SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended March 31, 1999
Commission File Number: 0-27058
PAREXEL INTERNATIONAL CORPORATION
(Exact name of registrant as specified in its Charter)
Massachusetts 04-2776269
(State or other jurisdiction of (I.R.S. Employer Identification Number)
incorporation or organization)
195 West Street
Waltham, Massachusetts 02451
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (781) 487-9900
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes X No ___
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date: As of May 12, 1999, there were
25,102,588 shares of PAREXEL International Corporation common stock outstanding.
<PAGE>
2
PAREXEL INTERNATIONAL CORPORATION
INDEX
Page
Part I. Financial Information
Item 1 Financial Statements (Unaudited):
Condensed Consolidated Balance Sheets-- March
31, 1999 and June 30, 1998 3
Condensed Consolidated Statements of Operations -- Three
months ended March 31, 1999 and 1998; Nine months ended
March 31, 1999 and 1998 4
Condensed Consolidated Statements of Cash Flows -- Nine
months ended March 31, 1999 and 1998 5
Notes to Condensed Consolidated Financial Statements 6
Item 2 Management's Discussion and Analysis of Financial
Condition and Results of Operations 9
Risk Factors 16
Part II. Other Information 22
Item 2 Changes in Securities and Use of Proceeds 22
Item 6 Exhibits and Reports on Form 8-K 22
Signatures 24
<PAGE>
Part I. Financial Information
Item 1 - Financial Statements
<TABLE>
PAREXEL INTERNATIONAL CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except share data)
<CAPTION>
March 31, June 30,
1999 1998
-------------------- -----------------
(Unaudited)
<S> ASSETS <C> <C>
Current assets:
Cash and cash equivalents $46,160 $39,941
Marketable securities 41,293 37,479
Accounts receivable, net 136,143 109,741
Prepaid expenses 10,404 11,895
Other current assets 10,852 10,674
------------------ ----------------
Total current assets 244,852 209,730
Property and equipment, net 46,057 45,311
Other assets 15,407 6,717
================== ================
$306,316 $261,758
================== ================
LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities:
Credit arrangements $ - $ 1,413
Accounts payable 16,204 10,923
Advance billings 57,501 45,273
Other current liabilities 37,020 33,184
------------------ ----------------
Total current liabilities 110,725 90,793
Other liabilities 4,109 2,585
------------------ ----------------
Total liabilities 114,834 93,378
------------------ ----------------
Stockholders' equity:
Preferred stock - $0.01 par value; shares
authorized: 5,000,000; none issued and outstanding - -
Common stock - $0.01 par value; shares authorized:
50,000,000; shares issued: 25,116,400 and 24,657,637 at
March 31, 1999 and June 30, 1998, respectively; shares
outstanding: 25,086,988 and 24,628,225 at March 31, 1999
and June 30, 1998, respectively 251 246
Additional paid-in capital 158,525 149,921
Retained earnings and cumulative translation adjustment 32,706 18,213
------------------ ----------------
Total stockholders' equity 191,482 168,380
================== ================
$306,316 $261,758
================== ================
See notes to condensed consolidated financial statements.
</TABLE>
<TABLE>
PAREXEL INTERNATIONAL CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
(in thousands, except per share data)
<CAPTION>
For the three months For the nine months
ended March 31, ended March 31,
--------------------------------------------------------------
1999 1998 1999 1998
<S> ------<C>----- ----<C>------ -------<C>---- --------<C>---
Net revenue $90,032 $73,067 $260,722 $204,051
-------------- ------------- ------------- -------------
Costs and expenses:
Direct costs 59,424 47,364 172,051 132,925
Selling, general and administrative 18,398 16,743 52,792 44,054
Depreciation and amortization 4,507 5,241 13,222 11,038
Acquisition-related charges - 6,173 - 10,273
-------------- ------------- ------------- -------------
82,329 75,521 238,065 198,290
-------------- ------------- ------------- -------------
Income (loss) from operations 7,703 (2,454) 22,657 5,761
Other income, net 1,044 905 2,384 2,946
-------------- ------------- ------------- -------------
Income (loss) before provision for income taxes 8,747 (1,549) 25,041 8,707
Provision for income taxes 3,062 817 8,710 4,827
-------------- ------------- ------------- -------------
Net income (loss) $5,685 ($2,366) $16,331 $3,880
============== ============= ============= =============
Earnings (loss) per common share:
Basic $0.23 ($0.10) $0.66 $0.16
Diluted $0.23 ($0.10) $0.65 $0.16
See notes to condensed consolidated financial statements.
</TABLE>
<PAGE>
<TABLE>
PAREXEL INTERNATIONAL CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
(in thousands)
<CAPTION>
For the nine months ended
March 31,
--------------------------------------
1999 1998
---------------- -----------------
<S> <C> <C>
Cash flows from operating activities:
Net income $16,331 $ 3,880
Adjustments to reconcile net income to net cash
provided by (used in) operating activities:
Depreciation and amortization 13,222 11,038
Acquisition-related charges - 10,273
Changes in operating assets and liabilities, net of effects of acquisition (7,358) (20,822)
---------------- -----------------
Net cash provided by operating activities 22,195 4,369
---------------- -----------------
Cash flows from investing activities:
Purchase of marketable securities (68,840) (90,217)
Proceeds from sale of marketable securities 65,026 124,803
Other investing activities - (1,377)
Dividend paid by pooled entity - (1,293)
Purchase of plant and equipment (13,431)
Cash of acquired company 633 (22,358)
-
---------------- -----------------
Net cash (used in) provided by investing activities (16,612) 9,558
---------------- -----------------
Cash flows from financing activities:
Proceeds from issuance of common stock 3,858 4,453
Repayments of long-term debt (1,386) (883)
---------------- -----------------
Net cash provided by financing activities 2,472 3,570
---------------- -----------------
Elimination of net cash activities of acquired companies
for duplicated periods - 672
---------------- -----------------
Effect of exchange rate changes on cash and cash equivalents (1,836) (167)
---------------- -----------------
Net increase in cash and cash equivalents 6,219 18,002
Cash and cash equivalents at beginning of period 39,941 36,626
---------------- -----------------
Cash and cash equivalents at end of period $46,160 $54,628
================ =================
See notes to condensed consolidated financial statements.
</TABLE>
<PAGE>
PAREXEL INTERNATIONAL CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
Note 1 -- Basis of Presentation
The accompanying unaudited condensed consolidated financial statements of
PAREXEL International Corporation (the "Company") have been prepared in
accordance with generally accepted accounting principles for interim financial
information and with the instructions of Form 10-Q and Article 10 of Regulation
S-X. Accordingly, they do not include all of the information and notes required
by generally accepted accounting principles for complete financial statements.
In the opinion of management, all adjustments (primarily consisting of normal
recurring adjustments) considered necessary for a fair presentation have been
included. Operating results for the three months ended March 31, 1999, are not
necessarily indicative of the results that may be expected for other quarters or
the entire fiscal year. The financial statements for the nine-month period ended
March 31, 1998 have been restated to reflect acquisitions made in the third
quarter of fiscal 1998 accounted for under the pooling of interests method.
Certain prior year balances have been reclassified in order to conform to
current year presentation. For further information, refer to the consolidated
financial statements and footnotes thereto included in the Company's Annual
Report on Form 10-K for the year ended June 30, 1998.
Note 2 -- Earnings per Share
Effective December 31, 1997, the Company adopted Statement of Financial
Accounting Standards No. 128, "Earnings per Share" ("SFAS 128"). Earnings per
share amounts for prior periods presented have been restated to conform to the
SFAS 128 requirements. The following table outlines the basic and diluted
earnings per common share computations (in thousands, except per share data):
<TABLE>
For the three months ended For the nine months ended
March 31, March 31,
----------------------------- ----------------------------
<CAPTION> 1999 1998 1999 1998
---------- -------------- ------------ ------------
<S> <C> <C> <C> <C>
Net income (loss) attributable to
common shares $5,685 ($2,366) $16,331 $3,880
========== ============ ============ ============
Basic Earnings (Loss) Per Common
Share Computation:
Weighted average common shares
outstanding 24,834 24,114 24,777 23,846
========== ============ ============ ============
Basic earnings (loss) per common share $0.23 ($0.10) $0.66 $0.16
========== ============ ============ ============
Diluted Earnings (Loss) Per Common
Share Computation:
Weighted average common shares outstanding:
Shares attributable to common stock 24,834 24,114 24,777 23,846
Shares attributable to common stock
options 230 - 328 930
---------- ------------ ------------ ------------
25,064 24,114 25,105 24,776
========== ============ ============ ============
Diluted earnings per common share $0.23 ($0.10) $0.65 $0.16
========== ============ ============ ============
</TABLE>
<PAGE>
Note 3 - Comprehensive Income (Loss)
The Company adopted Statement of Financial Accounting Standards ("SFAS") No.
130, "Reporting Comprehensive Income" at the beginning of fiscal 1999. SFAS No.
130 establishes new rules for the reporting and display of comprehensive income
and its components. The adoption of SFAS 130 had no impact on the Company's net
income or stockholders' equity. SFAS No. 130 requires the Company's foreign
currency translation adjustments, which prior to adoption were reported
separately in shareholders' equity, to be included in other comprehensive
income. Prior year financial statements have been reclassified to conform to the
requirements of this Statement. Total comprehensive income (loss), which was
comprised of net income (loss) and foreign currency translation adjustments, was
$4.8 million and ($3.9 million) for the three months ended March 31, 1999 and
1998, respectively. Total comprehensive income for the nine months ended March
31, 1999 and 1998 totaled $14.5 million and $3.9 million, respectively.
Note 4 - Acquisition
On March 31, 1999, the Company acquired the stock of Groupe PharMedicom S.A. in
exchange for approximately 199,600 shares of the Company's common stock in a
transaction accounted for as a purchase business combination. Groupe Pharmedicom
is a leading French provider of post-regulatory services to pharmaceutical
manufacturers. The Company recorded approximately $8.5 million related to the
excess cost over the fair value of the net assets acquired. Pro forma results of
operations of the Company, assuming this acquisition was recorded at the
beginning of each period presented, would not be materially different from
actual results presented.
Note 5 - New Accounting Pronouncements
In June 1997, the Financial Accounting Standards Board ("FASB") issued SFAS No.
131 "Disclosures about Segments of an Enterprise and Related Information." SFAS
No. 131 requires selected information to be reported on the Company's operating
segments. Operating segments are determined by the way management structures the
segments in making operating decisions and assessing performance. The Company is
currently reviewing what changes, if any, this will require on the presentation
of the financial statements for fiscal year 1999. The adoption of this statement
will not have an effect on the Company's financial position or results of
operations but may result in additional disclosures.
In June 1998, the FASB issued SFAS No. 133, "Accounting for Derivative
Instruments and Hedging Activities." SFAS No. 133 establishes new standards for
the recognition of gains and losses on derivative instruments and provides
guidance as to whether a derivative may be accounted for as a hedging
instrument. Gains or losses from hedging transactions may be wholly or partially
recorded in earnings or comprehensive income as part of a cumulative translation
adjustment. Gains or losses on derivative instruments not classified as hedging
instruments are recognized in earnings in the period of change. SFAS No. 133
will be effective for the Company beginning in fiscal 2000. The Company does not
believe that adoption of SFAS No. 133 will have a material impact on its
financial position or its results of operations.
Note 6 - Subsequent Event
On April 28, 1999, the Company entered into an Agreement and Plan of Merger with
Covance Inc., ("Covance"), pursuant to which the Company will become a
wholly-owned subsidiary of Covance, subject to obtaining, among other things,
applicable stockholder and regulatory approvals. As of the effective date of the
merger, each outstanding share of the Company's common stock will be converted
into the right to receive 1.184055 shares of common stock of Covance. The
transaction is expected to be accounted for as a pooling of interests. Also on
April 28, 1999, the Company and Covance entered into reciprocal Stock Option
Agreements under which the Company has granted Covance an option to purchase
19.9% of the outstanding shares of the Company's common stock at the time of
exercise, and Covance has granted the Company an option to purchase 10% of
Covance's common stock at the time of exercise, in each case, under certain
circumstances involving the termination of the Agreement and Plan of Merger.
<PAGE>
Item 2.
Management's Discussion and Analysis of Financial Condition and Results of
Operations
The financial information discussed below is derived from the Condensed
Consolidated Financial Statements included herein. The financial information set
forth and discussed below is unaudited but, in the opinion of management,
reflects all adjustments (primarily consisting of normal recurring adjustments)
necessary for a fair presentation of such information. The Company's results of
operations for a particular quarter may not be indicative of results expected
during subsequent fiscal quarters or for the entire year.
