Document:

Ex-4.1 Rights Agreement dated March 27, 2003

 

RIGHTS AGREEMENT

between

PAREXEL INTERNATIONAL CORPORATION

and

EQUISERVE TRUST COMPANY, N.A.,

as Rights Agent

Dated March 27, 2003

 

Table of Contents

	 	 	 	 	 	 	 
	Section 1.	 	Certain Definitions
	 	 	1	 
	Section 2.	 	
Appointment of Rights Agent
	 	 	5	 
	Section 3.	 	
Issuance of Rights
	 	 	5	 
	Section 4.	 	
Form of Rights Certificates
	 	 	8	 
	Section 5.	 	
Countersignature and Registration
	 	 	8	 
	Section 6.	 	
Transfer, Split Up, Combination and Exchange of Rights Certificates;
Mutilated, Destroyed, Lost or Stolen Rights Certificates
	 	 	9	 
	Section 7.	 	
Exercise of Rights; Purchase Price; Expiration Date of Rights
	 	 	10	 
	Section 8.	 	
Cancellation and Destruction of Rights Certificates
	 	 	12	 
	Section 9.	 	
Reservation and Availability of Capital Stock
	 	 	12	 
	Section 10.	 	
Preferred Stock Record Date
	 	 	13	 
	Section 11.	 	
Adjustment of Purchase Price, Number and Kind of Shares or Number
of Rights
	 	 	14	 
	Section 12.	 	
Certificate of Adjusted Purchase Price or Number of Shares
	 	 	21	 
	Section 13.	 	
Consolidation, Merger or Sale or Transfer of Assets or Earning Power
	 	 	21	 
	Section 14.	 	
Fractional Rights and Fractional Shares
	 	 	23	 
	Section 15.	 	
Rights of Action
	 	 	24	 
	Section 16.	 	
Agreement of Rights Holders
	 	 	25	 
	Section 17.	 	
Rights Certificate Holder Not Deemed a Stockholder
	 	 	25	 
	Section 18.	 	
Concerning the Rights Agent
	 	 	25	 
	Section 19.	 	
Merger or Consolidation or Change of Name of Rights Agent
	 	 	26	 
	Section 20.	 	
Duties of Rights Agent
	 	 	27	 
	Section 21.	 	
Change of Rights Agent
	 	 	28	 
	Section 22.	 	
Issuance of New Rights Certificates
	 	 	29	 
	Section 23.	 	
Redemption; Independent Director Review
	 	 	29	 

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	Section 24.	 	
Exchange
	 	 	30	 
	Section 25.	 	
Notice of Certain Events
	 	 	32	 
	Section 26.	 	
Notices
	 	 	32	 
	Section 27.	 	
Supplements and Amendments
	 	 	33	 
	Section 28.	 	
Successors
	 	 	34	 
	Section 29.	 	
Actions by the Board, etc.
	 	 	34	 
	Section 30.	 	
Benefits of this Agreement
	 	 	34	 
	Section 31.	 	
Severability
	 	 	34	 
	Section 32.	 	
Governing Law
	 	 	34	 
	Section 33.	 	
Counterparts
	 	 	35	 
	Section 34.	 	
Descriptive Headings
	 	 	35	 
	Section 34.	 	
Force Majeure
	 	 	35	 

 

 

RIGHTS AGREEMENT

          RIGHTS AGREEMENT, dated March 27, 2003 (the “Agreement”), between PAREXEL
International Corporation, a Massachusetts corporation (the “Company”), and
EquiServe Trust Company, N.A., a national banking association, as Rights Agent
(the “Rights Agent”).

W I T N E S S E T H

          WHEREAS, on March 27, 2003 the Board of Directors of the Company (the
“Board”) authorized and declared a dividend distribution of one Right for each
share of Common Stock (as hereinafter defined) of the Company outstanding at
the close of business on April 7, 2003 (the “Record Date”), and authorized the
issuance of one Right (as such number may hereinafter be adjusted pursuant to
the provisions of Section 11(i) or Section 11(p) hereof) for each share of
Common Stock of the Company issued between the Record Date (whether originally
issued or delivered from the Company’s treasury) and the earlier of the
Distribution Date or the Expiration Date, each Right initially representing the
right to purchase one one-thousandth of a share of Series A Junior
Participating Preferred Stock of the Company having the rights, powers and
preferences set forth in the form of Certificate of Vote attached hereto as
Exhibit A, upon the terms and subject to the conditions hereinafter set forth
(the “Rights”);

          NOW, THEREFORE, in consideration of the premises and the mutual agreements
herein set forth, the parties hereby agree as follows:

          Section 1.      Certain Definitions. For purposes of this Agreement, the
following terms have the meanings indicated:

          (a)      “Acquiring Person” shall mean any Person who or which, together with
all Affiliates and Associates of such Person, shall be the Beneficial Owner of
20% or more of the shares of Common Stock then outstanding, but shall not
include (i) the Company, (ii) any Subsidiary of the Company, (iii) any employee
benefit plan of the Company or of any Subsidiary of the Company, or (iv) any
Person organized, appointed or established by the Company for or pursuant to
the terms of any such plan. Notwithstanding the foregoing, (x) no Person shall
become an “Acquiring Person” as the result of an acquisition of Common Stock by
the Company which, by reducing the number of shares outstanding, increases the
proportionate number of shares beneficially owned by such Person to 20% or more
of the shares of Common Stock of the Company then outstanding; provided,
however that if a Person shall become the Beneficial Owner of 20% or more of
the shares of Common Stock of the Company then outstanding as the result of an
acquisition of Common Stock by the Company and shall, following written notice
from, or public disclosure by the Company of such share purchases by the
Company become the Beneficial Owner of any additional Common Stock of the
Company and shall then beneficially own 20% or more of the shares of Common
Stock then outstanding, then such Person shall be deemed to be an “Acquiring
Person” and (y) if the Board determines in good faith that a Person who would
otherwise be an “Acquiring Person,” as defined pursuant to the foregoing
provisions of this paragraph (a), has become such inadvertently, and such
Person divests as promptly as practicable (as determined in good faith by the
Board of Directors), but in any event within 15

 

 

Business Days, following receipt of written notice from the Company of
such event, of Beneficial Ownership of a sufficient number of shares of Common
Stock so that such Person would no longer be an “Acquiring Person,” as defined
pursuant to the foregoing provisions of this paragraph (a), then such Person
shall not be deemed to be an “Acquiring Person” for any purposes of this
Agreement unless and until such Person shall again become an “Acquiring
Person.”

          (b)      “Act” shall mean the Securities Act of 1933, as amended.

          (c)      “Affiliate” and “Associate” shall have the respective meanings
ascribed to such terms in Rule 12b-2 of the General Rules and Regulations under
the Securities Exchange Act of 1934, as amended (the “Exchange Act”) as in
effect on the date of this Agreement.

          (d)      “Adjustment Shares” shall have the meaning set forth in Section
11(a)(ii).

          (e)      A Person shall be deemed the “Beneficial Owner” of, and shall be
deemed to “beneficially own,” any securities:

                     (i)      which such Person or any of such Person’s Affiliates or Associates,
directly or indirectly, owns or has the right to acquire (whether such right is
exercisable immediately or only after the passage of time) pursuant to any
agreement, arrangement or understanding (other than customary agreements with
and between underwriters and selling group members with respect to a bona fide
public offering of securities), whether or not in writing, or upon the exercise
of conversion rights, exchange rights, other rights, warrants or options, or
otherwise; provided, however, that a Person shall not be deemed the “Beneficial
Owner” of, or to “beneficially own,” (A) securities tendered pursuant to a
tender or exchange offer made by or on behalf of such Person or any of such
Person’s Affiliates or Associates until such tendered securities are accepted
for purchase or exchange, or (B) securities issuable upon exercise of Rights at
any time prior to the occurrence of a Triggering Event, or (C) securities
issuable upon exercise of Rights from and after the occurrence of a Triggering
Event which Rights were acquired by such Person or any of such Person’s
Affiliates or Associates prior to the Distribution Date or pursuant to Section
3(a) or Section 22 hereof (the “Original Rights”) or pursuant to Section 11(i)
hereof in connection with an adjustment made with respect to any Original
Rights;

                     (ii)      which such Person or any of such Person’s Affiliates or Associates,
directly or indirectly, has the right to vote or dispose of or has “beneficial
ownership” of (as determined pursuant to Rule 13d-3 of the General Rules and
Regulations under the Exchange Act, or any comparable or successor rule),
including pursuant to any agreement, arrangement or understanding (other than
customary agreements with and between underwriters and selling group members
with respect to a bona fide public offering of securities), whether or not in
writing; provided, however, that a Person shall not be deemed the “Beneficial
Owner” of, or to “beneficially own,” any security under this subparagraph (ii)
as a result of an agreement, arrangement or understanding to vote such security
if such agreement, arrangement or understanding: (A) arises solely from a
revocable proxy or consent given in response to a public proxy or consent
solicitation made pursuant to, and in accordance with, the applicable
provisions of the General Rules and Regulations under the Exchange Act, and (B)
is not then reportable by

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such Person on Schedule 13D under the Exchange Act (or any comparable or
successor report); or

                     (iii)      which are beneficially owned, directly or indirectly, by any other
Person (or any Affiliate or Associate thereof) with which such Person (or any
of such Person’s Affiliates or Associates) has any agreement, arrangement or
understanding (other than customary agreements with and between underwriters
and selling group members with respect to a bona fide public offering of
securities) whether or not in writing, for the purpose of acquiring, holding,
voting (except pursuant to a revocable proxy or consent as described in the
proviso to subparagraph (ii) of this paragraph (e)) or disposing of any voting
securities of the Company.

For all purposes of this Agreement, any calculation of the number of shares of
Common Stock outstanding at any particular time, including for purposes of
determining the particular percentage of such outstanding shares of Common
Stock of which any Person is the Beneficial Owner, shall be made in accordance
with the last sentence of Rule 13d-3(d)(l)(i) of the General Rules and
Regulations under the Exchange Act.

          (f)      “Board” shall have the meaning set forth in the WHEREAS clause at the
beginning of this Agreement.

          (g)      “Business Day” shall mean any day other than a Saturday, Sunday or a
day on which banking institutions in the Commonwealth of Massachusetts are
authorized or obligated by law or executive order to close.

          (h)      “Close of business” on any given date shall mean 5:00 p.m., Boston
time, on such date; provided, however, that if such date is not a Business Day
it shall mean 5:00 p.m., Boston time, on the next succeeding Business Day.

          (i)      “Common Stock” shall mean the common stock, $.01 par value, of the
Company, except that “Common Stock” when used with reference to any Person
other than the Company shall mean the capital stock of such Person with the
greatest voting power, or the equity securities or other equity interest having
power to control or direct the management, of such Person.

          (j)      “Common stock equivalents” shall have the meaning set forth in Section
11(a)(iii) hereof.

          (k)      “Company” shall have the meaning set forth in the introductory
paragraph hereof.

          (l)      “Current market price” shall have the meaning set forth in Section
11(d)(i) hereof.

          (m)      “Current Value” shall have the meaning set forth in Section 11(a)(iii)
hereof.

          (n)      “Distribution Date” shall have the meaning set forth in Section 3(a)
hereof.

          (o)      “Equivalent Preferred Stock” shall have the meaning set forth in
Section 11(b) hereof.

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          (p)      “Exchange Act” shall have the meaning set forth in Section 1(c)
hereof.

          (q)      “Exchange Ratio” shall have the meaning set forth in Section 24(a)
hereof.

          (r)      “Expiration Date” shall have the meaning set forth in Section 7(a)
hereof.

          (s)      “Final Expiration Date” shall mean the close of business on March 27,
2013.

          (t)      “Person” shall mean any individual, firm, corporation, partnership,
trust, association, limited liability company or other entity.

          (u)      “Preferred Stock” shall mean shares of Series A Junior Participating
Preferred Stock, $.01 par value, of the Company having the rights and
preferences set forth in the form of Certificate of Vote attached to this
Agreement as Exhibit A and, to the extent that there is not a sufficient number
of shares of Series A Junior Participating Preferred Stock authorized to permit
the full exercise of the Rights, any other series of Preferred Stock, $.01 par
value, of the Company designated for such purpose containing terms
substantially similar to the terms of the Series A Junior Participating
Preferred Stock.

          (v)      “Principal Party” shall have the meaning set forth in Section 13(b)
hereof.

          (w)      “Purchase Price” shall have the meaning set forth in Section 4(a)
hereof.

          (x)      “Record Date” shall have the meaning set forth in the WHEREAS clause
at the beginning of this Agreement.

          (y)      “Redemption Date” shall have the meaning set forth in Section 7(a)
hereof.

          (z)      “Redemption Price” shall have the meaning set forth in Section 23(a)
hereof.

          (aa)      “Rights” shall have the meaning set forth in the WHEREAS clause at
the beginning of this Agreement.

          (bb)      “Rights Agent” shall have the meaning set forth in the introductory
paragraph hereof.

          (cc)      “Rights Certificates” shall have the meaning set forth in Section
3(a) hereof.

          (dd)      “Section 11(a)(ii) Event” shall mean an acquisition of Common Stock
described in the first sentence of Section 11(a)(ii) hereof.

          (ee)      “Section 11(a)(ii) Trigger Date” shall have the meaning set forth in
Section 11(a)(iii) hereof.

          (ff)      “Section 13 Event” shall mean any event described in clauses (x), (y)
or (z) of Section 13(a) hereof.

          (gg)      “Spread” shall have the meaning set forth in Section 11(a)(iii)
hereof.

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          (hh)      “Stock Acquisition Date” shall mean the later of (i) the first date
of public announcement (which, for purposes of this definition, shall include,
without limitation, a report filed pursuant to Section 13(d) under the Exchange
Act) by the Company or an Acquiring Person that an Acquiring Person has become
such or (ii) the first date on which an executive officer of the Company has
actual knowledge that an Acquiring Person has become such; provided, however
that, if such Person is deemed not to be an Acquiring Person pursuant to clause
(y) of Section 1(a) hereof, no Stock Acquisition Date shall be deemed to have
occurred.

          (ii)      “Subsidiary” shall mean, with reference to any Person, any
corporation or other entity of which an amount of voting securities sufficient
to elect at least a majority of the directors (or comparable body) of such
corporation or other entity is beneficially owned, directly or indirectly, by
such Person, or otherwise controlled by such Person.

          (jj)      “Substitution Period” shall have the meaning set forth in Section
11(a)(iii) hereof.

          (kk)      “Trading Day” shall have the meaning set forth in Section 11(d)(i)
hereof.

          (ll)      “Triggering Event” shall mean any Section 11(a)(ii) Event or any
Section 13 Event.

          Section 2.      Appointment of Rights Agent. The Company hereby appoints the
Rights Agent to act as agent for the Company and the holders of the Rights
(who, in accordance with Section 3 hereof, shall prior to the Distribution Date
also be the holders of the Common Stock) in accordance with the terms and
conditions hereof, and the Rights Agent hereby accepts such appointment. The
Company may from time to time appoint such Co-Rights Agents as it may deem
necessary or desirable upon ten (10) days’ prior written notice to the Rights
Agent. The Rights Agent shall have no duty to supervise, and shall in no event
be liable for, the acts or omissions of any such Co-Rights Agent.

          Section 3.      Issuance of Rights.

          (a)      Until the earlier of (i) the close of business on the tenth Business
Day (or such later date as may be determined by the Board) after the Stock
Acquisition Date (or, if the tenth Business Day after the Stock Acquisition
Date occurs before the Record Date, the close of business on the Record Date),
or (ii) the close of business on the tenth Business Day (or such later date as
may be determined by action of the Board) after the date that a tender or
exchange offer by any Person (other than the Company, any Subsidiary of the
Company, any employee benefit plan of the Company or of any Subsidiary of the
Company, or any Person organized, appointed or established by the Company for
or pursuant to the terms of any such plan) is first published or sent or given
within the meaning of Rule 14d-2 of the General Rules and Regulations under the
Exchange Act, if upon consummation thereof, such Person would be the Beneficial
Owner of 20% or more of the shares of Common Stock then outstanding, (the
earlier of (i) and (ii) being herein referred to as the “Distribution Date”),
(x) the Rights will be evidenced by the certificates for the Common Stock
registered in the names of the holders of the Common Stock (which certificates
for Common Stock shall be deemed also to be certificates for Rights) and not by
separate certificates, and (y) the Rights will be transferable only in
connection with the transfer of the underlying shares of Common Stock
(including a transfer to the

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Company). As soon as practicable after the Distribution Date, the Rights
Agent will send by first-class, insured, postage prepaid mail, to each record
holder of the Common Stock as of the close of business on the Distribution
Date, at the address of such holder shown on the records of the Company, one or
more rights certificates, in substantially the form of Exhibit B hereto (the
“Rights Certificates”), evidencing one Right for each share of Common Stock so
held, subject to adjustment as provided herein. With respect to certificates
for the Common Stock outstanding as of the close of business on the Record
Date, until the Distribution Date, the Rights will be evidenced by such
certificates for the Common Stock and the registered holders of the Common
Stock shall also be the registered holders of the associated Rights. In
addition, in connection with the issuance or sale of shares of Common Stock
following the Distribution Date and prior to the redemption or expiration of
the Rights, the Company (i) shall, with respect to shares of Common Stock so
issued or sold pursuant to the exercise of stock options or under any employee
benefit plan or arrangement, or upon the exercise, conversion or exchange of
securities granted or issued by the Company prior to the Distribution Date, and
(ii) may, in any other case, if deemed necessary or appropriate by the Board,
issue Rights Certificates representing the appropriate number of Rights in
connection with such issuance or sale; provided, however, that (x) no such
Rights Certificate shall be issued if, and to the extent that, the Company
shall be advised by counsel that such issuance would create a significant risk
of material adverse tax consequences to the Company or the Person to whom such
Rights Certificate would be issued, and (y) no such Rights Certificate shall be
issued if, and to the extent that, appropriate adjustment shall otherwise have
been made in lieu of the issuance thereof. In the event that an adjustment in
the number of Rights per share of Common Stock has been made pursuant to
Sections 11(i) or 11(p) hereof, at the time of distribution of the Rights
Certificates, the Company shall make the necessary and appropriate rounding
adjustments (in accordance with Section 14(a) hereof) so that Rights
Certificates representing only whole numbers of Rights are distributed and cash
is paid in lieu of any fractional Rights. As of and after the Distribution
Date, the Rights will be evidenced solely by such Rights Certificates.

          (b)      As promptly as practicable following the Record Date, the Company will
send a copy of a Summary of Rights to Purchase Preferred Stock, in
substantially the form attached hereto as Exhibit C, by first-class, postage
prepaid mail, to each record holder of the Common Stock as of the close of
business on the Record Date, at the address of such holder shown on the records
of the Company. The failure to send a copy of the Summary of Rights shall not
affect the enforceability of any part of this Rights Agreement or the rights of
any holder of the Rights.

          (c)      Rights shall be issued (i) in respect of all shares of Common Stock
that are issued (either as an original issuance or from the Company’s treasury)
after the Record Date but prior to the earlier of the Distribution Date or the
Expiration Date and (ii) in connection with the issuance or sale of shares of
Common Stock following the Distribution Date and prior to the redemption or
expiration of the Rights (x) with respect to shares of Common Stock so issued
or sold pursuant to the exercise of stock options or under any employee benefit
plan or arrangement, or upon the exercise, conversion or exchange of
securities, granted or issued by the Company prior to the Distribution Date and
(y) with respect to shares of Common Stock so issued or sold in any other case,
if deemed necessary or appropriate by the Board. Certificates representing
such shares of Common Stock (including, without limitation, certificates issued
upon transfer or exchange of Common Stock) shall also be deemed to be
certificates for Rights, and shall bear the following legend:

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	 	 	This certificate also evidences and entitles the
holder hereof to certain Rights as set forth in the
Rights Agreement between PAREXEL International
Corporation the (“Company”) and EquiServe Trust
Company, N.A. (the “Rights Agent”) dated March 27,
2003, as the same may be amended, restated or renewed
from time to time (the “Rights Agreement”), the terms
of which are hereby incorporated herein by reference
and a copy of which is on file at the principal
offices of the Company. Under certain circumstances,
as set forth in the Rights Agreement, such Rights will
be evidenced by separate certificates and will no
longer be evidenced by this certificate. The Company
will mail to the holder of this certificate a copy of
the Rights Agreement, as in effect on the date of
mailing, without charge promptly after receipt of a
written request therefor. Under certain circumstances
set forth in the Rights Agreement, Rights issued to,
or held by, any Person who is, was or becomes an
Acquiring Person or any Affiliate or Associate thereof
(as such terms are defined in the Rights Agreement),
whether currently held by or on behalf of such Person
or by any subsequent holder, may become null and void.

With respect to such certificates containing the foregoing legend, until the
earlier of (i) the Distribution Date and (ii) the Expiration Date, the Rights
associated with the Common Stock represented by such certificates shall be
evidenced by such certificates alone and registered holders of Common Stock
shall also be the registered holders of the associated Rights. Notwithstanding
this Section 3(c), the omission of a legend shall not affect the enforceability
of any part of this Rights Agreement or the rights of any holder of the Rights.

          (d)      Until the earlier of the Distribution Date and the Expiration Date,
the transfer of any certificates representing shares of Common Stock in respect
of which Rights have been issued shall also constitute the transfer of the
Rights associated with such shares of Common Stock. In the event that the
Company purchases or acquires any shares of Common Stock after the Record Date
but prior to the Distribution Date, any Rights associated with such shares of
Common Stock shall be deemed cancelled and retired so that the Company shall
not be entitled to exercise any Rights associated with the shares of Common
Stock which are no longer outstanding.

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          Section 4.      Form of Rights Certificates.

          (a)      The Rights Certificates (and the forms of election to purchase,
certification and assignment to be printed on the reverse thereof) shall each
be substantially in the form set forth in Exhibit B hereto and may have such
marks of identification or designation and such legends, summaries or
endorsements printed thereon as the Company may deem appropriate and as are not
inconsistent with the provisions of this Agreement, or as may be required to
comply with any applicable law or with any rule or regulation made pursuant
thereto or with any rule or regulation of any stock exchange or
over-the-counter market on which the Rights may from time to time be listed, or
to conform to usage. Subject to the provisions of Sections 7, 11 and 22
hereof, the Rights Certificates, whenever distributed, shall entitle the
holders thereof to purchase such number of one one-thousandths of a share of
Preferred Stock as shall be set forth therein at the price set forth therein
(such exercise price per one one-thousandth of a share, the “Purchase Price”),
but the amount and type of securities purchasable upon the exercise of each
Right and the Purchase Price thereof shall be subject to adjustment as provided
herein.

          (b)      Any Rights Certificate issued pursuant to Section 3, Section 11(i) or
Section 22 hereof that represents Rights beneficially owned by persons known to
be: (i) an Acquiring Person or an Associate or Affiliate of an Acquiring
Person, (ii) a transferee of an Acquiring Person (or of any such Associate or
Affiliate) who becomes a transferee after the Acquiring Person becomes such, or
(iii) a transferee of an Acquiring Person (or of any such Associate or
Affiliate) who becomes a transferee prior to or concurrently with the Acquiring
Person becoming such and receives such Rights pursuant to either (A) a transfer
(whether or not for consideration) from the Acquiring Person to holders of
equity interests in such Acquiring Person or to any Person with whom such
Acquiring Person has any continuing agreement, arrangement or understanding
(whether or not in writing) regarding the transferred Rights or (B) a transfer
which the Board has determined is part of a plan, arrangement or understanding
(whether or not in writing) that has as a primary purpose or effect avoidance
of Section 7(e) hereof, and any Rights Certificate issued pursuant to Section 6
or Section 11 hereof upon transfer, exchange, replacement or adjustment of any
other Rights Certificate referred to in this sentence, shall contain (to the
extent feasible) the following legend:

	 	 	The Rights represented by this Rights Certificate are
or were beneficially owned by a Person who was or
became an Acquiring Person or an Affiliate or
Associate of an Acquiring Person (as such terms are
defined in the Rights Agreement). Accordingly, this
Rights Certificate and the Rights represented hereby
may become null and void in the circumstances
specified in Section 7(e) of such Agreement.

The provisions of Section 7(e) hereof shall be operative whether or not the
foregoing legend is contained on any such Rights Certificate.

          Section 5.      Countersignature and Registration.

          (a)      The Rights Certificates shall be executed on behalf of the Company by
its Chairman of the Board, President or any Vice President and by its Treasurer
or an Assistant

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Treasurer, either manually or by facsimile signature, and shall have
affixed thereto the Company’s seal or a facsimile thereof, which shall be
attested by the Clerk or an Assistant Clerk of the Company, either manually or
by facsimile signature. The Rights Certificates shall be manually
countersigned by the Rights Agent and shall not be valid for any purpose unless
so countersigned. In case any officer of the Company who shall have signed any
of the Rights Certificates shall cease to be such officer of the Company before
countersignature by the Rights Agent and issuance and delivery by the Company,
such Rights Certificates, nevertheless, may be countersigned by the Rights
Agent and issued and delivered by the Company with the same force and effect as
though the person who signed such Rights Certificates had not ceased to be such
officer of the Company; and any Rights Certificates may be signed on behalf of
the Company by any person who, at the actual date of the execution of such
Rights Certificate, shall be a proper officer of the Company to sign such
Rights Certificate, although at the date of the execution of this Rights
Agreement any such person was not such an officer.

          (b)      Following the Distribution Date, the Rights Agent shall keep or cause
to be kept, at its office designated as the appropriate place for surrender of
Rights Certificates upon exercise or transfer, books for registration and
transfer of the Rights Certificates issued hereunder. Such books shall show
the names and addresses of the respective holders of the Rights Certificates,
the number of Rights evidenced on its face by each of the Rights Certificates,
the Rights Certificate number and the date of each of the Rights Certificates.

          Section 6.      Transfer, Split Up, Combination and Exchange of Rights
Certificates; Mutilated, Destroyed, Lost or Stolen Rights Certificates.

          (a)      Subject to the provisions of Section 4(b), Section 7(e) and Section 14
hereof, at any time after the close of business on the Distribution Date, and
at or prior to the close of business on the Expiration Date, any Rights
Certificate or Certificates (other than Rights Certificates representing Rights
that have become void pursuant to Section 7(e) hereof or that have been
exchanged pursuant to Section 24 hereof) may be transferred, split up, combined
or exchanged for another Rights Certificate or Certificates, entitling the
registered holder to purchase a like number of one one-thousandths of a share
of Preferred Stock (or, following a Triggering Event, Common Stock, other
securities, cash or other assets, as the case may be) as the Rights Certificate
or Certificates surrendered then entitled such holder (or former holder in the
case of a transfer) to purchase. Any registered holder desiring to transfer,
split up, combine or exchange any Rights Certificate or Certificates shall make
such request in writing delivered to the Rights Agent, and shall surrender the
Rights Certificate or Certificates to be transferred, split up, combined or
exchanged, with the form of assignment and certificate appropriately executed,
at the office of the Rights Agent designated for such purpose. Neither the
Rights Agent nor the Company shall be obligated to take any action whatsoever
with respect to the transfer of any such surrendered Rights Certificate until
the registered holder shall have completed and signed the certificate contained
in the form of assignment on the reverse side of such Rights Certificate and
shall have provided such additional evidence of the identity of the Beneficial
Owner (or former Beneficial Owner) or Affiliates or Associates thereof as the
Company shall reasonably request. Thereupon the Rights Agent shall, subject to
Section 4(b), Section 7(e) and Section 14 hereof, countersign and deliver to
the Person entitled thereto a Rights Certificate or Rights Certificates, as the
case may be, as so requested. The Company may require payment of a sum

-9-

 

sufficient to cover any tax or governmental charge that may be imposed in
connection with any transfer, split up, combination or exchange of Rights
Certificates.

          (b)      Upon receipt by the Company and the Rights Agent of evidence
reasonably satisfactory to them of the loss, theft, destruction or mutilation
of a Rights Certificate, and, in case of loss, theft or destruction, of
indemnity or security reasonably satisfactory to them, and reimbursement to the
Company and the Rights Agent of all reasonable expenses incidental thereto, and
upon surrender to the Rights Agent and cancellation of the Rights Certificate
if mutilated, the Company will execute and deliver a new Rights Certificate of
like tenor to the Rights Agent for countersignature and delivery to the
registered owner in lieu of the Rights Certificate so lost, stolen, destroyed
or mutilated.

          Section 7.      Exercise of Rights; Purchase Price; Expiration Date of Rights.

          (a)      Subject to Section 7(e) hereof, the registered holder of any Rights
Certificate may exercise the Rights evidenced thereby (except as otherwise
provided herein including, without limitation, the restrictions on
exercisability set forth in Section 9(c), Section 11(a)(iii) and Section 23
hereof) in whole or in part at any time after the Distribution Date upon
surrender of the Rights Certificate, with the form of election to purchase and
the certificate on the reverse side thereof duly executed, to the Rights Agent
at the office of the Rights Agent designated for such purpose, together with
payment of the aggregate Purchase Price with respect to the total number of one
one-thousandths of a share of Preferred Stock (or other shares, securities,
cash or other assets, as the case may be) as to which such surrendered Rights
are then exercisable, at or prior to the earliest of (i) the Final Expiration
Date, (ii) the time at which the Rights are redeemed as provided in Section 23
hereof (the “Redemption Date”) and (iii) the time at which such Rights are
exchanged as provided in Section 24 hereof (the earliest of (i), (ii) and (iii)
being herein referred to as the “Expiration Date”).

