passed for
the winding up of the Company, nor has any distress execution or other
process been levied in respect of the Company, nor is there any
unfulfilled or unsatisfied judgment or court order outstanding against
the Company.
1.8 Particulars of Subsidiaries
---------------------------
The particulars of the Subsidiaries set out in the Third Schedule above
are true and complete and the shares of the Subsidiaries are held and
owned as shown in the Third Schedule free from all encumbrances and with
all rights now or hereafter attaching thereto and the Company has no
other subsidiary.
1.9 The Shares
----------
1.9.1 Commission
----------
No one is entitled to receive from the Company any finders fee,
brokerage, or other commission in connection with the purchase
of shares in the Company or any Associate company of the
Company.
<PAGE> 30
-28-
1.9.2 New Issues since the Balance Sheet Date
---------------------------------------
Save as provided in this Agreement no share or loan capital has
been issued or agreed to be issued by the company since the
Balance Sheet Date.
1.9.3 There are no agreements or arrangements in force which provide
for the present or future issue, allotment or transfer of or
grant to any person the right (whether conditional or otherwise)
to call for the issue, allotment or transfer of any share or
loan capital of the Company (including any option of pre-emption
or conversion).
1.9.4 The Company has not adopted, agreed or resolved to adopt any
employee share option scheme, profit sharing involving the
Company's share capital or share incentive scheme of any nature
whatsoever.
1.10 Capacity of Vendors
-------------------
Each Vendor has full power to enter and perform this Agreement, which
when executed constitute binding obligations on each Vendor in
accordance with their terms.
1.11 Vendors' other interests
------------------------
No Vendor nor any Associate of any Vendor has any estate, right or
interest, directly or indirectly, in any business other than that now
carried on by the Company which is or is likely to be or become
competitive with the business or the proposed business of the Company
save as the registered holder or beneficial owner of any class of
securities of any company if such class of securities is listed on any
recognised Stock Exchange and in respect of which such person holds, or
is beneficially interested in, (together with his Associates) less than
five per cent. of any single class of the securities in that company.
2. ACCOUNTS
2.1 Accounts warranty
-----------------
The Accounts:-
<PAGE> 31
-29-
2.1.1 have been prepared in accordance with the requirements of the
Companies Acts and all relevant statutes and generally accepted
accountancy principles;
2.1.2 give a true and fair view of the assets and liabilities of the
Company at the Balance Sheet Date and the profits of the Company
for the financial period ended on that date;
2.1.3 apply accounting policies which have been consistently applied
in the audited balance sheet and profit and loss accounts for
the three financial years prior to the Balance Sheet Date
(except for intervening Statements of Standard Accounting
Practice);
2.1.4 comply with all current Statements of Standard Accounting
practice applicable to a United Kingdom company;
2.1.5 are not save to the extent expressly stated in such accounts
affected by any extraordinary exceptional or non-recurring item;
2.1.6 properly reflect the financial position of the Company as at the
Balance Sheet Date.
2.2 Management Accounts warranty
---------- -----------------
The Management Accounts:-
2.2.1 give a true and fair view of the assets and liabilities of the
Company at the Management Accounts Date and the profits of the
Company for the financial period ended on that date;
2.2.2 apply accounting policies which have been consistently applied
in the audited balance sheet and profit and loss accounts for
the three financial years prior to the Balance Sheet Date
(except for intervening Statements of Standard Accounting
Practice);
2.2.3 comply with all current Statements of Standard Accounting
practice applicable to a United Kingdom company;
2.2.4 are not save to the extent expressly stated in such accounts
affected by any extraordinary exceptional or non-recurring item;
<PAGE> 32
-30-
2.2.5 properly reflect the financial position of the Company as at the
Management Accounts Date.
2.3 Provisions for liabilities
--------------------------
Proper provision or reserve has been made in the Accounts for all
liabilities and capital commitments of the Company outstanding at the
Balance Sheet Date whether known contingent unquantified disputed or
not.
2.4 Tax Provisions
--------------
Proper provision or reserve has been made in the Accounts for all
Taxation assessed or liable to be assessed on the Company or for which
it is accountable in respect of income profits or gains earned accrued
or received on or before the Balance Sheet Date or any event on or
before the Balance Sheet Date including distributions made down to such
date or provided for in the Accounts and proper provision has been made
in the Accounts for deferred taxation in accordance with Statement of
Standard Accounting Practice 15.
2.5 Work in progress
----------------
In the Accounts:-
2.5.1 the Company's work in progress has been valued on a basis
consistent with that adopted for the purpose of the Company's
audited accounts in respect of the beginning and end of each of
the three last preceding accounting periods;
2.5.2 redundant or obsolete work in progress as at the Balance Sheet
Date has been wholly written off;
2.5.3 the value attributed to each item of the remaining work in
progress included in the Accounts does not exceed the lower of
cost and market value as at the Balance Sheet Date;
2.5.4 the provisions of Statement of Standard Accounting Practice 9
have been adhered to.
2.6 Books and Records
-----------------
<PAGE> 33
-31-
All accounts, books, ledgers, financial and other records of whatsoever
kind of the Company:-
2.6.1 have been fully and properly maintained are in the possession of
the Company and contain full records of all matters required to
be entered into therein by the Companies Acts;
2.6.2 do not contain or reflect any material inaccuracies or
discrepancies;
2.6.3 give and reflect a true and fair view of the matters which ought
to appear therein.
2.7 Debts
-----
2.7.1 All debts owed to the Company as at Completion will realise
their full face value and be good and collectable in the
ordinary course of business and in any event will have been paid
to the Company within three months of Completion.
2.7.2 No amount included in the Accounts as owing to the Company as at
the Balance Sheet Date is now more than three months overdue nor
has any such amount been released for an amount less than the
value at which it was included in the Accounts nor is any such
debt now regarded by the Vendors as irrecoverable in whole or in
part.
2.7.3 The Company has not factored or discounted its debts or agreed
to do so.
3. FINANCE
3.1 Financial Position and Prospects
--------------------------------
There has been no material deterioration in the financial position or
prospects or turnover of the Company since the Balance Sheet Date.
3.2 Capital Commitments
-------------------
There were no commitments on capital account outstanding at the Balance
Sheet Date (save as disclosed in the Accounts) and since the said date
the Company has not entered into, or agreed to enter into, any capital
commitments.
<PAGE> 34
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3.3 Borrowings
----------
The total amount borrowed by the Company and its Subsidiaries from its
bankers does not exceed its overdraft facilities and the total amount
borrowed by the Company and its Subsidiaries from whatsoever source does
not exceed any limitation on its borrowing contained in the Articles of
Association of, or in any Debenture or Loan Stock Deed or other
instrument executed by, the Company or any subsidiary.
3.4 Bank accounts
-------------
A statement of the bank accounts of the Company and of the credit or
debit balances on such accounts as at a date not more than seven days
before the date hereof has been supplied to the Purchaser. The Company
has not any other bank or deposit accounts (whether in credit or
overdrawn) not included in such statement. Since such statement there
have been no payments out of any such accounts except for routine
payments and the balances on current account are not now substantially
different from the balances shown on such statements.
3.5 Distributions and Loan Repayments
---------------------------------
3.5.1 Since the Balance Sheet Date no distributions of capital or
income have been declared made or paid in respect of any share
capital of the Company and (excluding fluctuations in overdrawn
current accounts with bankers) no loan or loan capital or
preference capital of the Company has been repaid in whole or
part or has become liable to be repaid.
3.5.2 All dividends or distributions of profits declared, made, or
paid by the Company since the date of incorporation of the
Company have been declared, made, or paid in accordance with its
Articles of Association and the Companies Acts or other relevant
legislation.
3.6 Working Capital
---------------
Having regard to existing bank and other facilities, the Company has
sufficient working capital for the purposes of continuing to carry on
its business in its present form and at its present level of turnover
for the foreseeable future and for the purposes of executing, carrying
out and fulfilling in accordance with their terms all orders,
<PAGE> 35
-33-
projects and contractual obligations which have been placed with, or
undertaken by, the Company.
3.7 Continuance of facilities
-------------------------
In relation to all debentures, acceptance credits, overdrafts, loans or
other financial facilities outstanding or available to the Company
("facilities"):-
3.7.1 the Vendors have supplied to the Purchaser in writing full
details thereof and true and correct copies of all documents
relating thereto;
3.7.2 neither the Vendors, nor the Company, has done anything nor is
aware of any circumstances whereby the continuance of any
facility in full force and effect might be affected or
prejudiced which might give rise to any detrimental alteration
in the terms or conditions of any of the facilities;
3.7.3 none of the facilities is dependent upon the guarantee or
indemnity of or any security provided by a third party other
than the Company or a Subsidiary;
3.7.4 no Vendor has any knowledge, information or belief that as a
result of the acquisition of the Shares by the Purchaser or any
other thing contemplated in this agreement any of the facilities
might be terminated or mature prior to its stated maturity.
4. OWNERSHIP OF ASSETS
4.1 Assets
------
4.1.1 Except for current assets disposed of by the Company in the
ordinary course of its business the Company is the owner of and
has good marketable title to all assets included in the Accounts
or which have been acquired by the Company since the Balance
Sheet Date.
4.1.2 The Company has not disposed or agreed to dispose of any of its
assets (save in the ordinary course of its business) or granted
or agreed to grant, any Encumbrance in respect of the whole or
any part of its estate or interest in any of the assets
(including the undertaking goodwill and uncalled capital of the
Company) included in the Accounts or acquired or agreed to be
acquired since the Balance Sheet Date.
<PAGE> 36
-34-
4.1.3 Save as disclosed in the Accounts none of the fixed assets
(including the undertaking, goodwill or uncalled capital) of the
Company is subject to any Encumbrance, or any agreement or
commitment to give or create any Encumbrance, but the same are
the sole unencumbered absolute property of the Company.
4.1.4 Since the Balance Sheet Date, save for disposals in the ordinary
course of its business, the assets of the Company have been in
the possession of, or under the control of the Company.
4.1.5 The assets owned by the Company together with the assets held
under the hire purchase, leasing or rental agreements to which
the Company is party (details of which have been listed in the
Disclosure Letter) comprise all assets necessary for the
continuation of the business of the Company as now carried on.
4.2 Title Retention
---------------
The Company has not acquired or agreed to acquire any material asset on
terms that property therein does not pass until full payment is made.
4.3 HP and Rental agreements etc
----------------------------
4.3.1 The Company has not defaulted in any of the provisions of any
hire, or hire purchase, or lease, or rental agreement, or
conditional sale agreement, or agreement for payment on deferred
terms, or bill of sale, or any trading contract under which
title to any property is retained by another person or any
arrangement similar in effect to the foregoing.
4.3.2 The Company has observed and performed all the terms and
conditions on its part to be observed and performed in all such
agreements, arrangements, leases, contracts and bills referred
to in paragraph 4.3.1 above.
4.4 Plant
-----
All the machinery and plant including fixed plant and machinery, and all
vehicles and office and other equipment used in connection with the
business of the Company:-
<PAGE> 37
-35-
4.4.1 are to the Vendors knowledge information and belief in a good
and safe state of repair and condition and are in satisfactory
working order and have been regularly and properly maintained;
4.4.2 are each capable, and will (subject to fair wear and tear) be
capable, over the period of time during which it will be written
down to a nil value in the accounts of the Company (in
accordance with normal Accounting principles consistently
applied prior to the date hereof), of doing the work for which
it was designed and/or purchased;
4.4.3 are not surplus to the Company's requirements;
4.4.4 are in the possession and control of, and are the absolute
property free from any Encumbrance of, the Company save for
those items held under hire purchase or rental agreements the
value of which items in the aggregate does not exceed
P1,000.
4.5 Insurances
----------
4.5.1 The policies of insurance which are maintained by the Company
afford the Company adequate cover against such risks as are
commonly covered by insurance by companies carrying on the same
type of business as the Company and in particular insure the
stock in trade assets and undertakings of the Company (of an
insurable nature) against fire in their full replacement or
reinstatement value.
4.5.2 The Company is now, and has at all material times been,
adequately covered against accident, damage, injury, third party
loss (including product liability), loss of profits and other
risks normally covered by insurance.
4.5.3 All insurance is currently in full force and effect and nothing
has been done or omitted to be done which could make any policy
of insurance void or voidable or which is likely to result in an
increase in premium.
4.5.4 There is no claim outstanding under any such policy nor are the
Vendors aware of any circumstances likely to give rise to a
claim.
<PAGE> 38
-36-
4.5.5 The Company has paid all sums falling due prior to Completion in
respect of premiums on all policies of insurance maintained by
the Company and the Company will at its expense from time to
time:-
(a) renew all policies due for renewal between the date
hereof and the Completion Date for a reasonable and
normal period of renewal; and
(b) insure and maintain insurance for the full value thereof
upon all assets coming into its possession between the
said date in accordance with its normal practice and for
a reasonable and normal period,
such periods in every case to extend beyond the Completion Date.
5. BUSINESS OF THE COMPANY
5.1 Changes since the Balance Sheet Date
------------------------------------
Since the Balance Sheet Date the Company:-
5.1.1 has carried on its business in the ordinary and usual course;
5.1.2 has not entered into any transaction nor assumed any liability
nor made any payment not provided for in the Accounts which is
not in the ordinary course of its business;
5.1.3 has carried on the business without any interruption or
alteration in the nature scope or manner of its business;
5.1.4 has not borrowed or raised any money or taken any financial
facility (except such short term borrowings from its bankers as
are disclosed in the Disclosure Letter);
5.1.5 has paid its creditors within the times agreed with such
creditors and there are not debts outstanding by the Company
which have been due for more than four weeks;
5.2 Licences etc.
-------------
5.2.1 All necessary licences consents permits and authorities (public
and private) have been obtained by the Company to enable the
Company to carry on its
<PAGE> 39
-37-
business effectively in the places and in the manner in which
such business is now carried on and all such licences consents
permits and authorities are valid and subsisting.
5.2.2 The Company is not in breach of any of the terms and conditions
of any such licences or consents and there are no factors known
to the Vendors that might in any way prejudice the continuation
or renewal of any of such licences or consents.
5.3 Breach of statutory provisions, etc.
------------------------------------
5.3.1 Neither the Company, nor any of its officers, agents or
employees to the Vendors knowledge information and belief
(during the course of their duties in relation to the Company)
have committed, or omitted to do, any act or thing the
commission or omission of which is, or could be, in
contravention of any Act, Order, Regulation, or the like in the
United Kingdom which is punishable by fine or other penalty; and
5.3.2 the Company has not received any Notice of any offence or breach
of statutory duty or any other Notice whatsoever (whether or not
giving rise to a criminal liability) under the provisions of the
Factories Act, 1961, The Office Shops and Railway Premises Act,
1963, The Fire Precautions Act, 1971 or The Health and Safety at
Work Act, 1974 (or any Order or Regulation made thereunder) the
Wages Act 1986;
5.3.3 the Company has duly complied with all relevant requirements of
the Financial Services Act 1986 and the Data Protection Act
1984.
5.3.4 the Company has not and nor has any of its Subsidiaries in the
last two years, as a counterparty thereto, been a party to a
transaction at an undervalue or a preference as those
expressions are used in sections 238 and 239 respectively of the
Insolvency Act 1986;
5.3.5 Environmental Issues
--------------------
The Company itself complies with, and the Vendor is aware of no
previous breach of, any legislation (including regulations,
codes of practice, circulars
<PAGE> 40
-38-
and guidance notes made thereunder) relating to environmental
matters, including (but without limitation):
(a) waste;
(b) contaminated land;
(c) discharges to (i) land (ii) ground and surface water and
(iii) sewers;
(d) emissions of air;
(e) noise;
(f) dangerous, hazardous or toxic substances and materials;
(g) nuisance;
(h) health and safety;
and neither the Company nor the Vendor is aware of any actions,
claims or proceedings (whether actual or potential) nor has any
other reason to believe that the Company has or is likely to
have any liability in relation to such matters.
5.4 Litigation
----------
5.4.1 The Company is not engaged in any litigation or arbitration
proceedings.
5.4.2 To the Vendors knowledge information and belief there are no
litigation or arbitration proceedings are pending or threatened
by or against the Company and there are no circumstances likely
to give rise to any litigation or arbitration.
5.4.3 The Company is not subject to any order or judgment given by any
Court or governmental agency and has not been a party to any
undertaking or assurance given to any Court or governmental
agency which is still in force.
5.5 Fair Trading etc.
-----------------
To the Vendors knowledge information and belief no agreement practice or
arrangement carried on by the Company or to which the Company is a
party:-
<PAGE> 41
-39-
5.5.1 is or requires to be registered in accordance with the
provisions of the Restrictive Trade Practices Acts 1976 and 1977
or contravenes the provisions of the Resale Prices Act 1976 and
the Company is not in default or in contravention of the
provisions of any of those Acts;
5.5.2 contravenes the Trade Descriptions Acts 1968 and 1972;
5.5.3 contravenes the provisions of the Consumer Credit Act 1974;
5.5.4 is by virtue of its terms or by virtue of any practice for the
time being carried on in connection therewith a "Consumer Trade
Practice" within the meaning of Section 13 of the Fair Trading
Act 1973 and susceptible to or under reference to the Consumer
Protection Advisory Committee or the subject matter of a report
to the Secretary of State or the subject matter of an Order by
the Secretary of State under the provisions of Part II of that
Act;
5.5.5 infringes Article 85 of the Treaty establishing the European
Economic Community or constitutes an abuse of dominant position
contrary to Article 86 of the said Treaty or infringes or
contravenes any provisions of the Treaty of Rome;
5.5.6 is prescribed or has been or may be or become the subject of any
reference enquiry or report under the Industry Act 1975 or the
Monopolies and Mergers Act or the Competition Act 1980 or any
other anti-restrictive practice, consumer protection or
anti-monopoly anti-trust or anti-cartel legislation in the
United Kingdom or elsewhere; or
5.5.7 in any way restricts its freedom to carry on the whole or any
part of its business in any part of the world in such manner as
it thinks fit.
5.6 Guarantees, Options, etc
------------------------
The Company is not a party to any option or pre-emption right, or a
party to any guarantee or suretyship or any other obligation (howsoever
called) to pay, purchase or provide funds (whether by the advance of
money, the purchase of or subscription for shares or other securities,
the purchase of assets or services, or otherwise) for the payment of,
indemnity against the consequence of default in the payment of, or
otherwise to be responsible for, any indebtedness of any other person.
<PAGE> 42
-40-
5.7 Tenders, etc
------------
No offer, tender, or the like not in the ordinary course of business is
outstanding which is capable of being converted into an obligation of
the Company by an acceptance or other act of some other person.
5.8 Powers of Attorney, etc
-----------------------
There are no powers of attorney given by the Company in force (other
than to the holder of an Encumbrance solely to facilitate its
enforcement) and no person, as agent or otherwise of the Company, is
entitled or authorised to bind or commit the Company to any obligations
not in the ordinary course of the Company's business.
5.9 Insider Contracts
-----------------
5.9.1 There is not outstanding, and there has not at any time during
the last six years been outstanding, any contract or arrangement
to which the Company is a party and in which any Vendor or any
Associate of any Vendor or any director of the Company or any
Associate of any such director is or has been interested,
whether directly or indirectly.
5.9.2 The Company is not a party to, nor have its profits or financial
position during such period been affected by, any contract or
arrangement which is not of an entirely arms' length nature.
5.9.3 There are no agreements or understandings (whether legally
enforceable or not) between the Company and any person who is a
shareholder or the beneficial owner of any interest in the
Company or any Associate of any such person relating in any way
to the Company or the affairs of the Company.
5.10 Other Party's Defaults
----------------------
No party to any agreement with or obligation to the Company is in
default thereunder being a default which would be material in the
context of the financial or trading position of the Company nor (so far
as the Vendors are aware) are there any circumstances likely to give
rise to such a default.
5.11 Other Material contracts
------------------------
<PAGE> 43
-41-
The Company is not a party to nor subject to any agreement, transaction,
obligation, commitment, understanding, arrangement or liability which:-
5.11.1 is incapable of complete performance in accordance with its
terms; or
5.11.2 is known by any Vendor or by the Company to be likely to result
in a loss to the Company on completion of performance; or
5.11.3 cannot readily be fulfilled or performed by the Company on time
and without undue or unusual expenditure of money, effort or
personnel; or
5.11.4 involves or is likely to involve obligations, restrictions,
expenditure or receipts of an unusual, onerous or exceptional
nature and not in the ordinary course of the Company's business;
or
5.11.5 is a contract with any trade union or body or organisation
representing its employees; or
5.11.6 requires an aggregate consideration payable by the Company in
excess of P20,000; or
5.11.7 involves or is likely to involve the supply of goods by or to
the Company the aggregate sales value of which will represent in
excess of ten per cent. of the turnover of the Company for the
last financial year; or
5.11.8 requires the Company to pay any commission, finders fee, royalty
or the like; or
5.11.9 is in any way otherwise than in the ordinary and proper course
of the Company's business.
5.12 Consequence of share acquisition by the Purchaser
-------------------------------------------------
The acquisition of the Shares of the Company by the Purchaser or the
compliance with the terms of this Agreement will not:-
5.12.1 cause the Company to lose the benefit of any right or privilege
it presently enjoys or cause any person who normally does
business with the Company not to continue to do so on the same
basis as previously;
<PAGE> 44
-42-
5.12.2 relieve any person of any obligation to the Company (whether
contractual or otherwise) or enable any person to determine any
such obligation or any right or benefit enjoyed by the Company
or to exercise any right whether under an agreement with or
otherwise in respect of the Company;
5.12.3 result in any present or future indebtedness of the Company
becoming due or capable of being declared due and payable prior
to its stated maturity;
and to the best of the knowledge and belief of the Vendors the attitude
and custom of clients, customers and suppliers with regard to the
Company will not be prejudicial affected thereby.
5.13 Investment Grants
-----------------
No investment grant paid to the Company is liable to be refunded in
whole or in part in consequence of any action or omission of the
Company.
5.14 Sureties
--------
No person other than the Company has given any guarantee of or security
for any overdraft loan or loan facility granted to the Company.
5.15 Documents
---------
All title deeds and agreements to which the Company is a party and other
documents owned by or which ought to be in the possession of the Company
are in the possession of the Company and are properly stamped.
5.16 DTI Grant
---------
The Company is not under any liability to repay any grant made to it by
the Departments of Trade and Industry or the Ministry of Technology
under the Industrial Development Act 1966 or otherwise and no
circumstances have arisen in which the Ministry of Technology or the
Departments of Trade and Industry would or might be entitled to require
the repayment of any such grant either in whole or in part.
6. EMPLOYMENT
6.1 Directors
---------
<PAGE> 45
-43-
The particulars shown in the Second Schedule are true and complete and
no person not named therein as such is a director or shadow director (as
defined in Section 741 of the Companies Act 1985) of the Company.
6.2 Particulars of Employees
------------------------
6.2.1 The particulars shown in the Schedule of Employees annexed to
the Disclosure Letter show all remuneration payable and other
benefits provided or which the Company is bound to provide
(whether now or in the future) to each officer and employee of
the Company or Associate of any such person and are true and
complete and include particulars of all profit sharing incentive
and bonus arrangements to which the Company is a party whether
legally binding on the Company or not.
6.2.2 Since the Balance Sheet Date no change has been made in the rate
of remuneration, or the emoluments or pension benefits of any
officer ex-officer or employee of the Company and no change has
been made in the terms of engagement of any such officer or
employee, and no additional officers or employees have been
appointed.
6.2.3 No present officer or employee of the Company has given or
received notice terminating his employment except as expressly
contemplated under this Agreement.
