As filed with the Securities and Exchange Commission on May 29, 1998
Registration No. 333-
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
_______________
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
_______________
PAREXEL INTERNATIONAL CORPORATION
(Exact name of registrant as specified in its charter)
Massachusetts 8731 04-2776269
(State or other (Primary Standard (I.R.S. Employer
Jurisdiction Industrial Identification Number)
of incorporation Classification Code Number)
organization)
195 WEST STREET
Waltham, Massachusetts 02154
(781) 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
(781) 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
_______________
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. __
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. __
CALCULATION OF REGISTRATION FEE
Title of Amount to Proposed Proposed Amount of
Shares be Maximum Maximum Registration
to be Registered Offering Price Aggregate Fee(2)
Registered Per Share(1) Offering
Price(1)
Common 1,510,148 $32.53 $49,125,114 $14,491.91
Stock,
$.01 par
value per
share
(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 26, 1998.
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.
PROSPECTUS (Subject to Completion)
Dated: May __, 1998
1,510,148 Shares
PAREXEL INTERNATIONAL CORPORATION
Common Stock
This prospectus relates to the resale of up to 1,510,148 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) 1,120,623 shares of Common Stock issued to
former stockholders of PPS Europe Limited ("PPS") and its subsidiary,
Creative Communications Solutions, Ltd ("CCS"), (the "PPS
Acquisition") pursuant to Share Acquisition Agreements dated March 1,
1998,(ii) 91,667 shares of Common Stock issued to former stockholders
of Genesis Pharma Strategies Ltd ("Genesis") pursuant to a Share
Acquisition Agreement dated March 1, 1998; (iii) 204,706 shares of
Common Stock issued to former stockholders of MIRAI B.V. ("MIRAI")
pursuant to a Share Purchase Agreement dated March 1, 1998 and (iv)
93,152 shares of Common Stock issued to a former stockholder of LOGOS
GmbH ("LOGOS") pursuant to a Sale and Purchase Agreement dated
February 28, 1998. Upon the closing of the Acquisitions, each of PPS,
CCS, Genesis, MIRAI and LOGOS became either a direct or indirect
subsidiary of the Company. The Company has agreed to register up to
840,387 additional shares of Common Stock issued to certain of the
Selling Stockholders no later than February 1, 1999 and up to 840,386
additional shares of Common Stock issued to certain of the Selling
Stockholders no later than February 1, 2000.
The Common Stock of the Company is quoted on the Nasdaq National
Market under the symbol "PRXL". On May 26, 1998, the last reported
sale price for the Common Stock on the Nasdaq National Market was
$32.00 per share.
SEE "RISK FACTORS," ON PAGE 10 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 , 1998
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 (781)
487-9900.
PAREXEL is a registered service mark of the Company.
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 and 10-K/A for
the fiscal year ended June 30, 1997.
2. The Company's Quarterly Report on Form 10-Q for the
quarter ended September 30, 1997.
3. The Company's Quarterly Report on Form 10-Q for the
quarter ended December 31, 1997.
4. The Company's Quarterly Report on Form 10-Q for the
quarter ended March 31, 1998.
5. The Company's Current Reports on Form 8-K and 8-K/A dated
August 7, 1997, October 23, 1997, January 27, 1998, March 1, 1998
and March 2, 1998.
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.
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 a broad range
of knowledge-based product development and product launch services to
the worldwide pharmaceutical, biotechnology and medical device
industries. The Company's primary objective is to help clients
quickly obtain the necessary regulatory approvals of their products
and, ultimately, optimize the market penetration of those products.
Over the past fifteen years, PAREXEL has developed significant
expertise in disciplines supporting this strategy. The Company's
service offerings include: clinical trials management, data
management, biostatistical analysis, medical marketing, clinical
pharmacology, regulatory and medical consulting, performance
improvement, industry training and publishing, and other drug
development consulting services. The Company believes that its
integrated services, therapeutic area depth, and sophisticated
information technology, along with its experience in global drug
development and product launch services, represent key competitive
strengths.
The Company complements the research and development ("R&D")
functions, as well as the marketing functions, of pharmaceutical and
biotechnology companies. Through its high quality clinical research
and medical marketing services, PAREXEL helps clients maximize the
return on their significant investments in research and development by
reducing the time and cost of clinically testing their products and
launching those products into the commercial marketplace. By
outsourcing these types of services, clients are provided with a
variable cost alternative to the fixed costs associated with internal
drug development and product marketing. Clients no longer need to
staff to peak periods, and can benefit from PAREXEL's technical
resource pool, broad therapeutic area expertise, global infrastructure
designed to expedite parallel, multi-country clinical trials, and
other expertise-oriented advisory services focused on accelerating
time-to-market.
Headquartered near Boston, Massachusetts, the Company has more than 40
offices throughout 24 countries, and employs approximately 3,500
individuals. The Company has established footholds in the major
health care markets around the world, including the United States,
Japan, Germany, the United Kingdom ("U.K."), France, Italy, Spain,
Sweden, Australia, and Israel.
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) 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; (ii)
many pharmaceutical companies, in response to competitive pressures to
accelerate time to market and contain costs, have turned to CROs as a
means of adding more flexible drug development capacity to accommodate
their full product pipelines, thereby shifting fixed costs to variable
costs; (iii) 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; (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
regulatory expertise, data management capabilities and global
presence; and (v) 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.
Central to PAREXEL's success has been the Company's focused strategy
on building its platform of knowledge in the pursuit of outstanding
client service. This includes a focus on its core clinical research
business; a focus on continuous process improvement, efficiency gains
and leveraging internal expertise, resources and infrastructure; a
focus on managing the Company's internal growth while augmenting the
Company's knowledge base through strategic acquisitions; a focus on
deeply and broadly penetrating key client accounts by offering a full
spectrum of clinical development and medical marketing services; and
always, a focus on outstanding quality and superior client service.
The Company's service philosophy involves a flexible approach which
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
complicated global trials are significant competitive strengths. The
Company continues to devote significant resources to developing
innovative methodologies and sophisticated information systems
designed to allow the Company to more effectively manage its business
operations and deliver services to its clients. The Company has
executed a focused growth strategy embracing internal expansion and
strategic acquisitions to expand or enhance the Company's portfolio of
services, geographic presence, therapeutic area knowledge, information
technology, and client relationships.
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 (781) 487-9900.
RECENT DEVELOPMENTS
PPS Acquisitions. Pursuant to Share Purchase Agreements by and among
the Company and the former stockholders of PPS Europe Limited ("PPS")
and its subsidiary Creative Communications Solutions, Ltd. ("CCS"),
PPS and CCS became direct or indirect, wholly-owned subsidiaries of
the Company (the "PPS Acquisitions"). In connection with the PPS
Acquisitions, the Company issued an aggregate of 2,801,396 shares of
Common Stock to the former stockholders of PPS and CCS, of which
1,120,623 shares are being offered hereby. Pursuant to the terms and
provisions of Registration Rights Agreements between the Company and
the former stockholders of PPS and CCS, the Company has agreed to
register up to 840,387 additional shares of Common Stock issued to the
former stockholders of PPS and CCS no later than February 1, 1999 and
up to 840,386 additional shares of Common Stock issued to the former
Stockholders of PPS and CCS no later than February 1, 2000. The PPS
Acquisitions have been accounted for as poolings of interests for
financial accounting purposes.
PPS and CCS provide physician-focused marketing and clinical
communications services to the international pharmaceutical industry.
Genesis Acquisition. Pursuant to a Share Acquisition Agreement by and
among the Company and the former stockholders of Genesis Pharma
Strategies Limited ("Genesis"), Genesis became a direct wholly-owned
subsidiary of the Company (the "Genesis Acquisition"). In connection
with the Genesis Acquisition, the Company issued an aggregate of
91,667 shares of Common Stock to the former stockholders of Genesis,
all of which are being offered hereby pursuant to the terms and
provisions of a Registration Rights Agreement between the Company and
the former stockholders of Genesis. The Genesis Acquisition has been
accounted for as a pooling of interests for financial accounting
purposes.
Genesis provides strategic consultancy services to the international
healthcare industry.
MIRAI Acquisition. Pursuant to a Share Purchase Agreement by and among
the Company and the former stockholders of MIRAI B.V. ("MIRAI"), MIRAI
became a direct wholly-owned subsidiary of the Company (the "MIRAI
Acquisition"). In connection with the MIRAI Acquisition, the Company
issued an aggregate of 682,345 shares of Common Stock to the former
stockholders of MIRAI, of which 204,706 shares are being offered
hereby pursuant to the terms and provisions of a Registration Rights
Agreement between the Company and the former stockholders of MIRAI.
The MIRAI Acquisition has been accounted for as a pooling of interests
for financial accounting purposes.
MIRAI is a full-service, multinational contract research organization
specializing in managing large, international, multicenter Phase II-IV
clinical trials for pharmaceutical, biotechnology and medical device
companies.
LOGOS Acquisition. Pursuant to a Sale and Purchase Agreement by and
among the Company and the former stockholder of LOGOS GmbH ("LOGOS"),
LOGOS became a direct wholly-owned subsidiary of the Company (the
"LOGOS Acquisition"). In connection with the LOGOS Acquisition, the
Company issued an aggregate of 93,152 shares of Common Stock to the
former stockholder of LOGOS, all of which are being offered hereby
pursuant to the terms and provisions of a Registration Rights
Agreement between the Company and the former stockholder of LOGOS.
The LOGOS Acquisition has been accounted for as a pooling of interests
for financial accounting purposes.
LOGOS is a regulatory affairs consulting firm specializing in dossier
preparation and marketing approval submissions.
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.
RISK FACTORS
In addition to the other information in this Registration Statement,
the following risk factors should be considered carefully in
evaluating the Company and its business. Information provided by the
Company from time to time 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) in releases made by
the Securities and Exchange Commission (the "SEC"). These risk factors
are being provided pursuant to the provisions of the Act and with the
intention of obtaining the benefits of the "safe harbor" provisions of
the Act.
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, such as for economic reasons,
insufficient patient enrollment or investigator recruitment or
production problems resulting in shortages of the drug. In addition,
the Company believes that cost-containment and competitive pressures
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
financial performance of 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, progress, or cancellation of significant projects,
exchange rate fluctuations, the mix of services offered, the opening
of new offices and other internal expansion costs, the costs
associated with integrating acquisitions and the startup costs
incurred in connection with the introduction of new products and
services. Because a high percentage of the Company's operating costs
are relatively fixed, variations in the initiation, completion, delay
or loss of contracts, or in the progress of client projects 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 companies to
outsource large clinical research projects. A reversal or slowing of
this trend would have a material adverse effect on the Company. In
fiscal 1997, 1996, and 1995, and the nine months ended March 31, 1998,
the Company's top five clients accounted for 36%, 29%, 17%, and 34%,
respectively, of the Company's consolidated net revenue. In fiscal
1997, 1996, and 1995, no single customer accounted for more than 10%
of net revenue; however, one client accounted for 13% and 12% of
consolidated net revenue for the three months and the nine months
ended March 31, 1998. 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 15
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 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. 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 and will continue to review future acquisition
opportunities. In particular, the Company has recently made several
substantial acquisitions. 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
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. Japan also legislated
GCP and legitimatized the use of CRO's in April 1997. 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, teaching
hospitals and other site organizations. Some of these competitors have
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
services, 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 and patients, 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.
PAREXEL believes that it competes favorably in these areas. There can
be no assurance that the Company will be able to compete favorably in
these areas.
The CRO industry is fragmented, with participants ranging from several
hundred small, limited-service providers to several large, full-
service CROs with global operations. Large CROs against whom PAREXEL
competes include Quintiles Transnational Corporation, Covance Inc.,
IBAH, Inc., Pharmaceutical Product Development, Inc. and ClinTrials
Research, Inc. The trend toward CRO industry consolidation has
resulted in heightened competition among the larger CROs for clients
and acquisition candidates. In addition, consolidation within the
pharmaceutical industry as well pharmaceutical companies outsourcing
to a fewer number of preferred CROs has led to heightened competition
for CRO contracts.
Potential Volatility of Stock Price. The market price of the
Company's Common Stock could be 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 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 reviewed or undertaken health care
reform. For example, German health care reform legislation implemented
in January 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; Ability to Attract and Retain 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 certain 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.
Potential Liability; Possible Insufficiency of Insurance. Clinical
research services involve the testing of new drugs on consenting 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
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 42% of
the Company's net revenue for fiscal 1997, 48% for fiscal 1996, 51%
for fiscal 1995, and 38% for the nine months ended March 31, 1998,
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.
SELECTED CONSOLIDATED FINANCIAL DATA
The selected consolidated financial data set forth below at and for
each of the three years in the period ended June 30, 1997 are derived
from, and are qualified by reference to, the Company's consolidated
financial statements audited by Price Waterhouse LLP, independent
accountants. The audited balance sheets at June 30, 1997 and 1996 and
the related statements of operations, of stockholders' equity and of
cash flows for each of the three years in the period ended June 30,
1997 and related notes thereto appear elsewhere in this Prospectus.
The financial data set forth below for the years ended June 30, 1994
and 1993 have been derived from the unaudited consolidated financial
statements of the Company. The balance sheet data at March 31, 1998
and the statement of operations data for the nine months ended March
31, 1998 and 1997 are derived from, and qualified by reference to, the
Company's unaudited consolidated financial statements which appear
elsewhere in the Prospectus, and, in the opinion of management,
include all adjustments, consisting only of normal recurring
adjustments, necessary for a fair presentation of the financial
position and results of operations for these periods. The operating
results for the nine months ended March 31, 1998 are not necessarily
indicative of the results that may be expected for the fiscal year
ending June 30, 1998. The selected consolidated financial data set
forth below should be read in conjunction with, and are qualified by
reference to, "Management's Discussion and Analysis of Financial
Condition and Results of Operations" and the Company's financial
statements and related notes included elsewhere in this Prospectus.
<TABLE>
<C> <C> <C> <C> <C> <C> <C>
<S> 1997 1996 1995 1994 1993 1998 1997
(in thousands, except
per share data and
number of employees)
STATEMENT OF OPERATIONS
DATA (1)
Net revenue $203,676 $125,053 $ 89,067 $81,835 $74,923 $204,049 $143,973
Income (loss) from
Operations 17,119 10,391 (8,454)(3) 5,895 2,627(5) 5,759(2) 11,701
Net income (loss) 12,803 6,655 (9,239)(6) 3,929(4) (293)(6) 3,876(2) 8,697
Diluted earnings (loss)
Per share $0.56 $0.39 ($2.02) $0.27 $0.07 $0.16 $0.40
BALANCE SHEET DATA(1)
Cash, cash equivalents
And marketable
Securities $104,339 $52,022 $12,996 $4,705 $10,989 $86,792 $100,227
Working capital 113,998 55,681 12,456 17,233 8,306 114,326 113,338
Total assets 240,544 135,721 67,693 64,411 61,614 259,595 220,809
Long-term debt 136 466 750 436 317 24 422
Stockholders' equity $147,448 $69,788 $21,972 $30,674 $26,289 $163,375 $140,329
OTHER DATA(1)
Investment in property
And equipment $25,112 $7,461 $4,742 $2,204 $1,890 $22,358 $16,027
Depreciation and
Amortization $7,710 $4,280 $3,920 $3,591 $3,329 $11,038 $5,144
Number of employees 2,928 1,767 1,108 1,057 975 3,478 2,598
Shares used in computing
Diluted earnings (loss)
Per share 22,822 17,255 4,580 14,688 4,319 24,776 21,633
</TABLE>
(1) The selected consolidated financial data has been restated to give
effect to the acquisition of KMI (December 1997) and PPS and MIRAI
(March 1998). The acquisitions were accounted for as poolings of
interests.
(2) Income from operations included $13.6 million of acquisition-
related and other charges. See Note 3 to the Consolidated Financial
Statements entitled "Acquisitions," for a description of this matter.
(3) Loss from operations includes an $11.3 million noncash charge for
impaired long-lived assets of the Company's German operations. See
Note 2 to Consolidated Financial Statements.
(4) Net income includes $500,000 related to the cumulative effect of
adopting Statement of Financial Accounting Standards (SFAS) No. 109,
"Accounting for Income Taxes."
(5) Income from operations includes a $3.3 million charge in
connection with a restructuring of operations in Germany.
(6) For the years ended June 30, 1993 and 1995, shares used to compute
diluted earnings per share exclude common share equivalents (primarily
convertible preferred stock), as their inclusion would be
antidilutive.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
OVERVIEW
The Company is a leading contract research and medical marketing
organization providing a broad range of knowledge-based product
development and product launch services to the worldwide
pharmaceutical, biotechnology and medical device industries. The
Company's primary objective is to help clients quickly obtain the
necessary regulatory approvals of their products and, ultimately,
optimize the market penetration of those products. The Company's
service offerings include: clinical trials management, data
management, biostatistical analysis, medical marketing, clinical
pharmacology, regulatory and medical consulting, performance
improvement, industry training and publishing, and other drug
development consulting services.
The Company's contracts are typically fixed price, multi-year
contracts that require a portion of the fee to be paid at the time the
contract is entered into, with the balance of the fee paid in
installments during the contract's duration. Net revenue from
contracts is generally recognized on a percentage of completion basis
as work is performed.
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.
As is customary in the industry, the Company routinely subcontracts
with third party investigators in connection with clinical trials and
other third party service providers for laboratory analysis and other
specialized services. These and other reimbursable costs, which vary
from contract to contract, are paid by the client and, in accordance
with industry practice, are included in revenue. Reimbursed costs
vary from contract to contract. Accordingly, the Company views net
revenue, which consists of revenue less reimbursed costs, as its
primary measure of revenue growth.
Direct costs primarily consist of compensation and related fringe
benefits for project-related employees, other project-related costs
not reimbursed and allocated facilities and information systems costs.
Selling, general and administrative expenses primarily consist of
compensation and related fringe benefits for selling and
administrative employees, professional services and advertising costs,
as well as allocated costs related to facilities and information
systems.
GLOBAL OPERATIONS
The following table presents net revenue by geographic region and the
percentage of total net revenue represented by each region:
<TABLE>
For the nine months ended
For the year ended June 30, March 31
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
% of % of % of % of % of
1997 Total 1996 Total 1995 Total 1998 Total 1997 Total
Net Revenue:
North America $118,525 58% $64,605 52% $43,557 49% $127,411 62% $84,061 58%
Europe 81,984 40% 59,455 47% 45,417 51% 73,619 36% 57,845 40%
Asia-Pacific 3,167 2% 993 1% 93 -- 3,019 2% 2,067 2%
Total $203,676 100% $125,053 100% $89,067 100% $204,049 100% $143,973 100%
</TABLE>
The Company's foreign subsidiaries generally enter into contracts
denominated in the local currency of the foreign subsidiary. Because
expenses of the foreign subsidiaries are generally paid in the local
currency, such foreign subsidiaries' local currency earnings are not
materially affected by fluctuations in exchange rates. However,
changes in the exchange rates between these local currencies and the
U.S. dollar will affect the translation of such subsidiaries'
financial results into U.S. dollars for the purposes of reporting the
Company's consolidated financial results. In cases where the Company
contracts for a multi-country clinical trial and a significant portion
of the contract expenses are in a currency other than the contract
currency, the Company seeks to contractually shift to its client the
effect of fluctuations in the relative values of the contract currency
and the currency that the expenses are incurred. To the extent the
Company is unable to shift to its clients the effects of currency
fluctuations, these fluctuations could have a material effect on the
Company's results of operations. The Company does not currently hedge
against the risk of exchange rate fluctuations.
As the Company conducts operations on a global basis, the Company's
effective tax rate has depended, and will continue to depend, upon the
distribution of its revenue among geographic locations with varying
tax rates.
The Company's results of operations may be affected by changes in the
tax rates of the various jurisdictions. In particular, from period to
period, as the geographic mix of the Company's results of operations
among various tax jurisdictions changes, the Company's effective tax
rate may vary significantly.
RESULTS OF OPERATIONS
Impact of Acquisition-related and Other Charges
In December 1997, the Company acquired Kemper-Masterson, Inc. ("KMI");
and in March 1998, the Company acquired, in separate transactions, PPS
Europe Limited ("PPS")and Genesis Pharma Strategies Limited
("Genesis"), MIRAI B.V. ("MIRAI") and LOGOS GmbH ("LOGOS") in business
combinations accounted for as poolings of interests. As described in
Note 3 to the Consolidated Financial Statements, the Company's results
of operations for the nine months ended March 31, 1998, were
significantly impacted by certain acquisitions-related and other
charges.
These charges included $4.1 million and $6.2 million recorded in the
second and third fiscal quarters, respectively, consisting of legal,
accounting and transaction fees pertaining to the acquisitions,
noncash compensation expense related to employee stock options
previously granted by KMI and PPS, and an accelerated compensation
payment to a PPS executive pursuant to a pre-existing employment
agreement.
In addition to these transaction-related costs, the Company also
recorded a $1.6 million provision to increase accounts receivable
reserves of PPS and MIRAI to conform such estimates with the Company's
policy, and a $1.7 million charge resulting from a change in estimate
of the remaining service lives of certain computer equipment arising
from integration activities and a company-wide program to upgrade and
standardize its information technology platform.
The following tables represent the effect of such charges for the nine-
month comparative periods ended March 31, 1998 and 1997 (in
thousands):
<TABLE>
<S> <C> <C> <C> <C>
1997 1998 Fiscal 1998
As before 1998 as
Nine months ended March 31, Reported charges charges reported
Net revenue $143,973 $204,049 $ -- $204,049
Direct costs 95,710 132,925 -- 132,925
Selling, general and
Administrative 31,418 42,444 1,610 44,054
Depreciation and amortization 5,144 9,354 1,684 11,038
Acquisition-related charges -- -- 10,273 10,273
Total costs 132,272 184,723 13,567 198,290
Income from operations $ 11,701 $ 19,326 $ 5,759
Percent of net revenue 8.1% 9.5%
</TABLE>
NINE MONTHS ENDED MARCH 31, 1998,
COMPARED TO NINE MONTHS ENDED MARCH 31, 1997
Net revenue increased by $60.1 million, or 41.7%, from $144.0 million
for the nine months ended March 31, 1997, to $204.0 million for the
nine months ended March 31, 1998. This net revenue growth was
primarily attributable to an increase in the volume and average
contract value of contract research projects serviced by the Company.
For the nine months ended March 31, 1998, net revenue from North
American, European and Asian operations increased by $43.4 million,
$15.8 million and $1.0 million, respectively, over the prior year
period. There can be no assurance that the Company can sustain this
rate of increase in net revenue from continuing operations in future
periods. See "Risk Factors."
Direct costs increased by $37.2 million, or 38.9%, from $95.7 million
for the nine months ended March 31, 1997, to $132.9 million for the
nine months ended March 31, 1998. This increase in direct costs was
due to the increase in the number of project-related personnel, hiring
expenses, facilities and information system costs necessary to support
the increased level of operations. Direct costs as a percentage of
net revenue decreased from 66.5% for the nine months ended March 31,
1997, to 65.1% for the nine months ended March 31, 1998.
Selling, general and administrative expenses increased by $12.6
million, from $31.4 million for the nine months ended March 31, 1997,
to $44.1 million for the nine months ended March 31, 1998. This
increase was due to increased selling and administrative personnel,
hiring and facilities costs, in line with increasing infrastructure to
accommodate the Company's growth, and a noncash charge of $1.6 million
recorded to increase the accounts receivable reserves of recently
acquired businesses to conform reserve estimates to the Company's
policies. Excluding this $1.6 million adjustment, selling, general
and administrative expenses were $42.4 million, an increase of 35.1%
over the comparable prior year period. As a percentage of net
revenue, selling, general and administrative expenses before the $1.6
million charge decreased from 21.8% for the nine months ended March
31, 1997, to 20.8% for the nine months ended March 31, 1998.
Depreciation and amortization expense increased by $5.9 million, from
$5.1 million for the nine months ended March 31, 1997 to $11.0 million
for the nine months ended March 31, 1998. The increase is due to
increased capital spending on computer equipment and facilities to
support the increase in project-related personnel and a $1.7 million
noncash charge to reflect a reduction in expected service lives of
certain computer equipment as a result of integration activities and
the Company's program to upgrade and standardize its information
technology platform. Excluding this charge, depreciation and
amortization expense was $9.4 million, an increase of $4.2 million, or
81.8%, over the comparable period in the prior year.
Income from operations for the nine months ended March 31, 1998,
includes acquisition-related charges of $10.3 million in aggregate,
incurred during the second and third quarters of fiscal 1998 (Note 3
of Notes to Condensed Consolidated Financial Statements), as well as
the $1.6 million charge to selling, general and administrative
expenses (accounts receivable reserves) and $1.7 million of charges to
depreciation incurred in the third quarter of fiscal 1998 as discussed
above. Excluding the impact of all of these charges, income from
operations increased $7.6 million, or 65.2%, from $11.7 million (or
8.1% of net revenue) for the nine months ended March 31, 1997 to $19.3
million (or 9.5% of net revenue) for the nine months ended March 31,
1998.
Other income, net increased by $283,000 from $2,661,000 for the nine
months ended March 31, 1997, to $2,944,000 for the nine months ended
March 31, 1998. This increase resulted from higher average balances
of cash, cash equivalents and marketable securities.
The Company's effective tax rate was 55.5% for the nine months ended
March 31, 1998. Excluding the effect of certain nondeductible
acquisition-related charges, the effective income tax rate for the
nine months ended March 31, 1998 would have been 35.0% compared to
39.4% for the nine months ended March 31, 1997. This decrease was due
to changes in the mix of taxable income from the different
jurisdictions in which the Company operates and the impact of tax-
exempt interest income from securities held by the Company.
FISCAL YEAR ENDED JUNE 30, 1997, COMPARED TO FISCAL YEAR ENDED
JUNE 30, 1996
Net revenue increased $78.6 million, or 62.9%, from $125.1 million for
fiscal 1996 to $203.7 million for 1997. This net revenue growth was
primarily attributable to an increase in the volume and average
contract value of contract research projects serviced by the Company.
In fiscal 1997, net revenue from North American, European and Asian
operations increased $53.9 million, $22.5 million and $2.2 million,
respectively, over the prior year.
Direct costs increased $53.2 million, or 64.9%, from $81.9 million for
fiscal 1996 to $135.0 million for 1997. This increase in direct costs
was due to the increase in the number of project-related personnel,
hiring, facilities, and information system costs necessary to support
the increased level of operations. As a percentage of net revenue,
direct costs increased from 65.5% in fiscal 1996 to 66.3% in fiscal
1997.
Selling, general, and administrative expenses increased by $15.3
million, or 53.7%, from $28.5 million for fiscal 1996 to $43.8 million
for 1997. This increase was due to increased selling and
administrative personnel hiring and facilities costs, in line with
increasing infrastructure to accommodate the Company's growth. As a
percentage of net revenue, selling, general, and administrative
expenses decreased from 22.8% in fiscal 1996 to 21.5% in fiscal 1997.
Depreciation and amortization expense increased $3.4 million, or 80.1%
from $4.3 million for fiscal 1996 to $7.7 million for 1997. This
increase was primarily due to increased capital spending on computer
equipment and facilities to support the increase in project-related
personnel required to support the increased level of operations.
Income from operations increased $6.7 million, or 64.7%, from $10.4
million for fiscal 1996 to $17.1 million in 1997. As a percentage of
net revenue, income from operations increased to 8.4% in fiscal 1997,
from 8.3% in 1996.
Interest income increased $2.4 million in fiscal 1997 as a result of
higher average balances of cash and investments. This increase was
due to proceeds from the Company's public offering in March 1996 and
cash generated from operations.
The Company's effective income tax rate decreased from 40.5% in fiscal
1996 to 39.4% in fiscal 1997. This decrease was attributable to
changes in the mix of taxable income from the different geographic
jurisdictions that the Company operated in fiscal 1997 compared to
fiscal 1996.
FISCAL YEAR ENDED JUNE 30, 1996, COMPARED TO FISCAL YEAR ENDED
JUNE 30, 1995
Net revenue increased by $36.0 million, or 40.4%, from $89.1 million
for fiscal 1995 to $125.1 million for 1996. This net revenue growth
was attributable to an increase in the number and average contract
value of contract research projects serviced by the Company.
Direct costs increased $20.6 million, or 33.6%, from $61.3 million for
fiscal 1995 to $81.9 million for 1996. This increase in direct costs
was due to the increase in the number of project-related personnel,
facilities, and information system costs necessary to support the
increased level of operations. As a percentage of net revenue, direct
costs decreased from 68.8% for 1995 to 65.5% for fiscal 1996.
Selling, general and administrative expenses increased $7.4 million,
or 35.2%, from $21.1 million for fiscal 1995 to $28.5 million for
1996. This increase was primarily due to increased costs associated
with additional administrative personnel, greater hiring and selling
costs, additional facilities to support the Company's growth, and
other costs related to operating as a publicly-held company. As a
percentage of net revenue, selling, general and administrative
expenses decreased from 23.7% for fiscal 1995 to 22.8% for fiscal
1996.
Depreciation and amortization expense increased $360,000, or 9.2%,
from $3.9 million for fiscal 1995 to $4.3 million for 1996. The
change resulted from an increase in depreciation associated with
increased capital expenditures, offset by a decrease in depreciation
and amortization due to the write-down of impaired long-lived assets
of the Company's German operations. Depreciation and amortization
expense in fiscal 1995 includes approximately $588,000 related to long-
lived assets which were written-down and did not recur in 1996.
Results from operations for fiscal 1995 included an $11.3 million
noncash charge related to the write-down of impaired long-lived assets
of the Company's German operations. Excluding the impact of the asset
impairment charge, income from operations increased $7.6 million or
271.2%, from $2.8 million (or 3.1% of net revenue) in fiscal 1995 to
$10.4 million (or 8.3% of net revenue) in fiscal 1996.
Interest income increased by $1.1 million in fiscal 1996. This
increase resulted from higher average balances of cash and investments
due primarily to proceeds from the Company's public offerings in
November 1995 and March 1996.
The Company's effective income tax rate was 40.5% for fiscal 1996.
The effective tax rate in fiscal 1995, excluding the effect of the
$11.3 million noncash, nondeductible write-down due to the impairment
of long-lived assets, would have been 38.9%.
QUARTERLY RESULTS
The following table presents unaudited quarterly operating results for
the Company for each of the eleven most recent fiscal quarters in the
period ended March 31, 1998. In the opinion of the Company, this
information has been prepared on the same basis as the consolidated
financial statements appearing elsewhere in this Prospectus and
reflects all adjustments (consisting only of normal recurring
adjustments) necessary for a fair presentation of the results of
operations for those periods. This quarterly financial data should be
read in conjunction with the Consolidated Financial Statements and
Notes thereto appearing elsewhere in this Prospectus. The operating
results for any quarter are not necessarily indicative of the results
of any future period.
<TABLE>
For the eleven quarters ended
<C> <C> <C> <C> <C> <C> <C>
<S> March 31, Dec.31, Sept. 30, June 30, March 31, Dec 31, Sept 30,
(in thousands) 1998 1997 1997 1997 1997 1996 1996
Net revenue $73,067 $67,991 $62,991 $59,703 $53,584 $48,164 $42,225
Costs and expenses:
Direct costs 47,364 44,252 41,309 39,338 35,243 32,179 28,288
Selling, general
And administrative 16,743 14,089 13,222 12,380 11,702 10,422 9,295
Depreciation and
Amortization 5,241 3,167 2,630 2,567 2,013 1,641 1,489
Acquisition-related
Charges 6,173 4,100 -- -- -- -- --
Total costs and
Expenses 75,521 65,608 57,161 54,285 48,958 4,242 3,072
Income (loss) from
Operations $(2,454) $ 2,383 $ 5,830 $ 5,418 $ 4,626 $ 3,922 $3,153
Net income (loss) $(2,366) $ 1,903 $ 4,339 $ 4,106 $ 3,645 $2,729 $2,323
</TABLE>
<TABLE>
For the eleven quarters ended
<S> <C> <C> <C> <C>
(in thousands) June 30, March 31, Dec. 31, Sept. 30,
1996 1996 1995 1995
Net revenue $37,135 $31,924 $29,782 $26,213
Costs & Expenses:
Direct costs 24,217 20,701 19,744 17,221
Selling, general and
admininistrative 8,591 7,456 6,563 5,890
Depreciation 957
and amortization 1,215 1,108 999
Acquisition
related charges -- -- -- --
Total costs and
Expenses 34,023 29,265 27,306 24,068
Income (loss) from
Operations $ 3,112 $ 2,659 $ 2,476 $ 2,145
Net income (loss) $ 1,767 $ 1,864 $ 1,571 $ 1,455
</TABLE>
LIQUIDITY AND CAPITAL RESOURCES
Since its inception, the Company has financed its operations and
growth, including acquisition costs, with cash flows from operations
and the proceeds from the sale of equity securities. Investing
activities primarily reflect capital expenditures for information
systems enhancements, and leasehold improvements.
The Company's clinical research and development contracts are
generally fixed price with some variable components and range in
duration from a few months to several years. The cash flows from
contracts typically consist of a down payment required to be paid at
the time the contract is entered into and the balance in installments
over the contract's duration, usually on a milestone-achievement
basis. Revenue from contracts is recognized on a percentage-of-
completion basis as the work is performed. Accordingly, cash receipts
do not necessarily correspond to costs incurred and revenue recognized
on contracts.
The Company's operating cash flow is influenced by changes in the
levels of billed and unbilled receivables and advance billings. These
account balances and the number of days revenue outstanding in
accounts receivable, net of advance billings, can vary based on
contractual milestones and the timing and size of cash receipts. The
number of days revenue outstanding in accounts receivable, net of
advance billings, was 44 days at March 31, 1998, compared to 42 days
at June 30, 1997. The increase in days revenue outstanding from June
30, 1997 to March 31, 1997, was primarily due to the timing of certain
project milestone billings and related payments, partially offset by
an increase in advance billings. Accounts receivable, net of the
allowance for doubtful accounts, increased from $53.1 million at June
30, 1996, to $82.8 million at June 30, 1997, to $102.1 million at
March 31, 1998. Advance billings increased from $32.7 million at June
30, 1996, to $46.2 million at June 30, 1997, to $54.6 million at March
31, 1998.