          (b)      The Purchase Price for each one one-thousandth of a share of Preferred
Stock pursuant to the exercise of a Right shall initially be $98 and shall be
subject to adjustment from time to time as provided in Sections 11 and 13(a)
hereof and shall be payable in lawful money of the United States of America in
accordance with paragraph (c) below.

          (c)      Upon receipt of a Rights Certificate representing exercisable Rights,
with the form of election to purchase and the certificate duly executed,
accompanied by payment, with respect to each Right so exercised, of the
Purchase Price per one one-thousandth of a share of Preferred Stock (or other
shares, securities, cash or other assets, as the case may be) to be purchased
and an amount equal to any applicable transfer tax, the Rights Agent shall,
subject to Section 20(k) hereof, thereupon promptly (i) (A) requisition from
any transfer agent of the shares of Preferred Stock (or make available, if the
Rights Agent is the transfer agent for such shares) certificates for the total
number of one one-thousandths of a share of Preferred Stock to be purchased and
the Company hereby authorizes its transfer agent to comply with such requests,
or (B) if the Company shall have elected to deposit the total number of shares
of Preferred Stock issuable upon exercise of the Rights hereunder with a
depositary agent, requisition from the depositary agent depositary receipts
representing such number of one one-thousandths of a share of Preferred Stock
as are to be purchased (in which case certificates for the shares of Preferred
Stock represented by such receipts shall be deposited by the transfer agent
with the depositary

-10-

 

agent) and the Company hereby directs the depositary agent to comply with
such requests, (ii) requisition from the Company the amount of cash, if any, to
be paid in lieu of fractional shares in accordance with Section 14 hereof,
(iii) after receipt of such certificates or depositary receipts, cause the same
to be delivered to or upon the order of the registered holder of such Rights
Certificate, registered in such name or names as may be designated by such
holder, and (iv) after receipt thereof, deliver such cash, if any, to or upon
the order of the registered holder of such Rights Certificate. The payment of
the Purchase Price (as such amount may be reduced pursuant to Section
11(a)(iii) hereof) may be made in cash or by certified bank check or money
order payable to the order of the Company. In the event that the Company is
obligated to issue other securities (including Common Stock) of the Company,
pay cash and/or distribute other property pursuant to Section 11(a) hereof, the
Company shall make all arrangements necessary so that such other securities,
cash and/or other property are available for distribution by the Rights Agent,
if and when appropriate.

          (d)      In case the registered holder of any Rights Certificate shall exercise
less than all the Rights evidenced thereby, a new Rights Certificate evidencing
Rights equivalent to the Rights remaining unexercised shall be issued by the
Rights Agent and delivered to, or upon the order of, the registered holder of
such Rights Certificate, registered in such name or names as may be designated
by such holder, subject to the provisions of Section 14 hereof.

          (e)      Notwithstanding anything in this Agreement to the contrary, from and
after the first occurrence of a Section 11(a)(ii) Event, any Rights
beneficially owned by (i) an Acquiring Person or an Associate or Affiliate of
an Acquiring Person, (ii) a transferee of an Acquiring Person (or of any such
Associate or Affiliate) who becomes a transferee after the Acquiring Person
becomes such, or (iii) a transferee of an Acquiring Person (or of any such
Associate or Affiliate) who becomes a transferee prior to or concurrently with
the Acquiring Person becoming such and receives such Rights pursuant to either
(A) a transfer (whether or not for consideration) from the Acquiring Person to
holders of equity interests in such Acquiring Person or to any Person with whom
the Acquiring Person has any continuing agreement, arrangement or understanding
(whether or not in writing) regarding the transferred Rights or (B) a transfer
which the Board has determined is part of a plan, arrangement or understanding
(whether or not in writing) that has as a primary purpose or effect avoidance
of this Section 7(e), shall become null and void without any further action and
no holder of such Rights shall have any rights whatsoever with respect to such
Rights, whether under any provision of this Agreement or otherwise. No Rights
Certificate shall be issued at any time upon the transfer of any Rights to an
Acquiring Person whose Rights would be void pursuant to the preceding sentence
or any Associate or Affiliate thereof or to any nominee of such Acquiring
Person, Associate or Affiliate; and any Rights Certificate delivered to the
Rights Agent for transfer to an Acquiring Person whose Rights would be void
pursuant to the preceding sentence shall be cancelled. The Company shall use
all reasonable efforts to insure that the provisions of this Section 7(e) and
Section 4(b) hereof are complied with, but shall have no liability to any
holder of Rights Certificates or other Person as a result of its failure to
make any determinations with respect to an Acquiring Person or its Affiliates,
Associates or transferees hereunder.

          (f)      Notwithstanding anything in this Agreement to the contrary, neither
the Rights Agent nor the Company shall be obligated to undertake any action
with respect to a registered holder upon the occurrence of any purported
transfer or exercise as set forth in this Section 7

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unless such registered holder shall have (i) completed and signed the
certificate following the form of assignment or election to purchase set forth
on the reverse side of the Rights Certificate surrendered for such assignment
or exercise, and (ii) provided such additional evidence of the identity of the
Beneficial Owner (or former Beneficial Owner) or any Affiliates or Associates
thereof as the Company shall reasonably request.

          Section 8.      Cancellation and Destruction of Rights Certificates. All
Rights Certificates surrendered for the purpose of exercise, transfer, split
up, combination or exchange shall, if surrendered to the Company or any of its
agents, be delivered to the Rights Agent for cancellation or in cancelled form,
or, if surrendered to the Rights Agent, shall be cancelled by it, and no Rights
Certificates shall be issued in lieu thereof except as expressly permitted by
any of the provisions of this Agreement. The Company shall deliver to the
Rights Agent for cancellation and retirement, and the Rights Agent shall so
cancel and retire, any other Rights Certificate purchased or acquired by the
Company otherwise than upon the exercise thereof. The Rights Agent shall
deliver all cancelled Rights Certificates to the Company, or shall, at the
written request of the Company, destroy such cancelled Rights Certificates, and
in such case shall deliver a certificate of destruction thereof to the Company.

          Section 9.      Reservation and Availability of Capital Stock.

          (a)      The Company covenants and agrees that it will cause to be reserved and
kept available out of its authorized and unissued shares of Preferred Stock
(and, following the occurrence of a Triggering Event, out of its authorized and
unissued shares of Common Stock and/or other securities or out of its
authorized and issued shares held in its treasury), the number of shares of
Preferred Stock (and, following the occurrence of a Triggering Event, Common
Stock and/or other securities) that, as provided in this Agreement including
Section 11(a)(iii) hereof, will be sufficient to permit the exercise in full of
all outstanding Rights.

          (b)      So long as the shares of Preferred Stock (and, following the
occurrence of a Section 11(a)(ii) Event, Common Stock and/or other securities)
issuable and deliverable upon the exercise of the Rights may be listed on any
national securities exchange or automated quotation system, the Company shall
use its best efforts to cause, from and after such time as the Rights become
exercisable, all shares reserved for such issuance to be so listed upon
official notice of issuance upon such exercise.

          (c)      The Company shall use its best efforts to (i) file, as soon as
practicable following the earliest date after the first occurrence of a Section
11(a)(ii) Event on which the consideration to be delivered by the Company upon
exercise of the Rights has been determined in accordance with Section
11(a)(iii) hereof, or as soon as is required by law following the Distribution
Date, as the case may be, a registration statement under the Act, with respect
to the securities purchasable upon exercise of the Rights on an appropriate
form, (ii) cause such registration statement to become effective as soon as
practicable after such filing, (iii) cause such registration statement to
remain effective (with a prospectus at all times meeting the requirements of
the Act) until the earlier of (A) the date as of which the Rights are no longer
exercisable for such securities, and (B) the Expiration Date, and (iv) obtain
such other regulatory approvals as may be necessary for it to issue securities
purchasable upon the exercise of the Rights. The Company will also take such
action as may be appropriate under, or to ensure compliance with, the
securities or “blue

-12-

 

sky” laws of the various states in connection with the exercisability of
the Rights. The Company may temporarily suspend, for a period of time not to
exceed ninety (90) days after the date set forth in clause (i) of the first
sentence of this Section 9(c), the exercisability of the Rights in order to
prepare and file such registration statement and permit it to become effective
or to obtain any other required regulatory approval in connection with the
exercisability of the Rights. Upon any such suspension, the Company shall
issue a public announcement stating that the exercisability of the Rights has
been temporarily suspended, as well as a public announcement at such time as
the suspension is no longer in effect. Notwithstanding any provision of this
Agreement to the contrary, the Rights shall not be exercisable in any
jurisdiction unless the requisite registration or qualification in such
jurisdiction shall have been effected or obtained.

          (d)      The Company covenants and agrees that it will take all such action as
may be necessary to ensure that all one one-thousandths of a share of Preferred
Stock (and, following the occurrence of a Triggering Event, Common Stock and/or
other securities) delivered upon exercise of Rights shall, at the time of
delivery of the certificates for such shares (subject to payment of the
Purchase Price), be duly and validly authorized and issued and fully paid and
nonassessable.

          (e)      The Company further covenants and agrees that it will pay when due and
payable any and all federal and state transfer taxes and charges that may be
payable in respect of the issuance or delivery of the Rights Certificates and
of any certificates for a number of one one-thousandths of a share of Preferred
Stock (or Common Stock and/or other securities, as the case may be) upon the
exercise of Rights. The Company shall not, however, be required (i) to pay any
transfer tax that may be payable in respect of any transfer or delivery of
Rights Certificates to a Person other than, or the issuance or delivery of a
number of one one-thousandths of a share of Preferred Stock (or Common Stock
and/or other securities, as the case may be) in respect of a name other than
that of, the registered holder of the Rights Certificate evidencing Rights
surrendered for exercise or (ii) to issue or deliver any certificates for a
number of one one-thousandths of a share of Preferred Stock (or Common Stock
and/or other securities, as the case may be) in a name other than that of the
registered holder upon the exercise of any Rights until such tax shall have
been paid (any such tax being payable by the holder of such Rights Certificate
at the time of surrender) or until it has been established to the Company’s
satisfaction that no such tax is due.

          Section 10.      Preferred Stock Record Date. Each Person in whose name any
certificate for a number of one one-thousandths of a share of Preferred Stock
(or Common Stock and/or other securities, as the case may be) is issued upon
the exercise of Rights shall for all purposes be deemed to have become the
holder of record of such fractional shares of Preferred Stock (or Common Stock
and/or other securities, as the case may be) represented thereby on, and such
certificate shall be dated, the date upon which the Rights Certificate
evidencing such Rights was duly surrendered with the forms of election and
certification duly executed and payment of the Purchase Price (and all
applicable transfer taxes) was made; provided, however, that if the date of
such surrender and payment is a date upon which the Preferred Stock (or Common
Stock and/or other securities, as the case may be) transfer books of the
Company are closed, such Person shall be deemed to have become the record
holder of such shares (fractional or otherwise) on, and such certificate shall
be dated, the next succeeding Business Day on which the Preferred Stock (or
Common Stock and/or other securities, as the case may be) transfer books of the

-13-

 

Company are open. Prior to the exercise of the Rights evidenced thereby,
the holder of a Rights Certificate, as such, shall not be entitled to any
rights of a stockholder of the Company with respect to securities for which the
Rights shall be exercisable, including, without limitation, the right to vote,
to receive dividends or other distributions or to exercise any preemptive
rights, and shall not be entitled to receive any notice of any proceedings of
the Company, except as provided herein.

          Section 11.      Adjustment of Purchase Price, Number and Kind of Shares or
Number of Rights. The Purchase Price, the number and kind of shares covered by
each Right and the number of Rights outstanding are subject to adjustment from
time to time as provided in this Section 11.

          (a)      (i)      In the event the Company shall at any time after the date of this
Agreement (A) declare a dividend on the Preferred Stock payable in shares of
Preferred Stock, (B) subdivide the outstanding Preferred Stock, (C) combine the
outstanding Preferred Stock into a smaller number of shares, or (D) issue any
shares of its capital stock in a reclassification of the Preferred Stock
(including any such reclassification in connection with a consolidation or
merger in which the Company is the continuing or surviving corporation), except
as otherwise provided in this Section 11(a) and Section 7(e) hereof, the
Purchase Price in effect at the time of the record date for such dividend or of
the effective date of such subdivision, combination or reclassification, and
the number and kind of shares of Preferred Stock or capital stock, as the case
may be, issuable on such date, shall be proportionately adjusted so that the
holder of any Right exercised after such time shall be entitled to receive,
upon payment of the Purchase Price then in effect, the aggregate number and
kind of shares of Preferred Stock or capital stock, as the case may be, which,
if such Right had been exercised immediately prior to such date and at a time
when the Preferred Stock transfer books of the Company were open, he would have
owned upon such exercise and been entitled to receive by virtue of such
dividend, subdivision, combination or reclassification. If an event occurs
that would require an adjustment under both this Section 11(a)(i) and Section
11(a)(ii) hereof, the adjustment provided for in this Section 11(a)(i) shall be
in addition to, and shall be made prior to, any adjustment required pursuant to
Section 11(a)(ii) hereof.

                     (ii)      Subject to Section 24 of this Agreement, in the event that any
Person, alone or together with its Affiliates or Associates, becomes an
Acquiring Person, then, promptly following the first occurrence of such event,
proper provision shall be made so that each holder of a Right (except as
provided below and in Section 7(e) hereof) shall thereafter have the right to
receive (subject to the last sentence of Section 23(a)), upon exercise thereof
at the then current Purchase Price in accordance with the terms of this
Agreement, in lieu of a number of one one-thousandths of a share of Preferred
Stock, such number of shares of Common Stock of the Company that equals the
result obtained by (x) multiplying the then current Purchase Price by the then
number of one one-thousandths of a share of Preferred Stock for which a Right
was exercisable immediately prior to the first occurrence of a Section
11(a)(ii) Event, and (y) dividing that product (which, following such first
occurrence, shall thereafter be referred to as the “Purchase Price” for each
Right and for all purposes of this Agreement) by 50% of the current market
price (determined pursuant to Section 11(d) hereof) per share of Common Stock
on the date of such first occurrence (such number of shares, the “Adjustment
Shares”).

-14-

 

                     (iii)      In the event that the number of shares of Common Stock that are
authorized by the Company’s Articles of Organization, as amended, but not
outstanding or reserved for issuance for purposes other than upon exercise of
the Rights are not sufficient to permit the exercise in full of the Rights in
accordance with the foregoing subparagraph (ii) of this Section 11(a), the
Company shall: (A) determine the excess of (1) the value of the Adjustment
Shares issuable upon the exercise of a Right (the “Current Value”) over (2) the
Purchase Price (such excess, the “Spread”), and (B) with respect to each Right,
make adequate provision to substitute for the Adjustment Shares, upon payment
of the applicable Purchase Price, (1) cash, (2) a reduction in the Purchase
Price, (3) Common Stock or other equity securities of the Company (including,
without limitation, shares, or units of shares, of preferred stock which the
Board has deemed to have the same value as shares of Common Stock (such shares
of preferred stock, “common stock equivalents”)), (4) debt securities of the
Company, (5) other assets, or (6) any combination of the foregoing, having an
aggregate value equal to the Current Value, where such aggregate value has been
determined by the Board based upon the advice of a nationally recognized
investment banking firm selected by the Board; provided, however, if the
Company shall not have made adequate provision to deliver value pursuant to
clause (B) above within thirty (30) days following the later of (x) the first
occurrence of a Section 11(a)(ii) Event and (y) the date on which the Company’s
right of redemption pursuant to Section 23(a) expires (the later of (x) and (y)
being referred to herein as the “Section 11(a)(ii) Trigger Date”), then the
Company shall be obligated to deliver, upon the surrender for exercise of a
Right and without requiring payment of the Purchase Price, shares of Common
Stock (to the extent available) and then, if necessary, cash, which shares
and/or cash have an aggregate value equal to the Spread. If the Board shall
determine in good faith that it is likely that sufficient additional shares of
Common Stock could be authorized for issuance upon exercise in full of the
Rights, the thirty (30) day period set forth above may be extended to the
extent necessary, but not more than ninety (90) days after the Section
11(a)(ii) Trigger Date, in order that the Company may seek stockholder approval
for the authorization of such additional shares (such period, as it may be
extended, the “Substitution Period”). To the extent that the Company
determines that some action need be taken pursuant to the first and/or second
sentences of this Section 11(a)(iii), the Company (x) shall provide, subject to
Section 7(e) hereof, that such action shall apply uniformly to all outstanding
Rights, and (y) may suspend the exercisability of the Rights until the
expiration of the Substitution Period in order to seek any authorization of
additional shares and/or to decide the appropriate form of distribution to be
made pursuant to such first sentence and to determine the value thereof. In
the event of any such suspension, the Company shall issue a public announcement
stating that the exercisability of the Rights has been temporarily suspended,
as well as a public announcement at such time as the suspension is no longer in
effect. For purposes of this Section 11(a)(iii), the value of the Common Stock
shall be the current market price (as determined pursuant to Section 11(d)
hereof) per share of the Common Stock on the Section 11(a)(ii) Trigger Date and
the value of any “common stock equivalent” shall be deemed to have the same
value as the Common Stock on such date.

          (b)      In case the Company shall fix a record date for the issuance of
rights, options or warrants to all holders of Preferred Stock entitling them to
subscribe for or purchase (for a period expiring within forty-five (45)
calendar days after such record date) Preferred Stock (or shares having the
same rights, privileges and preferences as the shares of Preferred Stock
(“equivalent preferred stock”)) or securities convertible into Preferred Stock
or equivalent preferred stock at a price per share of Preferred Stock or per
share of equivalent preferred stock (or having a

-15-

 

conversion price per share, if a security convertible into Preferred Stock
or equivalent preferred stock) less than the current market price (as
determined pursuant to Section 11(d) hereof) per share of Preferred Stock on
such record date, the Purchase Price to be in effect after such record date
shall be determined by multiplying the Purchase Price in effect immediately
prior to such record date by a fraction, the numerator of which shall be the
number of shares of Preferred Stock outstanding on such record date, plus the
number of shares of Preferred Stock which the aggregate offering price of the
total number of shares of Preferred Stock and/or equivalent preferred stock so
to be offered (and/or the aggregate initial conversion price of the convertible
securities so to be offered) would purchase at such current market price, and
the denominator of which shall be the number of shares of Preferred Stock
outstanding on such record date, plus the number of additional shares of
Preferred Stock and/or equivalent preferred stock to be offered for
subscription or purchase (or into which the convertible securities so to be
offered are initially convertible). In case such subscription price may be
paid by delivery of consideration part or all of which may be in a form other
than cash, the value of such consideration shall be as determined in good faith
by the Board, whose determination shall be described in a statement filed with
the Rights Agent and shall be conclusive for all purposes. Shares of Preferred
Stock owned by or held for the account of the Company shall not be deemed
outstanding for the purpose of any such computation. Such adjustment shall be
made successively whenever such a record date is fixed, and in the event that
such rights, options or warrants are not so issued, the Purchase Price shall be
adjusted to be the Purchase Price which would then be in effect if such record
date had not been fixed.

          (c)      In case the Company shall fix a record date for a distribution to all
holders of Preferred Stock (including any such distribution made in connection
with a consolidation or merger in which the Company is the continuing
corporation) of evidences of indebtedness, cash (other than a regular quarterly
cash dividend out of the earnings or retained earnings of the Company), assets
(other than a dividend payable in Preferred Stock, but including any dividend
payable in stock other than Preferred Stock) or subscription rights or warrants
(excluding those referred to in Section 11(b) hereof), the Purchase Price to be
in effect after such record date shall be determined by multiplying the
Purchase Price in effect immediately prior to such record date by a fraction,
the numerator of which shall be the current market price (as determined
pursuant to Section 11(d) hereof) per share of Preferred Stock on such record
date, less the fair market value (as determined in good faith by the Board,
whose determination shall be described in a statement filed with the Rights
Agent and shall be conclusive for all purposes) of the portion of the cash,
assets or evidences of indebtedness so to be distributed or of such
subscription rights or warrants applicable to a share of Preferred Stock and
the denominator of which shall be such current market price (as determined
pursuant to Section 11(d) hereof) per share of Preferred Stock on such record
date. Such adjustments shall be made successively whenever such a record date
is fixed, and in the event that such distribution is not so made, the Purchase
Price shall be adjusted to be the Purchase Price which would have been in
effect if such record date had not been fixed.

          (d)      (i)      For the purpose of any computation hereunder, other than
computations made pursuant to Section 11(a)(iii) hereof, the “current market
price” per share of Common Stock on any date shall be deemed to be the average
of the daily closing prices per share of such Common Stock for the thirty (30)
consecutive Trading Days (as such term is hereinafter defined) immediately
prior to such date, and for purposes of computations made pursuant to Section
11(a)(iii) hereof, the “current market price” per share of Common Stock on any
date

-16-

 

shall be deemed to be the average of the daily closing prices per share of
such Common Stock for the ten (10) consecutive Trading Days immediately
following such date; provided, however, that in the event that the current
market price per share of the Common Stock is determined during a period
following the announcement by the issuer of such Common Stock of (A) a dividend
or distribution on such Common Stock payable in shares of such Common Stock or
securities convertible into shares of such Common Stock (other than the
Rights), or (B) any subdivision, combination or reclassification of such Common
Stock, and prior to the expiration of the requisite thirty (30) Trading Day or
ten (10) Trading Day period, as set forth above, after the ex-dividend date for
such dividend or distribution, or the record date for such subdivision,
combination or reclassification occurs, then, and in each such case, the
“current market price” shall be properly adjusted to take into account
ex-dividend or post record date trading. The closing price for each day shall
be the last sale price, regular way, or, in case no such sale takes place on
such day, the average of the closing bid and asked prices, regular way, in
either case as reported in the principal consolidated transaction reporting
system with respect to securities listed or admitted to trading on the
principal national securities exchange on which the shares of Common Stock are
listed or admitted to trading or, if the shares of Common Stock are not listed
or admitted to trading on any national securities exchange, the last quoted
price or, if not so quoted, the average of the high bid and the low asked
prices in the over-the-counter market, as reported by The Nasdaq Stock Market,
Inc. (“Nasdaq”) or such other system then in use, or, if on any such date the
shares of Common Stock are not quoted by any such organization, the average of
the closing bid and asked prices as furnished by a professional market maker
making a market in the Common Stock selected by the Board. All references in
this Section to closing prices, last quoted prices or other stock prices mean
prices during regular trading hours, without giving effect to any after-hours
or extended hours trading. If on any such date no market maker is making a
market in the Common Stock, the fair value of such shares on such date shall be
as determined in good faith by the Board, whose determination shall be
described in a statement filed with the Rights Agent and shall be conclusive
for all purposes. The term “Trading Day” shall mean a day on which Nasdaq or
any national securities exchange on which the shares of Common Stock are listed
or admitted to trading is open for the transaction of business or, if the
shares of Common Stock are not listed or admitted to trading on Nasdaq or any
national securities exchange, a Business Day. If the Common Stock is not
publicly held or not so listed or traded, “current market price” per share
shall mean the fair value per share as determined in good faith by the Board,
whose determination shall be described in a statement filed with the Rights
Agent and shall be conclusive for all purposes.

                     (ii)      For the purpose of any computation hereunder, the “current market
price” per share of Preferred Stock shall be determined in the same manner as
set forth above for the Common Stock in clause (i) of this Section 11(d) (other
than the last sentence thereof). If the current market price per share of
Preferred Stock cannot be determined in the manner provided above or if the
Preferred Stock is not publicly held or listed or traded in a manner described
in clause (i) of this Section 11(d), the “current market price” per share of
Preferred Stock shall be conclusively deemed to be an amount equal to 1,000 (as
such number may be appropriately adjusted for such events as stock splits,
stock dividends and recapitalizations with respect to the Common Stock
occurring after the date of this Agreement) multiplied by the current market
price per share of the Common Stock. If neither the Common Stock nor the
Preferred Stock is publicly held or so listed or traded, “current market price”
per share of the Preferred Stock shall mean the fair value per share as
determined in good faith by the Board, which determination

-17-

 

shall be described in a statement filed with the Rights Agent and shall be
conclusive for all purposes. For all purposes of this Agreement, the “current
market price” of one one-thousandth of a share of Preferred Stock shall be
equal to the “current market price” of one share of Preferred Stock divided by
1,000.

          (e)      Anything herein to the contrary notwithstanding, no adjustment in the
Purchase Price shall be required unless such adjustment would require an
increase or decrease of at least one percent (1%) in the Purchase Price;
provided, however, that any adjustments which by reason of this Section 11(e)
are not required to be made shall be carried forward and taken into account in
any subsequent adjustment. All calculations under this Section 11 shall be
made to the nearest cent or to the nearest ten-millionth of a share of
Preferred Stock, or hundred-thousandth of a share of Common Stock or other
security, as the case may be. Notwithstanding the first sentence of this
Section 11(e), any adjustment required by this Section 11 shall be made no
later than the earlier of (i) three years from the date of the transaction
which mandates such adjustment, or (ii) the Expiration Date.

          (f)      If as a result of an adjustment made pursuant to Section 11(a)(ii) or
Section 13(a) hereof, the holder of any Right thereafter exercised shall become
entitled to receive any securities other than Preferred Stock, thereafter the
number of such other securities so receivable upon exercise of any Right and
the Purchase Price thereof shall be subject to adjustment from time to time in
a manner and on terms as nearly equivalent as practicable to the provisions
with respect to the Preferred Stock contained in Sections 11(a), (b), (c), (e),
(g), (h), (i), (j), (k) and (m), and the provisions of Sections 7, 9, 10, 13
and 14 hereof with respect to the Preferred Stock shall apply on like terms to
any such other securities; provided, however, that the Company shall not be
liable for its inability to reserve and keep available for issuance upon
exercise of the Rights pursuant to Section 11(a)(ii) a number of shares of
Common Stock greater than the number then authorized by the Company’s Articles
of Organization, as amended, but not outstanding or reserved for other
purposes.

          (g)      All Rights originally issued by the Company subsequent to any
adjustment made to the Purchase Price hereunder shall evidence the right to
purchase, at the adjusted Purchase Price, the number of one one-thousandths of
a share of Preferred Stock purchasable from time to time hereunder upon
exercise of the Rights, all subject to further adjustment as provided herein.

          (h)      Unless the Company shall have exercised its election as provided in
Section 11(i), upon each adjustment of the Purchase Price as a result of the
calculations made in Sections 11(b) and (c), each Right outstanding immediately
prior to the making of such adjustment shall thereafter evidence the right to
purchase, at the adjusted Purchase Price, that number of one one-thousandths of
a share of Preferred Stock (calculated to the nearest ten-millionth) obtained
by (i) multiplying (x) the number of one one-thousandths of a share covered by
a Right immediately prior to this adjustment, by (y) the Purchase Price in
effect immediately prior to such adjustment of the Purchase Price, and (ii)
dividing the product so obtained by the Purchase Price in effect immediately
after such adjustment of the Purchase Price.

          (i)      The Company may elect on or after the date of any adjustment of the
Purchase Price to adjust the number of Rights, in lieu of any adjustment in the
number of one one-thousandths of a share of Preferred Stock purchasable upon
the exercise of a Right. Each of the

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Rights outstanding after the adjustment in the number of Rights shall be
exercisable for the number of one one-thousandths of a share of Preferred Stock
for which a Right was exercisable immediately prior to such adjustment. Each
Right held of record prior to such adjustment of the number of Rights shall
become that number of Rights (calculated to the nearest one-hundred-
thousandth) obtained by dividing the Purchase Price in effect immediately prior
to adjustment of the Purchase Price by the Purchase Price in effect immediately
after adjustment of the Purchase Price. The Company shall make a public
announcement of its election to adjust the number of Rights, indicating the
record date for the adjustment, and, if known at the time, the amount of the
adjustment to be made. This record date may be the date on which the Purchase
Price is adjusted or any day thereafter, but, if the Rights Certificates have
been issued, shall be at least ten (10) days later than the date of the public
announcement. If Rights Certificates have been issued, upon each adjustment of
the number of Rights pursuant to this Section 11(i), the Company shall, as
promptly as practicable, cause to be distributed to holders of record of Rights
Certificates on such record date Rights Certificates evidencing, subject to
Section 14 hereof, the additional Rights to which such holders shall be
entitled as a result of such adjustment, or, at the option of the Company,
shall cause to be distributed to such holders of record in substitution and
replacement for the Rights Certificates held by such holders prior to the date
of adjustment, and upon surrender thereof, if required by the Company, new
Rights Certificates evidencing all the Rights to which such holders shall be
entitled after such adjustment. Rights Certificates so to be distributed shall
be issued, executed and countersigned in the manner provided for herein (and
may bear, at the option of the Company, the adjusted Purchase Price) and shall
be registered in the names of the holders of record of Rights Certificates on
the record date specified in the public announcement.

          (j)      Irrespective of any adjustment or change in the Purchase Price or the
number of one one-thousandths of a share of Preferred Stock issuable upon the
exercise of the Rights, the Rights Certificates theretofore and thereafter
issued may continue to express the Purchase Price per one one-thousandth of a
share and the number of one one-thousandths of a share which were expressed in
the initial Rights Certificates issued hereunder.

          (k)      Before taking any action that would cause an adjustment reducing the
Purchase Price below the then par value, if any, of the number of one
one-thousandths of a share of Preferred Stock issuable upon exercise of the
Rights, the Company shall take any corporate action which may, in the opinion
of its counsel, be necessary in order that the Company may validly and legally
issue such number of one one-thousandths of a share of fully paid and
nonassessable Preferred Stock at such adjusted Purchase Price.