6.3 Service Contracts
-----------------
There is not outstanding any contract of service between the Company and
any of its directors officers or employees which is not terminable by
the Company without compensation (other than any compensation payable by
statute) on three month's notice given at any time.
6.4 Pensions
--------
In this paragraph:
6.4.1 "the Schemes" means the Money Purchase Scheme, details of which
are set out in the Disclosure Letter.
<PAGE> 46
-44-
6.4.2 Other than the Schemes there is no arrangement to which the
Company contributes or has contributed or may become liable to
contribute under which benefits of any kind are payable to or in
respect of any of its employees or former employees on
retirement on death (whether accidental or not) or in the event
of disability or sickness.
6.4.3 The Company is not under any obligation or agreement (whether
legally binding or not) to provide or procure the provision of
benefits of the nature of those described in paragraph 5.4.2
above in respect of any of its employees or former employees
save in accordance with the provisions of the Schemes.
6.4.4 The Company is not making and has not made and will not before
Completion make any ex gratia payments to any employee or former
employee or to any spouse, child or dependant of any of them.
6.4.5 There are no actuarial, consultancy, legal investment and other
fees, charges or expenses due or accrued in respect of all of
the Schemes.
6.4.6 There are not in respect of any of the Schemes or the benefits
thereunder any actions, or proceedings or claims pending or
threatened against the employer or trustees and the Company is
not aware of any fact or matter which may give rise to any such
action or claim.
6.4.7 Each of the Schemes has been formally approved by the Inland
Revenue and treated by them as an exempt approved scheme under
Chapter I Part XIV of ICTA and such approval has not been
withdrawn and no action has been taken nor omission made by the
Company or the Trustees of any of the Schemes which might lead
to the withdrawal of such approval.
6.5 Disputes with Employees
-----------------------
The Vendors are not aware of any outstanding claim against the Company
by any person who is now or has been an officer or employee of the
Company or any dispute between the Company and a material number or
class of its employees and no payments are due by the Company under the
provisions of the Employment Protection (Consolidation) Act 1978 as
amended by the Employment Act 1982.
<PAGE> 47
-45-
7. INDUSTRIAL PROPERTY RIGHTS
The business of the Company as now carried on does not and is not likely
to infringe any Industrial Property Right of any other person (or would
not do so if the same were valid) or give rise to a liability to pay
compensation pursuant to the Patents Act 1977 ss 40 and 41 and all
licences to the Company in respect of any such protection are in full
force and effect.
7.1 The Company has not (otherwise than in the ordinary and normal course of
business) disclosed or permitted to be disclosed or undertaken or
arranged to disclose to any person other than the Purchaser any of its
know-how, trade secrets, confidential information, price lists or lists
of customers or suppliers.
7.2 The Company is not a party to any secrecy agreement or agreement which
may restrict the use or disclosure of information.
7.3 Nothing has been done or omitted by any Group Company which would enable
any licensee under a licence granted by a Group Company to be terminated
or which in any way constitutes a breach of terms of any licence.
7.4 All Industrial Property Rights used or required by the Company in
connection with its business are in full force and effect and are vested
in and beneficially owned by it.
7.5 The Company is the sole beneficial owner of the Industrial Property
Rights listed in the Disclosure Letter and (where registration is
possible) the Company has been and is registered as proprietor, and each
of those Rights is valid and enforceable, and none of them is being
used, claimed, opposed or attacked by any other person.
7.6 No right or licence has been granted to any person by the Company to use
in any manner or to do anything which would or might otherwise infringe
any of the Industrial Property Rights referred to above; and no act has
been done or omission permitted by the Company whereby they or any of
them have ceased or might cease to be valid and enforceable.
8. TAXATION
8.1 Administration
--------------
<PAGE> 48
-46-
8.1.1 All notices, returns, computations and payments which should be
or should have been given or made by the Company for any
Taxation purpose have been given or made within the requisite
periods and are up-to-date, correct and on a proper basis and
none of them is or is likely to be the subject of any dispute
with the Inland Revenue, H.M. Customs & Excise or other Taxation
or fiscal authority.
8.1.2 All particulars furnished to the Inland Revenue or other
Taxation authorities, in connection with the application for any
consent or clearance on behalf of the Company, or affecting the
Company, fully and accurately disclose all facts and
circumstances material for the decision of those authorities;
any consent or clearance is valid and effective; and any
transaction, for which consent or clearance has previously been
obtained, has been carried into effect (if at all) only in
accordance with the terms of the relative application consent or
clearance and the Company has not been a party to or otherwise
involved in any transaction scheme or arrangement in respect of
which clearance could have or should have been obtained.
8.1.3 There are set out in the Disclosure Letter full details of any
special arrangement (being an arrangement which is not based on
a strict and detailed application of the relevant legislation or
on generally published statements of practice or generally
published extra statutory concessions) operated by the Company
with the agreement of any Taxation Authority and the Company has
not taken any action which has had, or might have, the result of
altering, prejudicing or in any way disturbing any such
arrangement which it has previously negotiated.
8.1.4 The Company has not paid or become liable to pay any penalty or
interest charged by virtue of the provisions of TMA or any other
Taxation Statute.
8.1.5 The Company has duly and punctually paid to the Inland Revenue
or other appropriate authority all Taxation for which it is
liable as a result of any act or omission prior to Completion
and in particular:-
(a) all Taxation deductible by the Company prior to the date
hereof under Schedule E by virtue of the PAYE
regulations from time to time in force or ICTA s.559;
<PAGE> 49
-47-
(b) all advance corporation tax due in respect of franked
payments of the Company under ICTA s.14, and s.238 and
Schedule 13;
(c) all National Insurance Contributions (both employer's
and employees') due from the Company in respect of the
employees of the Company;
(d) all Taxation required to be deducted from any interest,
annuity or other annual payment, rent or royalty
pursuant to ICTA s.349 and 350; and
(e) all Taxation required to be deducted from any other
payments directed to be made as if those payments were
payments to which ICTA s.349 applied.
8.1.6 The Company has duly and punctually withheld, deducted or
collected for payment (as appropriate) all Taxation which it has
become liable to withhold deduct or collect for payment and is
under no liability to pay any penalty or interest in connection
with any Taxation at the date of this agreement or give any
security for any such matter and the Company has if required by
law so to do accounted for all such Taxation to the relevant
Taxation Authority.
8.1.7 The Company has not at any time been the subject of a discovery
or investigation by any Taxation Authority and there are no
facts to the Vendors knowledge information and belief which are
likely to cause a discovery or investigation to be made.
8.1.8 The Company is not liable as lessee or agent for any Taxation
under the provisions of ICTA s.23.
8.2 Taxation claims, liabilities and reliefs
----------------------------------------
8.2.1 There are set out in the Disclosure Letter with express
reference to this clause full details of all matters relating to
Taxation in respect of which the Company (either alone or
jointly with any other person) has, or at Completion will have,
an outstanding entitlement or obligation:-
<PAGE> 50
-48-
(a) to make any claim (including a supplementary claim) for
relief under ICTA or any other Taxation Statute;
(b) to make any election for one type of relief, or one
basis system or method of Taxation, as opposed to
another;
(c) to make any appeal against an assessment to Taxation;
(d) to make any application for the postponement of
Taxation;
(e) to disclaim or require the postponement or reduction of
any allowance;
(f) to elect to treat any machinery or plant as a short-life
asset within the provisions of CAA 1990 s.37 (Election
for certain machinery or plant to be treated as
short-life asset);
(g) to submit any return or provide particulars or
information to any Taxation Authority;
(h) to make any election under TCGA s.35.
8.2.2 The Company has not made nor is entitled to make a claim under
TCGA s.24(2) (Assets lost or destroyed, or whose value becomes
negligible) or s.48 (Consideration due after time of disposal).
8.2.3 The Company is not nor will become liable to pay, or make
reimbursement or indemnity in respect of, any Taxation (or any
amount corresponding to Taxation) in consequence of the failure
by any other person (other than the Company or its Subsidiaries)
to discharge that Taxation or amount within any specified period
or otherwise, where the Taxation or amount relates to a profit,
income or gain, transaction, event, omission or circumstances
arising, occurring or deemed to arise or occur (whether wholly
or partly) prior to Completion.
8.2.4 No relief (whether by way of deduction, reduction, set-off
exemption, repayment or allowance, or otherwise) from, against
or in respect of any Taxation has been claimed and/or given to
the Company which could or might be effectively withdrawn,
postponed, restricted or otherwise lost as a
<PAGE> 51
-49-
result of any act, omission, event or circumstance to the
Vendors knowledge information and belief arising or occurring at
any time after Completion.
8.3 Distributions and deductibility of payments
-------------------------------------------
8.3.1 The Company has not since 5 April 1965 repaid, or agreed to
repay or redeemed or agreed to redeem its share capital or
capitalised or agreed to capitalise in the form of redeemable
shares or debentures any profits or reserves of any class or
description.
8.3.2 No security (within the meaning of ICTA s.254(1) (Interpretation
of Part VI)) issued by the Company and outstanding at the date
of this agreement was issued in such circumstances that the
interest payable on it, or any other payment in respect of it,
falls to be treated as a distribution under ICTA s.209 (Meaning
of "distribution").
8.3.3 No rents, interest, annual payments or other sums of an income
nature paid or payable since the Balance Sheet Date by the
Company or which the Company is under an obligation to pay in
the future are or may be wholly or partially disallowable as
deductions in computing profits or as charges against profits,
for the purposes of corporation tax, by reason of the provisions
of ICTA s.74 (General rules as to deductions not allowable) or
ICTA s.75 (Expenses of Management: Investment Companies), ICTA
s.338 (Allowance of charges on income and capital), ICTA s.770
(Sales, etc, at an undervalue or overvalue), ICTA ss.779 to 784
(Leased assets), ICTA s.787 (Restriction of relief for payments
of interest), ICTA s.125 (Annual payments for non-taxable
consideration) or otherwise.
8.3.4 The Company has not received a capital distribution to which the
provisions of TCGA s.189 (Capital distribution of chargeable
gains: recovery of tax from shareholder) could apply.
8.3.5 The Company has not, since the Balance Sheet Date, incurred
expenditure which will not be wholly deductible in computing
profits for Taxation purposes, as a trading expense, as an
expense of management, as a charge on income, or in computing
income for the purposes of Schedule A, except for expenditure on
the acquisition of an asset to be held otherwise than as
stock-in-trade, details of which are set out in the Disclosure
Letter.
<PAGE> 52
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8.3.6 The Company has not issued any share capital to which the
provision of ICTA s.249 could apply.
8.3.7 The Disclosure Letter contains particulars of all elections made
by the Company under ICTA s.247 that are now in force; and the
Company has not paid any dividend without advance corporation
tax or made any payment without deduction of income tax in the
circumstances specified in ICTA s.247(6) nor is any Taxation
Authority entitled to make any recovery from the Company under
ICTA s.247(7).
8.4 Carry forward of losses and ACT
-------------------------------
Nothing has been done, and no event or series of events has occurred,
which might cause in relation to the Company the disallowance of the
carry forward or carry back of losses excess charges or advance
corporation tax under the provisions of ICTA s.393 (Losses other than
terminal losses), ICTA s.393A (Losses set off against profits of the
same or an earlier accounting period), ICTA s.768 (Change in ownership
of company: disallowance of trading losses), ICTA s.768A (Change in
Ownership: disallowance of carry back of trading losses), or ICTA s.245
(Calculation etc of ACT on change of ownership of Company).
8.5 Close Companies
---------------
8.5.1 The Company is not and has never been a close investment holding
company within the meaning of ICTA s.13A (close investment
holding companies).
8.5.2 No apportionment under ICTA s.423 (apportionment of
undistributed income) has been made or threatened against the
Company, nor are there any circumstances that could give rise to
such an apportionment.
8.5.3 The Company has, in respect of each accounting period ended on
or before 31st March 1989 but within seven years prior to
Completion, given full and accurate disclosure to the Inland
Revenue of all material facts and circumstances and on that
basis obtained written confirmation under ICTA paragraph 16(3)
of Schedule 19 that no apportionment will be made under ICTA
s.423 (apportionment of undistributed income).
<PAGE> 53
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8.5.4 The Company is not, nor has ever been, liable to taxation under
the provisions of ICTA ss.418 to 422 or paragraph 10 of Schedule
19, (close companies).
8.5.5 The Company has never made any transfer of the kind described in
TCGA s.125 (transfer of assets at undervalue).
8.5.6 The Company has never made any transfer of value within the
meaning of the IHTA.
8.5.7 Neither the assets owned by nor the shares of the Company are
subject to an outstanding Inland Revenue charge as defined in
IHTA s.237.
8.5.8 No circumstances exist, or but for IHTA s.204(6) would exist,
such that a power of sale could be exercised in relation to any
assets or shares of the Company pursuant to IHTA s.212
(contingent liability of transferee for unpaid capital transfer
tax or inheritance tax).
8.6 Groups of Companies
-------------------
8.6.1 The Company and the Subsidiaries ("Group Companies") comprise a
group for the purpose of ICTA s.402 (Group relief), and there is
nothing in ICTA s.413 or s.410 (Arrangements for transfer of
company to another group, or consortium) which precludes any
Group Company from being regarded as a member of such group.
8.6.2 The Disclosure Letter contains particulars of all arrangements
and agreements relating to group relief (as defined by ICTA
s.402) to which the Company is or has been a party and:-
(a) all claims by the Company for group relief were when
made and are now valid and have been or will be allowed
by way of relief from corporation tax;
(b) the Company has not made nor is it liable to make any
payment under such arrangement or agreement save as
provided for in the Accounts; and
<PAGE> 54
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(c) the Company has received all payments due to it under
any such arrangement or agreement for all surrenders of
group relief made by it.
8.6.3 The Disclosure Letter contains particulars of all arrangements
and agreements to which the Company is or has been a party
relating to the surrender of advance corporation tax made or
received by the Company under ICTA s.240 and:-
(a) the Company has not paid nor is liable to pay for the
benefit of any advance corporation tax which is or may
become incapable of set off against the Company's
liability to corporation tax; and
(b) the Company has received all payments due to it under
any such arrangement or agreement for all surrenders of
advance corporation tax made by it.
8.6.4 The Company has not made or received a payment for group relief
or for the surrender of advance corporation tax which may be
liable to be refunded in whole or in part.
8.6.5 The Company does not own any asset which was acquired from
another company which was at the time a member of the same group
of companies (as defined in TCGA s.170 (Groups of companies:
definitions) and which owned that asset otherwise than as
trading stock within the meaning of TCGA s.173 (Transfers within
a group: trading stock).
8.6.6 The execution or completion of this Agreement will not result in
any profit or gain being deemed to accrue to the Company for
Taxation purposes, whether pursuant to TCGA s.178 and 179
(Company ceasing to be a member of a group) or otherwise.
8.6.7 The Company has not held nor holds shares in a company which has
made any such transfer as is referred to in TCGA s.125 (Shares
in close company transferring assets at an undervalue); and the
Company has not received any assets by way of gift as mentioned
in TCGA s.282 (Gifts: recovery from donee).
<PAGE> 55
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8.6.8 The Company has no interest in any company which is not resident
in the United Kingdom and which would be a close company if it
were resident in the United Kingdom (TCGA s.13) (non-resident
company).
8.7 Capital Allowances
------------------
8.7.1 The aggregate book value of each of the assets of the Company,
on which an entitlement to industrial building allowances or
other allowances in respect of capital expenditure has arisen,
in or adopted for the purpose of the Accounts does not exceed
the aggregate residue of expenditure or written-down value
attributable to such assets for the purposes of the CAA and the
aggregate book value of plant and machinery allocated to pool of
plant and machinery on which an entitlement to capital
allowances has arisen does not exceed the written-down value of
the qualifying expenditure in respect of each such pool under
the CAA.
8.7.2 All expenditure incurred by the Company on which it may incur
under any subsisting commitment on the provision of machinery or
plant has qualified or will qualify (if not deductible as a
trading expense of a trade carried on by the Company) for
writing down allowances under CAA Part II (machinery and plant).
8.7.3 Since the Balance Sheet Date nothing has happened as a result of
which there may be made against the Company a balancing charge
or any disposal value may be brought into account under CAA s.24
(writing down allowances and balancing adjustments) or there may
be any recovery of excess relief within CAA ss.46 or 47
(recovery of excess relief) or a relevant event may occur within
the meaning of CAA s.138 (scientific research).
8.7.4 There is not, and there are no circumstances which could give
rise to, any dispute between the Company and any other person as
to the entitlement to capital allowances under CAA ss.51 to 59
(fixtures).
8.7.5 The Company has not made any election under CAA s.37 (short life
assets) nor has been taken to have made an election under CAA
s.37(8)(c).
<PAGE> 56
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8.7.6 No capital expenditure incurred or to be incurred by the Company
has been or will be deemed, under the provisions of CAA s.159
(Time when capital expenditure is incurred), to have been or be
incurred on a date other than that upon which the obligation to
pay the expenditure became or becomes unconditional.
8.7.7 No election has been made by the Company under CAA s.53
(Expenditure incurred by equipment lessor) or CAA s.55
(Expenditure incurred by incoming lessee: election to transfer
right to allowances) in relation to any fixtures.
8.8 Transactions not at arm's length
--------------------------------
8.8.1 The Company has not carried out or been engaged in, any
transaction or arrangement to which the provisions of ICTA s.770
(Sales, etc, at an undervalue or overvalue) have been or may be
applied.
8.8.2 The Company does not own nor has agreed to acquire any asset, or
has received or agreed to receive any services or facilities
(including without limitation the benefit of any licences or
agreements), the consideration for the acquisition or provision
of which was or will be in excess of its market value or
determined otherwise than on an arm's length basis.
8.8.3 The Company has not disposed of or acquired any asset in such
circumstances that the provisions of TCGA ss.17 or 19 (Disposals
and acquisitions treated as made at market value) could apply.
8.8.4 The Company has not, since the Balance Sheet Date engaged in any
transaction in respect of which there may be substituted for any
purpose of Taxation a different consideration for the actual
consideration given or received by it.
8.9 Capital Gains
-------------
8.9.1 The book value in or adopted for the purposes of the Accounts as
the value of each of the assets of the Company on the disposal
of which a chargeable gain or allowable loss could arise does
not exceed the amount deductible
<PAGE> 57
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under TCGA s.38 (expenditure: general) (excluding any indexation
allowance) in respect of each such asset.
8.9.2 No debt owed to the Company would on its disposal give rise to a
chargeable gain by reason of TCGA s.251 (disposals otherwise
than as original creditor).
8.9.3 No benefit under any policy of assurance has been acquired by
the Company which would on its disposal give rise to a
chargeable gain by reason of TCGA s.210 (disposals otherwise
than as original beneficial owner).
8.9.4 The Company does not have an interest in any assets which are
wasting assets within TCGA s.44 (wasting assets) and which do
not qualify for capital allowances.
8.9.5 The Company has not made nor is entitled to make any claims
under any of TCGA ss.23, 35, 152, 153, 154, 165, 172, 175, 229,
242, 243 or 247 insofar as such claims affect or would affect
the chargeable gain or allowable loss which would arise on a
disposal by the Company of any of its assets.
8.9.6 The Company has not made nor is it entitled to make any claim or
election under either of TCGA s.24 (assets lost or destroyed) or
TCGA s.161 (appropriations to or from stock). The Company has
not, since the Balance Sheet Date, appropriated any asset
forming part of its trading stock for any other purpose.
8.9.7 The Company has not since the Balance Sheet Date disposed of nor
acquired any asset in circumstances such that the provisions of
TCGA s.17 (disposals and acquisitions treated as made at market
value) could apply.
8.9.8 The Company has not since the Balance Sheet Date been a party to
any deprecatory transactions for the purpose of TCGA s.176
(transactions in a group) or which could be treated as a
deprecatory transaction under TCGA s.177 (dividend stripping).
<PAGE> 58
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8.9.9 The Company has not since the Balance Sheet Date been a party to
any value shifting arrangements under any of TCGA ss.29, 30 or
34 (value shifting).
8.9.10 No disposal of any assets or of any interest in assets in a
territory outside the United Kingdom has been made in respect of
which any claim under TCGA s.279 (foreign assets, delayed
remittances) has been made or is available to the Company.
8.9.11 The Company has not made nor is entitled to make any claim under
TCGA s.48 (consideration due after time of disposal) to pay by
instalments tax on chargeable gains.
8.9.12 The Company does not have any interest in either a controlled
foreign company or an offshore fund as defined respectively in
ICTA Chapters IV and V of Part XVII.
8.9.13 No part of the consideration given by the Company for a new
holding of shares (within the meaning of TCGA s.126 (Application
of ss.127 to 131)) will be disregarded by virtue of the proviso
to TCGA s.128(2) (Consideration given or received by holder).
8.9.14 No asset owned by the Company has been the subject of a deemed
disposal under TCGA Schedule 2 (Assets held on 6th April 1965),
so as to restrict the extent to which the gain or loss over the
period of ownership may be apportioned by reference to
straight-line growth.
8.9.15 The Company has not been a party to any election made pursuant
to the provisions of ICTA s.108.
8.9.16 There are set out in the Disclosure Letter full details of any
elections made pursuant to TCGA s.35 and all assets owned by the
Company to which the provisions of TCGA s.36 and Schedule 4
could apply.
8.10 Tax avoidance
-------------
8.10.1 The Company has not engaged in or been a party to any scheme or
arrangement of which the main purpose, or one of the main
purposes, was the avoidance of or a reduction in liability to
Taxation; and, in particular but
<PAGE> 59
-57-
without limitation, the Company has not at any time been a
party to or otherwise involved in any transaction to which any
of the following provisions could apply:-
(a) ICTA ss.729 to 737 (Tax avoidance: securities);
(b) ICTA s.774 (Transactions between dealing company and
associated company);
(c) ICTA ss.779-780 (Sale and lease-back: limitation on tax
reliefs and taxation of consideration received);
(d) ICTA ss.781-785 (Assets leased to traders and others
etc);
(e) ICTA ss.786 (Transactions associated with loans or
credit);
(f) CAA 1990 s.75 (Capital allowances: effect of sales
between connected persons, sale and leaseback, etc);
(g) FA 1972 s.76 (Securities bought with borrowed money);
(h) ICTA s.240 (Set-off of company's surplus advance
corporation tax against subsidiary's liability to
corporation tax);
(i) ICTA s.410 (Arrangements for transfer of company to
another group etc); s.395 (Leasing contracts and company
reconstructions); and s.116 (Partnerships involving
companies: arrangements for transferring relief);
(j) TCGA s.106 (Disposal of shares and securities within
prescribed period of acquisition);
(k) TCGA s.29 (Value shifting);
(l) CAA 1990 s.22 (First Year Allowances).
8.10.2 The Company has not been a party to any transaction to which any
of the following provisions has been or could be applied other
than transactions in respect of which all necessary consents or
clearances have been obtained:-
<PAGE> 60
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(a) TCGA s.139(5) Company reconstruction or amalgamation:
transfer of assets);
(b) ICTA ss.703 to 709 (Cancellation of tax advantages from
certain transactions in securities);
(c) ICTA s.776 (Transactions in land: taxation of capital
gains);
(d) TCGA ss.135, 136 and 137 (Company reconstructions and
amalgamations);
(e) ICTA s.213 to 218 (exempt distributions);
(f) ICTA s.765 (Migration etc of companies) or ICTA s.766
(Offences under Section 765);
(g) ICTA s.219 to 224 (Purchase of own shares).