During the nine months ended March 31, 1998, unrestricted cash and
cash equivalents increased by $18.0 million as a result of $4.4
million, $10.9 million, and $2.3 million in cash provided by operating
activities, investing activities, and financing activities,
respectively. Net cash provided by operating activities of $4.4
million resulted from net income, excluding noncash expenses, of $25.2
million and an increase in advance billings of $8.3 million, partially
offset by increases in accounts receivable and other current assets of
$25.2 million and $3.4 million, respectively. Net cash provided by
investing activities of $10.9 million consisted primarily of net
proceeds from sales of marketable securities of $34.6 million,
partially offset by capital expenditures of $22.4 million related to
facility expansions and investments in information technology. The
company expects to continue to make significant investments in
facility expansion and investments in information systems technology.
Financing activities consisted primarily of net proceeds from the
issuance of common stock of $4.5 million, partially offset by
dividends of $1.3 million paid by acquired companies prior to
acquisition.
Unrestricted cash and cash equivalents increased by $14.8 million
during fiscal 1997 as a result of $21.5 million of cash provided by
operations and $56.4 million provided by financing activities, offset
by $61.8 million of cash used for investing activities and a $1.3
unfavorable effect of exchange rate changes. Net cash provided by
operating activities resulted primarily from net income, excluding
noncash expenses, of $21.0 million and increases in advance billings
and other current liabilities of $13.5 million and $17.3 million,
respectively. Cash used by operating activities included increases in
accounts receivable and other current assets of $27.4 million and $2.3
million, respectively. Financing activities consisted primarily of
net proceeds of approximately $57.2 million from the Company's
December 1996 follow-on public offering of 2,516,300 shares of common
stock, net of repayments of long-term debt of $3.5 million. Debt
repayments included $2.3 million to retire third party debt assumed
during the August 1996 acquisition of State and Federal Associates,
Inc. Investing activities consisted of net purchases of marketable
securities of $37.5 million and capital expenditures.
The Company invested approximately $25.1 million in fiscal 1997 for
capital expenditures related to facility expansion and investments in
information systems technology.
The Company has domestic and foreign lines of credit with banks
totaling approximately $16.0 million, and a capital lease line of
credit with a U.S. bank for $2.4 million. At March 31, 1998, the
Company had approximately $17.8 million in available credit under
these arrangements.
The Company's primary short-term and long-term cash needs are for the
payment of the salaries and fringe benefits, hiring and recruiting
expenses, business development costs, capital expenditures and
facility-related expenses. The Company believes that its existing
capital resources together with cash flows from operations and
borrowing capacity under existing lines of credit will be sufficient
to meet its foreseeable cash needs. In the future, the Company will
consider acquiring businesses to enhance its service offerings,
therapeutic base, and global presence. Any such acquisitions may
require additional external financing, and the Company may from time
to time seek to obtain funds from public or private issuances of
equity or debt securities. There can be no assurance that such
financing will be available on terms acceptable to the Company.
The statements included in Management's Discussion and Analysis of
Financial Condition and Results of Operations include forward-looking
statements which involve risks and uncertainties. The Company's
actual experience may differ materially from that discussed above.
Factors that might cause such a difference include, but are not
limited to, the loss or delay of large contracts, the Company's
dependence on certain industries and clients and government regulation
of such industries and clients, competition or consolidation within
the industry, as well as those discussed in "Risk Factors" herein and
in the Company's Quarterly Report on Form 10-Q for the quarter March
31, 1998.
INFLATION
The Company believes the effects of inflation generally do not have a
material adverse impact on its operations or financial condition.
YEAR 2000
Information systems are an integral part of the services the Company
provides. As such the Company recognizes that it must ensure that its
services and operations will not be adversely affected by Year 2000
software failures (the "Year 2000 Issue") which can arise in time-
sensitive software applications with two digits to define the
applicable year. In such applications, a date using "00" as the year
may be recognized as the year 1900 rather than the year 2000.
The Company has formed a group, led by its Chief Information Officer,
to assess the Year 2000 Issue from an internal, supplier and customer
perspective. PAREXEL'S Year 2000 plan will have risk assessment,
evaluation, and remediation schedules finalized during 1998. For
business critical systems, remediation, validation, and implementation
is already underway. This plan is being executed under the guidance
of PAREXEL's senior management, who will receive periodic progress
reports from the group. Although the Company believes at this time
that the costs of the Year 2000 Issue will not be material to the
Company, the ultimate costs are currently unknown; and such costs or
the consequences of failure to correct any Year 2000 Issue could have
a material impact on the Company's financial condition, business, or
operations.
RECENTLY ISSUED ACCOUNTING STANDARDS
In February 1997, the Financial Accounting Standards Board (FASB)
issued Statement of Financial Accounting Standards (SFAS) No. 128,
"Earnings per Share," which replaces primary and fully diluted
earnings per share with basic and diluted earnings per share. The
Company adopted SFAS 128 in the second quarter of fiscal 1998 and
restated all previously reported earnings per share data.
In June 1997, the FASB issued SFAS No. 130, "Reporting Comprehensive
Income," and SFAS No. 131, "Disclosures about Segments of an
Enterprise and Related Information." SFAS No. 130 establishes
standards for reporting and display of comprehensive income and its
components in the consolidated financial statements. SFAS No. 131
establishes standards for reporting information on operating segments
in interim and annual financial statements. Both statements are
effective for the Company for fiscal 1999. The adoption of the new
standards will not have an effect on the Company's financial position
or results of operations but will result in additional interim and
annual financial disclosures.
SELLING STOCKHOLDERS
The following table sets forth certain information regarding
beneficial ownership of the Shares as of May 26, 1998 and the number
of Shares which may be offered by or for the account of the Selling
Stockholders or their transferees or distributees from time to time.
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>
Shares Offered Shares owned
Shares pursuant to after offering
Owned before this
offering Prospectus
<S> <C> <C> <C> <C> <C> <C>
Selling Number Percent Number Percent Number Percent
Stockholders (2) (2) (2)
Clarendon
Trust Company
Limited
(Joseph Eagle
1989 1,928,408 7.8% 771,364 3.1% 1,157,044 4.7%
Settlement)
("Eagle
Trust")
Gregory
Spenser 171,608 * 68,664 * 102,944 *
Caswill
Brian Harry 171,608 * 68,664 * 102,944 *
Bulley
Paul Desmond
FitzGerald 171,608 * 68,664 * 102,944 *
HSBC Trustee
(Jersey) 138,159 * 55,264 * 82,895 *
Limited
Thompson Clive
Investments 260,527 1.1% 44,211 * 216,316 *
plc
The Royal Bank
of Scotland
Trust Company
(Jersey) 87,500 * 33,158 * 54,342 *
Limited
Terrafirma
Designs 26,583 * 10,634 * 15,949 *
Limited
Clarendon
Trust Company
Limited
(Cheviot 73,334 * 73,334 * 0 *
Settlement)
("Caswill
Trust")
David 18,333 * 18,333 * 0 *
Satterthwaite
Van Der Linden
Holding BV 289,997 1.2% 87,000 * 202,997 *
Steinberg 289,997 1.2% 87,000 * 202,997 *
Holding BV
TOHO
Pharmaceutical 102,351 * 30,706 * 71,645 *
Co. Ltd.
Dr. Dieter 93,152 * 93,152 * 0 *
Russman
3,668,560 14.9% 1,510,148 6.1% 2,158,412 8.8%
</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 26, 1998, there were 24,603,251 shares of Common Stock
outstanding.
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.
The Eagle Trust, Mr. Gregory Spenser Caswill, Mr. Brian Harry Bulley,
Mr. Paul Desmond FitzGerald, HSBC Trustee (Jersey) Limited and
Terrafirma Designs Limited (the "PPS Stockholders") acquired all of
their shares in connection with the acquisition by the Company of PPS
Europe Limited ("PPS") and its subsidiary, Creative Communications
Solutions Ltd. ("CCS"), pursuant to Share Acquisition Agreements dated
March 1, 1998. Pursuant to the Share Acquisition Agreements, PPS and
CCS became direct and indirect wholly-owned subsidiaries of the
Company (the "PPS Acquisitions"). Thompson Clive Investments PLC, also
a former PPS Stockholder, acquired 110,527 shares of the Company's
Common Stock in connection with the PPS Acquisitions. The Royal Bank
of Scotland Trust Company (Jersey) Limited, also a former PPS
Stockholder, acquired 82,895 shares of the Company's Common Stock in
connection with the PPS Acquisitions. Pursuant to the terms of
Registration Rights Agreements dated February 27, 1998 by and among
the Company and the former PPS Stockholders, 1,120,623 of the
2,801,396 shares of Common Stock issued in connection with the PPS
Acquisitions are being offered hereby. The Company has agreed to
register up to 840,387 additional shares of Common Stock issued to the
former PPS Stockholders no later than February 1, 1999 and up to
840,386 additional shares of Common Stock issued to the former PPS
Stockholders no later than February 1, 2000.
The Caswill Trust and Mr. David Satterthwaite (the "Genesis
Stockholders") acquired their Shares in connection with the
acquisition by the Company of Genesis Pharma Strategies Ltd.
("Genesis") pursuant to a Share Acquisition Agreement dated March 1,
1998. Pursuant to the Share Acquisition Agreement, Genesis became a
wholly-owned subsidiary of the Company (the "Genesis Acquisition").
Pursuant to the terms of a Registration Rights Agreement dated
February 27, 1998 by and among the Company and the former Genesis
Stockholders, all of the 91,667 shares of Common Stock issued in
connection with the Genesis Acquisition are being offered hereby.
Van Der Linden Holding BV, Steinberg Holding BV and Toho
Pharmaceutical Co. Ltd. (the "MIRAI Stockholders") acquired their
Shares in connection with the acquisition by the Company of MIRAI, BV
("MIRAI") pursuant to a Share Purchase Agreement dated March 1, 1998.
Pursuant to the Share Purchase Agreement, MIRAI became a wholly-owned
subsidiary of the Company (the "MIRAI Acquisition"). Pursuant to the
terms of a Registration Rights Agreement dated February 27, 1998 by
and among the Company and the former MIRAI Stockholders, 204,706 of
the 682,345 shares of Common Stock issued in connection with the MIRAI
Acquisition are being offered hereby.
Dr. Dieter Russman acquired his Shares in connection with the
acquisition by the Company of LOGOS GmbH ("LOGOS") pursuant to a Sale
and Purchase Agreement dated as of February 28, 1998. Pursuant to the
Sale and Purchase Agreement, LOGOS became a wholly-owned subsidiary of
the Company (the "LOGOS Acquisition"). Pursuant to the terms of a
Registration Rights Agreement by and between the Company and Dr.
Russman, all of the 93,152 shares of Common Stock issued in connection
with the LOGOS Acquisition are being offered hereby.
Each of the Selling Stockholders represented to the Company that he or
it 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
such time.
Pursuant to the Share Acquisition Agreements by and among the Company
and the former PPS Stockholders and the former Genesis Stockholders
and the Share Purchase Agreement by and among the Company and the
former MIRAI Stockholders, ten percent (10%) of the shares issued to
the PPS Stockholders, the Genesis Stockholders and the MIRAI
Stockholders are being held in escrow until the earlier of: (i) the
delivery of the audit report concerning the Company's financial
statements for the fiscal year end June 30, 1998, or (ii) March 1,
1999 in the case of the PPS and Genesis Stockholders or February 28,
1999 in the case of the MIRAI Stockholders. The Shares held in escrow
may be used to satisfy indemnification claims brought by the Company
based upon a breach of the representations and warranties or tax
indemnities of the Selling Stockholders as set forth in the Share
Acquisition Agreements and Share Purchase Agreement.
Mr. A. Joseph Eagle, a life-income beneficiary of the Eagle Trust, and
Messrs. Caswill, Bulley and FitzGerald were each Directors of PPS and
CCS prior to the PPS Acquisitions and remain directors of PPS and CCS
in their capacities as subsidiaries of the Company. Additionally,
Messrs. Eagle and Bulley are directors of Pharos Healthcare
Communications Ltd., a wholly owned subsidiary of PPS and Messrs.
FitzGerald, Eagle and Caswill are directors of Pharos Healthcare
Communications, Inc. Mr. FitzGerald is President and Mr. Caswill is
Secretary and Treasurer of Pharos Healthcare Communications, Inc. Mr.
Eagle is Chairman and a director and Mr. Caswill is a director,
Secretary and Treasurer of The Center For Bio-Medical Communications,
Inc., a wholly-owned subsidiary of PPS. Mr. Caswill is a director,
Secretary and Treasurer and Mr. FitzGerald is a director and President
of HealthEd Communications Inc., a subsidiary of Pharos Healthcare
Communications, Inc. Mr. Eagle is a director of PPS International
Communications Limited. Mr. Eagle is a director and Mr. Caswill is a
director and Secretary of Cambridge Medical Publications Limited, a
subsidiary of PPS. Mr. Eagle is currently President of Medical
Marketing Services for the Company and a member of the Board of
Directors of the Company. Mr. Richard Thompson, a shareholder and
director of Thompson Clive Investments plc, was a director of PPS
prior to the PPS Acquisitions but resigned as a director upon the
completion of the PPS Acquisitions. Mr. Terry Brightmore, a director
and major shareholder of Terrafirma Designs Ltd, was a director of PPS
and CCS prior to the PPS Acquisitions and remains a director of PPS
and CCS in their capacities as subsidiaries of the Company. Mr.
Satterthwaite and Mr. Caswill were Directors of Genesis prior to the
Genesis Acquisition and remain directors of Genesis in its capacity as
a subsidiary of the Company. Except for Mr. Eagle, none of
Messrs. Caswill, Bulley, FitzGerald, Brightmore or Satterthwaite are
employed currently directly by the Company. Mrs. Els Van Der Linden
and Mr. Louis-Paul Steinberg were both members of MIRAI's Management
Board prior to the MIRAI Acquisition and Mrs. Els Van Der Linden
remains on such Board in MIRAI's capacity as a subsidiary of the
Company. Dr. Russman was managing director of LOGOS prior to the
LOGOS Acquisition and remains managing director of LOGOS in its
capacity as a subsidiary of the Company. Currently, neither Mrs. Van
Der Linden nor Mr. Steinberg are employed directly by the Company.
Dr. Russman is currently Vice President of Regulatory Affairs, Europe
for the Company.
Pursuant to Registration Rights Agreements by and between the Company
and each of the Selling Stockholders, 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 by and among the Company and the PPS Stockholders, the
Genesis Stockholders and Dr. Russman provide that the Company will
indemnify such 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 Stockholder. Similarly, the Registration
Rights Agreements by and among the Company and the PPS Stockholders,
the Genesis Stockholders and Dr. Russman provide that each Selling
Stockholder will indemnify the Company and its officers and directors
for any losses incurred by them in connection with any 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 Stockholder.
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.
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 26, 1998, there were 24,603,251 shares of Common Stock
outstanding and held of record by 138 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.
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. There are no shares of
Preferred Stock outstanding. 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 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. There are no shares
of Preferred Stock outstanding. 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 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 BankBoston,
N.A.
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 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
until February 28, 1999 or such period as may be 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."
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 consolidated financial statements of the Company as of June 30,
1997 and 1996 and for each of the three years in the period ended June
30, 1997 included in this Prospectus, except as they relate to PPS
Europe Limited, have been audited by Price Waterhouse LLP, independent
accountants, and, insofar as they relate to PPS Europe Limited, by
Grant Thornton, independent accountants, whose report thereon appears
herein. Such financial statements have been so included in reliance
on the reports of such independent accountants given on the authority
of such firms as experts in auditing and accounting.
Consolidated Financial Statements
The Company acquired Kemper-Masterson, Inc.("KMI") in December 1997
and, in separate transactions, PPS Europe Limited ("PPS") and MIRAI
B.V. ("MIRAI") in March 1998 in business combinations accounted for as
poolings of interests (Note 3). The following Consolidated Financial
Statements have been restated to include the financial position and
results of operations of these acquisitions.
PAREXEL INTERNATIONAL CORPORATION
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
Report of independent accountants .............................47
Report of independent auditors (PPS Europe, Limited)...........48
Consolidated statements of operations for the three years
ended June 30, 1997 and for the nine months ended
March 31, 1998 and 1997 (unaudited)..........................49
Consolidated balance sheets at June 30, 1997 and 1996 and
at March 31, 1998 and 1997 (unaudited).......................51
Consolidated statements of stockholders' equity for the
three years ended June 30, 1997 and for the nine months
ended March 31, 1998 (unaudited).............................53
Consolidated statements of cash flows for the three years
ended June 30, 1997 and for the nine months
ended March 31, 1998 and 1997 (unaudited)....................61
Notes to consolidated financial statements.....................64
Report of Independent Accountants
To the Board of Directors and Stockholders of
PAREXEL International Corporation:
In our opinion, based upon our audits and the report of other
auditors, the accompanying consolidated balance sheets and related
consolidated statements of operations, of stockholders' equity and of
cash flows present fairly, in all material respects, the financial
position of PAREXEL International Corporation and its subsidiaries at
June 30, 1997 and 1996, and the results of their operations and their
cash flows for each of the three years in the period ended June 30,
1997, in conformity with generally accepted accounting principles.
These financial statements are the responsibility of the Company's
management; our responsibility is to express an opinion on these
financial statements based on our audits. We did not audit the
financial statements of PPS Europe Limited, a wholly-owned subsidiary,
for fiscal years 1997, 1996 and 1995, which statements reflect total
assets of $26,197,000 and $21,336,000 at November 30, 1997 and 1996,
respectively, and net revenues of $24,881,000, $18,522,000 and
$14,522,000 for the years ended November 30, 1997, 1996, and 1995,
respectively. Those statements were audited by other auditors whose
report thereon has been furnished to us, and our opinion expressed
herein, insofar as it relates to the amounts included for PPS Europe
Limited as of and for the periods described above, is based solely on
the report of the other auditors. We conducted our audits of these
statements in accordance with generally accepted auditing standards
which require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements,
assessing the accounting principles used and significant estimates
made by management, and evaluating the overall financial statement
presentation. We believe that our audits and the report of other
auditors provide a reasonable basis for the opinion expressed above.
PRICE WATERHOUSE LLP
Boston, Massachusetts
August 6, 1997, except as to
Notes 3 and 16 and the effects of the poolings
of interests with Kemper-Masterson, Inc.,
PPS Europe Limited and MIRAI BV which are as of
March 1, 1998
REPORT OF INDEPENDENT AUDITORS
Board of Directors
PPS Europe Limited and Subsidiaries
We have audited the consolidated balance sheets of PPS Europe Limited
and Subsidiaries as of November 30, 1997 and 1996, and the related
consolidated statements of earnings, shareholders' equity, and cash
flows for the years ended November 30, 1997, 1996 and 1995. These
financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with United States generally
accepted auditing standards. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above, present
fairly, an all material respects, the consolidated financial position
of PPS Europe Limited and Subsidiaries as of November 30, 1997 and
1996, and the consolidated results of their operations and their
consolidated cash flows for the years ended November 30, 1997, 1996
and 1995, in conformity with United States generally accepted
accounting principles.
GRANT THORNTON
LONDON
UNITED KINGDOM
February 6, 1998
<TABLE>
PAREXEL INTERNATIONAL CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
(unaudited)
For the year ended For the nine months
June 30, ended March 31,
<S> <C> <C> <C> <C> <C>
1997 1996 1995 1998 1997
Revenue $272,164 $174,158 $124,368 $268,472 $192,920
Reimbursed costs (68,488) (49,105) (35,301) (64,423) (48,947)
Net revenue 203,676 125,053 89,067 204,049 143,973
Costs and expenses:
Direct costs 135,048 81,883 61,275 132,925 95,710
Selling, general and administrative 43,799 28,499 21,073 44,054 31,418
Depreciation and amortization 7,710 4,280 3,920 11,038 5,144
Acquisition-related charges -- -- -- 10,273 --
Impairment of long-lived assets -- -- 11,253 -- --
186,557 114,662 97,521 198,290 132,272
Income (loss) from operations 17,119 10,391 (8,454) 5,759 11,701
Interest income 4,040 1,646 525 2,773 2,106
Interest expense (278) (201) (252) (135) (126)
Other income (expense), net 241 (654) 222 306 681
4,003 791 495 2,944 2,661
Income (loss) before provision for
income taxes 21,122 11,182 (7,959) 8,703 14,362
Provision for income taxes 8,319 4,527 1,280 4,827 5,665
Net income (loss) $ 12,803 $ 6,655 $ (9,239) $ 3,876 $ 8,697
</TABLE>
<TABLE>
PAREXEL INTERNATIONAL CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
For the year ended (unaudited)
For the nine months
June 30, ended March 31
<S> <C> <C> <C> <C> <C>
1997 1996 1995 1998 1997
Earnings (loss) per share:
Basic $0.59 $0.42 $(2.02) $0.16 $0.41
Diluted $0.56 $0.39 $(2.02) $0.16 $0.40
Shares used in computing earnings
(loss) per common share:
Basic 21,628 15,801 4,580 23,846 21,052
Diluted 22,822 17,255 4,580 24,776 21,633
</TABLE>
The accompanying notes are an integral part of the consolidated
financial statements.
<TABLE>
PAREXEL INTERNATIONAL CORPORATION
CONSOLIDATED BALANCE SHEETS
(in thousands, except share data)
(unaudited)
June 30, March 31,
<S> <C> <C> <C>
1997 1996 1998
ASSETS
Current Assets:
Cash and cash equivalents:
Unrestricted $ 36,626 $ 21,875 $ 54,628
Restricted 1,967 2,129 1,663
Marketable securities 67,713 30,147 32,164
Accounts receivable, net 82,827 53,064 102,103
Other current assets 15,260 11,262 18,014
Total current assets 204,394 118,477 208,572
Property and equipment, net 33,508 13,739 44,115
Other assets 2,643 3,505 6,908
Total assets $240,544 $135,721 $259,595
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Notes payable and current
portion of long-term debt $ 2,236 $ 1,468 $ 989
Accounts payable 10,425 10,044 10,393
Advance billings 46,170 32,716 54,634
Other current liabilities 31,565 18,568 28,230
Total current liabilities 90,396 62,796 94,246
Long-term debt 136 466 24
Other liabilities 2,564 2,671 1,950
Total liabilities 93,096 65,933 96,220
</TABLE>
<TABLE>
PAREXEL INTERNATIONAL CORPORATION
CONSOLIDATED BALANCE SHEETS
(in thousands, except share data)
(unaudited)
June 30, March 31
<S> <C> <C> <C>
1997 1996 1998
Commitments (Note 15)
Stockholders' equity:
Preferred stock - $.01 par value; shares authorized:
5,000,000; none issued and outstanding -- -- --
Common stock - $.01 par value; shares authorized: 50,000,000
at March 31, 1998 (unaudited), and at June 30, 1997, and
25,000,000 at June 30, 1996; shares issued: 24,606,772
at March 31 1998 (unaudited), 24,021,082, at June 30,
1997, and 18,927,823 at June 30, 1996; shares outstanding:
24,577,360 at March 31, 1998 (unaudited), 23,991,670 at
June 30, 1997, and 18,898,411 at June 30, 1996 240 189 246
Additional paid-in capital 136,549 70,390 149,472
Retained earnings (accumulated deficit) 11,585 (1,136) 14,591
Cumulative translation adjustment (926) 345 (934)
Total stockholders' equity 147,448 69,788 163,375
$240,544 $135,721 $259,595
</TABLE>
The accompanying notes are an integral part of the consolidated
financial statements.
<TABLE>
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
Convertible Preferred Common Stock
Stock
<C>
<S> <C> <C> <C> <C> Additional
Number of Issuance Number of Par Paid-In
(in thousands, except share data) Shares Price, Net Shares Value Capital
Balance at June 30, 1994 2,327,744 $23,683 4,913,913 $49 $4,007
Shares issued under
stock option plans 43,972 2 64
Deferred compensation 183
Repurchase of common shares (2,746) (17)
Proceeds from stock subscriptions
receivable
Foreign currency translation
Common stock dividends paid by
acquired companies
Net loss
Balance at June 30, 1995 2,327,744 23,683 4,955,139 51 4,237
</TABLE>
The accompanying notes are an integral part of the consolidated
financial statements.
<TABLE>
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
<S> <C> <C> <C> <C>
Retained Stock Cumulative Total
Earnings Subscriptions Translation Stockholders'
(in thousands, except share data) (Accumulated Receivable Adjustment Equity
Deficit)
Balance at June 30, 1994 $3,583 $(163) $(454) $30,705
Shares issued under stock option
plans 66
Deferred compensation 183
Repurchase of common shares (17)
Proceeds from stock subscriptions
receivable 6 6
Foreign currency translation 774 774
Common stock dividends paid by
acquired companies (506) (506)
Net loss (9,239) (9,239)
Balance at June 30, 1995 (6,162) (157) 320 21,972
</TABLE>
The accompanying notes are an integral part of the consolidated
financial statements.
<TABLE>
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
Convertible Preferred Common Stock
Stock
<C> <C> <C> <C> <C>
<S> Number of Issuance Number of Par Additional
(in thousands, except share data) Shares Price, Shares Value Paid-in
Net Capital
Balance at June 30, 1995 2,327,744 23,683 4,955,139 51 4,237
Convertible preferred stock issued
upon exercise of warrants 176,887 1,769
Proceeds from stock subscriptions
receivable
Conversion of preferred stock into
common upon initial public offering (2,504,631) (25,452) 8,956,016 88 25,364
Payment of accrued preferred stock
dividends
Net proceeds from public offerings 4,200,000 42 36,845
Shares issued under stock option
plans 625,620 6 405
Deferred compensation 337
Acquisitions (Note 3) 161,636 2 144
Income tax benefit from exercise of
stock options 3,058
Net unrealized gain on marketable
securities
Common stock dividends paid by
acquired companies
Foreign currency translation
Net income
Balance at June 30, 1996 -- -- 18,898,411 189 70,390
</TABLE>
The accompanying notes are an integral part of the consolidated
financial statements.
<TABLE>
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
<C> <C> <C> <C>
Retained Stock Cumulative Total
<S> Earnings Subscriptions Translation Stockholders'
(in thousands, except share data) (Accumulated Receivable Adjustment Equity
Deficit)
Balance at June, 30 1995 (6,162) (157) 320 21,972
Convertible preferred stock issued
upon exercise of warrants 1,769
Proceeds from stock subscription
Receivable 157 157
Conversion of preferred stock into
common upon initial public offering --
Payment of accrued preferred stock
Dividends (940) (940)
Net proceeds from public offerings 36,887
Shares issued from stock option
Plans 411
Deferred compensation 337
Acquisitions (Note 3) (76) 70
Income tax benefit from exercise
of stock options 3,058
Net unrealized gain on marketable
Securities 44 44
Common stock dividends paid by
acquired companies (657) (657)
Foreign currency translation 25 25
Net income 6,655 6,655
Balance at June 30, 1996 (1,136) -- 345 69,788
</TABLE>
The accompanying notes are an integral part of the consolidated
financial statements.
<TABLE>
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
Convertible Preferred Common Stock
Stock
<S> <C> <C> <C> <C> <C>
Issuance Additional
Number of Price, Number of Par Paid-In
(in thousands, except share data) Shares Net Shares Value Capital
Balance at June 30, 1996 -- -- 18,898,411 189 70,390
Net proceeds from public offerings 2,516,300 25 57,161
Shares issued under stock option and
purchase plans 1,364,898 14 3,354
Deferred compensation 1,048
Income tax benefit from exercise of
stock options 4,527
Income tax benefit from building
Acquisition 320
Net unrealized gain on marketable
Securities
Acquisitions (Note 3) 1,217,841 12 30
Foreign currency translation
Dividends paid by acquired companies
Elimination of KMI's net activity
duplicated for the six months ended
December 31, 1996 (Note 3) (5,780) (281)
Net income
Balance at June 30, 1997 -- -- 23,991,670 240 136,549
</TABLE>
The accompanying notes are an integral part of the consolidated
financial statements.
<TABLE>
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
<S> <C> <C> <C> <C>
Retained Stock Cumulative Total
Earnings Subscription Translation Stockholders'
(in thousands, except share data) (Accumulated Receivable Adjustment Equity
Deficit)
Balance at June 30, 1996 (1,136) -- 345 69,788
Net proceeds from public offerings 57,186
Shares issued under stock option
and purchase plans 3,368
Deferred compensation 1,048
Income tax benefit from exercise
of stock options 4,527
Income tax benefit from building
acquisition 320
Net unrealized gain on marketable
securities 97 97
Acquisition (Note 3) 1,231 1,273
Foreign currency translation (1,271) (1,271)
Dividends paid by acquired companies (1,293) (1,293)
Elimination of KMI's net activity
duplicated for the six months
ended December 31, 1996 (Note 3) (117) (398)
Net income 12,803 12,803
Balance at June 30, 1997 11,585 -- (926) 147,448
</TABLE>
The accompanying notes are an integral part of the consolidated
financial statements.
<TABLE>
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
Convertible Preferred Common Stock
Stock
<S> <C> <C> <C> <C> <C>
Issuance Additional
Number of Price, Number of Par Paid-In
(in thousands, except share data) Shares Net Shares Value Capital
Balance at June 30, 1997 -- -- 23,991,670 240 136,549
Shares issued under stock option
plans (unaudited) 369,255 4 7,354
Deferred compensation (unaudited) 2,198
Income tax benefit from exercise of
stock options (unaudited) 2,400
Net unrealized loss on marketable
Securities (unaudited)
Acquisitions (Note 3) (unaudited) 216,435 2 1,227
Acquisition costs reimbursed by
Shareholders (unaudited) 300
Foreign currency translation
(unaudited)
Elimination of PPS and MIRAI net
Activity duplicated for the six months
ended November 30 and December 31,
1997 (Note 3) (unaudited) (556)
Net income (unaudited)
Balance at March 31, 1998 (unaudited) -- -- 24,577,360 $ 246 $149,472
</TABLE>
The accompanying notes are an integral part of the consolidated
financial statements.
<TABLE>
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
<C> <C> <C> <C>
Retained Stock Cumulative Total
<S> Earnings Subscriptions Translation Stockholders'
(in thousands, except share data) (Accumulated Receivable Adjustment Equity
Deficit)
Balance at June 30, 1997 11,585 -- (926) 147,448
Shares issued under stock option
and purchase plans (unaudited) 7,358
Deferred compensation (unaudited) 2,198
Income tax benefit from exercise
of stock options (unaudited) 2,400
Net unrealized loss on marketable
Securities (unaudited) (141) (141)
Acquisitions (Note 3) (unaudited) 311 1,540
Acquisition costs reimbursed by
Shareholders (unaudited) 300
Foreign currency translation (8) (8)
(unaudited)
Elimination of PPS and MIRAI net
Activity duplicated for the six months
ended November 30 and December 31,
1997 (Note 3) (unaudited) (1,040) (1,596)
Net income (unaudited) 3,876 3,876
Balance at March 31, 1998 (unaudited) $14,591 -- $(934) $163,375
</TABLE>
The accompanying notes are an integral part of the consolidated
financial statements.
<TABLE>
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)
For the year ended For the nine months
June 30, ended March 31,
<S> <C> <C> <C> <C> <C>
1997 1996 1995 1998 1997
Cash flows from operating activities:
Net income (loss) $12,803 $ 6,655 $(9,239) $3,876 $8,697
Adjustments to reconcile net income
(loss) to net cash provided by
operating activities:
Depreciation and amortization 7,710 4,280 3,920 11,038 5,144
Stock compensation expense 1,048 337 184 -- 387
Restructuring transactions -- (135) (683) -- --
Impairment of long-lived assets -- -- 11,253 -- --
Acquisition-related charges -- -- -- 10,273 --
Change in assets and liabilities,
net of effects from acquisitions:
Restricted cash 168 (1,597) (929) 1,108 835
Accounts receivable, net (27,373) (23,625) (1,159) (25,200) (22,738)
Other current assets (2,068) (3,865) 79 (3,395) (881)
Other assets (192) (2,013) 23 (2,032) 604
Accounts payable (834) 1,543 1,718 494 (2,378)
Advance billings 13,456 16,731 5,683 8,313 13,013
Other current liabilities 16,590 8,615 3,209 (1,751) 5,069
Other liabilities 699 987 (167) 1,645 446
Net cash provided by operating activities 22,007 7,913 13,892 4,369 8,198
</TABLE>
The accompanying notes are an integral part of the consolidated
financial statements.
<TABLE>
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)
For the year ended For the nine months
June 30, ended March 31,
<S> <C> <C> <C> <C> <C>
1997 1996 1995 1998 1997
Cash flows from investing activities:
Purchase of marketable securities (118,698) (131,903) (3,510) (90,217) (77,268)
Proceeds from sale of marketable
securities 81,223 104,128 2,710 124,803 74,436
Cash related to acquisition activities 781 52 -- 33 781
Purchase of property and equipment (25,112) (7,461) (4,988) (22,358) (15,795)
Other investing activities -- -- -- (1,410) --
Net cash provided (used) by investing
activities (61,806) (35,184) (5,788) 10,851 (17,846)
Cash flows from financing activities:
Proceeds from issuance of common stock 60,554 37,298 66 4,453 59,702
Proceeds from issuance of convertible
preferred stock -- 1,769 -- -- --
Cash received from stock
subscriptions -- 157 6 -- --
Purchase of treasury stock -- -- (17) -- --
Net proceeds (repayments) under line
of credit 63 619 (275) (497) 239
Proceeds from long term debt -- 56 200 -- --
Repayments of long-term debt (3,464) (1,001) (751) (386) (3,243)
Dividends paid (1,293) (1,597) (506) (1,293) --
Net cash provided (used) by financing
activities 55,860 37,301 (1,277) 2,277 56,698
</TABLE>
The accompanying notes are an integral part of the consolidated
financial statements.
<TABLE>
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)
For the nine months
For the year ended June 30, ended March 31,
<S> <C> <C> <C> <C> <C>
1997 1996 1995 1998 1997
Elimination of net cash activities of
acquired companies for the duplicated
periods (21) -- -- 672 (21)
Effect of exchange rate changes on
unrestricted cash and cash equivalents (1,289) 349 (36) (167) (1,572)
Net increase in unrestricted cash and
cash equivalents 14,751 10,379 6,791 18,002 45,457
Unrestricted cash and cash
equivalents at beginning of period 21,875 11,496 4,705 36,626 21,875
Unrestricted cash and cash
equivalents at end of period $36,626 $21,875 $11,496 $54,628 $67,332
Supplemental disclosures of cash flow
information:
Cash paid during the year for:
Interest $ 283 $ 267 $ 321 $ 147 $ 139
Income taxes $1,909 $3,038 $ 870 $1,494 $1,857
Supplemental disclosures of noncash
financing activities:
Property and equipment acquired
under capital lease obligations $ 323 $ 552 $1,265 -- $323
Income tax benefit from exercise of
stock options $4,527 $3,058 -- $2,440 --
Income tax benefit from building
acquisition $ 320 -- -- -- $ 320
</TABLE>
The accompanying notes are an integral part of the consolidated
financial statements.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1. DESCRIPTION OF BUSINESS
The Company is a leading contract research organization ("CRO")
providing a broad range of knowledge-based product development and
product launch services on a contract basis to the worldwide
pharmaceutical, biotechnology, and medical device industries. The
Company has developed expertise in such disciplines as: clinical
trials management, biostatistical analysis and data management,
medical marketing, clinical pharmacology, regulatory and medical
consulting, information technology, industry training and publishing,
and other drug development consulting services.