          (l)      In any case in which this Section 11 shall require that an adjustment
in the Purchase Price be made effective as of a record date for a specified
event, the Company may elect to defer until the occurrence of such event the
issuance to the holder of any Right exercised after such record date the number
of one one-thousandths of a share of Preferred Stock and other capital stock or
securities of the Company, if any, issuable upon such exercise over and above
the number of one one-thousandths of a share of Preferred Stock and other
capital stock or securities of the Company, if any, issuable upon such exercise
on the basis of the Purchase Price in effect prior to such adjustment;
provided, however, that the Company shall deliver to such holder a due bill or
other appropriate instrument evidencing such holder’s right to receive such

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additional shares (fractional or otherwise) or securities upon the
occurrence of the event requiring such adjustment.

          (m)      Anything in this Section 11 to the contrary notwithstanding, the
Company shall be entitled to make such reductions in the Purchase Price, in
addition to those adjustments expressly required by this Section 11, as and to
the extent that in their good faith judgment the Board shall determine to be
advisable in order that any (i) consolidation or subdivision of the Preferred
Stock, (ii) issuance wholly for cash of any shares of Preferred Stock at less
than the current market price, (iii) issuance wholly for cash of shares of
Preferred Stock or securities which by their terms are convertible into or
exchangeable for shares of Preferred Stock, (iv) stock dividends or (v)
issuance of rights, options or warrants referred to in this Section 11,
hereafter made by the Company to holders of its Preferred Stock shall not be
taxable to such stockholders.

          (n)      The Company covenants and agrees that it shall not, at any time after
the Distribution Date, (i) consolidate with any other Person (other than a
Subsidiary of the Company in a transaction that complies with Section 11(o)
hereof), (ii) merge with or into any other Person (other than a Subsidiary of
the Company in a transaction which complies with Section 11(o) hereof), or
(iii) sell or transfer (or permit any Subsidiary to sell or transfer), in one
transaction, or a series of related transactions, assets or earning power
aggregating more than 50% of the assets or earning power of the Company and its
Subsidiaries (taken as a whole) to any other Person or Persons (other than the
Company and/or any of its Subsidiaries in one or more transactions each of
which complies with Section 11(o) hereof), if (x) at the time of or immediately
after such consolidation, merger or sale there are any charter or bylaw
provisions or any rights, warrants or other instruments or securities
outstanding or agreements in effect that would substantially diminish or
otherwise eliminate the benefits intended to be afforded by the Rights or (y)
prior to, simultaneously with or immediately after such consolidation, merger
or sale, the stockholders of the Person who constitutes, or would constitute,
the “Principal Party” for purposes of Section 13(a) hereof shall have received
a distribution of Rights previously owned by such Person or any of its
Affiliates or Associates. The Company shall not consummate any consolidation,
merger, sale or transfer described in clause (i), (ii) or (iii) of the prior
sentence unless prior thereto the Company and such other Person shall have
executed and delivered to the Rights Agent a supplemental agreement evidencing
compliance with this Section 11(n).

          (o)      The Company covenants and agrees that, after the Distribution Date, it
will not, except as permitted by Section 23, Section 24 or Section 27 hereof,
take (or permit any Subsidiary to take) any action if at the time such action
is taken it is reasonably foreseeable that such action will diminish
substantially or otherwise eliminate the benefits intended to be afforded by
the Rights.

          (p)      Anything in this Agreement to the contrary notwithstanding, in the
event that the Company shall at any time after the Record Date and prior to the
Distribution Date (i) declare or pay any dividend on the outstanding shares of
Common Stock payable in shares of Common Stock, (ii) subdivide the outstanding
shares of Common Stock, or (iii) combine the outstanding shares of Common Stock
into a smaller number of shares, the number of Rights associated with each
share of Common Stock then outstanding, or issued or delivered thereafter but
prior to the Distribution Date, shall be proportionately adjusted so that the
number of Rights thereafter associated with each share of Common Stock
following any such event shall equal the result

-20-

 

obtained by multiplying the number of Rights associated with each share of
Common Stock immediately prior to such event by a fraction, the numerator of
which shall be the number of shares of Common Stock outstanding immediately
prior to the occurrence of such event and the denominator of which shall be the
number of shares of Common Stock outstanding immediately following the
occurrence of such event.

          Section 12.      Certificate of Adjusted Purchase Price or Number of Shares.
Whenever an adjustment is made as provided in Section 11 or Section 13 hereof,
the Company shall promptly (a) prepare a certificate setting forth such
adjustment and a brief statement of the facts accounting for such adjustment,
(b) file with the Rights Agent, and with each transfer agent for the Preferred
Stock and the Common Stock, a copy of such certificate, and (c) mail a brief
summary thereof to each holder of a Rights Certificate (or, if prior to the
Distribution Date, to each holder of a certificate representing shares of
Common Stock) in accordance with Section 26 hereof. The Rights Agent shall be
fully protected in relying on any such certificate and on any adjustment
therein contained and shall not be deemed to have knowledge of any adjustment
unless and until it shall have received such certificate.

          Section 13.      Consolidation, Merger or Sale or Transfer of Assets or Earning
Power.

          (a)      In the event that, at any time after a Person has become an Acquiring
Person, (x) the Company shall consolidate with, or merge with and into, any
other Person (other than a Subsidiary of the Company in a transaction that
complies with Section 11(o) hereof), and the Company shall not be the
continuing or surviving corporation of such consolidation or merger, (y) any
Person (other than a Subsidiary of the Company in a transaction that complies
with Section 11(o) hereof) shall consolidate with, or merge with or into, the
Company, and the Company shall be the continuing or surviving corporation of
such consolidation or merger and, in connection with such consolidation or
merger, all or part of the outstanding shares of Common Stock shall be changed
into or exchanged for stock or other securities of any other Person or cash or
any other property, or (z) the Company shall sell or otherwise transfer (or one
or more of its Subsidiaries shall sell or otherwise transfer), in one
transaction or a series of related transactions, assets or earning power
aggregating more than 50% of the assets or earning power of the Company and its
Subsidiaries (taken as a whole) to any Person or Persons (other than the
Company or any Subsidiary of the Company in one or more transactions each of
which complies with Section 11(o) hereof), then, and in each such case, proper
provision shall be made so that: (i) each holder of a Right, except as provided
in Section 7(e) hereof, shall thereafter have the right to receive, upon the
exercise thereof at the then current Purchase Price in accordance with the
terms of this Agreement, such number of validly authorized and issued, fully
paid, non-assessable and freely tradeable shares of Common Stock of the
Principal Party (as such term is hereinafter defined), which shall not be
subject to any liens, encumbrances, rights of first refusal or other adverse
claims, as shall be equal to the result obtained by (1) multiplying the then
current Purchase Price by the number of one one-thousandths of a share of
Preferred Stock for which a Right is exercisable immediately prior to the first
occurrence of a Section 13 Event (or, if a Section 11(a)(ii) Event has occurred
prior to the first occurrence of a Section 13 Event, multiplying the number of
such one one-thousandths of a share for which a Right was exercisable
immediately prior to the first occurrence of a Section 11(a)(ii) Event by the
Purchase Price in effect immediately prior to such first occurrence), and (2)
dividing that product (which, following the first occurrence of a Section 13
Event, shall be referred to as the “Purchase Price”

-21-

 

for each Right and for all purposes of this Agreement) by 50% of the
current market price (determined pursuant to Section 11(d)(i) hereof) per share
of the Common Stock of such Principal Party on the date of consummation of such
Section 13 Event; (ii) such Principal Party shall thereafter be liable for, and
shall assume, by virtue of such Section 13 Event, all the obligations and
duties of the Company pursuant to this Agreement; (iii) the term “Company”
shall thereafter be deemed to refer to such Principal Party, it being
specifically intended that, subject to clause (v) below, the provisions of
Section 11 hereof shall apply only to such Principal Party following the first
occurrence of a Section 13 Event; (iv) such Principal Party shall take such
steps (including, but not limited to, the reservation of a sufficient number of
shares of its Common Stock) in connection with the consummation of any such
transaction as may be necessary to assure that the provisions hereof shall
thereafter be applicable, as nearly as reasonably may be, in relation to its
shares of Common Stock thereafter deliverable upon the exercise of the Rights;
and (v) the provisions of Section 11(a)(ii) hereof shall be of no effect
following the first occurrence of any Section 13 Event.

          (b)      “Principal Party” shall mean

                     (i)      in the case of any transaction described in clause (x) or (y) of the
first sentence of Section 13(a), the Person that is the issuer of any
securities into which shares of Common Stock of the Company are converted in
such merger or consolidation, and if no securities are so issued, the Person
that is the other party to such merger or consolidation; and

                     (ii)      in the case of any transaction described in clause (z) of the first
sentence of Section 13(a), the Person that is the party receiving the greatest
portion of the assets or earning power transferred pursuant to such transaction
or transactions;

provided, however, that in any such case, (1) if the Common Stock of such
Person is not at such time and has not been continuously over the preceding
twelve (12) month period registered under Section 12 of the Exchange Act, and
such Person is a direct or indirect Subsidiary of another Person the Common
Stock of which is and has been so registered, “Principal Party” shall refer to
such other Person; (2) in case such Person is a Subsidiary, directly or
indirectly, of more than one Person, the Common Stocks of two or more of which
are and have been so registered, “Principal Party” shall refer to whichever of
such Persons is the issuer of the Common Stock having the greatest aggregate
market value; and (3) in case such Person is owned, directly or indirectly, by
a joint venture formed by two or more Persons that are not owned, directly or
indirectly, by the same Person, the rules set forth in (1) and (2) above shall
apply to each of the chains of ownership having an interest in such joint
venture as if such party were a “Subsidiary” of both or all of such joint
ventures and the Principal Parties in each such chain shall bear the
obligations set forth in this Section 13 in the same ratio as their direct or
indirect interests in such Person bear to the total of such interests.

          (c)      The Company shall not consummate any such consolidation, merger, sale
or transfer unless the Principal Party shall have a sufficient number of
authorized shares of its Common Stock which have not been issued or reserved
for issuance to permit the exercise in full of the Rights in accordance with
this Section 13 and unless prior thereto the Company and such Principal Party
shall have executed and delivered to the Rights Agent a supplemental agreement
providing for the terms set forth in paragraphs (a) and (b) of this Section 13
and further

-22-

 

providing that, as soon as practicable after the date of any
consolidation, merger or sale of assets mentioned in paragraph (a) of this
Section 13, the Principal Party will

                     (i)      prepare and file a registration statement under the Act, with respect
to the Rights and the securities purchasable upon exercise of the Rights on an
appropriate form, and will use its best efforts to cause such registration
statement to (A) become effective as soon as practicable after such filing and
(B) remain effective (with a prospectus at all times meeting the requirements
of the Act) until the Expiration Date;

                     (ii)      use its best efforts to qualify or register the Rights and the
securities purchasable upon exercise of the Rights under the blue sky laws of
such jurisdictions as may be necessary or appropriate; and

                     (iii)      deliver to holders of the Rights historical financial statements for
the Principal Party and each of its Affiliates that comply in all respects with
the requirements for registration on Form 10 under the Exchange Act.

The provisions of this Section 13 shall similarly apply to successive mergers
or consolidations or sales or other transfers. In the event that a Section 13
Event shall occur at the same time as, or at any time after, the occurrence of
a Section 11(a)(ii) Event, the Rights which have not theretofore been exercised
shall thereafter become exercisable in the manner described in Section 13(a).

          Section 14.      Fractional Rights and Fractional Shares.

          (a)      The Company shall not be required to issue fractions of Rights, except
prior to the Distribution Date as provided in Section 11(i) or (p) hereof, or
to distribute Rights Certificates that evidence fractional Rights. In lieu of
such fractional Rights, there shall be paid to the registered holders of the
Rights Certificates with regard to which such fractional Rights would otherwise
be issuable, an amount in cash equal to the same fraction of the current market
value of a whole Right. For purposes of this Section 14(a), the current market
value of a whole Right shall be the closing price of the Rights for the Trading
Day immediately prior to the date on which such fractional Rights would have
been otherwise issuable. The closing price of the Rights for any day shall be
the last sale price, regular way, or, in case no such sale takes place on such
day, the average of the closing bid and asked prices, regular way, in either
case as reported in the principal consolidated transaction reporting system
with respect to securities listed or admitted to trading on the principal
national securities exchange on which the Rights are listed or admitted to
trading, or if the Rights are not listed or admitted to trading on any national
securities exchange, the last quoted price or, if not so quoted, the average of
the high bid and the low asked prices in the over-the-counter market, as
reported by Nasdaq or such other system then in use or, if on any such date the
Rights are not quoted by any such organization, the average of the closing bid
and asked prices as furnished by a professional market maker making a market in
the Rights selected by the Board. All references in this Section to closing
prices, last quoted prices or other stock prices means prices during regular
trading hours, without giving effect to any after-hours or extended hours
trading. If on any such date no such market maker is making a market in the
Rights, the fair value of the Rights on such date as determined in good faith
by the Board shall be used, which determination shall be described in a
statement filed with Rights Agent and shall be conclusive for all purposes.

-23-

 

          (b)      The Company shall not be required to issue fractions of shares of
Preferred Stock (other than fractions which are integral multiples of one
one-thousandth of a share of Preferred Stock) upon exercise of the Rights or to
distribute certificates that evidence fractional shares of Preferred Stock
(other than fractions which are integral multiples of one one-thousandth of a
share of Preferred Stock). Fractional shares of Preferred Stock in integral
multiples of one one-thousandth of a share of Preferred Stock may, at the
election of the Company, be evidenced by depositary receipts; provided,
however, that holders of such depositary receipts shall have all of the
designations and the powers, preferences and rights, and the qualifications,
limitations and restrictions to which they are entitled as beneficial owners of
the shares of Preferred Stock represented by such depositary receipts. In lieu
of fractional shares of Preferred Stock (other than fractions which are
integral multiples of one one-thousandth of a share of Preferred Stock), the
Company shall pay to the registered holders of Rights Certificates at the time
such Rights are exercised as herein provided an amount in cash equal to the
same fraction of the current market value of one one-thousandth of a share of
Preferred Stock. For purposes of this Section 14(b), the current market value
of one one-thousandth of a share of Preferred Stock shall be one one-thousandth
of the closing price of a share of Preferred Stock (as determined pursuant to
Section 11(d)(ii) hereof) for the Trading Day immediately prior to the date of
such exercise.

          (c)      Following the occurrence of a Triggering Event, the Company shall not
be required to issue fractions of shares of Common Stock upon exercise of the
Rights or to distribute certificates which evidence fractional shares of Common
Stock. In lieu of fractional shares of Common Stock, the Company shall pay to
the registered holders of Rights Certificates at the time such Rights are
exercised as herein provided an amount in cash equal to the same fraction of
the current market price of one (1) share of Common Stock (as determined
pursuant to Section 11(d)(i) hereof) for the Trading Day immediately prior to
the date of such exercise.

          (d)      The holder of a Right by the acceptance of such Right expressly waives
his right to receive any fractional Rights or any fractional shares upon
exercise of a Right, except as permitted by this Section 14.

          Section 15.      Rights of Action. All rights of action in respect of this
Agreement, except the rights of action expressly given to the Rights Agent in
Section 18 hereof, are vested in the respective registered holders of the
Rights Certificates (and, prior to the Distribution Date, the registered
holders of the Common Stock); and any registered holder of any Rights
Certificate (or, prior to the Distribution Date, of the Common Stock), without
the consent of the Rights Agent or of the holder of any other Rights
Certificate (or, prior to the Distribution Date, of the Common Stock), may, in
his own behalf and for his own benefit, enforce, and may institute and maintain
any suit, action or proceeding against the Company to enforce, or otherwise act
in respect of, his right to exercise the Rights evidenced by such Rights
Certificate in the manner provided in such Rights Certificate and in this
Agreement. Without limiting the foregoing or any remedies available to the
holders of Rights, it is specifically acknowledged that the holders of Rights
would not have an adequate remedy at law for any breach of this Agreement and
shall be entitled to specific performance of the obligations hereunder and
injunctive relief against actual or threatened violations of the obligations
hereunder of any Person subject to this Agreement.

-24-

 

          Section 16.      Agreement of Rights Holders. Every holder of a Right by
accepting the same consents and agrees with the Company and the Rights Agent
and with every other holder of a Right that:

          (a)      prior to the Distribution Date, the Rights will be transferable only
in connection with the transfer of Common Stock;

          (b)      after the Distribution Date, the Rights Certificates are transferable
only on the registry books of the Rights Agent if surrendered at the office of
the Rights Agent designated for such purposes, duly endorsed or accompanied by
a proper instrument of transfer and with the appropriate forms and certificates
duly completed and fully executed;

          (c)      subject to Section 6(a) and Section 7(f) hereof, the Company and the
Rights Agent may deem and treat the person in whose name a Rights Certificate
(or, prior to the Distribution Date, the associated Common Stock certificate)
is registered as the absolute owner thereof and of the Rights evidenced thereby
(notwithstanding any notations of ownership or writing on the Rights
Certificates or the associated Common Stock certificate made by anyone other
than the Company or the Rights Agent) for all purposes whatsoever, and neither
the Company nor the Rights Agent, subject to the penultimate sentence of
Section 7(e) hereof, shall be required to be affected by any notice to the
contrary; and

          (d)      notwithstanding anything in this Agreement to the contrary, neither
the Company nor the Rights Agent shall have any liability to any holder of a
Right or other Person as a result of its inability to perform any of its
obligations under this Agreement by reason of any preliminary or permanent
injunction or other order, decree or ruling issued by a court of competent
jurisdiction or by a governmental, regulatory or administrative agency or
commission, or any statute, rule, regulation or executive order promulgated or
enacted by any governmental authority, prohibiting or otherwise restraining
performance of such obligation; provided, however, the Company must use its
best efforts to prevent the issuance of any such order, decree or ruling and to
have any such order, decree or ruling lifted or otherwise overturned as soon as
possible.

          Section 17.      Rights Certificate Holder Not Deemed a Stockholder. No
holder, as such, of any Rights Certificate shall be entitled to vote, receive
dividends or be deemed for any purpose the holder of the number of one
one-thousandths of a share of Preferred Stock or any other securities of the
Company which may at any time be issuable on the exercise of the Rights
represented thereby, nor shall anything contained herein or in any Rights
Certificate be construed to confer upon the holder of any Rights Certificate,
as such, any of the rights of a stockholder of the Company or any right to vote
for the election of directors or upon any matter submitted to stockholders at
any meeting thereof, or to give or withhold consent to any corporate action, or
to receive notice of meetings or other actions affecting stockholders (except
as provided in Section 25 hereof), or to receive dividends or subscription
rights, or otherwise, until the Right or Rights evidenced by such Rights
Certificate shall have been exercised in accordance with the provisions hereof.

          Section 18.      Concerning the Rights Agent.

-25-

 

          (a)      The Company agrees to pay to the Rights Agent reasonable compensation
for all services rendered by it hereunder and, from time to time, on demand of
the Rights Agent, its reasonable expenses and counsel fees and disbursements
and other disbursements incurred in the administration and execution of this
Agreement and the exercise and performance of its duties hereunder. The
Company also agrees to indemnify the Rights Agent for, and to hold it harmless
against, any loss, liability or expense, incurred without gross negligence, bad
faith or willful misconduct on the part of the Rights Agent, for anything done
or omitted by the Rights Agent in connection with the acceptance and
administration of this Agreement, including the costs and expenses of defending
against any claim of liability in the premises.

          (b)      The Rights Agent shall be protected and shall incur no liability for
or in respect of any action taken, suffered or omitted by it in connection with
its administration of this Agreement in reliance upon any Rights Certificate or
certificate for Common Stock or for other securities of the Company, instrument
of assignment or transfer, power of attorney, endorsement, affidavit, letter,
notice, direction, consent, certificate, statement, or other paper or document
believed by it to be genuine and to be signed, executed and, where necessary,
verified or acknowledged, by the proper Person or Persons, or otherwise upon
the advice of counsel as set forth in Section 20 hereof.

          Section 19.      Merger or Consolidation or Change of Name of Rights Agent.

          (a)      Any corporation into which the Rights Agent or any successor Rights
Agent may be merged or with which it may be consolidated, or any corporation
resulting from any merger or consolidation to which the Rights Agent or any
successor Rights Agent shall be a party, or any corporation succeeding to the
corporate trust business of the Rights Agent or any successor Rights Agent,
shall be the successor to the Rights Agent under this Agreement without the
execution or filing of any paper or any further act on the part of any of the
parties hereto; provided, however, that such corporation would be eligible for
appointment as a successor Rights Agent under the provisions of Section 21
hereof. In case at the time such successor Rights Agent shall succeed to the
agency created by this Agreement, any of the Rights Certificates shall have
been countersigned but not delivered, any such successor Rights Agent may adopt
the countersignature of a predecessor Rights Agent and deliver such Rights
Certificates so countersigned; and in case at that time any of the Rights
Certificates shall not have been countersigned, any successor Rights Agent may
countersign such Rights Certificates either in the name of the predecessor or
in the name of the successor Rights Agent; and in all such cases such Rights
Certificates shall have the full force provided in the Rights Certificates and
in this Agreement.

          (b)      In case at any time the name of the Rights Agent shall be changed and
at such time any of the Rights Certificates shall have been countersigned but
not delivered, the Rights Agent may adopt the countersignature under its prior
name and deliver Rights Certificates so countersigned; and in case at that time
any of the Rights Certificates shall not have been countersigned, the Rights
Agent may countersign such Rights Certificates either in its prior name or in
its changed name; and in all such cases such Rights Certificates shall have the
full force provided in the Rights Certificates and in this Agreement.

-26-

 

          Section 20.      Duties of Rights Agent. The Rights Agent undertakes the
duties and obligations imposed by this Agreement upon the following terms and
conditions, by all of which the Company and the holders of Rights Certificates,
by their acceptance thereof, shall be bound:

          (a)      The Rights Agent may consult with legal counsel (who may be legal
counsel for the Company), and the opinion of such counsel shall be full and
complete authorization and protection to the Rights Agent as to any action
taken or omitted by it in good faith and in accordance with such opinion.

          (b)      Whenever in the performance of its duties under this Agreement the
Rights Agent shall deem it necessary or desirable that any fact or matter
(including, without limitation, the identity of any Acquiring Person and the
determination of “current market price”) be proved or established by the
Company prior to taking or suffering any action hereunder, such fact or matter
(unless other evidence in respect thereof be herein specifically prescribed)
may be deemed to be conclusively proved and established by a certificate signed
by the Chairman of the Board, the President, any Vice President, the Treasurer,
any Assistant Treasurer, the Clerk or any Assistant Clerk of the Company and
delivered to the Rights Agent; and such certificate shall be full authorization
to the Rights Agent for any action taken or suffered in good faith by it under
the provisions of this Agreement in reliance upon such certificate.

          (c)      The Rights Agent shall be liable hereunder only for its own gross
negligence, bad faith or willful misconduct.

          (d)      The Rights Agent shall not be liable for or by reason of any of the
statements of fact or recitals contained in this Agreement or in the Rights
Certificates or be required to verify the same (except as to its
countersignature on such Rights Certificates), but all such statements and
recitals are and shall be deemed to have been made by the Company only.

          (e)      The Rights Agent shall not be under any responsibility in respect of
the validity of this Agreement or the execution and delivery hereof (except the
due execution hereof by the Rights Agent) or in respect of the validity or
execution of any Rights Certificate (except its countersignature thereof); nor
shall it be responsible for any breach by the Company of any covenant or
condition contained in this Agreement or in any Rights Certificate; nor shall
it be responsible for any adjustment required under the provisions of Section
11, Section 13 or Section 24 hereof or responsible for the manner, method or
amount of any such adjustment or the ascertaining of the existence of facts
that would require any such adjustment (except with respect to the exercise of
Rights evidenced by Rights Certificates after receipt of a certificate
describing any such adjustment, delivered pursuant to Section 12); nor shall it
by any act hereunder be deemed to make any representation or warranty as to the
authorization or reservation of any shares of Common Stock or Preferred Stock
to be issued pursuant to this Agreement or any Rights Certificate or as to
whether any shares of Common Stock or Preferred Stock will, when so issued, be
validly authorized and issued, fully paid and nonassessable.

          (f)      The Company agrees that it will perform, execute, acknowledge and
deliver or cause to be performed, executed, acknowledged and delivered all such
further and other acts, instruments and assurances as may reasonably be
required by the Rights Agent for the carrying out or performing by the Rights
Agent of the provisions of this Agreement.

-27-

 

          (g)      The Rights Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties hereunder from the
Chairman of the Board, the President, any Vice President, the Clerk, any
Assistant Clerk, the Treasurer or any Assistant Treasurer of the Company, and
to apply to such officers for advice or instructions in connection with its
duties, and it shall not be liable for any action taken or suffered to be taken
by it in good faith in accordance with instructions of any such officer. Any
application by the Rights Agent for written instructions from the Company may,
at the option of the Rights Agent, set forth in writing any action proposed to
be taken or omitted by the Rights Agent with respect to its duties or
obligations under this Rights Agreement and the date on and/or after which such
action shall be taken or omitted and the Rights Agent shall not be liable for
any action taken or omitted in accordance with a proposal included in any such
application on or after the date specified therein (which date shall not be
less than five Business Days after the date any such officer actually receives
such application, unless any such officer shall have consented in writing to an
earlier date) unless, prior to taking or omitting any such action, the Rights
Agent has received written instructions in response to such application
specifying the action to be taken or omitted.

          (h)      The Rights Agent and any stockholder, director, officer or employee of
the Rights Agent may buy, sell or deal in any of the Rights or other securities
of the Company or become pecuniarily interested in any transaction in which the
Company may be interested, or contract with or lend money to the Company or
otherwise act as fully and freely as though it were not Rights Agent under this
Agreement. Nothing herein shall preclude the Rights Agent from acting in any
other capacity for the Company or for any other legal entity.

          (i)      The Rights Agent may execute and exercise any of the rights or powers
hereby vested in it or perform any duty hereunder either itself or by or
through its attorneys or agents, and the Rights Agent shall not be answerable
or accountable for any act, default, neglect or misconduct of any such
attorneys or agents or for any loss to the Company resulting from any such act,
default, neglect or misconduct; provided, however, reasonable care was
exercised in the selection and continued employment thereof.

          (j)      No provision of this Agreement shall require the Rights Agent to
expend or risk its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder or in the exercise of its rights if
there shall be reasonable grounds for believing that repayment of such funds or
adequate indemnification against such risk or liability is not reasonably
assured to it.

          (k)      If, with respect to any Rights Certificate surrendered to the Rights
Agent for exercise or transfer, the certificate attached to the form of
assignment or form of election to purchase, as the case may be, has not been
completed, the Company and the Rights Agent will deem the beneficial owner of
the rights evidenced by such Rights Certificate to be an Acquiring Person or an
Affiliate or Associate thereof and such assignment or election to purchase will
not be honored.

          Section 21.      Change of Rights Agent. The Rights Agent or any successor
Rights Agent may resign and be discharged from its duties under this Agreement
upon thirty (30) days’ notice in writing mailed to the Company, and to each
transfer agent of the Common Stock and Preferred Stock, by registered or
certified mail, and to the holders of the Rights Certificates by

-28-

 

first-class mail. In the event the transfer agency relationship in effect
between the Company and the Rights Agent terminates, the Rights Agent will be
deemed to resign automatically on the effective date of such termination; and
any required notice will be sent by the Company. The Company may remove the
Rights Agent or any successor Rights Agent upon thirty (30) days’ notice in
writing, mailed to the Rights Agent or successor Rights Agent, as the case may
be, and to each transfer agent of the Common Stock and Preferred Stock, by
registered or certified mail, and to the holders of the Rights Certificates by
first-class mail. If the Rights Agent shall resign or be removed or shall
otherwise become incapable of acting, the Company shall appoint a successor to
the Rights Agent. If the Company shall fail to make such appointment within a
period of thirty (30) days after giving notice of such removal or after it has
been notified in writing of such resignation or incapacity by the resigning or
incapacitated Rights Agent or by the holder of a Rights Certificate (who shall,
with such notice, submit his Rights Certificate for inspection by the Company),
then any registered holder of any Rights Certificate may apply to any court of
competent jurisdiction for the appointment of a new Rights Agent. Any
successor Rights Agent, whether appointed by the Company or by such a court,
shall be (a) a corporation organized and doing business under the laws of the
United States (or of any state of the United States) in good standing, which is
authorized under such laws to exercise corporate trust or stock transfer powers
and is subject to supervision or examination by federal or state authority and
which has at the time of its appointment as Rights Agent a combined capital and
surplus of at least $50,000,000 or (b) an affiliate of a corporation described
in clause (a) of this sentence. After appointment, the successor Rights Agent
shall be vested with the same powers, rights, duties and responsibilities as if
it had been originally named as Rights Agent without further act or deed; but
the predecessor Rights Agent shall deliver and transfer to the successor Rights
Agent any property at the time held by it hereunder, and execute and deliver
any further assurance, conveyance, act or deed necessary for the purpose. Not
later than the effective date of any such appointment, the Company shall file
notice thereof in writing with the predecessor Rights Agent and each transfer
agent of the Common Stock and the Preferred Stock, and mail a notice thereof in
writing to the registered holders of the Rights Certificates. Failure to give
any notice provided for in this Section 21, however, or any defect therein,
shall not affect the legality or validity of the resignation or removal of the
Rights Agent or the appointment of the successor Rights Agent, as the case may
be.