8.11 Depreciatory transactions
-------------------------
No allowable loss, which may accrue on the disposal by the Company of
any asset, is likely to be reduced by reason of the provisions of TCGA
s.176 (Transactions in a group) or TCGA s.177 (Dividend stripping) and
no chargeable gain or allowable loss arising on a disposal is likely to
be adjusted in accordance with TCGA s.30 (Value shifting: further
provisions).
8.12 Overseas
--------
8.12.1 The Company is not nor has it within the last six years been
entitled to receive any income which is 'unremittable income'
within the meaning of ICTA s.584 (Relief for unremittable
overseas income), or made any gain to which the provisions of
TCGA s.279 (Foreign assets: delayed remittances) could apply.
8.12.2 The Company has not ceased to be resident in the United Kingdom
other than in pursuance of a Treasury Consent and could not and
is not considered to be resident in a territory outside the
United Kingdom.
<PAGE> 61
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8.13 Demergers and purchase of own shares
------------------------------------
8.13.1 The Company has not been engaged in or been a party to any of
the transactions set out in ICTA s.213 to 218 (Demergers) nor
has it made or received a chargeable payment as defined in ICTA
s.214(2).
8.13.2 The Company has not at any time since 15th June 1982 redeemed,
repaid or purchased or agreed to redeem, repay or purchase, any
of its own shares.
8.13.3 The Company is and has been throughout the last six years
resident in the United Kingdom for Taxation purposes and has
throughout that period traded only in the United Kingdom and
been in receipt only of UK source income and gains.
8.14 Sale and leaseback of land
--------------------------
The Company has not since the Balance Sheet Date entered into any
transaction to which the provisions of ICTA s.780 (Sale and lease-back:
taxation of consideration received) have been or could be applied.
8.15 Securities
----------
The Company has not at any time since 13th March 1984 owned or issued
any deep discount security within the meaning of ICTA Schedule 4, any
deep gain security within the meaning of FA 1989 Schedule 11, any
qualifying corporate bond within the meaning of TCGA s.116 or any
relevant discounted security within the meaning of FA 1996 Sch.13.
8.16 Capital losses
--------------
The Company has not incurred a capital loss to which the provisions of
TCGA s.18(3) and (4) (Transactions between connected persons) are
applicable.
8.17 Value Added Tax
---------------
8.17.1 The Company is not and has never been treated for the purposes
of VATA s.43 (groups of companies) as a member of a group.
8.17.2 The Company is a registered and taxable person for the purposes
of the VATA and has complied with and observed in all respects
the terms of all
<PAGE> 62
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legislation, (which expression shall for the purposes of this
sub-clause 17 include reference to all regulations, orders,
provisions, directions, conditions and notices) relating to
Value Added Tax and the Company has maintained and obtained
accounts, records, invoices and other documents (as the case may
be) appropriate or requisite for the purposes of Value Added Tax
which are complete, correct and up-to-date.
8.17.3 The Company:-
(a) is not, nor in the two years prior to Completion has
been, in arrears with any payments or returns or
notifications under the legislation relating to Value
Added Tax, or liable to any forfeiture penalty, interest
or surcharge or to the operation of any penalty,
interest or surcharge provisions contained in the same;
(b) has not in the two years prior to Completion received a
surcharge liability notice under VATA s.59 (default
surcharge) or a penalty liability notice under VATA s.64
(persistent misdeclarations).
(c) has not been required by HM Commissioners of Customs &
Excise to give security;
(d) is not, and has not agreed to become, an agent, manager
or factor for the purposes of VATA s.47 (agents etc) of
any person who is not resident in the United Kingdom;
(e) has not on or prior to the date hereof, nor will before
Completion make any supplies that are exempt supplies;
and
(f) or any other company which is or has been a member of
the same group of companies as the Company has not on or
prior to the date hereof, nor will before Completion,
make any election pursuant to VATA Schedule 10
paragraphs 2 and 3 which has or may have or have had the
effect of waiving any exemption from Value Added Tax in
relation to any property in which the Company has or
will have before Completion any interest or any part
thereof (having regard to paragraphs 3(3) and (4) of the
said Schedule 10 ) or which may
<PAGE> 63
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otherwise have or have had the effect of rendering Value
Added Tax payable or chargeable in respect thereof.
(g) is not for the purposes of VATA Schedule 10 paragraph
5(5) (developers of certain non-residential buildings
etc) the developer of any building or work in respect of
which the Company has not made an election under VATA
Schedule 10 paragraph 2(1).
8.17.4 The Company has not since the Balance Sheet Date been, and will
not prior to Completion be, treated as having made any supply of
goods or services for the purposes of Value Added Tax where no
supply has in fact been made by the Company, including without
limitation, deemed supplies under any of the following
provisions: VATA s.8 (supplies received from abroad); VATA s.44
(supplies to groups); VATA paragraph 6 of Schedule 10
(developers self supply); Value Added Tax (Self Supply of
Construction Services) Order 1989 paragraph 3 (self supply of
construction services);
8.17.5 The Company is not approved for the purposes of the Customs
Duties (Deferred Payment) Regulations 1976 (deferral of duty on
imports).
8.17.6 The Company is not the owner of any capital item to which Part
XV of the Value Added Tax (General) Regulations 1995
(adjustments to the deduction of input tax on capital items)
applies or will apply.
8.17.7 No document has left the possession of the Company which, if
improperly used by a third party, would lead to any liability on
its part to pay any amount of Value Added Tax under VATA
Schedule 11 paragraph 5 (Recovery of tax, etc) which but for
such use would not have been payable by it.
8.17.8 The Company is not the owner of, and has not contracted (nor
will it prior to completion contract) to acquire, goods which
are or will become "free zone goods" for the purposes of the
Free Zone Regulations 1984.
8.17.9 The Company has not incurred, nor will it before Completion by
act or omission bring about the likelihood of incurring to the
Vendors knowledge information and belief a liability to Taxation
in a country other than the
<PAGE> 64
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United Kingdom, the recovery of which would depend upon the
existence of and compliance with legislation or regulations in
that country.
8.17.10 The Company has not made or received any supplies in respect of
which there may be substituted for Value Added Tax purposes a
different consideration from the actual consideration given or
received by it.
8.18 Stamp Duties
------------
8.18.1 There is no instrument which is necessary to establish the
Company's title to any right or asset which is liable to stamp
duty in the United Kingdom or elsewhere but which has not been
duly stamped or which would attract stamp duty if brought within
the relevant jurisdiction.
8.18.2 The Company has complied in all respects with the provisions of
FA 1986 Part IV (stamp duty reserve tax) and with any
regulations made under the same and the Company is not and will
not become liable to pay stamp duty reserve tax by reference to
any agreement which falls within the terms of FA 1986 s.87(1)
and which is entered into prior to Completion.
8.18.3 The Company has not made any claim for relief or exemption under
FA 1930 s.42 (Relief from transfer stamp duty in case of
transfer of property as between associated companies) or under
FA 1986 ss.75 to 77 (reconstructions and acquisitions) nor of
capital duty under FA 1973 Schedule 19 Part III (Stamp duty on
documents relating to chargeable transactions of capital
companies) or under any other statute and practice statement or
regulation of the Inland Revenue or any other fiscal authority.
8.19 Employees
---------
8.19.1 The Company has received no notifications or notices under ICTA
s.166 (benefits in kind: notices of nil liability).
8.19.2 The Company does not operate any scheme approved under ICTA
s.202 (charities: payroll deduction scheme) or registered under
ICTA Chapter III of Part V (profit-related pay).
8.19.3 There are set out in the Disclosure Letter full details of all
schemes under which any officer or employee of the Company
participates under ICTA
<PAGE> 65
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Sch.9 (approved share option and profit sharing schemes) or is a
beneficiary or potential beneficiary of a qualifying employee
share ownership trust as defined in FA 1989 Sch.5 (employee
share ownership trusts) or any other trust or scheme established
for the benefit of employees of the Company.
8.19.4 All schemes and trusts operated by the Company for the benefit
of its officers and employees have been properly established and
administered in accordance with the rules thereof and any
relevant Taxation Statute.
8.19.5 Since the Balance Sheet Date the Company has not received any
payment to which ICTA s.601 to 603 applies (pension scheme
surpluses: payments to employers).
8.19.6 All sums payable under the existing arrangements for
remuneration of officers and employees and rewarding persons
rendering services to the Company are deductible for the
purposes of ICTA s.74 or 75 (deductions).
8.19.7 There are set out in the Disclosure Letter full details of any
payments made by the Company in the six years prior to
Completion to which the provisions of ICTA s.148 and/or s.188
applied or could have applied, such details to include the dates
and amounts of the payments and the respective ages of all
officers and employees receiving such payments at the time such
payments were made.
9. PROPERTIES
9.1 Title
-----
9.1.1 The particulars of the Properties shown in the Fourth Schedule
are true and correct and the owner shown therein has good and
marketable title to and exclusive occupation of each Property
which it is said to own.
9.1.2 There is appurtenant to each Property all rights and easements
necessary for its use and enjoyment for the Company's business.
9.1.3 The Properties comprise all the freehold and leasehold property
owned, occupied or otherwise used in connection with its
business by the Company.
9.1.4 The Company is the legal and beneficial owner of the Properties.
<PAGE> 66
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9.1.5 The Properties are only occupied by the Company and there are no
third parties on any part of the Properties, either as licensees
trespassers or squatters in respect of the whole or any part or
parts of the Properties.
9.2 Encumbrances and Restrictions
-----------------------------
9.2.1 The Properties are free from any mortgage, debenture, charge,
rent charge lien or any other Encumbrance securing the repayment
of monies or other obligation or liability of either the Company
or any other party.
9.2.2 The Properties are not subject to any outgoings other than the
general rates, water rates and insurance premiums and rent and
service charges and the rent and service charges are paid up to
the date hereof.
9.2.3 The Properties are not subject to any restrictive covenants,
stipulations, easements, way-leaves, licences, grants,
restrictions, over-riding interests or other such rights vested
in third parties.
9.2.4 The leases of the leasehold properties contain no onerous
covenants affecting freedom of alienation and no right on the
part of any Landlord to terminate the Lease except in the event
of default.
9.2.5 No Property is subject to any option, right of pre-emption or
right of first refusal.
9.2.6 All the covenants restrictions and stipulations contained in any
Lease demising or affecting any Property have been observed and
performed and the Vendors are not aware of any circumstance
whereby the Landlord could serve a notice on the Tenant under
any such Lease and further each Landlord has performed his or
its covenants and obligations pursuant to the relevant lease by
which the relevant Property was demised.
9.3 Planning
--------
9.3.1 The use of each Property is the permitted use for the purpose of
The Town and Country Planning Act 1971 to 1977.
9.3.2 Compliance has been made with all applicable statutory and
bye-law requirements with regard to the Properties to the
Vendors knowledge
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information and belief and in particular (but without
limitation) with the requirements as to Public Health Acts The
Housing Acts, The Highway Acts, Offices Shops and Railway
Premises Acts 1963, The Factory Acts, The London Building Acts
and it is confirmed that there are no outstanding unobserved or
unperformed obligations with respect to the Properties necessary
to comply with the requirements of the competent Authority
exercising statutory or delegated powers.
9.4 Adverse Orders
--------------
9.4.1 There are no Compulsory Purchase Notices, Orders or Resolutions
affecting the Property nor to the best of the knowledge and
belief of the Vendors and the Company are there any
circumstances likely to lead to any such orders being made.
9.4.2 There are no closing or demolition or clearance orders
enforcement notices or stop notices affecting the Properties nor
to the best information and belief of the Vendors and the
Company are there any circumstances likely to lead to any being
made.
9.5 Condition of the Properties
---------------------------
There are no disputes with regard to the ownership of any
boundary walls and fences, any easements, rights, means of
access, covenants, restrictions, way-leaves or licences
affecting the Properties.
9.6 Environmental Pollution
-----------------------
9.6.1 The Properties have not in the past been used, nor are the
Vendors aware of the use of any neighbouring land:-
(a) for any industrial process, storage, dumping, transit,
storage, lagooning or otherwise in relation to toxic
waste;
(b) as land-fill or for any other dumping or materials which
may potentially lead to the production of methane,
carbon dioxide or any other gaseous emissions.
<PAGE> 68
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9.6.2 The Vendors are not aware of any pollution of the ground water
or any aquifer beneath the Properties or any neighbouring
property of toxic waste, sewage or any other noxious substance
being a known or potential hazard to health or otherwise.
9.6.3 The Vendors are not aware of any intention or possible intention
on the part of the local authority to enter details of the
Properties or any neighbouring property under Section 143 of the
Environmental Protection Act 1990 upon any statutory register of
land which may be contaminated.
9.6.4 The Vendors are not aware of any actual intended or possible
proceedings by an aggrieved person under Section 82 of the
Environmental Protection Act 1990 or any equivalent legislation
in relation to any matters affecting the Properties or any
neighbouring property.
9.6.5 The Vendors have no reason for believing or suspecting that any
potential liability or detriment arising from pollution or
related environmental matters, whether of the Properties or
neighbouring property, may attach to the owners or occupiers of
the Properties at present or at any foreseeable future date.
9.6.6 The Vendor has supplied details of all reports, inspections,
surveys and investigations available to the Vendor in respect of
pollution or related environmental matters affecting the
Properties or neighbouring property.
10. GENERAL
10.1 Material Disclosure
-------------------
10.1.1 The contents of the Disclosure Letter and of all accompanying
documents are true and accurate in all material respects and
fully, clearly and accurately disclose every matter to which
they relate.
10.1.2 The Vendors (after having made reasonable enquiry) are not aware
of any other fact or matter which renders any of the information
referred to in Warranty 10.1.1 above misleading.
10.2 Loans to Vendors
----------------
<PAGE> 69
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There are not outstanding:-
10.2.1 any loans made by the Company to the Vendors and/or any director
of the Company and/or any Associate of the Vendors or of any
such director;
10.2.2 any debts owing to the Company by the Vendors and/or any
director of the Company and/or Associate of the Vendors or of
any such director;
10.2.3 any debts owing by the Company other than debts which have
arisen in the ordinary course of business; and
10.2.4 any securities for any such loans or debts as aforesaid.
10.3 Net Asset Value
---------------
The value of the net tangible assets of the Company at Completion
determined in accordance with the same accounting policies as those
applied in the Accounts (and on the footing that each of the fixed
assets and investments is valued at a figure no greater than the value
attributed to it in the Accounts or in the case of any of the said fixed
assets acquired by the Company after the Balance Sheet Date at a figure
no greater than cost) will not be less than the value of the net
tangible assets of the Company at the Management Accounts Date as shown
in the Management Accounts.
10.4 Investment, associations and branches
-------------------------------------
The Company:-
10.4.1 is not the holder or beneficial owner of and has not agreed to
acquire any class of the share or other capital of any other
company or corporation (whether incorporated in the United
Kingdom or elsewhere) other than the Subsidiaries;
10.4.2 is not and has not agreed to become a member of any partnership,
joint venture, consortium or other unincorporated association;
10.4.3 has no branch outside England and no permanent establishment (as
that expression is defined in the respective Double Taxation
Relief Orders current at the date hereof) outside the United
Kingdom.
<PAGE> 70
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SEVENTH SCHEDULE
----------------
TAX INDEMNITIES: CLAUSE 7
-------------------------
1. INDEMNITY
1.1 SUBJECT as hereinafter provided the Vendor hereby agrees to pay to the
Purchaser an amount equal to:-
1.1.1 any Liability to Taxation; and
1.1.2 any depletion or reduction in value of the assets or increase in
the liabilities of either the Company or the Purchaser as a
result of or in consequence of any Liability to Taxation
resulting from or by reference to any income profits or gains earned
accrued or received on or before Completion or any Event occurring or
pursuant to any Taxation Statute deemed to occur on or before Completion
whether alone or in conjunction with other Events or circumstances
(provided that if other Events or circumstances occur after Completion
they be within the ordinary course of business of the Company) and
whether or not such Taxation is chargeable against or attributable to
any other person.
1.2 The liability of the Vendors shall be joint and several and shall bind
their respective successors and personal representatives.
2. VAT INDEMNITY
Without prejudice to paragraph 1 above the Vendor hereby agrees to pay
to the Purchaser an amount equal to any Liability to Taxation of the
Company as a result of its being treated as a member of the same group
as any other body corporate for the purposes of VATA s43 during any
prescribed accounting period as defined in VATA s25(1) which ended on or
prior to or was current at Completion and the next following prescribed
accounting period together with all costs and expenses incurred and
payable by the Company in connection with any such Liability to
Taxation.
3. EXCLUSIONS
3.1 The Indemnities contained in this Schedule do not cover any Liability to
Taxation:-
<PAGE> 71
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3.1.1 to the extent that provision or reserve (not being a deferred
taxation reserve) specifically in respect thereof has been made
in the Accounts; or
3.1.2 for which the Company is or may become wholly or primarily
liable as a result of transactions in the ordinary course of
business after the Balance Sheet Date.
3.2 Without prejudice to the generality of paragraph 3.1.2 above the
following shall not be regarded as being within the ordinary course of
business of the Company for the purpose of this Schedule:
3.2.1 any Taxation arising under Part XVII Income and Corporation
Taxes Act 1988 (Tax Avoidance);
3.2.2 any Taxation arising in connection with any distribution (as
defined in Part VI Income and Corporation Taxes Act 1988) or any
deemed distribution;
3.2.3 any Taxation arising in respect of the acquisition disposal or
supply of any assets goods services or business facilities for a
consideration deemed for Taxation purposes to be in excess of
that actually given or received;
3.2.4 any disposal or deemed disposal of chargeable assets.
4. MITIGATION
4.1 The Vendor shall be liable under the indemnities contained in paragraphs
1 and 2 hereof notwithstanding any Reliefs which may be available to any
person entitled to the benefit of the indemnities to set against or
otherwise mitigate any Liability to Taxation so that the indemnities
contained in this Schedule shall take effect as though no such Reliefs
were available.
4.2 If any provision for Taxation (not being a provision for deferred
taxation) contained in the Accounts shall at the request and expense of
the Vendor and to the satisfaction of the Purchaser's Auditors prove to
be an over-provision the amount so over-provided shall be set off
against the liability (if any) of the Vendor under the provisions of
this Schedule.
<PAGE> 72
-70-
5. DISPUTES AND CONDUCT OF CLAIMS
5.1 If the Purchaser or the Company shall become aware of a Claim relevant
for the purposes of this Schedule the Purchaser shall or shall procure
that the Company will as soon as reasonably practicable give written
notice thereof to the Vendor at the address given.
5.2 If the Vendor shall indemnify and secure the Purchaser and the Company
to their reasonable satisfaction against any liabilities costs or
expenses which may be incurred thereby including any additional
Liability to Taxation the Purchaser shall or shall procure that the
Company will take such action as the Vendor may reasonably request in
writing to avoid resist appeal dispute or compromise the Claim (a Claim
where action is so requested being hereinafter referred to as a
"Dispute").
PROVIDED ALWAYS THAT the Purchaser shall not be obliged to nor be
required to procure that the Company shall take any such action if
having given the Vendor written notice of the receipt of such assessment
the Purchaser has not within 15 days thereafter received written
instructions from the Vendor in accordance with the preceding provisions
of this sub-paragraph to do so.
5.3 Notwithstanding that the conduct of a Dispute may be dealt with in
accordance with the Vendor's request under sub-paragraph 5.2 above:
5.3.1 the Company and the Purchaser shall be kept fully informed of
all matters pertaining thereto and shall be entitled to receive
copies of all correspondence pertaining thereto;
5.3.2 all communications pertaining to the Dispute which are to be
transmitted to the Inland Revenue H.M. Customs & Excise or any
other appropriate statutory or governmental authority or body
shall first be transmitted to the Purchaser and the Company for
approval and shall only be finally transmitted if such approval
is given;
5.3.3 the Vendor shall make no settlement or compromise of the Dispute
without the prior approval of the Purchaser.
5.4 Notwithstanding the foregoing provisions of this paragraph at all times
during the conduct of a Dispute the Purchaser shall have the option
exercisable by notice in
<PAGE> 73
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writing to the Vendor to refuse to take or procure the taking of such
action as the Vendor may request in accordance with 5.2 above after 14
days from the date of the notice if previously the Vendor has not taken
steps properly and effectively to conduct the said Dispute.
6. PAYMENTS
6.1 The Vendor will make payments to the Purchaser under the provisions of
this Schedule in full in cleared funds and without any deduction
whatsoever save as may be required by law as follows:
6.1.1 where the Company is due to make an actual payment of Taxation
to which this Schedule relates five days before that payment is
due;
6.1.2 in the case of the nullification cancellation or set-off of a
right to repayment of Taxation the date on which that repayment
would have been due;
6.1.3 in the case of the loss counteraction nullification disallowance
or claw-back of any Relief (other than a right to repayment of
Taxation) the date on which the Company is required to make an
actual payment of Taxation which it would not have been required
to make but for the loss counteraction nullification
disallowance or claw-back of that Relief;
6.1.4 in the case of costs and expenses incurred by the Purchaser or
the Company in connection with any Liability to Taxation or any
other matter not dealt with elsewhere in this paragraph 6 three
days after the service by the Purchaser of a notice containing a
written demand therefor.
6.2 Where there is or has been a Dispute and the Dispute relates to a Claim
where the Taxation the subject matter thereof has to be paid before the
action requested by the Vendor in respect of the Claim can effectively
be taken payment in respect thereof shall be made by the Vendor in full
in cleared funds three days before such Taxation must be paid to enable
the Purchaser to comply with the Vendor's request.
7. TAXATION OF CLAIMS
In the event of any payment pursuant to this Schedule being liable to
Taxation in the hands of the Purchaser the amount of any such Liability
to Taxation shall be deemed to be increased so as to ensure that the
amount received by the Purchaser shall after
<PAGE> 74
-72-
Taxation be equal to that which would have been received had the payment
not been subject to Taxation.
8. INTEREST
In the event that any payment pursuant to this Schedule has not been
received by the Company or the Purchaser by the date for payment in
accordance with paragraph 7 of this Schedule interest shall be payable
to the Purchaser as appropriate in respect of the sum unpaid at a rate
of 2% above Barclays Bank PLC base rate for the time being in force
calculated on a daily basis.
<PAGE> 75
-73-
NINTH SCHEDULE
--------------
The parties to this Agreement agree one with the other so as to qualify the
terms of this Agreement as follows:
1. Any breach of the Warranties or Tax Indemnities or misstatement of fact
by the Vendors shall not give rise to a right on the part of the
Purchaser to rescind or terminate this Agreement after Completion.
2. No proceedings for any claim under the Warranties or the Tax
Indemnities shall be instituted unless such proceedings shall be in
respect of a claim or claims totalling (together with the amount of any
such claims previously made) in excess of US$1,650,000.
3. The liability of the Vendors under the Warranties and Tax Indemnities
shall not in any event exceed in aggregate US$1,650,000.
4. The Vendors shall not be liable in respect of any Claim or Warranty
Claim unless the amount of such liability exceeds the sum of US$3,000
and any liability the amount of which does not exceed such sum shall be
disregarded in calculating the aggregate amount of liabilities in
respect of Claims or Warranty Claims for the purposes of clause 2 of
this Schedule.
5.1 The Vendors shall not be liable in respect of any Claim or Warranty
Claim unless written notice thereof (containing at least a general
description of the matters alleged to give rise thereto) has been
served on it on or before the earlier of (i) the first anniversary of
the date of Completion or (ii) the issue of the statutory report in
relation to the Company's accounts for the fiscal year ending
30 June 1997.
5.2 Where written notice of a Claim or Warranty Claim has been served on
the Vendor within the period appropriate to such Claim or Warranty
Claim in accordance with the provisions of clause 5.1 but liability in
respect of such Claim or Warranty Claim has not been accepted or
finally determined within one year from the date of service of such
written notice the Vendor shall not be liable in respect of such Claim
or Warranty Claim unless bona fide legal proceedings in respect thereof
have been issued and served upon the Vendor within such one year
period.