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation and Principles of Consolidation
The accompanying consolidated financial statements have been restated
to give effect to the acquisitions of PPS Europe Limited and MIRAI BV
by the Company in March 1998. The acquisitions were accounted for as
poolings of interest (Note 3).
The consolidated financial statements include the accounts of PAREXEL
International Corporation and its wholly-owned subsidiaries. In fiscal
year 1997, the Company's French subsidiary changed its year end to
June 30, which resulted in a 13-month year. The additional month is
included in the results of operations for fiscal 1997 and does not
materially affect the Company's consolidated financial statements.
The Company's German subsidiary operates on a May 31 fiscal year. All
significant intercompany accounts and transactions have been
eliminated.
Accounting Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets,
liabilities, revenues and expenses, and disclosures of contingent
assets and liabilities. Actual results may differ from those
estimates.
Interim Financial Data (Unaudited)
The interim financial data as of March 31, 1998, and for the nine
months ended March 31, 1998 and 1997, included in the accompanying
consolidated financial statements and notes thereto, is unaudited;
however, in the opinion of the Company, the interim financial data
include all adjustments, consisting only of normal recurring
adjustments (except for the items discussed in Note 3) necessary for a
fair presentation of the results for the interim periods. The interim
financial data are not necessarily indicative of the results of
operations for a full fiscal year.
Revenue
Fixed price contract revenue is recognized using the percentage-of-
completion method based on the ratio that costs incurred to date bear
to estimated total costs at completion. Revenue from other contracts
is recognized as services are provided. Revenue related to contract
modifications is recognized when realization is assured and the
amounts are reasonably determinable. Adjustments to contract cost
estimates are made in the periods in which the facts that require the
revisions become known. When the revised estimate indicates a loss,
such loss is provided in the current period in its entirety. "Unbilled
accounts receivable" represents revenue recognized in excess of
amounts billed. "Advance billings" represents amounts billed in excess
of revenue recognized.
Investigator Fees
Investigator fees are accrued as investigator services are rendered.
The timing of payments to investigators is determined by reference to
predetermined contractual arrangements, which may differ from the
accrual of the expense. Payments to investigators in excess of amounts
accrued are classified as prepaid expenses included in other current
assets, and accrued expenses in excess of amounts paid are classified
as other current liabilities.
Cash, Cash Equivalents, Marketable Securities, and Financial
Instruments
The Company considers all highly liquid investments purchased with
original maturities of three months or less to be cash equivalents.
Marketable securities include securities purchased with original
maturities of greater than three months. Cash equivalents and
marketable securities are classified as "available for sale" and are
carried at fair market value. Unrealized gains and losses are
recorded as part of stockholders' equity. Restricted cash consists of
advances and deposits from customers subject to certain restrictions.
The Company occasionally purchases securities with seven-day put
options that allow the Company to sell the underlying securities in
seven days at par value. The Company uses these derivative financial
instruments on a limited basis to shorten contractual maturity dates,
thereby managing interest rate risk. Approximately $2.7 million of
securities were subject to seven-day put options at June 30, 1997, and
$1.0 million at June 30, 1996. The Company does not hold derivative
instruments for trading purposes.
The fair value of the Company's financial instruments are not
materially different from their carrying amounts at June 30, 1997 and
1996.
Concentration of Credit Risk
Financial instruments which potentially expose the Company to
concentrations of credit risk include trade accounts receivable.
However, such risk is limited due to the large number of clients and
their international dispersion. In addition, the Company maintains
reserves for potential credit losses and such losses, in the
aggregate, have not exceeded management expectations. No single
customer accounted for more than 10% of the Company's consolidated net
revenue for the years ended June 30, 1997, 1996, and 1995.
Property and Equipment
Property and equipment is stated at cost. Depreciation is provided on
the straight-line method over the estimated useful lives of the assets
ranging from three to eight years. Leasehold improvements are
amortized over the lesser of the estimated useful lives of the
improvements or the remaining lease term. Repair and maintenance
costs are expensed as incurred.
Intangible Assets
Intangible assets consist principally of goodwill, customer lists,
covenants not to compete, and other intangible assets attributable to
businesses acquired. Goodwill represents the excess of the cost of
businesses acquired over the fair value of the related net assets at
the date of acquisition. Intangible assets are amortized using the
straight-line method over their expected useful lives ranging from
five to twenty years.
Intangible assets of $3.0 million and $3.4 million, included in Other
Assets, are net of accumulated amortization of $2.0 million and $2.1
million as of June 30, 1997 and 1996, respectively. Amortization
expense was $333,000, $290,000, and $570,000 for the fiscal years
ended June 30, 1997, 1996, and 1995, respectively.
Impairment of Long-Lived Assets
The Company periodically assesses the recoverability of the carrying
amount of long-lived assets, including intangible assets. A loss is
recognized when expected future cash flows (undiscounted and without
interest) are less than the carrying amount of the asset. The amount
of the impairment loss is determined as the difference by which the
carrying amount of the asset exceeds the fair value of the asset.
In fiscal 1995, the Company assessed the realizability of long-lived
assets of PAREXEL GmbH in response to various factors at that time
including a decline in revenue resulting in a significant net loss at
the subsidiary coupled with revisions to drug development regulations
in both Germany and Europe which were expected to have a further
adverse effect of its results of operations. As a result of the
Company's assessment, an impairment loss of $11.3 million was recorded
in fiscal 1995 for the excess of the carrying amount over the
estimated fair value of PAREXEL GmbH determined using a discounted
cash flow valuation technique with a discount rate of 19.5% based on
the calculated cost of capital of PAREXEL GmbH.
Income Taxes
The Company accounts for income taxes in accordance with Statement of
Financial Accounting Standards No. 109. Deferred tax assets and
liabilities are recognized for the expected future tax consequences,
utilizing current tax rates, of temporary differences between the
carrying amounts and the tax bases of assets and liabilities.
Deferred tax assets are recognized, net of any valuation allowance,
for the estimated future tax effects of deductible temporary
differences and tax operating loss and credit carryforwards. Deferred
income tax expense represents the change in the net deferred tax asset
and liability balances.
Foreign Currency
Assets and liabilities of the Company's international operations are
translated into U.S. dollars at exchange rates in effect at the
balance sheet date. Income and expense items are translated at
average exchange rates during the year. Translation adjustments are
accumulated in a separate component of stockholders' equity. Realized
gains and losses recorded in the statements of operations were not
material for each period presented.
Earnings Per Share
Earnings per share has been calculated in accordance with Statement of
Financial Accounting Standards No. 128, (SFAS No. 128) "Earnings per
Share." Basic earnings per share is calculated based on the weighted
average number of common shares outstanding during the period.
Diluted earnings per share is calculated based on the weighted
average number of common shares and dilutive common equivalent shares
assumed outstanding during the period.
Stock-Based Compensation
The Company accounts for employee stock awards in accordance with
Accounting Principles Board Opinion No. 25, "Accounting for Stock
Issued to Employees," and provides pro forma disclosures required by
Statement of Financial Accounting Standards No. 123, "Accounting for
Stock-Based Compensation."
Recently Issued Accounting Standards
In June 1997, the FASB issued SFAS No. 130, "Reporting Comprehensive
Income," and SFAS No. 131, "Disclosures about Segments of an
Enterprise and Related Information." SFAS No. 130 establishes
standards for reporting and display of comprehensive income and its
components in the consolidated financial statements. SFAS No. 131
establishes standards for reporting information on operating segments
in interim and annual financial statements. Both statements are
effective for the Company for fiscal 1999. The adoption of the new
standards will not have an effect on the Company's financial position
or results of operations but will result in additiional disclosures in
interim and annual financial statements.
NOTE 3. ACQUISITIONS AND RELATED CHARGES
In March 1998 the Company acquired, in separate transactions, PPS
Europe Limited ("PPS"), a leading marketing and clinical
communications firm, servicing the international pharmaceutical
industry based in the U.K. and MIRAI B.V. ("MIRAI"), a full service,
pan-European contract research organization based in the Netherlands.
The Company issued 2,774,813 shares of common stock in exchange for
all of the outstanding ordinary shares of PPS and 134,995 common stock
options in exchange for all of the outstanding ordinary share options
of PPS based on the exchange ratio for the acquisition. The Company
issued 682,345 shares of common stock in exchange for all of the
outstanding shares of MIRAI. Both acquisitions were accounted for as
poolings of interests. The Company's historical consolidated
financial statements have been restated to include the financial
position and results of operations of PPS and MIRAI for all periods
prior to the acquisitions.
Due to the differing fiscal year ends of PPS (November 30) and MIRAI
(December 31), financial information for dissimilar fiscal years has
been combined with the Company. The consolidated statements of
operations of the Company for fiscal 1997, 1996, and 1995 combines the
Company's results of operations for the years ended June 30, 1997,
1996 and 1995 with the results of operations of PPS and MIRAI for
their respective fiscal years ended November 30 and December 31, 1997,
1996 and 1995.
The consolidated statement of operations of the Company for the nine
months ended March 31, 1997 includes the results of operations of PPS
and MIRAI for the nine months ended August 31 and September 30, 1997,
respectively. Effective in March 1998, the Company changed the fiscal
year end of PPS from November 30 to May 31 and the fiscal year end of
MIRAI from December 31 to June 30. As such, the statement of
operations for the nine months ended March 31, 1998, includes the
results of operations of PPS and MIRAI for the nine months ended
February 28 and March 31, 1998, respectively. As a result of
conforming fiscal year ends, the results of operations of PPS and
MIRAI for the six months ended November 30 and December 31, 1997,
respectively, are duplicated in the combined statements of operations
for fiscal 1997 and 1998. Therefore, net income for one of the
duplicated periods was eliminated from stockholders' equity. The
following represents the duplicated amounts included in both the
results of operations for fiscal years 1997 and 1998:
<TABLE>
<S> <C> <C> <C>
($ in thousands) PPS MIRAI TOTAL
Net revenue $13,205 $4,891 $18,096
Operating income 1,553 438 1,991
Net income 697 343 1,040
</TABLE>
Revenue and net income for the previously separate companies are as
follows:
<TABLE>
Year ended June 30,
<S> <C> <C> <C> <C>
Six
months
ended
December
31,
(in thousands) 1997 1996 1995 1997
Net revenue
PAREXEL $159,679 $ 88,006 $ 58,573 $106,363
KMI 10,676 9,355 8,520 6,523
PPS 24,881 18,522 14,522 13,205
MIRAI 8,440 9,170 7,452 4,891
$203,676 $125,053 $89,067 $130,982
Net income (loss)
PAREXEL $10,848 $4,599 $(10,630) 4,478
KMI 189 94 (41) 725
PPS 1,201 1,721 1,308 697
MIRAI 565 241 124 342
$12,803 $6,655 $(9,239) $6,242
</TABLE>
Also in March 1998 the Company acquired, in separate transactions,
Genesis Pharma Strategies Limited ("Genesis"), a physician-focused
marketing and clinical communications firm servicing the international
pharmaceutical industry and LOGOS GmbH ("LOGOS"), a provider of
regulatory services to pharmaceutical manufacturers. The Company
issued 91,667 and 93,152 shares of common stock in exchange for all of
the outstanding capital stock of Genesis and LOGOS, respectively.
Both acquisitions were accounted for as poolings of interests. The
historical results of operations and financial position of Genesis and
LOGOS are not material, individually or in aggregate, to the Company's
historical financial statements. Therefore, prior period amounts have
not been restated and results of operations of Genesis and LOGOS have
been included in the consolidated results since acquisition.
In connection with the acquisitions during fiscal 1998, the Company
incurred acquisition-related charges of $10.3 million consisting
principally of noncash compensation attributed to stock options of KMI
and PPS (See Note 11), an accelerated compensation payment to a PPS
executive pursuant to a pre-existing employment agreement, and legal,
accounting and other transaction related fees.
In addition, the Company recorded a $1.6 million provision during the
fiscal quarter ended March 31, 1998, to increase the accounts
receivable reserves of PPS and MIRAI to conform reserve estimates with
company policy which has been reflected in selling, general and
administrative expense in the accompanying consolidated statement of
operations. The Company also recorded a $1.7 million charge to
depreciation and amortization expense resulting from a change in
estimate of the remaining service lives of certain computer equipment
arising from integration activities associated with acquisitions and a
company-wide program implemented to upgrade and standardize its
information technology platform. The aggregate effect of these
changes in estimates was an increase in operating expenses of $3.3
million and a decrease in both basic and diluted earnings per share of
$0.09 for the nine months ended March 31, 1998.
In December 1997 the Company acquired Kemper-Masterson, Inc. ("KMI), a
leading regulatory consulting firm based in Massachusetts in a
business combination accounted for as a pooling of interests. The
Company issued 581,817 shares of common stock in exchange for all of
the outstanding shares of KMI. The Company's historical consolidated
financial statements have been restated to include the financial
position and results of operations of KMI for all periods prior to the
acquisition. As a result of conforming dissimilar year ends, KMI's
results of operations for the six months ended December 31, 1996
(including revenue, operating income, and net income of $5.0 million,
$167,000, and $117,000, respectively) were duplicated in the
consolidated statements of operations for fiscal 1997 and 1996.
Therefore, net income and equity activity for one of the duplicated
six-month periods ended December 31, 1996, was eliminated from
stockholders' equity.
In September 1997 the Company acquired substantially all of the assets
of Perceptive Systems, Inc., a Colorado corporation doing business as
Hayden Image Processing Group ("Hayden") in exchange for 5,035 shares
of the Company's common stock. In addition, Hayden will receive three
annual contingent payments (not exceeding $228,000 in aggregate) of
the Company's common stock, based on net receipts generated by certain
acquired assets. The transaction was accounted for as a purchase for
financial accounting purposes.
In February 1997, the Company acquired, in separate transactions,
RESCON, Inc., a medical marketing consulting business located in the
Washington, D.C. area, and Sheffield Statistical Services, Ltd. (S-
Cubed), a company located in the United Kingdom that specializes in
biostatistical analysis. The Company issued a total of 209,537 shares
of common stock in exchange for all the outstanding shares of RESCON
and S-Cubed. In August 1996, the Company acquired, in separate
transactions, Lansal Clinical Pharmaceutics, Limited (Lansal), a
contract research organization located in Israel, and State and
Federal Associates, Inc. (S&FA), a medical marketing business located
in the Washington, D.C. area. The Company issued 1,008,304 shares of
common stock in exchange for all of the outstanding shares of Lansal
and S&FA. In June 1996, the Company acquired, in separate
transactions, Sitebase Clinical Systems, Inc. (Sitebase), a provider
of remote data entry technology, and Caspard Consultants (Caspard), a
Paris-based biostatistical and data management consulting company.
The Company issued a total of 161,636 shares of common stock in
exchange for all of the outstanding shares of Sitebase and Caspard.
These transactions were accounted for as poolings of interests. The
Company's financial statements were not restated as the historical
results of operations of the acquired companies were material.
NOTE 4. INVESTMENTS
Available-for-sale securities included in cash and cash equivalents as
of June 30, 1997 and 1996, consisted of the following:
($ in thousands) 1997 1996
Money market $ 988 $ 2,492
Municipal securities 1,000 10,000
Repurchase agreements 20,210 1,141
$22,198 $13,633
Available-for-sale securities included in marketable securities at
June 30, 1997, consisted of the following:
<TABLE>
<S> <C> <C> <C>
Amortized Unrealized Fair
($ in thousands) Cost Gains Losses Value
Municipal securities $ 3,785 $ 5 $(2) $ 3,788
Federal government
Securities 24,222 -- (1) 24,221
Corporate debt
Securities 39,565 140 (1) 39,704
$67,572 $145 $(4) $67,713
</TABLE>
Available-for-sale securities included in marketable securities at
June 30, 1996, consisted of the following:
<TABLE>
<S> <C> <C> <C> <C>
Amortized Unrealized Fair
($ in thousands) Cost Gains Losses Value
Municipal securities $16,972 $ 3 $(34) $16,941
Federal government
Securities 11,172 66 (1) 11,237
Corporate debt
Securities 1,959 10 -- 1,969
$30,103 $79 $(35) $30,147
</TABLE>
The contractual maturity of available-for-sale securities at June 30,
1997, was $67.3 million within one year, $19.1 million over one year
and less than five years, and $2.7 million over five years. Proceeds
from the maturities and sales of available-for-sale securities
amounted to approximately $1.9 billion for the year ended June 30,
1997, $568 million for the year ended June 30, 1996, and $3 million
for the year ended June 30, 1995. Purchases amounted to approximately
$1.9 billion for the year ended June 30, 1997, $607 million for the
year ended June 30, 1996, and $4 million for the year ended June 30,
1995. Gains and losses realized upon the sale of securities (the cost
of which is based upon the specific identification method) were not
significant.
NOTE 5. ACCOUNTS RECEIVABLE
Accounts receivable at June 30, 1997 and 1996, consisted of the
following:
($ in thousands) 1997 1996
Billed $53,939 $33,101
Unbilled 32,272 21,983
Allowance for doubtful accounts (3,384) (2,020)
$82,827 $53,064
NOTE 6. PROPERTY AND EQUIPMENT
Property and equipment at June 30, 1997 and 1996, consisted of the
following:
($ in thousands) 1997 1996
Computer and office equipment $29,855 $16,205
Computer software 5,351 1,767
Furniture and fixtures 12,228 5,972
Leasehold improvements 2,311 677
Building 2,757 --
Other 2,065 2,090
54,567 26,711
Less accumulated depreciation
And amortization 21,059 12,972
$33,508 $13,739
Included in the above amounts is computer and office equipment
acquired under capital lease obligations of approximately $3.9 million
and $3.6 million at June 30, 1997 and 1996, respectively. Accumulated
depreciation on computer and office equipment under capital leases
totaled approximately $2.5 million and $1.8 million at June 30, 1997
and 1996, respectively.
Depreciation and amortization expense relating to property and
equipment was approximately $7.0 million, $4.0 million, and $3.4
million for the years ended June 30, 1997, 1996, and 1995,
respectively, of which $603,000, $656,000, and $427,000 related to
amortization of property and equipment under capital leases.
NOTE 7. OTHER CURRENT LIABILITIES
Other current liabilities at June 30, 1997 and 1996, consisted of the
following:
($ in thousands) 1997 1996
Accrued compensation and
Withholding $12,420 $ 7,306
Accrued investigator fees 1,100 1,565
Other 18,045 9,697
$31,565 $18,568
NOTE 8. CREDIT ARRANGEMENTS
The Company has domestic and foreign line of credit arrangements with
banks totaling approximately $15.4 million. The lines are
collateralized by accounts receivable and fixed assets, payable on
demand, and bear interest at rates ranging from 4.9% to 9.5% at June
30, 1997). The lines of credit expire at various dates through April
1998 and are renewable. There was approximately $1.3 million and
$600,000 outstanding under these lines of credit at June 30, 1997 and
1996, respectively.
The Company has a renewal $2.4 million capital lease line of credit
with a U.S. bank for the financing of property and equipment. This
line is collateralized by property and equipment. Borrowings under
this line are payable over a three-year term with interest fixed at
the five-year U.S. Treasury note rate plus 2.5% (8.03% at June 30,
1997). Available capacity under this line was approximately $2.0
million at June 30, 1997.
Long-term debt at June 30, 1997 and 1996, consisted of borrowings
under the capital lease line. The fair value of debt is estimated
based on the market value for similar debt and approximates carrying
value at June 30, 1997 and 1996. Aggregate lease obligations bear a
weighted average interest rate of approximately 8.3% at June 30, 1997,
and 7.9% at June 30, 1996. Long-term debt matures as follows: $89,000
in fiscal 1999, $17,000 in fiscal 2000, and $30,000 in fiscal 2001.
NOTE 9. STOCKHOLDERS' EQUITY
On January 28, 1997, the Board of Directors of the Company declared a
two-for-one stock split of the Company's common stock, payable in the
form of a 100% stock dividend to be distributed to stockholders of
record as of the close of business on February 7, 1997. All share and
per share data included in these consolidated financial statements
have been restated to reflect the two-for-one stock split.
As of June 30, 1997 and 1996, there were 5 million shares of preferred
stock, $0.01 per share, authorized, but none were issued or
outstanding. Preferred stock may be issued at the discretion of the
Board of Directors (without stockholder approval) with such
designations, rights and preferences, as the Board of Directors may
determine.
There were 29,412 shares of common stock held in treasury as of June
30, 1997 and 1996, at a cost of $17,430.
NOTE 10. EARNINGS PER SHARE
The following table is a summary of shares used in calculating basic
and diluted earnings per share:
<TABLE>
(unaudited)
Nine months ended
Year ended June 30, March 31,
<S> <C> <C> <C> <C> <C>
(in thousands) 1997 1996 1995 1998 1997
Weighted average number of shares
Outstanding 21,628 15,801 4,580 23,846 21,052
Contingently issuable common
Shares 467 371 -- 379 459
Dilutive common stock options 727 1,083 -- 551 122
Shares used in computing diluted
Earnings per share 22,822 17,255 4,580 24,776 21,633
</TABLE>
Due to the Company's net loss for the year ended June 30, 1995, 4,237
shares of convertible preferred stock, 1,361 common stock options, and
371 contingently issuable common shares were outstanding but excluded
from the computation of diluted earnings per share for the period as
their effect would be antidilutive.
NOTE 11. STOCK AND EMPLOYEE BENEFIT PLANS
1995 Stock Plan
The 1995 Stock Plan ("1995 Plan") provides for the grant of incentive
stock options for the purchase of up to an aggregate of 1,000,000
shares of common stock to directors, officers, employees, and
consultants to the Company. In November 1996, the Company's
stockholders approved an increase in the number of shares issuable
under the 1995 Plan from 1,000,000 to 2,000,000 shares. The Stock
Option Committee of the Board of Directors is responsible for
administration of the Company's stock option plans and determines the
term of each option, the option exercise price, the number of option
shares granted, and the rate at which options become exercisable.
Options generally expire eight to ten years from the date of grant and
generally vest over four to five years.
1995 Nonemployee Director Stock Option Plan
The 1995 Nonemployee Director Option Plan ("Director Plan") provides
for the grant of options to purchase up to an aggregate of 600,000
shares of common stock to non-employee directors. In November 1995,
nonemployee directors were granted an aggregate of 173,000 options
which became exercisable on June 30, 1996. Other options granted
under the Director Plan vest ratably in three equal annual
installments beginning on the first anniversary of the date of grant,
subject to certain requirements, as defined in the Director Plan.
Employee Stock Purchase Plan
In September 1995, the Company adopted the 1995 Employee Stock
Purchase Plan ("the Purchase Plan"). Under the Purchase Plan,
employees have the opportunity to purchase common stock at 85% of the
average market value on the first or last day of the plan period (as
defined by the Purchase Plan), whichever is lower, up to specified
limits. An aggregate of 600,000 shares may be issued under the
Purchase Plan.
Stock Options of Acquired Companies
In conjunction with the acquisition of KMI in December 1997, the
Company assumed the Kemper-Masterson, Inc. Stock Option Plan ("KMI
Plan") which allows for the grant of stock options for the purchase of
up to an aggregate of 138,714 shares of stock. All outstanding
options were exercised in connection with the acquisition of KMI and
the Company does not intend to issue any additional options under the
KMI Plan.
The stock acquired through exercise of KMI options were subject to
repurchase by KMI upon certain events, as specified in the option
agreements. Certain options provided KMI the right, but not the
obligation, to repurchase shares of stock previously acquired by
employees through exercise at a formula price defined in the stock
option agreements ("formula options") upon termination of employment.
Other options required KMI to repurchase shares of stock previously
acquired by employees through exercise at the exercise price
("repurchase options"). All options were granted with an exercise
price of $0.17 per share.
The Company has accounted for the KMI Plan as a variable option plan.
Aggregate compensation cost was determined for formula options during
periods prior to exercise based on the estimated formula value at each
balance sheet date and was recognized ratably over the vesting period.
Upon exercise, compensation expense was recognized for the difference
between the formula value of the stock on the date of exercise and the
exercise price. For repurchase options, compensation expense was
recognized as the difference between the amount for which the stock
was repurchased and the exercise price. Because the exercise price of
the options was considered nonsubstantive and the repurchase features
lapsed as a result of the acquisition, KMI recorded additional
compensation expense of $4.1 million in December 1997 based upon the
value of the stock on the date of acquisition.
In conjunction with the acquisition of PPS, the Company assumed
134,995 outstanding options ("PPS options") on March 1, 1998, of which
options to purchase 121,121 shares were previously issued to employees
with an exercise price below the estimated fair value on the date of
grant. Compensation expense has been recognized ratably over the two-
year vesting period in an amount equal to the difference between the
exercise price and the estimated fair value of the underlying ordinary
shares on the date of grant. All PPS options become fully vested upon
a change in control, as defined in the stock option agreements and,
accordingly, the Company recognized remaining compensation expense of
$1.6 million in connection with the acquisition of PPS in March 1998.
Aggregate compensation expense under the various stock option plans
was $1.0 million, $337,000, and $187,000 for the years ended June 30,
1997, 1996, and 1995.
Aggregate stock option activity for the two years ended June 30, 1997
and 1996 is as follows:
<TABLE>
June 30, 1997 June 30, 1996
<S> <C> <C> <C> <C>
Weighted Weighted
Average Average
Exercise Exercise
Shares Price Shares Price
Outstanding at beginning of period 2,206,298 $ 5.88 1,984,417 $ 1.12
Granted 545,495 18.60 899,647 12.71
Exercised (1,204,734) 1.35 (625,620) 0.61
Canceled (31,260) 19.98 (52,146) 5.03
Outstanding at end of period 1,515,799 $13.76 2,206,298 $ 5.88
Options exercisable at end of period 594,460 $ 7.60
Weighted-average fair value of
options granted $13.22 $ 7.56
Options available for future grant 1,431,426
</TABLE>
Summary information related to options outstanding and exercisable as
of June 30, 1997 is as follows:
<TABLE>
Options Outstanding Options Exercisable
<S> <C> <C> <C> <C> <C>
Weighted
Outstanding Average Weighted Exercisable Weighted
Range Of As Of Remaining Average As Of Average
Exercise June 30, Contractual Exercise June 30, Exercise
Prices 1997 Life (Years) Price 1997 Price
$ 0.17 - 10.00 691,949 7.58 $ 4.47 492,443 $ 4.70
10.01 - 20.00 406,650 8.79 18.50 49,750 18.31
20.01 - 27.25 417,200 9.30 24.54 52,267 24.69
1,515,799 8.38 $13.76 594,460 $ 7.60
</TABLE>
The fair value for options granted was estimated at the time of the
grant using the Black-Scholes option pricing model with the following
weighted-average assumptions for the two years ended June 30, 1997:
Risk free interest rate of 6.18%, dividend yield of 0.0%, volatility
factor of the expected market price of the Company's common stock of
45%, and an average expected life of the option of one year from the
date of vesting.
Had compensation cost for the Company's stock options and the Purchase
Plan been determined based on the fair value at the date of grant, as
prescribed in SFAS 123, the Company's net income and net income per
share would have been as follows:
($ in thousands, except per
share data) 1997 1996
Pro forma net income $10,792 $5,373
Pro forma diluted income
per share $ 0.47 $ 0.31
As stock options vest over several years and additional stock option
grants are expected to be made each year, the above pro forma
disclosures are not necessarily representative of pro forma effects on
results of operations for future years.
NOTE 12. 401(K) PLAN
The Company sponsors an employee savings plan ("the Plan") as defined
by Section 401(k) of the Internal Revenue Code of 1986, as amended.
The Plan covers substantially all employees in the U.S. who elect to
participate. Participants have the opportunity to invest on a pre-tax
basis in a variety of mutual fund options. The Company matches 100% of
each participant's voluntary contributions up to 3% of gross salary
per payroll period. Company contributions vest to the participants in
20% increments for each year of employment and become fully vested
after five years of continuous employment. Company contributions to
the Plan were $1,053,000, $526,000, and $327,000 for the years ended
June 30, 1997, 1996, and 1995, respectively.
NOTE 13. INCOME TAXES
Domestic and foreign income (loss) before income taxes for the three
years ended June 30, 1997, are as follows:
($ in thousands) 1997 1996 1995
Domestic $11,961 $ 5,187 $ 280
Foreign 9,161 5,995 (8,239)
$21,122 $11,182 $(7,959)
The provision for income taxes for the three years ended June 30,
1997, are as follows:
($ in thousands) 1997 1996 1995
Current:
Federal $4,816 $2,364 $ 403
State 1,207 684 232
Foreign 3,411 2,021 1,151
9,434 5,069 1,786
Deferred:
Federal (432) (305) (315)
State (146) (87) (102)
Foreign (537) (150) (89)
(1,115) (542) (506)
$8,319 $4,527 $1,280
The Company's consolidated effective income tax rate differed from the
U.S. federal statutory income tax rate as set forth below:
<TABLE>
<S> <C>
<C> <C>
($ in thousands) 1997 1996 1995
Income tax, expense (benefit) at the federal statutory $7,374 $3,803 $(2,715)
rate
State income taxes, net of federal benefit 1,044 474 87
Foreign rate differential (33) (265) (129)
Utilization of foreign net operating loss carryforwards (1,166) -- --
Nondeductible amortization of intangible assets 595 45 169
Nondeductible impairment of assets -- -- 3,348
Nondeductible stock option expense 191 -- --
Foreign operating losses without current benefit 142 26 334
Other 172 444 186
$8,319 $4,527 $ 1,280
</TABLE>
Provision has not been made for U.S. or additional foreign taxes on
undistributed earnings of foreign subsidiaries as those earnings have
been permanently reinvested. Such taxes, if any, are not expected to
be significant.
Significant components of the Company's net deferred tax asset as of
June 30, 1997 and 1996, are as follows:
($ in thousands) 1997 1996
Deferred tax assets:
Foreign loss carryforwards $5,173 $6,048
Accrued expenses 1,121 566
Property and equipment -- 486
Allowance for doubtful accounts 878 528
Other 888 805
Gross deferred tax assets 8,060 8,433
Deferred tax asset valuation (3,504) (6,073)
allowance
Total deferred assets 4,556 2,360
Deferred contract profit (976) (706)
Property and equipment (1,108) (546)
Other (96) (292)
Total deferred tax liabilities (2,180) (1,544)
$2,376 $ 816
The net deferred tax assets are included in the consolidated balance
sheet as of June 30, 1997 and 1996, as follows:
($ in thousands) 1997 1996
Other current assets $3,251 $1,361
Other assets 226 423
Other current liabilities (466) --
Other liabilities (635) (968)
$2,376 $816
The net deferred tax asset includes the tax effect of approximately
$11 million of pre-acquisition and post-acquisition foreign tax loss
carryforwards available to offset future liabilities for foreign
income tax. Substantially all of the foreign tax losses are carried
forward indefinitely, subject to certain limitations. A valuation
allowance has been established for the future foreign income tax
benefits primarily related to income tax loss carryforwards and
temporary differences based on management's assessment that it is more
likely than not that such benefits will not be realized. Principally
due to the use of previously reserved foreign net operating loss
carryforwards, the Company's valuation allowance decreased to
approximately $3.5 million at June 30, 1997, from approximately $6.1
million at June 30, 1996. The ultimate realization of the remaining
loss carryforwards is dependent upon the generation of sufficient
taxable income in respective jurisdictions, primarily Germany.
NOTE 14. GEOGRAPHIC INFORMATION
The Company's operations involve a single industry segment providing
clinical research and development services. The principal financial
information by geographic area for the three years ended June 30,
1997, is as follows:
($ in thousands) 1997 1996 1995
Net revenue:
North America $118,525 $ 64,605 $43,557
Europe 81,984 59,455 45,417
Asia/Pacific 3,167 993 93
$203,676 $125,053 $89,067
Income (loss) from
operations:
North America $ 9,073 $ 5,331 $ 1,084
Europe 7,873 5,236 (9,538)
Asia/Pacific 173 (176) --
$ 17,118 $ 10,391 $ (8,454)
Identifiable
assets:
North America $173,866 $ 85,034 $28,416
Europe 65,985 50,531 31,638
Asia/Pacific 693 156 35
$240,544 $135,721 $60,089
NOTE 15. LEASES
The Company leases its facilities under operating leases which include
renewal and escalation clauses. Total rent expense was approximately
$8.4 million, $5.5 million, and $4.7 million for years ended June 30,
1997, 1996, and 1995, respectively. Future minimum lease payments due
under noncancelable operating leases and capital lease obligations are
as follow:
Capita Operati
($ in thousands) lleases ngleases
1998 $370 $13,799
1999 42 12,597
2000 6 10,349
2001 30 9,223
2002 -- 5,273
Thereafter -- 10,632
Total obligations 448 $61,871
Less amount representing interest (23)
$425
NOTE 16. RELATED PARTY TRANSACTIONS
Certain of the Company's Directors are related to certain of the
Company's customers. Net revenue recognized from these customers was
$13.1 million, $8.1 million, and $3.0 million in fiscal 1997, 1996,
and 1995, respectively. Amounts included in accounts receivable at
June 30, 1997 and 1996, were $3.3 million and $1.9 million,
respectively. Related party amounts included in accounts receivable
are on standard terms and manner of settlement.
At June 30, 1997 and 1996, the Company has notes receivable of $1.3
million and $2.1 million, respectively, from a company owned by the
former directors of PPS. The notes bear interest at 8.0% and are
payable on demand. The Company recorded interest income of $195,000
and $166,000 for the years ended June 30, 1997 and 1996, respectively.
There were no amounts outstanding during fiscal 1995.
NOTE 17. SUBSEQUENT EVENTS
In November 1997, the stockholders of the Company approved an
amendment to the Company's 1995 Stock Plan (the "1995 Plan"). In
connection therewith, the Company terminated the 1995 Non-Employee
Director Stock Option Plan (the "Director Plan") and transferred all
remaining shares under the Director Plan to the 1995 Plan, without
increasing the aggregate number of shares available for grant under
all of the Company's stock option plans. The amendment also provides
for the annual formula grant of options to purchase up to 15,000
shares of common stock of the Company to nonemployee directors
dependent upon the attendance by such nonemployee directors at
meetings of the Board of Directors and committees thereof.