          Section 22.      Issuance of New Rights Certificates. Notwithstanding any of
the provisions of this Agreement or of the Rights to the contrary, the Company
may, at its option, issue new Rights Certificates evidencing Rights in such
form as may be approved by the Board to reflect any adjustment or change in the
Purchase Price and the number or kind or class of shares or other securities or
property purchasable under the Rights Certificates made in accordance with the
provisions of this Agreement.

          Section 23.      Redemption; Independent Director Review.

          (a)      The Board may, at its option, at any time prior to the earlier of (i)
the close of business on the tenth Business Day (or such later date as may be
determined by the Board pursuant to clause (i) of the first sentence of Section
3(a) with respect to the Distribution Date) following the Stock Acquisition
Date (or, if the Stock Acquisition Date shall have occurred prior to the Record
Date, the close of business on the tenth Business Day following the Record
Date) and (ii) the Final Expiration Date, redeem all but not less than all the
then outstanding Rights at a

-29-

 

redemption price of $0.001 per Right, as such amount may be appropriately
adjusted to reflect any stock split, stock dividend or similar transaction
occurring after the date hereof (such redemption price being hereinafter
referred to as the “Redemption Price”). The redemption of the Rights by the
Board may be made effective at such time, on such basis and with such
conditions as the Board in its sole discretion may establish. The Company may,
at its option, pay the Redemption Price in cash, shares of Common Stock (based
on the “current market price,” as defined in Section 11(d)(i) hereof, of the
Common Stock at the time of redemption) or any other form of consideration, or
any combination of any of the foregoing, deemed appropriate by the Board.
Notwithstanding anything contained in this Agreement to the contrary, the
Rights shall not be exercisable after the first occurrence of a Section
11(a)(ii) Event until such time as the Company’s right of redemption hereunder
has expired.

          (b)      Immediately upon the action of the Board ordering the redemption of the
Rights, evidence of which shall have been filed with the Rights Agent and
without any further action and without any notice, the right to exercise the
Rights shall terminate and the only right thereafter of the holders of Rights
shall be to receive the Redemption Price for each Right so held. Promptly
after the action of the Board ordering the redemption of the Rights, the
Company shall give notice of such redemption to the Rights Agent and the
holders of the then outstanding Rights by mailing such notice to all such
holders at each holder’s last address as it appears upon the registry books of
the Rights Agent or, prior to the Distribution Date, on the registry books of
the Transfer Agent for the Common Stock. Any notice which is mailed in the
manner herein provided shall be deemed given, whether or not the holder
receives the notice. Each such notice of redemption will state the method by
which the payment of the Redemption Price will be made.

          (c)      In the event of a redemption of the Rights in accordance with this
Agreement, the Company may, at its option, discharge all of its obligations
with respect to the Rights by (i) issuing a press release announcing the manner
of redemption of the Rights in accordance with this Agreement and (ii) mailing
payment of the Redemption Price to the registered holders of the Rights at
their last addresses as they appear on the registry books of the Rights Agent
or, prior to the Distribution Date, on the registry books of the Transfer Agent
of the Common Stock, and upon such action, all outstanding Rights and Right
Certificates shall be null and void without any further action by the Company.

          (d)      At least once every three years, a committee of directors who
are independent of the management of the Company and free from any relationship
that, in the opinion of the Board would interfere with their exercise of
independent judgment, shall review and evaluate this Rights Agreement in order
to consider whether the maintenance of this Rights Agreement continues to be in
the interests of the Company and its stockholders. Following each such review,
the committee will communicate its conclusions to the full Board, including any
recommendation in light thereof as to whether this Rights Agreement should be
modified or the Rights should be redeemed.

          Section 24.      Exchange.

          (a)      The Board may, at its option, at any time after a Section 11(a)(ii)
Event, exchange all or part of the then outstanding and exercisable Rights
(which (i) shall not include Rights that have become void pursuant to the
provisions of Section 7(e) hereof, and (ii) shall include,

-30-

 

without limitation,
any Rights issued after the Distribution Date) for shares of Common Stock at an
exchange ratio of one share of Common Stock per Right, appropriately adjusted
to reflect any stock split, stock dividend or similar transaction occurring
after the date hereof (such exchange ratio being hereinafter referred to as the
“Exchange Ratio”). Notwithstanding the foregoing, the Board shall not be
empowered to effect such exchange at any time after any Person (other than the
Company, any Subsidiary of the Company, any employee benefit plan of the
Company or any such Subsidiary, or any entity holding Common Stock for or
pursuant to the terms of any such plan), together with all Affiliates and
Associates of such Person, becomes the Beneficial Owner of 50% or more of the
shares of Common Stock then outstanding.

          (b)      Immediately upon the action of the Board ordering the exchange of any
Rights pursuant to subsection (a) of this Section 24, evidence of which shall
have been filed with the Rights Agent, and without any further action and
without any notice, the right to exercise such Rights shall terminate and the
only right thereafter of a holder of such Rights shall be to receive that
number of shares of Common Stock equal to the number of such Rights held by
such holder multiplied by the Exchange Ratio. The Company shall promptly give
public notice of any such exchange; provided, however, that the failure to
give, or any defect in, such notice shall not affect the validity of such
exchange. The Company promptly shall mail a notice of any such exchange to all
of the holders of such Rights at their last addresses as they appear upon the
registry books of the Rights Agent. Any notice which is mailed in the manner
herein provided shall be deemed given, whether or not the holder receives the
notice. Each such notice of exchange shall state the method by which the
exchange of shares of Common Stock for Rights will be effected and, in the
event of any partial exchange, the number of Rights which will be exchanged.
Any partial exchange shall be effected pro rata based on the number of Rights
(other than Rights which have become void pursuant to the provisions of Section
7(e) hereof) held by each holder of Rights.

          (c)      In any exchange pursuant to this Section 24, the Company, at its
option, may substitute Preferred Stock (or equivalent preferred stock, as such
term is defined in Section 11(b) hereof) for shares of Common Stock
exchangeable for Rights, at the initial rate of one one-thousandth of a share
of Preferred Stock (or equivalent preferred stock) for each share of Common
Stock, as appropriately adjusted to reflect adjustments in the voting rights of
the Preferred Stock pursuant to Section 3(A) of the Certificate of Vote
attached hereto as Exhibit A, so that the fraction of a share of Preferred
Stock (or equivalent preferred stock) delivered in lieu of each share of Common
Stock shall have the same voting rights as one share of Common Stock.

          (d)      In the event that there shall not be sufficient shares of Common Stock
or Preferred Stock issued but not outstanding or authorized but unissued to
permit any exchange of Rights as contemplated in accordance with this Section
24, the Company shall take all such action as may be necessary to authorize
additional shares of Common Stock or Preferred Stock for issuance upon exchange
of the Rights.

          (e)      The Company shall not be required to issue fractions of shares of
Common Stock or to distribute certificates which evidence fractional shares of
Common Stock. In lieu of such fractional shares of Common Stock, there shall
be paid to the registered holders of the Right Certificates with regard to
which such fractional shares of Common Stock would otherwise be

-31-

 

issuable, an
amount in cash equal to the same fraction of the current market value of a
whole share of Common Stock. For the purposes of this subsection (e), the
current market value of a whole share of Common Stock shall be the closing
price per share of Common Stock (as determined pursuant to the second sentence
of Section 11(d)(i) hereof) for the Trading Day immediately prior to the date
of exchange pursuant to this Section 24.

          Section 25.      Notice of Certain Events.

          (a)      In case the Company shall propose, at any time after the Distribution
Date, (i) to pay any dividend payable in stock of any class to the holders of
Preferred Stock or to make any other distribution to the holders of Preferred
Stock (other than a regular quarterly cash dividend out of earnings or retained
earnings of the Company), or (ii) to offer to the holders of Preferred Stock
rights or warrants to subscribe for or to purchase any additional shares of
Preferred Stock or shares of stock of any class or any other securities, rights
or options, or (iii) to effect any reclassification of its Preferred Stock
(other than a reclassification involving only the subdivision of outstanding
shares of Preferred Stock), or (iv) to effect any consolidation or merger into
or with any other Person (other than a Subsidiary of the Company in a
transaction which complies with Section 11(o) hereof), or to effect any sale or
other transfer (or to permit one or more of its Subsidiaries to effect any sale
or other transfer), in one transaction or a series of related transactions, of
more than 50% of the assets or earning power of the Company and its
Subsidiaries (taken as a whole) to any other Person or Persons (other than the
Company and/or any of its Subsidiaries in one or more transactions each of
which complies with Section 11(o) hereof), or (v) to effect the liquidation,
dissolution or winding up of the Company, then, in each such case, the Company
shall give to each holder of a Rights Certificate, to the extent feasible and
in accordance with Section 26 hereof, a notice of such proposed action, which
shall specify the record date for the purposes of such stock dividend,
distribution of rights or warrants, or the date on which such reclassification,
consolidation, merger, sale, transfer, liquidation, dissolution, or winding up
is to take place and the date of participation therein by the holders of the
shares of Preferred Stock, if any such date is to be fixed, and such notice
shall be so given in the case of any action covered by clause (i) or (ii) above
at least twenty (20) days prior to the record date for determining holders of
the shares of Preferred Stock for purposes of such action, and in the case of
any such other action, at least twenty (20) days prior to the date of the
taking of such proposed action or the date of participation therein by the
holders of the shares of Preferred Stock, whichever shall be the earlier.

          (b)      In case a Section 11(a)(ii) Event shall occur, then, in any such case,
(i) the Company shall as soon as practicable thereafter give to each holder of
a Rights Certificate, to the extent feasible and in accordance with Section 26
hereof, a notice of the occurrence of such event, which shall specify the event
and the consequences of the event to holders of Rights under Section 11(a)(ii)
hereof, and (ii) all references in the preceding paragraph to Preferred Stock
shall be deemed thereafter to refer also to Common Stock and/or, if
appropriate, other securities; provided that the failure to give such notice
shall not affect the validity of such consent.

          Section 26.      Notices. Notices or demands authorized by this Agreement to be
given or made by the Rights Agent or by the holder of any Rights Certificate to
or on the Company shall be sufficiently given or made if sent by first-class
mail, postage prepaid, addressed (until another address is filed in writing
with the Rights Agent) as follows:

-32-

 

	 	 	 
	 	 	
PAREXEL International Corporation

195 West Street

Waltham, MA 02451

Attention: Chief Executive Officer
	 	 	 
	 	 	
with a copy to:
	 	 	 
	 	 	
Hale and Dorr LLP

60 State Street

Boston, MA 02109

Attention: David E. Redlick, Esq.

Subject to the provisions of Section 21, any notice or demand authorized by
this Agreement to be given or made by the Company or by the holder of any
Rights Certificate to or on the Rights Agent shall be sufficiently given or
made if sent by first-class mail, postage prepaid, addressed (until another
address is filed in writing with the Company) as follows:

	 	 	 
	 	 	EquiServe Trust Company, N.A.

150 Royall Street

Canton, MA 02021

Attn: Client Administration]

Notices or demands authorized by this Agreement to be given or made by the
Company or the Rights Agent to the holder of any Rights Certificate (or, if
prior to the Distribution Date, to the holder of certificates representing
shares of Common Stock) shall be sufficiently given or made if sent by
first-class mail, postage prepaid, addressed to such holder at the address of
such holder as shown on the registry books of the Company.

          Section 27.      Supplements and Amendments. Except as provided in the
penultimate sentence of this Section 27, for so long as the Rights are then
redeemable, the Company may, in its sole and absolute discretion, and the
Rights Agent shall, if the Company so directs, supplement or amend any
provision of this Agreement in any respect without the approval of any holders
of the Rights. At any time when the Rights are no longer redeemable, except as
provided in the penultimate sentence of this Section 27, the Company may, by
approval of at least 75% of the members of the Board, and the Rights Agent
shall, if the Company so directs, supplement or amend this Agreement without
the approval of any holders of Rights in order (i) to cure any ambiguity or
(ii) to correct or supplement any provision contained herein which may be
defective or inconsistent with any other provisions herein, provided that no
such supplement or amendment shall adversely affect the interests of the
holders of Rights as such (other than an Acquiring Person or an Affiliate or
Associate of an Acquiring Person). Upon the delivery of a certificate from an
appropriate officer of the Company which states that the proposed supplement or
amendment is in compliance with the terms of this Section 27, the Rights Agent
shall execute such supplement or amendment. Any supplement or amendment that the Rights
Agent is required to sign pursuant to this Section 27 shall be effective upon
execution by the Company (whether or not then executed by the Rights Agent or
the certificate referred to in the immediately preceding sentence has been
delivered). Notwithstanding anything contained in this Agreement to the
contrary, no supplement or amendment shall be made which changes the

-33-

 

Redemption
Price. Prior to the Distribution Date, the interests of the holders of Rights
shall be deemed coincident with the interests of the holders of Common Stock.

          Section 28.      Successors. All the covenants and provisions of this Agreement
by or for the benefit of the Company or the Rights Agent shall bind and inure
to the benefit of their respective successors and assigns hereunder.

          Section 29.      Actions by the Board, etc. The Board shall have the exclusive
power and authority to administer this Agreement and to exercise all rights and
powers specifically granted to the Board or to the Company, or as may be
necessary or advisable in the administration of this Agreement, including,
without limitation, the right and power to (i) interpret the provisions of this
Agreement, and (ii) make all determinations deemed necessary or advisable for
the administration of this Agreement (including a determination to redeem or
not redeem the Rights or to amend this Agreement). All such actions,
calculations, interpretations and determinations (including, for purposes of
clause (y) below, all omissions with respect to the foregoing) which are done
or made by the Board in good faith, shall (x) be final, conclusive and binding
on the Company, the Rights Agent, the holders of the Rights and all other
parties, and (y) not subject the Board to any liability to the holders of the
Rights.

          Section 30.      Benefits of this Agreement. Nothing in this Agreement shall be
construed to give to any Person other than the Company, the Rights Agent and
the registered holders of the Rights Certificates (and, prior to the
Distribution Date, registered holders of the Common Stock) any legal or
equitable right, remedy or claim under this Agreement; but this Agreement shall
be for the sole and exclusive benefit of the Company, the Rights Agent and the
registered holders of the Rights Certificates (and, prior to the Distribution
Date, registered holders of the Common Stock).

          Section 31.      Severability. If any term, provision, covenant or restriction
of this Agreement is held by a court of competent jurisdiction or other
authority to be invalid, void or unenforceable, the remainder of the terms,
provisions, covenants and restrictions of this Agreement shall remain in full
force and effect and shall in no way be affected, impaired or invalidated;
provided, however, that notwithstanding anything in this Agreement to the
contrary, if any such term, provision, covenant or restriction is held by such
court or authority to be invalid, void or unenforceable and the Board
determines in its good faith judgment that severing the invalid, void or
unenforceable language from this Agreement would adversely affect the purpose
or effect of this Agreement, the right of redemption set forth in Section 23
hereof shall be reinstated and shall not expire until the close of business on
the tenth day following the date of such determination by the Board.

          Section 32.      Governing Law. This Agreement, each Right and each Rights
Certificate issued hereunder shall be deemed to be a contract made under the
laws of the Commonwealth of Massachusetts and for all purposes shall be
governed by and construed in accordance with the laws of Massachusetts applicable to contracts made and to be performed
entirely within Massachusetts.

-34-

 

          Section 33.      Counterparts. This Agreement may be executed in any number of
counterparts and each of such counterparts shall for all purposes be deemed to
be an original, and all such counterparts shall together constitute but one and
the same instrument.

          Section 34.      Descriptive Headings. Descriptive headings of the several
Sections of this Agreement are inserted for convenience only and shall not
control or affect the meaning or construction of any of the provisions hereof.

          Section 35.      Force Majeure. Notwithstanding anything to the contrary
contained herein, Rights Agent shall not be liable for any delays or failures
in performance resulting from acts beyond its reasonable control including,
without limitation, acts of God, terrorist acts, shortage of supply, breakdowns
or malfunctions, interruptions or malfunction of computer facilities, or loss
of data due to power failures or mechanical difficulties with information
storage or retrieval systems, labor difficulties, war, or civil unrest.

-35-

 

          IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and their respective corporate seals to be hereunto affixed and
attested, all as of the day and year first above written.

	 	 	 	 
	Attest:	
PAREXEL INTERNATIONAL CORPORATION	 
	 	 	 	 
	By:	/s/ Mark T. Beaudouin, Esq.	By:	/s/ Josef H. von Rickenbach
	 	
	 	

	Name:	Mark T. Beaudouin, Esq.	Name:	Josef H. von Rickenbach
	 	
	 	

	Title:	Senior Vice President, General Counsel and
Clerk	Title:	Chairman of the Board of Directors
	 	
	 	

	

	 
	Attest:	
EQUISERVE TRUST COMPANY, N.A.	 
	 	 	 	 
	By:	/s/ Norris L. Richardson III	By:	/s/ Margaret Prentice
	 	
	 	

	Name:	Norris L. Richardson III	Name:	Margaret Prentice
	 	
	 	

	Title:	Senior Account Manager	Title:	Managing Director
	 	
	 	

-36-

 

Exhibit A

CERTIFICATE OF VOTE

OF

THE BOARD OF DIRECTORS

OF

PAREXEL INTERNATIONAL CORPORATION

ESTABLISHING THE TERMS

OF

SERIES A JUNIOR PARTICIPATING PREFERRED STOCK

(Pursuant to Chapter 156B, Section 26, of the General Laws

of the Commonwealth of Massachusetts)

          PAREXEL International Corporation, a corporation organized and existing
under the laws of the Commonwealth of Massachusetts (hereinafter called the
“Corporation”), hereby certifies that the following votes were adopted by the
Board of Directors of the Corporation at a meeting duly called and held on
March 27, 2003:

          VOTED: That pursuant to the authority granted to and vested in the Board
of Directors of the Corporation (hereinafter called the “Board”) in accordance
with the provisions of its Articles of Organization, as amended, the Board
hereby creates a series of Preferred Stock, $.01 par value per share (the
“Preferred Stock”), of the Corporation and hereby states the designation and
number of shares, and fixes the relative rights, preferences and limitations
thereof as follows:

          Series A Junior Participating Preferred Stock:

          Section 1.      Designation and Amount. The shares of such series shall be
designated as “Series A Junior Participating Preferred Stock” (the “Series A
Preferred Stock”) and the number of shares constituting the Series A Preferred
Stock shall be fifty thousand (50,000). Such number of shares may be increased
or decreased by vote of the Board prior to issuance; provided, that no decrease
shall reduce the number of shares of Series A Preferred Stock to a number less
than the number of shares then outstanding plus the number of shares reserved
for issuance upon the exercise of outstanding options, rights or warrants or
upon the conversion of any outstanding securities issued by the Corporation
convertible into Series A Preferred Stock.

          Section 2.      Dividends and Distributions.

          (A)      Subject to the rights of the holders of any shares of any series of
Preferred Stock (or any similar stock) ranking prior and superior to the Series
A Preferred Stock with respect to

A-1

 

dividends, the holders of shares of Series A Preferred Stock, in
preference to the holders of Common Stock, par value $.01 per share (the
“Common Stock”), of the Corporation, and of any other junior stock, shall be
entitled to receive, when, as and if declared by the Board out of funds of the
Corporation legally available for the payment of dividends, quarterly dividends
payable in cash on the last day of each fiscal quarter of the Corporation in
each year (each such date being referred to herein as a “Quarterly Dividend
Payment Date”), commencing on the first Quarterly Dividend Payment Date after
the first issuance of a share or fraction of a share of Series A Preferred
Stock, in an amount per share (rounded to the nearest cent) equal to the
greater of (a) $10 or (b) subject to the provision for adjustment hereinafter
set forth, 1,000 times the aggregate per share amount of all cash dividends,
and 1,000 times the aggregate per share amount (payable in kind) of all
non-cash dividends or other distributions, other than a dividend payable in
shares of Common Stock or a subdivision of the outstanding shares of Common
Stock (by reclassification or otherwise), declared on the Common Stock since
the immediately preceding Quarterly Dividend Payment Date or, with respect to
the first Quarterly Dividend Payment Date, since the first issuance of any
share or fraction of a share of Series A Preferred Stock. In the event the
Corporation shall at any time declare or pay any dividend on the Common Stock
payable in shares of Common Stock, or effect a subdivision, combination or
consolidation of the outstanding shares of Common Stock (by reclassification or
otherwise than by payment of a dividend in shares of Common Stock) into a
greater or lesser number of shares of Common Stock, then in each such case the
amount to which holders of shares of Series A Preferred Stock were entitled
immediately prior to such event under clause (b) of the preceding sentence
shall be adjusted by multiplying such amount by a fraction, the numerator of
which is the number of shares of Common Stock outstanding immediately after
such event and the denominator of which is the number of shares of Common Stock
that were outstanding immediately prior to such event. In the event the
Corporation shall at any time declare or pay any dividend on the Series A
Preferred Stock payable in shares of Series A Preferred Stock, or effect a
subdivision, combination or consolidation of the outstanding shares of Series A
Preferred Stock (by reclassification or otherwise than by payment of a dividend
in shares of Series A Preferred Stock) into a greater or lesser number of
shares of Series A Preferred Stock, then in each such case the amount to which
holders of shares of Series A Preferred Stock were entitled immediately prior
to such event under clause (b) of the first sentence of this Section 2(A) shall
be adjusted by multiplying such amount by a fraction, the numerator of which is
the number of shares of Series A Preferred Stock that were outstanding
immediately prior to such event and the denominator of which is the number of
shares of Series A Preferred Stock outstanding immediately after such event.

          (B)      The Corporation shall declare a dividend or distribution on the Series
A Preferred Stock as provided in paragraph (A) of this Section immediately
after it declares a dividend or distribution on the Common Stock (other than a
dividend payable in shares of Common Stock) and the Corporation shall pay such
dividend or distribution on the Series A Preferred Stock before the dividend or
distribution declared on the Common Stock is paid or set apart; provided that,
in the event no dividend or distribution shall have been declared on the Common
Stock during the period between any Quarterly Dividend Payment Date and the
next subsequent Quarterly Dividend Payment Date, a dividend of $10 per share on
the Series A Preferred Stock shall nevertheless be payable on such subsequent
Quarterly Dividend Payment Date.

A-2

 

          (C)      Dividends shall begin to accrue and be cumulative on outstanding
shares of Series A Preferred Stock from the Quarterly Dividend Payment Date
next preceding the date of issue of such shares, unless the date of issue of
such shares is prior to the record date for the first Quarterly Dividend
Payment Date, in which case dividends on such shares shall begin to accrue from
the date of issue of such shares, or unless the date of issue is a Quarterly
Dividend Payment Date or is a date after the record date for the determination
of holders of shares of Series A Preferred Stock entitled to receive a
quarterly dividend and before such Quarterly Dividend Payment Date, in either
of which events such dividends shall begin to accrue and be cumulative from
such Quarterly Dividend Payment Date. Accrued but unpaid dividends shall not
bear interest. Dividends paid on the shares of Series A Preferred Stock in an
amount less than the total amount of such dividends at the time accrued and
payable on such shares shall be allocated pro rata on a share-by-share basis
among all such shares at the time outstanding. The Board may fix a record date
for the determination of holders of shares of Series A Preferred Stock entitled
to receive payment of a dividend or distribution declared thereon, which record
date shall be not more than 60 days prior to the date fixed for the payment
thereof.

          Section 3.      Voting Rights. The holders of shares of Series A Preferred
Stock shall have the following voting rights:

          (A)      Subject to the provision for adjustment hereinafter set forth, each
share of Series A Preferred Stock shall entitle the holder thereof to 1,000
votes on all matters submitted to a vote of the stockholders of the
Corporation. In the event the Corporation shall at any time declare or pay any
dividend on the Common Stock payable in shares of Common Stock, or effect a
subdivision, combination or consolidation of the outstanding shares of Common
Stock (by reclassification or otherwise than by payment of a dividend in shares
of Common Stock) into a greater or lesser number of shares of Common Stock,
then in each such case the number of votes per share to which holders of shares
of Series A Preferred Stock were entitled immediately prior to such event shall
be adjusted by multiplying such number by a fraction, the numerator of which is
the number of shares of Common Stock outstanding immediately after such event
and the denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event. In the event the Corporation
shall at any time declare or pay any dividend on the Series A Preferred Stock
payable in shares of Series A Preferred Stock, or effect a subdivision,
combination or consolidation of the outstanding shares of Series A Preferred
Stock (by reclassification or otherwise than by payment of a dividend in shares
of Series A Preferred Stock) into a greater or lesser number of shares of
Series A Preferred Stock, then in each such case the number of votes per share
to which holders of shares of Series A Preferred Stock were entitled
immediately prior to such event shall be adjusted by multiplying such amount by
a fraction, the numerator of which is the number of shares of Series A
Preferred Stock that were outstanding immediately prior to such event and the
denominator of which is the number of shares of Series A Preferred Stock
outstanding immediately after such event.

          (B)      Except as otherwise provided herein, in the Articles of Organization,
as amended, or by law, the holders of shares of Series A Preferred Stock and
the holders of shares of Common Stock and any other capital stock of the
Corporation having general voting rights shall vote together as one class on
all matters submitted to a vote of stockholders of the Corporation.

A-3

 

          (C)      (i)      If at any time dividends on any Series A Preferred Stock shall be
in arrears in an amount equal to six quarterly dividends thereon, the holders
of the Series A Preferred Stock, voting as a separate series from all other
series of Preferred Stock and classes of capital stock, shall be entitled to
elect two members of the Board in addition to any Directors elected by any
other series, class or classes of securities and the authorized number of
Directors will automatically be increased by two. Promptly thereafter, the
Board of the Corporation shall, as soon as may be practicable, call a special
meeting of holders of Series A Preferred Stock for the purpose of electing such
members of the Board. Such special meeting shall in any event be held within
45 days of the occurrence of such arrearage.

                     (ii)      During any period when the holders of Series A Preferred Stock,
voting as a separate series, shall be entitled and shall have exercised their
right to elect two Directors, then, and during such time as such right
continues, (a) the then authorized number of Directors shall be increased by
two, and the holders of Series A Preferred Stock, voting as a separate series,
shall be entitled to elect the additional Directors so provided for, and (b)
each such additional Director shall not be a member of any existing class of
the Board, but shall serve until the next annual meeting of stockholders for
the election of Directors, or until his successor shall be elected and shall
qualify, or until his right to hold such office terminates pursuant to the
provisions of this Section 3(C).

                     (iii)      A Director elected pursuant to the terms hereof may be removed with
or without cause by the holders of Series A Preferred Stock entitled to vote in
an election of such Director.

                     (iv)      If, during any interval between annual meetings of stockholders for
the election of Directors and while the holders of Series A Preferred Stock
shall be entitled to elect two Directors, there is no such Director in office
by reason of resignation, death or removal, then, promptly thereafter, the
Board shall call a special meeting of the holders of Series A Preferred Stock
for the purpose of filling such vacancy and such vacancy shall be filled at
such special meeting. Such special meeting shall in any event be held within
45 days of the occurrence of such vacancy.

                     (v)      At such time as the arrearage is fully cured, and all dividends
accumulated and unpaid on any shares of Series A Preferred Stock outstanding
are paid, and, in addition thereto, at least one regular dividend has been paid
subsequent to curing such arrearage, the term of office of any Director elected
pursuant to this Section 3(C), or his successor, shall automatically terminate,
and the authorized number of Directors shall automatically decrease by two, the
rights of the holders of the shares of the Series A Preferred Stock to vote as
provided in this Section 3(C) shall cease, subject to renewal from time to time
upon the same terms and conditions, and the holders of shares of the Series A
Preferred Stock shall have only the limited voting rights elsewhere herein set
forth.

          (D)      Except as set forth herein, or as otherwise provided by law, holders
of Series A Preferred Stock shall have no special voting rights and their
consent shall not be required (except to the extent they are entitled to vote
with holders of Common Stock as set forth herein) for taking any corporate
action.

A-4

 

          Section 4.      Certain Restrictions.

          (A)      Whenever quarterly dividends or other dividends or distributions
payable on the Series A Preferred Stock as provided in Section 2 are in
arrears, thereafter and until all accrued and unpaid dividends and
distributions, whether or not declared, on shares of Series A Preferred Stock
outstanding shall have been paid in full, the Corporation shall not:

                     (i)      declare or pay dividends, or make any other distributions, on any
shares of stock ranking junior (either as to dividends or upon liquidation,
dissolution or winding up) to the Series A Preferred Stock;

                     (ii)      declare or pay dividends, or make any other distributions, on any
shares of stock ranking on a parity (either as to dividends or upon
liquidation, dissolution or winding up) with the Series A Preferred Stock,
except dividends paid ratably on the Series A Preferred Stock and all such
parity stock on which dividends are payable or in arrears in proportion to the
total amounts to which the holders of all such shares are then entitled;

                     (iii)      redeem or purchase or otherwise acquire for consideration shares of
any stock ranking junior (either as to dividends or upon liquidation,
dissolution or winding up) to the Series A Preferred Stock, provided that the
Corporation may at any time redeem, purchase or otherwise acquire shares of any
such junior stock in exchange for shares of any stock of the Corporation
ranking junior (either as to dividends or upon dissolution, liquidation or
winding up) to the Series A Preferred Stock; or

                     (iv)      redeem or purchase or otherwise acquire for consideration any shares
of Series A Preferred Stock, or any shares of stock ranking on a parity with
the Series A Preferred Stock, except in accordance with a purchase offer made
in writing or by publication (as determined by the Board) to all holders of
such shares upon such terms as the Board, after consideration of the respective
annual dividend rates and other relative rights and preferences of the
respective series and classes, shall determine in good faith will result in
fair and equitable treatment among the respective series or classes.