The following discussion contains forward-looking statements that involve risks
and uncertainties. Such forward-looking statements include those related to the
adequacy of the Company's existing capital resources and future cash flows from
operations, the Company's Year 2000 readiness and the Company's desire to
continue to expand through acquisitions. The forward-looking statements
contained in the following discussion include, but are not limited to, any
statements containing the words "expects," "anticipates," "estimates,"
"believes," "may," "will," "should" and similar expressions, and the negatives
thereof. The Company's actual experience may differ materially from that
discussed in the forward-looking statement. Factors that might cause such a
difference include, but are not limited to, the failure to successfully
consummate a strategic acquisition or merger, including the Company's proposed
merger with Covance Inc., the failure to achieve expected synergies from a
strategic acquisition or merger, the potential loss or cancellation of, or delay
of work under, one or more large contracts; the adequacy and effectiveness of
the Company's sales force in winning new business; the ability to attract, train
and retain qualified employees; the Company's ability to manage adequately its
continued expansion; the Company's ability to meet its deadlines regarding Year
2000 readiness; and future events that have the effect of reducing the Company's
available cash balances such as unexpected operating losses, capital
expenditures or cash expenditures related to possible future acquisitions; and
those discussed in Risk Factors.
Overview
The Company is a leading contract research organization. It provides a broad
range of product development services to pharmaceutical, biotechnology and
medical device companies all over the world. The Company's primary objective is
to help its clients obtain regulatory approvals for their products and market
those products successfully. The Company provides the following services to its
clients:
o clinical trials management;
o data management;
o biostatistical analysis;
o medical marketing;
o clinical pharmacology;
o regulatory and medical consulting;
o performance improvement;
o industry training and publishing; and
o 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.
Generally, the Company's contracts are terminable upon sixty 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 gross
revenue. Reimbursed costs vary from contract to contract. Accordingly, the
Company views net revenue, which consists of gross 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.
The Company's stock is quoted on the Nasdaq Stock Market under the symbol
"PRXL."
Results of Operations
Three Months Ended March 31, 1999 Compared to Three Months Ended March 31, 1998
Net revenue increased by $16.9 million, or 23.1%, to $90.0 million for the three
months ended March 31, 1999 from $73.1 million for the three months ended March
31, 1998. Growth occurred across each of the Company's geographic regions and
each of its major service groups. Net revenue growth was primarily attributable
to an increase in the volume of projects serviced by the Company. 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 $12.0 million, or 25.3%, to $59.4 million for the
three months ended March 31, 1999 from $47.4 million for the three months ended
March 31, 1998. This increase in direct costs was primarily due to a 23.1%
increase in revenue which required increases in hiring and personnel costs along
with related facilities and information systems costs necessary to support
current and future increased levels of operation. Direct costs as a percentage
of net revenue increased to 66.0% for the three months ended March 31, 1999 from
64.8% for the three months ended March 31, 1998, reflecting an increase in
overall operational capacity.
Selling, general and administrative expenses increased by $3.3 million, or
21.9%, to $18.4 million for the three months ended March 31, 1999 from $15.1
million for the three months ended March 31, 1998, excluding a $1.6 million
noncash charge to adjust accounts receivable reserves of acquired businesses to
conform with Company policy for the three months ended March 31, 1998. This
increase was primarily due to increased personnel, hiring expenses, and
facilities costs necessary to accommodate the Company's growth. Excluding the
noncash charge, selling, general and administrative expenses decreased as a
percentage of net revenue to 20.4% for the three months ended March 31, 1999
from 20.7% for the three months ended March 31, 1998.
Depreciation and amortization expense increased by $1.0 million, or 28.6%, to
$4.5 million for the three months ended March 31, 1999 from $3.5 million for the
three months ended March 31, 1998, excluding a $1.7 million noncash charge to
reflect the reduced 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 during the three months ended March 31, 1998.
This increase was primarily due to an increase in capital spending on
information technology, facility improvements and furnishings necessary to
support the increased level of operations. Excluding the noncash charge,
depreciation and amortization expense increased as a percentage of net revenue
to 5.0% for the three months ended March 31, 1999 from 4.8% for the three months
ended March 31, 1998, reflecting an increase in overall operational capacity.
Income from operations increased $0.7 million, or 10.1%, to $7.7 million for the
three months ended March 31, 1999 from $7.0 million for the three months ended
March 31, 1998, after excluding $9.5 million in acquisition-related and other
noncash charges incurred for the three months ended March 31, 1998. Excluding
the impact of these charges, income from operations decreased as a percentage of
net revenue to 8.6% for the three months ended March 31, 1999 from 9.6% for the
three months ended March 31, 1998, primarily due to the increase in direct costs
noted above.
Other income, net, which is primarily comprised of interest income, increased by
$0.1 million to $1.0 million for the three months ended March 31, 1999 from $0.9
million for the three months ended March 31, 1998.
The Company had an income tax provision of $3.1 million and an effective income
tax rate of 35% for the three months ended March 31, 1999. For the three months
ended March 31, 1998, the Company had an income tax provision of $0.8 million
despite a pre-tax loss primarily due to certain non-deductible
acquisition-related charges. Excluding the effect of such charges, the effective
tax rate for the three months ended March 31, 1998 was 35%.
Results of Operations
Nine Months Ended March 31, 1999 Compared to Nine Months Ended March 31, 1998
Net revenue increased by $56.6 million, or 27.8%, to $260.7 million for the nine
months ended March 31, 1999 from $204.1 million for the nine months ended March
31, 1998. This net revenue growth was primarily attributable to an increase in
the volume of projects serviced by the Company. 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 $39.1 million, or 29.4%, to $172.1 million for the
nine months ended March 31, 1999 from $132.9 million for the nine months ended
March 31, 1998. This increase in direct costs was primarily due to a 27.8%
increase in revenues which required increases in hiring and personnel costs
along with related facilities and information systems costs necessary to support
current and future increased levels of operation. Direct costs increased as a
percentage of net revenue to 66.0% for the nine months ended March 31, 1999 from
65.1% for the nine months ended March 31, 1998, reflecting an increase in
overall operational capacity.
Selling, general and administrative expenses increased by $10.3 million, or
24.2%, to $52.8 million for the nine months March 31, 1999 from $42.5 million
for the nine months ended March 31, 1998, excluding a $1.6 million noncash
charge to adjust accounts receivable reserves of acquired businesses to conform
with Company policy for the nine months ended March 31, 1998. This increase was
primarily due to increased personnel, hiring expenses, and facilities costs
necessary to accommodate the Company's growth. Excluding the noncash charge,
selling, general and administrative expenses decreased as a percentage of net
revenue to 20.2% for the nine months ended March 31, 1999 from 20.8% for the
nine months ended March 31, 1998.
Depreciation and amortization expense increased by $3.9 million, or 41.9%, to
$13.2 million for the nine months ended March 31, 1999 from $9.3 million for the
nine months ended March 31, 1998, excluding a $1.7 million noncash charge to
reflect the reduced 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 during the nine months ended March 31, 1998. The
increase was primarily due to an increase in capital spending on information
technology, facility improvements and furnishings necessary to support the
increased level of operations. Excluding the noncash charge, depreciation and
amortization expense increased as a percentage of net revenue to 5.1% for the
nine months ended March 31, 1999 from 4.6% for the nine months ended March 31,
1998, primarily due to an increase in assets necessary to support operations.
Income from operations increased $3.4 million, or 17.6%, to $22.7 million for
the nine months ended March 31, 1999 from $19.3 million for the nine months
ended March 31, 1998, excluding $13.6 million in acquisition-related and other
noncash charges for the nine months ended March 31, 1998. Excluding the impact
of these charges, income from operations decreased to 8.7% of net revenue for
the nine months ended March 31, 1999 from 9.5% of net revenue for the nine
months ended March 31, 1998.
Other income, net , which is primarily comprised of interest income, decreased
by $0.5 million to $2.4 million for the nine months ended March 31, 1999 from
$2.9 million for the nine months ended March 31, 1998. This decrease resulted
primarily from lower interest rates obtained due to a shift to tax-exempt
securities in fiscal 1998, which was partially offset by a shift back to taxable
securities in the third quarter of fiscal 1999.
The Company had an income tax provision of $8.7 million for the nine months
ended March 31, 1999. The effective income tax rate for the nine months ended
March 31, 1999 was 35%, compared to 55% for the nine months ended March 31,
1998. Excluding the effect of certain non-deductible acquisition-related
charges, the effective tax rate for the nine months ended March 31, 1998 would
have been 35%.
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 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 the contracts is generally recognized on a percentage of
completion basis as 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, increased to 59 days at March 31, 1999 compared to 56
days at December 31, 1998.
The Company had cash and cash equivalents of $46.2 million at March 31, 1999
compared to $39.9 million at June 30, 1998. Net cash provided by operating
activities of $22.2 million resulted primarily from net income excluding
depreciation and amortization expense of $29.6 million, a $10.8 million increase
in deferred revenue, a $5.9 million increase in accounts payable and accrued
expenses, and a $1.6 million decrease in prepaid expenses and other current
assets, partially offset by a $25.3 million increase in accounts receivable.
Net cash used in investing activities of $16.6 million consisted primarily of
capital expenditures of $13.4 million related to information technology,
facility improvements and furnishings along with net purchases of marketable
securities of $3.8 million, partially offset by $0.6 million in net cash from an
acquired business.
Financing activities consisted primarily of net proceeds from the issuance of
common stock of $3.9 million, partially offset by the repayment of credit
arrangements of $1.4 million.
The Company has domestic and foreign line of credit arrangements with banks
totaling approximately $15.4 million. At March 31, 1999, the Company had
approximately $15.4 million in available credit under these arrangements.
The Company's primary cash needs are for the payment of salaries and fringe
benefits, hiring and recruiting expenses, business development costs,
acquisition-related 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 its existing lines of credit,
will be sufficient to meet its foreseeable cash needs. In the future, the
Company will continue to 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 issuance of equity or debt securities.
There can be no assurance that such financing will be available on terms
acceptable to the Company.
Agreement and Plan of Merger
On April 28, 1999, the Company entered into an Agreement and Plan of Merger with
Covance subject to obtaining, among other things, applicable stockholder and
regulatory approvals. As of the effective date of the merger, each outstanding
share of the Company's common stock will be converted into the right to receive
1.184055 shares of common stock of Covance. The transaction is expected to be
accounted for as a pooling of interests. Also on April 28, 1999, the Company and
Covance entered into reciprocal Stock Option Agreements under which the Company
has granted Covance an option to purchase 19.9% of the outstanding shares of the
Company's common stock at the time of exercise, and Covance has granted the
Company an option to purchase 10% of Covance's common stock at the time of
exercise, in each case, under certain circumstances involving the termination of
the Agreement and Plan of Merger. There can be no assurance that this
transaction will be completed on time or at all. Failure to complete the
transaction in a timely manner or at all will have a material adverse effect on
the Company.
Year 2000 Readiness Disclosure Statement
Information systems are an integral part of the services the Company provides.
As such, the Company recognizes that it must ensure that its service and
operations will not be adversely affected by Year 2000 software and equipment
failures (the "Year 2000 Issue") which can arise from the use of date-dependent
systems that utilize only two digits to represent the year applicable to a
transaction; for example, "99" to represent "1999" rather than the full four
digits. Computer systems engineered in this manner may not operate properly when
the last two digits of the year become "00", as will occur on January 1, 2000.
The Company has initiated a four-phase program, led by its Chief Information
Officer and a global, cross-functional team, to assess and remediate the effect
of the Year 2000 issue on the Company's operations. As part of this program, the
Company is contacting its clients, principal suppliers, and other vendors to
assess whether their Year 2000 issues, if any, will affect the Company. This
effort is ongoing, with responses already received from more than 70% of these
entities.
This Company-wide effort began in 1997, and to date, several Year 2000 issues
have already been identified and addressed through planned systems and
infrastructure evolution, replacement, or elimination. The continuing program
described below was designed with the intent of ensuring that the Company
identifies and addresses all remaining Year 2000 issues in advance of the year
2000.
The first phase of the program, conducting an inventory of all systems that may
be affected by the Year 2000 issue, is complete for all critical business
functions. The second phase of the program, the assessment and categorization of
all the inventoried systems by level of priority, reflecting their potential
impact on business continuation, is substantially complete for all key business
areas. Based on this prioritization, the third phase is to develop detailed
plans to address each Year 2000 issue, and to develop a general contingency plan
in the event that any critical systems cannot be made fully compliant by January
1, 2000. Contingency plans will vary by function and will identify the work
procedure change or sourcing alternative to be utilized in the event that the
primary system fails. This third phase is currently in progress, with detailed
plans already completed for most critical business functions. The fourth phase
of the program is the implementation of the detailed plans. This phase is also
in various states of completion within the numerous functional areas. It is
anticipated that all functions essential for business continuity will be fully
compliant by June 30, 1999.
The Company estimates that the aggregate cost of its Year 2000 program will be
approximately $3 million, of which approximately 40% has already been incurred.
The Company's estimates regarding the cost, timing and impact of addressing the
Year 2000 issue are based on numerous assumptions of future events, including
the continued availability of certain resources, the ability of the Company to
meet its deadlines and the cooperation of third parties. However, if the Company
cannot continue to utilize certain resources or rely on third parties to respond
timely, or the Company fails to meet its deadlines among other things, actual
results could differ materially from those expected by the Company.