In December 1997 the Company acquired Kemper-Masterson, Inc; and in
March 1998 the Company acquired PPS Europe Limited, MIRAI B.V.,
Genesis Pharma Strategies Limited, and LOGOS GmbH. All of these
transactions were accounted for as poolings of interests
(Note 3).
In February 1998 the Company adopted the 1998 Non-Qualified, Non-
Officer Stock Option Plan ("the 1998 Plan") which provides for the
grant of options to purchase up to an aggregate of 500,000 shares of
common stock to any employee or consultant to the Company who is not
an officer or director of the Company. The 1998 Plan is administered
by the Stock Option Committee of the Board of Directors.
<TABLE>
PAREXEL INTERNATIONAL CORPORATION
VALUATION AND QUALIFYING ACCOUNTS AND RESERVES
$ (in thousands)
<S> <C> <C> <C> <C> <C>
Balance Charged Charged Deductions Balance at
at to Costs to and End of
Description Beginning and Other Write- Period
of Expenses Accounts Offs
Period
ALLOWANCE FOR
DOUBTFUL
ACCOUNTS
Year ended June 30, $ 843 $1,282 $ 18 $ (406) $1,737
1995
Year ended June 30, 1,737 593 0 (310) 2,020
1996
Year ended June 30, 2,020 1,718 329 (683) 3,384
1997
DEFERRED TAX ASSET
VALUATION ALLOWANCE
Year ended June 30, $6,071 $ -- $1,620 $ (200) $7,491
1995
Year ended June 30, 7,491 147 -- (1,565) 6,073
1996
Year ended June 30, 6,073 -- -- (2,569) 3,504
1997
</TABLE>
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
Available Information 3
Incorporation of Certain
Information by Reference5
The Company 6
Recent Developments 8
Use of Proceeds 9
Risk Factors 10
Management's Discussion and
Analysis of Financial
Condition 18
Selling Stockholders 35
Description of Capital
Stock. 39
Plan of Distribution 43
Legal Matters 45
Experts 45
Index to Supplemental
Consolidated Financial
Statements 46
1,510,148 Shares
PAREXEL INTERNATIONAL CORPORATION
Common Stock
_______________________
PROSPECTUS
1998
________________________
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:
SEC Registration fee $14,491.91
Nasdaq Additional Listing fee 35,146.90
Legal fees and expenses 20,000.00
Accounting fees and expenses 15,000.00
Total $84,638.81
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 9 of the Registration Rights
Agreements filed as Exhibits 4.7, 4.8 and 4.9 to this Registration
Statement and Section 10 of the Registration Rights Agreements filed
as Exhibit 4.11 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.
Item 16. Exhibits.
Exhibits:
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
4.2 Share Acquisition Agreement
dated as of March 1, 1998 by and among the Company and
the former stockholders of PPS Europe Ltd. (filed as
Exhibit 4.5 to the Company's Current Report on Form 8-
K/A dated March 1, 1998 and incorporated herein by
reference).
4.3 Share Acquisition Agreement
dated as of March 1, 1998 by and among the Company and
the former stockholders of Creative Communications
Solutions Limited
4.4 Share Acquisition Agreement
dated as of March 1, 1998 by and among the Company and
the former stockholders of Genesis Pharma Strategies
Ltd.
4.5 Share Purchase Agreement dated
as of March 1, 1998 by and among the Company and the
former stockholders of MIRAI, B.V.
4.6 Sale and Purchase Agreement
dated as of February 28, 1998 by and among the Company
and the former stockholder of LOGOS GmbH.
4.7 Registration Rights Agreement
dated as of February 27, 1998 by and among the Company
and the former stockholders of PPS Europe Ltd. (filed
as Exhibit 4.4 to the Company's Current Report on Form
8-K/A dated March 1, 1998 and incorporated herein by
reference).
4.8 Registration Rights Agreement
dated as of February 27, 1998 by and among the Company
and the former stockholders of Creative Communications
Solutions Limited.
4.9 Registration Rights Agreement
dated as of February 27, 1998 by and among the Company
and the former stockholders of Genesis Pharma
Strategies Ltd.
4.10 Registration Rights Agreement
dated as of February 27, 1998 by and among the Company
and the former stockholders of MIRAI, B.V.
4.11 Registration Rights Agreement
dated as of February 27, 1998 by and among the Company
and the former stockholder of LOGOS GmbH.
5.1 Opinion of Testa, Hurwitz & Thibeault, LLP.
23.1 Consent of Price Waterhouse LLP.
23.2 Consent of Grant Thorton.
23.3 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).
27.1 Financial Data Schedule
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.
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 28, 1998.
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.
Signature Title(s) Date
/s/ Josef H. von Rickenbach President, Chief Executive May 28, 1998
Josef H. von Rickenbach Officer and Chairman
(principal executive officer)
/s/ William T. Sobo,Jr. Senior Vice President and May 28, 1998
William T. Sobo, Jr. Treasurer (principal financial
and accounting officer)
/s/A. Dana Callow, Jr. Director May 28, 1998
A. Dana Callow, Jr.
/s/A. Joseph Eagle Director May 28, 1998
A. Joseph Eagle
/s/Patrick J. Fortune Director May 28, 1998
Patrick J. Fortune
/s/Werner M. Herrmann Director May 28, 1998
Werner M. Herrman
/s/Serge Okun Director May 28, 1998
Serge Okun
/s/James A. Saalfield Director May 28, 1998
James A. Saalfield
EXHIBIT INDEX
Exhibit No. Description of Exhibit
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 Share Acquisition Agreement dated
as of March 1, 1998 by and among the Company and the
former stockholders of PPS Europe Ltd. (filed as
Exhibit 4.5 to the Company's Current Report on Form 8-
K/A dated March 1, 1998 and incorporated herein by
reference).
4.3 Share Acquisition Agreement dated
as of March 1, 1998 by and among the Company and the
former stockholders of Creative Communications
Solutions Limited.
4.4 Share Acquisition Agreement dated
as of March 1, 1998 by and among the Company and the
former stockholders of Genesis Pharma Strategies Ltd.
4.5 Share Purchase Agreement dated as
of March 1, 1998 by and among the Company and the
former stockholders of MIRAI, B.V.
4.6 Sale and Purchase Agreement dated
as of February 28, 1998 by and among the Company and
the former stockholder of LOGOS GmbH.
4.7 Registration Rights Agreement dated
as of February 27, 1998 by and among the Company and
the former stockholders of PPS Europe Ltd. (filed as
Exhibit 4.4 to the Company's Current Report on Form 8-
K/A dated March 1, 1998 and incorporated herein by
reference).
4.8 Registration Rights Agreement dated
as of February 27, 1998 by and among the Company and
the former stockholders of Creative Communications
Solutions Limited.
4.9 Registration Rights Agreement dated
as of February 27, 1998 by and among the Company and
the former stockholders of Genesis Pharma Strategies
Ltd.
4.10 Registration Rights Agreement dated
as of February 27, 1998 by and among the Company and
the former stockholders of MIRAI, B.V.
4.11 Registration Rights Agreement by
and among the Company and the former stockholder of
LOGOS GmbH.
5.1 Opinion of Testa, Hurwitz &
Thibeault, LLP.
23.1 Consent of Price Waterhouse LLP.
23.2 Consent of Grant Thorton.
23.3 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).
27.1 Financial Data Schedule
EX43
EXHIBIT 4.3
DATED 1998
SHARE ACQUISITION AGREEMENT
TERRAFIRMA DESIGNS LIMITED (1)
PAREXEL INTERNATIONAL CORPORATION (2)
190 STRAND, LONDON WC2R 1JN
TEL: 0171 379 0000 FAX: 0171 379 6854
Ref: RWE/0653436.01
CONTENTS
No Heading Page
1. DEFINITIONS 1
3. THE SHARES 7
4. REPAYMENT BY VENDOR AND THE COMPANY 7
5. COMPLETION 8
8. COMPLIANCE WITH US LAW 9
9. RESTRICTIVE COVENANTS 11
11. GENERAL PROVISIONS 12
12. ANNOUNCEMENTS 13
13. COSTS 13
14. NOTICES 13
15. GOVERNING LAW AND JURISDICTION 14
THE FIRST SCHEDULE: PARTICULARS OF THE VENDOR 15
THE SECOND SCHEDULE: BASIC INFORMATION CONCERNING THE COMPANY16
THIS AGREEMENT is made the day of
1998
BETWEEN:
(1) THE PERSON whose name and address is set out in Column (1)
of the First Schedule hereto ("the Vendor") and
(2) PAREXEL INTERNATIONAL CORPORATION (whose principal place
of business is at 195 West Street, Waltham, Massachusetts
02154, USA ("the Purchaser")
WHEREAS
(A) Creative Communication Solutions 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 Vendor is the beneficial owner of or is otherwise able
to procure the transfer of the numbers of shares of the
Company specified in Column (2) of the First Schedule
hereto opposite its name such numbers of shares together
comprising ten per cent of the issued and allotted shares
of the Company.
(C) The Vendor is desirous of selling and the Purchaser is
willing to acquire 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:-
"Accredited Investor" a bank (as defined in Section
3(a)(2) of the Securities Act of
1933, as amended (the 'Act')) or a
savings and loan association or
other institution (as defined in
Section 3(a)(5)(A) of the Act),
whether acting in regard to this
investment in its individual or a
fiduciary capacity;
a broker or dealer registered
pursuant to Section 15 of the
United States Securities Exchange
Act of 1934, as amended;
an insurance company (as defined in
Section 2(13) of the Act);
an investment company registered
under the United States Investment
Company Act of 1940, as amended;
a business development company (as
defined in Section 2(a)(48) of the
Investment Company Act of 1940, as
amended;
a Small Business Development
Company licensed by the United
States Small Business
Administration under Section
301(c) or (d) of the United States
Small Business Investment Act of
1958, as amended;
a plan established and maintained
by a United States state, its
political subdivision, or any
agency or instrumentality of a
United States state or its
political subdivisions, for the
benefit of its employees, if the
plan has total assets in excess of
$5,000,000;
an employee benefit plan (an "ERISA
Plan") within the meaning of Title
1 of the United States Employee
Retirement Income Security Act of
1974, as amended ("ERISA") whose
decision to purchase the interest
in the Purchaser was made by a plan
fiduciary (as defined in Section
3(21) of ERISA), which is either a
bank, savings and loan association,
insurance company or registered
investment adviser;
an ERISA Plan with total assets in
excess of $5,000,000 or, if a self-
directed ERISA Plan, with
investment decisions made solely by
persons that are "accredited
investors";
a private business development
company (as defined in Section
202(a)(22) of the United States
Investment Advisors Act of 1940, as
amended);
an organisation described in
Section 501(c)(3) of the United
States Internal Revenue Code of
1986, as amended, corporation,
Massachusetts or similar business
trust, or partnership, not formed
for the specific purpose of holding
the Shares of the Company or
acquiring the Consideration Shares,
with total assets in excess of
$5,000,000;
a natural person whose net worth
(either individually or jointly
with such person's spouse) at the
time of Completion exceeds
$1,000,000;
a natural person who had an
individual income in excess of
$200,000 or joint income with such
person's spouse in excess of
$300,000 in each of the last two
calendar years and who reasonably
expects to reach the same income
level in the current calendar year;
a trust, with total assets in
excess of $5,000,000, not formed
for the specific purpose of holding
the Shares of the Company or
acquiring the Consideration Shares,
whose purchase of the Consideration
Shares is directed by a
sophisticated person as described
in Rule 506(b)(2)(ii) under the
Act;
an entity in which all of the
equity owners fit into at least one
of the categories listed above;
"Associate" any person or company who is a
connected person as that expression
is defined by Section 839 of the
ICTA;
"Business day" a day on which banks shall be open
in London for the conduct of
general banking business (excluding
Saturdays);
"the Consideration Shares" 26,583 Common Stock of
US$0.01 each of the Purchaser
(ranking pari passu with the Common
Stock of the Purchaser in issue at
Completion and credited as fully
paid);
"Completion" completion of the obligations of
the parties hereunder in accordance
with the provisions of Clause 4
hereof;
"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;
"Nasdaq" National Association of Securities
Dealers, Inc.Automated Quotation
System;
"the Purchaser's Solicitors" Lawrence Graham;
"Registration Rights
Agreement" agreement in the approved terms
between certain of the parties
hereto to be entered into at
Completion attached as appendix B
hereto;
"SEC" the United States Securities and
Exchange Commission;
"the Service Agreement"the existing agreement (as amended)
between the Company and Terry
Brightmore to be entered into at
Completion attached as appendix A
hereto;
"the Shares" the shares of the Company specified
in Column (2) of the First Schedule
hereto;
"Vendor Representative"means any person who satisfies all
of the following conditions
(a) is not an affiliate,
director, officer or other
employee of the Purchaser or
beneficial owner of 10% or
more of any class of the
equity securities or 10% or
more of the equity interest of
the Purchaser'
(b) has such knowledge and
experience in financial and
business matters that he is
capable of evaluating, alone
or together with other Vendor
Representatives of the Vendor,
or together with the Vendor,
the merits and risks of the
prospective investment in
Purchaser;
(c) is acknowledged by the
Vendor in writing, during the
course of the transaction, to
be his Vendor Representative
in connection with evaluating
the merits and risks of the
prospective investment in the
Purchaser; and
(d) discloses to the Vendor
in writing a reasonable time
prior to the sale of
securities of the Purchaser to
that Vendor any material
relationship between himself
or his affiliates and the
Purchaser that then exists,
that is mutually understood to
be contemplated, or that has
existed at any time during the
previous two years, and any
compensation received or to be
received as a result of such
relationship.
"the Vendor' Solicitors" Thomas Eggar Verrall
Bowles;
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 Vendor" includes any 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 References to Clauses, Sub-clauses and Schedules are
references to Clauses and Sub-clauses of this Agreement
and Schedules to this Agreement.
1.6 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.
1.7 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.
1.8 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 except where and to the extent that
any liability of the Vendor under this Agreement would be
created or extended as a result of any amendment,
extension, consolidation or replacement of any statute or
statutory provision in force at Completion.
1.9 The headings in this Agreement are inserted for
convenience only and shall not affect the construction
hereof.
2. THE SHARES
2.1 The Vendor shall sell and the Purchaser shall acquire with
effect from Completion 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 Vendor of the Consideration Shares.
3. REPAYMENT BY VENDOR AND THE COMPANY
3.1 The Vendor will prior to or simultaneously with Completion
repay to the Company any sums due by the Vendor, any
Associate of the Vendor 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 Vendor will confirm in writing to the Purchaser that
it has so procured.
4. COMPLETION
4.1 Completion shall take place on March 1, 1998 at the
offices of the Purchaser's Solicitors or such other
offices as the parties may subsequently agree when:-
4.1.1 the Vendor 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) written confirmation pursuant to Clause 3; and
4.1.2 Subject to the performance by the Vendor of their
obligations in accordance with the foregoing
provisions of this Clause 4 the Purchaser shall
allot to the Vendor the Consideration Shares and
deliver the relative documents of title; and
4.1.3 each of the parties will enter into the
Registration Rights Agreement.
4.2 If in any respect the provisions of sub-clauses 4.1.1,
4.1.2 and 4.1.3 are not complied with on the date for
Completion set by clause 4.1 the Purchaser may:-
4.2.1 defer Completion to a date not more than 28 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.
4.3 If in any respect the provisions of sub-clause 4.1.4 are
not complied with on the date for Completion set by Clause
4.1, the Vendor may:-
4.3.1 defer Completion to a date not more than 28 days
after the date set out above (and so that the
provisions of this sub-clause shall apply to
Completion as so deferred); or
4.3.2 proceed to Completion so far as practicable
(without prejudice to its rights hereunder); or
4.3.3 rescind this Agreement.
5. COMPLIANCE WITH US LAW
The Vendor:
5.1 warrants and represents to the Purchaser that the Vendor:-
5.1.1 is acquiring the Consideration Shares for his own
account and not on behalf of any other person, 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;
5.1.2 is not an officer or director of any affiliate of
the Purchaser or any of its affiliates;
5.1.3 was not organised for the specific purpose of
holding or acquiring the Consideration Shares (if
the Vendor is a corporation, trust, partnership or
other organisation).
5.1.4 is an Accredited Investor or had, immediately prior
to receipt of any information regarding the
Purchaser, such knowledge and experience (alone or
with the Vendor's Vendor Representative, if any) in
financial and business matters as to be able to
evaluate the merits and risks of an investment in
the Purchaser.
5.1.5 is able now, and was able prior to receipt of any
information regarding the Purchaser, to bear the
economic risks of an investment in the Company and
the Purchaser.
5.2 acknowledges and agrees that the Consideration Shares have
not been registered under United States Securities Act of
1933, as amended ("the Act"), and may not be offered or
sold unless the Consideration Shares are registered under
the Act or an exemption from the registration requirements
of the Act is available;
5.3 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;
5.4 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;
5.5 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 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;
5.6 has received and carefully reviewed (and/or the Vendor's
Vendor Representative, if any, has received and carefully
reviewed) the PPS Transaction Summary, Prospectus dated
January 27, 1998, Annual Report on Form 10-K for the
fiscal year ended June 30, 1997, Quarterly Report on Form
10-Q for the quarter ended September 30, 1997 and December
31, 1997, Current Reports on Form 8-K dated October 23,
1997 and January 27, 1998, 1997 Annual Report to
Stockholders; and Proxy Statement dated October 8, 1997
and the Vendor and Vendor's Vendor Representative, if any
have had a reasonable opportunity to ask questions of and
receive answers from the Purchaser concerning the
Purchaser, and to obtain any additional information
reasonably necessary to verify the accuracy of the
information furnished to the Vendor concerning the
Purchaser and all such questions, if any, have been
answered to the full satisfaction of the Vendor.
5.7 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,
and the results of independent investigations by the
Vendor;
5.8 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;
5.9 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 in relation 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-
Completion 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;
5.10 acknowledges and agrees that all offers and sales of the
Consideration Shares shall only be made in compliance with
(i) the Pooling Lock-up Period and (ii) the Purchaser's
insider trading and black out period policies, as from
time to time in effect and (iii) pursuant to an effective
registration statement under the Act or pursuant to an
exemption from registration under the Act.
6. RESTRICTIVE COVENANTS
6.1 For the purpose of assuring to the Purchaser the full
benefit of the businesses and goodwill of the Company
Terry Brightmore hereby undertakes by way of further
consideration for the obligations of the Purchaser under
this agreement as separate and independent agreements
that:-
6.1.1 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 confidential business, accounts or
finances of the Company or any of its clients or
customers transactions or affairs, which may, or
may have, come to his knowledge;
6.1.2 for a period of 2 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 the United States of America
and any country within 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;
6.1.3 for a period of 2 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 two years 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 person named in sub-clause 6.1 above from
carrying out his duties pursuant to a service agreement or
contract of employment between himself and the Company.
6.2 The restrictions contained in sub-clause 6.1 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.
7. GENERAL PROVISIONS
7.1 The Vendor 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.
7.2 The Purchaser 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
Vendor for securing to or vesting in the Vendor the legal
and beneficial ownership of the Consideration Shares
forthwith upon Completion in accordance with the terms and
conditions of this Agreement.
7.3 This Agreement shall not be assignable by any party hereto
without the prior written consent of the others save by
the Purchaser to any affiliate of the Purchaser to which
the Shares shall be transferred but notwithstanding any
such transfer the Purchaser shall remain bound by the
obligations contained in this Agreement
7.4 If the benefit of this Agreement is assigned, the
liability of the Vendor shall be no greater than it would
have been if the Purchaser had remained the owners of the
Shares.
7.5 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.
7.6 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.
7.7 Any right of rescission conferred upon either party hereby
shall be in addition to and without prejudice to all other
rights and remedies available to it and no exercise or
failure to exercise such a right of rescission shall
constitute a waiver by that party of any such other right
or remedy.
7.8 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.
8. 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 SEC or Nasdaq. A party to
this Agreement who makes a statement or announcement
necessary to comply with the requirements of the SEC or
Nasdaq shall use its reasonable endeavours to consult with
the other parties before making that statement or
announcement.
9. COSTS
Each party to this Agreement shall pay its own costs of
and incidental to this Agreement and the sale and purchase
hereby agreed to be made.
10. 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 or by facsimile and if served by post shall be
served by prepaid registered letter sent through the post
(airmail if overseas) 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 or 72 hours
after the time on which it was posted in the case of
airmail post and in proving such service it shall be
sufficient to prove that the notice was properly addressed
and posted and that before the notice is sent by post a
copy shall be sent by facsimile to the Vendor's Solicitors
for the attention of Mr AJ Edwards. If served by
facsimile, notice shall be deemed to have been served upon
transmission of the communication to the relevant
facsimile number and production by the sending facsimile
machine of a transmission report showing that the
facsimile message has been properly received by the
facsimile number to which it was transmitted..
11. 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.
THE FIRST SCHEDULE
PARTICULARS OF THE VENDOR, THEIR SHAREHOLDINGS
IN THE COMPANY AND THE CONSIDERATION
(1) (2) (3)
Names and Addresses No. of Consideration
Shares Shares
Terrafirma Designs Limited 10B Shares 26,583
THE SECOND SCHEDULE
BASIC INFORMATION CONCERNING THE COMPANY
A. The Company : Creative Communication
Solutions Limited
1. Registered Number : 2973798
2. Date of incorporation : October 5, 1994
3. Address of registered : Wicker House, High Street,
office Worthing, West Sussex, BN 11
1DJ
4. Authorised share : 1000 pounds sterling
capital
5. Issued and fully paid : 100 ordinary shares of 1 pound sterling each
share capital
6. Directors:
Full Names G S Caswill
A J Eagle
T J Brightmore
7. Secretary:
Full Name G S Caswill
SIGNED by Terry Brightmore )
in the presence of:- ) /s/Terry Brightmore
SIGNED by )
for and on behalf of ) /s/Terry Brightmore
TERRAFIRMA DESIGNS LIMITED )
in the presence of:- )
SIGNED by )
for and on behalf of )
PAREXEL INTERNATIONAL )
CORPORATION )
in the presence of:- ) /s/Barry R. Philpott
EXHIBIT 4.4
DATED 1998
SHARE ACQUISITION AGREEMENT
CLARENDON TRUST COMPANY LIMITED
DAVID SATTERTHWAITE (1)
PAREXEL INTERNATIONAL CORPORATION (2)
190 STRAND, LONDON WC2R 1JN
TEL: 0171 379 0000 FAX: 0171 379 6854
Ref: RWE/0644959.01
CONTENTS
No Heading Page
1. DEFINITIONS 1
2. THE SHARES 12
3. REPAYMENT BY VENDORS AND THE COMPANY 12
4. COMPLETION 13
5. WARRANTIES 15
6. TAX INDEMNITIES 17
7. COMPLIANCE WITH US LAW 17
8. RESTRICTIVE COVENANTS 20
9. PENSION SCHEME 21
10. GENERAL PROVISIONS 21
11. ANNOUNCEMENTS 22
12. COSTS 22
13. NOTICES 22
14. GOVERNING LAW AND JURISDICTION 23
THE FIRST SCHEDULE: PARTICULARS OF THE VENDORS 24
THE SECOND SCHEDULE: BASIC INFORMATION CONCERNING
THE COMPANY 25
THE THIRD SCHEDULE: PROPERTY 26
THE FOURTH SCHEDULE: PROVISIONS AFFECTING THE
PENSION SCHEME 27
THE FIFTH SCHEDULE: WARRANTIES 28
THE SIXTH SCHEDULE: TAX INDEMNITIES 65
THE SEVENTH SCHEDULE: LIMITS ON CLAIMS UNDER WARRANTIES 73
THE EIGHTH SCHEDULE: HOLDBACK 76
THIS AGREEMENT is made the day of 1998
BETWEEN:
(1) THE PERSONS whose names and addresses are set out in
Column (1) of the First Schedule hereto ("the Vendors")
and
(2) PAREXEL INTERNATIONAL CORPORATION (whose principal place
of business is at 195 West Street, Waltham, Massachusetts
02154, USA ("the Purchaser")
WHEREAS
(A) Genesis Pharma Strategies 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 acquire 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:-
"the Accounts" the audited balance sheet as at the
[Balance Sheet Date] and audited
profit and loss account for the six
months ended on the [Balance Sheet
Date] of the Company including the
directors report and notes in
relation thereto;
"Accounts Reliefs" means any Reliefs where the
availability of the Reliefs has
been shown as an asset in the
Accounts or has been taken into
account in computing (and so
reducing) any provision for
deferred taxation which appears in
the Accounts or has resulted in no
provision for deferred taxation
being shown in the Accounts;
"Accredited Investor" a bank (as defined in Section
3(a)(2) of the Securities Act of
1933, as amended (the 'Act')) or a
savings and loan association or
other institution (as defined in
Section 3(a)(5)(A) of the Act),
whether acting in regard to this
investment in its individual or a
fiduciary capacity;
a broker or dealer registered
pursuant to Section 15 of the
United States Securities Exchange
Act of 1934, as amended;
an insurance company (as defined in
Section 2(13) of the Act);
an investment company registered
under the United States Investment
Company Act of 1940, as amended;
a business development company (as
defined in Section 2(a)(48) of the
Investment Company Act of 1940, as
amended;
a Small Business Development
Company licensed by the United
States Small Business
Administration under Section
301(c) or (d) of the United States
Small Business Investment Act of
1958, as amended;
a plan established and maintained
by a United States state, its
political subdivision, or any
agency or instrumentality of a
United States state or its
political subdivisions, for the
benefit of its employees, if the
plan has total assets in excess of
$5,000,000;
an employee benefit plan (an "ERISA
Plan") within the meaning of Title
1 of the United States Employee
Retirement Income Security Act of
1974, as amended ("ERISA") whose
decision to purchase the interest
in the Purchaser was made by a plan
fiduciary (as defined in Section
3(21) of ERISA), which is either a
bank, savings and loan association,
insurance company or registered
investment adviser;
an ERISA Plan with total assets in
excess of $5,000,000 or, if a self-
directed ERISA Plan, with
investment decisions made solely by
persons that are "accredited
investors";
a private business development
company (as defined in Section
202(a)(22) of the United States
Investment Advisors Act of 1940, as
amended);
an organisation described in
Section 501(c)(3) of the United
States Internal Revenue Code of
1986, as amended, corporation,
Massachusetts or similar business
trust, or partnership, not formed
for the specific purpose of holding
the Shares of the Company or
acquiring the Consideration Shares,
with total assets in excess of
$5,000,000;
a natural person whose net worth
(either individually or jointly
with such person's spouse) at the
time of Completion exceeds
$1,000,000;
a natural person who had an
individual income in excess of
$200,000 or joint income with such
person's spouse in excess of
$300,000 in each of the last two
calendar years and who reasonably
expects to reach the same income
level in the current calendar year;
a trust, with total assets in
excess of $5,000,000, not formed
for the specific purpose of holding
the Shares of the Company or
acquiring the Consideration Shares,
whose purchase of the Consideration
Shares is directed by a
sophisticated person as described
in Rule 506(b)(2)(ii) under the
Act;
an entity in which all of the
equity owners fit into at least one
of the categories listed above;
"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 November 1997;
"Business day" a day on which banks shall be open
in London for the conduct of
general banking business (excluding
Saturdays);
"Tax Claim" in the Sixth 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" 91,667 Common Stock of
US$0.01 each of the Purchaser
(ranking pari passu with the Common
Stock of the Purchaser in issue at
Completion and credited as fully
paid);
"the Companies Acts" the Companies Acts 1985 and 1989,
the Insolvency Act 1986, the
Business Names Act 1985, the
Criminal Justice Act 1993 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 4
hereof;
"the the letter of even date herewith
Disclosure Letter" 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;
"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
applications for any of the
foregoing, trade or business names
and copyright and design rights;
"Liability to Taxation"a liability to make an actual
payment of Taxation whether or not
such Taxation is also or
alternatively chargeable against or
attributable to any other person
and whether or not any member of
the Group shall or may have any
right of recovery or reimbursement
against any other person;
"Nasdaq" National Association of Securities
Dealers, Inc.Automated Quotation
System;
"New Reliefs" any Reliefs which arise to the
Company :
(a) as a result of any Event
occurring after the Balance Sheet
Date; or
(b) in respect of any period
commencing on or after the Balance
Sheet Date;
"the Property" the property or properties short
particulars whereof are set out in
the Fourth Schedule hereto and
includes any part or parts thereof
together with any property used by
the Company and a place of business
in any Relevant Country;
"the Purchaser's Solicitors" Lawrence Graham;
"Registration agreement in the approved terms
Rights between certain of the parties
Agreement" hereto to be entered into at
Completion attached as appendix
'A' hereto;
"Relevant Country" means any country in which any
member of the Group has a place of
business, including, but not
limited to the United Kingdom, the
United States of America;
"Reliefs" in the Eighth 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;
"SEC" the United States Securities and
Exchange Commission;
"the Service Agreement"the existing agreements (as
amended) between the Company and
David Satterthwaite to be entered
into at Completion attached as
appendix 'B' hereto;
"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 or equivalent
legislation in any country
including orders, regulations,
instruments, bye-laws or other
subordinate legislation made
under the relevant statute or
statutory provision or
equivalent legislation in any
country 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 any
country 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 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) subject to paragraph 5
of the Sixth Schedule any
penalties fines costs charges
interest or damages payable in
connection with any Taxation;
(e) subject to paragraph 5
of the Sixth Schedule any
payment made or liability
incurred in connection with
any reasonable settlement of
any Tax Claim;
(f) all costs and expenses
reasonably incurred by the
Company or the Purchaser in
connection with any Tax Claim
to which the Tax Indemnities
relate;
"Taxation Authority" any national or local government,
authority or body whatsoever
whether of a Relevant Country or
elsewhere empowered to impose
collect or administer Taxation;
"Tax Indemnities" the indemnities provided by Clause
7 and the Sixth Schedule hereto;
"Taxation Statute" any statute, enactment, law,
regulation or practice enacted or
issued or coming into force
providing for or imposing any
Taxation;
"Vendor Representative"means any person who satisfies all
of the following conditions
(a) is not an affiliate,
director, officer or other
employee of the Purchaser or
beneficial owner of 10% or
more of any class of the
equity securities or 10% or
more of the equity interest of
the Purchaser'
(b) has such knowledge and
experience in financial and
business matters that he is
capable of evaluating, alone
or together with other Vendor
Representatives of the Vendor,
or together with the Vendor,
the merits and risks of the
prospective investment in
Purchaser;
(c) is acknowledged by the
Vendor in writing, during the
course of the transaction, to
be his Vendor Representative
in connection with evaluating
the merits and risks of the
prospective investment in the
Purchaser; and
(d) discloses to the Vendor
in writing a reasonable time
prior to the sale of
securities of the Purchaser to
that Vendor any material
relationship between himself
or his affiliates and the
Purchaser that then exists,
that is mutually understood to
be contemplated, or that has
existed at any time during the
previous two years, and any
compensation received or to be
received as a result of such
relationship.
"the Vendors' Solicitors" Thomas Eggar Verrall Bowles;
"Warranties" those representations and
warranties made to the Purchaser
contained or referred to in Clauses
5 and 7 and the Fifth Schedule
hereto;
"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 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 having its principal place of business in the
UK or otherwise.
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 except where and to the extent that
any liability of the Vendors under this Agreement would be
created or extended as a result of any amendment,
extension, consolidation or replacement of any statute or
statutory provision in force at Completion.
1.11 The headings in this Agreement are inserted for
convenience only and shall not affect the construction
hereof.
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 acquire
with effect from Completion 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 (subject to sub-clause 2.3 below) to the Vendors of
the Consideration Shares in the amounts set against each
of their names in column 3 of the First Schedule.
2.3 A proportion of the Consideration Shares amounting in
aggregate to 10% of the total Consideration Shares shall
not be delivered to the Vendors on Completion but shall be
withheld by the Purchaser on the terms and conditions set
out in the Eleventh Schedule.
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 The Vendors and/or the Company will prior to or
simultaneously with Completion repay all outstanding debt
(whether accrued due or not) other than amounts due to
trade creditors in the ordinary course of business.
4. COMPLETION
4.1 Completion shall take place on March 1, 1998 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) such Title Deeds to the Property as are
available;
(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; and
(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;
(g) written resignation letter of Grant Thornton as
auditor together with a statement in accordance
with S.394 Companies Act confirming that there
are no circumstances which he considers should
be brought to the attention of the members or
creditors of the Company;
(h) signed opinion from Grant Thornton that
transaction qualifies for pooling of interests
accounting treatment;
(i) signed opinion from Grant Thornton in relation
to the Accounts.
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 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 to the Company;
(e) the Directors shall approve the Service
Agreements;
4.1.3 the Vendors shall procure that the Company will and
the other party thereto shall enter into the
Service Agreement;
4.1.4 Subject to the performance by the Vendors of their
obligations in accordance with the foregoing
provisions of this Clause 4 and subject to the
provisions of Clause 2.3 the Purchaser shall allot
to each of the Vendors the number of Consideration
Shares to which he is entitled hereunder and
deliver the relative documents of title; and
4.1.5 each of the parties will enter into the
Registration Rights Agreement.
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 may:-
4.2.1 defer Completion to a date not more than 28 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.
4.3 If in any respect the provisions of sub-clause 4.1.5 are
not complied with on the date for Completion set by Clause
4.1, the Vendors may:-
4.3.1 defer Completion to a date not more than 28 days
after the date set out above (and so that the
provisions of this sub-clause shall apply to
Completion as so deferred); or
4.3.2 proceed to Completion so far as practicable
(without prejudice to its rights hereunder); or
4.3.3 rescind this Agreement.
5. WARRANTIES
5.1 The Vendors hereby warrant and represent to the Purchaser
in the terms 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 Any references in the Fifth Schedule, the Sixth Schedule
or elsewhere in this Agreement to any statutory provision,
regulation or accounting principles applying in England
and Wales shall be deemed to include references to any
equivalent provision, regulation or accounting principles
in any Relevant Country and any references to any
governmental or administrative authority or agency shall
include references to any equivalent governmental or
administrative authority or agency in any Relevant
Country.
5.4 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 fairly and
accurately disclosed in all material respects to the
Purchaser in the Disclosure Letter.