          (B)      The Corporation shall not permit any subsidiary of the Corporation to
purchase or otherwise acquire for consideration any shares of stock of the
Corporation unless the Corporation could, under paragraph (A) of this Section
4, purchase or otherwise acquire such shares at such time and in such manner.

          Section 5.      Reacquired Shares. Any shares of Series A Preferred Stock
purchased or otherwise acquired by the Corporation in any manner whatsoever
shall be retired and cancelled promptly after the acquisition thereof. All
such shares shall upon their cancellation become authorized but unissued shares
of Preferred Stock and may be reissued as part of a new series of Preferred
Stock subject to the conditions and restrictions on issuance set forth herein,
in the Articles of Organization, as amended, or in any other Certificate of
Vote creating a series of Preferred Stock or any similar stock or as otherwise
required by law.

A-5

 

          Section 6.      Liquidation, Dissolution or Winding Up.

          (A)      Upon any liquidation, dissolution or winding up of the Corporation, no
distribution shall be made (1) to the holders of shares of stock ranking junior
(either as to dividends or upon liquidation, dissolution or winding up) to the
Series A Preferred Stock unless, prior thereto, the holders of shares of Series
A Preferred Stock shall have received $1,000 per share, plus an amount equal to
accrued and unpaid dividends and distributions thereon, whether or not
declared, to the date of such payment, provided that the holders of shares of
Series A Preferred Stock shall be entitled to receive an aggregate amount per
share, subject to the provision for adjustment hereinafter set forth, equal to
1,000 times the aggregate amount to be distributed per share to holders of
shares of Common Stock, or (2) to the holders of shares of stock ranking on a
parity (either as to dividends or upon liquidation, dissolution or winding up)
with the Series A Preferred Stock, except distributions made ratably on the
Series A Preferred Stock and all such parity stock in proportion to the total
amounts to which the holders of all such shares are entitled upon such
liquidation, dissolution or winding up.

          (B)      Neither the consolidation, merger or other business combination of the
Corporation with or into any other corporation nor the sale, lease, exchange or
conveyance of all or any part of the property, assets or business of the
Corporation shall be deemed to be a liquidation, dissolution or winding up of
the Corporation for purposes of this Section 6.

          (C)      In the event the Corporation shall at any time declare or pay any
dividend on the Common Stock payable in shares of Common Stock, or effect a
subdivision, combination or consolidation of the outstanding shares of Common
Stock (by reclassification or otherwise than by payment of a dividend in shares
of Common Stock) into a greater or lesser number of shares of Common Stock,
then in each such case the aggregate amount to which holders of shares of
Series A Preferred Stock were entitled immediately prior to such event under
the proviso in clause (1) of paragraph (A) of this Section 6 shall be adjusted
by multiplying such amount by a fraction, the numerator of which is the number
of shares of Common Stock outstanding immediately after such event and the
denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event. In the event the Corporation
shall at any time declare or pay any dividend on the Series A Preferred Stock
payable in shares of Series A Preferred Stock, or effect a subdivision,
combination or consolidation of the outstanding shares of Series A Preferred
Stock (by reclassification or otherwise than by payment of a dividend in shares
of Series A Preferred Stock) into a greater or lesser number of shares of
Series A Preferred Stock, then in each such case the aggregate amount to which
holders of shares of Series A Preferred Stock were entitled immediately prior
to such event under the proviso in clause (1) of paragraph (A) of this Section
6 shall be adjusted by multiplying such amount by a fraction, the numerator of
which is the number of shares of Series A Preferred Stock that were outstanding
immediately prior to such event and the denominator of which is the number of
shares of Series A Preferred Stock outstanding immediately after such event.

          Section 7.      Consolidation, Merger, etc. Notwithstanding anything to the
contrary contained herein, in case the Corporation shall enter into any
consolidation, merger, combination or other transaction in which the shares of
Common Stock are exchanged for or changed into other stock or securities, cash
and/or any other property, then in any such case each share of Series A Preferred Stock shall at the same time be similarly exchanged or
changed into an

A-6

 

amount per share, subject to the provision for adjustment
hereinafter set forth, equal to 1,000 times the aggregate amount of stock,
securities, cash and/or any other property (payable in kind), as the case may
be, into which or for which each share of Common Stock is changed or exchanged.
In the event the Corporation shall at any time declare or pay any dividend on
the Common Stock payable in shares of Common Stock, or effect a subdivision,
combination or consolidation of the outstanding shares of Common Stock (by
reclassification or otherwise than by payment of a dividend in shares of Common
Stock) into a greater or lesser number of shares of Common Stock, then in each
such case the amount set forth in the preceding sentence with respect to the
exchange or change of shares of Series A Preferred Stock shall be adjusted by
multiplying such amount by a fraction, the numerator of which is the number of
shares of Common Stock outstanding immediately after such event and the
denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event. In the event the Corporation
shall at any time declare or pay any dividend on the Series A Preferred Stock
payable in shares of Series A Preferred Stock, or effect a subdivision,
combination or consolidation of the outstanding shares of Series A Preferred
Stock (by reclassification or otherwise than by payment of a dividend in shares
of Series A Preferred Stock) into a greater or lesser number of shares of
Series A Preferred Stock, then in each such case the amount set forth in the
first sentence of this Section 7 with respect to the exchange or change of
shares of Series A Preferred Stock shall be adjusted by multiplying such amount
by a fraction, the numerator of which is the number of shares of Series A
Preferred Stock that were outstanding immediately prior to such event and the
denominator of which is the number of shares of Series A Preferred Stock
outstanding immediately after such event.

          Section 8.      No Redemption. The shares of Series A Preferred Stock shall
not be redeemable.

          Section 9.      Rank. The Series A Preferred Stock shall rank, with respect to
the payment of dividends and the distribution of assets, junior to all series
of any other class of the Preferred Stock issued either before or after the
issuance of the Series A Preferred Stock, unless the terms of any such series
shall provide otherwise.

          Section 10.      Amendment. At such time as any shares of Series A Preferred
Stock are outstanding, the Articles of Organization, as amended, of the
Corporation shall not be amended in any manner which would materially alter or
change the powers, preferences or special rights of the Series A Preferred
Stock so as to affect them adversely without the affirmative vote of the
holders of at least two-thirds of the outstanding shares of Series A Preferred
Stock, voting together as a single class.

          Section 11.      Fractional Shares. Series A Preferred Stock may be issued in
fractions of a share which shall entitle the holder, in proportion to such
holder’s fractional shares, to exercise voting rights, receive dividends,
participate in distributions and have the benefit of all other rights of
holders of Series A Preferred Stock.

A-7

 

          IN WITNESS WHEREOF, this Certificate of Vote is executed on behalf of the
Corporation by its Chief Executive Officer this 27th day of March, 2003.

	 	 	 
	 	
PAREXEL INTERNATIONAL CORPORATION
	 	 	 
	 	By:	 
	 	

	 	Name:	    Josef H. von Rickenbach

	 	 	 
	 	Title:	    Chairman of the Board of Directors

	 	 	 

A-8

 

Exhibit B

[Form of Rights Certificate]

	 	 	 
	Certificate No. R-	 	     Rights

NOT EXERCISABLE AFTER March 27, 2013 OR EARLIER IF REDEEMED OR EXCHANGED BY THE
COMPANY. THE RIGHTS ARE SUBJECT TO REDEMPTION AT $.001 PER RIGHT AND TO
EXCHANGE ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT. UNDER CERTAIN
CIRCUMSTANCES, RIGHTS BENEFICIALLY OWNED BY AN ACQUIRING PERSON (AS SUCH TERM
IS DEFINED IN THE RIGHTS AGREEMENT) AND ANY SUBSEQUENT HOLDER OF SUCH RIGHTS
MAY BECOME NULL AND VOID. [THE RIGHTS REPRESENTED BY THIS RIGHTS CERTIFICATE
ARE OR WERE BENEFICIALLY OWNED BY A PERSON WHO WAS OR BECAME AN ACQUIRING
PERSON OR AN AFFILIATE OR ASSOCIATE OF AN ACQUIRING PERSON (AS SUCH TERMS ARE
DEFINED IN THE RIGHTS AGREEMENT). ACCORDINGLY, THIS RIGHTS CERTIFICATE AND THE
RIGHTS REPRESENTED HEREBY MAY BECOME NULL AND VOID IN THE CIRCUMSTANCES
SPECIFIED IN SECTION 7(e) OF SUCH AGREEMENT.]1

PAREXEL INTERNATIONAL CORPORATION

Rights Certificate

          This certifies that      , or registered assigns, is the registered
owner of the number of Rights set forth above, each of which entitles the owner
thereof, subject to the terms, provisions and conditions of the Rights
Agreement, dated March 27, 2003 (the “Rights Agreement”), between PAREXEL
International Corporation, a Massachusetts corporation (the “Company”), and
EquiServe Trust Company, N.A. (the “Rights Agent”), to purchase from the
Company after the Distribution Date (as such term is defined in the Rights
Agreement) and at any time prior to 5:00 p.m. (Boston time) on March 27, 2013
at the office of the Rights Agent designated for such purpose, or its
successors as Rights Agent, one one-thousandth of a fully paid, non-assessable
share of Series A Junior Participating Preferred Stock (the “Preferred Stock”)
of the Company, $.01 par value per share, at a purchase price of $98 in cash
per one one-thousandth of a share (the “Purchase Price”), upon presentation and
surrender of this Rights Certificate with the Form of Election to Purchase and
related Certificate duly executed. The number of Rights evidenced by this
Rights Certificate (and the number of one one-thousandth of a share of
Preferred Stock which may be purchased upon exercise hereof) set forth above,
and the Purchase Price set forth above, are the number and Purchase Price as of
the close of business on April 7, 2003, based on the Preferred Stock as
constituted at such date. Capitalized terms used herein and not otherwise
defined herein shall have the meanings ascribed to such terms in the Rights
Agreement.

          Upon the occurrence of a Section 11(a)(ii) Event, if the Rights evidenced
by this Rights Certificate are beneficially owned by (i) an Acquiring Person or
an Affiliate or Associate of any

	1	 	The portion of the legend in brackets shall be inserted only if applicable and
shall replace the preceding sentence.

B-1

 

such Acquiring Person (as such terms are
defined in the Rights Agreement), (ii) a transferee of any such Acquiring
Person, Associate or Affiliate who becomes a transferee after the Acquiring
Person becomes an Acquiring Person, or (iii) under certain circumstances
specified in the Rights Agreement, a transferee of a person who, concurrently
with or after such transfer, became an Acquiring Person, or an Affiliate or
Associate of an Acquiring Person, such Rights shall become null and void and no
holder hereof shall have any right with respect to such Rights from and after
the occurrence of such Section 11(a)(ii) Event.

          As provided in the Rights Agreement, the Purchase Price and the number and
kind of shares of Preferred Stock or other securities which may be purchased
upon the exercise of the Rights evidenced by this Rights Certificate are
subject to modification and adjustment upon the happening of certain events,
including Section 11(a)(ii) Events.

          This Rights Certificate is subject to all of the terms, provisions and
conditions of the Rights Agreement, which terms, provisions and conditions are
hereby incorporated herein by reference and made a part hereof and to which
Rights Agreement reference is hereby made for a full description of the rights,
limitations of rights, obligations, duties and immunities hereunder of the
Rights Agent, the Company and the holders of the Rights Certificates, which
limitations of rights include the temporary suspension of the exercisability of
such Rights under the specific circumstances set forth in the Rights Agreement.
Copies of the Rights Agreement are on file at the principal offices of the
Company and are available upon written request to the Company.

          This Rights Certificate, with or without other Rights Certificates, upon
surrender at the office of the Rights Agent designated for such purpose, with
the Form of Election and Certificate set forth on the reverse side duly
executed, may be exchanged for another Rights Certificate or Rights
Certificates of like tenor and date evidencing Rights entitling the holder to
purchase a like aggregate number of one one-thousandths of a share of Preferred
Stock as the Rights evidenced by the Rights Certificate or Rights Certificates
surrendered shall have entitled such holder to purchase. If this Rights
Certificate shall be exercised in part, the holder shall be entitled to receive
upon surrender hereof another Rights Certificate or Rights Certificates for the
number of whole Rights not exercised.

          Subject to the provisions of the Rights Agreement, the Rights evidenced by
this Certificate may be redeemed by the Company at its option at a redemption
price of $.001 per Right at any time prior to the earlier of (i) the close of
business on the tenth Business Day (or such later date as may be determined by
the Board pursuant to clause (i) of the first sentence of Section 3(a) with
respect to the Distribution Date) following the Stock Acquisition Date (or, if
the Stock Acquisition Date shall have occurred prior to the Record Date, the
close of business on the tenth Business Day following the Record Date) and (ii)
the Final Expiration Date.

          Subject to the provisions of the Rights Agreement, the Company may, at its
option, at any time after a Section 11(a)(ii) Event, exchange all or part of
the Rights evidenced by this Certificate for shares of the Company’s Common
Stock or for Preferred Stock (or shares of a class or series of the Company’s
preferred stock having the same rights, privileges and preferences as the
Preferred Stock).

B-2

 

          No fractional shares of Preferred Stock will be issued upon the exercise
of any Right or Rights evidenced hereby (other than fractions which are
integral multiples of one one-thousandth of a share of Preferred Stock, which
may, at the election of the Company, be evidenced by depositary receipts), but
in lieu thereof a cash payment will be made, as provided in the Rights
Agreement.

          No holder of this Rights Certificate, as such, shall be entitled to vote
or receive dividends or be deemed for any purpose the holder of shares of
Preferred Stock or of any other securities of the Company which may at any time
be issuable on the exercise hereof, nor shall anything contained in the Rights
Agreement or herein be construed to confer upon the holder hereof, as such, any
of the rights of a stockholder of the Company or any right to vote for the
election of directors or upon any matter submitted to stockholders at any
meeting thereof, or to give or withhold consent to any corporate action, or to
receive notice of meetings or other actions affecting stockholders (except as
provided in the Rights Agreement), or to receive dividends or subscription
rights, or otherwise, until the Right or Rights evidenced by this Rights
Certificate shall have been exercised as provided in the Rights Agreement.

          This Rights Certificate shall not be valid or obligatory for any purpose
until it shall have been countersigned by the Rights Agent.

          WITNESS the facsimile signature of the proper officers of the Company and
its corporate seal.

	 
	Dated as of            ,      

	 	 	 	 
	ATTEST:	 	
PAREXEL INTERNATIONAL CORPORATION
	 	 	 	 
	 	 	By:	 

	

	

	Clerk	
Name:	Josef H. von Rickenbach
	 
	

	 	 	
Title:	Chairman of the Board of Directors
	 
	

	 	 	 	 
	 	 	By:	 

	 	 	

	 	 	
Name:	 
	 	 	

	 	 	
Title:	Treasurer/Assistant Treasurer
	 
	

COUNTERSIGNED:

EQUISERVE TRUST COMPANY, N.A.

By:

Authorized Signature

B-3

 

[Form of Reverse Side of Rights Certificate]

FORM OF ASSIGNMENT

(To be executed by the registered holder if such

holder desires to transfer the Rights Certificate.)

	 
	FOR VALUE RECEIVED                                   hereby sells,
assigns and transfers unto

(Please print name and address of transferee)

                                         this
Rights Certificate, together with all right, title and interest therein, and
does hereby irrevocably constitute and appoint                  Attorney,
to transfer the within Rights Certificate on the books of the within-named
Company, with full power of substitution.

	 	 
	Dated:	 

	 	

Signature

Signature Guaranteed:

	 	Certificate

The undersigned hereby certifies that the Rights evidenced by this Rights
Certificate are not beneficially owned by, or being assigned to, an Acquiring
Person or an Affiliate or Associate thereof (as such terms are defined pursuant
to the Rights Agreement).

	 	 
	Dated:	 

	 	

Signature

Signature Guaranteed:

NOTICE

The signature to the foregoing Assignment and Certificate must correspond to
the name as written upon the face of this Rights Certificate in every
particular, without alteration or enlargement or any change whatsoever.

B-4

 

FORM OF ELECTION TO PURCHASE

(To be executed if holder desires to exercise

Rights represented by the Rights Certificate.)

To: EquiServe Trust Company, N.A.

The undersigned hereby irrevocably
elects to
exercise                      Rights
represented by this Rights Certificate to purchase the shares of Preferred
Stock issuable upon the exercise of the Rights (or such other securities of the
Company or of any other person which may be issuable upon the exercise of the
Rights) and requests that certificates for such shares be issued in the name of
and delivered to:

Please insert social security

or other identifying number       

(Please print name and address)

If such number of Rights shall not be all the Rights evidenced by this Rights
Certificate, a new Rights Certificate for the balance of such Rights shall be
registered in the name of and delivered to:

Please insert social security

or other identifying number

(Please print name and address)

	 	 
	Dated:	 

	 	

Signature

Signature Guaranteed:

B-5

 

Certificate

          The undersigned hereby certifies by checking the appropriate boxes that:

          (1)      the Rights evidenced by this Rights Certificate [ ] are [ ] are not
being exercised by or on behalf of a Person who is or was an Acquiring Person
or an Affiliate or Associate thereof (as such terms are defined pursuant to the
Rights Agreement);

          (2)      after due inquiry and to the best knowledge of the undersigned, the
undersigned [ ] did [ ] did not acquire the Rights evidenced by this Rights
Certificate from any Person who is, was or became an Acquiring Person or an
Affiliate or Associate thereof.

	 	 
	Dated:	 

	 	

Signature

Signature Guaranteed:

	 	
NOTICE

The signature to the foregoing Election to Purchase and Certificate must
correspond to the name as written upon the face of this Rights Certificate in
every particular, without alteration or enlargement or any change whatsoever.

B-6

 

Exhibit C

SUMMARY OF RIGHTS TO

PURCHASE PREFERRED STOCK

          On March 27, 2003, the Board of Directors of PAREXEL International
Corporation (the “Company”), declared a dividend of one Right for each
outstanding share of the Company’s Common Stock to stockholders of record at
the close of business on April 7, 2003 (the “Record Date”). Each Right
entitles the registered holder to purchase from the Company one one-thousandth
of a share of Series A Junior Participating Preferred Stock, $.01 par value per
share (the “Preferred Stock”), at a Purchase Price of $98 in cash, subject to
adjustment. The description and terms of the Rights are set forth in a Rights
Agreement dated March 27, 2003 (the “Rights Agreement”) between the Company and
EquiServe Trust Company, N.A., as Rights Agent.

          Initially, the Rights are not exercisable and will be attached to all
certificates representing outstanding shares of Common Stock, and no separate
Rights Certificates will be distributed. The Rights will separate from the
Common Stock, and the Distribution Date will occur, upon the earlier of (i) 10
business days following the later of (a) the first date of a public
announcement that a person or group of affiliated or associated persons (an
“Acquiring Person”) has acquired, or obtained the right to acquire, beneficial
ownership of 20% or more of the outstanding shares of Common Stock or (b) the
first date on which an executive officer of the Company has actual knowledge
that an Acquiring Person has become such (such later date, the “Stock
Acquisition Date”) or (ii) 10 business days following the commencement of a
tender offer or exchange offer that would result in a person or group
beneficially owning 20% or more of the outstanding shares of Common Stock. The
Distribution Date may be deferred in circumstances determined by the Board of
Directors. In addition, certain inadvertent acquisitions will not trigger the
occurrence of the Distribution Date. Until the Distribution Date (or earlier
redemption or expiration of the Rights), (i) the Rights will be evidenced by
the Common Stock certificates outstanding on the Record Date, together with
this Summary of Rights, or by new Common Stock certificates issued after the
Record Date which contain a notation incorporating the Rights Agreement by
reference, (ii) the Rights will be transferred with and only with such Common
Stock certificates; and (iii) the surrender for transfer of any certificates
for Common Stock outstanding (with or without a copy of this Summary of Rights
or such notation) will also constitute the transfer of the Rights associated
with the Common Stock represented by such certificate.

          The Rights are not exercisable until the Distribution Date and will expire
upon the close of business on March 27, 2013 (the “Final Expiration Date”)
unless earlier redeemed or exchanged as described below. As soon as
practicable after the Distribution Date, separate Rights Certificates will be
mailed to holders of record of the Common Stock as of the close of business on
the Distribution Date and, thereafter, the separate Rights Certificates alone
will represent the Rights. Except as otherwise determined by the Board of
Directors, and except for shares of Common Stock issued upon exercise,
conversion or exchange of then outstanding options, convertible or exchangeable
securities or other contingent obligations to issue shares or pursuant to any
employee benefit plan or arrangement, only shares of Common Stock issued prior
to the Distribution Date will be issued with Rights.

C-1

 

          In the event that any Person becomes an Acquiring Person, then, promptly
following the first occurrence of such event, each holder of a Right (except as
provided below and in Section 7(e) of the Rights Agreement) shall thereafter
have the right to receive, upon exercise, that number of shares of Common Stock
of the Company (or, in certain circumstances, cash, property or other
securities of the Company) which equals the exercise price of the Right divided
by 50% of the current market price (as defined in the Rights Agreement) per
share of Common Stock at the date of the occurrence of such event. However,
Rights are not exercisable following such event until such time as the Rights
are no longer redeemable by the Company as described below. Notwithstanding
any of the foregoing, following the occurrence of such event, all Rights that
are, or (under certain circumstances specified in the Rights Agreement) were,
beneficially owned by any Acquiring Person will be null and void. The event
summarized in this paragraph is referred to as a “Section 11(a)(ii) Event.”

          For example, at an exercise price of $98 per Right, each Right not owned
by an Acquiring Person (or by certain related parties) following a Section
11(a)(ii) Event would entitle its holder to purchase for $98 such number of
shares of Common Stock (or other consideration, as noted above) as equals $98
divided by one-half of the current market price (as defined in the Rights
Agreement) of the Common Stock. Assuming that the Common Stock had a market
price of $14 per share at such time, the holder of each valid Right would be
entitled to purchase fourteen shares of Common Stock, having a market value of
14 x $14, or $196, for $98.

          In the event that, at any time after any Person becomes an Acquiring
Person, (i) the Company is consolidated with, or merged with and into, another
entity and the Company is not the surviving entity of such consolidation or
merger or if the Company is the surviving entity, but shares of its outstanding
Common Stock are changed or exchanged for stock or securities (of any other
person) or cash or any other property, or (ii) more than 50% of the Company’s
assets or earning power is sold or transferred, each holder of a Right (except
Rights which previously have been voided as set forth above) shall thereafter
have the right to receive, upon exercise, that number of shares of common stock
of the acquiring company which equals the exercise price of the Right divided
by 50% of the current market price (as defined in the Rights Agreement) of such
common stock at the date of the occurrence of the event. The events summarized
in this paragraph are referred to as “Section 13 Events.” A Section 11(a)(ii)
Event and Section 13 Events are collectively referred to as “Triggering
Events.”

          For example, at an exercise price of $98 per Right, each valid Right
following a Section 13 Event would entitle its holder to purchase for $98 such
number of shares of common stock of the acquiring company as equals $98 divided
by one-half of the current market price (as defined in the Rights Agreement) of
such common stock. Assuming that such common stock had a market price of $14
per share at such time, the holder of each valid Right would be entitled to
purchase fourteen shares of common stock of the acquiring company, having a
market value of 14 x $14, or $196, for $98.

          At any time after the occurrence of a Section 11(a)(ii) Event, when no
person owns a majority of the Common Stock, the Board of Directors of the
Company may exchange the Rights (other than Rights owned by such Acquiring
Person which have become void), in whole or in part, at an exchange ratio of
one share of Common Stock, or one one-thousandth of a share of

C-2

 

Preferred Stock (or of a share of a class or series of the Company’s
preferred stock having equivalent rights, preferences and privileges), per
Right (subject to adjustment).

          The Purchase Price payable, and the number of units of Preferred Stock or
other securities or property issuable, upon exercise of the Rights are subject
to adjustment from time to time to prevent dilution (i) in the event of a stock
dividend on, or a subdivision, combination or reclassification of, the
Preferred Stock, (ii) if holders of the Preferred Stock are granted certain
rights or warrants to subscribe for Preferred Stock or convertible securities
at less than the then-current market price (as defined in the Rights Agreement)
of the Preferred Stock, or (iii) upon the distribution to holders of the
Preferred Stock of evidences of indebtedness or assets (excluding regular
periodic cash dividends paid out of earnings or retained earnings) or of
subscription rights or warrants (other than those referred to above). The
number of Rights associated with each share of Common Stock is also subject to
adjustment in the event of a stock split of the Common Stock or a stock
dividend on the Common Stock payable in Common Stock or subdivisions,
consolidations or combinations of the Common Stock occurring, in any such case,
prior to the Distribution Date.

          With certain exceptions, no adjustment in the Purchase Price will be
required until cumulative adjustments amount to at least 1% of the Purchase
Price. No fractional shares of Preferred Stock (other than fractions which are
integral multiples of one one-thousandth of a share of Preferred Stock) will be
issued and, in lieu thereof, an adjustment in cash will be made based on the
market price of the Preferred Stock on the last trading date prior to the date
of exercise.

          Preferred Stock purchasable upon exercise of the Rights will not be
redeemable. Each share of Preferred Stock will be entitled to receive, when,
as and if declared by the Board of Directors, a minimum preferential quarterly
dividend payment of $10 per share or, if greater, an aggregate dividend of
1,000 times the dividend declared per share of Common Stock. In the event of
liquidation, the holders of the Preferred Stock will be entitled to a minimum
preferential liquidation payment of $1,000 per share, plus an amount equal to
accrued and unpaid dividends, and will be entitled to an aggregate payment of
1,000 times the payment made per share of Common Stock. Each share of
Preferred Stock will have 1,000 votes, voting together with the Common Stock.
In the event of any merger, consolidation or other transaction in which Common
Stock is changed or exchanged, each share of Preferred Stock will be entitled
to receive 1,000 times the amount received per share of Common Stock. These
rights are protected by customary antidilution provisions. Because of the
nature of the Preferred Stock’s dividend, liquidation and voting rights, the
value of one one-thousandth of a share of Preferred Stock purchasable upon
exercise of each Right should approximate the value of one share of Common
Stock.

          At any time prior to the earlier of the tenth Business Day (or such later
date as may be determined by the Board of Directors of the Company) after the
Stock Acquisition Date, the Company may redeem the Rights in whole, but not in
part, at a price of $0.001 per Right (the “Redemption Price”), payable in cash
or stock. Immediately upon the redemption of the Rights or such earlier time
as established by the Board in the vote ordering the redemption of the Rights,
the Rights will terminate and the only right of the holders of Rights will be
to receive the

C-3

 

Redemption Price. The Rights may also be redeemable following certain
other circumstances specified in the Rights Agreement.

          At least once every three years, a committee of independent directors will
evaluate the Rights Agreement in order to consider whether the maintenance of
the Rights Agreement continues to be in the interests of the Company and its
stockholders.

          Until a Right is exercised, the holder thereof, as such, will have no
rights as a stockholder of the Company, including, without limitation, the
right to vote or to receive dividends. Although the distribution of the Rights
should not be taxable to stockholders or to the Company, stockholders may,
depending upon the circumstances, recognize taxable income in the event that
the Rights become exercisable for Common Stock (or other consideration) of the
Company or for common stock of the acquiring company as set forth above.

          Any provision of the Rights Agreement, other than the redemption price,
may be amended by the Board prior to such time as the Rights are no longer
redeemable. Once the Rights are no longer redeemable, the Board’s authority to
amend the Rights is limited to correcting ambiguities or defective or
inconsistent provisions in a manner that does not adversely affect the interest
of holders of Rights.

          The Rights are intended to protect the stockholders of the Company in the
event of an unfair or coercive offer to acquire the Company and to provide the
Board with adequate time to evaluate unsolicited offers. The Rights may have
anti-takeover effects. The Rights will cause substantial dilution to a person
or group that attempts to acquire the Company without conditioning the offer on
a substantial number of Rights being acquired. The Rights, however, should not
affect any prospective offeror willing to make an offer at a fair price and
otherwise in the best interests of the Company and its stockholders, as
determined by a majority of the Board. The Rights should not interfere with
any merger or other business combination approved by the Board.

          A copy of the Rights Agreement has been filed with the Securities and
Exchange Commission as an Exhibit to the Company’s Current Report on Form 8-K
dated March 27, 2003. A copy of the Rights Agreement is available free of
charge from the Company. This summary description of the Rights does not
purport to be complete and is qualified in its entirety by reference to the
Rights Agreement, which is incorporated herein by reference.

C-4<PAGE>
                                                                    Exhibit 10.6

                               LICENSE AGREEMENT

         This License Agreement, dated as of July 9, 1997, is by and among
Angiotech Pharmaceuticals, Inc., a corporation organized under the laws of the
Province of British Columbia ("Angiotech"); Boston Scientific Corporation, a
Delaware corporation ("BSC"); and Cook Incorporated, an Indiana corporation
("Cook").

                                   WITNESSETH

         WHEREAS, Angiotech owns certain domestic and foreign patents and patent
applications and has acquired licenses to other domestic and foreign parents and
patent applications relating to the use of paclitaxel as a coating for certain
medical devices;

         WHEREAS, Angiotech has also developed and owns certain products and
technology in the area of the use of paclitaxel as a coating for certain medical
devices;

         WHEREAS, Angiotech has the right to grant licenses with respect to such
patents, patent applications, products and technology for use in specified
areas; and

         WHEREAS, each of BSC and Cook desires to receive a co-exclusive
license, subject only to the grant of such a license to the other party, for the
use of such patents, patent applications, products and technology for the
duration of the United States and foreign patents covering such products and
technology for certain applications in the fields of vascular and alimentary
tract and liver applications, and Angiotech is willing to grant such a license
to each of BSC and Cook.