Euro Conversion
On January 4, 1999, certain member countries of the European Union established
fixed conversion rates between their existing currencies and the European
Union's common currency ("Euro"). The transition period for the introduction of
the Euro is from January 4, 1999 to January 1, 2002. The Company has established
a Euro Initiative Project Team to determine how this will affect the Company
with its business processes, applications, and internal and external contracts.
The project team has begun the process of determining the many issues involved
with the introduction of the Euro, including the conversion of information
technology systems, recalculating currency risk, and impacts on the processes
for preparing taxation and accounting records.
While the Company has not yet completed its full assessment of the scope of the
Euro Conversion Issue facing its systems and dependencies, based on its analysis
to date it does not believe that the costs to be incurred will be material.
However, until the full analysis is complete, the Company is unable to
definitively determine whether or not future costs will be material.
<PAGE>
RISK FACTORS
In addition to the other information in this report, the following risk factors
should be considered carefully in evaluating the Company and its business,
including the forward-looking statements made in the section of this report
entitled Management's Discussion and Analysis of Financial Condition and Results
of Operations and other forward-looking statements that the Company may make
from time to time.
THE LOSS OR DELAY OF LARGE CONTRACTS MAY NEGATIVELY IMPACT THE COMPANY'S
FINANCIAL PERFORMANCE
Generally, the Company's clients can terminate their contracts with the Company
upon sixty days' notice. Clients terminate or delay their contracts for a
variety of reasons, including:
o products being tested fail to satisfy safety requirements;
o products have unexpected or undesired clinical results;
o the client decides to forego a particular study, perhaps for economic
reasons;
o not enough patients enroll in the study;
o not enough investigators are recruited; or
o production problems cause shortages of the drug.
In addition, the Company believes that drug companies may proceed with fewer
clinical trials if they are trying to reduce costs. These factors may cause drug
companies to cancel contracts with contract research organizations at a higher
rate than in the past. The loss or delay of a large contract or the loss or
delay of multiple contracts could have a material adverse effect on the
Company's financial performance.
THE COMPANY'S OPERATING RESULTS HAVE FLUCTUATED BETWEEN QUARTERS AND YEARS AND
MAY CONTINUE TO FLUCTUATE IN THE FUTURE
The Company's quarterly operating results have varied, and will continue to
vary. Factors that affect these variations include:
o the level of new business authorizations in a particular quarter or year;
o the timing of the initiation, progress, or cancellation of significant
projects;
o exchange rate fluctuations between quarters or years;
o the mix of services offered in a particular quarter or year;
o the timing of the opening of new offices;
o the timing of other internal expansion costs;
o the timing and amountof costs associated with integrating acquisitions; and
o the timing and amount of startup costs incurred in connection with the
introduction of new products and services.
A high percentage of the Company's operating costs are fixed. Therefore, the
timing of the completion, delay or loss of contracts, or in the progress of
client projects, can cause the Company's operating results to vary substantially
between reporting periods.
THE COMPANY DEPENDS ON A SMALL NUMBER OF INDUSTRIES AND CLIENTS FOR ALL OF ITS
BUSINESS
The Company depends on research and development expenditures by pharmaceutical
and biotechnology companies. The Company's operations could be materially and
adversely affected if:
o its clients' businesses experience financial problems or are affected by a
general economic downturn;
o consolidation in the drug or biotechnology industries leads to a smaller
client base for the Company; or
o its clients reduce their research and development expenditures.
Furthermore, the Company has benefited to date from the increasing tendency of
pharmaceutical companies to out-source large clinical research projects. If this
trend slows or reverses, the Company's operations would be materially and
adversely affected. In fiscal 1998, the Company's five largest clients accounted
for 34% of its consolidated net revenue. For the three months ended March 31,
1999, the Company's five largest clients accounted for 43% of its consolidated
net revenue, and for the nine months ended March 31,1999, the five largest
clients accounted for 42% of consolidated net revenue. In fiscal 1998, one
client accounted for 12% of consolidated net revenue, and for the three months
ended March 31, 1999 a different client accounted for 20% of consolidated net
revenue. For the nine months ended March 31, 1999, one client accounted for 20%
of consolidated net revenue. The Company could suffer a material adverse effect
if it lost the business of a significant client.
THE COMPANY'S BUSINESS HAS EXPANDED RAPIDLY AND THE COMPANY MUST PROPERLY MANAGE
THAT EXPANSION
The Company's business has expanded substantially, particularly over the past
few years. This may strain the Company's operational, human and financial
resources. In order to manage expansion, the Company must:
o continue to improve its operating, administrative and information systems;
o accurately predict its future personnel and resource needs to meet client
contract commitments;
o track the progress of ongoing client projects; and
o attract and retain qualified management, sales, professional, scientific
and technical operating personnel.
THE COMPANY WILL FACE ADDITIONAL RISKS IN EXPANDING ITS FOREIGN OPERATIONS.
SPECIFICALLY, THE COMPANY MAY FIND IT DIFFICULT TO:
o assimilate differences in foreign business practices;
o hire and retain qualified personnel; and
o overcome language barriers.
If an acquired business does not meet the Company's performance expectations,
the Company may have to restructure the acquired business or write-off the value
of some or all of the assets of the acquired business. If the Company fails to
properly manage its expansion, the Company could experience a material adverse
effect.
THE COMPANY MAY NOT BE ABLE TO MAKE STRATEGIC ACQUISITIONS IN THE FUTURE
The Company relies on it ability to make strategic acquisitions to sustain its
growth. The Company has made a number of acquisitions and will continue to
review future acquisition opportunities. The Company may not be able to acquire
companies on terms and conditions acceptable to the Company. Additionally, the
Company faces several obstacles in connection with the acquisitions it
consummates, including:
o The Company may encounter difficulties and will encounter expenses in
connection with the acquisitions and the subsequent assimilation of the
operations and services or products of the acquired companies;
o The Company's management will necessarily divert attention from other
business concerns; and
o The Company could lose some or all of the key employees of the acquired
company.
The Company may also face additional risks when acquiring foreign companies,
such as adapting to different business practices and overcoming language
barriers. In the event that the operations of an acquired business do not meet
the Company's performance expectations, the Company may have to restructure the
acquired business or write-off the value of some or all of the assets of the
acquired business. The Company may experience difficulty integrating acquired
companies into its operations.
THE COMPANY RELIES ON HIGHLY QUALIFIED MANAGEMENT AND TECHNICAL PERSONNEL WHO
MAY NOT REMAIN WITH THE COMPANY
The Company relies on a number of key executives, including Josef H. von
Rickenbach, its President, Chief Executive Officer and Chairman. The Company
maintains key man life insurance on Mr. von Rickenbach. The Company has entered
into agreements containing non-competition restrictions with its senior
officers. However, the Company does not have employment agreements with most of
its senior officers and if any of these key executives leave the company, it
could have a material adverse effect on the Company. In addition, in order to
compete effectively, the Company must attract and maintain qualified sales,
professional, scientific and technical operating personnel. Competition for
these skilled personnel, particularly those with a medical degree, a Ph.D. or
equivalent degrees is intense. The Company may not be successful in attracting
or retaining key personnel.
THE COMPANY MAY NOT HAVE ADEQUATE INSURANCE AND MAY HAVE SUBSTANTIAL EXPOSURE TO
PAYMENT OF PERSONAL INJURY CLAIMS
Clinical research services primarily involve the testing of experimental drugs
on consenting human volunteers pursuant to a study protocol. Such services
involve a risk of liability for personal injury or death to patients who
participate in the study or who use a drug approved by regulatory authorities
after the clinical research has concluded, due to, among other reasons, possible
unforeseen adverse side effects or improper administration of the new drug by
physicians. In certain cases, these patients are already seriously ill and are
at risk of further illness or death. The Company's financial stability could be
materially and adversely affected if the Company had to pay damages or incur
defense costs in connection with a claim that is outside the scope of an
indemnity or insurance coverage. The Company's financial stability could also be
materially and adversely affected in cases where the indemnity, although
applicable, is not performed in accordance with its terms. Additionally, the
Company could be adversely and materially affected if its liability exceeds the
amount of its insurance. The Company may not be able to continue to secure
insurance on acceptable terms.
THE COMPANY'S STOCK PRICE IS VOLATILE AND COULD DECLINE
The market price of the Company's common stock has fluctuated widely in the past
and may continue to do so in the future in response to quarter-to-quarter
variations in:
o operating results;
o earnings estimates by analysts;
o market conditions in the industry;
o prospects of health care reform;
o changes in government regulation; and
o general economic conditions.
In addition, the stock market has from time to time experienced significant
price and volume fluctuations that are not related to the operating performance
of particular companies. These market fluctuations may adversely affect the
market price of the Company's common stock. Since the Company's common stock
currently trades at a relatively high price-earnings multiple, due in part to
analysts' expectations of continued earnings growth, the price of the stock
could quickly and substantially decline as a result of even a relatively small
shortfall in earnings from, or a change in, analysts' expectations. Investors in
the Company's common stock must be willing to bear the risk of such fluctuations
in earnings and stock price.
THE COMPANY'S BUSINESS DEPENDS ON CONTINUED COMPREHENSIVE GOVERNMENTAL
REGULATION OF THE DRUG DEVELOPMENT PROCESS
In the United States, governmental regulation of the drug development process
has become more complicated and more extensive. However, the FDA recently
announced regulatory changes intended to streamline the approval process for
biotechnology products by applying the same standards for approval of
biotechnology products as are in effect for conventional drugs. In Europe,
governmental authorities are coordinating common standards for clinical testing
of new drugs, leading to changes in the various requirements currently imposed
by each country. In April 1997, Japan legislated good clinical practices and
legitimatized the use of contract research organizations. The Company's business
could be materially and adversely affected if governments relaxed their
regulatory requirements or simplified their drug approval procedures, since such
actions would eliminate much of the demand for the Company's services. In
addition, if the Company was unable to comply with any applicable regulation,
the relevant governmental agencies could terminate the Company's ongoing
research or disqualify research data.
THE COMPANY FACES INTENSE COMPETITION
The Company primarily competes against in-house departments of drug companies,
full service contract research organizations, 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. Contract research organizations generally compete on the basis of:
o previous experience;
o medical and scientific expertise in specific therapeutic areas;
o the quality of services;
o the ability to organize and manage large-scale trials on a global basis;
o the ability to manage large and complex medical databases;
o the ability to provide statistical and regulatory services;
o the ability to recruit investigators and patients;
o the ability to integrate information technology with systems to improve the
efficiency of contract research;
o an international presence with strategically located facilities;
o financial strength and stability; and
o price.
The contract research organizations industry is fragmented, with several hundred
small, limited-service providers and several large, full-service contract
research organizations with global operations. The Company competes against
large contract research organizations, including Quintiles Transnational
Corporation, Covance Inc., and Pharmaceutical Product Development, Inc., for
both clients and acquisition candidates. In addition, the Company competes for
contract research organizations contracts as a result of the consolidation
within the drug industry and the growing tendency of drug companies to out
source to a small number of preferred contract research organizations.
THE COMPANY MAY LOSE BUSINESS OPPORTUNITIES AS A RESULT 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 drug companies. In the last few years, the U.S. Congress has
entertained several comprehensive health care reform proposals. The proposals
were generally intended to expand health care coverage for the uninsured and
reduce the growth of total health care expenditures. While the U.S. Congress did
not adopt any of the proposals, members of Congress may raise similar proposals
in the future. If any of these proposals are approved by the U.S. Congress, drug
and biotechnology companies may react by spending less on research and
development. If this were to occur, the Company would have fewer business
opportunities. The Company is unable to predict the likelihood that health care
reform proposals will be enacted into law or the effect such laws would have on
the Company's business.
Many governments outside the U.S. have also reviewed or undertaken health care
reform. The Company cannot predict the impact that any pending or future foreign
health care reform proposals may have on its business in other countries.
THE COMPANY IS SUBJECT TO CURRENCY TRANSLATION RISKS
The Company derived approximately 41% of its net revenue for fiscal 1998, 40%
for the three months ended March 31, 1999, and 42% for the nine months ended
March 31, 1999 from operations outside of North America. The Company's revenues
and expenses from foreign operations are usually denominated in local
currencies. The Company is therefore subject to exchange rate fluctuations
between local currencies and the United States dollar. To the extent that the
Company cannot shift this currency translation risk to other parties, the
Company's operating results could be materially and adversely affected. The
Company does not currently hedge against the risk of exchange rate fluctuations.
A THIRD PARTY MAY HAVE DIFFICULTY ACQUIRING THE COMPANY
Certain provisions of the Company's Restated Articles of Organization, as
amended, and Restated By-Laws contain provisions that 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, the Board of Directors of the Company may issue preferred stock in the
future without further stockholder approval. The Board of Directors of the
Company would determine the terms and conditions, as well as the rights,
privileges and preferences of such preferred stock. The holders of common stock
would be subject to, and may be adversely affected by, the rights of any holders
of preferred stock that the Board of Directors of the Company may issue. The
Company benefits from its Board of Directors' ability to issue the preferred
stock by affording the Company desirable flexibility in connection with possible
acquisitions and other corporate purposes. However, the Company's Board of
Directors' ability to issue the preferred stock could also 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.