6. The Vendor shall not be liable in respect of any Warranty Claim if and
to the extent of which:
<PAGE> 76
-74-
6.1 specific provision reserve or allowance has been made in the
Management Accounts for any liability which is the subject
matter of such Warranty Claim; or
6.2 the discharge of any liability of the Company or the
Subsidiaries which is the subject matter of such Warranty Claim
has specifically been taken into account and identified in the
Management Accounts; or
6.3 the subject matter of such Warranty Claim has been or is made
good including (without limitation) the receipt by the Company
the Subsidiaries or the Purchaser of compensation relating to
the subject matter of such Warranty Claim under the terms of any
policy of insurance; or
7. The Vendor shall not be liable in respect of any Claim if and to the
extent of which:
7.1 such Claim would not have arisen but for a voluntary act
transaction or omission of the Company the Subsidiaries or the
Purchaser after Completion otherwise than in the ordinary course
of business; or
7.2 such Claim would not have arisen but for any change or changes
in legislation (including without limitation any increase in
rates of Taxation) or in the practice of the Inland Revenue or
HM Customs and Excise or any other Taxation authority (in the
United Kingdom or elsewhere) occurring after Completion whether
or not such change or changes purport to be retrospectively
effective in whole or in part; or
7.3 such Claim would not have arisen but for the making of this
Agreement or but for any act, transaction or omission required
under the terms of this Agreement or under the provisions of any
legislation; or
7.4 such Claim arises by virtue of any change in the bases upon
which the Accounts of the Company or the Subsidiaries after
Completion are prepared and/or in the policies or practice
adopted in the preparation of such accounts.
8. If the Vendors make payment in respect of any Claim and the Purchaser
the Company or the relevant Subsidiary subsequently recovers from a
third party (including without limitation the Inland Revenue HM Customs
and Excise or any other Taxation authority) a sum which is referable to
the subject matter of such Claim the Purchaser shall forthwith repay to
the Vendors the amount paid by it in respect of such Claim.
<PAGE> 77
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9. The Purchaser may not bring a Claim or Warranty Claim more than once in
respect of the same or substantially the same set of facts and may not
bring such Claim or Warranty Claim to the extent that a deduction has
been made under Clause 3.3 of the Agreement. .
10. Without prejudice to the liability of the Vendors in respect of any
Warranty Claim:
10.1 the Purchaser shall notify the Vendors of any claim against the
Purchaser and shall procure the Company and the Subsidiary to
notify the Vendors of any claim against the Company or the
Subsidiary in respect of which (if valid) a Warranty Claim would
lie against the Vendors forthwith within a reasonable period of
the Purchaser or (as the case may be) the Company or the
Subsidiary becoming aware of the same.
10.2 the Vendors shall be kept fully informed of all steps proposed
to be taken by the Purchaser and the Purchaser shall not and
shall procure that the Company and the Subsidiary shall not
admit settle or discharge any such assessment or claim without
the Vendors having first been notified of the proposals and
having been given an opportunity to comment on same.
11. Nothing in the Agreement or in the Warranties shall be deemed to relieve
the Purchaser from a duty to the Vendors to mitigate their loss.
12. Any payment made by the Vendors hereunder shall be by way of reduction
of the Consideration paid for the Shares.
<PAGE> 78
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SIGNED by DR RICHARD KAY )
in the presence of: ) /s/ Richard Kay
---------------
SIGNED by JANET ANN KAY )
in the presence of ) /s/ Janet Kay
-------------
SIGNED by )
for and on behalf of )
PAREXEL INTERNATIONAL )
CORPORATION )
in the presence of:- ) /s/ Barry R. Philpott
---------------------
<PAGE> 1
EXHIBIT 4.5
REGISTRATION RIGHTS AGREEMENT
AGREEMENT dated as of February 28, 1997 among PAREXEL International
Corporation, a Massachusetts corporation (the "COMPANY") and Dr. Richard Kay and
Janet Kay (the "STOCKHOLDER").
W I T N E S S E T H :
WHEREAS, pursuant to the Agreement dated as of the date hereof (the
"ACQUISITION AGREEMENT") among the Company and the Stockholder, the Company is
acquiring all of the issued and outstanding shares of capital stock of Sheffield
Statistical Services Limited ("SSS");
WHEREAS, in connection therewith, the Stockholder will receive
unregistered shares of Common Stock of the Company (the "SHARES"); and
WHEREAS, the Company and the Stockholder wish to set forth certain rights
and obligations with regard to the registration of the Shares;
NOW, THEREFORE, the parties hereto agree as follows:
1. CERTAIN DEFINITIONS. As used in this Agreement, the following
terms shall have the following respective meanings:
"COMMISSION" shall mean the Securities and Exchange Commission, or any
other federal agency at the time administering the Securities Act.
"SHARES" shall mean the shares of Common Stock of the Company issued to
the Stockholder on even date herewith pursuant to the Acquisition
Agreement.
"COMMON STOCK" shall mean the Common Stock, $.01 par value, of the
Company, as constituted as of the date of this Agreement.
"EXCHANGE ACT" shall mean the Securities Exchange Act of 1934, as
amended, or any similar federal statute, and the rules and regulations of
the Commission thereunder, all as the same shall be in effect at the time.
"REGISTRATION EXPENSES" shall mean the expenses so described in
Section 10.
"SECURITIES ACT" shall mean the Securities Act of 1933, as amended, or
any similar federal statute, and the rules and regulations of the
Commission thereunder, all as the same shall be in effect at the time.
"SELLING EXPENSES" shall mean the expenses so described in Section 10.
<PAGE> 2
-2-
2. COMPLIANCE WITH SECURITIES LAWS. The Stockholder represents
and warrants that he:
(a) has paid no brokerage or similar commissions in connection
with the acquisition of the Shares.
(b) is acquiring such Shares solely for his own account.
(c) has provided such information as may reasonably have been
requested by the Company in order for the Company or its counsel to evaluate the
availability of an exemption under the Securities Act for the issuance of the
Shares to the Stockholder.
3. SECURITIES ACT MATTERS. The Stockholder acknowledges and
agrees that the Shares have not been registered under the Securities Act or
under the securities laws of any state, in reliance upon certain exemptive
provisions of such statutes. The Stockholder recognizes and acknowledges that
such claims of exemption are based, in part, upon the Stockholder's
representations contained in this Agreement. The Stockholder further recognizes
and acknowledges that, because the Shares are unregistered under federal and
state laws, they are not presently eligible for public resale, and may only be
resold in the future pursuant to an effective registration statement under the
Securities Act and any applicable state securities laws, or pursuant to a valid
exemption from such registration requirements. The Stockholder recognizes and
acknowledges that Rule 144 or any other exemption promulgated under the
Securities Act (which facilitates routine sales of securities in accordance with
the terms and conditions of that Rule, including a holding period requirement)
is not now available for resale of the Shares, and the Stockholder recognizes
and acknowledges that, in the absence of the availability of Rule 144 or any
other exemption under the Securities Act, a sale pursuant to a claim of
exemption from registration under the Securities Act would require compliance
with some other exemption under the Securities Act, none of which may be
available for resale of the Shares. The Stockholder recognizes and acknowledges
that, except as set forth in this Agreement, the Company is under no obligation
to register the Shares, either pursuant to the Securities Act or the securities
laws of any state.
4. RESTRICTIVE LEGEND. Each certificate representing Shares
shall, except as otherwise provided in this Section 4 or in Section 5, be
stamped or otherwise imprinted with a legend substantially in the following
form:
"The Securities represented hereby have not been registered
under the Securities Act of 1933, as amended, and may not be sold,
transferred or otherwise disposed of except in accordance with the
terms thereof and unless registered with the Securities and Exchange
Commission of the United States and the securities regulatory
authorities of certain states or unless an exemption from such
registration is available."
Such certificates shall not bear such legend if in the opinion of
counsel satisfactory to the Company the securities being sold thereby may be
publicly sold without registration under the
<PAGE> 3
-3-
Securities Act or if such securities have been sold pursuant to Rule 144, any
other exemption under the Securities Act or an effective registration statement.
5. NOTICE OF PROPOSED TRANSFER. Prior to any proposed transfer of any
Shares, the Stockholder shall give written notice to the Company of his
intention to effect such transfer. Prior to any registration statement described
in Section 6 or Section 7 becoming effective, each such notice shall describe
the manner of the proposed transfer and, if requested by the Company, shall be
accompanied by an opinion of counsel satisfactory to the Company to the effect
that the proposed transfer may be effected without registration under the
Securities Act, whereupon the Stockholder shall be entitled to transfer such
security in accordance with the terms of his notice. Each certificate for Shares
transferred as above provided shall bear the legend set forth in Section 4,
except that such certificate shall not bear such legend if (i) such transfer is
in accordance with the provisions of Rule 144 (or any other rule permitting
public sale without registration under the Securities Act) or (ii) the opinion
of counsel referred to above is to the further effect that the transferee and
any subsequent transferee (other than an affiliate of the Company) would be
entitled to transfer such securities in a public sale without registration under
the Securities Act.
6. REQUIRED REGISTRATION. The Company agrees to use commercially
reasonable efforts to (i) cause a registration statement on Form S-3 or any
successor from thereto under the Securities Act relating to the resale of up to
an aggregate of fifty percent (50%) of the Shares to be filed no later than the
90th day following Completion (as defined in the Acquisition Agreement); and
(ii) cause such registration statement to become effective as soon as
practicable after the Pooling Restricted Period (as defined below) and
thereafter remain effective until the earlier of (A) two years after Completion
(as defined in the Acquisition Agreement) or (B) the sale of all Shares covered
thereby. Anything to the contrary herein notwithstanding, the Company shall not
be required to take any action to cause any registration statement to be
declared effective by the Commission at any time prior to the publication by the
Company of financial results including at least thirty (30) days' post-closing
combined operating results of the Company and SSS (the "POOLING RESTRICTED
PERIOD"), and the Company may suspend sales in accordance with Section 9 at any
time under any registration statement immediately upon notice to the Stockholder
at his last known address, for any of the reasons set forth in Section 9.
7. REQUESTED REGISTRATION. At any time following twelve months after
the Closing Date, the Stockholder may request in writing that the Company file a
registration statement on Form S-3 or any successor thereto relating to the
resale of the remainder of the Shares then held by the Stockholder. Provided
that the Company is a registrant entitled to use Form S-3 or any successor
thereto to register such Shares, upon receipt of such notice the Company shall
use commercially reasonable efforts to promptly register under the Securities
Act on Form S-3 or any successor thereto, for public sale in accordance with the
method of disposition specified in such notice, the remainder of the Shares then
held by the Stockholder and not covered by the registration statement referenced
in Section 6 hereof. The Company will use commercially reasonable efforts to
cause such registration statement to remain effective until the earlier of (i)
two years after the Closing Date or (ii) the sale of all Shares covered thereby.
Anything to the contrary herein notwithstanding, the Company may suspend sales
in accordance with Section 9 at
<PAGE> 4
-4-
any time under any registration statement immediately upon notice to the
Stockholder at his last known address, for any of the reasons set forth in
Section 9.
8. REGISTRATION PROCEDURES. If and whenever the Company is
required by the provisions of Sections 6 or 7 to use commercially reasonable
efforts to effect the registration of any Shares under the Securities Act, the
Company will, as expeditiously as possible:
(a) prepare and file with the Commission such amendments
and supplements to the applicable registration statement, and the prospectus
used in connection therewith, as may be necessary to comply with the Securities
Act;
(b) furnish to the Stockholder such number of copies of
the relevant registration statement and each amendment and supplement thereto
(in each case including exhibits) and the prospectus included therein (including
each preliminary prospectus) as he reasonably may request in order to facilitate
the public sale or other disposition of the Shares covered by such registration
statement;
(c) register or qualify the Shares covered by the
applicable registration statement under the securities or "blue sky" laws of the
jurisdictions where the Company is currently registered or qualified, provided,
however, that the Company shall not for any such purpose be required to qualify
generally to transact business as a foreign corporation in any jurisdiction
where it is not so qualified or to consent to general service of process in any
such jurisdiction;
(d) have the Shares covered by the applicable
registration statement subject to quotation on the Nasdaq National Market; and
(e) promptly notify the Stockholder (at his last known
address) (i) of the effective date of the applicable registration statement and
the date when any post-effective amendment to such registration statement
becomes effective, (ii) of any stop order or notification from the Commission or
any other jurisdiction as to the suspension of the effectiveness of such
registration statement, or (iii) of the end of any suspension under Section 9.
9. SUSPENSION.
(a) The rights of the Stockholder to resell the Shares
pursuant to this Agreement and the applicable registration statement may be
suspended by the Company on the occurrence of any of the following events:
(i) the Company has made a determination to
conduct a public offering;
(ii) the Company is about to make a disclosure of
information of a material nature;
<PAGE> 5
-5-
(iii) there then exists material, non-public
information relating to the Company which, in the good faith
determination of its Board of Directors, the disclosure of which would
not be in the interests of the Company or its stockholders during that
time; or
(iv) the Company is engaged in any activity at
any time that, in the good faith determination of its Board of
Directors, would be adversely affected by the continued compliance with
this Agreement or the continued distribution of the Shares by the
Stockholders.
(b) The Company shall use commercially reasonable efforts
to minimize the length of any suspension:
(i) under Section 9(a)(i), to a period of
thirty (30) days, more or less, beginning on the day that notice of a suspension
is given to the Stockholder and ending on the earlier of: (A) the date of
disclosure of the public offering, or (B) the date which is 30 days after the
beginning of the suspension, provided that during such suspension, the Company
will proceed with commercially reasonable efforts to file the appropriate
documentation in respect of, and otherwise complete, such public offering as
expeditiously as practicable;
(ii) under Section 9(a)(ii), to a period of
three (3) business days, more or less;
(iii) under Section 9(a)(iii) or 9(a)(iv), if the
activity is a prospective acquisition by the Company, to a period beginning when
the notice of suspension is given to the Stockholder and ending on the earlier
of: (A) the closing of the transaction and the making of all required filings
under the Securities Act or Exchange Act, or (B) the date on which discussions
regarding the acquisition are terminated; and
(iv) under Section 9(a)(iii) or 9(a)(iv), for any
reason other than a prospective acquisition by the Company, to a period
beginning when the notice of suspension is given to the Stockholder and ending
on the earlier of: (A) the disclosure of the activity, or (B) the reason is no
longer operative.
10. EXPENSES. All expenses incurred by the Company in complying with
Sections 6 and 7, including, without limitation, all registration and filing
fees, printing expenses, fees and disbursements of counsel and independent
public accountants for the Company, fees and expenses incurred in connection
with complying with state securities or "blue sky" laws, fees of the National
Association of Securities Dealers, Inc., transfer taxes, fees of transfer agents
and registrars, and costs of issuance, but excluding any Selling Expenses, are
called "REGISTRATION EXPENSES". All underwriting discounts (if any) and selling
commissions applicable to the sale of the Shares covered by any registration
statement, as well as all professional service fees incurred by the Stockholder,
are called "SELLING EXPENSES".
<PAGE> 6
-6-
All Selling Expenses shall be borne by the Stockholder. The Company
will pay all Registration Expenses in connection with the preparation and filing
of each registration statement. The Company shall not be obligated to pay any
Registration Expenses in connection with the preparation and filing of any
registration statement if such registration statement is withdrawn, delayed or
abandoned for any reason by the Stockholder.
11. INDEMNIFICATION AND CONTRIBUTION.
(a) In connection with the registration of the Shares under
the Securities Act pursuant to Section 6 or Section 7, the Company will
indemnify and hold harmless the Stockholder, each underwriter of such Shares
thereunder and each other person, if any, who controls such underwriter within
the meaning of the Securities Act, against any losses, claims, damages or
liabilities, joint or several, to which such Stockholder, underwriter or
controlling person may become subject under the Securities Act, Exchange Act,
state securities laws or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon (i)
any untrue statement or alleged untrue statement of material fact contained in
the registration statement under which such Shares were registered under the
Securities Act pursuant to Section 6 or Section 7, any preliminary prospectus or
final prospectus contained therein, or any amendment or supplement thereto, (ii)
the omission or alleged omission of a material fact required to be stated
therein or necessary to make the statements therein not misleading or (iii) any
violation by the Company or its agents of any rule or regulation promulgated
under the Securities Act, Exchange Act or state securities laws applicable to
the Company or its agents and relating to action or inaction required of the
Company in connection with such registration, and the Company will reimburse the
Stockholder, each such underwriter and each such controlling person for any
legal or other expenses reasonably incurred by them in connection with
investigating or defending any such loss, claim, damage, liability or action,
PROVIDED, HOWEVER, that the Company will not be liable in any such case if any
to the extent that any such loss, claim, damage or liability arises out of or is
based upon an untrue statement or alleged untrue statement or omission or
alleged omission so made based upon information furnished by the Stockholder,
any such underwriter or any such controlling person.
(b) In connection with the registration of the Shares under
the Securities Act pursuant to Section 6 or Section 7, the Stockholder will
indemnify and hold harmless the Company, each person, if any, who controls the
Company within the meaning of the Securities Act, each officer of the Company
who signs such registration statement, each director of the Company, each
underwriter and each person who controls any underwriter within the meaning of
the Securities Act, against all losses, claims, damages or liabilities, joint or
several, to which the Company or such officer, director, underwriter or
controlling person may become subject under the Securities Act or otherwise,
insofar as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon (i) the failure of the Stockholder to
comply with the provisions of Section 14 herein or (ii) any untrue statement or
alleged untrue statement of any material fact contained in the registration
statement, any preliminary prospectus or final prospectus contained therein, or
any amendment or supplement thereto, or arise out of or are based upon the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, and
will reimburse the
<PAGE> 7
-7-
Company and each such officer, director, underwriter and controlling person for
any legal or other expenses reasonably incurred by them in connection with
investigating or defending any such loss, claim, damage, liability or action,
PROVIDED, HOWEVER, that the Stockholder will be liable hereunder in any such
case if and only to the extent that any such loss, claim, damage or liability
arises out of or is based upon an untrue statement or alleged untrue statement
or omission or alleged omission made in reliance upon and based upon information
pertaining to the Stockholder, furnished by or for the Stockholder.
(c) Promptly after receipt by an indemnified party hereunder
of notice of the commencement of any action, such indemnified party shall, if a
claim in respect thereof is to be made against the indemnifying party hereunder,
notify the indemnifying party in writing thereof, but the omission so to notify
the indemnifying party shall not relieve it from any liability which it may have
to such indemnified party other than under this Section 11 and shall only
relieve it from any liability which it may have to such indemnified party under
this Section 11 if and to the extent the indemnifying party is prejudiced by
such omission. In case any such action shall be brought against any indemnified
party and it shall notify the indemnifying party of the commencement thereof,
the indemnifying party shall be entitled to participate in and, to the extent it
shall wish, to assume and undertake the defense thereof with counsel
satisfactory to such indemnified party, and, after notice from the indemnifying
party to such indemnified party of its election so to assume and undertake the
defense thereof and the approval by the indemnified party of the counsel chosen
by the indemnifying party, the indemnifying party shall not be liable to such
indemnified party under this Section 11 for any legal expenses subsequently
incurred by such indemnified party in connection with the defense thereof other
than reasonable costs of investigation and of liaison with counsel so selected,
PROVIDED, HOWEVER, that, if the defendants in any such action include both the
indemnified party and the indemnifying party and if the interests of the
indemnified party reasonably may be deemed to conflict with the interests of the
indemnifying party, the indemnified party shall have the right to select a
separate counsel and to assume such legal defenses and otherwise to participate
in the defense of such action, with the expenses and fees of such separate
counsel and other expenses related to such participation to be reimbursed by the
indemnifying party as incurred.
(d) In order to provide for just and equitable contribution to
joint liability in any case in which either (i) the Stockholder exercises rights
under this Agreement and makes a claim for indemnification pursuant to this
Section 11 but it is judicially determined (by the entry of a final judgment or
decree by a court of competent jurisdiction and the expiration of time to appeal
or the denial of the last right of appeal) that such indemnification may not be
enforced in such case notwithstanding the fact that this Section 11 provides for
indemnification in such case, or (ii) contribution under the Securities Act may
be required on the part of the Stockholder in circumstances for which
indemnification is provided under this Section 11; then, and in each such case,
the Company and the Stockholder will contribute to the aggregate losses, claims,
damages or liabilities to which they may be subject (after contribution from
others) in proportion to the relative fault of the Company, on the one hand, and
the Stockholder, on the other hand; PROVIDED, HOWEVER, that, in any such case,
no person or entity guilty of fraudulent misrepresentation (within the meaning
of Section 10(f) of the Securities Act) will be entitled to contribution from
any person or entity who was not guilty of such fraudulent misrepresentation.
<PAGE> 8
-8-
(e) The indemnities provided in this Section 11 shall survive
the transfer of any Shares by the Stockholder.
12. REPORTS UNDER SECURITIES EXCHANGE ACT OF 1934. With a view to
making available to the Stockholder the benefits of Rule 144 promulgated under
the Securities Act and any other rule or regulation thereunder that may at any
time permit the Stockholder to sell securities of the Company to the public
without registration and with a view to maintaining the Company's eligibility to
file a registration statement on Form S-3, the Company agrees to:
(a) make and keep public information available, as those terms
are understood and defined in Rule 144;
(b) maintain registration of its Common Stock under Section 12
of the Exchange Act;
(c) use all reasonable efforts to file in a timely manner all
reports and other documents required of the Company under the Securities Act and
the Exchange Act; and
(d) furnish to the Stockholder, so long as the Stockholder
owns any Shares, forthwith upon request: (i) a written statement by the Company
that it has complied with the reporting requirements of Rule 144, (ii) a copy of
the most recent annual or quarterly report of the Company and such other reports
and documents so filed by the Company; and (iii) such other information as may
be reasonably requested in availing the Stockholder of any rule or regulation
under the Securities Act which permits the selling of any such securities
without registration or pursuant to such form.
13. CHANGES IN COMMON STOCK. If, and as often as, there is any
change in the Common Stock by way of a stock split, stock dividend, combination
or reclassification, or through a Acquisition, consolidation, reorganization or
recapitalization, or by any other means, appropriate adjustment shall be made in
the provisions hereof so that the rights and privileges granted hereby shall
continue with respect to the Shares as so changed.
14. STOCKHOLDER'S CONDUCT. With respect to any sale of Shares
covered by a registration statement, the Stockholder understands and agrees as
follows:
(a) The Stockholder will carefully review the information
concerning him contained in any registration statement and will promptly notify
the Company if such information is not complete and accurate in all respects,
including having properly disclosed any position, office or other material
relationship within the past three years with the Company or its affiliates;
(b) The Stockholder agrees to sell Shares only in the manner
set forth in (i) the applicable registration statement (or in compliance with
Section 5 hereof), and (ii) Section 15;
<PAGE> 9
-9-
(c) The Stockholder agrees to comply with the
anti-manipulation rules under the Exchange Act in connection with purchases and
sales of securities of the Company during the time any registration statement
remains effective;
(d) The Stockholder agrees to only sell Shares in a
jurisdiction after counsel for the Company has advised that such sale is
permissible under the applicable state securities or "Blue Sky" laws;
(e) The Stockholder agrees to comply with the prospectus
delivery requirements of the Exchange Act;
(f) The Stockholder agrees to promptly notify the Company of
any and all planned sales and completed sales of Shares; and
(g) The Stockholder agrees to suspend sales during the periods
when sales are to be suspended pursuant to Section 9.