         NOW, THEREFORE, in consideration of the mutual promises and agreements
set forth herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Angiotech, BSC and Cook hereby
agree as follows:

1.       DEFINITIONS

         Capitalized terms used in this Agreement and not otherwise defined
herein shall have the meaning as set forth below:

         "Affiliate" means any entity that, directly or indirectly, through one
or more intermediaries, controls, is controlled by or is under common control
with a party to this Agreement. For purposes of this definition, control means
the direct or indirect ownership of at least fifty percent (50%) (or such lesser
percentage which is the maximum allowed to be owned by a foreign corporation in
a particular jurisdiction), of (a) the outstanding voting securities of such
entity, or (b) the decision making authority of such entity.

         "Agreement" means this License Agreement, together with all exhibits
annexed hereto, as the same shall be modified and in effect from time to time.

         "Allowable Fees" has the meaning set forth in Section 8.7.

<PAGE>

         "Angiotech" shall have the meaning set forth in the Preamble to this
Agreement.

         "Angiotech Technology" shall mean (a) the Patent Rights, license rights
and existing technology set forth on Exhibit A hereto, (b) any New Angiotech
Technology which Cook or BSC, as the case may be, elects to have included in the
Angiotech Technology pursuant to Section 2.3, (c) any and all improvements to
the foregoing developed by Angiotech, or, subject to limitations and
restrictions on Angiotech's rights to technology licensed from third parties,
for Angiotech, during the term of this Agreement (including those arising under
the CRADA to the extent solely owned by Angiotech), and (d) Technical
Information that is useful or necessary to practice the foregoing.

         "Base Unit Number" shall be calculated for each of BSC and Cook and
their respective Affiliates in each Geographical Area at such times as BSC or
Cook or their respective Affiliates, as the case may be, makes its first
commercial sale of an Eligible Stent Product in such Geographical Area for a
vascular application (each, a "Calculation Date") and shall mean, with respect
to BSC or Cook, as the case may be, the number of units of Stent Products sold
for vascular applications by BSC or Cook, as the case may be, to non-Affiliates
in such Geographical Area during the last Contract Quarter ending prior to the
applicable Calculation Date.

         "BSC" has the meaning set forth in the preamble to this Agreement.

         "BSC Endoluminal Royalty" has the meaning set forth in Section 3.2(c).

         "BSC GI Sales Royalty" has the meaning set forth in Section 3.2(b).

         "BSC IDE Approval Date" has the meaning set forth Section 3.1(b)(i).

         "BSC IDE Filing Date" has the meaning set forth in Section 3.1(a).

         "BSC License" shall have the meaning set forth in Section 2.1(a).

         "BSC Milestone License Fees" has the meaning set forth in Section 3.1.

         "BSC PMA Filing Date" has the meaning set forth in Section 3.1(b).

         "BSC Royalty Payments" has the meaning set forth in Section 3.2 and
includes royalties under Section 3.3.

         "BSC Sales Milestone License Fee" has the meaning set forth in Section
3.1(c).

         "BSC Vascular Sales Royalty" has the meaning set forth in Section
3.2(a).

         "Confidential Information" means all information and data provided by
the parties, to each other hereunder in written or other tangible medium and
marked as confidential, or if

                                      -2-

<PAGE>

disclosed orally or displayed, confirmed in writing as confidential within
thirty (30) days after disclosure, except any portion thereof which:

                  (a)      is known to the receiving party, as evidenced by the
receiving party's written records, before receipt thereof under this Agreement;

                  (b)      is disclosed to the receiving party by a third person
who is under no obligation of confidentially to the disclosing party hereunder
with respect to such information and who otherwise has a right to make such
disclosure;

                  (c)      is or becomes generally known in the trade through no
fault of the receiving party;

                  (d)      is independently developed by the receiving party, as
evidenced by the receiving party's written records, without access to such
information; or

                  (e)      is required to be disclosed by applicable statute,
rule or regulation of any court or regulatory authority with competent
jurisdiction; provided, that the party whose information is to be disclosed
shall be notified as soon as possible and the party that is being required to
disclose such information shall, if requested by the party whose information is
to be disclosed, use reasonable good faith efforts, at the expense of the
requesting party, to assist in seeking a protective order (or equivalent) with
respect to such disclosure or otherwise take reasonable steps to avoid making
such disclosure.

         "Contract Quarter" means a calendar quarter or any part thereof.

         "Contract Year" shall mean each successive period of four consecutive
Contract Quarters, with the first such Contract Year beginning on the first day
of the first full Contract Quarter beginning after the date hereof.

         "Cook" has the meaning set forth in the Preamble to this Agreement.

         "Cook Endoluminal Royalty" has the meaning set forth in Section 4.2(c).

         "Cook GI Sales Royalty" has the meaning set forth in Section 4.2(b).

         "Cook IDE Approval Date" has the meaning set forth in Section
4.1(b)(i).

         "Cook IDE Filing Date" has the meaning set forth in Section 4.1(a).

         "Cook License" shall have the meaning set forth in Section 2.1(b).

         "Cook Milestone License Fees" has the meaning set forth in Section 4.1.

         "Cook PMA Filing Date" has the meaning set forth in Section 4.1(b).

                                      -3-

<PAGE>

         "Cook Royalty Payments" has the meaning set forth in Section 4.2 and
includes royalties under Section 4.3.

         "Cook Sales Milestone License Fee" has the meaning set forth in Section
4.1(c).

         "Cook Vascular Sales Royalty" has the meaning set forth in Section
4.2(a).

         "CRADA" has the meaning set forth in Section 6.1.

         "Eligible Endoluminal Products" means any Endoluminal Products that
incorporate Angiotech Technology and are sold by BSC, Cook or their Affiliates,
respectively, provided, however, that "Eligible Endoluminal Products" shall not
include any Eligible Stent Products.

         "Eligible Products" means Eligible Stent Products and Eligible
Endoluminal Products.

         "Eligible Stent Products" means any Stent Products that incorporate
Angiotech Technology and are sold by BSC, Cook or their Affiliates,
respectively; provided, however, that "Eligible Stent Products" shall not
include any Eligible Endoluminal Products.

         "Endoluminal Products" means endoluminal drug delivery devices,
including stent grafts and stent-like devices, as well as balloons and other
endoluminal delivery systems used for drug delivery, but excluding vascular
grafts and Stent Products.

         "Entity" means any corporation, association, partnership (general or
limited), joint venture, trust, estate, limited liability company, limited
liability partnership or other legal entity or organization.

         "FDA" means the United States Food and Drug Administration.

         "Geographical Areas" means the five areas of the world comprised of the
(a) United States, (b) the countries of the European Union, as comprised on the
date of this Agreement, (c) Japan, (d) Canada, and (e) the remaining countries
of the world, respectively.

         "GI" means the alimentary tract and liver.

         "Investment Documentation" means that certain Investment Agreement
between Angiotech, BSC and Cook and related documents, each dated as of the date
of this Agreement, pursuant to which BSC and Cook shall each agree to purchase,
and Angiotech shall agree to sell to each of BSC and Cook, 190,042 Class C
Preference shares of Angiotech's capital stock for the purchase price, and
subject to the terms and conditions, specified therein.

         "Licensed Application" shall means the use of Angiotech Technology in
the Licensed Field of Use on or incorporated in Stent Products and Endoluminal
Products, but specifically excluding systemic treatments and pastes,
micropheres, films, sprays and similar formulations in circumstances where such
are not applied to or incorporated in either a Stent Product or an Endoluminal
Product, as the case may be.

                                      -4-

<PAGE>

         "Licensed Field of Use" means endoluminal vascular and GI applications.

         "Licenses" has the meaning set forth in Section 7.2(d).

         "Net Sales" means gross sales from the sale, rent, lease or otherwise
making available to third parties of Eligible Products, less the fol1owing, to
the extent the same are credited or deducted from the invoiced amount:
discounts, refunds, replacement or credits allowed to purchasers for return of
Eligible Products or as reimbursement for damaged Eligible Products, freight,
postage, insurance, and other shipping charges, sales and use taxes, customs
duties, and any other governmental tax or charge (except income taxes) imposed
on or at the time of the production, importation, use, or sale of Eligible
Products (if separately invoiced), including any value added taxes (VAT), as
adjusted for rebates and refunds, and transfers at or below cost by or on behalf
of BSC or Cook of Eligible Products or the practice of the Angiotech Technology
in connection with compassionate use, emergency use, bona fide research,
treatment, Investigational New Drug Applications (IND's) or the like authorized
by the FDA or corresponding foreign agencies, provided, however, that in the
case of an Eligible Product sold by BSC or Cook in combination with one or more
Non-Stent Products (collectively, a "Combination Product"), Net Sales shall
exclude the Value (as defined below) of any Non-Stent Products included in the
Combination Product (e.g., where a Stent Product is combined with a balloon for
delivery). No deductions shall be made for commissions paid to individuals,
whether they be with independent agencies or regularly employed by BSC, Cook,
their Affiliates and on their respective payrolls, or for the cost of
col1ections. "Value," for purposes of this subparagraph, shall mean fair market
value, as determined by the commercial sales price of the Non-Stent Product(s)
sold separately, or, if not sold separately, the fair market value of such
Non-Stent Product(s) reasonably determined by BSC or Cook, as the case may be,
with notice of such fair market value to be given to Angiotech together with the
basis upon which such determination was made. If Angiotech does not agree with
the fair market value determined by BSC or Cook, as the case may be, Angiotech
may submit the matter to arbitration in accordance with Section 10.2. The
calculation of Net Sales of Combination Products will be subject to the audit
rights set forth in Section 6.4(b).

         "New Angiotech Technology" has the meaning set forth in Section 2.3(a).

         "NIH" has the meaning set forth in Section 6.1.

         "NIH Agreement" has the meaning set forth in Section 6.1.

         "NIH License" means the licenses granted to Angiotech and its
sublicensees under the NIH Agreement.

         "NIH Patent Rights" means the intellectual property rights covered
under the NIH Agreement.

                                      -5-

<PAGE>

          "NIH Royalty" shall mean the percentage of Net Sales required to be
paid to the NIH under the NIH Agreement with respect to sales of Eligible
Products by BSC or Cook, as the case may be, in a Particular country.

         "Non-Licensed Products" has the meaning set forth in Section 8.11.

         "Non-Stent Product" means all Products of BSC and Cook other than
Endoluminal Products and Stent Products.

         "Patent Rights" means all of the following intellectual property or
other rights of Angiotech:

                  (a)      all United States and foreign patents, patent
applications and provisional applications concerning the Angiotech Technology
listed on Exhibit A hereto; including without limitation the patents owned or
filed by, or licensed to, Angiotech listed on Exhibit A hereto; and

                  (b)      all United States and foreign patents issued with
respect to the applications identified in clause (a) hereof including
divisionals, continuations, re-examinations and re-issues of such applications
or patents.

         "Remaining Licensee" has the meaning set forth in Section 9.3.

         "Stent Products" means stents.

         "Technical Information" means all know-how, data and other proprietary
information in the possession of or developed or acquired by Angiotech during
the term of this Agreement that directly relates to the Patent Rights, license
rights and technology set forth on Exhibit A hereto or otherwise relates to the
use of chemotherapeutic or anti-angiogenic compounds or is necessary or useful
to practice the licenses set forth in Section 2.1(a) or 2.l(b), as the case may
be.

         "Technology Transfer" means delivery of all Angiotech Technology to BSC
and Cook, including all applicable documentation related thereto, including but
not limited to the documentation and procedures specified in Exhibit B annexed
hereto.

2.       LICENSES

         2.1      Grants. Subject to the terms and conditions hereof, the
following licenses are granted hereby, each effective as of the date of this
Agreement:

                  (a)      BSC Technology License. In consideration for the
execution, delivery and performance of the Investment Documentation and the
assumption by BSC of its payment and other obligations hereunder and subject to
all the other terms and conditions of this license, Angiotech hereby grants to
BSC an exclusive (subject only to the rights granted to Cook and reserved to
Angiotech in paragraphs (b) and (c) below and the reservations in favor of the
NIH, the United States Government and third parties specified under the NIH
Agreement), worldwide

                                      -6-

<PAGE>

right and license to use, manufacture, have manufactured, distribute and sell,
and to grant sublicenses to its Affiliates to use, manufacture, have
manufactured, distribute and sell, the Angiotech Technology in the Licensed
Field of Use solely for use in the Licensed Applications (the "BSC License").

                  (b)      Cook Technology License. In consideration for the
execution, delivery and performance of the Investment Documentation and the
assumption by Cook of its payment and other obligations hereunder and subject to
all the other terms and conditions of this license, Angiotech hereby grants to
Cook an exclusive (subject only to the rights granted to BSC and reserved to
Angiotech pursuant to paragraphs (a) above and (c) below and the reservations in
favor of the NIH, the United States Government and third parties under the NIH
Agreement) worldwide right and license to use, manufacture, have manufactured,
distribute and sell, and to grant sublicenses to its Affiliates to use,
manufacture, have manufactured, distribute and sell, the Angiotech Technology in
the Licensed Field of Use solely for use in the Licensed Applications (the "Cook
License").

                  (c)      Reservation of Rights. Angiotech reserves all rights
to the Angiotech Technology for (i) any use or purpose outside the Licensed
Field of Use and Licenced Applications and (ii) noncommercial research purposes
in all fields and applications, including the Licensed Field of Use and Licensed
Applications.

         2.2      Duration and Term. The BSC License, the Cook License and this
Agreement shall each, subject to the early termination provisions of Sections
5.1, 5.2 and 9.1, have a term from the date hereof until the last expiration
date of any United States or foreign patents included in the Angiotech
Technology (including any United States or foreign patents which become part of
the Angiotech Technology after the date of this Agreement), provided, however,
that the terms of Sections 6.4(b) and (c), 8.3 through 8.6 (but only with
respect to rights or obligations that arise prior to the termination of this
Agreement), 8.9, 9.2, 9.3, 10 and 11 shall survive the expiration or termination
of the Agreement or any licenses granted hereunder.

         2.3      New Inventions or License Rights. Subject to the rights of
third parties that may exist at any time and from time to time, Angiotech hereby
grants to each of BSC and Cook, jointly or individually, a right to elect to
include in the BSC License (in the event that BSC so elects), and in the Cook
License (in the event that Cook so elects), (a) as "Angiotech Technology," any
new inventions and developments, and (b) as "Patent Rights," any patents and
patent applications, all of the foregoing which are made by, or for, or licensed
to, Angiotech (including those arising from the CRADA), to the extent such new
inventions, developments, patents and patent applications relate to the patents,
patent applications, license rights and other technology described on Exhibit A
hereto or may be used in the Licensed Field of Use (other than Angiotech
Technology) ("New Angiotech Technology"). Angiotech shall notify BSC and Cook in
writing of such inventions and developments, providing a description of the
technology and any financial and other obligations under any applicable third
party license, and each of BSC and Cook may, by giving written notice to
Angiotech at any time during the BSC License and Cook License elect to include
the New Angiotech Technology as Angiotech Technology or

                                      -7-

<PAGE>

Patent Rights, whichever is applicable, under this Agreement (to the extent an
election is made, the " Electing Parties"); provided, that an Electing Party
will be obligated to reimburse Angiotech for all of the costs and expenses of
Angiotech under any third party license (apportioned between BSC and Cook by
agreement between BSC and Cook, if both parties elect, and by Angiotech, acting
reasonably, notice of such apportionment to be given to BSC and Cook together
with the basis upon which the apportionment determination was made, between the
uses authorized in this Agreement and uses outside the scope of this Agreement,
subject to the right of BSC or Cook to review the determination and submit the
determination to arbitration pursuant to Section 10.2) and will be obligated to
pay royalties on sales as required by any third party license in addition to the
royalties payable under this Agreement. In addition, an Electing Party will be
subject to all performance, minimum sales and other obligations set forth in the
third party license (or apportioned by Angiotech) relating to such New Angiotech
Technology. Notwithstanding the foregoing, Angiotech shall be free to license
the New Angiotech Technology to third parties outside the Licensed Applications
and the Licensed Field of Use. Notwithstanding the foregoing, in no event shall
any failure by BSC or Cook to elect to include any New Angiotech Technology in
the Angiotech Technology pursuant to this Section 2.3 be deemed to grant any
right to Angiotech to use, manufacture, have manufactured, distribute or sell,
or grant any license to any third party to do any of the same, any Angiotech
Technology in the Licensed Field of Use for use in any Licensed Applications.

3.       BSC ROYALTIES & FEES

         3.1      BSC Milestone License Fees. In consideration for the license
granted under Section 2.1 (a) of this Agreement, BSC shall pay the following
amounts to Angiotech as license fees at the times, and subject to the
conditions, set forth below (col1ectively, the "BSC Milestone License Fees"):

                  (a)      BSC IDE Fee. Within twenty (20) business days after
the date of the first filing by BSC of an Investigational Device Exemption with
the FDA or an equivalent filing with an appropriate governmental agency in one
or more European countries with respect to a product of BSC incorporating or
utilizing the Angiotech Technology in a vascular application (the "BSC IDE
Filing Date"), BSC shall pay a license fee calculated as follows:

                           (i)      if the BSC IDE Filing Date is on or after
October 15, 1998, the amount of $1,275,000; or

                           (ii)     if the BSC IDE Filing Date is prior to
October 15, 1998, the amount of (x) $1,275,000 minus (y) the product of $125,000
for each complete thirty (30) day period by which the BSC IDE Filing Date
precedes October 15, 1998; provided, however, that in no event shall any fee
calculated pursuant to this Section 3.1(a)(ii) be less than $525,000.

                  (b)      BSC PMA Fee. Within twenty (20) business days after
the date of the first filing by BSC of a Pre-Market Approval Application or
Section 510(k) Pre-Marketing Notification with the FDA, or an equivalent filing
with an appropriate governmental agency in Europe, with respect to a product of
BSC incorporating or utilizing the Angiotech Technology in

                                      -8-

<PAGE>

a vascular application (the "BSC PMA Filing"), BSC shall pay an additional
license fee calculated as follows:

                           (i)      subject to Section 3.1(b)(iii) below, if the
date of the BSC PMA Filing is on or after the twenty-four month anniversary of
the date on which the FDA (or appropriate governmental agency in Europe)
approves the applicable IDE or equivalent European filing filed by BSC (the
"BSC IDE Approval Date"), the amount of $2,050,000; or

                           (ii)     if the date of the BSC PMA Filing is prior
to the twenty-four month anniversary of the BSC IDE Approval Date, the amount of
(x) $2,050,000,minus (y) the product of $200,000 for each complete thirty (30)
day period by which the date of the BSC PMA Filing precedes the twenty-four
month anniversary of the BSC IDE Approval Date, provided, however, that in no
event shall any fee calculated pursuant to this Section 3.1(b)(ii) be less than
$800,000; or

                           (iii)    if, and to the extent, prior to the date of
the BSC PMA Filing, the FDA requires clinical follow-up in excess of nine (9)
months and BSC is unable to make the BSC PMA Filing prior to expiration of the
"twenty-four (24) month" period referenced in Section 3.2(b)(ii) above, the
amount of (x) $2,050,000, minus (y) the product of $100,000 for each complete
thirty (30) day period by which the date of the BSC PMA Filing precedes the
Extended BSC PMA Filing Date, provided, however, that in no event shall any fee
calculated pursuant to this Section 3.1(b)(iii) be less than $800,000. For
purposes of this paragraph, "Extended BSC PMA Filing Date" means the date which
is twenty-four (24) months following the BSC IDE Approval Date plus the number
of months the FDA requires clinical follow-up in excess of nine (9) months.

                  (c)      BSC Milestone License Fee. Within twenty (20)
business days after the end of the first Contract Quarter in which the Net Sales
by BSC of Eligible Stent Products for such Contract Quarter and the immediately
preceding Contract Quarter together exceed $5,000,000, BSC shall pay Angiotech
an additional license fee (the "BSC Sales Milestone License Fee") equal to the
difference of (x) $4,500,000 minus (y) one-half of the amount of any BSC Royalty
Payments paid by BSC pursuant to Section 3.2 prior to or on the date on which
the BSC Sales Milestone License Fee is actually paid.

         3.2      BSC Royalties. As additional consideration for the license
granted under Section 2.1(a) of the Agreement BSC shall pay the following
royalties to Angiotech (collectively, the "BSC Royalty Payments").

                  (a)      Vascular Sales Royalty on Eligible Stent Products.
Within sixty (60) days after the end of each Contract Quarter during the term of
the BSC License, BSC shall pay Angiotech a royalty (the "BSC Vascular Sales
Royalty") on Net Sales of Eligible Stent Products that are covered in the
country of sale by one or more valid and enforceable claims included in the
Patent Rights, by BSC and its Affiliates during such Contract Quarter for
vascular applications in each of the Geographical Areas, calculated as the sum
of the following:

                                      -9-

<PAGE>

                           (i)      with respect to sales during a Contract
Quarter of units of Eligible Stent Products covered in the country of sale by
one or more valid and enforceable claims included in the Patent Rights for
vascular applications from zero to the product of the Base Unit Number for such
Eligible Stent Products for such Geographical Area multiplied by 1.25, the
royalty shall be an amount equal to five percent (5%) of the Net Sales of such
units of Eligible Stent Products;

                           (ii)     with respect to sales during a Contract
Quarter of units of Eligible Stent Products covered in the country of sale by
one or more valid and enforceable claims included in the Patent Rights for
vascular applications from (x) the product of the Base Unit Number for such
Eligible Stent Products for such Geographical Area multiplied by 1.25, to (y)
the product of the Base Units Number of such Eligible Stent Products for such
Geographical Area multiplied by two, the royalty shall be an amount equal to
seven percent (7%) of the Net Sales of such units of Eligible Stent Products:
and

                           (iii)    with respect to sales during a Contract
Quarter of units of Eligible Stent Products covered in the country of sale by
one or more valid and enforceable claims included in the Patent Rights for
vascular applications above the product of the Base Unit Number for such
Eligible Stent Products for such Geographical Area multiplied by two, the
royalty shall be an amount equal to ten (l0%) percent of the Net Sales of such
units of Eligible Stent Products, provided, however, that from and after the
date on which the aggregate amount of BSC Royalty Payments made by BSC pursuant
to this Section 3.2(a)(iii) during the term of the BSC License exceed
$100,000,000, any further royalties payable under this Section 3.2(a)(iii) shall
be calculated as an amount equal to eight percent (8%) of the Net Sales of such
Eligible Stent Products.

                           (iv)     by way of example but not limitation,
Exhibit E sets forth an example of calculating BSC Royalty Payments based on the
Base Unit Number.

                  (b)      GI Sales Royalty on Eligible Stent Products. Within
sixty (60) days after the end of each Contract Quarter during the term of the
BSC License, BSC shall pay Angiotech an additional royalty (the "BSC GI Sales
Royalty") on Net Sales of Eligible Stent Products that are covered in the
country of sale by one or more valid and enforceable claims included in the
Patent Rights, by BSC and its Affiliates during such Contract Quarter for GI
applications in each of the Geographical Areas, calculated as five percent (5%)
of the Net Sales of such Eligible Stent Products.

                  (c)      Royalties on Eligible Endoluminal Products. Within
sixty (60) days after the end of each Contract Quarter during the term of the
BSC License, BSC shall pay Angiotech an additional royalty (the "BSC Endoluminal
Royalty") on Net Sales of Eligible Endoluminal Products that are covered in the
country of sale by one or more valid and enforceable claims included in the
Patent Rights, by BSC and its Affiliates during such Contract Quarter in each of
the Geographical Areas, calculated as five percent (5%) of the Net Sales of such
Eligible Endoluminal Products.

                                      -10-

<PAGE>

                  (d)      Royalties in Japan. Notwithstanding anything contrary
in this Agreement, for purposes of determining whether a particular Eligible
Product is covered in Japan by one or more valid and enforceable claims included
in the Patent Rights for purposes of Sections 3.2(a), (b) and (c), such Product
shall be deemed to be covered in Japan by one or more valid and enforceable
claims included in the Patent Rights if (i) the particular Eligible Product is
covered by a valid and enforceable claim of a patent included in the Patent
Rights which has been issued in Japan, or (ii) the particular Eligible Product
is covered by a claim of a pending patent application in Japan, and BSC has "de
facto exclusivity" (as defined in Section 3.3(a) below) in Japan with respect to
that Eligible Product.

         3.3      Patent Coverage and De Facto Exclusivity

                  (a)      De Facto Exclusivity Defined. BSC shall be deemed to
have "de facto exclusivity" for a particular Eligible Product in a particular
country unless a third party (other than Cook or an Affiliate of BSC or Cook)
(i) has obtained approval for sale (if required) in that country for a product
which is competitive to a particular Eligible Product in that country and (ii)
has made at least one commercial sale for value of that product in that country
within six (6) months prior to or after the Contract Quarter in which the
royalty calculation is being made, provided, however, that BSC shall not be
deemed to have "de facto exclusivity" in a particular country to the extent that
such "de facto exclusivity" is primarily attributable to patent rights (other
than the Patent Rights) owned by, or licensed to, BSC.

                  (b)      Patent Coverage Defined. BSC shall be deemed to have
"Patent Coverage" for a particular Eligible Product in a country if there is a
valid claim that, but for the licenses granted to BSC under this Agreement,
would be infringed by the manufacture, use or sale of such Eligible Product in
such country or by the manufacture of such Eligible Product in the country of
manufacture.

                  (c)      De Facto Royalty. For countries in which there is no
Patent Coverage, if at any time BSC does have de facto exclusivity for a
particular Eligible Product in a particular country, then BSC shall pay
Angiotech a royalty on its Net Sales of that Eligible Product in that country of
three percent (3%) during such period of de facto exclusivity, which payments
shall also constitute BSC Royalty Payments. If, during the term of the BSC
License, BSC does not have de facto exclusivity for a particular Eligible
Product in a particular country and there is no Patent Coverage for such
Eligible Product in that country, but an NIH Royalty is still payable by
Angiotech for Net Sales by BSC of such Eligible Product in such country, BSC
shall be responsible for the payment of such NIH Royalty during such period(s).

         3.4      Reduction of BSC Royalties. After the BSC Sales Milestone
License Fee has been paid, BSC shall be entitled to reduce the amount of any BSC
Royalty Payments that may become payable with respect to any Contract Quarter by
an amount equal to one-half of the aggregate amount of such payment (calculated
without regard to any other possible reductions in such fees pursuant to the
terms of this Agreement) until the aggregate amount of the reductions made to
the BSC Royalty Payments pursuant to this Section 3.4 equal the amount of

                                      -11-

<PAGE>

the BSC Sales Milestone License fee actually paid and not already offset by BSC
Royalty Payments pursuant to Section 3.1(c), after which time no further
reductions will be made.

         3.5      Sales to Affiliates. On sales of Eligible Products by BSC to
its Affiliates, or on sales made in other than an arm's-length transaction, the
value of the Net Sales attributed under this Section 3 to such a transaction
shall be that which would have been received in an arm's-length transaction.
Notwithstanding the foregoing, sales between and among BSC and its Affiliates
that are intended for resale shall not be included in Net Sales.

         3.6      Reporting of BSC Royalties. BSC shall deliver to Angiotech
within sixty (60) days after the end of each Contract Quarter during the term of
the BSC License, a written account, including quantities, of the aggregate of
BSC's and its Affiliates' sales subject to royalty payments hereunder and the
amount of the royalty payment due to Angiotech for such Contract Quarter. Each
royalty report shall be certified as correct by an authorized employee of BSC
and shall include a reasonably detailed listing of all deductions made to
determine Net Sales and to calculate the royalties payable hereunder.

         3.7      Payment of BSC Milestone License Fees and BSC Royalties. BSC
Milestone License Fees and BSC Royalties due under this Section 3 shall be paid
in U.S. dollars. For conversion of foreign currency to U.S. dollars, the
conversion rate shall be the conversion rate used by BSC to convert the
applicable sales into U.S. dollars for purposes of the preparation of BSC's
consolidated financial statements, such conversion to be calculated in
accordance with generally accepted accounting principles in the United States,
applied consistently. All payments shall be made by wire transfer to Angiotech's
account in accordance with the following instructions:

                         Chase Manahattan Bank
                         New York, NY
                         ABM# 021000021
                         For credit to the account of:
                         Angiotech Pharmaceuticals, Inc.
                         Account #401-217-5
                         Branch #7400
                         Institution #003
                         Royal Bank of Canada - Pender & Bute Branch
                         1205 West Pender Street
                         Vancouver, B.C. V6E 2V5

                  Any loss of exchange, value, taxes, or other expenses incurred
in the transfer or conversion to U.S. dollars shall be paid entirely by BSC. The
royalty report required by Section 3.6 shall accompany each such payment.

         3.8      Late Payments. Late charges will be assessed by Angiotech as
additional royalties on any overdue payments at one percent (1%) per month,
compounded monthly (an

                                      -12-

<PAGE>

effective annual rate of twelve and 68/100 percent (12.68%) per annum). The
payment of such late charges will not prevent Angiotech from exercising any
other rights it may have as a consequence of the lateness of any payment.

         3.9      Governmental Filings. Except for taxes based on Angiotech's
income, BSC will be solely responsible for determining if any tax on Net Sales
and royalty payments is owed to any governmental authority and shall pay any
such tax and be responsible for all filings with appropriate governmental
authorities.