<PAGE>
Part II. Other Information
Item 2. Changes in Securities and Use of Proceeds
a) Not applicable
b) Not applicable
c) Effective March 31, 1999, the Company issued 199,568 shares of its
common stock, par value $.01 per share, in consideration of the
acquisition all of the outstanding share capital of Groupe
PharMedicom S.A. ("PharMedicom"). All of such shares were issued
without registration under the Securities Act of 1933, in reliance
on the exemption from registration provided by Regulation S under
such Act. The shares were offered, sold and delivered only to the
shareholders of PharMedicom, all of whom were non-United States
persons, outside of the United States, its territories and
possessions.
Item 6. Exhibits and Reports on Form 8-K
(a)Exhibit No. Description
2.1 Agreement and Plan of Merger dated as of April 28,
1999 among Covance Inc., CCJ Holding Corp. and
PAREXEL International Corporation (incorporated
herein by reference to Exhibit 2.1 to the
Company's Current Report on Form 8-K dated April
28, 1999 and filed with the Commission on May 4,
1999).
2.2 Share Acquisition Agreement with respect to Groupe
PharMedicom S.A., dated March 31, 1999 among Herve
Laurent, Philippe Conquet and Others, as Sellers,
and PAREXEL International Corporation, as Buyer.
4.1 Registration Rights Agreement dated as of March
31, 1999 among PAREXEL International Corporation
and certain former stockholders of Groupe
PharMedicom S.A.
99.1 Stock Option Agreement dated April 28, 1999 among
Covance Inc., as grantee and PAREXEL International
Corporation, as issuer (incorporated herein by
reference to Exhibit 99.1 to the Company's Current
Report on Form 8-K dated April 28, 1999 and filed
with the Commission on May 4, 1999).
99.2 Stock Option Agreement dated April 28, 1999 among
PAREXEL International Corporation, as grantee and
Covance Inc., as issuer (incorporated herein by
reference to Exhibit 99.2 to the Company's Current
Report on Form 8-K dated April 28, 1999 and filed
with the Commission on May 4, 1999).
27 Financial Data Schedule
(b) Reports on Form 8-K.
The Company filed a Current Report on Form 8-K dated January 27,
1999 reporting the public announcement of its quarterly earnings.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized, on this 14th day of May, 1999.
PAREXEL International Corporation
By:/s/ Josef H. von Rickenbach__________
Josef H. von Rickenbach
President, Chief Executive Officer and Chairman
By:/s/ William T. Sobo, Jr. ______________
William T. Sobo, Jr.
Senior Vice President, Chief Financial Officer
<PAGE>
EXHIBIT 2.2
DATED 31 March 1999
SHARE ACQUISITION AGREEMENT
HERVE LAURENT, PHILIPPE CONQUET AND OTHERS (1)
PAREXEL INTERNATIONAL CORPORATION (2)
l-g
190 STRAND, LONDON WC2R 1JN
TEL: 0171 379 0000 FAX: 0171 379 6854
Ref: RWE/0892677.01
1 -
<TABLE>
892677.01
CONTENTS
<CAPTION>
<S> <C> <C>
No Heading Page
1. Definitions 1
2. The Shares 9
3. Repayment by Sellers and the Company 9
4. Completion 9
5. vendors Warranties 11
6. COMPLIANCE WITH US LAW 15
7. Restrictive Covenants 18
8. Pension Scheme 19
9. General Provisions 19
10. Announcements 20
11. Costs 20
12. Notices 20
13. Governing Law and Jurisdiction 21
THE FIRST SCHEDULE: Particulars of the Sellers 22
THE SECOND SCHEDULE: Basic Information concerning the Company 23
THE THIRD SCHEDULE: Particulars of Subsidiaries 24
THE FOURTH SCHEDULE: Property 25
THE FIFTH SCHEDULE: Provisions affecting the Pension Scheme 26
THE SIXTH SCHEDULE: VENDOR'S Warranties 27
THE SEVENTH SCHEDULE: limits on claims 45
THE EIGHTH SCHEDULE: holdback 47
THE NINTH SCHEDULE: SPECIFIC CONTINGENCIES 50
Affiliate Agreement: Appendix A
Registration Rights Agreement: Appendix B
- 3 -
892677.01
892677.01
THIS AGREEMENT is made the 31st day of March 1999
BETWEEN:
(1) THE SEVERAL PERSONS whose names and addresses are set out in Column
(1) of the First Schedule hereto ("the Sellers") and
(2) PAREXEL INTERNATIONAL CORPORATION (whose principal place of
business is at 195 West Street, Waltham,
Massachusetts 02154, USA ("the Purchaser")
WHEREAS
(A) Groupe PharMedicom (registered No. B411470481) ("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 Sellers 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 shares of the Company.
(C) The Sellers 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.
(D) Particulars of the companies which at the date hereof are
subsidiaries of the Company are set out in the Third Schedule.
NOW IT IS HEREBY AGREED as follows:-
1. Definitions
1.1 In this Agreement and the Schedules hereto the following
expressions shall unless the context otherwise requires have the
meanings following:-
"the Accounts" the unaudited balance sheet as at the 31 December 1998 and
unaudited profit and loss account for the 9 months ended on the 31 December
1998 of each of the Company and the Subsidiaries including in the case of the
Company the unaudited consolidated balance sheet as at such date and the
unaudited consolidated profit and loss account for such period and in each
case the directors report and notes in relation thereto; US GAAP Accounts the
Accounts and the related consolidated statement of earnings, shareholders
equity and cash flows restated to USGAAP;
"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;
"Affiliate Agreements" the agreements in the form annexed hereto at Appendix
A;
"the Balance Sheet Date" 31 December 1998;
"Business" the business(es) of statistical studies, clinical, biological,
epidemiological studies, creation and marketing of software, consultancy,
information and documentation, and marketing services on pharmaceutical areas
carried on by the Group at the date hereof;
"Business day" a day on which banks shall be open in Paris for the conduct of
general banking business (excluding Saturdays);
"Tax Claim" 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 any member of the Group or the Purchaser is to be or
is sought to be made subject to a Liability to Taxation;
"the Consideration Shares" 199,746 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;
"the Disclosure Letter" the letter of even date herewith from the Sellers 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 a member of the Group is a party thereto and
includes Completion;
"Group" the Company together with the Subsidiaries;
"Senior Commercial Counsel/ Independent Accountant" means such person who shall
be nominated by either party upon agreement or failing agreement within three
days by the President of the Commercial Court of Paris for the time being
following request by any party; "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;
"March Accounts" the unaudited and projected Balance Sheet and Profit and Loss
Accounts for the Group for the period January, February and March 1999;
"Nasdaq" National Association of Securities Dealers, Inc. Automated Quotation
System;
"New Reliefs" any Reliefs which arise to the Company or any of the Subsidiaries:
(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;
"Proceeding" any judicial or quasi-judicial process or other investigation by
any court, government department, regulator or otherwise;
"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 any member of the Group and a place of business in
any Relevant Country;
"the Purchaser's Lawyers" 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; "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 , Germany and France;
"Reliefs" 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 Agreements" the service agreements between the Company and H.
Laurent, the Company and P. Conquet;
"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 relevant law or equivalent
legislation in any country including orders, regulations, instruments,
bye-laws or other subordinate legislation made under the relevant law or
equivalent legislation in any country and includes (without limitation)
corporation tax, income tax, capital gains tax, value added tax, customs
and other import duties, social contributions, stamp duty, capital duty,
capital transfer tax and inheritance tax and any amount which any member
of the Group 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 any member of the Group may be or become bound to
make to any person as a result of the operation of any enactment relating
to Taxation;
(b)any penalties fines costs charges interest or damages payable in
connection with any Taxation;
(c)any payment made or liability incurred in connection with any reasonable
settlement of any Tax Claim;
(d)all costs and expenses reasonably incurred by any member of the Group or
the Purchaser in connection with any Tax Claim;
"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;
"Seller Representative" means either of H. Laurent or P. Conquet;
"the Sellers' lawyer" Maitre Denis Polack;
"Sellers Warranties" those representations and warranties made to the Purchaser
contained or referred to in Clauses 5 and 6 and the Sixth Schedule hereto;
"US Person" any natural person resident in the United States;
any partnership or corporation organised or incorporated under the laws of
the United States;
any estate of which any executor or administrator is a US person;
any trust of which any trustee is a US person;
any agency or branch of a foreign entity located in the United States;
any non-discretionary account or similar account (other than an estate or
trust) held by a dealer or other fiduciary for the benefit or account of a
US person;
any discretionary account or similar account (other than an estate or
trust) held by a dealer or other fiduciary organised, incorporated, or (if
an individual) resident in the United States; and
any partnership or corporation if:
(a) organised or incorporated under the laws of any foreign jurisdiction;
and
(b) formed by a US person principally for the purpose of investing in
securities not registered under the United States Securities Act of
1933, as amended (the "Act"), unless it is organised or incorporated
and owned by accredited investors (as defined in Rule 501(a) under the
Act) who are not natural persons, estates or trusts.
"Year 2000 compliant" means that the performance or functionality of Systems
used or required by the Group for the purposes of its business will not be
affected by dates prior to, during or after the Year 2000, whether through a
failure of a System to adequately recognise or process such dates or
otherwise and a "System" is any relevant computer system including hardware,
equipment with embedded computer chips, software, networks, interfaces and
data storage.
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 Sellers" 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
Seller, each of the Sellers 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 Article 354 of the French Law on Companies (the Act of July
1966)) for the time being of the Company.
1.7 The expression "the Company" where used in clauses 3, 4, 5 and 6
and in the Sixth and Seventh Schedules to this Agreement shall mean
each of the Company and each of its Subsidiaries.
1.8 References to Clauses, Sub-clauses and Schedules are references to
Clauses and Sub-clauses of this
Agreement and Schedules to this Agreement.
1.9 In this Agreement and the Schedules hereto the masculine gender
shall include the feminine and neuter, the singular number shall
include the plural and vice versa, and references to persons shall
include bodies corporate, unincorporated associations and
partnerships.
1.10 References in this Agreement to any law shall include (except where
the context otherwise requires) any law which amends extends
consolidates or replaces the same and any law 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 law except where and to the
extent that any liability of the Sellers under this Agreement would
be created or extended as a result of any amendment, extension,
consolidation or replacement of any law in force at Completion.
1.11 The headings in this Agreement are inserted for convenience only
and shall not affect the
construction hereof.
2. The Shares
2.1 The Sellers 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 Sellers of the
Consideration Shares in the amounts set against each of their names
in column 4 of the First Schedule.
2.3 A proportion of the Consideration Shares determined in accordance
with the Eighth and Ninth Schedules shall not be delivered to the
Sellers on Completion but shall be withheld by the Purchaser on the
terms and conditions set out in the Eighth and Ninth Schedules.
3. Repayment by Sellers and the Company
The Sellers will prior to or simultaneously with Completion repay
to the Company any sums due by the Sellers, any Associate of the
Sellers 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 or sums expressly disclosed in the
Disclosure Letter) 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 Sellers will confirm in writing to the
Purchaser that they have so procured.
4. Completion
4.1 Completion shall take place on March 31, 1999 at the offices of the
Purchaser's Lawyers or such other offices as the parties may
subsequently agree when:-
4.1.1 the Sellers shall deliver or cause to be delivered to the
Purchaser:-
(a) duly executed transfers in respect of the Shares;
(b) registers of the Company made up to the date of Completion
etc;
(c) 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 and by-laws (statuts) 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;
(d) written confirmation pursuant to Clause 3; and
(e) written resignation letters by such of the directors of the
Company and the Subsidiaries as the Purchaser may nominate (if
any), each such letter incorporating an acknowledgement that
the party resigning has no claims (whether for compensation
for loss of office or termination of employment, unpaid
remuneration or otherwise howsoever) against the Company or
any of the Subsidiaries;
(f) representation letters from certain of the Sellers to
Pricewaterhouse Coopers L.L.P that the transaction qualifies
for pooling of interests accounting treatment; (g) signed
stock transfer forms in favour of the Purchaser in relation to
the Holdback Shares and Additional Holdback Shares;
(h) duly executed Affiliate Agreements by H. Laurent and P.
Conquet and Comir.
4.1.2 the Sellers shall procure that the Directors shall hold a meeting
of the Directors 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;
(c) the Directors shall approve the Service Agreements;
4.1.3 the Sellers shall procure that the Company will and the other
persons and parties thereto shall enter into the Service Agreements
and the Affiliate Agreements;
4.1.4 Subject to the performance by the Sellers 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 Sellers the number of Consideration Shares to which
he is entitled hereunder and deliver certificates evidencing such
Consideration Shares to the Sellers; 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 4.1.5 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).
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
Sellers 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).