5.5 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:-
5.5.1 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
5.5.2 any asset represented as belonging to the Company
does not so belong; or
5.5.3 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 account to the Purchaser
pursuant to the provisions of the Eighth Schedule for an
amount equal to the amount by which the value of the net
assets of the Company are less than they would have been
had there been no such breach of Warranty and any such
settlement 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.
5.6 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.
5.7 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.
5.8 The Vendors undertake to indemnify the Purchaser against
any reasonable costs (including legal costs on a solicitor
and own client basis) and expenses which the Purchaser may
reasonably incur either before or after the commencement
of any action in connection with:
5.8.1 the settlement of any claim brought on reasonable
grounds that any of the Warranties are untrue or
misleading or have been breached;
5.8.2 any legal proceedings in which the Purchaser claims
that any of the Warranties are untrue or misleading
or have been breached and in which judgment is
given for the Purchaser; or
5.8.3 the enforcement of any such settlement or judgment.
5.9 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
(other than a Vendor), 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 any other Vendor under any right of contribution
or indemnity to which he may be entitled, 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 Sixth Schedule hereto.
7. COMPLIANCE WITH US LAW
Each Vendor severally:
7.1 warrants and represents to the Purchaser that the Vendor:-
7.1.1 is acquiring the Consideration Shares for his own
account and not on behalf of any other person, 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;
7.1.2 is not an officer or director of any affiliate of
the Purchaser or any of its affiliates;
7.1.3 was not organised for the specific purpose of
holding or acquiring the Consideration Shares (if
the Vendor is a corporation, trust, partnership or
other organisation).
7.1.4 is an Accredited Investor or had, immediately prior
to receipt of any information regarding the
Purchaser, such knowledge and experience (alone or
with such Vendor's Vendor Representative, if any)
in financial and business matters as to be able to
evaluate the merits and risks of an investment in
the Purchaser.
7.1.5 is able now, and was able prior to receipt of any
information regarding the Purchaser, to bear the
economic risks of an investment in the Company and
the Purchaser.
7.2 acknowledges and agrees that the Consideration Shares have
not been registered under United States Securities Act of
1933, as amended ("the Act"), and may not be offered or
sold 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 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 (and/or the Vendor's
Vendor Representative, if any, has received and carefully
reviewed) the PPS Transaction Summary, Prospectus dated
January 27, 1998, Annual Report on Form 10-K for the
fiscal year ended June 30, 1997, Quarterly Report on Form
10-Q for the quarter ended September 30, 1997 and December
31, 1997, Current Reports on Form 8-K dated October 23,
1997 and January 27, 1998, 1997 Annual Report to
Stockholders; and Proxy Statement dated October 8, 1997
and the Vendor and Vendor's Vendor Representative, if any
have had a reasonable opportunity to ask questions of and
receive answers from the Purchaser concerning the
Purchaser, and to obtain any additional information
reasonably necessary to verify the accuracy of the
information furnished to the Vendor 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
or specifically referred to in Clause 7.6, 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 in relation 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-
Completion 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 shall only be made in compliance with
(i) the Pooling Lock-up Period and (ii) the Purchaser's
insider trading and black out period policies, as from
time to time in effect and (iii) pursuant to an effective
registration statement under the Act or pursuant to an
exemption from registration under the Act.
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 Gregory S Caswill and David Satterthwaite 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 reasonable endeavours to prevent the
publication or disclosure of, any information
concerning the confidential business, accounts or
finances of the Company or the 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 2 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 the United States of America
and any country within 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 2 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 two years 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 person named in Clause 8.1 above 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 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. PENSION SCHEME
The provisions set out in the Fourth 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 The Purchaser 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
Vendors for securing to or vesting in the Vendors the
legal and beneficial ownership of the Consideration Shares
(subject to Clause 2.3) forthwith upon Completion in
accordance with the terms and conditions of this
Agreement.
10.3 This Agreement shall not be assignable by any party hereto
without the prior written consent of the others save by
the Purchaser to any affiliate of the Purchaser to which
the Shares shall be transferred but notwithstanding any
such transfer the Purchaser shall remain bound by the
obligations contained in this Agreement
10.4 If the benefit of this Agreement is assigned, the
liability of the Vendors shall be no greater than it would
have been if the Purchaser had remained the owners of the
Shares and had retained the benefit of the Warranties.
10.5 The obligations of the Vendors are several (except where
expressly stated otherwise) and such obligations and
undertakings shall be enforceable accordingly.
10.6 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.
10.7 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.
10.8 Any right of rescission conferred upon either party hereby
shall be in addition to and without prejudice to all other
rights and remedies available to it and no exercise or
failure to exercise such a right of rescission shall
constitute a waiver by that party of any such other right
or remedy.
10.9 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.
10.10 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.
10.11 Any party executing this Agreement in its capacity as
trustee hereby warrants and represents to the Purchaser
that its performance of this Agreement will not constitute
a breach if any terms of the trust deed under which he/it
is appointed and that he/it is fully empowered to perform
(or procure the performance of) each and every obligation
imposed hereunder.
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
required by law or save to the extent necessary to comply
with the requirements of the SEC or Nasdaq. A party to
this Agreement who makes a statement or announcement
necessary to comply with the requirements of the SEC or
Nasdaq shall use its reasonable endeavours to consult with
the other parties before making that statement or
announcement.
12. COSTS
Each party to this Agreement shall pay its own costs of
and incidental to this Agreement and the sale and purchase
hereby agreed to be made.
13. 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 or by facsimile and if served by post shall be
served by prepaid registered letter sent through the post
(airmail if overseas) 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 or 96 hours
after the time on which it was posted in the case of
airmail post and in proving such service it shall be
sufficient to prove that the notice was properly addressed
and posted and that before the notice is sent by post a
copy shall be sent by facsimile to the Vendor's Solicitors
for the attention of Mr AJ Edwards. If served by
facsimile, notice shall be deemed to have been served upon
transmission of the communication to the relevant
facsimile number and production by the sending facsimile
machine of a transmission report showing that the
facsimile message has been properly received by the
facsimile number to which it was transmitted.
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.
THE FIRST SCHEDULE
PARTICULARS OF THE VENDORS, THEIR SHAREHOLDINGS
IN THE COMPANY AND THE CONSIDERATION
(1) (2) (3)
Names and Addresses No. of Consideration
Ordinary Shares
Shares
Clarendon Trust Company 80 73,334
Limited,
Portland House,
32 Hue Street,
Jersey,
HE1 4HH
David Satterthwaite 20 18,333
Kingsway House
Kingsway
Gerrards Cross
Bucks
THE SECOND SCHEDULE
BASIC INFORMATION CONCERNING THE COMPANY
A. The Company : Genesis Pharma Strategies
Limited
1. Registered Number : 3165368
2. Date of incorporation : 28 February 1996
3. Address of registered : Highway House, 17 London End,
office Beaconsfield, Bucks
4. Authorised share : 1000 pounds sterling
capital
5. Issued and fully paid : 100 ordinary shares of 1 pound sterling each
share capital
6. Directors:
Full Names Addresses
Stephen Morris 71 Nightingale Road,
Rickmansworth, Herts, WD3 2BU
David Satterthwaite Kingsway House, Kingsway,
Gerrards Cross, Bucks
7. Secretary:
David Satterthwaite Kingsway House, Kingsway,
Gerrards Cross, Bucks
THE THIRD SCHEDULE
PROPERTY
Short Description of Tenure Expiry of Lease Owner if
Property Leasehold
Highway House Leasehold June 2016 Graham
Bryant
THE FOURTH SCHEDULE
PROVISIONS AFFECTING THE PENSION SCHEME
There is no pension scheme or similar funding obligation on the
Company.
THE FIFTH SCHEDULE
WARRANTIES
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 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.
1.5 Returns and compliance with Company Law etc.
The Company has 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,
accurate 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 Subsidiaries
The Company has no subsidiaries.
1.9 The Shares
1.9.1 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.
1.9.2 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.
1.9.5 The Company has not redeemed or purchased any of
its shares during the preceding two years.
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 (as at the date hereof) 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 investment exchange
(as defined in section 207 of the Financial Services Act
1986) 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:-
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 31 May 1997 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 31 May 1997 (except
for intervening Statements of Standard Accounting
Practice and Financial Reporting Standards);
2.1.4 comply with all current Statements of Standard
Accounting Practice and Financial Reporting
Standards 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 as defined in FRS
3;
2.1.6 properly reflect the financial position of the
Company as at the 31 May 1997.
2.3 Tax Provisions
To the extent required by the Statements of Standard
Accounting Practice and the Financial Reporting Standards
applicable to a United Kingdom company 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 31 May
1997 or any event on or before the 31 May 1997 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.
2.4 Work in progress
In the Accounts:-
2.4.1 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;
2.4.2 redundant or obsolete work in progress as at the 31
May 1997 has been wholly written off;
2.4.3 the value attributed to each item of the work in
progress included in the Accounts does not exceed
the lower of cost and market value as at the 31 May
1997;
2.4.4 the provisions of Statement of Standard Accounting
Practice 9 have been adhered to.
2.5 Books and Records
All accounts, books, ledgers, financial and other records
of whatsoever kind of the Company:-
2.5.1 have been fully properly and accurately maintained
are in the possession of the Company and contain
due and accurate records of all matters required to
be entered into therein by the Companies Acts;
2.5.2 do not contain or reflect any material inaccuracies
or discrepancies;
2.5.3 give and reflect a true and fair view of the
matters which ought to appear therein.
2.6 Debts
2.6.1 So far as the Vendors are aware, 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.
2.6.2 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.
2.6.3 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 material
capital commitments.
3.3 Borrowings
The total amount borrowed by the Company from its bankers
does not exceed its overdraft facilities and the total
amount borrowed by the Company 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.
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
The Company has sufficient working capital for the
purposes of continuing to carry on its business as
projected in the budget for the Company for the 12 months
December 1997 through to November 1998 for that twelve
month period and for the purposes of executing, carrying
out and fulfilling in accordance with their terms all
projects and contractual obligations which have been
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 are the Vendors aware of any
circumstances whereby the continuance of any
facility in full force and effect might be affected
or prejudiced or 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 Completion 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 and
except for the Properties 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.
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.
4.2 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 and Equipment
All vehicles and office and other equipment used in
connection with the business of the Company:-
4.4.1 are 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 1,000 pounds sterling.
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.
4.5.2 The Company is now, and has at all material times
been, adequately covered against accident, damage,
injury, third party loss (including service/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.
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
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 material and 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 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 (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 or elsewhere 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 so far as the Vendors are aware, the Company has
not 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;
5.4 Litigation
5.4.1 The Company is not engaged in any litigation or
arbitration proceedings.
5.4.2 So far as the Vendors are aware 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.
No agreement practice or arrangement carried on by the
Company or to which the Company is a party:-
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.
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 three years been outstanding,
any contract (other than a contract of employment)
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
during the last three years been affected by, any
contract or arrangement which is not of an entirely
arms' length nature.
5.10 Other Party's Defaults
So far as the Vendors are aware, 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
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 within six months after the date on
which it was entered into or undertaken; or
5.11.2 is known by any Vendor 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 for hire or rent hire purchase or
purchase by way of credit sale or periodical
payment; or
5.11.6 is a contract with any trade union or body or
organisation representing its employees; or
5.11.7 requires an aggregate consideration payable by the
Company in excess of 10,000 pounds sterling; or
5.11.8 involves or is likely to involve the supply of
services 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
5.11.10 requires the Company to pay any commission,
finders fee, royalty or the like; or
5.11.11 is in any way otherwise than in the ordinary
and proper course of the Company's business; or
5.11.12 would have been such an agreement or
arrangement but for its cancellation or termination
by any counter-party since the Balance Sheet Date.
5.12 Consequence of share acquisition by the Purchaser
So far as the Vendors are aware 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;
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;
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 documents to which the Company is a
party affecting the title or interest of the Company to or
in any of its assets are in the possession or under the
control of the Company and are properly stamped.
5.16 Compliance with Laws
The Company has conducted its business in all material
respects in accordance with all applicable laws and
regulations of the United Kingdom or (so far as the
Vendors are aware) any foreign country and there is no
violation of or default with respect to any statute
regulation order decree or judgement of any Court or any
governmental agency of the United Kingdom or any foreign
country which may have a material adverse effect upon the
assets or business of the Company.
5.17 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
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 moneys or benefits other than in respect of
remuneration or emoluments of employment, are
payable to, or for the benefit of, any officer or
employee of the Company or any Associate of any
such person.
6.2.4 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 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 Rights Act 1996.
7. INDUSTRIAL PROPERTY RIGHTS
7.1 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 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
Industrial Property Rights are in full force and effect.
7.2 The Company has not (otherwise than in the ordinary and
normal course of business) or on terms of confidentiality
disclosed or permitted to be disclosed or undertaken or
arranged to disclose to any person other than the
Purchaser any of its secret know-how, trade secrets or
confidential information.
7.3 The Company is not a party to any secrecy agreement or
agreement which restricts the use or disclosure of
confidential information.
7.4 Nothing has been done or omitted by the Company which
would enable any licensee under a licence granted by the
Company to be terminated by any other party to the licence
or which in any way constitutes a material breach of terms
of any licence.
7.5 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 or
validly licensed to it.
7.6 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 so far as the Vendors are aware
none of them is being used, claimed, opposed or attached
by any other person.
7.7 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 will cease to be valid and
enforceable.
8. TAXATION
8.1 Administration
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
in all material respects up-to-date, correct and on
a proper basis and none of them is or so far as the
Vendors are aware 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, within
the period of 6 years before Completion 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 should
have been obtained but was not.
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 so far as the Vendors are
aware the Company has not taken any action which
has had, or will 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;
(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 so far as the Vendors are aware there
are no facts 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 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).
8.2.2 The Company is not nor so far as the Vendors are
aware 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.
8.2.3 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 result of any act, omission, event or
circumstance arising or occurring at any time after
Completion which is not a deliberate act or
omission, or an event or circumstance deliberately
created, by the Company or the Purchaser after
Completion for the purpose of effecting the
withdrawal, postponement, restriction or loss.
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 will 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), or ICTA s.125 (Annual
payments for non-taxable consideration).
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 other than in the normal
course of business 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.
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 [will] 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) and for the purposes of this warranty the
provisions of Clause 1.2 shall not apply.
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 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).
8.5.3 The Company has never made any transfer of the kind
described in TCGA s.125 (transfer of assets at
undervalue).
8.5.4 The Company has never made any transfer of value
within the meaning of the IHTA [otherwise than for
the purposes of, or in the course of, its
business.]
8.5.5 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.
8.5.6 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
(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 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).
8.6.7 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 or 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 so far as the Vendors are aware
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).
8.7.6 No capital expenditure incurred or to be incurred
by the Company has been 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 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 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 depreciatory transactions for
the purpose of TCGA s.176 (transactions in a group)
or which could be treated as a depreciatory
transaction under TCGA s.177 (dividend stripping).
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.
8.9.11 The Company has not made 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
straightline 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
8.10 Tax avoidance
8.10.1 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:-
(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.
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 material respects the terms of all
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 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, 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.
8.17.8 The Company is not the owner of, and has not
contracted 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, a liability to
Taxation in a country other than the 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
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).
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.
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.
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 licencees 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 except to the extent not yet due or
payable.
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 in all
material respects 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 in all material
respects 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 As far as Vendors are aware compliance has been
made in all material respects with all applicable
statutory and bye-law requirements with regard to
the Properties 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 As far as the Vendors are aware 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 As far as the Vendors are aware 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
9.5.1 The buildings and other structures on the
Properties are in good and substantial repair and
fit for the purposes for which they are presently
used.
9.5.2 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.
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 on the
part of the local authority to enter details of the
Properties 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.
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, 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
The contents of the Disclosure Letter and of all
accompanying documents are true and accurate in all
material respects and clearly and accurately disclose in
al material respects every matter to which they relate.
10.2 Loans to Vendors
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;
10.2.4 any securities for any such loans or debts as
aforesaid.
10.3 Net Assets
The value of current assets less current liabilities as at
Completion is not less than their value as at the Balance
Sheet Date.
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.
SIXTH SCHEDULE
TAX INDEMNITIES
1. INDEMNITY
1.1 SUBJECT as hereinafter provided the Vendors hereby agree
to provide to the Purchaser an amount equal to:-
1.1.1 any Liability to Taxation:
(i) arising as a consequence of or by reference to
one or more Events which occurred on or before
the date hereof; or
(ii) arising in respect of or by reference to
any income, profits or gains which were earned,
accrued or received on or before or in respect
of a period ended on or before the date hereof.
1.1.2 any Liability to Taxation which would have arisen
(and in respect of which the Vendors would have
been liable under paragraph 1.1.1) but for the
setting off of an Accounts Relief or a New Relief
against that Liability to Taxation or (as the case
may be) against the income profits or gains which
would have given rise to that Liability to
Taxation;
1.1.3 any Liability to Taxation which would (on the basis
of the current rates of Taxation and assuming
income profits or gains chargeable to Taxation of
an amount equal to the Relief) have been saved but
for the loss of any Accounts Relief;
1.1.4 any reasonable costs and expenses incurred in
connection either with any such liability or amount
as is referred to in paragraphs 1.1.1 to 1.1.3
inclusive or with any Tax Claim in respect thereof
(including investigating, assessing or contesting
the same) or in taking or defending any action
under this schedule at the request or direction of
the Vendors.
1.2 The liability of the Vendors shall be joint and
several and shall bind their respective successors
and personal representatives.
2. EXCLUSIONS
2.1 The Indemnities contained in this Schedule do not cover
any Liability to Taxation:-
2.1.1 to the extent that provision or reserve
specifically in respect thereof has been made in
the US GAAP Accounts or specifically referred to in
the notes to the US GAAP Accounts;
2.1.2 to the extent that that Liability to Taxation was
paid or discharged on or before the Balance Sheet
Date;
2.1.3 to the extent that the Tax Claim arises as a result
of the appropriate provision or reserves in the US
GAAP Accounts being insufficient by reason of an
increase in the rate of Taxation (or a variation in
the method of applying or calculating the rate of
Taxation) made after the date hereof
2.1.4 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;
2.1.5 to the extent that no actual loss is suffered by
the Company by reason that Liability to Taxation
has been made good or otherwise compensated for at
no expense to the Company by the Vendors or any of
them under any other provision of this Agreement or
by any other party;
2.1.6 to the extent that it would not have arisen but for
the fact that the treatment in future accounts of
the Company of assets or liabilities, or of the
Taxation attributable to timing differences is
different from the treatment in the last accounts
other than to the extent that any change in
accounting practice is necessary to bring the
accounts in to line with generally accepted
accounting practice;
2.1.7 to the extent that the Liability to Taxation arises
as a result of a change in the law or its
interpretation enacted or made after the date
hereof or a withdrawal or amendment, published
after that date of any extra-statutory concessions
or practice;
2.1.8 which would not have arisen but for the voluntary
act or omission of the Company or the Purchaser
(which should reasonably have been avoided) carried
our, or occurring, after the date hereof otherwise
than in the ordinary course of business and
otherwise than pursuant to a legally binding
commitment created on or before Completion;
2.1.9 to the extent of any recovery by the Purchaser
under the Warranties in respect of, or arising from
the same Liability to Taxation.
2.1.10 if and to the extent that the Liability to Taxation
arises because the Company fails, after due warning
to act in accordance with the reasonable
instructions of the Vendors in accordance with
paragraph 5.
2.2 Without prejudice to the generality of paragraph 2.1.2
above the following shall not be regarded as being within
the ordinary course of business of a member of the Group
for the purpose of this Schedule:
2.2.1 any Taxation arising under Part XVII Income and
Corporation Taxes Act 1988 (Tax Avoidance);
2.2.2 any Taxation arising in connection with any
distribution (as defined in Part VI Income and
Corporation Taxes Act 1988) or any deemed
distribution;
2.2.3 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;
2.2.4 any disposal or deemed disposal of chargeable
assets.
2.3 No claim for payment shall be brought by the Purchaser in
respect of this Schedule unless notice of the Tax Claim
(specifying in reasonable detail the matter which gives
rise to such a Tax Claim and the amount claimed) is
received by the Vendors within the period set out in
paragraph 1.3 of the Seventh Schedule except that in
relation to matters referred to in Clause 10 of the
Seventh Schedule to this Agreement in which case the
period shall be not later than 7 years from the date
hereof.
2.4 The provisions of paragraphs 1.1, 1.2, 1.3, and 1.6 of the
Seventh Schedule (Limits on claims under Warranties) shall
apply to claims under this Schedule.
3. MITIGATION
3.1 The Vendors 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.
3.2 Paragraph 3.1 does not apply if, and to the extent that,
the Reliefs, rights of repayment or other rights or claims
mentioned in that paragraph arise wholly or mainly by
reason of an act or omission of the Company before the
Balance Sheet Date (unless the Relief in question is an
Accounts Relief).
3.3 If the Vendors satisfy a liability under this Schedule to
indemnify the Purchaser in respect of a Liability to
Taxation and the Company has a right of reimbursement
(including by way of indemnity) against another person in
respect of the Liability to Taxation, the Purchaser shall
procure that the Company at the expense of the Vendors
shall take all reasonable steps to enforce the right and
shall account to the Vendors for whichever is the lesser
of:-
3.3.1 any sum so recovered by the Company in respect of
that Liability to Taxation (including interest and
any repayment supplement paid by any Taxation
Authority less any Taxation chargeable on the
Company in respect of that interest); and
3.3.2 the liability satisfied by the Vendors under this
Schedule in respect of that Liability to Taxation.
3.4 If any provision for Taxation (not being a provision for
deferred taxation) contained in the Accounts shall at the
request and expense of the Vendors 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 Vendors under the provisions of
this Schedule.
4. DISPUTES AND CONDUCT OF TAX CLAIMS
4.1 If the Purchaser or the Company shall become aware of a
Tax Claim which is or may be 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 Vendors at the address
stated in accordance with Clause 13 of this Agreement for
this purpose.
4.2 The Purchaser shall procure that the Company shall ensure
that a Claim for Taxation to which paragraph 4.1 applies
is, so far as reasonably practicable, dealt with
separately from claims to which it does not apply and that
no Liability to Taxation arising from the Claim is
accepted or discharged prematurely. For this purpose, a
payment made by the Company to avoid incurring interest or
a penalty in respect of unpaid Taxation shall be deemed
not to be made prematurely.
4.3 If the Vendors shall indemnify and secure the Purchaser
and the Company to their reasonable satisfaction against
any liabilities, reasonable 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 Vendors may
reasonably request in writing to avoid resist appeal
dispute or compromise the Tax Claim (a Tax Claim where
action is so requested being hereinafter referred to as a
"Dispute") with the intent that the conduct and costs and
expenses of the Dispute shall be delegated to and borne by
the Vendors.
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 Vendors written notice of
the receipt of such assessment the Purchaser has not
within 15 days thereafter received written instructions
from the Vendors in accordance with the preceding
provisions of this sub-paragraph to do so.
4.4 Notwithstanding that the conduct of a Dispute may be dealt
with in accordance with the Vendors' request under sub-
paragraph 4.2 above:
4.4.1 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;
4.4.2 the appointment of solicitors or other professional
advisers shall be subject to the approval of the
Purchaser such approval not to be unreasonably
withheld or delayed;
4.4.3 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 which shall be
afforded a reasonable opportunity to make comments
before the communication is transmitted;
4.4.4 the Vendors shall make no settlement or compromise
of the Dispute without the prior approval of the
Purchaser such approval not to be unreasonably
withheld or delayed.
4.5 If any dispute arises between the Vendor and the Purchaser
as to whether the Tax Claim should be at any time be
settled in full or contested in whole or in part, it shall
be resolved in accordance with the provisions set out in
the Eighth Schedule
5. PAYMENTS
5.1 The Vendors will settle with the Purchaser under the
provisions of this Schedule in full as follows (subject
always to the provisions of the Eighth Schedule and in the
event that these provisions and those of the Eighth
Schedule should conflict or otherwise be inconsistent the
latter shall prevail):
5.1.1 where a member of the Group is due to make an
actual payment of Taxation to which this Schedule
relates five days before that payment is due;
5.1.2 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;
5.1.3 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
a member of the Group 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;
5.1.4 in the case of costs and expenses incurred by the
Purchaser or a member of the Group in connection
with any Liability to Taxation or any other matter
not dealt with elsewhere in this paragraph 5 ten
days after the service by the Purchaser of a notice
containing a written demand therefor which includes
reasonable evidence of such expenses and costs
being incurred.
5.2 Where there is or has been a Dispute and the Dispute
relates to a Tax Claim where the Taxation the subject
matter thereof has to be paid before the action requested
by the Vendors in respect of the Tax Claim can effectively
be taken settlement in respect thereof shall be made by
the Vendors in full three days before such Taxation must
be paid to enable the Purchaser to comply with the
Vendors' request.
5.3 The Purchaser shall make a settlement with the Vendors to
the extent that, and on the date on which, the Company
receives a repayment of an amount paid in respect of a
Liability to Taxation under Clause 5.1. A settlement with
the Vendors under this paragraph 5.3 shall not prejudice
the right of the Purchaser to recover from the Vendors
under this schedule if a further liability to Taxation is
imposed upon the Company, whether in respect of matters to
which the settlement relates or otherwise.
5.4 For the purpose of Clause 5.3, the Company shall be deemed
to receive a repayment:
5.4.1 on the date on which the Company receives a
repayment of Taxation to which Clause 5.3 applies;
5.4.2 if and when the Company would have received the
repayment but for a Liability to Taxation in
respect of which the Company is not entitled to be
indemnified under this deed; or
5.4.3 if and when the Company would have received the
repayment had the Liability to Taxation been
discharged by a payment of Taxation;
5.5 The obligations of the Purchaser pursuant to Clauses 5.3
and 5.4 shall cease forthwith on the date determined in
accordance with the provisions of Clause 1.3 of the
Seventh Schedule.
6. TAXATION OF CLAIMS
In the event of any settlement pursuant to this Schedule
(and the Eighth 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 settlement received by the Purchaser shall after
Taxation be equal to that which would have been received
had the settlement not been subject to Taxation.
7. INTEREST
In the event that any settlement pursuant to this Schedule
has not been received by the date for settlement in
accordance with the provisions of this Schedule interest
shall accrue in respect of the sum unpaid at a rate of 2%
above NatWest/Barclays Bank PLC base rate for the time
being in force calculated on a daily basis.
8. TAX SAVINGS
If the Vendors have indemnified the Purchaser against a
Liability to Taxation which is in respect of advance
corporation tax, the Purchaser shall account to the
Vendors for an amount equal to any resulting reduction in
its liability to corporation tax as and when the Company
obtains the benefit of the reduction.
9. WITHHOLDING
Any settlement made by the Vendors pursuant to the
provisions of this Schedule shall be made in accordance
with, and be subject to, the provisions of the Eleventh
Schedule.
THE SEVENTH SCHEDULE
LIMITS ON CLAIMS UNDER WARRANTIES
1. The Vendors shall not have any liability under or in
relation to the Warranties:-
1.1 as regards any single claim, unless the amount of
the liability thereunder exceeds $25,000;
1.2 except to the extent that the aggregate amount of
the Vendors' liability in respect of all claims
hereunder exceeds $50,000 and for this purpose
single claims excluded by Clause 1.1 above will not
to be taken into account;
1.3 as regards any claim (other than a claim falling
within the provisions of paragraph 1.4 below)
unless notice in writing specifying particulars and
the amount thereof is received by the Vendors by 3
Business Days before the earlier of (i) the
delivery by Price Waterhouse LLP of its report on
the Purchaser's financial statements for the fiscal
year ended June 30th, 1998 or (ii) March 1, 1999;
1.4 As regards any claim to the extent that such claim
or liability arises or that the amount thereof is
increased as a result of any change in the basis
rate or method of calculation of any Taxation or as
a result of any other legislation decision or
regulation (whether or not in relation to Taxation)
or any change in or in the interpretation of any
such legislation decision or regulation occurring
or coming into force after the date hereof;
1.5 as regards any claim, to the extent of any amount
which is recovered from insurers;
1.6 to the extent that a breach of this Agreement also
gives rise to a claim under the Tax Indemnity and
the Vendors have satisfied such claim or vice
versa.
2. The liability of the Vendors under the Warranties shall be
reduced:
2.1 by an amount of or by which Taxation for which the
Company is accountable is extinguished or reduced
as a result of the claim giving rise to the
liability;
2.2 to the extent that provision or allowance therefore
has been made in the Accounts.
3. No claim shall lie in respect of any breach of the
Warranties to the extent that the same is capable of
remedy unless the Purchaser shall first afford the Vendors
a reasonable opportunity to remedy the breach complained
of in a reasonable fashion.
4. If the Purchaser or the Company shall be in receipt of any
claim which might constitute or give rise to or allege
that there has been a breach of any of the Vendor's
Warranties or made any claim thereunder the Purchaser
shall within a reasonable period notify the Vendors giving
as full details as practicable and shall allow the Vendors
and their authorised representatives and shall allow the
Vendors and their authorised representatives full and free
access at all reasonable times to the books and records of
the Company for the purposes of verifying such allegation
or claim and further shall (subject to being secured to
its reasonable satisfaction against all costs and expenses
incurred or for which it may become liable) take such
action as the Vendors may reasonable request to avoid
dispute resist appeal compromise or avoid any such claim.
5. If the Vendors settle with the Purchaser or the Company
for an amount in respect of a breach of any
representation, warranty, indemnity or undertaking
hereunder or under the Tax Indemnity or any document
ancillary hereto or thereto:
5.1 the Purchaser shall forthwith on receipt thereof by
the Purchaser or the Company reimburse to the
Vendors an amount equivalent to any sum recovered
from any third party (including any Taxation or
other authority) in respect of the amount settled
by the Vendors.
5.2 the Vendors may (subject to indemnifying the
Purchaser and the Company to their reasonable
satisfaction) require the Purchaser and the Group
Company to take all reasonable and appropriate
steps to enforce any rights against third parties;
and
5.3 the Purchaser shall or shall procure that the
Company shall keep the Vendors informed of any
actual or prospective such recovery, receipt or
right;
5.4 if the Purchaser is bound to reimburse any amount
under this Clause the Purchaser shall allocate and
make reimbursement to the Vendor(s) in proportion
to the amounts borne by them individually of the
original claim.
6. The aggregate liability of the Vendors in relation to the
Warranties and the Tax Indemnity shall in any event be
restricted to the value of the Holdback Shares (as defined
in the Eighth Schedule) as at the date of Completion. The
recourse of the Purchaser in respect of any claim under
the Vendors Warranties or the Tax Indemnity shall be
limited to the exercise of its rights under the Eighth
Schedule in respect of the Holdback Shares.
7. The amount of any settlement made by each Vendor to the
Purchaser in respect of any claim under the Warranties or
the Tax Indemnity shall be deemed a reduction dollar for
dollar in the value of the consideration payable to the
Vendors under this Agreement.
8. Nothing in this Seventh Schedule shall operate to limit or
exclude the liability of the Vendors for fraud or
misrepresentation (other than innocent misrepresentation).
9. Any settlement made by the Vendors pursuant to the
provisions of this Schedule shall be made in accordance
with, and be subject to, the provisions of the Eighth
Schedule.
THE EIGHTH SCHEDULE
HOLDBACK
1.1 On Completion, each Vendor shall be deemed to have
directed the Purchaser to withhold from delivery ten per
cent (10%) of the Consideration Shares issued to such
Vendor. The Consideration Shares withheld are herein
referred to as the "Holdback Shares". The Holdback Shares
shall be deemed to be issued to the Vendors but held by
the Purchaser subject to the terms and conditions set out
below. Holdback Shares shall be considered as issued
share capital of the Purchaser and shall have the rights
set out below.
1.2 All dividends and distributions (other than cash dividends
and distributions) made by the Purchaser with respect to
the Holdback Shares will be held by the Purchaser with the
other Holdback Shares as provided herein as additional
assets of the withholding to satisfy any claims arising
from a breach of the Warranties or a claim under the Tax
Indemnities ("a Claim"). Cash dividends and
distributions, if any, will be made by the Purchaser to
each Vendor, pro rata according to their respective
interests in the Holdback Shares.
1.3 If a meeting or written action of shareholders of the
Purchaser occurs while the provisions of this Schedule are
still in effect, the Purchaser shall promptly send to each
Vendor copies of any notices, proxies and proxy materials
in connection with such meeting or written action. At the
time of any such meeting, the Purchaser shall, if deemed
necessary by any of the Vendors, execute and deliver a
proxy authorising each Vendor to vote the whole number of
their Holdback Shares (eliminating any fractions).
2. The withholding of the Holdback Shares hereunder is for
the purpose of providing a source of indemnification to
the Purchaser and the other members of the Purchaser's
Group pursuant to the terms and conditions of this
Agreement, from and against all Claims.
3.1 The Holdback Shares shall be retained by the Purchaser
until the earlier to occur of (i) the delivery by Price
Waterhouse LLP of its report on the Purchaser's financial
statements for the fiscal year ended June 30th 1998 or
(ii) March 1, 1999 ("the Holdback Termination Date")
when, subject to Clause 3.2 below, the Holdback Shares,
less the Payment Shares (as defined below) if any, shall
be distributed to the Vendors.
3.2 The Holdback Shares shall not be distributed to a Vendor
on the Holdback Termination Date in the event that:
(a) a Vendor has either agreed liability for a Claim or
a counsel appointed pursuant to Clause 4 below has
determined the amount of a Claim and in either case
such Claim has not been satisfied in full; and/or
(b) the Purchaser has made a Claim which is subject to
determination in accordance with Clause 4 below.
4.1 If the Purchaser and/or the Company has a Claim the
Purchaser (on its own behalf and/or on the behalf of the
Company) will deliver a written notice thereof to the
Vendors pursuant to Clause 4 of the Ninth Schedule and
Clause 4 of the Eighth Schedule (a "Notice of Claim") and
setting forth the number of Holdback Shares necessary to
satisfy the claim in question, which will be determined by
dividing (x) the amount of such Claim by (y) the value of
one of the Holdback Shares on the date of Completion (the
"Payment Shares"). A good faith failure to state
correctly in a Notice of Claim the full amount of the
damage suffered by the Purchaser and/or the Company will
not prejudice their claim for damages in respect of such
Claim, and the Purchaser may deliver an additional Notice
of Claim as provided herein with respect to any amount of
damages not stated (in good faith) in a previous Notice of
Claim.