         3.10     Estimation of Net Sales. In the event that BSC is unable to
report and pay royalties due under this Section 3 on actual Net Sales in any
Contract Quarter. BSC will make a good faith estimate of Net Sales for those
jurisdictions in which actual Net Sales information is not readily available and
will make Royalty Payments based on such estimate. When actual Net Sales
information becomes available for those jurisidictions for which estimates had
previously been made, BSC will promptly determine, and give notice to Angiotech
of, the appropriate adjustment necessary to reconcile the estimated Royalty
Payment with the actual Royalty Payment due to Angiotech based on actual Net
Sales (each a "Reconciliation"). The next Royalty Payment due Angiotech from BSC
under this Agreement will include an adjustment to reflect such Reconciliation,
or the amount of such Reconciliation will be paid in cash if no further
royalties are anticipated.

4.       COOK ROYALTIES & FEES

         4.1      Cook Milestone License Fees. In consideration for the license
granted under Section 2.1(b) of this Agreement, Cook shall pay the following
amounts to Angiotech as license fees at the times, and subject to the
conditions, set forth below (collectively, the "Cook Milestone License Fees"):

                  (a)      Cook IDE Fee. Within twenty (20) business days after
the date of the first filing by Cook of an Investigational Device Exemption with
the FDA or an equivalent filing with an appropriate governmental agency in one
or more European countries with respect to a product of Cook incorporating or
utilizing the Angiotech Technology in a vascular application (the "Cook IDE
Filing Date"), Cook shall pay a license fee calculated as follows:

                           (i)      if the Cook IDE Filing Date is on or after
October 15, 1998, the amount of $1,275,000; or

                           (ii)     if the Cook IDE Filing Date is prior to
October 15, 1998, the amount of (x) $1,275,000 minus (y) the product of $125,000
for each complete thirty (30) day period by which the Cook IDE Filing Date
precedes October 15, 1998; provided, however, that in no event shall any fee
calculated pursuant to this Section 4.1(a)(ii) be less than $525,000.

                  (b)      Cook PMA Fee. Within twenty (20) business days after
the date of the first filing by Cook of a Pre-Market Approval Application or
Section 510(k) Pre-Marketing Notification with the FDA, or an equivalent filing
with an appropriate governmental agency in

                                      -13-

<PAGE>

Europe, with respect to a product of Cook incorporating or utilizing the
Angiotech Technology in a vascular application (the "Cook PMA Filing"), Cook
shall pay an additional license fee calculated as follows:

                           (i)      subject to Section 4.1(b)(iii) below, if
the date of the Cook PMA Filing is on or after the twenty-four (24) month
anniversary of the date on which the FDA (or appropriate governmental agency in
Europe) approves the applicable IDE or equivalent European filing filed by Cook
(the "Cook IDE Approval Date"), the amount of $2,050,000; or

                           (ii)     if the date of the Cook PMA Filing is prior
to the twenty-four (24) month anniversary of the Cook IDE Approval Date, the
amount of (x) $2,050,000, minus (y) the product of $200,000 for each complete
thirty (30) day period by which the date of the Cook PMA Filing precedes the
twenty-four month anniversary of the Cook IDE Approval Date, Provided, however,
that in no event shall any fee calculated pursuant to this Section 4.1(b)(ii)
be less than $800,000; or

                           (iii)    if, and to the extent, prior to the date of
the Cook PMA Filing, the FDA requires clinical follow-up in excess of nine (9)
months and Cook is unable to make the Cook PMA Filing prior to expiration of the
"twenty-four (24) month" period referenced in Section 4.2(b)(ii) above, the
amount of (x) $2,050,000, minus (y) the product of $100,000 for each complete
thirty (30) day period by which the date of the Cook PMA Filing precedes the
Extended Cook PMA Filing Date, provided, however, that in no event shall any fee
calculated pursuant to this Section 4.1(b)(iii) be less than $800,000. For
purposes of this paragraph, "Extended Cook PMA Filing Date" means the date
which is twenty-four (24) months following the Cook IDE Approval Date plus the
number of months the FDA requires clinical follow-up in excess of nine (9)
months.

                  (c) Cook Sales Milestone License Fee. Within twenty (20)
business days after the end of the first Contract Quarter in which the Net Sales
by Cook of Eligible Stent Products for such Contract Quarter and the immediately
preceding Contract Quarter together exceed $5,000,000, Cook shall pay Angiotech
an additional license fee (the "Cook Sales Milestone License Fee") equal to the
difference of (x) $4,500,000 minus (y) one-half of the amount of any Cook
Royalty Payments paid by Cook pursuant to Section 4.2 prior to or on the date on
which the Cook Sales Milestone License Fee is actually paid.

         4.2      Cook Royalties. As additional consideration for the license
granted under Section 2.1(a) of the Agreement, Cook shall pay the following
royalties to Angiotech (collectively, the "Cook Royalty Payments").

                  (a)      Vascular Sales Royalty on Eligible Stent Products.
Within sixty (60) days after the end of each Contract Quarter during the term of
the Cook License, Cook shall pay Angiotech a royalty (the "Cook Vascular Sales
Royalty") on Net Sales of Eligible Stent Products that are covered in the
country of sale by one or more valid and enforceable claims included in the
Patent Rights, by Cook and its Affiliates during such Contract Quarter for
vascular applications in each of the Geographical Areas, calculated as the sum
of the following:

                                      -14-

<PAGE>

                           (i)      with respect to sales during a Contract
Quarter of units of Eligible Stent Products covered in the country of sale by
one or more valid and enforceable claims included in the Patent Rights for
vascular applications from zero to the product of the Base Unit Number for such
Eligible Stent Products for such Geographical Area multiplied by 1.25, the
royalty shall be an amount equal to five percent (5%) of the Net Sales of such
units of Eligible Stent Products:

                           (ii)     with respect to sales during a Contract
Quarter of units of Eligible Stent Products covered in the country of sale by
one or more valid and enforceable claims included in the Patent Rights for
vascular applications from (x) the product of the Base Unit Number for such
Eligible Stent Products for such Geographical Area multiplied by 1.25, to (y)
the product of the Base Unit Number of such Eligible Stent Products for such
Geographical Area multiplied by two, the royalty shall be an amount equal to
seven percent (7%) of the Net Sales of such units of Eligible Stent Products;
and

                           (iii)    with respect to sales during a Contract
Quarter of units of Eligible Stent Products covered in the country of sale by
one or more valid and enforceable claims included in the Patent Rights for
vascular applications above the product of the Base Unit Number for such
Eligible Stent Products for such Geographical Area multiplied by two, the
royalty shall be an amount equal to ten (10%) percent of the Net Sales of such
units of Eligible Stent Products, provided, however, that from and after the
date on which the aggregate amount of Cook Royalty Payments made by Cook
pursuant to this Section 4.2(a)(iii) during the term of the Cook License exceed
$100,000,000, any further royalties payable under this Section 4.2(a)(iii) shall
be calculated as an amount equal to eight percent (8%) of the Net Sales of such
Eligible Stent Products.

                           (iv)     by way of example but not limitation,
Exhibit E sets forth an example of calculating Cook Royalty Payments based on
the Base Unit Number.

                  (b)      GI Sales Royalty on Eligible Stent Products. Within
sixty (60) days after the end of each Contract Quarter during the term of the
Cook License, Cook shall pay Angiotech an additional royalty (the "Cook GI Sales
Royalty") on Net Sales of Eligible Stent Products that are covered in the
country of sale by one or more valid and enforceable claims included in the
Patent Rights, by Cook and its Affiliates during such Contract Quarter for GI
applications in each of the Geographical Areas, calculated as five percent (5%)
of the Net Sales of such Eligible Stent Products.

                  (c)      Royalties on Eligible Endoluminal Products. Within
sixty (60) days after the end of each Contract Quarter during the term of the
Cook License, Cook shall pay Angiotech an additional royalty (the "Cook
Endoluminal Royalty") on Net Sales of Eligible Endoluminal Products that are
covered in the country of sale by one or more valid and enforceable claims
included in the Patent Rights, by Cook and its Affiliates during such Contract
Quarter in each of the Geographical Areas, calculated as five percent (5%) of
the Net Sales of such Eligible Endoluminal Products.

                                      -15-

<PAGE>

                  (d)      Royalties in Japan. Notwithstanding anything contrary
in this Agreement, for purposes of determining whether a particular Eligible
Product is covered in Japan by one or more valid and enforceable claims included
in the Patent Rights for purposes of Sections 4.2(a), (b) and (c), such Product
shall be deemed to be covered in Japan by one or more valid and enforceable
claims included in the Patent Rights if (i) the particular Eligible Product is
covered by a valid and enforceable claim of a patent included in the Patent
Rights which has been issued in Japan, or (ii) the particular Eligible Product
is covered by a claim of a pending patent application in Japan, and Cook has "de
facto exclusivity" (as defined in Section 4.3(a) below) in Japan with respect to
that Eligible Product.

         4.3      Patent Coverage and De Facto Exclusivity

                  (a)      De Facto. Exclusivity Defined. Cook shall be deemed
to have "de facto exclusivity" for a particular Eligible Product in a particular
country unless a third party (other than BSC or an Affiliate of BSC or Cook) (i)
has obtained approval for sale (if required) in that country for a product which
is competitive to a particular Eligible Product in that country and (ii) has
made at least one commercial sale for value of that product in that country
within six (6) months prior to or after the Contract Quarter in which the
royalty calculation is being made, provided, however, that Cook shall not be
deemed to have "de facto exclusivity" in a particular country to the extent that
such "de facto exclusivity" is primarily attributable to patent rights (other
than the Patent Rights) owned by, or licensed to, Cook.

                  (b)      Patent Coverage Defined. Cook shall be deemed to have
"Patent Coverage" for a particular Eligible Product in a country if there is
valid claim that, but for the licenses granted to Cook under this Agreement,
would be infringed by the manufacture, use or sale of such Eligible Product in
such country or by the manufacture of such Eligible Product in the country of
manufacture.

                  (c)      De Facto Royalty. For countries in which there is no
Patent Coverage, if at any time Cook does have de facto exclusivity for a
particular Eligible Product in a particular country, then Cook shall pay
Angiotech a royalty on its Net Sales of that Eligible Product in that country of
three percent (3%) during such period of de facto exclusivity, which payments
shall also constitute Cook Royalty Payments. If, during the term of the Cook
License, Cook does not have de facto exclusivity for a particular Eligible
Product in a particular country and there is no Patent Coverage for such
Eligible Product in that country, but an NIH Royalty is still payable by
Angiotech for Net Sales by Cook of such Eligible Product in such country, Cook
shall be responsible for the payment of such NIH Royalty during such period(s).

         4.4      Reduction of Cook Royalties. After the Cook Sales Milestone
License Fee has been paid, Cook shall be entitled to reduce the amount of any
Cook Royalty Payments that may become payable with respect to any Contract
Quarter by an amount equal to one-half of the aggregate amount of such payment
(calculated without regard to any other possible reductions in such fees
pursuant to the terms of this Agreement) until the aggregate amount of the
reductions made to the Cook Royalty Payments pursuant to this Section 4.4 equal
the amount of

                                      -16-

<PAGE>

the Cook Sales Milestone License Fee actually paid and not already offset by
Cook Royalty Payments pursuant to Section 4.1(c), after which time no further
reductions will be made.

         4.5      Sales to Affiliates. On sales of Eligible Products by Cook to
its Affiliates, or on sales made in other than an arm's-length transaction, the
value of the Net Sales attributed under this Section 4 to such a transaction
shall be that which would have been received in an arm's-length transaction.
Notwithstanding the foregoing, sales between and among Cook, its Affiliates that
are intended for resale shall not be included in Net Sales.

         4.6      Reporting of Cook Royalties. Cook shall deliver to Angiotech
within sixty (60) days after the end of each Contract Quarter during the term of
the Cook License, a written account, including quantities, of the aggregate of
Cook's and its Affiliates' sales subject to royalty payments hereunder and the
amount of the royalty payment due to Angiotech for such Contract Quarter. Each
royalty report shall be certified as correct by an authorized employee of Cook
and shall include a detailed listing of all deductions made to determine Net
Sales and to ca1culate the royalties payable hereunder.

         4.7      Payment of Cook Milestone License Fees and Cook Royalties.
Cook Milestone License Fees and Cook Royalties due under this Section 4 shall be
paid in U.S. dollars. For conversion of foreign currency to U.S. dollars, the
conversion rate shall be the conversion rate used by Cook to convert the
applicable sales into U.S. dollars for purposes of the preparation of Cook's
consolidated income statements, such conversion to be calculated in accordance
with generally accepted accounting principles in the United States, applied
consistently. All payments shall be made by wire transfer to Angiotech's account
in accordance with the following instructions:

                     Chase Manahattan Bank
                     New York, NY
                     ABM# 021000021
                     For credit to the account of:
                     Angiotech Pharmaceuticals, Inc.
                     Account #401-217-5
                     Branch #7400
                     Institution #003
                     Royal Bank of Canada - Pender & Bute Branch
                     1205 West Pender Street
                     Vancouver, B.C. V6E 2V5

                  Any loss of exchange, value, taxes, or other expenses incurred
in the transfer or conversion to U.S. dollars shall be paid entirely by Cook.
The royalty report required by Section 4.6 shall accompany each such payment.

         4.8      Late Payments. Late charges will be assessed by Angiotech as
additional royalties on any overdue payments at one percent (1%) per month,
compounded monthly (an

                                      -17-

<PAGE>

effective annual rate of twelve and 68/100 percent (12.68%) per annum). The
payment of such late charges will not prevent Angiotech from exercising any
other rights it may have as a consequence of the lateness of any payment.

         4.9      Governmental Filings. Except for taxes based on Angiotech's
income. Cook will be solely responsible for determining if any tax on Net Sales
and royalty payments is owed to any governmental authority and shall pay any
such tax and be responsible for all filings with appropriate governmental
authorities.

         4.10     Estimation of Net Sales. In the event that Cook is unable to
report and pay royalties due under this Section 4 on actual Net Sales in any
Contract Quarter, Cook will make a good faith estimate of Net Sales for those
jurisdictions in which actual Net Sales information is not readily available and
will make Royalty Payments based on such estimate. When actual Net Sales
information becomes available for those jurisdictions for which estimates had
previously been made, Cook will promptly determine, and give notice to Angiotech
of, the appropriate adjustment necessary to reconcile the estimated Royalty
Payment with the actual Royalty Payment due to Angiotech based on actual Net
Sales (each a "Reconciliation"). The next Royalty Payment due Angiotech from
Cook under this Agreement will include an adjustment to reflect such
Reconciliation, or the amount of such Reconciliation will be paid in cash if no
further royalties are anticipated.

5.       TERMINATIONS AND AMENDMENTS RELATING TO ANGIOTECH TECHNOLOGY

         5.1      Termination by BSC -- Vascular Paclitaxel-Based Technology. In
the event that BSC reasonably determines that the use of the paclitaxel-based
technology contained in the Angiotech Technology with vascular Stent Products is
not commercially viable, BSC shall have the right, subject to giving written
notice to Angiotech setting forth in reasonable detail the basis for its
determination, to cause the BSC License, insofar as it relates to such
paclitaxel-based technology in the use of vascular Stent Products, to be
terminated. In the event of any such termination, (a) the BSC License, insofar
as it relates to the Angiotech Technology other than paclitaxel-based technology
in the Licensed Field of Use, shall remain in full force and effect, (b) the
amount of any BSC Milestone License Fees which may become due after the date on
which BSC gives Angiotech notice of its intent to terminate pursuant to this
Section 5.l, shall be reduced by fifty percent (50%) and (c) the minimum amounts
payable under Sections 6.2 and 6.3 shall terminate.

         5.2      Termination by Cook -- Vascular Paclitaxel-Based Technology.
In the event that Cook reasonably determines that the use of the
paclitaxel-based technology contained in the Angiotech Technology with vascular
Stent Products is not commercially viable, Cook shall have the right subject to
giving written notice to Angiotech setting forth in reasonable detail the basis
for its determination, to cause the Cook License, insofar as it relates to such
paclitaxel-based technology in the use of vascular Stent Products, to be
terminated. In the event of any such termination, (a) the Cook License, insofar
as it relates to the Angiotech Technology other than paclitaxel-based technology
in the Licensed Field of Use, shall remain in full force

                                      -18-
<PAGE>

and effect, (b) the amount of any Cook Milestone License Fees which may become
due after the date on which Cook gives Angiotech notice of its intent to
terminate pursuant to this Section 5.2, shall be reduced by fifty percent (50%)
and (c) the minimum amounts payable under Sections 6.2 and 6.3 shall terminate.

         5.3      Amendment to Include Additional NIH License Rights. The
parties acknowledge that Angiotech intends to negotiate in good faith with the
NIH for an exclusive license to the NIH Patents Rights for vascular applications
(an "Exclusive License"). The parties anticipate that any Exclusive License may
be conditioned upon Angiotech and its sublicensees assuming additional
obligations, including performance milestones. The parties agree that if and
when such Exclusive License is granted, they will negotiate in good faith
amendments to this Agreement that are not inconsistent with the obligations and
terms of such Exclusive License.

6.       OTHER OBLIGATION OF BSC, COOK AND ANGIOTECH

         6.1      CRADA Study. Angiotech covenants to pay the National
Institutes of Health ("NIH") all amounts owed to NIH under the License Agreement
dated as of November 26, 1996, between Angiotech and NIH relating to "Drug
Delivery Systems and Methods of Treating Fibroproliterative Vascular Diseases
using Microtubial Stabilizing Agents," a copy of which is attached hereto as
Exhibit B (the "NIH Agreement") and all amounts owed to NIH under its
cooperative research and development agreement with NIH (the "CRADA"). Each of
BSC and Cook shall reimburse Angiotech, within thirty (30) days of receipt of an
invoice therefor, for fifty percent (50%) of all direct expenditures made by
Angiotech for research relevant to determining the effect of Eligible Products
in the treatment of vascular disease under the CRADA, up to a maximum of
$351,500 for each of BSC and Cook. In addition, if the research conducted under
the CRADA is expanded at the request of BSC or Cook, BSC or Cook, as the case
may be, will reimburse Angiotech for one hundred percent (100%) of any
additional expenditures as a result thereof (with each of BSC and Cook
reimbursing Angiotech for fifty percent (50%) of such cost if both parties so
request, and solely if only one party so requests). Cook and BSC agree to
provide a reasonable number of stents and other endoluminal devices necessary
for the research to be conducted under the CRADA at no cost; provided, however,
that BSC and Cook shall not be required to provide any stents or other
endoluminal devices for any study protocols which they have not approved in
advance in writing (such approval not to be untimely or unreasonably withheld).

         6.2      Regulatory Approvals. Each of BSC and Cook shall be
responsible for obtaining all regulatory approvals for their respective Eligible
Products in all Geographical Areas which such parties, in their sole discretion,
deem necessary or advisable, including funding all pre-clinical and clinical
studies deemed by such parties to be necessary or advisable for obtaining
regularly approvals, provided, however, that each of BSC and Cook agrees that
during the term of their respective licenses granted under Sections 2.1(a) and
2.1(b) hereof, they will each commit to spend a minimum of $ 1,750 000
(including any amounts reimbursed to Angiotech pursuant to Section 6.1, and
subject to reduction under Sections 5.1 and 5.2) on

                                     - 19 -

<PAGE>

clinical studies relating to products which may incorporate or utilize Angiotech
Technology. Angiotech agrees to provide reasonable assistance upon request by
BSC or Cook in the pursuit of regulatory approvals for products incorporating or
utilizing Angiotech Technology; provided that BSC or Cook, as the case may be,
reimburse Angiotech for its reasonable expenses of providing such assistance.

         6.3      Market Launch. During the term of their respective licenses
granted under Section 2.1, each of BSC and Cook agrees to commit a minimum of
$1,000,000 in direct marketing and sales expenses for Eligible Products that
incorporate Angiotech Technology (subject to reduction pursuant to Sections 5.1
and 5.2).

         6.4      Reporting

                  (a)      Progress Reports. BSC and Cook shall each provide
written annual reports on their respective product development progress or
efforts to commercialize the Angiotech Technology for each of the Licensed
Applications and Licensed Fields of Use within forty-five (45) days after
December 31 of each calendar year. These progress reports shall include, but not
be limited to, progress on research and development, status of applications for
regulatory approvals, manufacturing, sublicensing, marketing, and sales during
the preceding calendar year, as well as plans for the present calendar year. BSC
and Cook each agree to provide any additional information reasonably required by
Angiotech to evaluate their respective performance under this Agreement and to
allow Angiotech to fulfill its obligations under the NIH Agreement.

                  (b)      Audit Rights. BSC and Cook shall each keep accurate
records of all of their respective operations and of reports of operations by
their Affiliates within the scope of this Agreement for five (5) years following
a given reporting period, and Angiotech, at its expense, shall have the right,
exercisable with respect to each of BSC and Cook no more frequently than once
per Contract Year, to have a certified public accountant, reasonably acceptable
to BSC or Cock, as the case may be, inspect such records at the offices of BSC
or Cook, as applicable, no later than three (3) years after the end of the
Contract Quarter to which they pertain upon two (2) weeks prior notice by
Angiotech. Any such certified public accountant shall be required to agree in
writing to be bound by reasonable confidentiality provisions with respect to
such information prior to receiving access to such information. In the event the
examination shows an underpayment of more than five percent (5%) for any
Contract Year due to an error on the part of the record-keeping party, such
party shall pay the examining party the amounts underpaid, together with
interest pursuant to Section 3.8 or 4.8, as applicable, and the actual cost of
such examination.

                  (c)      NIH Reporting. BSC and Cook shall use their
reasonable best efforts to assist Angiotech in fulfilling its reporting
obligations under the NIH Agreement, including but not limited to notifying
Angiotech of the date of First Commercial Sale (as defined in the NIH Agreement)
in each country within sixty (60) days of such occurrence, and providing the
information necessary to determine royalties due to NIH for Combined Products
(as defined in

                                     - 20 -

<PAGE>

the NIH Agreement). BSC and Cook hereby consent to the delivery to NIH by
Angiotech of any reports and information provided under this Agreement.
Angiotech agrees to (i) only provide such information to NIH as is required by
the NIH Agreement and (ii) take steps reasonably necessary under the NIH
Agreement to protect the confidentiality of such information.

         6.5      Patent Applications and Foreign Filing. Angiotech shall be
entitled to fi1e, prosecute and maintain in force any and all patents and patent
applications included in the Patent Rights (excluding the NIH Patent Rights
which are governed by the NIH Agreement); provided, that with respect to the
Angiotech Patent Rights, Angiotech will provide BSC and Cook a reasonable
opportunity to review and comment on the same. The filing, prosecution and
maintenance of patents and patent applications pursuant to this Section shall be
done through patent counsel selected by Angiotech. Angiotech shall keep BSC and
Cook reasonably informed of all office actions, proposed responses or other
patent prosecution activities involving the Patent Rights.

         6.6      Supply of Paclitaxel. If requested by either or both of BSC
and Cook, Angiotech agrees to use commercially reasonable efforts to assist such
party or parties in acquiring sufficient quantities of Paclitaxel to practice
the Angiotech Technology under the license granted to such party or parties
under Section 2.1.

7.       REPRESENTATIONS AND COVENANTS

         7.1      Mutual Representations. Angiotech, BSC and Cook each represent
and warrant to the other parties that:

                  (a)      Organization & Power. The party is a corporation duly
organized and validly existing under the laws of its state of incorporation and
has all requisite corporate power and authority to enter into this Agreement;

                  (b)      Authorization. The party is duly authorized by all
requisite action to execute, deliver and perform this Agreement and to
consummate the transactions contemplated hereby, and that the same do not
conflict or cause a default with respect to its obligations under any other
agreement; and

                  (c)      Execution & Delivery. The party has duly executed and
delivered this Agreement.

         7.2      Angiotech Technology Representations and Warranties. Angiotech
represents and warrants to BSC and Cook that:

                  (a)      Except as set forth on Exhibit A hereto, Angiotech is
the sole and exclusive owner of the Angiotech Technology, including without
limitation, the Patent Rights, free of any liens or encumbrances;

                                     - 21 -

<PAGE>

                  (b)      Except as set forth on Exhibit A hereto, Angiotech
has not received any notice from any person or Entity claiming to have any
right, title or interest in or to the Angiotech Technology and, to Angiotech's
knowledge, there is no reason to expect that any such notice is forthcoming; and

                  (c)      Except as set forth on Exhibit A hereto, Angiotech
has not entered into, and is not aware of, any outstanding options, licenses or
agreements relating to the Angiotech Technology; and

                  (d)      Each of the Patent Rights included in the Angiotech
Technology which is listed on Exhibit A as being licensed to Angiotech is
subject to a valid and enforceable license (the "Licenses"), except as such
enforceability may be limited by (i) applicable bankruptcy, insolvency,
reorganization, moratorium or other laws of general application affecting
enforcement of creditors' rights and (ii) general principles of equity that
restrict the availability of equitable remedies. Neither Angiotech nor, to the
knowledge of Angiotech, the other party to any of such Licenses is in material
breach or violation of such License.

         7.3      Covenants Regarding Licenses. Angiotech, BSC and Cook each
hereby covenant and agree to take all commercially reasonable actions necessary
to perform all of their respective obligations under the Licenses and remain in
compliance with any conditions of such Licenses. Angiotech agrees to notify each
of BSC and Cook in the event of any material breach of any of the Licenses. Upon
receipt of such notice from Angiotech, and provided Angiotech has not commenced
to cure, diligently pursued such cure and in fact cured such breach, within a
reasonable time period, each of BSC and Cook shall be permitted, acting
individually or in concert and upon prior written notice to Angiotech, to Cure
any such breach on behalf of Angiotech and shall be permitted to recover the
amount of any damages, losses or expenses (including any reasonable attorney's
fees and expenses) incurred by such party in connection with curing such breach,
or offset any such amounts against any obligations that such party shall have to
pay to Angiotech hereunder.

         7.4      Compliance with NIH License. BSC and Cook each hereby agree to
comply with the covenants and conditions of the NIH Agreement set forth in
Exhibit C hereto as if they were a party to the NIH Agreement. To the extent the
NIH Agreement is amended to include additional terms and conditions, the parties
agree to amend Exhibit C to include such terms and conditions as are relevant to
the BSC License and Cook License; provided, that any such amendment to the NIH
Agreement will not impair the rights of BSC or Cook under this Agreement; and
provided further, that any such amendment to the NIH Agreement that imposes
additional obligations on BSC or Cook, or may reduce the benefits to either of
BSC or Cook of the NIH Agreement, will not be entered into without the prior
written consent of BSC and Cook, which consent will not be untimely or
unreasonably withheld.

         7.5      Technical Assistance. Commencing promptly after the execution
of this Agreement. Angiotech shall use reasonable best efforts to complete the
Technology Transfer.

                                     - 22 -

<PAGE>

8.       INFRINGEMENT AND OTHER PRODUCTS

         8.1      Notification of Infringement. Each of BSC, Cook and Angiotech
agrees to promptly notify the other parties hereto of any infringements of any
rights contained within the Angiotech Technology in the Licensed Field of Use of
which they become aware.

         8.2      Action by Angiotech. Subject to Angiotech's obligations to NIH
and any other third party licensors, Angiotech shall have in the first instance
the right, in its sole discretion and at its expense, to prosecute any alleged
infringements of the Angiotech Technology in its own name. Each of BSC and Cook
agrees to allow Angiotech to include it, at the expense of Angiotech, as a
plaintiff in any suit brought with respect to such infringement and Angiotech
agrees to consult with counsel for BSC and Cook on any significant matters
related to such litigation.

         8.3      Actions by BSC or Cook. Subject to Angiotech's obligations to
NIH and any other third party licensors, in the event that Angiotech, within one
hundred twenty (120) days after being notified by BSC or Cook of any
infringement of the Angiotech Technology in the Licensed Field of Use, shall
have been unsuccessful in negotiating with the alleged infringer to cease and
desist such infringement and shall not have brought an infringement action, or
shall have notified BSC and Cook that it has determined not to bring an action
against the alleged infringer, then, in those events, BSC and Cook shall have
the right to bring an action against such infringer. Prior to instituting any
such action, Cook and BSC shall consult with one another to agree upon a
mutually acceptable strategy for pursuing such action. Angiotech agrees to allow
each of BSC and Cook to include it, at the expense of the requesting party or
parties, as a plaintiff in any suit brought with respect to any such
infringement and each of BSC and Cook agree to consult with counsel for
Angiotech on any significant matters relating to such litigation.

         8.4      Damages. Any recovery of damages for each suit shall be
applied as follows: (a) first, to pay any amounts owed to NIH under the
corresponding infringement language in the NIH Agreement, (b) second, to the
party or parties bringing the action, to reimburse it or them for its or their
expenses of the litigation or suit, including reasonable attorneys' fees; (c)
third, to the other party or parties to reimburse it or them for its or their
expenses of the litigation or suit, including reasonable attorneys' fees; then
(d) fourth, twenty-five percent (25%) of the balance to Angiotech, then (e)
fifth, the remaining balance to each of BSC and Cook in amounts to be agreed
upon by BSC and Cook, giving appropriate weight to all relevant factors
including, but not limited to, historical and projected sales of products and
the relative market shares of BSC and Cook in the area or areas which are the
subject of such action, and the expenses of such parties incurred in pursuing
such action.

         8.5      Disposition. No settlement, consent judgment or other
voluntarily final disposition of any such action relating to an alleged
infringement of the Angiotech Technology in the Licensed Field of Use may be
entered into (a) without the consent of Angiotech, BSC and Cook, as applicable,
if such party participates in the infringement action, which consent shall

                                     - 23 -

<PAGE>

not be unreasonably withheld by such party, and (b) without the Consent of NIH
to the extent required under the NIH Agreement.