5. vendors Warranties
5.1 The Sellers hereby warrant and represent to the Purchaser in the
terms of the Sellers Warranties.
5.2 In particular and without prejudice to the generality of sub-clause
5.1 the Sellers hereby warrant and represent to the Purchaser that
the recitals to this Agreement and the Sellers Warranties are at
the date hereof true and accurate in all respects.
5.3 The Sellers Warranties shall apply (mutatis mutandis) to the
Company and to the Subsidiaries and any references in the Sixth
Schedule or elsewhere in this Agreement to any statutory provision,
regulation or accounting principles applying in France 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 Sellers Warranties untrue or misleading or caused them
to be breached if it has been fully, fairly and accurately
disclosed to the Purchaser in the Sellers' Disclosure Letter.
5.5 The Sellers hereby covenant and undertake to the Purchaser that, if
after the date hereof it shall be found that any matter the subject
of a Sellers Warranty was not as warranted then, notwithstanding
any further right of the Purchaser hereunder in respect of such
breach of Sellers Warranty, if the effect thereof is that:-
5.5.1 the value of the Group is less than its value would have been had
there been no breach of Sellers Warranty; or
5.5.2 the value of any asset belonging to the Group is less than its
value would have been had there been no breach of Sellers Warranty;
or
5.5.3 any asset represented as belonging to the Group does not so belong;
or
5.5.4 the Group is subject to any liability (including any Liability to
Taxation) not disclosed (in accordance with Clause 5.4) in the
Disclosure Letter; or
5.5.5 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 Sellers Warranty;
then the Sellers shall on demand account to the Purchaser pursuant
to the provisions of the Eighth Schedule for an amount equal to the
amount of any loss or reduction in value or liability (or
contingent liability) so incurred by the Purchaser or by any
company in the Group and any such settlement made by the Sellers
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 Sellers Warranty.
5.6 To the extent not already provided for in Clause 5.5 above the
Sellers hereby agree to provide to the Purchaser an amount equal
to:-
5.6.1 any Liability to Taxation of the Group:
(a) arising as a consequence of or by reference to one or more
Events which occurred on or before the date hereof; or
(b) 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;
5.6.2 any Liability to Taxation which would have arisen (and in respect
of which the Sellers would have been liable under Clause 5.6.1) 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;
5.6.3 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;
5.6.4 any reasonable costs and expenses incurred in connection either
with any such liability or amount as is referred to in Clauses
5.6.1 to 5.6.3 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 Sellers.
5.6.5 The Indemnities contained in Clause 5.6 above do not cover any
Liability to Taxation:-
(a) to the extent that provision or reserve specifically in
respect thereof has been made in the Accounts or specifically
referred to in the notes to the Accounts;
(b) to the extent that that Liability to Taxation was paid or
discharged on or before the Balance Sheet Date;
(c) to the extent that the Tax Claim arises as a result of the
appropriate provision or reserves in the 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
(d) 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;
(e) 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
Sellers or any of them under any other provision of this
Agreement or by any other party;
5.7 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 Sellers 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.
5.8 The Sellers 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 Sellers Warranties shall remain
in full force and effect notwithstanding Completion.
5.9 The Sellers undertake to indemnify the Purchaser against any
reasonable costs and expenses which the Purchaser may reasonably
incur either before or after the commencement of any action in
connection with:
5.9.1 the settlement of any claim brought on reasonable grounds that any
of the Sellers Warranties are untrue or misleading or have been
breached;
5.9.2 any legal proceedings in which the Purchaser claims that any of the
Sellers Warranties are untrue or misleading or have been breached
and in which judgment is given for the Purchaser; or
5.9.3 the enforcement of any such settlement or judgment.
5.10 The Sellers 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 Seller), 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 Seller from claiming against any other
Seller under any right of contribution or indemnity to which he may
be entitled, and each Seller 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.
5.11 The liability of the Sellers shall be joint and several and shall
bind their respective successors and personal representatives.
6. COMPLIANCE WITH US LAW
Each Seller severally:
6.1 warrants and represents to the Purchaser that the Seller:-
6.1.1 is acquiring the Consideration Shares for his own account and not
for the account or benefit of any other person including any US
Person;
6.1.2 is not an officer or director of any affiliate of the Purchaser or
any of its affiliates;
6.1.3 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).
6.1.4 is not a U.S Person..
6.2 acknowledges and agrees that the Consideration Shares have not been
registered under the Act and may be offered or sold only in
accordance with the provisions of Regulation S under the Act,
pursuant to a registration of the Consideration Shares under the
Act or pursuant to an exemption from the registration requirements
of the Act and further acknowledges that hedging transactions
involving the Consideration Shares may not be conducted unless in
compliance with the Act.
6.3 acknowledges and agrees that the Purchaser shall refuse to register
any transfer of the Consideration Shares not made in accordance
with the provisions of Regulation S under the Act, pursuant to a
registration of the Consideration Shares under the Act, or pursuant
to an exemption from the registration requirements of the Act.
6.4 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;
6.5 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;
6.6 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;
6.7 has received and carefully reviewed the Purchaser's Annual Report
on Form 10-K for the fiscal year ended June 30, 1998, Quarterly
Reports on Form 10-Q for the quarters ended September 30, 1998 and
December 31, 1998, Current Reports on Form 8-K dated August 12
1998, October 29 1998 and January 28 1999 and the 1998 Annual
Report to Stockholders; and the Sellers 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.
6.8 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 6.7, and the
results of independent investigations by the Seller;
6.9 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 and represents
to Parexel in the same terms as have been represented to
Pricewaterhouse Coopers in the letter to them annexed hereto.
6.10 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;
6.11 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.
6.12 warrants that the Company has never, directly or indirectly (i)
used any corporate funds for unlawful contributions, gifts,
entertainment or other unlawful expenses relating to political
activity; (ii) made any unlawful payment to foreign or domestic
government officials or employees, or to foreign or domestic
political parties or campaigns, from corporate funds; (iii)
violated any provisions of the United States Foreign Corrupt
Practices Act of 1977; (iv) established or maintained any unlawful
or unrecorded fund of monies or other assets; (v) made any false or
fictitious entry on its books or records; (vi) made any bribe,
rebate, payoff, influence payment, kickback, finder's fee,
commission or other payment or compensation of a similar or
comparable nature whether lawful or not, to any person or entity,
private or public, regardless of form, whether in money, property
or services to obtain favourable treatment in securing business or
to obtain special concessions, or to pay for favourable treatment
for business secured or for special concessions already obtained;
(viii) submitted or caused to be submitted any false claims against
the US Government or (ix) made, or caused to be made any false
statements to the US Government subject to prosecution under 18
U.S.C. Section 1001.
6.13 warrants that the Company has delivered to the Purchaser a letter
identifying all persons who are "affiliates" of it for purposes of
Rule 145 under the Act.
7. Restrictive Covenants
7.1 For the purpose of assuring to the Purchaser the full benefit of
the businesses and goodwill of the Company each of Herve Laurent
and Philippe Conquet hereby undertakes by way of further
consideration for the obligations of the Purchaser under this
agreement as separate and independent agreements that:-
7.1.1 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;
7.1.2 for a period of 3 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 and Switzerland which is similar to or competitive
with any trade or business carried on by the Company and/or the
Subsidiaries within the period of two years prior to the date of
Completion;
7.1.3 for a period of 3 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 7.1 above from carrying out his duties
pursuant to a service agreement or contract of employment between
himself and the Company.
7.2 The restrictions contained in Clause 7.1 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.
8. Pension Scheme
The provisions set out in the Fifth Schedule shall apply.
9. General Provisions
9.1 The Sellers shall (and shall procure that any other necessary party
shall) execute and do all such documents acts and things as may be
reasonably required by the Purchaser for securing to or vesting in
the Purchaser the legal and beneficial ownership of the Shares
forthwith upon Completion in accordance with the terms and
conditions of this Agreement.
9.2 This Agreement shall not be assignable by any party hereto without
the prior written consent of the others save by the Purchaser to
any 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
9.3 If the benefit of this Agreement is assigned, the liability of the
Sellers 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 Sellers Warranties.
9.4 The obligations of the Sellers in this Agreement are joint and
several and such obligations and undertakings shall be enforceable
accordingly.
9.5 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.
9.6 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.
9.7 Any right of termination 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 termination shall constitute a waiver by that party
of any such other right or remedy.
9.8 The Purchaser may release or compromise the liability of any of the
Sellers hereunder or grant to any Seller time or other indulgence
without affecting the liability of any other Seller hereunder.
10. Announcements
No party to this Agreement shall make any statement or announcement
in connection with this transaction except with the prior approval
of the other party save as may be required by law or save to the
extent necessary to comply with the requirements of the 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.
11. Costs
The Parties shall each pay their own costs of and incidental to
this Agreement and the sale and purchase hereby agreed to be made
and the Company shall have no liability for such costs.
12. Notices
Any notice required to be given by any party hereto to any other
shall be in writing and may be served personally or by post 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 to the Sellers a copy shall be sent by
facsimile to the Seller's lawyers for the attention of M. Denis
Polack (fax number 00 33 1 45 61 58 39) and to the Purchaser a copy
shall be sent to the Purchaser's lawyers for the attention of
Richard Elphick (fax number 00 44 171 379 6854). 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.
13. Governing Law and Jurisdiction
13.1 This Agreement shall be governed by either: (i) the law of the
Republic of France in which case the parties hereby submit to the
non-exclusive jurisdiction of the Courts in Paris; or (ii) the laws
of England and Wales in which case the parties hereby submit to the
non-exclusive jurisdiction of the High Court in London.
13.2 In the event that any party initiates any proceedings it may elect
which of the laws referred to above shall apply and the other
parties shall be bound by such election and the appropriate Court
shall have jurisdiction.
AS WITNESS whereof this Agreement has been entered into the day and year first
above written.
TABLE>
THE FIRST SCHEDULE
PARTICULARS OF THE SELLERS, THEIR SHAREHOLDINGS (actions)
IN THE COMPANY AND THE CONSIDERATION
(1) (2) (3) (4)
Names and Addresses No. of Ordinary Shares Capital FFr Consideration
(actions) Shares
<CAPTION>
- ----------------------------------- -------------------------- ---------------------------- --------------------
<S> <C> <C> <C>
M. Laurent 45,239 4,523,900,00 75,302
Herve
Comir 26,680 2,668,000,00 44,410
M. Conquet 43,967 4,396,700,00 73,185
Philippe
Melle Laurent 16 1,600,00 27
Valerie
M. Baur 16 1,600,00 27
Charles
Succession de M. Baur 16 1,600,00 27
Francois
Melle Laurent 16 1,600,00 27
Caroline
Mme Laurent 16 1,600,00 27
Karine
Finanval 4,008 400,800,00 6,671
M. Chahid-Nourai 15 1,500,00 25
Behrouz
M. Leroux 5 500,00 8
Yvon
Mme Conquet 5 500,00 8
Caroline
La Senlisienne 1 100,00 2
de Portefeuille
(action pretee par Comir)
</TABLE>
THE SECOND SCHEDULE
BASIC INFORMATION CONCERNING THE COMPANY
THE SECOND SCHEDULE
1. Registered number : B 411 470 487
2. Date of Registration : 25 March 1997
3. Address of registered office : 12 rue de Lorraine
92300 Levallois Perret
4. Registered capital : 12,000,000 FF (120,000 shares
of 100 FF each)
5. Directors Full Names CONQUET Philippe
LAURENT Herve
CHAID-NOURAI Behrouz
AOUSTIN- LAURENT Karine
CONQUET Caroline
LA SENLISIENNE DE PORTEFEUILLE
6. Auditors: Polack, Thierry
<TABLE>
THE THIRD SCHEDULE
PARTICULARS OF SUBSIDIARIES
Name Date and Place of Share Held by Beneficially
Incorporation and Capital owned by
Registered Number
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Biostat 9 December 1985, 5,123 PharMedicom PharMedicom
B334 323 979 (81B 02180) 1 H. Laurent "
1 V. Laurent "
1 C. Baur "
1 C. Laurent "
1 K. Laurent "
1 P. Conquet "
1 Comir "
Droit & Pharmacie 1 October 1956 7,812 PharMedicom PharMedicom
B562 108 084 (97B04948) 1 P. Conquet "
1 C. Conquet "
1 B.C Nourai "
Cercles 22 May 1993 499 Pharmedicom Pharmedicom
391 324 373 1 "
RCS Nanterre (95B3191)
Paris
</TABLE>
<TABLE>
THE FOURTH SCHEDULE
PROPERTY
Short Description of Property Expiry of Lease Owner if Leasehold
<CAPTION>
- ------------------------------------------- --------------- -------------------------------- ----------------------
<S> <C> <C>
Offices at 12 rue de Lorraine, 92300 30 June 2006 Comir
Levallois Perret, Paris
15 Avenue des Droits de l'Homme, 45000 3 July 2004 SCI Oxford
Orleans
</TABLE>
THE FIFTH SCHEDULE
PROVISIONS AFFECTING THE PENSION SCHEME
1. The Group contributes to those pension schemes on behalf of its
employees more particularly described in the documents at Annex 15
of the Disclosure Letter provided to the Purchaser.