4.2 If the Vendors object to such Notice of Claim (whether as
to liability or the amount claimed), he/it will give
written notice to the Purchaser, within 7 Business Days,
of receipt of such Notice of Claim advising the Purchaser
of its objection (a "Notice of Objection"). If no Notice
of Objection is received from the Vendors by the Purchaser
within such period (and time shall be of the essence), the
Purchaser will effect payment of the amount of such Claim
as provided in Clause 5 below. If the Vendors deliver a
Notice of Objection within such period (and time shall be
of the essence), the Purchaser and the Vendors will
promptly meet and use their best endeavours in good faith
to settle the dispute. If the Purchaser and the Vendors
are able to settle the dispute, in whole or in part, they
will record such settlement in writing and the Purchaser
will effect payment of that Claim (or other agreed amount)
as provided in Clause 5 below. If the Purchaser and
Vendors are unable to reach agreement within 10 Business
Days after the delivery of the Notice of Objection, then
the dispute shall be referred to the determination of a
senior commercial counsel of at least ten years' standing
appointed by agreement between the Vendors and the
Purchaser, or (if they do not agree within 3 Business
Days) upon the application by either party to the
President for the time being of the Law Society, whose
determination shall be final. The counsel shall be asked
whether in his opinion an appeal against that Claim would
on the balance of probability be likely to succeed and the
quantum of such Claim. Such opinion to be available
within 10 Business Days of submission of argument from all
parties such argument to be provided to Counsel by all
parties no later than 5 Business Days following the day of
Counsel's appointment. Time shall be of the essence.
4.3 If the Purchaser is entitled to any damages pursuant to
the determination of counsel in accordance with Clause 4.2
above payment of the amount of such damages which is
specified in such determination will be made in the manner
prescribed in Clause 5 below. Notwithstanding the
foregoing, the Purchaser shall deliver to the Vendors a
notice specifying the amount and the equivalent number of
Payment Shares which will be deducted from the Holdback
Shares.
5. If the Purchaser is entitled pursuant to Clause 4 above to
receive damages in respect of a Claim, the Purchaser will
exchange the certificate representing the Holdback Shares
for a new share certificate representing a number of
shares of the Purchaser (which will remain Holdback
Shares) equal to the number of Holdback Shares previously
held by the Purchaser less the number of Payment Shares.
The number of Holdback Shares attributable to each Vendor
will be reduced (and the number of Payment Shares
determined) pro rata (subject to appropriate adjustment in
respect of fractions) to a Vendor's entitlement to
Consideration Shares as set out in the First Schedule.
SIGNED by )
in the presence of: ) /s/David E. Satterthwaite
SIGNED by )
for and on behalf of )
PAREXEL INTERNATIONAL )
CORPORATION )
in the presence of:- ) /s/Barry R. Philpott
THE SEAL of CLARENDON )
TRUST COMPANY was hereunto )
affixed in the presence of:- )
Director
/s/Contra Services Limited
Director/Secretary
EXHBIT 4.5
DATED1998SHARE PURCHASE AGREEMENT- between -VAN DER LINDEN HOL
DING BVSTEINBERG HOLDING BVTOHO PHARMACEUTICAL CO LTDhereinafter
referred to as the "Vendors"- and -PAREXEL INTERNATIONAL
CORPORATIONhereinafter referred to as the "Purchaser"
LAWRENCE GRAHAM
190 Strand
London WC2R 1JN
Tel: 0171-379 0000
Fax: 0171-379 6854
Ref: RWE/0627323.01A
SHARE PURCHASE AGREEMENT dated 1998 BETWEEN
(1) VAN DER LINDEN HOLDING BV, a company incorporated under
the laws of [the Netherlands], having its corporate seat at [
];
(2) STEINBERG HOLDING BV, a company incorporated under the
laws of [the Netherlands] having its corporate seat at
[ ];
(3) TOHO PHARMACEUTICAL CO LTD, a company incorporated under
the laws of Japan, having its corporate seat at
[ ];
hereinafter together referred to as "the Vendors";
and
(4) PAREXEL INTERNATIONAL CORPORATION, a company incorporated
under the laws of Massachusetts, having its corporate seat
at [ ], hereinafter referred to as "Purchaser";
and
(5) Mrs Els van der LINDEN of [ ];
(6) Mr Louis-Paul STEINBURG of [ ];
hereinafter together referred to as "the Guarantors".
WHEREAS
a. the Vendors hold [the entire issued share capital,
[ shares] numbered [ ] through [ ] in the capital
of MIRAI B.V., a limited liability company incorporated
under the laws of the Netherlands, having its corporate
seat at [ ], registered number 206.308 (Amsterdam)
hereinafter referred to as "the Company". The shares in
the capital of the Company held by the Vendors are
hereinafter referred to as "the Shares";
b. [ ];
HAVE AGREED AS FOLLOWS:
Article 1: Sale and purchase
1.1 The Vendors herewith sell the Shares to the Purchaser, who
herewith purchases and accepts the Shares (together with
all accrued rights and benefits) from the Vendors for the
consideration described in Article 1.2 ("the
Consideration").
1.2 The Consideration shall be satisfied by the allotment and
issue (subject to sub-article 1.3 below) to the Vendors of
[ ] Common Stock of US$0.01 each of the Purchaser
ranking pari passu with the Common Stock of the Purchaser
in issue at Completion and credited as fully paid ("the
Consideration Shares").
1.3 A proportion of the Consideration Shares amounting in
aggregate to [10%] of the total Consideration Shares shall
not be issued to the Vendors on the date hereof but shall
be held in escrow on the terms and conditions set out in
Articles 3.5 and 3.6.
Article 2: Transfer
2.1 Transfer of the Shares will take place on [ ], or such
earlier or later date as parties will agree to in writing
(hereinafter referred to as "the Transfer Date"), in front
of a civil law notary, in accordance with the relevant
clauses of the Articles of Association of the Company and
the law.
2.2 The Consideration Shares shall be issued at the Transfer
Date.
2.3 All costs related to the transfer of the Shares shall be
shared equally by the Purchaser and the Vendors.
2.4 Parties commit themselves herewith to perform all (legal)
acts as necessary for the transfer of the Shares.
Article 3: Representations and warranties
3.1 In this Agreement and Annex 1 the expression "Warranty"
shall mean those representation and warranties made to the
Purchaser by the Vendors set out in this Agreement and in
Annex 1;
3.2 The Purchaser has entered into this Agreement and proposes
to acquire the Shares on the faith of the Warranties and
the further representations by the Vendors/Guarantors that
all information relating to the Company and its business
which is at the date hereof known or would on reasonable
enquiry be known to the Vendors/Guarantors and which ought
to be disclosed to a purchaser of the Shares has been
disclosed to the Purchaser. The Vendors/Guarantors
represent and warrant to the Purchaser that each and every
separate Warranty as listed in Annex 1 hereto is true and
correct both at the date of signing of this agreement and
at the Transfer Date.
3.4 The expression "the Company" where used in this Agreement
(and in Annex 1) shall mean the Company and each of the
subsidiaries listed in Annex 2 ("the Subsidiaries").
Accordingly the representations and warranties contained
in this Agreement shall apply in each case to the Company
and to the Subsidiaries and (without prejudice to the
generality) any references in this Agreement (and the
Annexures) to any statutory provision, regulation or
accounting principles applying in the Netherlands shall be
deemed to include references to any equivalent provision,
regulation or accounting principles in any jurisdiction in
which any Subsidiary is incorporated and/or carries on
business and any reference to any governmental or
administrative authority or agency shall include
references to any equivalent governmental or
administrative authority in any other relevant
jurisdiction.
3.5 At the signing, each Vendor shall be deemed to have
directed Purchaser to withhold from delivery ten percent
(10%) of the Consideration Shares. The Consideration
Shares withheld are herein referred to as the "Holdback
Shares". The Holdback Shares shall be issued to the
Vendor but held in escrow by Purchaser, subject to the
terms and conditions hereinafter set forth. Holdback
Shares shall be considered issued and outstanding shares
of capital stock of Purchaser and each Vendor shall be
entitled to vote such shares and receive any and all
dividends or distributions payable with respect to such
shares.
3.6 The Holdback Shares shall be distributed to the Vendors as
follows:
3.6.1 promptly after the earlier to occur of (i) the
delivery by Price Waterhouse LLP of its report on
Purchaser's financial statements for the fiscal
year ended June 30, 1998, or (ii) January [], 1999,
the Holdback Shares shall be distributed to the
Vendors, except that the portion of the Holdback
Shares having a fair market value as of the signing
date most nearly equal to the damages incurred by
the Purchaser as to which a claim shall have been
previously and duly delivered to the Vendors, shall
continue to be withheld in escrow. The amount of
such damages shall be based upon a written
certification of the Chief Executive Officer of
Purchaser to the Vendors as to the amount of
damages incurred, together with supporting
documentation. The balance of the Holdback Shares
not so withheld shall be distributed to the
Vendors;
3.6.2 the Holdback Shares not so distributed to the
Vendors pursuant to subsection 3.6.1 shall be
retained by Purchaser 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, Purchaser shall
distribute to the Vendors that amount of the
Holdback Shares having a value as of the signing
date in excess of 100% of the aggregate amounts of
the remaining damages incurred as determined above.
Article 4: Period until Transfer Date
4.1 The Vendors will not alienate, or vest any security right
or grant an option on the Shares between the date of
signing of this agreement and the Transfer Date.
4.2 The Vendors represent and warrant that as from the date of
signing of this agreement until the Transfer Date the
Company will not enter into any transaction or commit
itself other than in the ordinary and usual course of its
business.
Article 5: Directors
5.1 On the Transfer Date, prior to transfer of the Shares, the
Vendors shall deliver to the Purchaser resignation letters
from all of the members of the Executive Board [and
Supervisory Board] of the Company, in which they resign
effective on the Transfer Date as member of [this
Board/these Boards] and waive any claim against the
Company for remuneration or loss of office.
Article 6: Compliance with US law
Each Vendor and Guarantor:
6.1 warrants and represents to the Purchaser that the
Vendor/Guarantor:-
6.1.1 is acquiring the Consideration Shares for his own
account and not on behalf of any other person, and
the Vendor/Guarantor 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;
6.1.2 is not an officer or director of any affiliate of
the Purchaser;
6.2 acknowledges and agrees that the Consideration Shares have
not been registered under the Act, and may not be offered
or sold unless the Consideration Shares are registered
under the Act or an exemption from the registration
requirements of the Act is available;
6.3 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/Guarantor set forth
herein in order to determine the applicability of such
exemptions and the suitability of Vendor/Guarantor to
acquire the Consideration Shares;
6.4 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;
6.5 acknowledges that in the 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/Guarantor is part of a plan or scheme
to evade the registration provisions of the Act and the
Vendor/Guarantor confirms that this transaction is not
part of any such plan or scheme;
6.6 has received and carefully reviewed the Purchaser's Annual
Report on form 10-K for the fiscal year June 30, 1997,
Quarterly Reports on Form 10-Q for the Quarters Ended
September 30 [and December 31], 1997, Current Reports on
Form 8-K dated October 23 1997 and [ ] 1998,
and Proxy Statement dated October 8, 1997 (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/Guarantor.
6.7 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/Guarantor is not relying upon any
information, other than that contained in this Agreement
and the results of independent investigations by the
Vendor/Guarantor;
6.8 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;
6.9 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/Guarantor hereby agrees with the Purchaser that the
Vendor/Guarantor 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;
6.10 acknowledges and agrees that all offers and sales of the
Consideration Shares shall only be made in compliance with
(i) the Pooling Lock-up Period and (ii) Purchaser's insider
trading and blackout period policies, as from time to time
in effect; and (iii) pursuant to an effective registration
statement under the Act or an exemption from registration
under the Act.
Article 7: Guarantees
[Guarantors to guarantee obligations of Vendors].
Article 8: Governing law/Competent court
8.1 This deed, including its annexes, is governed by Dutch
law. Any dispute arising under this agreement or any other
agreement resulting therefrom shall be brought before the
competent Court of Amsterdam, the Netherlands.
Signed in twofold in [ ], on [ ]
Vendors Guarantors
Purchaser
Annex 1: Representations and Warranties (article 3.1)
Annex 2: Details of Company and Subsidiaries
Placebo BV
Echo Medical BV
Til Occam (UK)
Medstat (Norway)
Medstat (Baltic)
Item
Mirai (Poland)
Mirai (Czech)
Mirai (Hungary)
Mirai (Russia)
ANNEX 1 to the Share Purchase Agreement of [ ] between
[Vendor] and [Purchaser]
This annex forms an integral part of the Share Purchase Agreement
between [Vendors], [Purchaser] and [Guarantors] of [date] on the
sale and purchase of the Shares (hereinafter: the Agreement).
The terms, as defined in said agreement will have the same
meaning in this annex. Save where the context otherwise requires
the expression "the Company" shall mean the Company and each of
the Subsidiaries.
"Industrial Property Rights" shall mean patents, trade marks,
registered designs, pending
applications for any of the
foregoing, trade or business names
and copyright and [design rights];
and
"Accounts" shall mean [the audited balance
sheet as at the
[ ] and
audited profit and loss account for
the year ended on the
[ ] of each
of the Company and the Subsidiaries
including in the case of the
Company the audited consolidated
balance sheet as at such date and
the audited consolidated profit and
loss account for such period and in
each case the] [directors report
and notes, if any];
Representations and Warranties
The Vendors represent and warrant to Purchaser as follows:
1.1 Corporate Standing
The Company is duly organised and validly existing under
the laws of the Netherlands.
1.2 Articles of Association
The Articles of Association of the Company as currently in
force do not contain any provision which could prevent or
impair the performance of any obligation of the Vendor
under the Agreement.
1.3 Directorships and Permanent Powers of Attorney
Annex 1.3 to this Annex lists the names of all members of
the executive board [and the supervisory board] of the
Company, and of all the individuals who have permanent
powers of attorney to represent the Company.
1.4 Capital and Shares
There are neither share certificates nor depository
receipts (certificaten) in respect of the Shares. The
Shares have been validly issued and fully paid up, and are
free from all pledges, liens and other encumbrances. No
subscription, warrant, option, convertible security or
other right (contingent or otherwise) to purchase or
acquire any shares or capital stock of the Company is
authorised or outstanding. The Company is under no
obligation whatsoever to issue any further shares and no
resolution to that effect has been passed. The Company has
fulfilled all its statutory and legal obligations.
1.5 Register of Shareholders
The Register of Shareholders of the Company (Annex 1.5) is
correct in all respects, complete and up-to-date.
1.6 The Annual Accounts
a. The Accounts, a copy of which is attached hereto as
Annex 1.6, have been prepared in accordance with
the requirements of all relevant laws and
accounting principles generally accepted In the
Netherlands applied on a consistent basis and give
a true and fair view of the assets and liabilities
and of the net worth and financial position of the
Company as at [ ] ("the Balance Sheet Date").
b. The Accounts 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 and Financial Reporting
Standards);
c. On the Balance Sheet Date the Company did not have
any liabilities or commitments, contingent or
otherwise, whether mature or not, not included or
provided for in the Accounts.
d. Full provision has been made in the Accounts for
all accounts receivable considered by the Company's
management to be bad and doubtful and not
adequately covered by insurance.
e. As of the Balance Sheet Date no dividends or
distributions have been declared or paid by the
Company.
f. Full 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.
g. In the Accounts:-
(i) the Company's work in progress/back log 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;
(ii) redundant or obsolete work in
progress/back log as at the Balance Sheet Date
has been wholly written off;
1.7 Absence of Certain Changes or Events
Since the Balance Sheet Date there has not been any change
in the condition, financial, commercial or otherwise, of
the Company which has adversely affected to a material
extent its business, properties or financial condition,
other than changes occurred in the ordinary course of its
business. In particular, no fixed assets have been
acquired or disposed of, and no material contracts,
commitments or investments have been entered into in the
period referred to. 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
material capital commitments.
1.8 Certain Assets
The Company has good and marketable title to all its
assets as reflected in the Accounts or acquired since the
Balance Sheet Date, other than assets or properties sold
or otherwise disposed of in the ordinary course of its
business, free and clear of all encumbrances other than as
explicitly disclosed in the Accounts.
1.9 Corporate Records
All resolutions of the shareholders' meetings of the
Company since its incorporation were fully and accurately
recorded, and the records relating thereto as well as any
other records which must be kept by law are being properly
kept by the Company, and have been made available to the
Purchaser.
1.10 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.
1.11 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 no 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.
1.12 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 as projected in the
budget for the Company and its Subsidiaries for the 12
months [December 1997 through to November 1998 for that
twelve month period] and for the purposes of executing,
carrying out and fulfilling in accordance with their terms
all projects and contractual obligations which have been
undertaken by, the Company.
1.13 Continuance of facilities
In relation to all debentures, acceptance credits,
overdrafts, loans or other financial facilities
outstanding or available to the Company ("facilities"):-
a. the Vendors have supplied to the Purchaser in
writing full details thereof and true and correct
copies of all documents relating thereto are
attached on Annex 1.13;
b. neither the Vendors, nor the Company, has done
anything nor are the Vendors aware of any
circumstances whereby the continuance of any
facility in full force and effect might be affected
or prejudiced or which might give rise to any
detrimental alteration in the terms or conditions
of any of the facilities;
c. 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;
d. no Vendor has any knowledge, information or belief
that as a result of the acquisition of the Shares
by the Purchaser any of the facilities might be
terminated or mature prior to its stated maturity.
1.14 Legality of the Operation of the Business
The Company has in all material respects complied with all
laws, regulations and orders applicable to it, and the
conduct of its business does not violate any provisions of
any applicable laws, orders, regulations or requirements
of any governmental agency having jurisdiction thereof.
All necessary licences, consents, permits and
authorisations (public and private) have been obtained by
the Company to enable it to lawfully carry on its business
in the places and in the manner in which such business is
now carried on, and all such licences, consents, permits
and authorisations are valid and subsisting, and the
Vendors know of no reason why any of them should be
revoked, cancelled or suspended.
In particular, without limiting the generality of the
foregoing, the Company has complied with all statutory,
governmental or agency provisions in the field of work
place protection, health and safety protection as well as
in the field of environmental laws and regulations.
1.15 Company Name
The Company does not carry on business under any name
other than its company name, and it has the right to the
use such name in respect of its business.
1.16 Intellectual Property Rights
a. 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 and all licences to
the Company in respect of any such protection are
in full force and effect.
b. The Company has not (otherwise than in the ordinary
and normal course of business) or on terms of
confidentiality 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 or
lists of customers or supplieres.
c. The Company is not a party to any secrecy agreement
or agreement which restricts the use or disclosure
of information.
d. Nothing has been done or omitted by the Company
which would enable any licensee under a licence
granted by the Company to be terminated by any
other party to the licence or which in any way
constitutes a material breach of terms of any
licence.
e. 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 or validly licensed to it.
f. The Company is the sole beneficial owner of the
Industrial Property Rights listed in Annex 1.16 and
(where registration is possible) the Company has
been and is registered as proprietor, and each of
those Rights is valid and enforceable, and so far
as the Vendors are aware none of them is being
used, claimed, opposed or attached by any other
person.
g. 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 will cease to be valid and
enforceable.
1.17 Material Contracts and Commitments
1.17.1 Except as disclosed in Annex 1.17, the Company is
not a party or subject to any agreement, commitment
or arrangement, whether in writing or oral, which:
a. is a collective employment agreement or any other
agreement with a labour union or an agreement with
a works council;
b. is a bonus, profit-sharing, incentive, pension,
retirement, saving, severance pay, insurance (group
or single) or ally other benefit plan or
arrangement with or in favour of employees or
others;
c. is an employment contract or arrangement with a
member of the board of management, or with any
other employee;
d. is one under which the other party thereto is
expressly entitled under that contract to terminate
the same as a result of any change of control,
whether direct or indirect, of the Company;
e. cannot be terminated by the Company within twelve
months following the date of this Agreement without
incurring any obligation to pay damages or
compensation;
f. concerns the sale of any subsidiary or part of the
business of the Company and which has any express
or implied representations or warranties still
outstanding or any other ongoing obligations on the
part of the Company;
g. relates to the borrowing by the Company of money in
excess of NLG[ ] (including loan agreements,
bonds, credit facilities, mortgages and deeds of
trust);
h. relates to the lending by the Company of money in
excess of NLG [ ];
i. involves a guarantee or indebtedness or performance
by the Company in excess of NLG [ ] outside the
ordinary course of its business;
j. is a hire purchase-, rental- or lease agreement to
which the Company is a party or otherwise
committed, and which is outside the ordinary course
of business or implies payments in excess of NLG [
] each, annually;
k. is not a trading contract or a contract referred to
in item j above, but which entails to the Company a
monetary obligation in excess of NLG [ ] annually
or NLG [ ] totally,
or
1. constitutes a cartel or other anti-competitive
arrangement
1.17.2 The Company has performed all obligations required
to be performed by it and is not in default under
any contact, written or oral, of whatsoever nature.
1.17.3 The execution of the Agreement will not in any way
conflict with or result in the termination of or
accelerate the performance required by or under any
agreement to which the Company is a Party or for
the financial consequences whereof it is
responsible, or constitute a default thereunder or
result in the creation of any encumbrance upon any
of its assets.
1.18 Litigation
The Company is not engaged in any legal action, nor any
proceedings, investigations or material claims pending,
threatened or likely to be asserted against or affecting
the Company, which might involve any liability not fully
covered by insurance or provided for in the Accounts or
which might result in any material adverse change in the
business operations or in the conditions, financial or
other, of the Company, nor is there any basis for such
legal action, proceedings or investigations known to the
Vendors.
1.19 Insurance Policies
a. 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.
b. The Company is now, and has at all material times
been, adequately covered against accident, damage,
injury, third party loss (including service/product
liability), loss of profits and other risks
normally covered by insurance.
c. 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.
d. There is no claim outstanding under any such policy
nor are the Vendors/Guarantors aware of any
circumstances likely to give rise to a claim.
e. The Company has paid all sums falling due in
respect of premiums on all policies of insurance
maintained by the Company [and the Company will at
its expense from time to time:-
(i) renew all policies due for renewal between the
date hereof and the Completion Date for a
reasonable and normal period of renewal; and
(ii) 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,]
1.20 Employees
No employee of the Company has been granted notice period,
severance pay or other right in excess of their
entitlement under the law or any existing collective
labour agreement, nor has any such employee given or
received notice of termination to expire after the date of
the Agreement Except as disclosed in Annex 1.20a., the
Company has not made any promises vis-a-vis its personnel
in respect of salary or position improvements which have
as yet not been implemented. The list of employees,
attached to this Agreement as Annex 1.20.b. is complete
and all data regarding salaries, pensions, date of birth,
date of employment etc. are correct.
1.21 Pensions
Except as disclosed in Annex 1.21, the Company does not
have any obligation, whether legally or established by
custom, to pay any pension or other payment after
retirement to or in respect of any person who is or has
been its (managing or supervisory) director or employee.
1.22 Taxes and Contributions to Social Security and State
Pension Schemes
All returns relating to tax and contributions to social
security and state pension schemes which should have been
filed (including but not limited to those relating to VAT)
by or for the Company have been duly and correctly made
and filed, and all the taxes and social security and state
pension contributions have been paid when due.
Without prejudice to the provision in item 1.6 of this
Annex, at the date of the Agreement no additional
assessments have been imposed or claims for repayment made
by any governmental authority in respect of any tax or
levy, any grant or premium received, or any social
security or state pension contributions regarding the
period preceding the date of the Agreement, nor will any
such additional assessments he imposed except as provided
for in the Annual Accounts or as a normal consequence of
the ordinary course of business of the Company carried on
after the Balance Sheet Date.
Taxes and levies as used in this item l.22 include taxes
imposed both by Dutch and foreign tax authorities.
1.23 Environmental matters
[to be specified]
1.24 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.
1.25 Particulars of Subsidiaries
The particulars of the Subsidiaries set out in Annex 2
above are true and complete and the shares of the
Subsidiaries are held and owned as shown in Annex 2 free
from all encumbrances and with all rights now or hereafter
attaching thereto and the Company has no other subsidiary.
1.26 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.
1.27 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 investment 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.
1.28 Material Disclosure
All information contained or referred to in the Agreement
or the Exhibits or Annexes thereto is accurate in all
respects, and there is no fact, matter or circumstance
which renders any such information misleading. The
Vendors/Guarantors are not aware of any other information,
which may reasonably be regarded as material to an
accurate appraisal of the business, the assets,
liabilities and affairs of the Company and which has not
been disclosed to the Purchaser.
The representations and warranties by Vendors, contained
or referred to in the Agreement or the Exhibits or Annexes
thereto remain in full force and effect [in case it
appears that the Purchaser has failed in its obligation to
examine or investigate unless Vendors can substantiate
gross negligence on the Purchaser's part.]
1.29 Net Assets
The value of current assets less current liabilities as at
[the date hereof] is not less than their value as at the
Balance Sheet Date.
/s/Els van der Linden
Van der Linden Holding B.V.
/s/Louis Paul Steinberg
Steinberg Holding B.V.
/s/Els van der Linden
Toho Pharmaceutical Co. Ltd.
/s/Louis Paul Steinberg
Louis-Paul Steinberg (and spouse)
/s/Barry R. Philpott
PAREXEL International Corporation
/s/Els van der Linden
Mirai B.V.
EXHIBIT 4.6
DATED 1998
SALE AND PURCHASE AGREEMENT
- between -
DR. DIETER RUSSMAN
hereinafter referred to as the "Seller"
- and -
PAREXEL INTERNATIONAL CORPORATION
hereinafter referred to as the "Purchaser"
LAWRENCE GRAHAM
190 Strand
London WC2R 1JN
Tel: 0171-379 0000
Fax: 0171-379 6854
Ref: RWE/627009.01
CONTENTS
No. Heading Page
1. OWNERSHIP 1
2. SALE AND PURCHASE OF THE SHARES 1
3. PURCHASE PRICE 2
4. EFFECTIVE DATE 2
5. WARRANTIES OF SELLER 2
6. REMEDIES FOR BREACH OF WARRANTIES AND SELLERS' LIABILITY
8
7. REFERENCE TO ARBITER 10
8. COMPLIANCE WITH US LAW 11
9. NON-COMPETITION UNDERTAKING 13
10. TAXES, COSTS AND EURO 13
11. ASSIGNMENT OF RIGHTS AND UNDERTAKINGS 14
12. CONFIDENTIALITY 14
13. NOTICES 14
14. MISCELLANEOUS 15
SALE AND PURCHASE AGREEMENT
PREAMBLE
The Seller is the sole shareholder of the limited company LOGOS
GmbH, Kartauserstrabe 47, 79102 Freiburg, registered in the
Commercial Register of the Amtsgericht Freiburg under no. HRB
4285 ("the Company"). The Seller also holds 75 per cent of the
shares of the limited company Translation Gesellschaft fur
wissenschaftliche Ubersetzungen mbH, Bocklerstrabe 7, 79110
Freiburg, registered in the Commercial Register of the
Amtsgericht Freiburg unter no. HRB 4208 ("the Translation GmbH").
The Seller intends to sell his shares in the Company and his
shares in Translation GmbH to the Purchaser.
NOW, THEREFORE, the parties hereto agree as follows:
1. OWNERSHIP
1.1 Seller is the sole shareholder of the Company. The stated
and paid-in capital of the Company amounts to DM 60,000
(in words: sixty thousand Deutschmarks).
1.2 The shares in the Company are hereinafter collectively
referred to as the "Shares" and constitute all the shares issued
by the Company.
1.3 Seller is the sole owner of the 75 per cent of shares held
by him in the Translation GmbH. The other shareholder is Alan A.
Milson, who is the sole owner of the remaining 25 per cent of
shares in Translation GmbH. The stated and paid-in capital of the
Translation GmbH amounts to DM 100,000.00 (in words: one hundred
thousand Deutschmarks).
The shares owned by Seller in the Translation GmbH are
hereinafter collectively referred to as the "Translation
Shares".
2. SALE AND PURCHASE OF THE SHARES
2.1 The Seller hereby sells and with effect from Effective
Date within the meaning of Section 4 of this Agreement
assigns the Shares ("Geschaftsanteile") and the
Translation Shares ("Geschaftsanteile") as set out above
for the price described in Section 3 below ("the
Consideration"). Purchaser hereby accepts such sale and
assignment.
2.2 The sale and purchase includes any and all rights and
secondary rights attached to the Shares, including the
right to participate in all undistributed profits and
losses of the Company for whatever period. Seller shall
not be entitled to participate in any profits of the
Company for whatever period.
3. PURCHASE PRICE
The Consideration shall be satisfied by
- the allotment and issue (subject to sub-Section 3.2
below) to the Seller of 92,598 Common Stock of US$
0.01 each of the Purchaser (ranking pari passu with
the Common Stock of the Purchaser in issue at the
date hereof and credited as fully paid ("the
Consideration Shares");
- the granting of a continuing option (the "Call
Option") to demand the issue of 33,440 Common Stock
of US$ 0.01 of the Purchaser in issue at the date
hereof and credited as fully paid ("the Call Option
Shares").
4. EFFECTIVE DATE
This Agreement and all transactions contemplated and made
hereunder shall enter into force on and become effective
as per 28 February 1998, 24.00 hrs., hereinafter sometimes
referred to as the "Effective Date".
5. WARRANTIES OF SELLER
Seller hereby warrants and represents to Purchaser as per
Effective Date and again as at the date hereof, the
following:
5.1 Corporate Structure
5.1.1 The Company and the Translation GmbH have each been
properly established, is duly organised and validly
existing under the laws of its jurisdiction. All
information and data regarding ownership, corporate
rights and privileges of the Seller as referred to
in Section 1 and the Preamble above are true,
complete and correct. The articles of
association/by-laws (Satzungen/
Gesellschaftsvertrage) of the Company are current
and complete in the versions as disclosed in the
Documentary Folder.
5.1.2 No party other than Seller holds an interest in the
Company. The Company has not issued participation
rights or sub-participation rights, nor entered
into a silent partnership agreement, or any other
agreement under which the Company had to share its
current profits with a third party. The Company is
not a party to an enterprise agreement within the
meaning of sections 291, 292 German Stock
Corporation Act (Aktiengesetz) or to a joint
venture agreement.
5.1.3 Seller is the owner of the Shares and the
Translation Shares. Seller holds full and
unencumbered title to the Shares and the
Translation Shares. The Shares and the Translation
Shares are validly existing, free and clear of any
claim, lien, rights and privileges of third
parties. Seller may freely dispose of the Shares
and the Translation Shares subject only to the laws
and regulations applicable to the Company. There
are no pre-emptive rights, options, shareholders'
agreements or understandings with respect to the
Shares and the Translation Shares including,
without limitation, individual shareholder rights.
5.1.4 The execution, delivery and performance of this
Agreement including the transactions contemplated
hereunder, do not violate any other undertakings or
obligations of the Seller. Seller has full
authority to enter into this Agreement and to
perform its obligations hereunder.
5.1.5 The nominal capital of the Company and the
Translation GmbH has been fully paid up; there has
not, at any time, occured a re-payment in part or
in whole of the capital, nor has the capital of
either company been diminished by losses.
5.1.6 All assets belonging or being attributable to the
business of the Company, which are necessary for
the continuation of the Company's business as
operated at the Effective Date or are shown as the
Company's assets ("Sachanlagevermogen") in its
financial accounts as per 31 December 1997 are the
sole property of the Company or are leased by it,
and are not subject to any rights, lien and
interest or third parties, except for statutory
liens or retention of title-clauses in the ordinary
course of business. The Company does not hold any
interest in subsidiaries or any other companies.
5.1.7 Neither the Company nor the Translation GmbH is
bankrupt, overindebted, insolvent or in liquidation
as of Effective Date. To the best knowledge of
Seller, no motions for composition or bankruptcy
proceedings for the Company or the Translation GmbH
have been filed.
5.1.8 Except as disclosed in the Documentary Folder, the
Company has not incurred any contractual liability
exceeding the amount of DM50,000 or has posted any
contractual collateral for loans in the amount of
more than DM100,000 which is still effective.
5.1.9 Except as disclosed in the financial statements of
the Company as per 31 December 1997 a copy of which
is disclosed in the Documentary Folder, the Company
has not given any guarantee, letter of comfort or
similar undertaking exceeding the amount of
DM10,000 and surviving the Effective Date to secure
liabilities of third persons.
5.1.10 There exist no advisory boards nor any other boards
under the Articles of Association in the Company
and no workers' councils (Betriebsrat).
5.1.11 The Company has not made any distribution of
profits or similar payment to the Seller or any
other person on his behalf since .
5.1.12 The financial statement of the Company per 31
December 1997, has been prepared in accordance with
the statutory (German Commercial Code) provisions
in application of the German generally accepted
accounting principles including the principle of
continuity and present a true and fair view of the
economic, financial and income situation of the
company per 31 December 1997. There exist no
liabilities (liabilities incurred ("bestehende
Verbindlichkeiten"), possible liabilities
("Eventualverbindlichkeiten") or contested
liabilities ("bestrittene Verbindlichkeiten")) of
the Company per 31 December 1997 which are not
shown in the financial statement of the Company per
31 December 1997. There have not been any
significant changes as to any position in these
financial statement in the period between 31
December 1997 and the Effective Date.
5.2 Taxes and social security contribution
5.2.1 The Company has correctly, completely and timely
fulfilled all tax returns required by law to be
made and has adequately provided for and has paid
when due all taxes, duties, social security
contributions and related penalties, fines and
interests;
5.2.2 The Company is not involved in any lawsuit with
fiscal or other authorities which could affect the
tax or social security liabilities of the Company.
To the best of Sellers' knowledge, there exists no
reason to assume that any such lawsuit is
threatening.
5.2.3 The Seller has accounted for and paid in full all
taxes arising out of any relationship he has with
the Company, whether as employee, consultant or
otherwise and the Company has no liability in
respect of any tax other than tax ordinarily
payable by the Company arising in the ordinary
course of its business.
5.3 Operation of the Company
5.3.1 All public or private permits and licences required
for the conduct of the business of the Company have
been obtained and are in full force and effect
subject only to the statutory right of any
authority to revoke or restrict any such permits or
licences. The Company has always complied with all
conditions and restrictions imposed in connection
with such permits and licences. To the best
knowledge of Seller, there are no indications for
any such revocation or restrictions following
Effective Date.
5.3.2 To the best knowledge of Seller, the Company
operates its business in accordance with all
applicable statutory rules and in compliance with
governmental law.
5.3.3 To the best knowledge of Seller, the Company's
products and services conform to statutory law
applicable in the country in which they are
actively marketed. During the last three years
prior to Effective Date, there have not been any
liability claims with regard to any products and/or
services provided by the Company.