(h) In connection with the registration of the Shares, the
Stockholder will furnish to the Company in writing such information requested by
the Company with respect to himself and the proposed distribution by him as
shall be necessary in order to assure compliance with federal and applicable
state securities laws.
(i) The Stockholder hereby agrees that he will not sell,
exchange, transfer, pledge, dispose or otherwise reduce his or her risk relative
to any Shares owned by him during the period which begins on the date hereof and
ends at such time as the Company publicly announces financial results covering
at least thirty days of combined operations of the Company and SSS. The Company,
at its discretion, may cause stop transfer orders to be placed with its transfer
agent with respect to the certificates representing the Shares, provided that
such stop transfer orders are consistent with the other provisions of this
Agreement.
15. SELLING PROCEDURES.
(a) The Stockholder will notify the Company of his intention
to sell Shares under any registration statement not less than five (5) business
days prior to the expected date of such sale by faxing the "Takedown Request"
attached hereto as EXHIBIT A to:
<PAGE> 10
-10-
Testa, Hurwitz & Thibeault, LLP
125 High Street
High Street Tower
Boston, Massachusetts 02110
Attn: William J. Schnoor, Jr.
Phone: (617) 248-7278
Facsimile: (617) 248-7100
During this period, the Company will review the prospectus to determine if a
suspension pursuant to Section 9 is necessary or appropriate. If the Company
does not notify the Stockholder of a suspension pursuant to Section 9, the
Stockholder may conclude the proposed sale, on the proposed date of sale,
strictly in accordance with the Takedown Request.
(b) The Stockholder will notify the Company of each sale under
any registration statement in accordance with the Takedown Request within 24
hours of the sale by faxing the "Notification of Sale" attached hereto as
EXHIBIT B to:
Testa, Hurwitz & Thibeault, LLP
125 High Street
High Street Tower
Boston, Massachusetts 02110
Attn: William J. Schnoor, Jr.
Phone: (617) 248-7278
Facsimile: (617) 248-7100
Based on the information set forth on the Notification of Sale, the Company will
prepare or cause to be prepared the appropriate notifications to its Transfer
Agent to remove the legend described in Section 4 from the Shares so sold.
16. REPRESENTATIONS AND COVENANTS. The Stockholder hereby
represents and warrants to the Company as follows:
(a) THE STOCKHOLDER UNDERSTANDS THAT HIS INVESTMENT IN THE
SHARES INVOLVES RISK.
(b) THE STOCKHOLDER HAS CONSULTED HIS OWN ATTORNEY, ACCOUNTANT
OR INVESTMENT ADVISOR WITH RESPECT TO THE INVESTMENT CONTEMPLATED HEREBY AND ITS
SUITABILITY FOR THE STOCKHOLDER. ANY SPECIFIC ACKNOWLEDGMENT SET FORTH BELOW
WITH RESPECT TO ANY STATEMENT OR INFORMATION FURNISHED TO THE STOCKHOLDER SHALL
NOT BE DEEMED TO LIMIT THE GENERALITY OF THIS REPRESENTATION AND WARRANTY.
<PAGE> 11
-11-
(c) The Stockholder understands that he must bear the economic
risk of this investment until such time as the Shares are registered; that the
Shares are not currently registered under the Securities Act, and, therefore,
cannot be resold unless they are subsequently registered under the Securities
Act or unless an exemption from such registration is available; that the
Stockholder is purchasing the Shares with no present view toward resale or other
distribution thereof; and that the Stockholder agrees not to resell or otherwise
dispose of all or any part of the Shares, except as permitted by law, including,
without limitation, any and all applicable provisions of the Acquisition
Agreement and this Agreement and any regulations under the Securities Act and
applicable state securities laws.
(d) The Stockholder has adequate means of providing for his
current needs and personal contingencies and has no need for liquidity in
connection with this investment in the Shares.
(e) The Stockholder has reviewed the information provided to
the Stockholder by the Company pursuant to Clause 8.6 of the Acquisition
Agreement and has consulted with his or her personal legal and financial
advisors in evaluating the merits and risks of the investment in the Shares.
(f) The Stockholder received an offer concerning the Shares
and first learned of this investment in the state or other jurisdiction listed
in the Stockholder's residence address on the signature page hereto, and intend
that the state securities laws of that state or other jurisdiction alone govern
this transaction.
(g) The Stockholder hereby acknowledges receipt of the
documents described in Clause 8.6 of the Acquisition Agreement, which documents
each Stockholder has reviewed. The Stockholder further acknowledges and warrants
that, prior to the execution of this Agreement, he has had the opportunity to
ask questions and receive answers from the Company concerning the terms and
conditions of the transactions contemplated by the Acquisition Agreement and the
issuance of the Shares, and concerning any of the documents identified above,
and to obtain such additional further information from the Company as he has
deemed necessary to verify the accuracy of the information contained in the
documents identified above or any other information furnished to the
Stockholder.
(h) The Stockholder has been advised that, as of the date
hereof, he may be deemed to be an "affiliate" of SSS, as the term "affiliate" is
used in and for purposes of Accounting Series Releases 130 and 135, as amended,
of the Commission.
(i) The Stockholder understands that the representations,
warranties and covenants set forth herein will be relied upon by the Company,
the stockholders of the Company and their respective counsel and accounting
firms.
(j) The Stockholder hereby represents and warrants that he has
not sold, exchanged, transferred, pledged, disposed or otherwise reduced his or
her risk relative to any shares of SSS owned by him during the 30 day period
preceding the date hereof.
<PAGE> 12
-12-
17. MISCELLANEOUS.
(a) All covenants and agreements contained in this Agreement
by or on behalf of any of the parties hereto shall bind and inure to the benefit
of the respective successors and assigns of the parties hereto (including
without limitation transferees of any Shares, PROVIDED, that such transferee
executes a counterpart signature page to this Agreement), whether so expressed
or not.
(b) All notices and other communications which by any
provision of this Agreement are required or permitted to be given shall be given
in writing and shall be (a) mailed by first-class or express mail, postage
prepaid, (b) sent by telex, telegram, telecopy or other form of rapid
transmission, confirmed by mailing (by first class or express mail, postage
prepaid) written confirmation at substantially the same time as such rapid
transmission, or (c) personally delivered to the receiving party (which if other
than an individual shall be an officer or other responsible party of the
receiving party). All such notices and communications shall be mailed, sent or
delivered as follows:
if to the Company, to:
PAREXEL International Corporation
195 West Street
Waltham, MA 02154
Attn: William T. Sobo, Jr.
Senior Vice President and Chief Financial Officer
Telecopy: (617) 487-9931
with a copy to:
William J. Schnoor, Jr.
Testa, Hurwitz & Thibeault, LLP
125 High Street
High Street Tower
Boston, MA 02110
Telecopy: (617) 248-7100
<PAGE> 13
-13-
if to the Stockholder, to:
Dr. Richard Kay
St. Giles View
off Main Road
Great Longstone
Bakewell
Derbyshire
DE45 1TZ
if to any subsequent Stockholder of Shares, to it at such address
as may have been furnished to the Company in writing by such
Stockholder;
or, in any case, at such other address or addresses as shall have been furnished
in writing to the Company (in the case of a Stockholder) or to the Stockholder
(in the case of the Company) in accordance with the provisions of this
paragraph. Notices shall be deemed duly delivered three business days after
being sent by first class mail, postage prepaid, or one business day after being
sent via a reputable nationwide express mail service. Notices delivered via any
other means shall be deemed duly delivered upon actual receipt by the individual
for whom such notice is intended. Any notice delivered to a party hereunder
shall be sent simultaneously, by the same means, to such party's counsel as set
forth above.
(c) This Agreement shall be governed by and construed in
accordance with the laws of the Commonwealth of Massachusetts.
(d) This Agreement may be amended or modified, and provisions
hereof may be waived, with the written consent of the Company and the holders of
at least a majority of the outstanding Shares.
(e) This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
(f) If any provision of this Agreement shall be held to be
illegal, invalid or unenforceable, such illegality, invalidity or
unenforceability shall attach only to such provision and shall not in any manner
affect or render illegal, invalid or unenforceable any other provision of this
Agreement, and this Agreement shall be carried out as if any such illegal,
invalid or unenforceable provision were not contained herein.
<PAGE> 14
-14-
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement
as of the day and year first above written.
PAREXEL INTERNATIONAL CORPORATION
By: /s/ Barry R. Philpott
--------------------------------------------
Name: Barry R. Philpott
------------------------------------------
Title: President
-----------------------------------------
/s/ Dr. Richard Kay
------------------------------------------------
Dr. Richard Kay
/s/ Janet Kay
------------------------------------------------
Janet Kay
[You MUST complete pages 15-16 of this Agreement]
<PAGE> 1
EXHIBIT 4.6
DATED 28TH FEBRUARY 1997
- --------------------------------------------------------------------------------
SHARE PURCHASE AGREEMENT
ARFON LLOYD JONES (1)
and
DIANA SMITH
AND
PAREXEL INTERNATIONAL CORPORATION (2)
S-CUBED CLINICAL LIMITED
LAWRENCE GRAHAM
190 Strand
London WC2R 1JN
Tel: 0171-379 0000
Fax: 0171-379 6854
Ref: 0450711.01
<PAGE> 2
CONTENTS
--------
NO. HEADING PAGE
- --- ------- ----
1. DEFINITIONS 2
2. THE SHARES 9
3. REPAYMENT BY VENDORS AND THE COMPANY 10
4. COMPLETION 10
5. WARRANTIES 12
6. TAX INDEMNITIES 14
7. COMPLIANCE WITH US LAW 14
8. RESTRICTIVE COVENANTS 16
9. GENERAL PROVISIONS 17
10. ANNOUNCEMENTS 18
11. COSTS 18
12. NOTICES 18
13. GOVERNING LAW AND JURISDICTION 18
FIRST SCHEUDLE: Particulars of the Venors 20
SECOND SCHEDULE: Basic Information Concerning the Company 21
THIRD SCHEUDLE: Warranties and Representations Clause 5 23
FOURTH SCHEDULE: Tax indemnities 34
FIFTH SCHEDULE: Vendors Protection
<PAGE> 3
2
THIS AGREEMENT is made the 28th day of February 1997
BETWEEN:
(1) THE SEVERAL PERSONS whose names and addresses are set out in Column
(1) of the First Schedule hereto ("the Vendors")
(2) PAREXEL INTERNATIONAL CORPORATION whose principal place of business is
at 195 West Street, Waltham, Massachusetts 02154, USA ("the Purchaser")
WHEREAS
(A) S-Cubed Clinical Limited ("the Company") has an authorised and issued
share capital particulars whereof together with other details are set
out in the Second Schedule hereto.
(B) The Vendors are the beneficial owners of or are otherwise able to
procure the transfer of the numbers of shares of the Company specified
in Column (2) of the First Schedule hereto opposite their respective
names.
(C) The Vendors are desirous of selling and the Purchaser is willing to
purchase the Shares (as hereinafter defined) on the terms and subject
to the conditions hereinafter contained.
NOW IT IS HEREBY AGREED as follows:-
1. DEFINITIONS
1.1 In this Agreement and the Schedules hereto the following expressions
shall unless the context otherwise requires have the meanings
following:-
"Business day" a day on which banks shall be open in London
for the conduct of generally banking
business (excluding Saturdays);
"Claim" in the Fourth and Fifth Schedule hereto
shall mean any claim assessment notice
demand letter or other document issued or
action taken by or on behalf of any Taxation
Authority whereby it appears that the
<PAGE> 4
3
Company or the Purchaser is to be or is
sought to be made subject to a Liability to
Taxation;
"the Consideration Shares" means such Common Stock of US$0.01each of
the Purchaser issued to the Vendors as
Consideration hereunder;
"the Companies Acts" the Companies Acts 1985 and 1989, the
Insolvency Act 1986, the Business Names Act
1985, the Companies Securities (Insider
Dealing) Act 1985 and every statutory
modification or re-enactment thereof for the
time being in force;
"Completion" completion of the obligations of the parties
hereunder in accordance with the provisions
of Clause 5 hereof;
"the Disclosure Letter" the letter of even date herewith from the
Vendors' to the Purchaser's a copy of which
is annexed hereto;
"Encumbrance" includes any interest or equity of any
person (including, without prejudice to the
generality of the foregoing, any right to
acquire, option or right of pre-emption), or
any mortgage, charge, pledge, lien,
assignment, hypothecation, security
interest, title retention or any other
security agreement or arrangement;
"the Effective Date" the date of Completion;
"Event" includes (without limitation) any act
omission, transaction or shortfall in
distributions whether or not the Company is
a party thereto and includes Completion;
"Independent Accountant" means such person who shall be nominated by
either party upon agreement or failing
agreement by
<PAGE> 5
4
the President for the time being of the
Institute of Chartered Accountants;
"Industrial Property Rights" patents, trade marks, registered designs,
pending application for any of the
foregoing, trade or business names and
copyright and all other similar industrial,
intellectual or commercial rights;
"Liability to Taxation" means not only a liability to make an
actual payment of or in respect of
Taxation (whether the same has been the
subject of any assessment or demand at
Completion or otherwise) and whether
satisfied or unsatisfied at Completion but
shall also include:-
(a) the loss, counteraction,
nullification, disallowance or
claw-back of any Relief granted by
or pursuant to any Taxation Statute
or otherwise for taxation purposes
which would (were it not for the
Liability to Taxation in question)
have been available to the Company
or the Purchaser; and
(b) the nullification cancellation or
set-off of a right to repayment of
Taxation which would (were it not
for the Liability to Taxation in
question) have been so available to
the Company or the Purchaser
and in the case of a relief allowance or
credit so lost, the amount of the relief
allowance or credit so lost, or if such
relief allowance or credit is a deduction
from or is offset against gross income or
profits, the amount of Taxation which would
(in the case of a lost relief allowance or
credit and on the basis of tax rates current
at the date of such loss) have been saved
thereby but for such loss shall be treated
as an
<PAGE> 6
5
amount of Taxation for which a liability on
the Company or the Purchaser (as
appropriate) has arisen and fallen due, and
in the case of a nullification cancellation
or set-off of a right to repayment of
Taxation the amount of the repayment which
would otherwise have been obtained shall be
treated as an amount of Taxation for which a
liability on the Company or the Purchaser as
appropriate has arisen and fallen due;
"Management Accounts Date" 31st January 1997;
"Nasdaq" National Association of Securities Dealers
Automated Quotation System;
"the Purchaser's Accountant" means Messrs Price Waterhouse of Thames
Court, 1 Victoria Street, Windsor;
"the Purchaser's Solicitors" Lawrence Graham of 190 Strand, London
WC2R 1JN
"Reliefs" in the Fourth Schedule hereto means all
amounts available to reduce either profits
or Taxation and includes (without
limitations) all losses allowances
exemptions set-offs deductions credits and
repayments;
"the Shares" the shares of the Company specified in
Column (2) of the First Schedule hereto;
"Taxation" means:-
(a) any charge, tax, duty, levy or
liability imposed by national or
local government or any other
person pursuant to any statute or
statutory provision including
orders, regulations, instruments,
bye-laws or other subordinate
legislation made under the
<PAGE> 7
6
relevant statute or statutory
provision and includes (without
limitation) corporation tax,
advance corporation tax, income
tax, capital gains tax,
development land tax, value added
tax, customs and other import
duties, national insurance
contributions, stamp duty, capital
duty, stamp duty reserve tax,
estate duty, capital transfer tax,
inheritance tax and any amount
which the Company is liable to
account for by way of deduction or
withholding, amounts equivalent to
the foregoing and any payment
whatsoever chargeable in the
United Kingdom or elsewhere which
the Company may be or become bound
to make to any person as a result
of the operation of any enactment
relating to Taxation;
(b) any capital transfer tax or
inheritance tax which:-
(i) is at the date hereof a
charge over any of the
shares of the Company; or
(ii) at the date hereof gives
rise to a power of sale
over the shares of the
Company; or
(iii) after the date hereof
becomes a charge on or
gives rise to a power of
sale over any of the
shares of the Company
being a liability in
respect of additional
capital transfer tax or
inheritance tax payable
on the death of any
person within three years
or seven years after a
transfer of value or gift
and in deciding whether a
charge
<PAGE> 8
7
on or power of sale over
any of the shares exists
at any time the fact
that any capital
transfer tax or
inheritance tax is not
yet payable or may be
paid by instalments
shall be disregarded and
such tax shall be
treated as becoming due
and a charge or power of
sale as arising on the
date of the transfer of
value or capital
distribution in respect
of which it becomes
payable or arises and
the provisions of IHTA
S213 shall not apply
thereto;
(c) any Taxation assessed on the
Vendors under ICTA S776 which is
recoverable from the Purchaser
and/or the Company pursuant to the
provisions of S777(8) of that Act
to the extent the Vendors make a
claim for recovery from the
Purchaser and/or the Company;
(d) any penalties fines costs charges
interest or damages payable in
connection with any Taxation;
(e) any payment made or liability
incurred in connection with any
reasonable settlement of any Claim
for Taxation;
(f) all costs and expenses incurred by
the Company or the Purchaser in
connection with any Claim for
Taxation to which the Tax
Indemnities relate;
"Taxation Authority" any national or local government, authority
or body whatsoever whether of the United
Kingdom or
<PAGE> 9
8
elsewhere empowered to impose collect or
administer Taxation;
"Tax Indemnities" the indemnities provided by Clause 7 and the
Seventh Schedule hereto;
"Taxation Statute" any statute enactment law regulation or
practice enacted or issued or coming into
force providing for or imposing any
Taxation;
"the Vendor's Accountants" Grant Thornton of 28 Kenwood Park Road,
Sheffield S7 1NG;
"the Vendors' Solicitors" Wake Smith of 68 Clarkehouse Road, Sheffield
S10 2LJ;
"Warranties" means the representations and warranties
made to the Purchaser in the terms set out
in Clause 5 and the Third Schedule;
"Warranty Claim" in relation to the Fifth Schedule shall mean
any claim made by the Purchaser against the
Vendors for breach of the Warranties in the
Third Schedule;
"ICTA" the Income and Corporation Taxes Act 1988;
"CAA" the Capital Allowances Act 1990;
"IHTA" the Inheritance Tax Act 1984;
"FA" Finance Act;
"TCGA" the Taxation of Chargeable Gains Act 1992;
"VATA" the Value Added Tax Act 1994;
"TMA" the Taxes Management Act 1970.
1.2 References to the consequences of acts or transactions effected prior
to Completion shall include the combined effect of two or more acts or
transactions the first of which
<PAGE> 10
9
shall have taken place or be deemed to have taken place on or before
the date of Completion. Reference to the result of Events on or before
Completion shall include the combined result of two or more Events the
first of which shall have taken place or is deemed to have taken place
on or before Completion.
1.3 The expression "the Vendors" includes their respective personal
representatives.
1.4 Any document expressed to be "in the approved terms" means in a form
approved and for the purpose of identification signed by or on behalf
of the parties hereto.
1.5 Where any Warranty or matter disclosed in the Disclosure Letter refers
to the knowledge information awareness or belief of a Vendor, each of
the Vendors shall be deemed to have made all reasonable enquiries into
the subject matter of that Warranty or Disclosure.
1.6 The expression "Subsidiary" shall mean any subsidiary (as defined by
Section 736 of the Companies Act 1985 (as amended by the Companies Act
1989)) for the time being of the Company.
1.7 References to Clauses, Sub-clauses and Schedules are references to
Clauses and Sub-clauses of this Agreement and Schedules to this
Agreement.
1.8 In this Agreement and the Schedules hereto the masculine gender shall
include the feminine and neuter, the singular number shall include the
plural and vice versa, and references to persons shall include bodies
corporate, unincorporated associations and partnerships.
1.9 In this Agreement words and phrases the definition of which is
contained or referred to in Part XXVI of the Companies Act 1985 shall
be construed as defined therein.
1.10 References in this Agreement to any statute or statutory provision
shall include (except where the context otherwise requires) any statute
or statutory provision which amends extends consolidates or replaces
the same and any statute or statutory provision which has been amended,
extended, consolidated or replaced by the same and shall include any
order, regulation, instrument or other subordinate legislation made
under the relevant statute or statutory provision.
1.11 The headings in this Agreement are inserted for convenience only and
shall not affect the construction hereof.
<PAGE> 11
10
1.12 Reference to income or profits or gains earned accrued or received
shall include income or profits or gains deemed to have been or treated
as or regarded as earned accrued or received for the purposes of any
Taxation Statute.
2. THE SHARES
2.1 The Vendors shall sell and the Purchaser shall purchase with effect
from the Effective Date the Shares free from any Encumbrance and
together with all accrued benefits and rights for the consideration
described in sub-clause 3.2 below ("the Consideration").
2.2 The Consideration shall be satisfied by the allotment and issue to the
Vendors credited as fully paid of 4,000 Common Stock of US$0.01 each of
the Purchaser ranking pari passu with the existing issued Common Stock
of US$0.01 each in the capital of the Purchaser save that such shares
shall not be entitled to participate in any dividend declared or paid
in respect of the year ending 30th June 1997;
3. REPAYMENT BY VENDORS AND THE COMPANY
3.1 The Vendors will prior to or simultaneously with Completion repay to
the Company any sums due by the Vendors, any Associate of the Vendors
or any of them (or by any person to whom they or any of them are or is
a trustee or personal representative) to the Company at Completion and
shall at Completion procure that neither they nor any such person as
aforesaid has any claim or right of action against the Company (other
than in respect of current remuneration as directors or executives) and
that the Company is not in any way obliged or indebted (other than as
aforesaid) to them or any such person and at Completion the Vendors
will confirm in writing to the Purchaser that they have so procured
3.2 At Completion the Purchaser shall procure that the Company shall repay
the Vendors the amount owing to them as specified in the Disclosure
Letter.
3.3 The Purchaser shall use its reasonable endeavours to secure the release
of the Vendors from any guarantees and other contingent liabilities
listed in the Disclosure letter and the Purchaser shall until it has
obtained a release indemnify and keep indemnified the Vendors against
any liability (including costs, damages and expenses) thereunder or
which may be incurred in relation thereto.
<PAGE> 12
11
4. COMPLETION
4.1 Completion shall take place on 28 February 1997 at the offices of the
Purchaser's Solicitors or such other offices as the parties may
subsequently agree when:-
4.1.1 the Vendors shall deliver or cause to be delivered to the
Purchaser:-
(a) duly executed Transfers together with the relative
share certificates in respect of the Shares;
(b) the certificate of incorporation, all certificates on
change of name, the seal and statutory books of the
Company made up to the date of Completion;
(c) the Leases to the Property;
(d) if the Purchaser so requires an effective waiver by
each of the members of the Company of any rights
which he may have under the Articles of Association
of the Company to have the Shares or any of them
offered to him for purchase and any other documents
necessary to substantiate the right of the
transferors of the Shares pursuant to this Agreement
to transfer the same;
(e) written confirmation pursuant to Clause 3.1;
(f) written resignation letters executed under seal by
such of the directors and secretaries of the Company
as the Purchaser may nominate, each such letter
incorporating an acknowledgement that the party
resigning has no claims (whether for compensation for
loss of office or termination of employment, unpaid
remuneration or otherwise howsoever) against the
Company; and
4.1.2 the Vendors shall procure that the Directors shall hold a
meeting of the Board of the Company at which
(a) the Directors shall appoint such persons as the
Purchaser may nominate as directors of the Company
and procure the resignation without compensation of
any nature whatsoever of such of the
<PAGE> 13
12
Directors and Secretary of the Company as the
Purchaser may nominate;
(b) the Directors shall vote in favour of the
registration of the Purchaser or its nominees as
members of the Company subject to the production of
duly stamped and completed Transfers;
(c) Messrs Price Waterhouse shall be appointed Auditors;
4.1.3 the Vendors shall procure the convening of an extraordinary
general meeting of the Company and the passing of a special
resolution to adopt new articles of association in the
approved terms;
4.1.4 Subject to the performance by the Vendors of their obligations
in accordance with the foregoing provisions of this Clause 4,
the Purchaser shall allot to each of the Vendors the number of
the Consideration Shares of the Purchaser to which he is
entitled hereunder and deliver the relative documents of
title;
4.2 If in any respect the provisions of sub-clauses 4.1.1, 4.1.2, 4.1.3 and
4.1.4 are not complied with on the date for Completion set by clause
4.1 the Purchaser and the Vendors as appropriate may:-
4.2.1 defer Completion to a date not more than 10 days after the
date set out above (and so that the provisions of this
sub-clause shall apply to Completion as so deferred); or
4.2.2 proceed to Completion so far as practicable (without prejudice
to its rights hereunder); or
4.2.3 rescind this Agreement.