2. There are no schemes other than those referred to in the paragraph
above to which any members of the Group are obliged to contribute
funds.
THE SIXTH SCHEDULE
SELLER'S WARRANTIES
In this Schedule (save where the context otherwise requires) the expression "the
Company" shall mean each of the Company and each of its Subsidiaries.
The Sellers jointly and severally provide the following Representations and
Warranties. Each Representation and Warranty shall be construed as a separate
representation and warranty and shall be deemed to survive Completion.
The warranties and representations referred to in Clause 5 of the foregoing
Agreement are that:-
1. CONSTITUTION OF THE COMPANY
1.1 Ownership of Shares; Authorisation
(a) Each Seller has full and valid title to the Shares owned by
him as specified in the First Schedule hereto and such Shares
are free of all Encumbrances. The Sellers hereby deliver good
and marketable title to all of the Shares to the Purchaser
free of all Encumbrances.
(b) Each Seller has the power and capacity to execute, deliver and
carry out the terms and provisions of this Agreement and has
taken all necessary action to authorise the execution and
performance of this Agreement. This Agreement constitutes a
valid and binding obligation on each Seller enforceable in
accordance with its terms.
(c) Each Seller has obtained all the consents, approvals or
authorisations required in connection with the execution and
performance of this Agreement by it.
(d) The execution and performance of this Agreement and the
transactions stipulated herein will not, with or without
notice and/or lapse of time, result in a breach of or conflict
with any provision, covenant or obligation of any of the
Sellers or in the modification or termination of any such
covenant or obligation.
1.2 Corporate Organisation of the Company
(a) The Company is a corporation (societe anonyme) duly organised
and validly existing under the laws of the Republic of France
with all requisite corporate power and authority to carry on
its business as it is now being conducted.
(b) The articles of association and by-laws (statuts) of the
Company and the Extrait k-bis, a copy of which is annexed to
the Disclosure Letter, are complete and up-to-date. The
Company has been in compliance with its articles of
association and by-laws since its formation.
(c) The Company has a share capital of twelve million French
francs (FRF 12,000,000) divided into (i) 120,000 ordinary
shares with a par value of 100FRF per share, all of which are
validly issued and fully paid. The aforesaid securities are
the only outstanding interests in the capital of the Company
and there is no outstanding subscription right, option,
conversion right, warrant, pre-emptive right or other
agreement providing for the purchase, issuance or sale of any
securities representative of the capital or any voting rights
of the Company whatsoever.
(d) The Company is not the subject of any judicial, administrative
or amicable procedure of judicial reorganisation or
liquidation, reorganisation, winding-up or liquidation, nor is
it in a state of insolvency (cessation de paiements)
(inability to satisfy its debts as they fall due). No
administrator (mandataire ad hoc) has been designated by any
court or been requested to be designated to assist the
Company. The Company does not fall within the scope of Article
241 of the Act of July 1966 with respect to insufficient or
impaired capital.
1.3 Subsidiaries; Secondary Establishments
The Company has the subsidiaries details of which are set out in
the Second Schedule. It has no investments of any kind whatsoever
in any other entity, nor has it entered into any agreements or
commitments relating to the acquisition of any investment in any
other entity. The Company does not have any secondary
establishments.
1.4 The Shares
(a) 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.
(b) 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.
1.5 Title to Assets
The Company has good and valid title free of any Encumbrances to
all assets necessary for the operation of the Business. Such assets
are in good condition and are adequate and sufficient for the
Business of the Company. No Person has any right or option to
purchase, lease or use any such assets.
The Fourth Schedule contains details of all of the various real
property in and on the premises of which the Company carries on the
Business and such real property in respect of which it holds a
right of occupancy and/or purchase under lease agreements or
capital lease agreements.
1.6 Litigation
(a) There is no Proceeding pending against the Company and, to the
best knowledge of the Sellers, there are no facts likely to
result in any Proceeding.
(b) There are not now, nor have there been during the twenty four
months prior to the date hereof, any governmental
investigations or disciplinary proceedings concerning the
Company or the Business. The last audit of the Company by the
tax authorities took place on January 1995 for Biostat and
covered the period up to December 1994 and for Droit et
Pharmacie it took place in October 1994 for the period up to
31 December 1993. The Company provided all information
requested by the authorities and all other relevant
information necessary in connection with such audit, and such
information was true and accurate.
(c) There has never been any issue which could have given rise to
a product/service liability claim against the Company and the
Sellers are not aware of any facts or matters which could give
rise to such claim in the future.
.7 Compliance with Laws
(a) The Company has not violated any law, order, rule, ordinance
or, more generally, any regulation relating to the use of its
assets or the operation of the Business, and the Business is
currently operated in compliance with all applicable laws,
statutes, regulations, orders and decrees in force, and in
particular, statutory provisions relating to pricing,
competition and the obtaining of grants and subsidies.
(b) The Company has all permits, licences and other authorisations
(and is in compliance with the terms and conditions thereof)
required by the statutory and regulatory provisions in force.
In particular, the Company has all permits, licences and other
authorisations (and is in compliance with the terms and
conditions thereof) required under Environmental Law or laws
and regulations governing public health and safety.
(c) The Company has not received written notice from any
Governmental Authority or other regulatory body of any matter
(i) relating to any breach or non-compliance with any law or
regulation, or (ii) which is likely to form the basis of any
Proceeding.
(d) The assets (including plant and machinery) used by the Company
are in compliance with the provisions of applicable laws and
regulation governing environmental health and public health
and safety;
(e) All permits, licences and authorisations required in
connection with the use and/or occupancy by the Company of
real property or the construction of any building or the
carrying out of any works by the Company on such properties
have been obtained and remain valid.
1.8 Effect of Agreement
Neither the execution or performance of this Agreement nor the
consummation of the transactions contemplated herein will (a)
violate any law applicable to the Company (b) result in the breach
or termination of any agreement, permit or licence applicable to
the Company or entitle any third party to renegotiate or modify the
terms thereof or (c) result in the creation of or imposition of any
Encumbrance upon the Business or any of the assets of the Company.
Neither the acquisition of the Shares, nor compliance with the
terms of this Agreement will (x) result in any present indebtedness
of the Company becoming due or capable of being declared due and
payable prior to its stated maturity or (y) give rise to or cause
to become exercisable any material right in respect of the Company.
The Company has not received any grant or benefited from any
concession made by any governmental agency or authority in relation
to the Business which, in the case of a grant, will become liable
to be repaid in whole or in part or, in the case of a concession,
will be lost or forfeited in whole or in part as a result of the
transactions contemplated in this Agreement.
1.9 Sellers' other interests
No Seller nor any Associate of any Seller 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
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 Financial Statements
(a) The Accounts, have been prepared in accordance with all
applicable laws and generally accepted accounting principles.
(b) As of the Balance Sheet Date, the Company had no liabilities
(including off-balance sheet liabilities) which were required
to be reflected in financial statements that were not
reflected or adequately reserved against according to such
principles in a manner consistent with the Company's past
practices and procedures. Since the Balance Sheet Date the
Company has not incurred any liability except liabilities that
were incurred in the usual and normal course of business
consistent with the Company's past practices.
(c) The Company has not declared or paid any dividends or other
distributions or paid any special drawings since the Balance
Sheet Date.
(d) The Accounts give a true and fair view of the assets and
liabilities of the Company at the Balance Sheet Date and the
profits of the Company for the financial period ended on that
date;
(e) 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
theBalance Sheet Date;
(f) The Accounts properly reflect the financial position of the
Company as at the Balance Sheet Date.
2.2 US GAAP Accounts
The balance sheets of the Company as of the Balance Sheet Date, and
the statements of operations, cash flows and changes in
stockholders' equity of the Company for that fiscal year then
ended, as prepared by Pricewaterhouse Coopers, shall be known
collectively as the Financial Statements. Each of the balance
sheets included in the Financial Statements fairly presents in all
material respects the financial position of the Company as of its
date, and the other statements included in the Financial Statements
fairly present in all material respects the results of operations,
cash flows and stockholders equity, as the case may be, of the
Company for the periods therein set forth, in each case in
accordance with generally accepted accounting principles in the
United States consistently applied during the periods involved
except as otherwise stated therein.
2.3 March Accounts
The March Accounts give a true and fair view of the assets and
liabilities of the Company as at 31 March 1999 and the projected
profits of the Company as at that date.
2.4 Tax Provisions
To the extent required by the Statements of Standard Accounting
Practice and the Financial Reporting Standards applicable to a
French company provision or reserve has been made in the Accounts
and March 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 March 1999 or any event on or before the 31 March 1999
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.
2.5 Work in progress
In the Accounts:-
(a) the Company's work in progress/inventory 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;
(b) redundant or obsolete work in progress/inventory as at the
Balance Sheet Date has been wholly written off;
(c) the value attributed to each item of the work in
progress/inventory included in the Accounts does not exceed
the lower of cost and realisable value as at the Balance Sheet
Date;
2.6 Books and Records
All accounts, books, ledgers, financial and other records of
whatsoever kind of the Company:-
(a) 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;
(b) do not contain or reflect any material inaccuracies or
discrepancies;
(c) give and reflect a true and fair view of the matters which
ought to appear therein.
Debts
2.7 No amount included in the Accounts as owing to the Company as at
the Balance Sheet Date was 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 Sellers as irrecoverable in whole or in part.
2.8 The Company has not factored or discounted its debts or agreed to
do so.
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 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 and by-laws (statuts) of, or in any
other instrument executed by, the Company or any Subsidiary.
3.4 Bank accounts
A statement of the bank accounts of the Company and of the credit
or debit balances on such accounts as at a date not more than seven
days before the date hereof has been supplied to the Purchaser. The
Company has not any other bank or deposit accounts (whether in
credit or overdrawn) not included in such statement. Since such
statement there have been no payments out of any such accounts
except for routine payments and the balances on current account are
not now substantially different from the balances shown on such
statements.
3.5 Distributions and Loan Repayments
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 by-laws (statuts) or other relevant legislation.
3.6 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 Sellers have supplied to the Purchaser in writing full
details thereof and true and correct copies of all documents
relating thereto;
(b) neither the Sellers, nor the Company, has done anything nor
are the Sellers 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 Seller 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.
3.7 Real Property Leases and Capital Leases (Credit-baux)
Set out in the Fourth Schedule is a detailed list of all leases and
capital leases of real property used in the Business (the "Leases
and Capital Leases"). All of the Leases and Capital Leases are in
full force and effect.
4. COMMERCIAL
4.1 Contracts
Save for those contracts (including the Leases and Capital Leases)
and other documents listed in the Disclosure Letter complete copies
of which have been made available for inspection by the Buyer and
its agents prior to the date hereof (the "Contracts"), there are no
other material contracts relating to the Company or the Business.
For these purposes, "material contracts" shall mean contracts in
respect of which (i) the obligations of either party thereto
involve expenditure in excess of one hundred thousand French francs
(FRF 100,000) per annum, or (ii) more than three (3) months' notice
of termination is required.
4.2 Breach of Contracts
The Company is not, nor has it been in a situation of breach or
default of any of the Contracts.
4.3 Insider Contracts
(a) 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 Seller or any Associate of
any Seller or any director of the Company or any Associate of
any such director is or has been interested, whether directly
or indirectly.
(b) 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.
4.4 Other Party's Defaults
So far as the Sellers 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 Sellers are aware) are
there any circumstances likely to give rise to such a default.
4.5 Other Material contracts
The Company is not a party to nor subject to any agreement,
transaction, obligation, commitment, understanding, arrangement or
liability which:-
(a) 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
(b) is known by any Seller to be likely to result in a loss to the
Company on completion of performance; or
(c) cannot readily be fulfilled or performed by the Company on
time and without undue or unusual expenditure of money, effort
or personnel; or
(d) 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
(e) is a contract for hire or rent hire purchase or purchase by
way of credit sale or periodical payment; or
(f) is a contract with any trade union or body or organisation
representing its employees; or
(g) requires an aggregate consideration payable by the Company in
excess of FFr100,000; or
(h) 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
(i) requires the Company to pay any commission, finders fee,
royalty or the like; or
(j) is in any way otherwise than in the ordinary and proper course
of the Company's business; or
(k) would have been such an agreement or arrangement but for its
cancellation or termination by any counter-party since the
Balance Sheet Date.
4.6 Employment Matters
(a) The Disclosure Letter contains a true and complete list as of
the date hereof of the names, of job titles, salaries, working
hours per week, date of hire and date of birth of all persons
who are currently full or part-time employees of the Company
and no other persons are so employed.
(b) The only collective bargaining agreement (convention
collective) applicable to the Company is the National
Collective Bargaining Agreement for consulting and engineering
activities (No. 3018).
(c) Since the Balance Sheet Date no change has been made or agreed
in the rate of remuneration, the emoluments or the pension or
other benefits of any executive or employee and no employees,
agents or consultants have been hired by the Company.