5.3.4 To the best knowledge of Seller, there exist no
claims of third parties and/or public authorities
arising out of or in connection with any
contamination of soil, water and/or air on the
business premises used by the Company; the Company
is not involved in any legal dispute or
administrative or court proceedings, nor are any
law suits of private or public parties against the
Company pending or threatening, regarding any
contamination of soil, water and/or air on the
business premises used by the Company. To the best
knowledge of Seller, neither the premises used by
the Company nor any of its assets constitutes a
health hazard to employees of the Company or third
parties.
5.4 Contracts and Commitments
5.4.1 The Company is not a party to any material contract or
commitment outside the usual and ordinary course of its
business including unusually onerous terms and conditions
or substantially impairing the earnings potential of the
Company.
5.4.2 There exist no agreements between the Company on
the one hand and the Seller or a former shareholder
of the Company or relatives of the Seller within
the meaning of 15 "Abgabenordnung" or companies
in which the Seller or his relatives hold an
interest on the other hand, except for the rental
agreement as set out in Sect. 14.2 and the
employment contract with the Seller. The parties to
this Agreement agree that all contracts between the
Company and the Seller or their relatives shall be
deemed terminated on the Effective Date at no cost
for the Company, except for the rental agreement as
set out in Section 14.2 and the employment
agreement with the Seller. Such employment contract
shall be deemed terminated upon signing of the new
employment contract between the Company and the
Seller pursuant to the draft agreement as shown in
Schedule 1. The Seller renounces all rights and
titles from such terminated contracts, including
the existing employment contract, except for such
rights and titles accounted for in the financial
statements as per 31 December 1997 and except for
such rights and titles incurred up to the Effective
Date that have been fully fulfilled by the
Effective Date. The Company has not entered into
any guarantee or security agreements of any kind in
favour of Seller, his relatives or companies in
which the Seller or his relatives hold an interest
which will survive the Effective Date.
5.4.3 The Company has not entered into any agreements
with aggregate payment obligations exceeding 5 per
cent of its respective net equity and being of
speculative nature.
5.4.4 There exist no agreements not disclosed in the
Documentary Folder that the Company depends on to
such an extent that the continuation of the
business would become impossible in case such
agreement would be terminated;
5.4.5 The Company is not subject to any agreements with
third parties restricting it in competition, in
particular agreements which exclude or restrict the
right of the Company to engage in certain branches
or fields of its business either geographically or
in a particular field of business.
5.4.6 The transfer of the Shares under this Agreement
does not lead to a right of contracting partners of
any of the Company to prematurely terminate or
modify their agreements or to impose any penalty or
additional cost on the Company.
5.5 Insurance
The Company has obtained the usual insurance coverage
adequate and sufficient to cover the Company's assets and
the liabilities that may arise from the conduct of the
Company's business to its present extent. All insurance
policies listed in the Documentary Folder hereto are fully
effective. Insurance premiums have always been paid when
due. The existence of any material and substantial
insurance agreements is not affected by virtue of the
transactions envisaged by this Agreement.
5.6 Labour Matters
5.6.1 The Documentary Folder contains a list stating
correctly and completely the name, years of
employment, and current remuneration of all of the
Company's employees. The Vendor is the only
managing director of the Company, and no
unfulfilled obligations to former managing
directors exist.
5.6.2 The Documentary Folder contains a complete list of
the shop council agreements
(Betriebsvereinbarungen) and of any regular benefit
which has become binding on the Company
(betriebliche Ubung), provided that such regular
benefit leads to an average payment obligation
exceeding DM 1,000 per employee per year. The
Company is not a member of an employers'
association and is thus not bound by any collective
pay agreement or other collective agreements.
5.6.3 The Company has regularly paid all salaries and
benefits due to employees in time.
5.6.4 To the best knowledge of Seller, there exists no other
permanent payment obligation of the Company vis a vis current or
former employees of the Company. In particular, the Company has
not granted any pension rights to current or former employees,
except where disclosed in the Documentary Folder.
5.6.5 None of the employment agreements as set out in Section
5.6.1 has been terminated by either the Company or the employee,
nor exist any facts or circumstances indicating that any of the
employees intends to leave the company; in particular, none of
the employees as set out in Section 5.6.1 have expressed their
unwillingness to continue employment after the change of
ownership in the Company or demanded amendments or supplements to
the existing terms of their employment.
5.7 Intellectual Property Rights
5.7.1 According to the best knowledge of the Seller the
patents, design patents, trademarks and other
industrial property rights registered by the
Company (if any) do not violate the rights of any
third persons.
5.7.2 To the best knowledge of Seller:
- the Company owns no registered intellectual
property rights (ie. patents, trademarks,
service marks, copyrights) except as disclosed
in the Documentary Folder;
- no right for third parties to intellectual
property rights of the Company or their use
exists;
- the Company has unrestricted ownership of all
intellectual property rights, or is a party to
a legally binding licence agreement allowing
the use of the intellectual property rights,
required to conduct their business operations
in their present form;
5.7.3 All payments of fees and other measures needed to
maintain the registered intellectual property
rights have been made and undertaken fully in a
timely fashion until Effective Date.
5.7.4 As of the date of signing of this Agreement, the
Company has not been charged or threatened to be
charged with infringement of, or been asked or has
agreed to defend or hold harmless with respect to
any infringement or charge thereof, any patent,
trademark, service mark, copyright or other
intellectual property rights.
5.8 Legal Disputes
The Company is not involved in any legal dispute or
administrative or court proceedings, nor are any law suits
of private or public parties against the Company pending
or threatening, involving a sum in dispute of more than
DM 10,000 in each case. The aggregate sum in dispute of
any such on-going, pending or threatening disputes or
proceedings for the Company does not exceed a total of
DM 50,000.
5.9 Conduct of Business until Effective Date
From 1 January 1997 until Effective Date:
(a) There has been no material adverse change in the
aggregate of customer and/or supplier relations of
the Company and its customers and/or suppliers as
compared with the position disclosed in the
financial accounts.
(b) The Company has not become bound or liable to be
called upon to repay prematurely any loan capital
or borrowed money.
5.10. Library
The company is the sole owner and holder of all copyrights
with regard to the Library as defined below.
The Library consists of more than 900 Expert Reports,
predominately in accordance with the current standard for
drug registration, Standardised Information, and all other
documentation created by the Company and/or its
predecessors in title. The Expert Reports, documenting
known active ingredients for pharmaceuticals, comprise
reports on at least 160 active ingredients dating from
1990 or later and at least 190 reports on active
ingredients dating from the period before 1990; all of the
Expert Reports from 1990 or later are in accordance with
the current standard for drug registration; the
Standardised Information includes package inserts, patient
information leaflets, product monographs for medical
doctors, standard information for hospital pharmacists,
summaries of product characteristics ("SPC") and annotated
SPCs; the standardised information comprises at least 45
SPCs.
All of the Library is accessible through a structured
filing system as hardcopy and as an in-house data bank of
the company according to active ingredients and other
descriptors and in proper and marketable condition.
The Library has in the past and up to the Effective Date
been protected against duplication and theft and no such
thefts and, to the best knowledge of the Seller,
duplication has occurred; the Library is unique and forms
the reliable basis for the market leadership of the
Company.
The Purchaser is aware of the fact that the Company also
is in pocession of at least 800
bioavailability/bioequivalence studies; however, these are
owned by the company's clients and do not form part of the
Library.
5.11 Disclosures and Documentary Folder
The documents and information provided by the Seller to
the Purchaser, and in particular the contents of the
Documentary Folder, are correct, complete and as per the
Effective Date current; there exist no circumstances or
aspects that were not mentioned to the Purchaser which
would be of significance in the evaluation of the Shares
and/or for the future development of the Company's
business.
6. REMEDIES FOR BREACH OF WARRANTIES AND SELLERS' LIABILITY
6.1 If any of the warranties and representations stated in
section 5 above and section 8 below should not be true and
correct, Sellers shall put Purchaser or, at Purchaser's
option, the Company in the position, Purchaser or the
Company would have been in had the warranties and
representations been true and correct.
6.2 Purchaser shall have no warranty claim under this
Agreement if the aggregate of all warranty claims arising
out of and in connection with this Agreement does not
exceed DM 10,000. In the event the aggregate of all
warranty claims is in excess of DM 10,000, Purchaser may
claim all of its actual damages pursuant the terms and
conditions of this Agreement.
6.3 No warranty claim arises in case the loss Purchaser has
suffered has already been recovered under the same or any other
provision of this Agreement, or if and to the extent that the
loss, costs or expenses suffered by Purchaser are paid under
insurance coverage.
6.4 If and in so far as warranties under Section 5.2 (Taxes
and Social Security Contribution) are incorrect, the
Seller is under an obligation to the Purchaser to re-pay
all additional business tax (in particular turnover tax,
salary tax, trade tax, trade capital tax, corporate tax,
vehicle tax, real estate transfer tax, real estate tax,
property tax as well as solidarity surcharges) and/or
social contributions. This applies, in particular, to
additional tax payments resulting from a tax audit or a
social security inspection. In the assessment of the
additional tax burden for the Company and/or the Purchaser
any direct or indirect future advantages or disadvantages
in a period of five years from the Effective Date
("Phasenverschiebung") shall be taken into account. Any
additional tax burdens that do not lead to an increase of
taxes due to a loss carried forward ("Verlustvortrag"), if
any, shall be re-paid by the Seller to the Purchaser to
the extent Purchaser has an disadvantage, i.e. a
subsequent higher tax payment than he would have had, had
the loss carried forward not been used up.
In any event, the Seller shall bear all additional tax
payments (or, in case where a loss carried forward is
diminished, the tax payment that would otherwise have been
made) for any periods up to and including the Effective
Date. This includes additional tax assessments based on
hidden profit distribution and/or any tax assessments in
connection with the capital increase entered in the
Commercial Register on 17 January 1994 with the
possibility that the transfer date (for tax purposes) may
not be more than 6 months before the transfer of the
economic ownership.
6.5 Claims for any breach of warranties under Section 5 hereof
shall become statute barred two years following Effective
Date, except with respect to warranty claims under Section
6.4, which shall become statute barred six months as from
the date upon which an additional assessment or amended
assessment by the tax or social contribution authorities
becomes res judicata, but not later than the authorities'
claims have become time barred under the applicable
statute, unless such barrment is impeded by the Purchaser.
6.6 Seller shall be given the right and opportunity to defend,
at his own risk, discretion and expense, any action
brought against the Company and/or Purchaser which might
result in any liability of Seller towards Purchaser and/or
the Company in connection with this Agreement, including
the transactions contemplated hereunder. Seller shall, at
his request, be included in the clarification of all tax
and social security questions regarding the time prior to
Effective Date, including all tax or social security
inspection. Upon request of the Seller and at his costs,
the Company will file any appeal against possible
additional tax or social security assessments that may
give raise to claims under this Agreement, unless the
Seller himself is legally entitled to file such appeal.
6.7 The Seller guarantees that the shares sold and transferred
pursuant to Section 1 do not constitute all or
substantially all of his assets ( 419 German Civil Code).
The Seller undertakes to indemnify and hold harmless the
Purchaser from any claims raised by third parties in
application of 419 German Civil Code.
7. REFERENCE TO ARBITER
The Seller and the Purchaser agree that all disputes out
of or in connection with this Agreement, including such
about its validity, will not be decided by an ordinary
court but through an arbitrational tribunal pursuant to
the separate Arbitration Agreement signed concurrently
herewith. The decision of the arbitration tribunal is
binding and final for all parties. The language of the
proceedings is English. As far as Sections 1 et seq. of
the Act on Restraints of Competition (Gesetz gegen
Wettbewerbsbechrankungen) shall apply pursuant to section
91 of the Act on Restraints of Competition to individual
provisions of this Agreement, the parties hereto are
entitled to demand decision of the ordinary courts on such
disputes instead of decision by arbitration.
8. COMPLIANCE WITH US LAW
8.1 For the purposes of this Section, the following
definitions apply:
"Accredited Investor" a bank (as defined in Section
3(a)(2) of the Securities Act of
1933, as amended (the 'Act')) or a
savings and loan association or
other institution (as defined in
Section 3(a)(5)(A) of the Act),
whether acting in regard to this
investment in its individual or a
fiduciary capacity;
a broker or dealer registered
pursuant to Section 15 of the
United States Securities Exchange
Act of 1934, as amended;
an insurance company (as defined in
Section 2(13) of the Act);
an investment company registered
under the United States Investment
Company Act of 1940, as amended;
a business development company (as
defined in Section 2(a)(48) of the
Investment Company Act of 1940, as
amended;
a Small Business Development
Company licensed by the United
States Small Business
Administration under Section
301(c) or (d) of the United States
Small Business Investment Act of
1958, as amended;
a plan established and maintained
by a United States state, its
political subdivision, or any
agency or instrumentality of a
United States state or its
political subdivisions, for the
benefit of its employees, if the
plan has total assets in excess of
$ 5,000,000;
an employee benefit plan (an "ERISA
Plan") within the meaning of Title
1 of the United States Employee
Retirement Income Security Act of
1974, as amended ("ERISA") whose
decision to purchase the interest
in the Purchaser was made by a plan
fiduciary (as defined in Section
3(21) of ERISA), which is either a
bank, savings and loan association,
insurance company or registered
investment adviser;
an ERISA Plan with total assets in
excess of $ 5,000,000 or, if a self-
directed ERISA Plan, with
investment decisions made solely by
persons that are "accredited
investors";
a private business development
company (as defined in Section
202(a)(22) of the United States
Investment Advisors Act of 1940, as
amended);
an organisation described in
Section 501(c)(3) of the United
States Internal Revenue Code of
1986, as amended, corporation,
Massachusetts or similar business
trust, or partnership, not formed
for the specific purpose of holding
the Shares of the Company or
acquiring the Consideration Shares,
with total assets in excess of
$ 5,000,000;
a natural person whose net worth
(either individually or jointly
with such person's spouse) at the
time of Completion exceeds
$1,000,000;
a natural person who had an
individual income in excess of
$200,000 or joint income with such
person's spouse in excess of
$300,000 in each of the last two
calendar years and who reasonably
expects to reach the same income
level in the current calendar year;
a trust, with total assets in
excess of $ 5,000,000, not formed
for the specific purpose of holding
the Shares of the Company or
acquiring the Consideration Shares,
whose purchase of the Consideration
Shares is directed by a
sophisticated person as described
in Rule 506(b)(2)(ii) under the
Act;
an entity in which all of the
equity owners fit into at least one
of the categories listed above;
8.2 The Seller:
warrants and represents to the Purchaser that the Seller:-
8.2.1 is acquiring the Consideration Shares for his own
account and not on behalf of any other person, and
the Seller 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;
8.2.2 is not an officer or director of any affiliate of
the Purchaser or any of its affiliates;
8.2.3 was not organised for the specific purpose of
holding or acquiring the Consideration Shares (if
the Seller is a corporation, trust, partnership or
other organisation).
8.2.4 is an Accredited Investor or had, immediately prior
to receipt of any information regarding the
Purchaser, such knowledge and experience (alone or
with such Seller's Seller Representative, if any)
in financial and business matters as to be able to
evaluate the merits and risks of an investment in
the Purchaser.
8.2.5 is able now, and was able prior to receipt of any
information regarding the Purchaser, to bear the
economic risks of an investment in the Company and
the Purchaser.
8.3 acknowledges and agrees that the Consideration Shares have
not been registered under United States Securities Act of
1933, as amended ("the Act"), and may not be offered or
sold unless the Consideration Shares are registered under
the Act or an exemption from the registration requirements
of the Act is available;
8.4 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 Seller set forth herein in order
to determine the applicability of such exemptions and the
suitability of Seller to acquire the Consideration
Shares;
8.5 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;
8.6 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 Seller is part of a plan or scheme to evade the
registration provisions of the Act and the Seller confirms
that this transaction is not part of any such plan or
scheme;
8.7 has received and carefully reviewed (and the Seller's
Seller Representative, if any, as received and carefully
reviewed) the PPS Transaction Summary, Prospectus dated
27 January 1998, Annual Report on Form 10-K for the fiscal
year ended 30 June 1997, Quarterly Report on Form 10-Q
for the quarter ended 30 September 1997 and 31 December
1997, Current Reports on Form 8-K dated 23 October 1997
and 27 January 1998, 1997 Annual Report to Stockholders;
and Proxy Statement dated 8 October 1997 and the Seller
and Seller's Seller Representative, if any have had a
reasonable opportunity to ask questions of and receive
answers from the Purchaser concerning the Purchaser, and
to obtain any additional information reasonably necessary
to verify the accuracy of the information furnished to the
Seller concerning the Purchaser and all such questions, if
any, have been answered to the full satisfaction of the
Seller.
8.8 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 Seller is not relying upon any
information, other than that contained in this Agreement
or specifically referred to in Clause 8.6, and the results
of independent investigations by the Seller;
8.9 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;
8.10 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
Seller hereby agrees with the Purchaser that the Seller
will not sell, exchange, transfer, pledge, dispose or
otherwise reduce his risk in relation 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-
Completion 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;
8.11 acknowledges and agrees that all offers and sales of the
Consideration Shares shall only be made in compliance with
(i) the Pooling Lock-up Period and (ii) the Purchaser's
insider trading and black out period policies, as from
time to time in effect and (iii) pursuant to an effective
registration statement under the Act or pursuant to an
exemption from registration under the Act.
9. NON-COMPETITION UNDERTAKING
Seller agrees that he will not, during a period of five
years as from Effective Date, engage either directly or
indirectly in the ownership, control, management or
operation of any company or business having the same or
similar business to that of the Company, or act as an
advisor or in any other function to any company or
business having the same or similar business to that of
the Company. This shall not apply for a participation in
such company or business of not more than 10% for
investment purposes only. It is known to the Purchaser
that the Seller is the head of the scientific advisory
board of ratiopharm GmbH, Ulm, and a member of the
supervisory board of Asche AG, Hamburg.
10. TAXES, COSTS AND EURO
10.1 Each party shall bear its costs and expenses in connection
with the preparation, execution and implementation of this
Agreement, including any and all professional fees of
their advisers. The parties need not to pay any fees to
brokers or any other intermediaries involved by the
respective other party.
10.2 Taxes on income, profits and capital gains including trade
taxes arising for and assessed against Seller out of or in
connection with this Agreement, including the transactions
contemplated under this Agreement, shall be borne by
Seller.
10.3 The notarial fees for this Agreement shall be borne in
equal shares by Seller and Purchaser.
10.4 Every liability under this contract not fulfilled at the
start day of European Monetary Union will be fulfilled in
EURO.
11. ASSIGNMENT OF RIGHTS AND UNDERTAKINGS
11.1 This agreement and any rights and obligations hereunder
may not be assigned and transferred in whole or in part
without prior written consent of the other party hereto.
11.2 Purchaser is entitled to assign and transfer all rights
and obligations under this Agreement to an affiliated
company ( 15 AktG) of the Purchaser.
12. CONFIDENTIALITY
12.1 Seller and Purchaser agree to keep confidential and secret
the contents of this Agreement from third parties, except
as they are obliged to disclose and to give notice of the
same to any court or administrative authorities or
pursuant to other mandatory notice requirements. They
will use their best efforts even in such cases to ensure
that, notwithstanding any disclosure and notice to courts
and administrative authorities, confidentiality is
maintained to the maximum possible extent.
12.2 Prior to the execution of this Agreement, Seller and
Purchaser have mutually agreed upon the language of an
official press release and additional information to be
released to the transactions contemplated by this
Agreement which is to be published after the execution of
this Agreement.
13. NOTICES
13.1 Notices in connection with this Agreement shall be
addressed to the following addresses:
If to Seller:
Herrn Dr. Theo Schubert
Humboldtstrabe 2
79098 Freiburg
Phone: 0761/2962060
Fax : 0761/2962066
If to Purchaser:
Karyn C. Finamore, Esq.
PAREXEL International Corporation
195 West Street
Waltham, Massachusetts 02154
Phone: +(781)487 9904
Fax : +(781)487 9931
13.2 The aforesaid addresses shall remain valid and in force
unless and until the other party has been notified in
writing by registered mail of any other address.
13.3 All notices in connection with this Agreement must be in
writing and shall become effective upon receipt.
14. MISCELLANEOUS
14.1 This Agreement is subject to the laws of the Federal
Republic of Germany.
14.2 The Seller undertakes to cause the present landlord of the
Company, the BHG Kartauserstrabe Wilma Russmann u.a., to
amend the rental agreement of 1 April 1993 as amended on
1 December 1995, 16 August 1996, 16 September 1996 and
6 March 1997 to provide for a net rent payment of DM 23,50
per sqm per month. The Seller further undertakes to cause
the landlord to agree to any further amendments of the
rental agreement as set out above with regard to unusual,
onerous or otherwise detrimental compared to what is
adequate and consistent with the present market
conditions.
14.3 Seller shall, upon request of Purchaser, use best efforts,
as far as legally possible, to cause the auditors of the Company
to step down from their position.
14.4 Purchaser undertakes to use its best efforts to cause
Volksbank Freiburg and Dresdner Bank Freiburg to terminate all
obligations of Seller resulting from his personal bank guarantees
("Burgschaften") in connection with lines of credit to the
Company in the amounts of DM 200,000.00 and DM 300,000.00,
respectively; in any case, Purchaser agrees to put Seller as far
as possible into the same position he would be in had the bank
guarantees been terminated by the Effective Date.
14.5 The Seller represents that he is either not married or
that the consent of his spouse pursuant to 1365 German Civil
Code has been granted in writing, such documents being included
in the Documentary Folder.
14.6 The Seller explicitly consents to the conclusion of this
Agreement and its execution both in his position as shareholder
and in his position as managing director of the Company acting in
its name; the Seller undertakes to cooperate in any way as is
necessary for the execution and fulfilment of this Agreement and
to procure any other consent as required by Articles of
Association or the law of either the Company or the Translation
GmbH; the Seller explicitly consents to the conclusion of this
Agreement and its execution in his position as shareholder.
14.7 All amendments to this Agreement, including without
limitation a change of this clause itself, must be made in
writing and with the express reference to this Agreement,
unless notarisation or any other form is required.
14.8 If any of the provisions of this Agreement shall become or
be held invalid, ineffective or unenforceable, all other
provisions hereof shall remain in full force and ef-
fect. The invalid, ineffective or unenforceable provision shall
be amended and replaced by the parties hereto to such
form, substance, time, measure and jurisdiction as shall
be valid, effective and enforceable and comes as close as
possible to the purpose and intent of the invalid,
ineffective or unenforceable provision. The aforesaid
shall apply mutatis mutandis for any situation not
contemplated and covered by this Agreement.
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
Dr. Dieter Russman
Dr. Dieter Russman
EXHIBIT 4.8
REGISTRATION RIGHTS AGREEMENT
AGREEMENT dated as of February 27, 1998 among PAREXEL
International Corporation, a Massachusetts corporation (the
"Company") and Sharp Cookie Limited (the "Stockholder").
W I T N E S S E T H :
WHEREAS, pursuant to the Share Acquisition Agreement dated
as of __________ (the "Acquisition Agreement") among the Company
and the Shareholder, the Company will acquire all outstanding
capital stock of Creative Communications Solutions Limited
("CCS") owned by the Stockholder and CCS will become a wholly-
owned subsidiary of the Company;
WHEREAS, in connection therewith, the Stockholder will
receive shares of Common Stock of the Company (the "Shares") that
are being issued pursuant to an exemption from registration under
the Securities Act; and
WHEREAS, the Company and the Stockholder wish to set forth
certain rights and obligations with regard to the registration of
the Shares pursuant to the Securities Act;
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 United States 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 United States Securities
Exchange Act of 1934, as amended, or any successor 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 9.
"Securities Act" shall mean the United States
Securities Act of 1933, as amended, or any successor 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 8.
2. 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 the Acquisition Agreement and in the
Stockholder's New Owner Questionnaire. The Stockholder further
recognizes and acknowledges that, because the issuance of the
Shares was not registered under federal and state laws, the
Shares 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 (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, 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,
which may not 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.
3. Restrictive Legend. Each certificate representing
Shares shall, except as otherwise provided in this Section 3 or
in Section 4, 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 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 (Breslow & Walker,
LLP shall be considered satisfactory) the securities represented
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.
4. Notice of Proposed Transfer. Prior to any proposed
transfer of any Shares before the expiration of the applicable
holding period set forth in Rule 144, each Stockholder shall give
written notice to the Company of his intention to effect such
transfer. Prior to any registration statement described in
Section 5 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 3, 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) such
transfer is pursuant to a registration under the Securities Act,
or (iii) 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.
5. Required Registration. The Company agrees to use all
reasonable efforts to (i) cause a registration statement on Form
S-3 (the "Initial Registration Statement") or any successor form
thereto under the Securities Act relating to the resale of forty
percent (40%) of the Shares to be filed no later than the 90th
day following Completion (as defined in the Acquisition
Agreement); (ii) cause a registration statement on Form S-3 or
any successor form thereto under the Securities Act (or an
amendment to the Initial Registration Statement) relating to the
resale of thirty percent (30%) of the Shares to be filed not
later than eleven months after Completion (the "Second
Registration Statement"); (iii) cause a registration statement on
Form S-3 or any successor form thereto under the Securities Act
(or an amendment to the Initial Registration Statement or the
Second Registration Statement) relating to the resale of the
remaining thirty percent (30%) of the Shares to be filed not
later than twenty-three months after Completion (the "Third
Registration Statement"); (iv) cause the Initial Registration
Statement to become effective as soon as practicable after the
filing thereof and thereafter remain effective until the earlier
of (A) one year after Completion or (B) the sale of all Shares
covered thereby; (v) cause the Second Registration Statement to
become effective as soon as practicable after the filing thereof
and thereafter remain effective until the earlier of (A) two
years after Completion or (B) the sale of all Shares covered
thereby; and (vi) cause the Third Registration Statement to
become effective as soon as practicable after the filing thereof
and thereafter remain effective until the earlier of (A) three
years after Completion or (B) the sale of all Shares covered
thereby. In the event that any Shares registered pursuant to the
Initial Registration Statement or the Second Registration
Statement, respectively, remain unsold at the time the Second
Registration Statement or the Third Registration Statement,
respectively, is filed, then the Company agrees to use all
reasonable efforts to, at its sole option, (i) include such
unsold shares in the Second Registration Statement or the Third
Registration Statement, as applicable, or (ii) cause the Initial
Registration Statement or the Second Registration Statement, as
applicable, to remain effective until the earlier of (A) two
years (for the Initial Registration Statement) or three years
(for the Second Registration Statement), as applicable, after
Completion 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-Completion
combined operating results of the Company and CCS (the "Pooling
Restricted Period"), and the Company may suspend sales in
accordance with Section 7 at any time under any registration
statement immediately upon written notice to the Stockholder at
their last known address, for any of the reasons and for the time
periods set forth in Section 7.
6. Registration Procedures. If and whenever the Company
is required by the provisions of Section 5 to use all 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 they 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 or its common stock is currently
registered or qualified for resale and provide the Stockholder
with a list of such jurisdictions, 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 quoted or traded on the Nasdaq National
Market or any other quotation system or exchange where the
Company's Common Stock is then quoted or traded; 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 institution and ending of any
suspension under Section 7.
7. 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 Board of Directors of the Company has
voted to conduct a public offering or the Company is holding
or has held an "organizational" or "all hands" meeting
relating to a public offering, whichever first occurs;
(ii) the Company is about to make a public
disclosure of information of a material nature;
(iii) there then exists material, non-public
information relating to the Company the disclosure of which,
in the good faith determination of its Board of Directors,
would not be in the interests of the Company or its
stockholders during that time and which the Company is not
otherwise, after consultation with counsel, obligated to
disclose; or
(iv) the Company is engaged in any activity or
transaction at any time that, in the good faith
determination of its Board of Directors, would be materially
adversely affected by the continued compliance with this
Agreement or the continued distribution of the Shares by the
Stockholder.
(b) The Company shall use all reasonable efforts to
minimize the length of any suspension:
(i) under Section 7(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 all reasonable
efforts to file the appropriate documentation in respect of,
and otherwise complete, such public offering as
expeditiously as practicable;
(ii) under Section 7(a)(ii), to a period of three
(3) business days, more or less;
(iii) under Section 7(a)(iii) or 7(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, or (C) the disclosure of the acquisition,
unless, despite such disclosure, the continued distribution
of the Shares by the Stockholder pursuant to the applicable
registration statement would violate the Securities Act; and
(iv) under Section 7(a)(iii) or 7(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.
(c) The period during which any registration statement
filed pursuant to Section 5 remains effective shall be extended
by any period during which resales of Shares pursuant to such
registration statement are suspended pursuant to this Section 7.
8. Expenses. All expenses incurred by the Company in
complying with Section 5, 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 or
abandoned for any reason at the request of the Stockholder. The
Company shall not be obligated to pay any reasonably verifiable
increase in Registration Expenses in connection with the
preparation and filing of any registration statement if such
registration statement is delayed for any reason at the request
of the Stockholder.
9. Indemnification and Contribution.
(a) In connection with the registration of the Shares
under the Securities Act pursuant to Section 5, the Company will
indemnify and hold harmless the Stockholder, each underwriter of
such Shares thereunder and each other person, if any, who
controls such Stockholder or 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 5, 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, as
such expenses are incurred, provided, however, that the Company
will not be liable in any such case if and 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 written information
furnished by or for the Stockholder, any such underwriter or any
such controlling person specifically for use in the applicable
registration statement.
(b) In connection with the registration of the Shares
under the Securities Act pursuant to Section 5, 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 12
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 (iii) 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, as such expenses are incurred, 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 in conformity with written
information pertaining to the Stockholder, furnished by or for
the Stockholder specifically for use in the applicable
registration statement.
(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 9 and shall only relieve it from any liability
which it may have to such indemnified party under this Section 9
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 9 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 one 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. No indemnifying party will consent to entry of
judgment or enter into any settlement which does not include as
an unconditional term thereof the giving by the claimant or
plaintiff to such indemnified party of a release from all
liability with respect to such claim or litigation.
(d) In order to provide for just and equitable
contribution to joint liability in any case in which either (i) a
Stockholder exercises rights under this Agreement and makes a
claim for indemnification pursuant to this Section 9 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 9 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 9; 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 9 shall
survive the transfer of any Shares by the Stockholder.
10. 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.
11. 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.
12. 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 material
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 4 hereof), (ii) the Affiliate
Agreement (as defined in the Acquisition Agreement) (if the
Stockholder is a party thereto) and (iii) Section 13;
(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 Securities Act;
(f) The Stockholder agrees to notify the Company of
any and all planned sales and completed sales of Shares in
accordance with the terms of this Agreement; and
(g) The Stockholder agrees to suspend sales during the
periods when sales are to be suspended pursuant to Section 7.
(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 comply 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
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 CCS. 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.
13. Selling Procedures.
(a) The Stockholder will notify the Company of his
intention to sell Shares under any registration statement not
less than five (5) nor more than fifteen (15) 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 7 is necessary or
appropriate. If the Company does not notify the Stockholder of a
suspension pursuant to Section 7, the Stockholder may conclude
the proposed sale, on the proposed date of sale, 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 3 from the Shares so sold.
14. 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 (i) mailed by first-class
or express mail, postage prepaid, (ii) 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 (iii) 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: (781) 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 their addresses as set
forth on Schedule A hereto;
with a copy to:
Joel Walker
Breslow & Walker
767 3rd Avenue
New York, NY 10017
Telecopy: (212) 888-4955
if to any subsequent holder 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 the
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 five business days after being
sent by first class mail, postage prepaid, or two business days
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.
(g) This Agreement shall become effective upon
Completion.
IN WITNESS WHEREOF, the parties hereto have duly executed
this Agreement as of the day and year first above written.
THE COMPANY:
PAREXEL International Corporation
By:
Name:
Title:
STOCKHOLDER:
[Name]
[The Stockholder must complete page 15 of this Agreement]
Stockholder Name:______________________________
Principal Residence Address:
Note: Non-principal residence addresses and post office boxes
cannot be accepted.
_______________________________________________
(Number and Street)
_______________________________________________
(City, State) (Zip Code)
_______________________________________________
(Residence Telephone)
Mailing Address (if different from above):
_______________________________________________
(Number and Street)
_______________________________________________
(City, State) (Zip Code)
Citizenship:_____________________________________
Social Security or Taxpayer I.D. No.:_________________
Exhibit A
to Registration Rights Agreement
TAKEDOWN REQUEST
The undersigned Stockholder intends to offer and sell to the
public Shares of PAREXEL International Corporation registered
under a certain Registration Statement on Form S-3, File No. 333-
_______.
Name, Address,
Telephone Number
Name, Address, and Facsimile Number Number Propose
Telephone Number Number of Agent, of of d Date
and Facsimile Broker-Dealer or Shares Shares of
Number of Underwriter Owned to be Sale*
Stockholder Sold
* MUST BE AT LEAST FIVE (5) AND NOT MORE THAN FIFTEEN (15)
BUSINESS DAYS AFTER THE DATE HEREOF.
Other Information:
The undersigned Stockholder agrees to provide all reasonably
necessary information and reasonably necessary materials and to
take all reasonably necessary actions as may be required in order
for PAREXEL International Corporation to comply with all
applicable securities laws.
Signature of Stockholder
Print Name
Date
ALL TAKEDOWN REQUESTS SHOULD BE FORWARDED BY FACSIMILE 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
AT LEAST FIVE (5) AND NOT MORE THAN FIFTEEN (15) BUSINESS DAYS
PRIOR TO A PROPOSED SALE
Exhibit B
to Registration Rights Agreement
NOTIFICATION OF SALE
The undersigned Stockholder sold to the public Shares of
PAREXEL International Corporation registered under a certain
Registration Statement on Form S-3, File No. 333-_______, as
follows.
Name, Address,
Telephone Number
Name, Address, and Facsimile Number Number
Telephone Number Number of Agent, of of Date
and Facsimile Broker-Dealer or Shares Shares of Sale
Number of Underwriter Owned Sold
Stockholder
Other Information:
Signature of Stockholder
Print Name
Date
ALL NOTIFICATIONS OF SALE SHOULD BE FORWARDED BY FACSIMILE 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
WITHIN 24 HOURS FOLLOWING A SALE
EXHIBIT 4.9
REGISTRATION RIGHTS AGREEMENT
AGREEMENT dated as of February 27, 1998 among PAREXEL
International Corporation, a Massachusetts corporation (the
"Company") and the stockholders listed on Schedule A hereto
(individually, a "Stockholder," and collectively, the
"Stockholders").