5. WARRANTIES
5.1 The Purchaser has entered into this Agreement and proposes to acquire
the Shares on the faith of the Warranties.
5.2 In particular and without prejudice to the generality of sub-clause 5.1
the Vendors hereby warrant and represent to the Purchaser that the
recitals to this Agreement and
<PAGE> 14
13
the Warranties are at the date hereof and will at Completion be true
and accurate in all respects.
5.3 The Purchaser shall not be entitled to claim that any fact renders any
of the Warranties untrue or misleading or caused them to be breached if
it has been fully fairly and accurately disclosed to the Purchaser in
the Disclosure Letter.
5.4 The Vendors hereby covenant and undertake to the Purchaser that, if
after the date hereof it shall be found that any matter the subject of
a Warranty was not as warranted then, notwithstanding any further right
of the Purchaser hereunder in respect of such breach of Warranty, if
the effect thereof is that:-
5.4.1 the value of any asset belonging to the Company is less than
its value would have been had there been no breach of
Warranty; or
5.4.2 any asset represented as belonging to the Company does not so
belong; or
5.4.3 the Company has incurred or is under any liability or
contingent liability which it would not have incurred or been
under had there been no breach of Warranty;
then the Vendors shall on demand pay to the Purchaser (or, if so
requested by the Purchaser, to the Company) an amount equal to the
amount by which the value of the net assets of the Company is less than
it would have been had there been no such breach of Warranty and any
such payment made by the Vendors shall be taken into account in
assessing the damages of the Purchaser in connection with, arising out
of or resulting from any such breach of Warranty.
5.5 No claim by the Purchaser under the provisions of this Clause 5 shall
be prejudiced nor shall the amount of any such claim be reduced in
consequence of any information relating to the Company which may at any
time have come to the knowledge of the Purchaser or any of its advisers
(other than information contained in the Disclosure Letter and any
annexure thereto) and it shall not be a defence to any claim against
the Vendors that the Purchaser knew or ought to have known or had
constructive knowledge of any information (other than information
contained or supplied as aforesaid) relating to the circumstances
giving rise to such claim.
<PAGE> 15
14
5.6 The Warranties are separate and independent and save as expressly
provided in this Agreement or in the Disclosure Letter shall not be
limited by reference to any other paragraphs or anything in this
Agreement and such Warranties shall remain in full force and effect
notwithstanding Completion.
5.7 The Vendors shall procure that prior to Completion the Purchaser, its
agents, accountants and solicitors are given promptly on request all
such facilities and information regarding the business, assets,
liabilities, contracts and affairs of the Company and of the documents
of title and other evidence of ownership of its assets as the Purchaser
may reasonably require.
5.8 The Vendors undertake (in the event of any claim being made against any
of them in connection with the sale of the Shares to the Purchaser) not
to make any claim against the Company, or a director or an employee of
the Company, on whom any of them may have relied before agreeing to any
term of this Agreement or authorising any statement in the Disclosure
Letter but so that this shall not preclude any Vendor from claiming
against :-
5.8.1 any other Vendor under any right of contribution or indemnity
to which he may be entitled; and
5.8.2 any employee of the Company on whom they may have relied if
they have been fraudulent; and each Vendor hereby agrees to
consent to the grant of injunctive relief to restrain a breach
of the undertaking contained in this sub-paragraph if
requested by the Purchaser so to do.
6. TAX INDEMNITIES
The Vendors hereby indemnify the Purchaser in the terms of the Seventh
Schedule hereto.
7. COMPLIANCE WITH US LAW
The Vendor:
7.1 warrants and represents to the Purchaser that the Vendor:-
7.1.1 is not a US person, as that term is defined under Regulation S
of the Securities Act 1933 as amended ("the Act") and as at 15
May 1996 the
<PAGE> 16
15
Vendor was outside the United States (as that term is defined
under Regulation S) and is outside of the United States as of
the date of the execution and delivery of this Agreement.
7.1.2 is acquiring the Consideration Shares for his own account and
not on behalf of any US person or any other person, and the
transaction has not been pre-arranged with a purchaser in the
United States and the Vendor is acquiring the Consideration
Shares for investment purposes and not with a view towards
distribution and has no present arrangement to sell the
Consideration Shares.
7.1.3 is not an officer or director of any affiliate of the
Purchaser.
7.2 acknowledges and agrees that the Consideration Shares have not been
registered under the Act, and may not be offered or sold in the United
States or to US persons unless the Consideration Shares are registered
under the Act or an exemption from the registration requirements of the
Act is available.
7.3 acknowledges that the Consideration Shares are being offered and sold
to him in reliance on specific exemptions from the registration
requirements of the United States Federal and State securities laws and
that the Purchaser is relying upon the truth and accuracy of the
representations, warranties, agreements, acknowledgements and
understandings of the Vendor set forth herein in order to determine the
applicability of such exemptions and the suitability of Vendor to
acquire the Consideration Shares.
7.4 acknowledges that it is his responsibility to satisfy himself as to the
full observance by this transaction and the sale of the Consideration
Shares to him of the laws of any jurisdiction outside the United States
and that he has done so.
7.5 acknowledges that in view of the United States Securities and Exchange
Commission, the statutory basis for the exemption claimed for the
transactions would not be present if the offer and sale of the
Consideration Shares to the Vendor although in technical compliance
with Regulation S, is part of a plan or scheme to evade, the
registration provisions of the Act and the Vendor confirms that this
transaction is not part of any such plan or scheme.
7.6 has received and carefully reviewed the Purchaser's Prospectus dated
March 1, 1996 and Quarterly Report on Form 10-Q for the Quarter Ended
March 31, 1996
<PAGE> 17
16
(collectively, the "SEC Reports") and has had a reasonable opportunity
to ask questions of and receive answers from the Purchaser concerning
the Purchaser, and all such questions, if any, have been answered to
the full satisfaction of the Vendor.
7.7 acknowledges that no representations or warranties have been made to
him by the Purchaser or any agent, employee or affiliate of the
Purchaser and in entering into this transaction the Vendor is not
relying upon any information, other than that contained in this
Agreement, the SEC Reports and the results of independent
investigations by the Vendor.
7.8 has not sold, exchanged, transferred, pledged, disposed or otherwise
reduced her risk relative to the Consideration Shares during the 30 day
period preceding the date hereof.
7.9 acknowledges and agrees that this transaction is intended to be
accounted for as a pooling of interests for financial accounting
purposes, and, in that regard the Vendor hereby agrees with the
Purchaser that the Vendor will not sell, exchange, transfer, pledge,
dispose or otherwise reduce his/risk to the Consideration Shares during
the period which begins on the date hereof and ends at such time as the
Purchaser publicly announces financial results covering at least thirty
days of post-closing combined operations of the Purchaser and the
company (the "Pooling Lock-up Period") and the Purchaser at its
discretion, may cause stop transfer orders to be placed with its
transfer agent with respect to the Consideration Shares during the
Pooling Lock-up Period.
7.10 acknowledges and agrees that all offers and sales of the Consideration
Shares prior to the expiration of the period commencing on the date
hereof and ending 40 days thereafter (the "Restricted Period") shall
only be made in compliance with (i) the Pooling Lock-up Period and (ii)
the safe harbour provisions contained in Regulation S, with which the
Vendor is familiar, or pursuant to an exemption from registration under
the Act, and the Vendor shall not take a short position directly or
indirectly with respect to the Purchaser's during the Restricted
Period, and that all offers and sales after the expiration of the
Restricted Period in the United States or to the US persons shall be
made only pursuant to such a registration or to such exemption from
registration.
<PAGE> 18
17
8. RESTRICTIVE COVENANTS
8.1 For the purpose of assuring to the Purchaser the full benefit of the
businesses and goodwill of the Company each of the Vendors hereby
undertakes by way of further consideration for the obligations of the
Purchaser under this agreement as separate and independent agreements
that:-
8.1.1 he will not at any time after Completion disclose to any
person or himself use for any purpose and shall use his best
endeavours to prevent the publication or disclosure of, any
information concerning the business, accounts or finances of
the Company or its subsidiaries or any of its clients or
customers transactions or affairs, which may, or may have,
come to his knowledge;
8.1.2 for a period of two years after Completion he will not except
as hereinafter mentioned either on his own account or in
conjunction with or on behalf of any person firm or company
carry on or be engaged concerned or interested in any trade or
business conducted in or from any member State of the European
Union which is similar to or competitive with any trade or
business carried on by the Company within the period of two
years prior to the date of Completion;
8.1.3 for a period of two years after Completion he will not (save
with the prior written consent of the Purchaser) either on his
own account or in conjunction with or on behalf of any other
person firm or company directly or indirectly:
(a) solicit or entice away from the Company or employ any
officer manager or servant whether or not such person
would commit a breach of his contract of employment
by reason of leaving the service of the Company; nor
(b) solicit or accept the custom of any person firm or
corporation which during the one year prior to the
date of Completion shall have been a customer of the
Company.
<PAGE> 19
18
Provided that nothing in this sub-clause shall preclude or inhibit any
Vendor from carrying out his duties pursuant to a service agreement or
contract of employment between himself and the Company.
8.2 The restrictions contained in sub-clause 8.1 are considered reasonable
by the parties but in the event that any such restriction shall be
found to be void but would be valid if some part thereof were deleted
or the period or area of application reduced such restriction shall
apply with such modification as may be necessary to make it valid and
effective.
9. GENERAL PROVISIONS
9.1 The Vendors shall (and shall procure that any other necessary party
shall) execute and do all such documents acts and things as may be
reasonably required by the Purchaser for securing to or vesting in the
Purchaser the legal and beneficial ownership of the Shares forthwith
upon Completion in accordance with the terms and conditions of this
Agreement.
9.2 This Agreement shall not be assignable by any party hereto without the
prior written consent of the others save by the Purchaser to any
Subsidiary of the Purchaser to which the Shares shall be transferred.
9.3 The obligations of the Vendors are joint and several and such
obligations and undertakings shall be enforceable accordingly.
9.4 This Agreement (together with any document annexed hereto and signed by
or on behalf of the parties hereto) constitutes the whole Agreement
between the parties hereto and no variations hereof shall be effective
unless made in writing.
9.5 The provisions of this Agreement in so far as the same shall not have
been performed at Completion shall remain in full force and effect.
9.6 The Purchaser may release or compromise the liability of any of the
Vendors hereunder or grant to any Vendor time or other indulgence
without affecting the liability of any other Vendor hereunder.
9.7 None of the provisions of this Agreement which are relevant
restrictions as that term is defined by the Restrictive Trade Practices
Act 1976 shall come into effect until the day
<PAGE> 20
19
following the day on which full particulars of this Agreement have been
furnished to the Office of Fair Trading in accordance with the said
Act.
10. ANNOUNCEMENTS
No party to this Agreement shall make any statement or announcement in
connection with this transaction except with the prior approval of the
other party save as may be required by law or save to the extent
necessary to comply with the requirements of the NASDAQ and Securities
and Exchange Commission.
11. COSTS
Each party to this Agreement shall pay its own costs of and incidental
to this Agreement.
12. NOTICES
Any notice required to be given by any party hereto to any other shall
be in writing and may be served personally or by post and if served by
post shall be served by prepaid registered letter sent through the post
to the address of the party to be served as shown in this Agreement or
such other address as may from time to time be notified for this
purpose and any notice so served shall be deemed to have been served 48
hours after the time on which it is posted and in proving such service
it shall be sufficient to prove that the notice was properly addressed
and posted.
13. GOVERNING LAW AND JURISDICTION
This Agreement shall be governed by the law of England and Wales and
the parties hereby submit to the non-exclusive jurisdiction of the
Courts of England and Wales.
AS WITNESS whereof this Agreement has been entered into the day and year first
above written.
<PAGE> 21
20
THE FIRST SCHEDULE
------------------
PARTICULARS OF THE VENDORS THEIR SHAREHOLDINGS
AND THE CONSIDERATION
(1) (2) (3)
No of Common Stock shares
of the Purchaser allotted
Names and Addresses No. of Ordinary Shares to the Vendors
Arfon Lloyd Jones of: 25 2,000
47 Westville Road
Penylan
Cardiff CF2 5DF
Diana Smith of: 25 2,000
47 Westville Road
Penylan
Cardiff CF2 5DF
<PAGE> 22
21
THE SECOND SCHEDULE
-------------------
BASIC INFORMATION CONCERNING THE COMPANY
A. The Company
1. Registered Number : 311023
2. Date of incorporation : 5th October 1995
3. Address of registered office : Cardiff Medicentre, Heath Park, Cardiff
CF4 4UJ
4. Authorised share capital : P100 in Ordinary Shares of P1 each
5. Issued share capital : P100 in Ordinary Shares of P1 each
6. Directors:
Full Names Addresses
DR ARFON LLOYD JONES 47 Westville Road
Penylan
Cardiff CF2 5DF
DR DIANA SMITH 47 Westville Road
Penylan
Cardiff CF2 5DF
DR RICHARD KAY St Giles View
off Main Road
Great Longstone
Bakewell
Derbyshire DE4 1PA
SHIRLEY ANNE WILDEY 6 Arnside Avenue
Hazel Grove
Stockport
Cheshire
<PAGE> 23
22
7. Company Secretary
NIGEL KEITH RAWLINGS 18 Hollin Lane
Styal
Cheshire
SK9 4JH
<PAGE> 24
23
THE THIRD SCHEDULE
------------------
WARRANTIES AND REPRESENTATIONS: CLAUSE 5
----------------------------------------
The warranties and representations referred to in Clause 5 of the foregoing
Agreement are that:-
1. CONSTITUTION OF THE COMPANY
1.1 Share Capital
-------------
The Company has an authorised and issued share capital as set out in
the Second Schedule and the issued shares are beneficially owned by the
Vendors in the numbers set opposite their respective names in the
second column of the First Schedule to the foregoing agreement free
from all liens charges and encumbrances or interests in favour of any
other person.
1.2 Memorandum and Articles
-----------------------
The copy of the Memorandum and Articles of Association of the Company
annexed to the Disclosure Letter is true and complete and has embodied
therein or annexed thereto a copy of every such resolution or agreement
as is referred to in Section 380 of the Companies Act 1985.
1.3 Company Resolutions
-------------------
Neither the Company nor any class of its members has passed any
resolution (other than resolutions relating to business at Annual
General Meetings which was not special business).
1.4 Options etc.
-----------
No person has the right (whether exerciseable now or in the future and
whether contingent or not) to call for the issue of any share or loan
capital of the Company under any option or other agreement (including
conversion rights and rights of pre-emption) and no claim has been made
by any person to be entitled to any such right.
<PAGE> 25
24
1.5 Returns and Compliance with Company Law etc.
-------------------------------------------
The Company has to the Vendors knowledge information and belief
complied with the provisions of the Companies Acts The Financial
Services Act 1986 and the European Communities Act 1972 and all returns
particulars resolutions and other documents required under any
legislation to be delivered on behalf of the Company to the Registrar
of Companies or to any other authority whatsoever have been properly
made and delivered.
1.6 Statutory Books
---------------
The register of members and other statutory books of the Company have
been properly kept and contain a true and complete record of the
matters which should be dealt with therein; no notice or allegation
that any of the same is incorrect or should be rectified has been
received.
1.7 Insolvency
----------
No order has been made or petition presented or resolution passed for
the winding up of the Company, nor has any distress execution or other
process been levied in respect of the Company, nor is there any
unfulfilled or unsatisfied judgment or court order outstanding against
the Company.
1.8 The Shares
----------
1.8.1 Commission
----------
No one is entitled to receive from the Company any finders fee,
brokerage, or other commission in connection with the purchase
of shares in the Company or any Associate company of the
Company.
1.8.2 New Issues
----------
Save as provided in this Agreement no share or loan capital has
been issued or agreed to be issued by the company other than
the 100 ordinary shares of P1 each issued to the Vendors and
Sheffield Statistical Services Limited.
1.8.3 There are no agreements or arrangements in force which provide
for the present or future issue, allotment or transfer of or
grant to any person the
<PAGE> 26
25
right (whether conditional or otherwise) to call for the
issue, allotment or transfer of any share or loan capital of
the Company (including any option of pre-emption or
conversion).
1.9.4 The Company has not adopted, agreed or resolved to adopt any
employee share option scheme, profit sharing involving the
Company's share capital or share incentive scheme of any nature
whatsoever.
1.9 Capacity of Vendors
-------------------
Each Vendor has full power to enter and perform this Agreement, which
when executed constitute binding obligations on each Vendor in
accordance with their terms.
1.10 Vendors' other Interests
------------------------
No Vendor nor any Associate of any Vendor has any estate, right or
interest, directly or indirectly, in any business other than that now
carried on by the Company which is or is likely to be or become
competitive with the business or the proposed business of the Company
save as the registered holder or beneficial owner of any class of
securities of any company if such class of securities is listed on any
recognised Stock Exchange and in respect of which such person holds, or
is beneficially interested in, (together with his Associates) less than
five per cent. of any single class of the securities in that company.
2. ACCOUNTS
2.1 Management Accounts Warranty
----------------------------
The Management Accounts:-
2.1.1 give a true and fair view of the assets and liabilities of
the Company at the Management Accounts Date;
2.1.2 properly reflect the financial position of the Company as at
the Management Accounts Date.
2.2 Provisions for Liabilities
--------------------------
<PAGE> 27
26
Proper provision or reserve has been made in the Management Accounts
for all liabilities and capital commitments of the Company outstanding
at the Management Accounts Date whether known contingent unquantified
disputed or not.
2.3 Tax Provisions
--------------
Proper provision or reserve has been made in the Management Accounts
for all Taxation assessed or liable to be assessed on the Company or
for which it is accountable in respect of income profits or gains
earned accrued or received on or before the Balance Sheet Date or any
event on or before the Management Accounts Date.
2.4 Debts
-----
All debts owed to the Company as at Completion will realise their full
face value and be good and collectable in the ordinary course of
business and in any event will have been paid to the Company within
three months of Completion.
3. FINANCE
Financial Position and Prospects
--------------------------------
There has been no material deterioration in the financial position or
prospects or turnover of the Company since the Management Accounts
Date.
4. OWNERSHIP OF ASSETS
4.1 Assets
------
4.1.1 Except for current assets disposed of by the Company in the
ordinary course of its business the Company is the owner of and
has good marketable title to all assets included in the
Management Accounts or which have been acquired by the Company
since the Management Accounts Date.
4.2 Insurances
----------
4.2.1 The policies of insurance which are maintained by the Company
afford the Company adequate cover against such risks as are
commonly covered by insurance by companies carrying on the same
type of business as the Company and in particular insure the
assets and undertakings of the
<PAGE> 28
27
Company (of an insurable nature) against fire in their full
replacement or reinstatement value.
4.2.2 The Company is now, and has at all material times been,
adequately covered against accident, damage, injury, third
party loss (including product liability), loss of profits and
other risks normally covered by insurance.
4.2.3 All insurance is currently in full force and effect and nothing
has been done or omitted to be done which could make any policy
of insurance void or voidable or which is likely to result in
an increase in premium.
4.2.4 There is no claim outstanding under any such policy nor are the
Vendors aware of any circumstances likely to give rise to a
claim.
4.2.5 The Company has paid all sums falling due prior to Completion
in respect of premiums on all policies of insurance maintained
by the Company and the Company will at its expense from time to
time:-
(a) renew all policies due for renewal between the date
hereof and the Completion Date for a reasonable and
normal period of renewal; and
(b) insure and maintain insurance for the full value thereof
upon all assets coming into its possession between the
said date in accordance with its normal practice and for
a reasonable and normal period,
such periods in every case to extend beyond the Completion
Date.
5. BUSINESS OF THE COMPANY
5.1 Changes since incorporation
---------------------------
Since the date of incorporation the Company:-
5.1.1 has carried on its business in the ordinary and usual course;
5.1.2 has not entered into any transaction nor assumed any liability
nor made any payment not provided for in the Management
Accounts which is not in the ordinary course of its business;
<PAGE> 29
28
5.1.3 has carried on the business without any interruption or
alteration in the nature scope or manner of its business;
5.1.4 has not borrowed or raised any money or taken any financial
facility (except such short term borrowings from its bankers
as are disclosed in the Disclosure Letter);
5.1.5 has paid its creditors within the times agreed with such
creditors and there are not debts outstanding by the Company
which have been due for more than four weeks;
5.2 Licences etc.
------------
5.2.1 All necessary licences consents permits and authorities
(public and private) have been obtained by the Company to
enable the Company to carry on its business effectively in the
places and in the manner in which such business is now carried
on and all such licences consents permits and authorities are
valid and subsisting.
5.2.2 The Company is not in breach of any of the terms and
conditions of any such licences or consents and there are no
factors known to the Vendors that might in any way prejudice
the continuation or renewal of any of such licences or
consents.
5.3 Breach of statutory provisions, etc.
-----------------------------------
5.3.1 Neither the Company, nor any of its officers, agents or
employees to the Vendors knowledge information and belief
(during the course of their duties in relation to the Company)
have committed, or omitted to do, any act or thing the
commission or omission of which is, or could be, in
contravention of any Act, Order, Regulation, or the like in
the United Kingdom which is punishable by fine or other
penalty; and
5.3.2 the Company has not received any Notice of any offence or
breach of statutory duty or any other Notice whatsoever
(whether or not giving rise to a criminal liability) under the
provisions of the Factories Act, 1961, The Office Shops and
Railway Premises Act, 1963, The Fire Precautions Act,
<PAGE> 30
29
1971 or The Health and Safety at Work Act, 1974 (or any Order
or Regulation made thereunder) the Wages Act 1986;
5.3.3 the Company has duly complied with all relevant requirements
of the Financial Services Act 1986 and the Data Protection Act
1984.
<PAGE> 31
30
5.4 Litigation
----------
5.4.1 The Company is not engaged in any litigation or arbitration
proceedings.
5.4.2 To the Vendors knowledge information and belief there are no
litigation or arbitration proceedings pending or threatened by
or against the Company and there are no circumstances likely
to give rise to any litigation or arbitration.
5.4.3 The Company is not subject to any order or judgment given by
any Court or governmental agency and has not been a party to
any undertaking or assurance given to any Court or
governmental agency which is still in force.
5.5 Guarantees, Options, etc
------------------------
The Company is not a party to any option or pre-emption right, or a
party to any guarantee or suretyship or any other obligation (howsoever
called) to pay, purchase or provide funds (whether by the advance of
money, the purchase of or subscription for shares or other securities,
the purchase of assets or services, or otherwise) for the payment of,
indemnity against the consequence of default in the payment of, or
otherwise to be responsible for, any indebtedness of any other person.