(d) No collective lay-offs involving more than ten employees are
currently in progress within the Company.
(e) The Company has not experienced any strike, labour unrest or
collective labour controversies during the past two (2) years
and no such disturbances are currently threatened.
(f) The Company has duly held all elections required to be held
for the purposes of appointing workers' representatives within
the Company.
(g) The Company does not breach, and has not breached, any laws or
regulations relating to the recruitment of personnel on a
temporary or fixed-term basis.
4.7 Special Employee Benefits
Except for the plans, benefits, bonuses, welfare, pension,
retirement, profit sharing and other compensation plans required to
be maintained by law and described in the Fifth Schedule hereto
(collectively, the "Plans"), the Company is not a party to any plan
or agreement having as its purpose or effect the payment of such
sums or the provision of such benefits. Each of the Plans has been
administered in accordance with all applicable laws and regulations
and all payments required to be made under such Plans have been
made. The Company is not under any obligation to pay any person any
additional amount over and above that provided for by law in
respect of any pension or early retirement benefit, gratuity, death
benefit, disability benefit or similar benefit on an individual
basis.
4.8 Intellectual Property
(a) Set forth in the Disclosure Letter is a list of the patents,
trademarks, trade names, copyrights, logos and designs
currently used by the Company in connection with the Business
(together the "Intellectual Property"). None of the
Intellectual Property is licensed to or from a third party. No
third party is breaching the Company's rights to its
Intellectual Property.
(b) The Company has good and marketable title, (fully enforceable
against third parties), free of Encumbrances to, or the free
right to use, all intellectual property necessary for the
conduct of its business as presently conducted. The Company is
not infringing any patent, trade name, copyright or trademark
of any third party, nor will the conclusion of the
transactions envisaged by this Agreement result in the
infringement of any third party's rights.
(c) All necessary steps have been taken by the Company to protect
its rights to the Intellectual Property and in particular, the
Intellectual Property has been duly registered or filed with
the appropriate authority and there are no adverse claims of
any third party pertaining to any of the Intellectual
Property.
4.9 Taxes
(a) All returns, declarations and reports (the "Returns") required
to be delivered by the Company to any taxation authority have
been properly prepared and delivered and no Return is disputed
by the relevant Taxation Authority. All Taxation that was due
and payable by the Company prior to the date hereof has been
paid.
(b) There are no pending audits, investigations or disputes
involving the Company relating to Taxation.
(c) None of the current activities of the Company causes it to
have a taxable presence or permanent establishment in any
country other than France.
(d) All social security charges (both employer's and employee's
parts) required to be withheld in respect of compensation paid
to employees of the Company have been withheld and paid to the
relevant authority or social security institution, and income
withholding taxes, if any, payable by the Company as employer
have been duly paid and the relevant tax and social security
returns and records are in good order.
4.10 Debts; Loans
(a) Except as set forth in the Disclosure Letter (which in
particular sets out complete and accurate details of all loans
extended to the Company), there are no sums owed by the
Company to any third party (including shareholders) other than
debts which have arisen in the ordinary course of business and
for the purpose only of carrying on its normal trading
activities, nor has the Company lent any money to any third
party other than in the ordinary course of business.
(b) All trade debts owed by customers to the Company are
collectible within a maximum period of ninety days from the
relevant invoice date.
4.11 Insurance
The Company has effected adequate insurance relating to all risks
that companies having similar business activities normally cover.
All of the policies of insurance maintained by the Company in
relation to the Business and its assets (the "Policies") (a
complete list of which is set forth in the Disclosure Letter) are
in full force and effect. All premiums payable under the Policies
have been paid and no notices of termination, or intention to
terminate such policies, have been received. No claim under any
insurance policy taken out in respect of the assets of the Company
or the Business is currently outstanding.
4.12 Conduct of Business since the Balance Sheet Date
Since the Balance Sheet Date, the Business has been carried on by
the Company in the ordinary and usual course and substantially in
the same manner as conducted during the twelve (12) months
preceding the Balance Sheet Date.
4.13 Sureties and Guarantees
The Company has not been granted any guarantee of or security for
any overdraft, loan or loan facility extended to it in relation to
the Business. The Company has not provided any guarantee or surety
for the performance of undertakings entered into by third parties
or its shareholders, corporate officers or members of staff, nor is
it liable to any third party for the performance or failure to
perform of any Person, nor has it issued any comfort letter in
their favour.
4.14 Inventory/Backlog
The current backlog of the Company as provided to the Purchaser
consists of items of a quality and quantity usable and billable in
the normal course of business.
4.15 Subsidies
(a) Set forth in the Disclosure Letter is a complete list and
summary of the terms of those governmental, regional and
departmental grants, advances, subsidies and aids from which
the Company benefits as of the date hereof.
(b) The Company has not carried out any act that may cause the
refund in full or in part of any grant, subsidy or aid
received by the Company in relation to the Business or cause
any application made by the Company in relation to the
Business for such a grant, subsidy or aid to be refused wholly
or partly, and the signature of this Agreement shall not have
such result.
4.16 Products/Services
Except for any condition, warranty, representation or obligation
implied by law or contained in its standard terms of business or
otherwise given, made or accepted in the normal course of business,
the Company has not provided any other warranty or made any
representation, or assumed any material obligation in respect of
the quality of services supplied or agreed to be supplied by it.
4.17 Brokers' Fees
All negotiations relating to this Agreement and the transactions
provided for herein have been carried on without the intervention
of third parties acting on behalf of any of the Sellers or the
Company who could on that basis make a valid claim against the
Company or the Purchaser for any finders' fee or commission or
similar compensation in connection with the transactions hereby
contemplated.
4.18 Year 2000;
The Company is Year 2000 compliant in all respects.
4.19 Suppliers and Customers
There is no supplier from whom the Company makes purchases, nor any
customer to whom the Company makes sales, which in either case
represents more than five per cent (5%) of the Company's annual
turnover.
4.20 Information
All information in this Agreement, including the Schedules, and the
information provided by the Company or the Sellers to the
Purchaser, is true, complete and correct. The Sellers have not
failed to disclose to the Purchaser any determinative information
or item concerning the Company.
5. BUSINESS OF THE COMPANY
5.1 Changes since the Balance Sheet Date
Since the Balance Sheet Date the Company:-
(a) has carried on its business in the ordinary and usual course;
(b) 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;
(c) has carried on the business without any interruption or
alteration in the nature scope or manner of its business;
(d) 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);
(e) 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 Fair Trading etc.
No agreement practice or arrangement carried on by the Company or
to which the Company is a party 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;
5.3 Guarantees, Options, etc.
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.
5.4 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.
5.5 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.
5.6 Grants
No grant made to the Company is liable to be refunded in whole or
in part in consequence of any action or omission of the Company.
6. GENERAL
6.1 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 all material respects every
matter to which they relate.
6.2 Loans to Sellers
Save as set out in the Disclosure Letter there are not
outstanding:-
(a) any loans made by the Company to the Sellers and/or any
director of the Company and/or any Associate of the Sellers or
of any such director;
(b) any debts owing to the Company by the Sellers and/or any
director of the Company and/or Associate of the Sellers or of
any such director;
(c) any securities for any such loans or debts as aforesaid.
6.3 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.
6.4 Investment, associations
The Company:-
(a) 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 Republic
of France or elsewhere) other than the Subsidiaries;
(b) is not and has not agreed to become a member of any
partnership, joint venture, consortium or other unincorporated
association;
6.5 Forecast
The 12 month forecast/budget as at 31 March 1999 was carefully and
consistently prepared and does not include any items that cannot
reasonably be justified. There is in existence valid documentation
supporting the valuation of FFr28.913million of current new
business (contracts signed and/or regular repeat business); of
FFr16.625million of proposed new business (contracts not signed);
and FFr16.628million of new business opportunity
(IBM/IPN/Convergence projects).
THE SEVENTH SCHEDULE
LIMITS ON CLAIMS UNDER SELLERS WARRANTIES
1. The Sellers shall not have any liability under or in relation to
the Sellers Warranties:-
1.1 as regards any single claim, unless the amount of the
liability thereunder exceeds FFr20,000;
1.2 except to the extent that the aggregate amount of the
Sellers' liability in respect of all claims hereunder
exceeds FFr100,000 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 unless notice in writing
specifying particulars and the amount thereof is
received by the Sellers by 2 Business Days before the
earlier of (i) the delivery by Pricewaterhouse Coopers
LLP of its report on the Purchaser's financial
statements for the fiscal year ended 30 June 1999 or
(ii) 31 March 2000;
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.
2. The liability of the Sellers under the Sellers Warranties shall be
reduced 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 Sellers
Warranties to the extent that the same is capable of remedy unless
the Purchaser shall first afford the Sellers a reasonable
opportunity to remedy the breach complained of in a reasonable
fashion.
4. The aggregate liability of the Sellers in relation to the Sellers
Warranties shall in any event be restricted to the value of the
Holdback Shares as at the date of Completion. The recourse of the
Purchaser in respect of any claim under the Sellers Warranties
shall be limited to the exercise of its rights under the Eighth
Schedule in respect of the Holdback Shares.
5. The amount of any settlement made by each Seller to the Purchaser
in respect of any claim under the Sellers Warranties shall be
deemed a reduction dollar for dollar in the value of the
consideration payable to the Sellers under this Agreement.
6. Nothing in this Seventh Schedule shall operate to limit or exclude
the liability of the Sellers for fraud or misrepresentation.
7. Any settlement made by the Sellers 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 Seller shall be deemed to have directed the
Purchaser to withhold from delivery ten per cent (10%) of the
Consideration Shares issued to such Seller against the Seller's
liabilities under the Seller's Warranties. The Consideration Shares
withheld are herein referred to as the "Holdback Shares". The
Holdback Shares shall be deemed to be issued to the Sellers 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 Sellers Warranties
("a Claim"). Cash dividends and distributions, if any, will be made
by the Purchaser to each Seller, 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 Seller 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 Sellers, execute
and deliver a proxy authorising each Seller 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 Pricewaterhouse Coopers LLP
of its report on the Purchaser's financial statements for the
fiscal year ended 30 June 1999 or (ii) 31 March 2000 ("the Holdback
Termination Date") when, subject to Clauses 3.2 and 3.3 below the
Holdback Shares, less the Payment Shares (as defined below) if any,
shall be distributed to the Sellers.
3.2 The Holdback Shares shall not be distributed to a Seller on the
Holdback Termination Date in the event that:
3.2.1 a Seller 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
3.2.2 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 Sellers Representative (which shall
be valid notice to all Sellers) (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 Sellers object (and for this purpose an objection will only
be valid if it is made by Seller(s) representing 75% of the Shares
formerly held) to such Notice of Claim (whether as to liability or
the amount claimed), the Seller's Representative 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
Sellers' Representative 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
Seller's Representative delivers a Notice of Objection within such
period (and time shall be of the essence), the Purchaser and the
Sellers will promptly meet and use their best endeavours in good
faith to settle the dispute. If the Purchaser and the Sellers 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 Sellers 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/Independent Accountant ("the Appointee"). The
Appointee shall be asked whether in his opinion 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 the Appointee by all parties no later than 5 Business
Days following the day of the Appointee's appointment. Time shall
be of the essence.
4.3 If the Purchaser is entitled to any damages pursuant to the
determination of the Appointee 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 Sellers 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 Seller will be
reduced (and the number of Payment Shares determined) pro rata
(subject to appropriate adjustment in respect of fractions) to a
Seller's entitlement to Consideration Shares as set out in the
First Schedule.
THE NINTH SCHEDULE
SPECIFIC CONTINGENCIES
1. The following are identified as specific contingencies in relation
to the acquisition of the Shares:
(i) In or about October 1998 five employees of Biostat were
made redundant for economic reasons. Liability to the
Company may arise out of the inadequacy of the reasons
and/or the redundancy letters sent to those employees
should those former employees initiate proceedings:
FF600,000;
(ii) The employment by Biostat of Dr. Kharat was terminated
in or about September 1997. Dr. Kharat brought
proceedings against Biostat inter alia for wrongful
dismissal and termination indemnities: FF475,000;
(iii) During 1998 Biostat paid fees to a number of doctors
which fees are required to be reported on a particular
annual return. Certain doctors were employees of
clinics or hospitals and in those circumstances any
payment to those doctors would be subject to proper
payroll taxes. Liability to account for such payroll
taxes falls on Biostat: FF200,000
(iv) Droit et Pharmacie publishes two reviews; the persons
who are responsible for producing the articles for such
publications may claim the status of journalist. In
this event and were they to seek termination of their
employment agreements with that company they would be
entitled to certain termination indemnities: FF950,000;
(v) Proceedings have been issued against Biostat by Mr.
Boinet in or about July 1998 in which a claim is made
against the Company for breach of patent in respect of
an electronic pill box. Mr. Boinet inter alia claims
damages against Biostat: FF600,000
(vi) Proceedings have been issued against Biostat by Mr.