W I T N E S S E T H :
WHEREAS, pursuant to the Share Acquisition Agreement dated
as of __________ (the "Acquisition Agreement") among the Company,
Clarendon Trust Company Limited and David Satterthwaite, the
Company will acquire all of the outstanding capital stock of
Genesis Pharma Strategies Limited ("Genesis") and Genesis will
become a wholly-owned subsidiary of the Company;
WHEREAS, in connection therewith, the Stockholders will
receive shares of Common Stock of the Company (the "Shares") that
are being issued pursuant to an exemption from registration under
the Securities Act; and
WHEREAS, the Company and the Stockholders wish to set forth
certain rights and obligations with regard to the registration of
the Shares pursuant to the Securities Act;
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 United States 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 Stockholders 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 United States Securities
Exchange Act of 1934, as amended, or any successor 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 9.
"Securities Act" shall mean the United States
Securities Act of 1933, as amended, or any successor 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 8.
2. Securities Act Matters. The Stockholders acknowledge
and agree 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
Stockholders recognize and acknowledge that such claims of
exemption are based, in part, upon the Stockholders'
representations contained in the Acquisition Agreement and in
each Stockholder's New Owner Questionnaire. The Stockholders
further recognize and acknowledge that, because the issuance of
the Shares was not registered under federal and state laws, the
Shares 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 Stockholders recognize and
acknowledge that Rule 144 (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 Stockholders
recognize and acknowledge that, in the absence of the
availability of Rule 144, 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,
which may not be available for resale of the Shares. The
Stockholders recognize and acknowledge 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.
3. Restrictive Legend. Each certificate representing
Shares shall, except as otherwise provided in this Section 3 or
in Section 4, 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 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 (Breslow & Walker,
LLP shall be considered satisfactory) the securities represented
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.
4. Notice of Proposed Transfer. Prior to any proposed
transfer of any Shares before the expiration of the applicable
holding period set forth in Rule 144, each Stockholder shall give
written notice to the Company of his intention to effect such
transfer. Prior to any registration statement described in
Section 5 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 3, 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) such
transfer is pursuant to a registration under the Securities Act,
or (iii) 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.
5. Required Registration. The Company agrees to use all
reasonable efforts to (i) cause a registration statement on Form
S-3 (the "Registration Statement") or any successor form thereto
under the Securities Act relating to the resale of one hundred
percent (100%) of the Shares to be filed no later than the 90th
day following Completion (as defined in the Acquisition
Agreement); and (ii) cause the Registration Statement to become
effective as soon as practicable after the filing thereof and
thereafter remain effective until the earlier of (A) one year
after Completion 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-Completion
combined operating results of the Company and Genesis (the
"Pooling Restricted Period"), and the Company may suspend sales
in accordance with Section 7 at any time under any registration
statement immediately upon written notice to the Stockholders at
their last known address, for any of the reasons and for the time
periods set forth in Section 7.
6. Registration Procedures. If and whenever the Company
is required by the provisions of Section 5 to use all 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 Stockholders 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 they 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 or its common stock is currently
registered or qualified for resale and provide each Stockholder
with a list of such jurisdictions, 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 quoted or traded on the Nasdaq National
Market or any other quotation system or exchange where the
Company's Common Stock is then quoted or traded; and
(e) promptly notify each 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 institution and
ending of any suspension under Section 7.
7. Suspension.
(a) The rights of the Stockholders 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 Board of Directors of the Company has
voted to conduct a public offering or the Company is holding
or has held an "organizational" or "all hands" meeting
relating to a public offering, whichever first occurs;
(ii) the Company is about to make a public
disclosure of information of a material nature;
(iii) there then exists material, non-public
information relating to the Company the disclosure of which,
in the good faith determination of its Board of Directors,
would not be in the interests of the Company or its
stockholders during that time and which the Company is not
otherwise, after consultation with counsel, obligated to
disclose; or
(iv) the Company is engaged in any activity or
transaction at any time that, in the good faith
determination of its Board of Directors, would be materially
adversely affected by the continued compliance with this
Agreement or the continued distribution of the Shares by the
Stockholders.
(b) The Company shall use all reasonable efforts to
minimize the length of any suspension:
(i) under Section 7(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 Stockholders 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 all reasonable
efforts to file the appropriate documentation in respect of,
and otherwise complete, such public offering as
expeditiously as practicable;
(ii) under Section 7(a)(ii), to a period of three
(3) business days, more or less;
(iii) under Section 7(a)(iii) or 7(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 Stockholders 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, or (C) the disclosure of the acquisition,
unless, despite such disclosure, the continued distribution
of the Shares by the Stockholders pursuant to the applicable
registration statement would violate the Securities Act; and
(iv) under Section 7(a)(iii) or 7(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 Stockholders and ending on the earlier of: (A) the
disclosure of the activity, or (B) the reason is no longer
operative.
(c) The period during which any registration statement
filed pursuant to Section 5 remains effective shall be extended
by any period during which resales of Shares pursuant to such
registration statement are suspended pursuant to this Section 7.
8. Expenses. All expenses incurred by the Company in
complying with Section 5, 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 Stockholders, are called "Selling Expenses".
All Selling Expenses shall be borne by the Stockholders.
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 or
abandoned for any reason at the request of the Stockholders. The
Company shall not be obligated to pay any reasonably verifiable
increase in Registration Expenses in connection with the
preparation and filing of any registration statement if such
registration statement is delayed for any reason at the request
of the Stockholders.
9. Indemnification and Contribution.
(a) In connection with the registration of the Shares
under the Securities Act pursuant to Section 5, the Company will
indemnify and hold harmless each Stockholder, each underwriter of
such Shares thereunder and each other person, if any, who
controls such Stockholder or 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 5, 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 each such 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, as such expenses are incurred, provided,
however, that the Company will not be liable in any such case if
and 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 written information furnished by or for any such
Stockholder, any such underwriter or any such controlling person
specifically for use in the applicable registration statement.
(b) In connection with the registration of the Shares
under the Securities Act pursuant to Section 5, each 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 such Stockholder to comply with the provisions of Section 12
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 (iii) 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, as such expenses are incurred, provided,
however, that such 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 in conformity with written
information pertaining to such Stockholder, furnished by or for
such Stockholder specifically for use in the applicable
registration statement.
(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 9 and shall only relieve it from any liability
which it may have to such indemnified party under this Section 9
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 9 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 one 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. No indemnifying party will consent to entry of
judgment or enter into any settlement which does not include as
an unconditional term thereof the giving by the claimant or
plaintiff to such indemnified party of a release from all
liability with respect to such claim or litigation.
(d) In order to provide for just and equitable
contribution to joint liability in any case in which either (i) a
Stockholder exercises rights under this Agreement and makes a
claim for indemnification pursuant to this Section 9 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 9 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 9; then, and
in each such case, the Company and the Stockholders 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 Stockholders, 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 9 shall
survive the transfer of any Shares by a Stockholder.
10. Reports Under Securities Exchange Act of 1934. With a
view to making available to each of the Stockholders the benefits
of Rule 144 promulgated under the Securities Act and any other
rule or regulation thereunder that may at any time permit any
such 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 any such 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.
11. 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.
12. Stockholder's Conduct. With respect to any sale of
Shares covered by a registration statement, each Stockholder
understands and agrees as follows:
(a) Each 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 material
respects, including having properly disclosed any position,
office or other material relationship within the past three years
with the Company or its affiliates;
(b) Each Stockholder agrees to sell Shares only in the
manner set forth in (i) the applicable registration statement (or
in compliance with Section 4 hereof), (ii) the Affiliate
Agreement (as defined in the Acquisition Agreement) (if the
Stockholder is a party thereto) and (iii) Section 13;
(c) Each 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) Each 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) Each Stockholder agrees to comply with the
prospectus delivery requirements of the Securities Act;
(f) Each Stockholder agrees to notify the Company of
any and all planned sales and completed sales of Shares in
accordance with the terms of this Agreement; and
(g) Each Stockholder agrees to suspend sales during
the periods when sales are to be suspended pursuant to Section 7.
(h) In connection with the registration of the Shares,
each 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 comply with federal and applicable state securities laws.
(i) Each Stockholder hereby agrees that he will not
sell, exchange, transfer, pledge, dispose or otherwise reduce his
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 Genesis. 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.
13. Selling Procedures.
(a) Each Stockholder will notify the Company of his
intention to sell Shares under any registration statement not
less than five (5) nor more than fifteen (15) 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 7 is necessary or
appropriate. If the Company does not notify the Stockholder of a
suspension pursuant to Section 7, the Stockholder may conclude
the proposed sale, on the proposed date of sale, in accordance
with the Takedown Request.
(b) Each 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 3 from the Shares so sold.
14. 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 (i) mailed by first-class
or express mail, postage prepaid, (ii) 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 (iii) 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: (781) 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 Stockholders, to their addresses as set
forth on Schedule A hereto;
with a copy to:
Joel Walker
Breslow & Walker
767 3rd Avenue
New York, NY 10017
Telecopy: (212) 888-4955
if to any subsequent holder 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 Stockholders (in the case of the Company)
in accordance with the provisions of this paragraph. Notices
shall be deemed duly delivered five business days after being
sent by first class mail, postage prepaid, or two business days
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.
(g) This Agreement shall become effective upon
Completion.
IN WITNESS WHEREOF, the parties hereto have duly executed
this Agreement as of the day and year first above written.
THE COMPANY:
PAREXEL International Corporation
By:/s/Barry R. Philpott
Name: Barry R. Philpott
Title:Chief Administrative Officer
STOCKHOLDERS:
/s/Clarendon Trust Company Limited
[Name]
/s/Contra Services Limited
[Name]
[Each Stockholder must complete page 15 of this Agreement]
Stockholder Name:______________________________
Principal Residence Address:
Note: Non-principal residence addresses and post office boxes
cannot be accepted.
_______________________________________________
(Number and Street)
_______________________________________________
(City, State) (Zip Code)
_______________________________________________
(Residence Telephone)
Mailing Address (if different from above):
_______________________________________________
(Number and Street)
_______________________________________________
(City, State) (Zip Code)
Citizenship:_____________________________________
Social Security or Taxpayer I.D. No.:_________________
Schedule A
to Registration Rights Agreement
Stockholder Address Phone Number Fax Number
Name
Exhibit A
to Registration Rights Agreement
TAKEDOWN REQUEST
The undersigned Stockholder intends to offer and sell to the
public Shares of PAREXEL International Corporation registered
under a certain Registration Statement on Form S-3, File No. 333-
_______.
Name, Address,
Telephone Number
Name, Address, and Facsimile Number Number Propose
Telephone Number Number of Agent, of of d Date
and Facsimile Broker-Dealer or Shares Shares of
Number of Underwriter Owned to be Sale*
Stockholder Sold
* MUST BE AT LEAST FIVE (5) AND NOT MORE THAN FIFTEEN (15)
BUSINESS DAYS AFTER THE DATE HEREOF.
Other Information:
The undersigned Stockholder agrees to provide all reasonably
necessary information and reasonably necessary materials and to
take all reasonably necessary actions as may be required in order
for PAREXEL International Corporation to comply with all
applicable securities laws.
Signature of Stockholder
Print Name
Date
ALL TAKEDOWN REQUESTS SHOULD BE FORWARDED BY FACSIMILE 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
AT LEAST FIVE (5) AND NOT MORE THAN FIFTEEN (15) BUSINESS DAYS
PRIOR TO A PROPOSED SALE
Exhibit B
to Registration Rights Agreement
NOTIFICATION OF SALE
The undersigned Stockholder sold to the public Shares of
PAREXEL International Corporation registered under a certain
Registration Statement on Form S-3, File No. 333-_______, as
follows.
Name, Address,
Telephone Number
Name, Address, and Facsimile Number Number
Telephone Number Number of Agent, of of Date
and Facsimile Broker-Dealer or Shares Shares of Sale
Number of Underwriter Owned Sold
Stockholder
Other Information:
Signature of Stockholder
Print Name
Date
ALL NOTIFICATIONS OF SALE SHOULD BE FORWARDED BY FACSIMILE 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
WITHIN 24 HOURS FOLLOWING A SALE
EXHIBIT 4.10
REGISTRATION RIGHTS AGREEMENT
AGREEMENT dated as of February 27, 1998 among PAREXEL
International Corporation, a Massachusetts corporation (the
"Company") and Van Der Linden Holding BV, a Dutch company,
Steinberg Holding BV, a Dutch company and Toho Pharmaceutical
Co., Ltd., a Japanese corporation (individually, a "Stockholder,"
and collectively, the "Stockholders").
W I T N E S S E T H :
WHEREAS, pursuant to the Share Purchase AgreementAgreement
dated as of March 1, 1998 (the "Agreement") among the Company and
the Stockholders, pursuant to which the Company will acquire all
outstanding shares of Mirai B.V., a Dutch limited liability
company ("Mirai") and Mirai will become a wholly-owned subsidiary
of the Company;
WHEREAS, in connection therewith, the Stockholders will
receive unregistered shares of Common Stock of the Company (the
"Shares"); and
WHEREAS, the Company and the Stockholders 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 Stockholders pursuant to the 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 successor 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 9.
"Securities Act" shall mean the Securities Act of 1933,
as amended, or any successor 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 9.
2. Compliance with Securities Laws. The Stockholders
represent and warrant that they:
(a) have paid no brokerage or similar commissions in
connection with the acquisition of the Shares.
(b) are acquiring such Shares solely for their own
account.
(c) have 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
Stockholders.
3. Securities Act Matters. The Stockholders acknowledge
and agree 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
Stockholders recognize and acknowledge that such claims of
exemption are based, in part, upon the Stockholders'
representations contained in this Agreement. The Stockholders
further recognize and acknowledge 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 Stockholders recognize and acknowledge that
Rule 144 (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 Stockholders recognize and acknowledge that,
in the absence of the availability of Rule 144, 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, which may not be available for resale of the
Shares. The Stockholders recognize and acknowledge 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 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 before the expiration of the applicable
holding period set forth in Rule 144, each 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), (ii) such
transfer is pursuant to a registration under the Securities Act,
or (iii) 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 (the "Registration Statement") or any
successor form thereto under the Securities Act relating to the
resale of thirty percent (30%) of the Shares to be filed no later
than the 90th day following the Transfer Date (as defined in the
Agreement); and (ii) cause the Registration Statement to become
effective as soon as practicable after the filing thereof and
thereafter remain effective until the earlier of (A) one year
after the Transfer Date 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 Mirai (the "Pooling
Restricted Period"), and the Company may suspend sales in
accordance with Section 8 at any time under any registration
statement immediately upon written notice to the Stockholders at
their last known address, for any of the reasons and for the time
periods set forth in Section 8.
7. Registration Procedures. If and whenever the Company
is required by the provisions of Section 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 Stockholders 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 they 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 each 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 institution and
ending of any suspension under Section 8.
8. Suspension. The rights of the Stockholders 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 an initial determination
to conduct a public offering;
(ii) the Company is about to make a public
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.
9. Expenses. All expenses incurred by the Company in
complying with Section 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 Stockholders, are called "Selling Expenses".
All Selling Expenses shall be borne by the Stockholders.
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 Stockholders.
10. Reports Under Securities Exchange Act of 1934. With a
view to making available to each of the Stockholders the benefits
of Rule 144 promulgated under the Securities Act and any other
rule or regulation thereunder that may at any time permit any
such 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 any such 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.
11. 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.
12. Stockholder's Conduct. With respect to any sale of
Shares covered by a registration statement, each Stockholder
understands and agrees as follows:
(a) Each 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) Each 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 Agreement) and (iii) Section 13;
(c) Each 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) Each 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) Each Stockholder agrees to comply with the
prospectus delivery requirements of the Securities Act;
(f) Each Stockholder agrees to promptly notify the
Company of any and all planned sales and completed sales of
Shares; and
(g) Each 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,
each 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 comply with federal and applicable state securities laws.
(i) Each Stockholder hereby agrees that he will not
sell, exchange, transfer, pledge, dispose or otherwise reduce his
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 Mirai. 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.
13. Selling Procedures.
(a) Each Stockholder will notify the Company of his
intention to sell Shares under any registration statement not
less than five (5) nor more than ten (10) 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) Each 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.
14. Representations and Covenants. Each 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(S),
ACCOUNTANT(S) OR INVESTMENT ADVISOR(S) 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 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 Agreement, as well
as the information provided to the Stockholder by the Company
pursuant to Section 6.6 of the Agreement and has consulted with
his 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 intends 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 6.6 of the 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 Mirai concerning the terms
and conditions of the transactions contemplated by the 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 Mirai 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 Mirai, 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 Mirai, 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 risk relative to any shares of Mirai
common stock owned by him during the 30 day period preceding the
date hereof.
15. 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: (781) 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 Stockholders, to:
[Name]
[Address]
Telecopy:
with a copy to:
Hans Sachse
[Address]
Telecopy: 011-31-20-431-3132
if to any subsequent holder 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 Stockholders (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.
(g) This Agreement shall become effective upon Completion.
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
Van Der Linden Holding B.V.
By: /s/Els
van Der Linden
Name: Els
van Der Linden
Title:
Managing Director
Steinberg Holding B.V.
By:
/s/Louis Paul Steinberg
Name: Louis Paul Steinberg
Title: Dir.
New Business Development
Toho Pharmaceutical Co. Ltd.
By: /s/Els
van Der Linden
Name: Els
van Der Linden
Title:
Managing Director
[Each Stockholder must complete page 14 of this Agreement]
Van Der Linden Holding B.V.
Principal Residence Address:
Note: Non-principal residence addresses and post office boxes
cannot be accepted.
_______________________________________________
(Number and Street)
_______________________________________________
(City, State) (Zip Code)
_______________________________________________
(Residence Telephone)
Mailing Address (if different from above):
_______________________________________________
(Number and Street)
_______________________________________________
(City, State) (Zip Code)
Citizenship:_____________________________________
Social Security or Taxpayer I.D. No.:_________________
If the Stockholder is a natural person and is an accredited
investor described by category 12 or 13 (or both) set forth on
the attached Exhibit C, please check this box.
If the Stockholder has not checked the box above, please
check this box if at least one of the categories set forth on the
attached Exhibit C describes you.
Steinberg Holding B.V.
Principal Residence Address:
Note: Non-principal residence addresses and post office boxes
cannot be accepted.
_______________________________________________
(Number and Street)
_______________________________________________
(City, State) (Zip Code)
_______________________________________________
(Residence Telephone)
Mailing Address (if different from above):
_______________________________________________
(Number and Street)
_______________________________________________
(City, State) (Zip Code)
Citizenship:_____________________________________
Social Security or Taxpayer I.D. No.:_________________
If the Stockholder is a natural person and is an accredited
investor described by category 12 or 13 (or both) set forth on
the attached Exhibit C, please check this box.
If the Stockholder has not checked the box above, please
check this box if at least one of the categories set forth on the
attached Exhibit C describes you.
Toho Pharmaceutical Co. Ltd.
Principal Residence Address:
Note: Non-principal residence addresses and post office boxes
cannot be accepted.
_______________________________________________
(Number and Street)
_______________________________________________
(City, State) (Zip Code)
_______________________________________________
(Residence Telephone)
Mailing Address (if different from above):
_______________________________________________
(Number and Street)
_______________________________________________
(City, State) (Zip Code)
Citizenship:_____________________________________
Social Security or Taxpayer I.D. No.:_________________
If the Stockholder is a natural person and is an accredited
investor described by category 12 or 13 (or both) set forth on
the attached Exhibit C, please check this box.
If the Stockholder has not checked the box above, please
check this box if at least one of the categories set forth on the
attached Exhibit C describes you.
Exhibit A
to Registration Rights Agreement
TAKEDOWN REQUEST
The undersigned Stockholder intends to offer and sell to the
public Shares of PAREXEL International Corporation registered
under a certain Registration Statement on Form S-3, File No. 333-
_______.
Name, Address,
Telephone Number
Name, Address, and Facsimile Number Number Propose
Telephone Number Number of Agent, of of d Date
and Facsimile Broker-Dealer or Shares Shares of
Number of Underwriter Owned to be Sale*
Stockholder Sold
MUST BE AT LEAST FIVE (5) BUT NOT MORE THAN TEN (10) BUSINESS
DAYS AFTER THE DATE HEREOF.
Other Information:
The undersigned Stockholder agrees to provide all
information and materials and to take all actions as may be
required in order for PAREXEL International Corporation to comply
with all applicable securities laws.
Signature of Stockholder
Print Name
Date
ALL TAKEDOWN REQUESTS SHOULD BE FORWARDED BY FACSIMILE 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
AT LEAST FIVE (5) BUT NO MORE THAN TEN (10) BUSINESS DAYS PRIOR
TO A PROPOSED SALE
Exhibit B
to Registration Rights Agreement
NOTIFICATION OF SALE
The undersigned Stockholder sold to the public Shares of
PAREXEL International Corporation registered under a certain
Registration Statement on Form S-3, File No. 333-_______, as
follows.
Name, Address,
Telephone Number
Name, Address, and Facsimile Number Number
Telephone Number Number of Agent, of of Date
and Facsimile Broker-Dealer or Shares Shares of Sale
Number of Underwriter Owned Sold
Stockholder
Other Information:
Signature of Stockholder
Print Name
Date
ALL NOTIFICATIONS OF SALE SHOULD BE FORWARDED BY FACSIMILE 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
WITHIN 24 HOURS FOLLOWING A SALE
Exhibit C
to Registration Rights Agreement
1. A bank (as defined in Section 3(a)(2) of the Securities
Act) or a savings and loan association or other institution (as
defined in Section 3(a)(5)(A) of the Securities Act), whether
acting in regard to this investment in its individual or a
fiduciary capacity.
2. A broker or dealer registered pursuant to Section 15 of
the Securities Exchange Act of 1934.
3. An insurance company (as defined in Section 2(13) of
the Securities Act).
4. An investment company registered under the Investment
Company Act.
5. A business development company (as defined in
Section 2(a)(48) of the Investment Company Act).
6. A Small Business Investment Company licensed by the
U.S. Small Business Administration under Section 301(c) or (d) of
the Small Business Investment Act of 1958.
7. A plan established and maintained by a state, its
political subdivisions, or any agency or instrumentality of a
state or its political subdivisions, for the benefit of its
employees, if the plan has total assets in excess of $5,000,000.
8. An employee benefit plan within the meaning of Title I
of the Employee Retirement Income Security Act of 1974 (an "ERISA
Plan") whose decision to purchase the Interest was made by a plan
fiduciary (as defined in Section 3(21) of ERISA), which is either
a bank, savings and loan association, insurance company or
registered investment adviser.
9. An ERISA Plan with total assets in excess of $5,000,000
or, if a self-directed ERISA Plan, with investment decisions made
solely by persons that are "accredited investors."
10. A private business development company (as defined in
Section 202(a)(22) of the Investment Advisers Act of 1940).
11. An organization described in Section 501(c)(3) of the
Internal Revenue Code of 1986, as amended, corporation,
Massachusetts or similar business trust or partnership, not
formed for the specific purpose of acquiring the Interest, with
total assets in excess of $5,000,000.
12. A natural person whose net worth (either individually
or jointly with such person's spouse) at the time of the Closing
exceeds $1,000,000.
13. A natural person who had an individual income in excess
of $200,000 or joint income with such person's spouse in excess
of $300,000 in each of the last two calendar years and who
reasonably expects to reach the same income level in the current
calendar year.
14. A trust, with total assets in excess of $5,000,000, not
formed for the specific purpose of acquiring the Interest, whose
purchase of the Interest is directed by a sophisticated person as
described in Rule 506(b)(2)(ii) under the Securities Act.
15. An entity in which all of the equity owners fit into at
least one of the categories listed under paragraphs 1-14 above.
237hms6463/1.479991_1
Exhibit 4.11
REGISTRATION RIGHTS AGREEMENT
AGREEMENT dated as of February 27, 1998 among PAREXEL
International Corporation, a Massachusetts corporation (the
"Company") and Dr. Dieter Russman (the "Stockholder").
W I T N E S S E T H :
WHEREAS, pursuant to the Sale and Purchase Agreement dated as
of February 27, 1998 (the "Agreement") between the Company and
the Stockholder, pursuant to which the Company will acquire all
outstanding shares of LOGOS GmbH, a German corporation ("LOGOS")
and LOGOS 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 pursuant to the 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 successor 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 9.
"Securities Act" shall mean the Securities Act of 1933,
as amended, or any successor 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 9.
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 (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, 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, which may not 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 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 before the expiration of the applicable
holding period set forth in Rule 144, 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), (ii) such
transfer is pursuant to a registration under the Securities Act,
or (iii) 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 (the "Registration Statement") or any
successor form thereto under the Securities Act relating to the
resale of one hundred percent (100%) of the Shares to be filed as
expeditiously as possible after the Effective Date (as defined in
the Agreement), but no later than the 90th day following the
Effective Date; and (ii) cause the Registration Statement to
become effective as soon as practicable after the filing thereof
and thereafter remain effective until the earlier of (A) one year
after the Effective Date 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 LOGOS (the "Pooling
Restricted Period"), and the Company may suspend sales in
accordance with Section 8 at any time under any registration
statement immediately upon written notice to the Stockholder at
his last known address, for any of the reasons and for the time
periods set forth in Section 8.
7. Registration Procedures. If and whenever the Company
is required by the provisions of Section 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 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 institution and ending of any
suspension under Section 8.
8. Suspension.
(a) The rights of the Stockholder to resell the Shares
pursuant to this Agreement and the registration statement may be
suspended by the Company on the occurrence of any of the
following events:
(i) the Company has made an initial determination
to conduct a public offering;
(ii) the Company is about to make a public
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 Stockholder.
(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 Stockholders 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 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 Stockholders 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 Stockholders and ending on the earlier of: (A) the
disclosure of the activity, or (B) the reason is no longer
operative.
(c) The Distribution Period shall be extended by the
length of any suspensions under Section 8(b).
9. Expenses. All expenses incurred by the Company in
complying with Section 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 Stockholder or 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, 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 such 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 such 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 such 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 such
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 such Stockholder,
furnished by or for such 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 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 exercising rights under this Agreement 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 such Stockholder in circumstances for
which indemnification is provided under this Section 10; then,
and in each such case, the Company and such 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 such 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, 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.
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 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.
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), (ii) the Affiliate
Agreement (as defined in the Agreement) and (iii) 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 Securities 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 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 comply 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
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 LOGOS. 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 nor more than ten (10) 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:
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(S),
ACCOUNTANT(S) OR INVESTMENT ADVISOR(S) 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 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 Agreement, as well
as the information provided to the Stockholder by the Company
pursuant to Section 8.7 of the Agreement and has consulted with
his 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 intends 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 8.7 of the Agreement, which
documents the 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 LOGOS concerning the terms
and conditions of the transactions contemplated by the 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 LOGOS 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 LOGOS, 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 LOGOS, 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 risk relative to any shares of LOGOS
capital stock 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:
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: (781) 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. Dieter Russman
[Address]
Telecopy:
with a copy to:
Dr. Theo Schubert
Humboldtstrase
79098 Freiburg
Germany
Telecopy: 011-49-761-29-62-066
if to any subsequent holder 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.
(g) This Agreement shall become effective upon
Completion.
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
Dr. Dieter Russman
Dr. Dieter Russman
[You must complete page 15 of this Agreement]
Dr. Dieter Russman
Principal Residence Address:
Note: Non-principal residence addresses and post office boxes
cannot be accepted.
_______________________________________________
(Number and Street)
_______________________________________________
(City, State) (Zip Code)
_______________________________________________
(Residence Telephone)
Mailing Address (if different from above):
_______________________________________________
(Number and Street)
_______________________________________________
(City, State) (Zip Code)
Citizenship:_____________________________________
Social Security or Taxpayer I.D. No.:_________________
If the Stockholder is a natural person and is an accredited
investor described by category 12 or 13 (or both) set forth on
the attached Exhibit C, please check this box. ___
If the Stockholder has not checked the box above, please
check this box if at least one of the categories set forth on the
attached Exhibit C describes you. ____
Exhibit A
to Registration Rights Agreement
TAKEDOWN REQUEST
The undersigned Stockholder intends to offer and sell to the
public Shares of PAREXEL International Corporation registered
under a certain Registration Statement on Form S-3, File No. 333-
_______.
Name, Address,
Telephone Number
Name, Address, and Facsimile Number Number Propose
Telephone Number Number of Agent, of of d Date
and Facsimile Broker-Dealer or Shares Shares of
Number of Underwriter Owned to be Sale*
Stockholder Sold
*MUST BE AT LEAST FIVE (5) BUSINESS DAYS NOR MORE THAN TEN (10)
BUSINESS DAYS AFTER THE DATE HEREOF
Other Information:
The undersigned Stockholder agrees to provide all
information and materials and to take all actions as may be
required in order for PAREXEL International Corporation to comply
with all applicable securities laws.
Signature of Stockholder
Print Name
Date
ALL TAKEDOWN REQUESTS SHOULD BE FORWARDED BY FACSIMILE 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
AT LEAST FIVE (5) BUT NOT MORE THAN TEN (10) BUSINESS DAYS PRIOR
TO A PROPOSED SALE
Exhibit B
to Registration Rights Agreement
NOTIFICATION OF SALE
The undersigned Stockholder sold to the public Shares of
PAREXEL International Corporation registered under a certain
Registration Statement on Form S-3, File No. 333-_______, as
follows.
Name, Address,
Telephone Number
Name, Address, and Facsimile Number Number
Telephone Number Number of Agent, of of Date
and Facsimile Broker-Dealer or Shares Shares of Sale
Number of Underwriter Owned Sold
Stockholder
Other Information:
Signature of Stockholder
Print Name
Date
ALL NOTIFICATIONS OF SALE SHOULD BE FORWARDED BY FACSIMILE 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
WITHIN 24 HOURS FOLLOWING A SALE
Exhibit C
to Registration Rights Agreement
1. A bank (as defined in Section 3(a)(2) of the Securities
Act) or a savings and loan association or other institution (as
defined in Section 3(a)(5)(A) of the Securities Act), whether
acting in regard to this investment in its individual or a
fiduciary capacity.
2. A broker or dealer registered pursuant to Section 15 of
the Securities Exchange Act of 1934.
3. An insurance company (as defined in Section 2(13) of
the Securities Act).
4. An investment company registered under the Investment
Company Act.
5. A business development company (as defined in
Section 2(a)(48) of the Investment Company Act).
6. A Small Business Investment Company licensed by the
U.S. Small Business Administration under Section 301(c) or (d) of
the Small Business Investment Act of 1958.
7. A plan established and maintained by a state, its
political subdivisions, or any agency or instrumentality of a
state or its political subdivisions, for the benefit of its
employees, if the plan has total assets in excess of $5,000,000.
8. An employee benefit plan within the meaning of Title I
of the Employee Retirement Income Security Act of 1974 (an "ERISA
Plan") whose decision to purchase the Interest was made by a plan
fiduciary (as defined in Section 3(21) of ERISA), which is either
a bank, savings and loan association, insurance company or
registered investment adviser.
9. An ERISA Plan with total assets in excess of $5,000,000
or, if a self-directed ERISA Plan, with investment decisions made
solely by persons that are "accredited investors."
10. A private business development company (as defined in
Section 202(a)(22) of the Investment Advisers Act of 1940).
11. An organization described in Section 501(c)(3) of the
Internal Revenue Code of 1986, as amended, corporation,
Massachusetts or similar business trust or partnership, not
formed for the specific purpose of acquiring the Interest, with
total assets in excess of $5,000,000.
12. A natural person whose net worth (either individually
or jointly with such person's spouse) at the time of the Closing
exceeds $1,000,000.
13. A natural person who had an individual income in excess
of $200,000 or joint income with such person's spouse in excess
of $300,000 in each of the last two calendar years and who
reasonably expects to reach the same income level in the current
calendar year.
14. A trust, with total assets in excess of $5,000,000, not
formed for the specific purpose of acquiring the Interest, whose
purchase of the Interest is directed by a sophisticated person as
described in Rule 506(b)(2)(ii) under the Securities Act.
15. An entity in which all of the equity owners fit into at
least one of the categories listed under paragraphs 1-14 above.
EXHIBIT 5.1
TESTA, HURWITZ & THIBEAULT
125 High Street
Boston, MA 02110
May 27, 1998
PAREXEL International
Corporation
195 West Street
Waltham, MA 02154
RE: Registration Statement on Form S-3
Relating to 1,510,148 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 1,510,148 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
EXHIBIT 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the use in the Prospectus constituting
part of this Registration Statement on Form S-3 of our
report dated August 16, 1997, except as to Notes 3 and 16
and the effects of the poolings of interests with Kemper-
Masterson, Inc., PPS Europe Limited and MIRAI BV, which are
as of March 1, 1998, which appears in such Prospectus. We
also consent to references to us under the heading "Experts"
and "Selected Consolidated Financial Data" in such
Prospectus. However, it should be noted that Price
Waterhouse LLP has not prepared or certified such "Selected
Consolidated Financial Data."
PRICE WATERHOUSE LLP
Boston, Massachusetts
May 29, 1998
EXHIBIT 23.2
GRANT THORNTON
CONSENT OF INDEPENDENT ACCOUNTANTS
We have issued our report dated February 6, 1998,
accompanying the financial statements of PPS Europe Limited
and Subsidiaries, as of and for the two years ended November
30, 1997 contained in this Registration Statement on Form S-
3 of PAREXEL International Corporation. We consent to the
use of the aforementioned report in this Registration
Statement, and to the use of our name as it appears under
the caption "Experts".
London, United Kingdom
May 29, 1998
<TABLE> <S> <C>
<ARTICLE> 5
<RESTATED>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> JUN-30-1997
<PERIOD-START> JUL-01-1996
<PERIOD-END> JUN-30-1997
<CASH> 38,593
<SECURITIES> 67,713
<RECEIVABLES> 86,211
<ALLOWANCES> 3,384
<INVENTORY> 0
<CURRENT-ASSETS> 204,393
<PP&E> 54,567
<DEPRECIATION> 21,059
<TOTAL-ASSETS> 240,544
<CURRENT-LIABILITIES> 90,396
<BONDS> 0
0
0
<COMMON> 240
<OTHER-SE> 147,208
<TOTAL-LIABILITY-AND-EQUITY> 240,544
<SALES> 0
<TOTAL-REVENUES> 203,676
<CGS> 0
<TOTAL-COSTS> 135,048
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 1,718
<INTEREST-EXPENSE> 278
<INCOME-PRETAX> 21,122
<INCOME-TAX> 8,319
<INCOME-CONTINUING> 12,803
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 12,803
<EPS-PRIMARY> 0.59
<EPS-DILUTED> 0.56
</TABLE>