5.6 Other Party's Defaults
----------------------
No party to any agreement with or obligation to the Company is in
default thereunder being a default which would be material in the
context of the financial or trading position of the Company nor (so far
as the Vendors are aware) are there any circumstances likely to give
rise to such a default.
5.7 Other Material Contracts
------------------------
The Company is not a party to nor subject to any agreement,
transaction, obligation, commitment, understanding, arrangement or
liability which:-
5.7.1 is incapable of complete performance in accordance with its
terms; or
5.7.2 is known by any Vendor or by the Company to be likely to
result in a loss to the Company on completion of performance;
or
<PAGE> 32
31
5.7.3 cannot readily be fulfilled or performed by the Company on
time and without undue or unusual expenditure of money, effort
or personnel; or
5.7.4 involves or is likely to involve obligations, restrictions,
expenditure or receipts of an unusual, onerous or exceptional
nature and not in the ordinary course of the Company's
business; or
5.7.5 is a contract with any trade union or body or organisation
representing its employees; or
5.7.6 requires an aggregate consideration payable by the Company in
excess of P10,000; or
5.7.7 involves or is likely to involve the supply of goods by or to
the Company the aggregate sales value of which will represent
in excess of ten per cent. of the turnover of the Company for
the last financial year; or
5.7.8 requires the Company to pay any commission, finders fee,
royalty or the like; or
5.7.9 is in any way otherwise than in the ordinary and proper course
of the Company's business.
5.8 Consequence of share acquisition by the Purchaser
-------------------------------------------------
The acquisition of the Shares of the Company by the Purchaser or the
compliance with the terms of this Agreement will not:-
5.8.1 cause the Company to lose the benefit of any right or
privilege it presently enjoys or cause any person who normally
does business with the Company not to continue to do so on the
same basis as previously;
5.8.2 relieve any person of any obligation to the Company (whether
contractual or otherwise) or enable any person to determine
any such obligation or any right or benefit enjoyed by the
Company or to exercise any right whether under an agreement
with or otherwise in respect of the Company;
5.8.3 result in any present or future indebtedness of the Company
becoming due or capable of being declared due and payable
prior to its stated maturity;
<PAGE> 33
32
and to the best of the knowledge and belief of the Vendors the attitude
and custom of clients, customers and suppliers with regard to the
Company will not be prejudicial affected thereby.
6. EMPLOYMENT
6.1 Directors
---------
The particulars shown in the Second Schedule are true and complete and
no person not named therein as such is a director or shadow director
(as defined in Section 741 of the Companies Act 1985) of the Company.
No present officer or employee of the Company has given or received
notice terminating his employment except as expressly contemplated
under this Agreement.
6.2 Service Contracts
-----------------
There is not outstanding any contract of service between the Company
and any of its directors officers or employees which is not terminable
by the Company without compensation (other than any compensation
payable by statute) on three month's notice given at any time.
7. PENSIONS
The Company has no pension scheme and there is no arrangement to which
the Company contributes under which benefits of any kind are payable to
any employee.
8. INDUSTRIAL PROPERTY RIGHTS
The business of the Company as now carried on does not and is not
likely to infringe any Industrial Property Right of any other person
(or would not do so if the same were valid) or give rise to a liability
to pay compensation pursuant to the Patents Act 1977 ss 40 and 41 and
all licences to the Company in respect of any such protection are in
full force and effect.
8.1 The Company has not (otherwise than in the ordinary and normal course
of business) disclosed or permitted to be disclosed or undertaken or
arranged to disclose to any person other than the Purchaser any of its
know-how, trade secrets, confidential information, price lists or lists
of customers or suppliers.
<PAGE> 34
33
8.2 The Company is not a party to any secrecy agreement or agreement
which may restrict the use or disclosure of information.
8.3 Nothing has been done or omitted by any Group Company which would
enable any licensee under a licence granted by a Group Company to be
terminated or which in any way constitutes a breach of terms of any
licence.
8.4 All Industrial Property Rights used or required by the Company in
connection with its business are in full force and effect and are
vested in and beneficially owned by it.
8.5 The Company is the sole beneficial owner of the Industrial Property
Rights listed in the Disclosure Letter and (where registration is
possible) the Company has been and is registered as proprietor, and
each of those Rights is valid and enforceable, and none of them is
being used, claimed, opposed or attacked by any other person.
8.6 No right or licence has been granted to any person by the Company to
use in any manner or to do anything which would or might otherwise
infringe any of the Industrial Property Rights referred to above; and
no act has been done or omission permitted by the Company whereby they
or any of them have ceased or might cease to be valid and enforceable.
9. GENERAL
9.1 Material Disclosure
-------------------
9.1.1 The contents of the Disclosure Letter and of all accompanying
documents are true and accurate in all material respects and
fully, clearly and accurately disclose every matter to which
they relate.
9.1.2 The Vendors (after having made reasonable enquiry) are not
aware of any other fact or matter which renders any of the
information referred to in Warranty 8.1.1 above misleading.
9.2 Loans to Vendors
----------------
There are not outstanding:-
9.2.1 any loans made by the Company to the Vendors and/or any
director of the Company and/or any Associate of the Vendors or
of any such director;
<PAGE> 35
34
9.2.2 any debts owing to the Company by the Vendors and/or any
director of the Company and/or Associate of the Vendors or of
any such director;
9.2.3 any debts owing by the Company other than debts which have
arisen in the ordinary course of business; and
9.2.4 any securities for any such loans or debts as aforesaid.
<PAGE> 36
35
9.3 Investment, associations and branches
-------------------------------------
The Company:-
9.3.1 is not the holder or beneficial owner of and has not agreed to
acquire any class of the share or other capital of any other
company or corporation (whether incorporated in the United
Kingdom or elsewhere);
9.3.2 is not and has not agreed to become a member of any
partnership, joint venture, consortium or other unincorporated
association;
9.3.3 has no branch outside England and no permanent establishment
(as that expression is defined in the respective Double
Taxation Relief Orders current at the date hereof) outside the
United Kingdom.
<PAGE> 37
36
THE FOURTH SCHEDULE
-------------------
TAX INDEMNITIES: CLAUSE 7
-------------------------
1. INDEMNITY
1.1 SUBJECT as hereinafter provided the Vendor hereby agrees to pay to
the Purchaser an amount equal to:-
1.1.1 any Liability to Taxation; and
1.1.2 any depletion or reduction in value of the assets or increase
in the liabilities of either the Company or the Purchaser as a
result of or in consequence of any Liability to Taxation
resulting from or by reference to any income profits or gains earned
accrued or received on or before Completion or any Event occurring or
pursuant to any Taxation Statute deemed to occur on or before
Completion whether alone or in conjunction with other Events or
circumstances (provided that if other Events or circumstances occur
after Completion they be within the ordinary course of business of the
Company) and whether or not such Taxation is chargeable against or
attributable to any other person.
1.2 The liability of the Vendors shall be joint and several and shall bind
their respective successors and personal representatives.
2. VAT INDEMNITY
Without prejudice to paragraph 1 above the Vendor hereby agrees to pay
to the Purchaser an amount equal to any Liability to Taxation of the
Company as a result of its being treated as a member of the same group
as any other body corporate for the purposes of VATA s43 during any
prescribed accounting period as defined in VATA s25(1) which ended on
or prior to or was current at Completion and the next following
prescribed accounting period together with all costs and expenses
incurred and payable by the Company in connection with any such
Liability to Taxation.
3. EXCLUSIONS
3.1 The Indemnities contained in this Schedule do not cover any Liability
to Taxation:-
<PAGE> 38
37
3.1.1 to the extent that provision or reserve (not being a deferred
taxation reserve) specifically in respect thereof has been made
in the Management Accounts;
4. MITIGATION
4.1 The Vendor shall be liable under the indemnities contained in
paragraphs 1 and 2 hereof notwithstanding any Reliefs which may be
available to any person entitled to the benefit of the indemnities to
set against or otherwise mitigate any Liability to Taxation so that the
indemnities contained in this Schedule shall take effect as though no
such Reliefs were available.
4.2 If any provision for Taxation (not being a provision for deferred
taxation) contained in the Management Accounts shall at the request and
expense of the Vendor and to the satisfaction of the Purchaser's
Auditors prove to be an over-provision the amount so over-provided
shall be set off against the liability (if any) of the Vendor under the
provisions of this Schedule.
5. DISPUTES AND CONDUCT OF CLAIMS
5.1 If the Purchaser or the Company shall become aware of a Claim relevant
for the purposes of this Schedule the Purchaser shall or shall procure
that the Company will as soon as reasonably practicable give written
notice thereof to the Vendor at the address given.
5.2 If the Vendor shall indemnify and secure the Purchaser and the Company
to their reasonable satisfaction against any liabilities costs or
expenses which may be incurred thereby including any additional
Liability to Taxation the Purchaser shall or shall procure that the
Company will take such action as the Vendor may reasonably request in
writing to avoid resist appeal dispute or compromise the Claim (a Claim
where action is so requested being hereinafter referred to as a
"Dispute").
PROVIDED ALWAYS THAT the Purchaser shall not be obliged to nor be
required to procure that the Company shall take any such action if
having given the Vendor written notice of the receipt of such
assessment the Purchaser has not within 15 days thereafter received
written instructions from the Vendor in accordance with the preceding
provisions of this sub-paragraph to do so.
<PAGE> 39
38
5.3 Notwithstanding that the conduct of a Dispute may be dealt with in
accordance with the Vendor's request under sub-paragraph 5.2 above:
5.3.1 the Company and the Purchaser shall be kept fully informed of
all matters pertaining thereto and shall be entitled to receive
copies of all correspondence pertaining thereto;
5.3.2 all communications pertaining to the Dispute which are to be
transmitted to the Inland Revenue H.M. Customs & Excise or any
other appropriate statutory or governmental authority or body
shall first be transmitted to the Purchaser and the Company for
approval and shall only be finally transmitted if such approval
is given;
5.3.3 the Vendor shall make no settlement or compromise of the
Dispute without the prior approval of the Purchaser.
5.4 Notwithstanding the foregoing provisions of this paragraph at all times
during the conduct of a Dispute the Purchaser shall have the option
exercisable by notice in writing to the Vendor to refuse to take or
procure the taking of such action as the Vendor may request in
accordance with 5.2 above after 14 days from the date of the notice if
previously the Vendor has not taken steps properly and effectively to
conduct the said Dispute.
6. PAYMENTS
6.1 The Vendor will make payments to the Purchaser under the provisions of
this Schedule in full in cleared funds and without any deduction
whatsoever save as may be required by law as follows:
6.1.1 where the Company is due to make an actual payment of Taxation
to which this Schedule relates five days before that payment is
due;
6.1.2 in the case of the nullification cancellation or set-off of a
right to repayment of Taxation the date on which that repayment
would have been due;
6.1.3 in the case of the loss counteraction nullification
disallowance or claw-back of any Relief (other than a right to
repayment of Taxation) the date on which the Company is
required to make an actual payment of Taxation
<PAGE> 40
39
which it would not have been required to make but for the loss
counteraction nullification disallowance or claw-back of that
Relief;
6.1.4 in the case of costs and expenses incurred by the Purchaser or
the Company in connection with any Liability to Taxation or any
other matter not dealt with elsewhere in this paragraph 6 three
days after the service by the Purchaser of a notice containing
a written demand therefor.
6.2 Where there is or has been a Dispute and the Dispute relates to a Claim
where the Taxation the subject matter thereof has to be paid before the
action requested by the Vendor in respect of the Claim can effectively
be taken payment in respect thereof shall be made by the Vendor in full
in cleared funds three days before such Taxation must be paid to enable
the Purchaser to comply with the Vendor's request.
7. TAXATION OF CLAIMS
In the event of any payment pursuant to this Schedule being liable to
Taxation in the hands of the Purchaser the amount of any such Liability
to Taxation shall be deemed to be increased so as to ensure that the
amount received by the Purchaser shall after Taxation be equal to that
which would have been received had the payment not been subject to
Taxation.
8. INTEREST
In the event that any payment pursuant to this Schedule has not been
received by the Company or the Purchaser by the date for payment in
accordance with paragraph 7 of this Schedule interest shall be payable
to the Purchaser as appropriate in respect of the sum unpaid at a rate
of 2% above Barclays Bank PLC base rate for the time being in force
calculated on a daily basis.
<PAGE> 41
40
THE FIFTH SCHEDULE
------------------
The parties to this Agreement agree one with the other so as to qualify the
terms of this Agreement as follows:
1. Any breach of the Warranties or Tax Indemnities or misstatement of fact by
the Vendor shall not give rise to a right on the part of the Purchaser to
rescind or terminate this Agreement after Completion.
2. No proceedings for any claim under the Warranties or the Tax Indemnities
shall be instituted unless such proceedings shall be in respect of a claim
or claims totalling (together with the amount of any such claims
previously made) in excess of US$10,000.
3. The liability of the Vendors under the Warranties and Tax Indemnities
shall not in any event exceed in aggregate US$100,000.
4. The Vendor shall not be liable in respect of any Claim or Warranty Claim
unless the amount of such liability exceeds the sum of US$1,000 and any
liability the amount of which does not exceed such sum shall be
disregarded in calculating the aggregate amount of liabilities in respect
of Claims or Warranty Claims for the purposes of clause 2 of this
Schedule.
5.1 The Vendors shall not be liable in respect of any Claim or Warranty
Claim unless written notice thereof (containing at least a general
description of the matters alleged to give rise thereto) has been
served on it on or before the earlier of (i) the first anniversary
of Completion or (ii) the issue of the statutory report in relation
to the Company's accounts for the fiscal year ending 31st March
1997.
5.2 Where written notice of a Claim or Warranty Claim has been served on
the Vendor within the period appropriate to such Claim or Warranty
Claim in accordance with the provisions of clause 5.1 but liability in
respect of such Claim or Warranty Claim has not been accepted or
finally determined within one year from the date of service of such
written notice the Vendor shall not be liable in respect of such Claim
or Warranty Claim unless bona fide legal proceedings in respect thereof
have been issued and served upon the Vendor within such one year
period.
6. The Vendor shall not be liable in respect of any Warranty Claim if and
to the extent of which:
<PAGE> 42
41
6.1 specific provision reserve or allowance has been made in the
Management Accounts for any liability which is the subject
matter of such Warranty Claim; or
6.2 the discharge of any liability of the Company which is the
subject matter of such Warranty Claim has specifically been taken
into account and identified in the Management Accounts; or
6.3 the subject matter of such Warranty Claim has been or is made
good including (without limitation) the receipt by the Company or
the Purchaser of compensation relating to the subject matter of
such Claim under the terms of any policy of insurance; or
7. The Vendor shall not be liable in respect of any Claim if and to the
extent of which:
7.1 such Claim would not have arisen but for a voluntary act
transaction or omission of the Company or the Purchaser after
Completion otherwise than in the ordinary course of business; or
7.2 such Claim would not have arisen but for any change or changes in
legislation (including without limitation any increase in rates
of Taxation) or in the practice of the Inland Revenue or HM
Customs and Excise or any other Taxation authority (in the United
Kingdom or elsewhere) occurring after Completion whether or not
such change or changes purport to be retrospectively effective in
whole or in part; or
7.3 such Claim would not have arisen but for the making of this
Agreement or but for any act, transaction or omission required
under the terms of this Agreement or under the provisions of any
legislation; or
7.4 such Claim arises by virtue of any change in the bases upon which
the Accounts of the Company after Completion are prepared and/or
in the policies or practice adopted in the preparation of such
accounts.
8. If the Vendors make payment in respect of any Claim and the Purchaser the
Company subsequently recovers from a third party (including without
limitation the Inland Revenue HM Customs and Excise or any other Taxation
authority) a sum which is
<PAGE> 43
42
referable to the subject matter of such Claim the Purchaser shall
forthwith repay to the Vendors the amount paid by it in respect of such
Claim.
9. The Purchaser may not bring a Claim or Warranty Claim more than once in
respect of the same or substantially the same set of facts.
10. Without prejudice to the liability of the Vendors in respect of any Claim:
10.1 the Purchaser shall notify the Vendors of any claim against the
Purchaser and shall procure the Company to notify the Vendors of
any claim against the Company in respect of which (if valid) a
Warranty Claim would lie against the Vendors forthwith within a
reasonable period of the Purchaser or (as the case may be) the
Company becoming aware of the same.
10.2 the Vendors shall be kept fully informed of all steps proposed to
be taken by the Purchaser and the Purchaser shall not and shall
procure that the Company and the Subsidiary shall not admit
settle or discharge any such assessment or claim without the
Vendors having first been notified of the proposals and having
been given an opportunity to comment on same.
11. Nothing in the Agreement or in the Warranties shall be deemed to relieve
the Purchaser from a duty to the Vendors to mitigate their loss.
12. Any payment made by the Vendors hereunder shall be by way of reduction of
the Consideration paid for the Shares.
<PAGE> 44
43
SIGNED by ARFON LLOYD JONES )
in the presence of:- ) /s/ Arfon Lloyd Jones
---------------------
SIGNED by DIANA SMITH )
in the presence of:- ) /s/ Diana Smith
---------------
SIGNED by )
for and on behalf of )
PAREXEL INTERNATIONAL )
CORPORATION )
in the presence of:- ) /s/ Barry R. Philpott
---------------------
<PAGE> 1
EXHIBIT 4.7
REGISTRATION RIGHTS AGREEMENT
AGREEMENT dated as of February 28, 1997 among PAREXEL International
Corporation, a Massachusetts corporation (the "COMPANY") and Dr. Arfon Lloyd
Jones and Dr. Diana Smith (the "STOCKHOLDER").
W I T N E S S E T H :
WHEREAS, pursuant to the Agreement dated as of the date hereof (the
"ACQUISITION AGREEMENT") among the Company and the Stockholder, the Company is
acquiring 50% of the issued and outstanding shares of capital stock of S-Cubed
Clinical Limited ("SCC");
WHEREAS, in connection therewith, the Stockholder will receive
unregistered shares of Common Stock of the Company (the "SHARES"); and
WHEREAS, the Company and the Stockholder wish to set forth certain rights
and obligations with regard to the registration of the Shares;
NOW, THEREFORE, the parties hereto agree as follows:
1. CERTAIN DEFINITIONS. As used in this Agreement, the following
terms shall have the following respective meanings:
"COMMISSION" shall mean the Securities and Exchange Commission, or any
other federal agency at the time administering the Securities Act.
"SHARES" shall mean the shares of Common Stock of the Company issued to
the Stockholder on even date herewith pursuant to the Acquisition
Agreement.
"COMMON STOCK" shall mean the Common Stock, $.01 par value, of the
Company, as constituted as of the date of this Agreement.
"EXCHANGE ACT" shall mean the Securities Exchange Act of 1934, as
amended, or any similar federal statute, and the rules and regulations of
the Commission thereunder, all as the same shall be in effect at the time.
"REGISTRATION EXPENSES" shall mean the expenses so described in
Section 10.
"SECURITIES ACT" shall mean the Securities Act of 1933, as amended, or
any similar federal statute, and the rules and regulations of the
Commission thereunder, all as the same shall be in effect at the time.
"SELLING EXPENSES" shall mean the expenses so described in Section 10.
<PAGE> 2
-2-
2. COMPLIANCE WITH SECURITIES LAWS. The Stockholder represents
and warrants that he:
(a) has paid no brokerage or similar commissions in connection
with the acquisition of the Shares.
(b) is acquiring such Shares solely for his own account.
(c) has provided such information as may reasonably have been
requested by the Company in order for the Company or its counsel to evaluate the
availability of an exemption under the Securities Act for the issuance of the
Shares to the Stockholder.
3. SECURITIES ACT MATTERS. The Stockholder acknowledges and
agrees that the Shares have not been registered under the Securities Act or
under the securities laws of any state, in reliance upon certain exemptive
provisions of such statutes. The Stockholder recognizes and acknowledges that
such claims of exemption are based, in part, upon the Stockholder's
representations contained in this Agreement. The Stockholder further recognizes
and acknowledges that, because the Shares are unregistered under federal and
state laws, they are not presently eligible for public resale, and may only be
resold in the future pursuant to an effective registration statement under the
Securities Act and any applicable state securities laws, or pursuant to a valid
exemption from such registration requirements. The Stockholder recognizes and
acknowledges that Rule 144 or any other exemption promulgated under the
Securities Act (which facilitates routine sales of securities in accordance with
the terms and conditions of that Rule, including a holding period requirement)
is not now available for resale of the Shares, and the Stockholder recognizes
and acknowledges that, in the absence of the availability of Rule 144 or any
other exemption under the Securities Act, a sale pursuant to a claim of
exemption from registration under the Securities Act would require compliance
with some other exemption under the Securities Act, none of which may be
available for resale of the Shares. The Stockholder recognizes and acknowledges
that, except as set forth in this Agreement, the Company is under no obligation
to register the Shares, either pursuant to the Securities Act or the securities
laws of any state.
4. RESTRICTIVE LEGEND. Each certificate representing Shares
shall, except as otherwise provided in this Section 4 or in Section 5, be
stamped or otherwise imprinted with a legend substantially in the following
form:
"The Securities represented hereby have not been registered
under the Securities Act of 1933, as amended, and may not be sold,
transferred or otherwise disposed of except in accordance with the
terms thereof and unless registered with the Securities and Exchange
Commission of the United States and the securities regulatory
authorities of certain states or unless an exemption from such
registration is available."
Such certificates shall not bear such legend if in the opinion of
counsel satisfactory to the Company the securities being sold thereby may be
publicly sold without registration under the
<PAGE> 3
-3-
Securities Act or if such securities have been sold pursuant to Rule 144, any
other exemption under the Securities Act or an effective registration statement.
5. NOTICE OF PROPOSED TRANSFER. Prior to any proposed transfer of
any Shares, the Stockholder shall give written notice to the Company of his
intention to effect such transfer. Prior to any registration statement described
in Section 6 becoming effective, each such notice shall describe the manner of
the proposed transfer and, if requested by the Company, shall be accompanied by
an opinion of counsel satisfactory to the Company to the effect that the
proposed transfer may be effected without registration under the Securities Act,
whereupon the Stockholder shall be entitled to transfer such security in
accordance with the terms of his notice. Each certificate for Shares transferred
as above provided shall bear the legend set forth in Section 4, except that such
certificate shall not bear such legend if (i) such transfer is in accordance
with the provisions of Rule 144 (or any other rule permitting public sale
without registration under the Securities Act) or (ii) the opinion of counsel
referred to above is to the further effect that the transferee and any
subsequent transferee (other than an affiliate of the Company) would be entitled
to transfer such securities in a public sale without registration under the
Securities Act.
6. REQUIRED REGISTRATION. The Company agrees to use commercially
reasonable efforts to (i) cause a registration statement on Form S-3 or any
successor from thereto under the Securities Act relating to the resale of all of
the Shares to be filed no later than the 90th day following Completion (as
defined in the Acquisition Agreement); and (ii) cause such registration
statement to become effective as soon as practicable after the Pooling
Restricted Period (as defined below) and thereafter remain effective until the
earlier of (A) two years after Completion (as defined in the Acquisition
Agreement) or (B) the sale of all Shares covered thereby. Anything to the
contrary herein notwithstanding, the Company shall not be required to take any
action to cause any registration statement to be declared effective by the
Commission at any time prior to the publication by the Company of financial
results including at least thirty (30) days' post-closing combined operating
results of the Company and SCC (the "POOLING RESTRICTED PERIOD"), and the
Company may suspend sales in accordance with Section 9 at any time under any
registration statement immediately upon notice to the Stockholder at his last
known address, for any of the reasons set forth in Section 8.