Maraschli in which it is claimed inter alia that the
software installed by Biostat is defective. Mr.
Maraschli claims against the Company damages together
with repayment of the sum paid by him to the Company:
FF250,000;
(vii) Proceedings have been issued against Biostat by
Syndicate National des Gynecologues Obstetriciens de
France (SNGOF) by way of counterclaim for damages and
maintenance obligations: FF800,000;
(viii) Proceedings have been issued against Biostat by Solvay
Pharma by way of counterclaim for wrongful termination
of contract by Biostat. Solvay Pharma claims damages
and costs: FF186,000.
together or individually the "Specific Contingencies".
2. The Sellers jointly and severally indemnify the Purchaser against
any liability suffered or incurred by the Purchaser as a
consequence of or arising out of any of the Specific Contingencies.
3. On Completion, each Seller shall be deemed to have directed the
Purchaser to withhold from delivery in aggregate an additional
fifteen per cent of the Consideration Shares issued to such Seller
against the Sellers liabilities in relation to the Specific
Contingencies identified above. The Consideration Shares withheld
pursuant hereto are herein referred to as the "Additional Holdback
Shares".
4. The provisions of Clauses 1.2 to 5 (inclusive) of the Eighth
Schedule shall apply to this Ninth Schedule as if set out in full
herein provided that the Additional Holdback Shares may be retained
by the Purchaser until 31 March 2000 unless the Specific
Contingency is still outstanding in which event the relevant shares
may be withheld for a further year (the "Additional Holdback
Termination Date" and the Sellers will continue to be liable to the
Purchaser hereunder until that date).
SIGNED by )
in the presence of: ) /s/ Herve Laurent
Denis Polack, Lawyer
SIGNED by )
in the presence of: ) /s/ Philippe Conquet
Denis Polack, Lawyer
SIGNED by )
in the presence of ) /s/ Christian Haas, for COMIR
Denis Polack, Lawyer
SIGNED by )
in the presence of: ) /s/ Christian Haas, for SENLISIENNE de
Denis Polack, Lawyer PORTEFEUILLE
SIGNED by )
in the presence of: ) /s/ Philippe Conquet, as attorney for
Denis Polack, Lawyer B. Chahid-Nourai
SIGNED by )
in the presence of: ) /s/ Philippe Conquet, as attorney for
Denis Polack, Lawyer FINANVAL
SIGNED by )
in the presence of: ) /s/ Philippe Conquet, as attorney for
Denis Polack, Lawyer Caroline Conquet
SIGNED by )
in the presence of: ) /s/ Herve Laurent, as attorney for
Denis Polack, Lawyer Karine Laurent
SIGNED by )
in the presence of: ) /s/ Herve Laurent, as attorney for
Denis Polack, Lawyer Valerie Laurent
SIGNED by )
for and on behalf of )
PAREXEL INTERNATIONAL )
CORPORATION )
in the presence of: ) /s/ Barry R. Philpott
Richard Elphick
Lawrence Graham
190 Strand
WC2R 1JN
SIGNED by )
in the presence of: ) /s/ Herve Laurent, as attorney for
Denis Polack, Lawyer Caroline Laurent
SIGNED by )
in the presence of: ) /s/ Philippe Conquet, as attorney for
Denis Polack, Lawyer Yvon Leroux
SIGNED by )
in the presence of: ) /s/ Philippe Conquet, as attorney for
Denis Polack, Lawyer Succession de Francois Baur
SIGNED by )
in the presence of: ) /s/ Philippe Conquet, as attorney for
Denis Polack, Lawyer Charles Baur
<PAGE>
EXHIBIT 4.1
Draft of 3/25/99
REGISTRATION RIGHTS AGREEMENT
AGREEMENT dated as of March 31, 1999 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 March
31, 1999 (the "Acquisition Agreement") among the Company, Herve Laurent,
Philippe Conquet and the other parties named therein, the Company will acquire
all of the outstanding capital stock of Group PharMedicom S.A. ("PharMedicom")
and PharMedicom 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, in reliance on the provisions of Regulation S under the
Securities Act, or under the securities laws of any state, in
reliance upon certain exemptive provisions of such state laws.
The Stockholders recognize and acknowledge that the
availability of Regulation S and claims of exemption from
state laws are based, in part, upon the Stockholders'
representations contained in the Acquisition Agreement and in
each Stockholder's New Owner Questionnaire (attached as page
12 of this Agreement. The Stockholders further recognize and
acknowledge that, because the Shares were issued pursuant to
Regulation S and the Shares were 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 the provisions of Regulation S, 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 further acknowledge and agree that they may not
engage in hedging transactions with respect to the Shares
unless in compliance with the Securities Act. 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 (the "Securities
Act"), and the sale, transfer or other disposition of such
securities is prohibited except in accordance with the
provisions of Regulation S, pursuant to registration under the
Securities Act and the securities laws of certain states, or
pursuant to an available exemption from such registration.
Hedging transactions involving the securities represented
hereby may not be conducted unless in compliance with the
Securities Act."
Such certificates shall not bear such legend if in the opinion of
counsel satisfactory to the Company 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 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 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 fifty percent
(50%) of the Shares to be filed no later than the 10th day
following the date on which the Company files with the
Commission its Annual Report on Form 10-K for the fiscal year
ending June 30, 1999; 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 (as defined in the
Acquisition Agreement) or (B) the sale of all Shares covered
thereby. Anything to the contrary herein notwithstanding, the
Company shall not be required to take any action to cause any
registration statement to be declared effective by the
Commission at any time prior to the publication by the Company
of financial results including at least 30 days'
post-Completion combined operating results of the Company and
PharMedicom, and the Company may suspend sales in accordance
with Section 7 at any time under the 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 when the Company is required
by the provisions of Section 5 to use 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 Stockholders such number of copies of
the 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 the
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 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
Registration Statement and the date when any
post-effective amendment to the 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 the 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 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 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
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 reasonable efforts to minimize
the length of any suspension under Section 7(a).
(c) The period during which the Registration Statement
filed pursuant to Section 5 remains effective shall
be extended by any period during which resales of
Shares pursuant to the 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 the 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 the Registration Statement;
provided, however, that in the event that the Registration
Statement is withdrawn or abandoned for any reason at the
request of the Stockholders, then the Stockholders shall bear
all Registration Expenses paid or incurred in connection with
such abandoned Registration Statement. The Company shall not
be obligated to pay any reasonably verifiable increase in
Registration Expenses in connection with the preparation and
filing of the Registration Statement if the Registration
Statement is delayed for any reason at the request of the
Stockholders; such increased Registration Expenses shall be
borne by 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, 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 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 the
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 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 9if
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 reasonably 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 (which
approval shall not be unreasonably withheld or
delayed), 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 reasonable expenses and fees
of such separate counsel and other reasonable
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 that 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 the 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.
Notwithstanding anything in this Agreement to the contrary,
the Company's obligations identified in subsections (a)
through (d) of this Section 10 shall cease at such time as the
Stockholders may resell their Shares pursuant to Rule 144(k),
if and to the extent that the fulfillment of any such
obligation is not a condition to the resale of the Shares
pursuant to Rule 144(k).
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 the Registration Statement, each Stockholder
understands and agrees as follows:
(a) Each Stockholder will carefully review the
information concerning him contained in the
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 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 of this Agreement;
(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 the 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 30 days of
combined operations of the Company and PharMedicom.
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, however, that such stop transfer
orders shall be 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 the Registration
Statement not fewer than five nor more than 15
business days prior to the expected date of such sale
by faxing the "Takedown Request" attached hereto as
Exhibit A to:
Carl F. Barnes
Vice President and General Counsel
PAREXEL International Corporation
195 West Street
Waltham, Massachusetts 02451
Phone: (781) 487-9904 x 4158
Facsimile: (781) 890-4813
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 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:
Carl F. Barnes
Vice President and General Counsel
PAREXEL International Corporation
195 West Street
Waltham, Massachusetts 02451
Phone: (781) 487-9904 x 4158
Facsimile: (781) 890-4813
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, telescope 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,
Massachusetts 02451
Attn: William T. Sobo, Jr., Senior Vice President and Chief Financial
Officer
Facsimile: (781) 487-9931
with a copy to:
Carl F. Barnes
Vice President and General Counsel
PAREXEL International Corporation
195 West Street
Waltham, Massachusetts 02451
United States of America
Facsimile: (781) 890-4813
if to the Stockholders, to their addresses as set forth on Schedule A
hereto;
with a copy to:
Maitre Denis Polack
Amperal
155 Boulevard Haussmann
75008 Paris
FRANCE
Facsimile: 33-1-45-61-58-39
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 of Stockholders who hold
(from time to time) 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 Raymond Philpott
Name Barry Raymond Philpott
Title: Chief Administrative Officer
STOCKHOLDERS:
/s/ Herve Laurent
Herve Laurent
COMIR
By: /s/ Christian Haas
Title: Attorney
/s/ Philippe Conquet
Philippe Conquet
FINANVAL
By: /s/ Philippe Conquet
Title: Attorney
[Each Stockholder must complete page 12 of this Agreement]
New Owner Questionnaire
[Each Stockholder must complete this page 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/Province) (Country)
_______________________________________________
(Residence Telephone)
Mailing Address (if different from above):
_______________________________________________
(Number and Street)
_______________________________________________
(City, State/Province) (Country)
Citizenship:_____________________________________
Social Security or Taxpayer I.D. No. (U.S. Persons only):_________________
<TABLE>
Schedule A to Registration Rights Agreement
<CAPTION>
- -------------------------------------- -------------------------------------- ---------------------- -----------------------
Phone Fax
Stockholder Name Address Number Number
- -------------------------------------- -------------------------------------- ---------------------- -----------------------
<S> <C> <C> <C>
Dr. Herve Laurent 5, Avenue Rodin 33/1 40 72 52 22 33/1 40 72 52 21
75016 Paris, FRANCE
- -------------------------------------- -------------------------------------- ---------------------- -----------------------
Comir 27, Avenue Etienne Audibert BP 100
60304 Senlis, FRANCE
- -------------------------------------- -------------------------------------- ---------------------- -----------------------
- -------------------------------------- -------------------------------------- ---------------------- -----------------------
Philippe Conquet 12, rue de Madrid 33/1 45 22 78 34
75008 Paris, FRANCE
- -------------------------------------- -------------------------------------- ---------------------- -----------------------
- -------------------------------------- -------------------------------------- ---------------------- -----------------------
Finanval 38, rue Bassano
75008 Paris, FRANCE
- -------------------------------------- -------------------------------------- ---------------------- -----------------------
</TABLE>
<TABLE>
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- _______.
<CAPTION>
- ------------------------- ---------------------- ----------------------- ---------------------- ----------------------
<S> <C> <C> <C> <C>
Name, Address,
Telephone Number and Number
Name, Address, Facsimile Number of Of
Telephone Number and Agent, Broker-Dealer Number Shares Proposed
Facsimile Number of or Underwriter Of To Date
Stockholder Shares Be Of
Owned Sold Sale*
- ------------------------- ---------------------- ----------------------- ---------------------- ----------------------
- ------------------------- ---------------------- ----------------------- ---------------------- ----------------------
- ------------------------- ---------------------- ----------------------- ---------------------- ----------------------
</TABLE>
* MUST BE AT LEAST FIVE AND NOT MORE THAN 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:
CARL F. BARNES
VICE PRESIDENT AND GENERAL COUNSEL
PAREXEL INTERNATIONAL CORPORATION
195 WEST STREET
WALTHAM, MASSACHUSETTS 02451
UNITED STATES OF AMERICA
PHONE: (781) 487-9904 X 4158
FACSIMILE: (781) 890-4813
AT LEAST FIVE AND NOT MORE THAN 15 BUSINESS DAYS PRIOR TO A PROPOSED SALE
<TABLE>
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.
<CAPTION>
- ------------------------- ---------------------- ----------------------- ---------------------- ----------------------
<S> <C> <C> <C> <C>
Name, Address,
Telephone Number and
Name, Address, Facsimile Number of Number
Telephone Number and Agent, Broker-Dealer Of
Facsimile Number of or Underwriter Number Shares
Stockholder Of Date Owned
Shares Of After
Sold Sale Sale
- ------------------------- ---------------------- ----------------------- ---------------------- ----------------------
- ------------------------- ---------------------- ----------------------- ---------------------- ----------------------
- ------------------------- ---------------------- ----------------------- ---------------------- ----------------------
</TABLE>
Other Information:
_______________________________________
Signature of Stockholder
_______________________________________
Print Name
_______________________________________
Date
ALL NOTIFICATIONS OF SALE SHOULD BE FORWARDED BY FACSIMILE TO:
CARL F. BARNES
VICE PRESIDENT AND GENERAL COUNSEL
PAREXEL INTERNATIONAL CORPORATION
195 WEST STREET
WALTHAM, MASSACHUSETTS 02451
UNITED STATES OF AMERICA
PHONE: (781) 487-9904 X 4158
FACSIMILE: (781) 890-4813
WITHIN 24 HOURS FOLLOWING A SALE