7. REGISTRATION PROCEDURES. If and whenever the Company is
required by the provisions of Sections 6 to use commercially reasonable efforts
to effect the registration of any Shares under the Securities Act, the Company
will, as expeditiously as possible:
(a) prepare and file with the Commission such amendments and
supplements to the applicable registration statement, and the prospectus used in
connection therewith, as may be necessary to comply with the Securities Act;
(b) furnish to the Stockholder such number of copies of the
relevant registration statement and each amendment and supplement thereto (in
each case including exhibits) and the prospectus included therein (including
each preliminary prospectus) as he
<PAGE> 4
-4-
reasonably may request in order to facilitate the public sale or other
disposition of the Shares covered by such registration statement;
(c) register or qualify the Shares covered by the
applicable registration statement under the securities or "blue sky" laws of the
jurisdictions where the Company is currently registered or qualified, provided,
however, that the Company shall not for any such purpose be required to qualify
generally to transact business as a foreign corporation in any jurisdiction
where it is not so qualified or to consent to general service of process in any
such jurisdiction;
(d) have the Shares covered by the applicable
registration statement subject to quotation on the Nasdaq National Market; and
(e) promptly notify the Stockholder (at his last known
address) (i) of the effective date of the applicable registration statement and
the date when any post-effective amendment to such registration statement
becomes effective, (ii) of any stop order or notification from the Commission or
any other jurisdiction as to the suspension of the effectiveness of such
registration statement, or (iii) of the end of any suspension under Section 8.
8. SUSPENSION.
(a) The rights of the Stockholder to resell the Shares
pursuant to this Agreement and the applicable registration statement may be
suspended by the Company on the occurrence of any of the following events:
(i) the Company has made a determination to
conduct a public offering;
(ii) the Company is about to make a disclosure of
information of a material nature;
(iii) there then exists material, non-public
information relating to the Company which, in the good faith
determination of its Board of Directors, the disclosure of which would
not be in the interests of the Company or its stockholders during that
time; or
(iv) the Company is engaged in any activity at
any time that, in the good faith determination of its Board of
Directors, would be adversely affected by the continued compliance with
this Agreement or the continued distribution of the Shares by the
Stockholders.
(b) The Company shall use commercially reasonable efforts
to minimize the length of any suspension:
(i) under Section 8(a)(i), to a period of
thirty (30) days, more or less, beginning on the day that notice of a suspension
is given to the Stockholder and ending on the
<PAGE> 5
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earlier of: (A) the date of disclosure of the public offering, or (B) the date
which is 30 days after the beginning of the suspension, provided that during
such suspension, the Company will proceed with commercially reasonable efforts
to file the appropriate documentation in respect of, and otherwise complete,
such public offering as expeditiously as practicable;
(ii) under Section 8(a)(ii), to a period of
three (3) business days, more or less;
(iii) under Section 8(a)(iii) or 8(a)(iv), if the
activity is a prospective acquisition by the Company, to a period beginning when
the notice of suspension is given to the Stockholder and ending on the earlier
of: (A) the closing of the transaction and the making of all required filings
under the Securities Act or Exchange Act, or (B) the date on which discussions
regarding the acquisition are terminated; and
(iv) under Section 8(a)(iii) or 8(a)(iv), for any
reason other than a prospective acquisition by the Company, to a period
beginning when the notice of suspension is given to the Stockholder and ending
on the earlier of: (A) the disclosure of the activity, or (B) the reason is no
longer operative.
9. EXPENSES. All expenses incurred by the Company in complying with
Sections 6, including, without limitation, all registration and filing fees,
printing expenses, fees and disbursements of counsel and independent public
accountants for the Company, fees and expenses incurred in connection with
complying with state securities or "blue sky" laws, fees of the National
Association of Securities Dealers, Inc., transfer taxes, fees of transfer agents
and registrars, and costs of issuance, but excluding any Selling Expenses, are
called "REGISTRATION EXPENSES". All underwriting discounts (if any) and selling
commissions applicable to the sale of the Shares covered by any registration
statement, as well as all professional service fees incurred by the Stockholder,
are called "SELLING EXPENSES".
All Selling Expenses shall be borne by the Stockholder. The Company
will pay all Registration Expenses in connection with the preparation and filing
of each registration statement. The Company shall not be obligated to pay any
Registration Expenses in connection with the preparation and filing of any
registration statement if such registration statement is withdrawn, delayed or
abandoned for any reason by the Stockholder.
10. INDEMNIFICATION AND CONTRIBUTION.
(a) In connection with the registration of the Shares
under the Securities Act pursuant to Section 6, the Company will indemnify and
hold harmless the Stockholder, each underwriter of such Shares thereunder and
each other person, if any, who controls such underwriter within the meaning of
the Securities Act, against any losses, claims, damages or liabilities, joint or
several, to which such Stockholder, underwriter or controlling person may become
subject under the Securities Act, Exchange Act, state securities laws or
otherwise, insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon (i) any untrue statement or
alleged untrue statement of material fact contained in
<PAGE> 6
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the registration statement under which such Shares were registered under the
Securities Act pursuant to Section 6, any preliminary prospectus or final
prospectus contained therein, or any amendment or supplement thereto, (ii) the
omission or alleged omission of a material fact required to be stated therein or
necessary to make the statements therein not misleading or (iii) any violation
by the Company or its agents of any rule or regulation promulgated under the
Securities Act, Exchange Act or state securities laws applicable to the Company
or its agents and relating to action or inaction required of the Company in
connection with such registration, and the Company will reimburse the
Stockholder, each such underwriter and each such controlling person for any
legal or other expenses reasonably incurred by them in connection with
investigating or defending any such loss, claim, damage, liability or action,
PROVIDED, HOWEVER, that the Company will not be liable in any such case if any
to the extent that any such loss, claim, damage or liability arises out of or is
based upon an untrue statement or alleged untrue statement or omission or
alleged omission so made based upon information furnished by the Stockholder,
any such underwriter or any such controlling person.
(b) In connection with the registration of the Shares under
the Securities Act pursuant to Section 6, the Stockholder will indemnify and
hold harmless the Company, each person, if any, who controls the Company within
the meaning of the Securities Act, each officer of the Company who signs such
registration statement, each director of the Company, each underwriter and each
person who controls any underwriter within the meaning of the Securities Act,
against all losses, claims, damages or liabilities, joint or several, to which
the Company or such officer, director, underwriter or controlling person may
become subject under the Securities Act or otherwise, insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise out of or
are based upon (i) the failure of the Stockholder to comply with the provisions
of Section 13 herein or (ii) any untrue statement or alleged untrue statement of
any material fact contained in the registration statement, any preliminary
prospectus or final prospectus contained therein, or any amendment or supplement
thereto, or arise out of or are based upon the omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein not misleading, and will reimburse the Company and each
such officer, director, underwriter and controlling person for any legal or
other expenses reasonably incurred by them in connection with investigating or
defending any such loss, claim, damage, liability or action, PROVIDED, HOWEVER,
that the Stockholder will be liable hereunder in any such case if and only to
the extent that any such loss, claim, damage or liability arises out of or is
based upon an untrue statement or alleged untrue statement or omission or
alleged omission made in reliance upon and based upon information pertaining to
the Stockholder, furnished by or for the Stockholder.
(c) Promptly after receipt by an indemnified party hereunder
of notice of the commencement of any action, such indemnified party shall, if a
claim in respect thereof is to be made against the indemnifying party hereunder,
notify the indemnifying party in writing thereof, but the omission so to notify
the indemnifying party shall not relieve it from any liability which it may have
to such indemnified party other than under this Section 10 and shall only
relieve it from any liability which it may have to such indemnified party under
this Section 10 if and to the extent the indemnifying party is prejudiced by
such omission. In case any such action shall be brought against any indemnified
party and it shall notify the indemnifying party of the
<PAGE> 7
-7-
commencement thereof, the indemnifying party shall be entitled to participate in
and, to the extent it shall wish, to assume and undertake the defense thereof
with counsel satisfactory to such indemnified party, and, after notice from the
indemnifying party to such indemnified party of its election so to assume and
undertake the defense thereof and the approval by the indemnified party of the
counsel chosen by the indemnifying party, the indemnifying party shall not be
liable to such indemnified party under this Section 10 for any legal expenses
subsequently incurred by such indemnified party in connection with the defense
thereof other than reasonable costs of investigation and of liaison with counsel
so selected, PROVIDED, HOWEVER, that, if the defendants in any such action
include both the indemnified party and the indemnifying party and if the
interests of the indemnified party reasonably may be deemed to conflict with the
interests of the indemnifying party, the indemnified party shall have the right
to select a separate counsel and to assume such legal defenses and otherwise to
participate in the defense of such action, with the expenses and fees of such
separate counsel and other expenses related to such participation to be
reimbursed by the indemnifying party as incurred.
(d) In order to provide for just and equitable
contribution to joint liability in any case in which either (i) the Stockholder
exercises rights under this Agreement and makes a claim for indemnification
pursuant to this Section 10 but it is judicially determined (by the entry of a
final judgment or decree by a court of competent jurisdiction and the expiration
of time to appeal or the denial of the last right of appeal) that such
indemnification may not be enforced in such case notwithstanding the fact that
this Section 10 provides for indemnification in such case, or (ii) contribution
under the Securities Act may be required on the part of the Stockholder in
circumstances for which indemnification is provided under this Section 10; then,
and in each such case, the Company and the Stockholder will contribute to the
aggregate losses, claims, damages or liabilities to which they may be subject
(after contribution from others) in proportion to the relative fault of the
Company, on the one hand, and the Stockholder, on the other hand; PROVIDED,
HOWEVER, that, in any such case, no person or entity guilty of fraudulent
misrepresentation (within the meaning of Section 10(f) of the Securities Act)
will be entitled to contribution from any person or entity who was not guilty of
such fraudulent misrepresentation.
(e) The indemnities provided in this Section 10 shall
survive the transfer of any Shares by the Stockholder.
11. REPORTS UNDER SECURITIES EXCHANGE ACT OF 1934. With a view to
making available to the Stockholder the benefits of Rule 144 promulgated under
the Securities Act and any other rule or regulation thereunder that may at any
time permit the Stockholder to sell securities of the Company to the public
without registration and with a view to maintaining the Company's eligibility to
file a registration statement on Form S-3, the Company agrees to:
(a) make and keep public information available, as those
terms are understood and defined in Rule 144;
(b) maintain registration of its Common Stock under
Section 12 of the Exchange Act;
<PAGE> 8
-8-
(c) use all reasonable efforts to file in a timely manner all
reports and other documents required of the Company under the Securities Act and
the Exchange Act; and
(d) furnish to the Stockholder, so long as the Stockholder
owns any Shares, forthwith upon request: (i) a written statement by the Company
that it has complied with the reporting requirements of Rule 144, (ii) a copy of
the most recent annual or quarterly report of the Company and such other reports
and documents so filed by the Company; and (iii) such other information as may
be reasonably requested in availing the Stockholder of any rule or regulation
under the Securities Act which permits the selling of any such securities
without registration or pursuant to such form.
12. CHANGES IN COMMON STOCK. If, and as often as, there is any
change in the Common Stock by way of a stock split, stock dividend, combination
or reclassification, or through a Acquisition, consolidation, reorganization or
recapitalization, or by any other means, appropriate adjustment shall be made in
the provisions hereof so that the rights and privileges granted hereby shall
continue with respect to the Shares as so changed.
13. STOCKHOLDER'S CONDUCT. With respect to any sale of Shares
covered by a registration statement, the Stockholder understands and agrees as
follows:
(a) The Stockholder will carefully review the information
concerning him contained in any registration statement and will promptly notify
the Company if such information is not complete and accurate in all respects,
including having properly disclosed any position, office or other material
relationship within the past three years with the Company or its affiliates;
(b) The Stockholder agrees to sell Shares only in the manner
set forth in (i) the applicable registration statement (or in compliance with
Section 5 hereof), and (ii) Section 14;
(c) The Stockholder agrees to comply with the
anti-manipulation rules under the Exchange Act in connection with purchases and
sales of securities of the Company during the time any registration statement
remains effective;
(d) The Stockholder agrees to only sell Shares in a
jurisdiction after counsel for the Company has advised that such sale is
permissible under the applicable state securities or "Blue Sky" laws;
(e) The Stockholder agrees to comply with the prospectus
delivery requirements of the Exchange Act;
(f) The Stockholder agrees to promptly notify the Company of
any and all planned sales and completed sales of Shares; and
<PAGE> 9
-9-
(g) The Stockholder agrees to suspend sales during the periods
when sales are to be suspended pursuant to Section 8.
(h) In connection with the registration of the Shares, the
Stockholder will furnish to the Company in writing such information requested by
the Company with respect to himself and the proposed distribution by him as
shall be necessary in order to assure compliance with federal and applicable
state securities laws.
(i) The Stockholder hereby agrees that he will not sell,
exchange, transfer, pledge, dispose or otherwise reduce his or her risk relative
to any Shares owned by him during the period which begins on the date hereof and
ends at such time as the Company publicly announces financial results covering
at least thirty days of combined operations of the Company and SCC. The Company,
at its discretion, may cause stop transfer orders to be placed with its transfer
agent with respect to the certificates representing the Shares, provided that
such stop transfer orders are consistent with the other provisions of this
Agreement.
14. SELLING PROCEDURES.
(a) The Stockholder will notify the Company of his intention
to sell Shares under any registration statement not less than five (5) business
days prior to the expected date of such sale by faxing the "Takedown Request"
attached hereto as EXHIBIT A to:
Testa, Hurwitz & Thibeault, LLP
125 High Street
High Street Tower
Boston, Massachusetts 02110
Attn: William J. Schnoor, Jr.
Phone: (617) 248-7278
Facsimile: (617) 248-7100
During this period, the Company will review the prospectus to determine if a
suspension pursuant to Section 8 is necessary or appropriate. If the Company
does not notify the Stockholder of a suspension pursuant to Section 8, the
Stockholder may conclude the proposed sale, on the proposed date of sale,
strictly in accordance with the Takedown Request.
(b) The Stockholder will notify the Company of each sale under
any registration statement in accordance with the Takedown Request within 24
hours of the sale by faxing the "Notification of Sale" attached hereto as
EXHIBIT B to:
<PAGE> 10
-10-
Testa, Hurwitz & Thibeault, LLP
125 High Street
High Street Tower
Boston, Massachusetts 02110
Attn: William J. Schnoor, Jr.
Phone: (617) 248-7278
Facsimile: (617) 248-7100
Based on the information set forth on the Notification of Sale, the Company will
prepare or cause to be prepared the appropriate notifications to its Transfer
Agent to remove the legend described in Section 4 from the Shares so sold.
15. REPRESENTATIONS AND COVENANTS. The Stockholder hereby
represents and warrants to the Company as follows:
(a) THE STOCKHOLDER UNDERSTANDS THAT HIS INVESTMENT IN THE
SHARES INVOLVES RISK.
(b) THE STOCKHOLDER HAS CONSULTED HIS OWN ATTORNEY, ACCOUNTANT
OR INVESTMENT ADVISOR WITH RESPECT TO THE INVESTMENT CONTEMPLATED HEREBY AND ITS
SUITABILITY FOR THE STOCKHOLDER. ANY SPECIFIC ACKNOWLEDGMENT SET FORTH BELOW
WITH RESPECT TO ANY STATEMENT OR INFORMATION FURNISHED TO THE STOCKHOLDER SHALL
NOT BE DEEMED TO LIMIT THE GENERALITY OF THIS REPRESENTATION AND WARRANTY.
(c) The Stockholder understands that he must bear the economic
risk of this investment until such time as the Shares are registered; that the
Shares are not currently registered under the Securities Act, and, therefore,
cannot be resold unless they are subsequently registered under the Securities
Act or unless an exemption from such registration is available; that the
Stockholder is purchasing the Shares with no present view toward resale or other
distribution thereof; and that the Stockholder agrees not to resell or otherwise
dispose of all or any part of the Shares, except as permitted by law, including,
without limitation, any and all applicable provisions of the Acquisition
Agreement and this Agreement and any regulations under the Securities Act and
applicable state securities laws.
(d) The Stockholder has adequate means of providing for his
current needs and personal contingencies and has no need for liquidity in
connection with this investment in the Shares.
(e) The Stockholder has reviewed the information provided to
the Stockholder by the Company pursuant to Clause 7.6 of the Acquisition
Agreement and has consulted with his or her personal legal and financial
advisors in evaluating the merits and risks of the investment in the Shares.
<PAGE> 11
-11-
(f) The Stockholder received an offer concerning the Shares
and first learned of this investment in the state or other jurisdiction listed
in the Stockholder's residence address on the signature page hereto, and intend
that the state securities laws of that state or other jurisdiction alone govern
this transaction.
(g) The Stockholder hereby acknowledges receipt of the
documents described in Clause 7.6 of the Acquisition Agreement, which documents
each Stockholder has reviewed. The Stockholder further acknowledges and warrants
that, prior to the execution of this Agreement, he has had the opportunity to
ask questions and receive answers from the Company concerning the terms and
conditions of the transactions contemplated by the Acquisition Agreement and the
issuance of the Shares, and concerning any of the documents identified above,
and to obtain such additional further information from the Company as he has
deemed necessary to verify the accuracy of the information contained in the
documents identified above or any other information furnished to the
Stockholder.
(h) The Stockholder has been advised that, as of the date
hereof, he may be deemed to be an "affiliate" of SCC, as the term "affiliate" is
used in and for purposes of Accounting Series Releases 130 and 135, as amended,
of the Commission.
(i) The Stockholder understands that the representations,
warranties and covenants set forth herein will be relied upon by the Company,
the stockholders of the Company and their respective counsel and accounting
firms.
(j) The Stockholder hereby represents and warrants that he has
not sold, exchanged, transferred, pledged, disposed or otherwise reduced his or
her risk relative to any shares of SCC owned by him during the 30 day period
preceding the date hereof.
16. MISCELLANEOUS.
(a) All covenants and agreements contained in this Agreement
by or on behalf of any of the parties hereto shall bind and inure to the benefit
of the respective successors and assigns of the parties hereto (including
without limitation transferees of any Shares, PROVIDED, that such transferee
executes a counterpart signature page to this Agreement), whether so expressed
or not.
(b) All notices and other communications which by any
provision of this Agreement are required or permitted to be given shall be given
in writing and shall be (a) mailed by first-class or express mail, postage
prepaid, (b) sent by telex, telegram, telecopy or other form of rapid
transmission, confirmed by mailing (by first class or express mail, postage
prepaid) written confirmation at substantially the same time as such rapid
transmission, or (c) personally delivered to the receiving party (which if other
than an individual shall be an officer or other responsible party of the
receiving party). All such notices and communications shall be mailed, sent or
delivered as follows:
<PAGE> 12
-12-
if to the Company, to:
PAREXEL International Corporation
195 West Street
Waltham, MA 02154
Attn: William T. Sobo, Jr.
Senior Vice President and Chief Financial Officer
Telecopy: (617) 487-9931
with a copy to:
William J. Schnoor, Jr.
Testa, Hurwitz & Thibeault, LLP
125 High Street
High Street Tower
Boston, MA 02110
Telecopy: (617) 248-7100
if to the Stockholder, to:
Dr. Arfon Lloyd Jones and
Dr. Diana Smith
47 Westville Road
Penylan
Cardiff, CF25DF
if to any subsequent Stockholder of Shares, to it at such address
as may have been furnished to the Company in writing by such
Stockholder;
or, in any case, at such other address or addresses as shall have been furnished
in writing to the Company (in the case of a Stockholder) or to the Stockholder
(in the case of the Company) in accordance with the provisions of this
paragraph. Notices shall be deemed duly delivered three business days after
being sent by first class mail, postage prepaid, or one business day after being
sent via a reputable nationwide express mail service. Notices delivered via any
other means shall be deemed duly delivered upon actual receipt by the individual
for whom such notice is intended. Any notice delivered to a party hereunder
shall be sent simultaneously, by the same means, to such party's counsel as set
forth above.
(c) This Agreement shall be governed by and construed in
accordance with the laws of the Commonwealth of Massachusetts.
(d) This Agreement may be amended or modified, and provisions
hereof may be waived, with the written consent of the Company and the holders of
at least a majority of the outstanding Shares.
<PAGE> 13
-13-
(e) This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
(f) If any provision of this Agreement shall be held to be
illegal, invalid or unenforceable, such illegality, invalidity or
unenforceability shall attach only to such provision and shall not in any manner
affect or render illegal, invalid or unenforceable any other provision of this
Agreement, and this Agreement shall be carried out as if any such illegal,
invalid or unenforceable provision were not contained herein.
<PAGE> 14
-14-
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement
as of the day and year first above written.
PAREXEL INTERNATIONAL CORPORATION
By: /s/ Barry R. Philpott
--------------------------------------------
Name: Barry R. Philpott
------------------------------------------
Title: President
-----------------------------------------
/s/ Arfon Lloyd Jones
------------------------------------------------
Dr. Arfon Lloyd Jones
/s/ Diana Smith
------------------------------------------------
Dr. Diana Smith
[You MUST complete pages 14-15 of this Agreement]
<PAGE> 1
EXHIBIT 5.1
May 20, 1997
PAREXEL International Corporation
195 West Street
Waltham, MA 02154
RE: Registration Statement on Form S-3
Relating to 106,769 shares of Common Stock
------------------------------------------
Dear Sir or Madam:
We are counsel to PAREXEL International Corporation, a Massachusetts
corporation (the "Company"), and have represented the Company in connection with
the preparation and filing of the Company's Registration Statement on Form S-3
(the "Registration Statement"), covering the resale to the public of up to
106,769 shares of the Company's Common Stock, $.01 par value per share, by
certain stockholders of the Company (the "Shares").
We have reviewed the corporate proceedings taken by the Board of
Directors of the Company with respect to the authorization and issuance of the
Shares. We have also examined and relied upon originals or copies, certified or
otherwise authenticated to our satisfaction, of all corporate records,
documents, agreements or other instruments of the Company and have made all
investigations of law and have discussed with the Company's officers all
questions of fact that we have deemed necessary or appropriate.
Based upon and subject to the foregoing, we are of the opinion that the
Shares are legally issued, fully paid and non-assessable.
We hereby consent to the filing of this opinion as Exhibit 5.1 to the
Registration Statement and to the reference to our firm in the Prospectus
contained in the Registration Statement under the caption "Legal Matters."
Very truly yours,
/s/ Testa, Hurwitz & Thibeault, LLP
--------------------------------------------
Testa, Hurwitz & Thibeault, LLP
<PAGE> 1
EXHIBIT 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Prospectus
constituting part of this Registration Statement on Form S-3 of our report dated
August 22, 1996, which appears on page 33 of the 1996 Annual Report to
Shareholders of PAREXEL International Corporation, which is incorporated by
reference in PAREXEL International Corporation's Annual Report on Form 10-K for
the year ended June 30, 1996. We also consent to the application of such report
to the Financial Statement Schedule for the three years ended June 30, 1996
listed under Item 14(a) of PAREXEL International Corporation's Annual Report on
Form 10-K for the year ended June 30, 1996 when such schedule is read in
conjunction with the financial statements referred to in our report. The audit
referred to in such report also included this Financial Statement Schedule. We
also consent to the reference to us under the heading "Experts" in such
Prospectus.
PRICE WATERHOUSE LLP
BOSTON, MASSACHUSETTS
MAY 20, 1997