         8.6      Cooperation. In any infringement suit, any party shall be
entitled to request the cooperation and assistance of the other parties, at the
requesting party's expense, as may be reasonably necessary for the suit. Each
party agrees to make available relevant records, papers, information, samples
and specimens, as well as to have its employees testify upon request.

         8.7      Third Party Licenses. Angiotech represents that, to its
knowledge, except as set forth on Exhibit A, there are no third parties to whom
license fees must be paid to utilize the Angiotech Technology in a manner
contemplated by the licenses granted in Section 2.1 of this Agreement. If use of
the Angiotech Technology in a manner contemplated by the licenses granted in
Section 2.1 of this Agreement would infringe third party rights such that BSC or
Cook require a license from such third party to use the Angiotech Technology for
any of the Licensed Applications (provided that this Section 8.7 shall not apply
(i) to the extent BSC or Cook, or an Affiliate of either BSC or Cook, decide to
use an agent, drug delivery technology or composition that would require a third
party license, even though an alternative agent, drug delivery technology or
composition might be available, or developed, that would not require a third
party license or (ii) to New Inventions licensed from third parties under
Section 2.3, in which event the license with the third party will govern the
rights of BSC and Cook), then BSC or Cook may obtain a license from such third
party and shall be permitted to offset the total of any royalties or other
amounts paid thereunder (subject to the limitation set out in this Section 8.7)
against any BSC Royalty Payments or Cook Royalty Payments, unless the third
party is BSC or Cook or an Affiliate of the party obtaining the license
("Allowable Fees"). Fifty percent (50%) of Allowable Fees which become due to
such third parties by BSC or Cook shall be credited against any BSC Royalty
Payments or Cook Royalty Payments owed by BSC or Cook, as the case may be, to
Angiotech in respect of the applicable period when paid, provided, however,
that, subject to any recoveries, reductions or offsets made by BSC or Cook, as
the case may be, pursuant to other Sections of this Agreement, in no event shall
any BSC Royalty Payments or Cook Royalty Payments be reduced by virtue of this
Section 8.7 below the following amounts:

<TABLE>
<CAPTION>
                                            Minimum Royalty in
Royalty:                                  each Geographical Area:
--------                                  -----------------------
<S>                                <C>
BSC Vascular Sales Royalty         4% of Net Sales of Eligible Products
BSC GI Sales Royalty               3% of Net Sales of Eligible Products
Cook Vascular Sales Royalty        4% of Net Sales of Eligible Products
Cook GI Sales Royalty              3% of Net Sales of Eligible Products
BSC Endoluminal Royalty            3% of Net Sales of Eligible Products
Cook Endoluminal Royalty           3% of Net Sales of Eligible Products
</TABLE>

For purposes of determining whether or not of the Angiotech Technology in a
manner contemplated by the licenses granted in Section 2.1 of this Agreement
would infringe third party

                                     - 24 -

<PAGE>

rights such that BSC or Cook will require a license from such third party to use
the Angiotech Technology for any of the Licensed Applications, in the absence of
determination by a court or pursuant to arbitration under Section 10.2, BSC,
Cook or their Affiliates, as the case may be, shall be entitled to rely upon an
infringement opinion from a law firm reasonably acceptable to Angiotech, which
opinion shall be controlling for purposes of this Section 8.7.

         8.8      Reduction Relating to Claims. In the event that BSC or Cook
incurs or accrues any expenses in connection with any claim or objection of any
third party that any of the Angiotech Technology infringes a patent or other
right of such third party relating to the Angiotech Technology, or other
intellectual property in which Angiotech has an ownership or licensee interest,
whether or not BSC or Cook, as the case may be, is a party to such litigation.
such party shall be entitled, from the date of such claim or objection until the
claim or objection is resolved favorably to Angiotech, BSC or Cook, as the case
may be, to reduce the amount of any payments in respect of royalties which may
otherwise be due in accordance with the terms of Sections 3.1 and 3.2, in the
case of BSC, or Sections 4.1 and 4.2, in the case of Cook (calculated without
regard to any other possible reductions in such fees pursuant to the terms of
this Agreement), by an amount equal to up to fifty percent (50%) of any such
payment; provided, however, that, subject to any recoveries, reductions or
offsets made by BSC or Cook, as the case may be, pursuant to other sections of
this Agreement, in no event shall the royalty payments be reduced by virtue of
this Section 8.8 below the minimum amounts set forth in Section 8.7 above.

         8.9      Indemnification

                  (a)      BSC and each of its Affiliates shall indemnify and
hold Cook, its Affiliates and Angiotech and their respective officers,
directors, employees, consultants, contractors and agents harmless from and
against any and all liability, damage, loss, Cost (including reasonable
attorneys' fees) and expense resulting from any claim of bodily injury or
property damage (i) relating to the development, manufacture, use, distribution
or sale of any Eligible Product by BSC, or its Affiliates, or (ii) due to the
negligence or willful misconduct of BSC, its Affiliates, or their respective
employees or agents.

                  (b)      Cook and each of its Affiliates shall indemnify and
hold BSC and its Affiliates, and Angiotech and their respective officers,
directors, employees, consultants, contractors and agents harmless from and
against any and all liability, damage, loss, cost (including reasonable
attorneys' fees) and expense resulting from any claim of bodily injury or
property damage (i) relating to the development, manufacture, use, distribution
or sale of any Eligible Product by Cook or its Affiliates, or (ii) due to the
negligence or willful misconduct of Cook, its Affiliates, or their respective
employees or agents.

                  (c)      Angiotech shall indemnify and hold BSC, Cook and
their respective Affiliates, officers, directors, employees, consultants,
contractors and agents harmless from and against any and all liability, damage,
loss, cost (including reasonable attorneys' fees) and expense resulting from any
claim of bodily injury or property damage (i) relating to the

                                     - 25 -

<PAGE>

development, manufacture, use, distribution or sale of any product by Angiotech
or its sublicensees (other than BSC, Cook or their respective Affiliates), or
(ii) due to the negligence or willful misconduct of Angiotech or its employees
or agents.

         8.10     Insurance. BSC, Cook and each of their Affiliates shall
procure and maintain, during the term of this Agreement, public liability,
product liability and errors and omissions insurance in the minimum amounts, and
with the insurance carriers (or other insurance carriers of comparable
reputation and financial credibility), set forth on Exhibit D. BSC, Cock and
each of their Affiliates will provide Angiotech with a certificate of insurance
evidencing the insurance coverage required by this Section 8.10.

         8.11     Strength of Patent Rights. In the event that, during the term
of any license granted Angiotech pursuant to this Agreement, one or more
products are marketed or sold by one or more Entities which are not Affiliates
of either of BSC or Cook, in one or more countries, that (a) employ delivery of
paclitaxel, or an analog or derivative thereof, on Stent Products in the
Licensed Field of Use that are competitive to the Eligible Products, (b) do not
infringe the Patent Rights, and (c) represent a market share of three percent
(3%) or more in such country or countries (collectively, "Non-License
Products"), then each of BSC, Cook or their respective Affiliates, as the case
may be, may either (i) upon written notice to Angiotech terminate the license
granted to such party with respect to such country or countries in which such
Non-License Products are marketed or sold, or (ii) give written notice of such
Non-License Products to Angiotech and all BSC Royalty Payments and Cook Royalty
Payments, as the case may be, due to Angiotech for such country or countries, on
and after notice to Angiotech of such Non-Licensed Products, shall be reduced to
a royalty rate equal to the NIH Royalty plus one percent (1%) of Net Sales of
Eligible Products (of any class) in such country or countries. For purposes of
determining whether or not the product or products infringe the Patent Rights,
in the absence of determination by a court or pursuant to arbitration under
Section 10.2, BSC, Cook or their Affiliates, as the case may be, shall be
entitled to rely upon an infringement Opinion from a law firm reasonably
acceptable to Angiotech, which opinion shall be controlling for purposes of this
Section 8.11.

9.       TERMINATION

         9.1      Early Termination of Licenses. Notwithstanding the foregoing,
and subject to the limitations set forth below, Angiotech shall be entitled in
the following circumstance to terminate one or more of the licenses granted to a
party pursuant to Section 2.1 in the following circumstances:

                  (a)      Material Breach. If either BSC or Cook materially
breaches this Agreement, Angiotech shall have the right, at its election, to
terminate any or all 1icenses granted by it to such breaching party under this
Agreement upon forty-five (45) days, or thirty (30) days in the case of breach
for non-payment, prior written notice, provided, however, that if the breaching
party shall cure the breach or default within the forty-five (45) or thirty (30)
day period, as applicable, all such licenses and agreements shall continue in
full force and effect.

                                     - 26 -

<PAGE>

                  (b)      Insolvency, Etc. If either BSC or Cook shall file a
petition in bankruptcy or if an involuntary petition shall be filed against it
and such petition shall not be dismissed within sixty (60) days, or if it shall
become insolvent or admit its inability to pay its debts when due, or if a
receiver or guardian shall be appointed for it, then all licenses granted to
such party under this Agreement shall immediately terminate.

                  (c)      Abandonment. If either Cook or BSC shall have
acknowledged in writing its intention to abandon the commercial development of
products based on the Angiotech Technology, Angiotech shall have the right, at
its election, to terminate any and all licenses granted by it to such abandoning
party under this Agreement upon thirty (30) days prior written notice.

                  (d)      Failure to Exploit. In the event that either BSC or
Cook shall have failed to (i) file an Investigational Device Exemption with the
FDA or an equivalent filing with an appropriate governmental authority in one or
more European countries with respect to a product incorporating or utilizing the
Angiotech Technology prior to the thirty-month anniversary of the date of this
Agreement, or (ii) file a Pre-market Approval Application or Section 510(K)
Pre-Marketing Notification with the FDA or equivalent filing with an appropriate
governmental authority in one or more European countries prior to the
sixty-month anniversary of the date of this Agreement, then Angiotech shall have
the right, at its election, to terminate any and all licenses granted by it to
such party under this Agreement upon thirty (30) days prior written notice at
any time prior to such filing.

                  (e)      Limitation on Stent Products. If, for a period of
five (5) years during the term of this Agreement, BSC or Cook is unable to
obtain approval for, and gain significant sales of, an Eligible Stent Product in
the United States, Angiotech shall have the right, at its election, to terminate
any and all licenses in the United States granted by it to such party under this
Agreement upon thirty (30) days prior written notice.

                  (f)      Termination of NIH Agreement. In the event of a
termination of the NIH License, (i) the Cook License and the BSC License,
insofar as they relate to the NIH License only, shall terminate; provided,
however, that BSC and Cook shall have the right, in accordance with the terms of
Section 4.03 of the NIH Agreement, to convert the NIH License to a direct
license between NIH and BSC and Cook, and (ii) each of BSC and Cook shall be
permitted to terminate this Agreement as it relates to the licenses granted to
such parties hereunder and such party's obligations thereunder, upon thirty (30)
days prior written notice to Angiotech.

         9.2      Termination-Supply of Paclitaxel. In the event that either BSC
or Cook, as the case may be, is unable to acquire a supply of paclitaxel at
commercially reasonable prices sufficient to enable BSC or Cook to practice the
Angiotech Technology in accordance with the licenses granted under this
Agreement, then the party which is unable to acquire such supply shall have the
right, upon thirty (30) days prior written notice to Angiotech, to terminate the
license granted to such party.

                                     - 27 -

<PAGE>

         9.3      Effect of Termination. Promptly after termination of any
license, or part thereof, pursuant to Sections 9.1 or 9.2, Angiotech shall
deliver notice of such termination to the other licensee, if any, remaining
under Section 2.1 ( the "Remaining Licensee"). In the event of the termination
of some or all of the BSC License or the Cook License, as the case may be, the
obligations of the party to such license under Sections 3.1, 3.2 and 3.3, in the
case of BSC, or Sections 4.1, 4.2 and 4.3, in the case of Cook, and Sections 6.1
to 6.4, shall also terminate, other than with respect to royalty payments which
may have accrued in respect of sales of Eligible Products by such party during
the current Contract Quarter, and such termination shall have no effect on the
remaining license granted pursuant to Section 2.1. Within sixty (60) days of
delivery of such notice of termination to any Remaining Licensee, such party
shall have the option to cause the license granted to such party under such
Section 2.1 to become exclusive as to all other parties by delivering notice of
such election to Angiotech. In the event that such Remaining Licensee makes such
an election, such party shall assume the obligations of such terminated licensee
to make any unpaid milestone fees under Sections 3.1 or 4.1, as the case may be,
and the amount of such Remaining Licensee's original royalty obligations under
Section 3.2 or Section 4.2, as the case may be shall be increased by one percent
(1%) of Net Sales of Eligible Products. If the remaining licensee does not make
such an election within the period of sixty (60) days after delivery of notice
of any such termination pursuant to this Section 9.3, Angiotech shall be
permitted to grant a license to the Angiotech Technology to a single third
party.

         9.4      Accrued Obligations. Upon termination of any license granted
under this Agreement for any reason, each of Angiotech and the holder of such
license shall remain liable for those obligations that accrued with respect to
such license prior to the effective date of the termination. The party to such
terminated license may, for a period of no longer than six (6) months after the
effective date of the termination of such license, complete and sell any or all
products containing Angiotech Technology that it can demonstrate were in the
process of manufacture or in inventory on the effective date of the
termination; provided, however, that such party shall remain obligated to pay
any applicable royalties thereon as provided in this Agreement. Within thirty
(30) days after receipt of notice of termination, each party to such license
shall provide the other with an accounting of products incorporating the
Angiotech Technology then on hand and in process and its best estimate of when
within the one (1) year period sales of such products will conclude.

10.      DISPUTE RESOLUTION

         10.1     Negotiation of Parties. In the event of any dispute with
respect to the interpretation of any provision of this Agreement or with respect
to the performance of either party under this Agreement, either party may at any
time provide the other party written notice specifying the terms of such
disagreement in reasonable detail. As soon as practicable after receipt of such
notice, the President of Angiotech and a designated officer with appropriate
settlement authority from BSC and/or Cook shall meet at a mutually agreed upon
time and location for the purpose of resolving such disagreement. They shall
engage in good faith discussions and/or negotiations for a period of up to
thirty (30) days to resolve the disagreement

                                     - 28 -

<PAGE>

or negotiate an interpretation of revision of the applicable portion of this
Agreement which is mutually agreeable to both parties, without the necessity of
formal procedures relating thereto. During the course of such discussion and/or
negotiation, the parties shall reasonably cooperate and provide information that
is not materially confidential in order so that each of the parties may be fully
informed with respect to the issues in dispute.

         10.2     Arbitration. In the event any dispute arising between the
parties concerning this Agreement is not resolved pursuant to Section 10.1, then
the same shall be submitted by the parties to arbitration in Seattle, Washington
in accordance with the then-current commercial arbitration rules of the American
Arbitration Association ("AAA") except as otherwise provided herein. The parties
shall choose, by mutual agreement, one (1) arbitrator within thirty (30) days
of receipt of notice of the intent to arbitrate. If no arbitrator is appointed
within the times herein provided or any extension of time which is mutually
agreed upon, the AAA shall make such appointment within thirty (30) days of such
failure. The judgment rendered by the arbitrator shall include costs of
arbitration, reasonable attorneys' fees and reasonable costs for expert and
other witnesses. Nothing in this Agreement shall be deemed as preventing either
party from seeking injunctive relief (or any other provisional remedy) pursuant
to Section 11.1 herein. If the issues in dispute involve scientific, technical
or commercial matters, any arbitrator chosen hereunder shall have educational
training and/or industry experience sufficient to demonstrate a reasonable level
of relevant scientific, medical and industry knowledge.

         10.3     NIH Agreement. Sections 10.1 or 10.2 shall not prevent
Angiotech from seeking any remedies in law or equity it may have to protect its
rights under the NIH Agreement.

11.      GENERAL PROVISIONS

         11.1     Remedies. The parties acknowledge and agree that, in the event
of a breach or a threatened breach by either party of this Agreement for which
it will have no adequate remedy at law, the other party may suffer irreparable
damage and, accordingly, shall be entitled to injunctive and other equitable
remedies to prevent or restrain such breach or threatened breach, without the
necessity of posting any bond or surety, in addition to any other remedy they
might have at law or at equity.

         11.2     Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Washington in force
therein without regard to its conflict of law rules. Subject to Sections 10.1
and 10.2, all parties agree that by executing this Agreement they consent to the
exclusive jurisdiction of the courts of the State of Washington.

         11.3     Confidentiality. It is contemplated that in the course of the
performance of this Agreement each party may, from time to time, disclose
Confidential Information to the other. Each party agrees that for the term of
this Agreement and for a period of five (5) years thereafter, the receiving
party shall keep confidential and shall not publish or otherwise disclose, and
will take all reasonable steps to prevent disclosure of, such Confidential
Information and will not use any Confidential Information except for the limited
purposes set forth in this Agreement; provided, however, that no provision of
this Agreement shall be construed to

                                     - 29 -

<PAGE>

preclude such disclosure of Confidential Information as may be necessary or
appropriate (i) to obtain from any governmental agency any necessary approval
(subject to Section 11.9), (ii) to obtain patents that are included in the
Angiotech Technology or (iii) to fulfill Angiotech's obligations under the CRADA
and the NIH Agreement; provided, further, however, that the party whose
information is to be disclosed shall be notified as soon as possible and the
party that is being required to disclose such information shall, if requested
by the party whose information is to be disclosed, use reasonable good faith
efforts, at the expense of the requesting party, to assist in seeking a
protective order (or equivalent) with respect to such disclosure or otherwise
avoid making such disclosure.

         11.4     Amendment and Waiver. No provision of or right under this
Agreement shall be deemed to have been waived by any act or acquiescence on the
part of any party, its agents or employees, but only by an instrument in writing
signed by an authorized officer of such party. No waiver by either party of any
breach of this Agreement by any other party shall be effective as to any other
breach, whether of the same or any other term or condition and whether occurring
before or after the date of such waiver.

         11.5     Intellectual Property

                  (a)      Trademarks. During the term of their respective
licenses granted pursuant to Sections 2.1(a) and 2.1(b), each of BSC and Cook
shall have the right to market and advertise products incorporating or utilizing
Angiotech Technology under their respective names, trademarks, trade names,
labels, or other designations, and the same shall remain the property of their
respective owners, and Angiotech shall have no rights therein.

                  (b)      Patents. BSC and Cook each agree to mark the Eligible
Products or their packaging sold in the United States with all applicable U.S.
patent numbers and similarly to indicate "Patent Pending" status. All Eligible
Products manufactured in, shipped to, or sold in other countries shall be marked
in such a manner as to protect and preserve the Patent Rights in such countries.

         11.6     Independent Contractors. Each party represents that it is
acting on its own behalf as an independent contractor and is not acting as an
agent for or on behalf of any third party. This Agreement and the relations
hereby established by and among Angiotech, BSC and Cook do not constitute a
partnership, joint venture, agency or contract of employment between them.

         11.7     Assignment. Except with respect to any sublicenses granted by
BSC or Cook pursuant to Section 2.1, no party may assign its rights or
obligations hereunder without the prior written consent of the other parties,
which consent shall not be unreasonably withheld in the case of any assignment
pursuant to a merger, consolidation or sale of substantially all of the assets
or stock; provided, however, that either BSC or Cook may assign their respective
rights and obligations to an Affiliate of such party without consent if BSC or
Cook, as the case may be, agrees to remain liable for their obligations under
this Agreement and provided, that no purported assignment under this Section
11.7 shall be effective unless and until the proposed assignee under this
Section 11.7 agrees in writing to assume all of the obligations of the

                                     - 30 -

<PAGE>

assignor party under this Agreement and shall remain effective only so long as
the proposed assignee remains an Affiliate.

         11.8     Successors and Assigns. This Agreement shall bind and inure to
the benefit of the parties hereto and their respective successors and permitted
assigns.

         11.9     Press Release. The parties agree that the public announcement
of the execution of this Agreement shall be in the form of a press release to be
agreed upon by the parties. Thereafter, Angiotech, BSC and Cook shall be free to
use the information set forth in such press release in future public
announcements. With respect to other public statements that reference a party,
including submissions to the Securities and Exchange Commission or stock
exchange or market system on which its securities are listed, such statements
shall be submitted to the referenced party for review and approval, which
approval shall not be untimely or unreasonably withheld.

         11.10    Publications

                  (a)      Subject to obligations under the NIH Agreement and
agreements with third party collaborators, if any, BSC and Cook each agree that
they shall not publish or present the results of studies carried out under this
Agreement without the opportunity for prior review by Angiotech. Each of BSC and
Cook shall provide to Angiotech the opportunity to review any proposed
abstracts, manuscripts or presentations (including information to be presented
orally) covering information arising from the use of the Angiotech Technology
under this Agreement and not previously disclosed at least thirty (30) days
prior to their intended submission for publication and such submitting party
agrees, upon written request from Angiotech, not to submit such abstract or
manuscript for publication or to make such presentation until Angiotech is given
a reasonable period of time to secure patent protection for any material in such
publication or presentation which it believes is patentable.

                  (b)      Subject to obligations Under the NIH Agreement and
agreements with third party collaborators, if any, Angiotech agrees that it
shall not publish or present the results of studies relating to the Angiotech
Technology licensed under this Agreement without the opportunity for prior
review by BSC and Cook. Angiotech shall provide BSC and Cook the opportunity to
review any proposed abstracts, manuscripts or presentations (including
information to be presented orally) covering information related to the
Angiotech Technology in the Licensed Field of Use under this Agreement and not
previously disclosed at least thirty (30) days prior to its intended submission
for publication.

                                     - 31 -

<PAGE>

         11.11    Notices. All communications hereunder shall be in writing and
shall be deemed to have been duly given upon receipt by the addressee at the
addresses set forth below, or such other address as either party may specify by
notice sent in accordance with this section:

                  If to BSC:            Boston Scientific Corporation
                                        One Boston Scientific Place
                                        Natick, Massachusetts 01760
                                        Attention: Frank Grillo
                                                   Director, New Business
                                                   Development

                  with a copy to:       General Counsel
                                        Boston Scientific Corporation
                                        One Boston Scientific Place
                                        Natick, Massachusetts 01760-1537

                  If to Angiotech:      Angiotech Pharmaceuticals, Inc.
                                        6660 N. W. Marine Drive
                                        Vancouver, BC, Canada V6T lZ4
                                        Attention: President and Vice
                                                   President-Corporate Affairs

                  with a copy to:       Venture Law Group
                                        4750 Carillon Point
                                        Kirkland, WA 98033
                                        Attention: William W. Ericson, Esq.

                  If to Cook:           Cook Incorporated
                                        925 South Curry Pike
                                        Bloomington, Indiana 47403
                                        Attention: Brian L. Bates

                  with a copy to:       Sommer and Barnard
                                        4000 Bank One Tower
                                        111 Monument Circle
                                        Indianapolis, Indiana 46204
                                        Attention: Erick Ponader, Esq.

         11.12    Severabi1ity. In the event any provision of this Agreement
shall for any reason be held to be invalid, illegal or unenforceable in any
respect, such invalidity, illegality or unenforceability shall not affect any
other term or provision hereof. The parties agree that they wil1 negotiate in
good faith or will permit a court or arbitrator to replace any provision hereof
so held invalid, illegal or unenforceable with a valid provision which is as
similar as possible in substance to the invalid, illegal or unenforceable
provision.

                                     - 32 -

<PAGE>

         11.13    Conflict of Inconsistency. In the event of any conflict or
inconsistency between the terms and conditions hereof and any terms or
conditions set forth in any purchase order or other document relating to the
transactions contemplated by this Agreement, the terms and conditions set forth
in this Agreement shall prevail.

         11.14    Captions. Captions of the Sections and subsections of this
Agreement are for reference purposes only and do not constitute terms or
conditions of this Agreement and shall not limit or affect the terms and
conditions hereof.

         11.15    Word Meanings. Words such as herein, hereinafter, hereof and
hereunder refer to this Agreement as a whole and not merely to a Section or
paragraph in which such words appear, unless the context otherwise requires. The
singular shall include the plural, and each masculine, feminine and neuter
reference shall include and refer also to the others, unless the context
otherwise requires.

         11.16    Entire Agreement. This Agreement and the Investment Agreement
contain the entire understanding of each of the parties hereto with respect to
the transactions and matters contemplated hereby, including without limitation
any licensing of the Angiotech Technology, supersedes all prior agreements and
understandings relating to the subject matter hereof, and no representations,
inducements, promises or agreements, whether oral or otherwise, between such
parties not contained herein or incorporated herein by reference shall be of any
force or affect.

         11.17    Rules of Construction. The parties agree that they have
participated equally in the formation of this Agreement and that the language
and terms of this Agreement shall not be presumptively construed against any of
them.

         11.18    Counterparts. This Agreement may be executed in multiple
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument. In making proof of this
Agreement, it shall not be necessary to produce or account for more than one
such counterpart.

                            [SIGNATURE PAGES FOLLOW]

                                     - 33 -

<PAGE>

         IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective duly authorized officers, and have duly delivered
and executed this Agreement under seal as of the date first set forth above.

ANGIOTECH PHARMACEUTICALS, INC.

    /s/ William L. Hunter
    -------------------------
By: WILLIAM L. HUNTER
Title: CHAIRMAN & CEO

BOSTON SCIENTIFIC CORPORATION

_____________________________
By:__________________________
Title:_______________________

COOK INCORPORATED

_____________________________
By:__________________________
Title:_______________________

                       SIGNATURE PAGE TO LICENSE AGREEMENT

<PAGE>

         IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective duly authorized officers, and have duly delivered
and executed this Agreement under seal as of the date first set forth above.

ANGIOTECH PHARMACEUTICALS, INC.

_____________________________
By:__________________________
Title:_______________________

BOSTON SCIENTIFIC CORPORATION

    /s/ Lawrence C. Best
    -------------------------
BY: Lawrence C. Best
Title: Sr. Vice President and
       Chief Financial Officer

COOK INCORPORATED

_____________________________
By:__________________________
Title:_______________________

                       SIGNATURE PAGE TO LICENSE AGREEMENT

<PAGE>

         IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective duly authorized officers, and have duly delivered
and executed this Agreement under seal as of the date first set forth above.

ANGIOTECH PHARMACEUTICALS, INC.

_____________________________
By:__________________________
Title:_______________________

BOSTON SCIENTIFIC CORPORATION

_____________________________
By:__________________________
Title:_______________________

COOK INCORPORATED

    /s/ Brian Bates
    -------------------------
By: BRIAN BATES
Title: VICE PRESIDENT, PRODUCT DEVELOPMENT

                       SIGNATURE PAGE TO LICENSE AGREEMENT
<PAGE>

                            AGREEMENT WITH RESPECT TO
                                LICENSE AGREEMENT
                                      AMONG
                         ANGIOTECH PHARMACEUTICALS, INC.
                          BOSTON SCIENTIFIC CORPORATION
                                       AND
                                COOK INCORPORATED

         This Agreement with respect to License Agreement is made and entered
into as of this 13th day of December, 1999, by and between Angiotech
Pharmaceuticals, Inc., a corporation organized under the laws of the Province of
British Columbia ("Angiotech") and Boston Scientific Corporation, a Delaware
corporation ("BSC").

         WHEREAS, Angiotech, BSC and Cook Incorporated, an Indiana corporation
("Cook"), have entered into a License Agreement dated as of July 9, 1997,
pursuant to which Angiotech agreed to license to each of BSC and Cook certain
patents, patent applications, products and technology relating to the use of
paclitaxel as a coating for certain medical devices (as may be amended from time
to time, the "License Agreement");

         WHEREAS, Angiotech and BSC desire to modify certain provisions of the
License Agreement as they relate to Angiotech and BSC as provided herein;

         NOW THEREFORE, Angiotech and BSC hereby agree as follows:

1.       As between Angiotech and BSC, to replace Sections 3.1(a) and 3.1(b) in
         their entirety with the following:

         3.1(a)   BSC IDE Fee. Within twenty (20) business days after the date
                  of the (x) first filing by BSC of an Investigational Device
                  Exemption ("IDE") with the FDA or an equivalent filing in one
                  or more European countries or Canada or (y) initiation of a
                  BSC sponsored human clinical trial anywhere in the world, with
                  respect to a product incorporating or utilizing the Angiotech
                  Technology in a vascular application (the "BSC IDE Filing
                  Date"), BSC shall pay a license fee in the amount of
                  $1,275,000.

         3.1(b)   BSC PMA Fee. Within twenty (20) business days after the date
                  of the (x) first filing by BSC of a Pre-Market Approval
                  Application or Section 510(k) Pre-Market Notification
                  (collectively, "PMA") with the FDA or an equivalent filing in
                  on or more European. countries or Canada or (y) initiation of
                  commercial sale by BSC anywhere in the world, with respect to
                  a product incorporating or utilizing the Angiotech Technology
                  in a vascular application (the "BSC PMA Filing"), BSC shall
                  pay an additional license fee calculated as follows:

<PAGE>

                  (i)      subject to Section 3.1(b)(iii) below, if the date of
                           the BSC PMA Filing is on or after the twenty-four
                           month anniversary of the date on which the applicable
                           IDE or other equivalent filing in one or more
                           European countries or Canada is approved or a BSC
                           sponsored human clinical trial is initiated anywhere
                           in the world (the "BSC IDE Approval Date"), the
                           amount of $2,050,000; or

                  (ii)     if the date of the BSC PMA Filing is prior to the
                           twenty-four month anniversary of the BSC IDE Approval
                           Date, the amount of (x) $2,050,000 minus (y) the
                           product of $200,000 for each complete thirty (30)
                           days period by which the date of the BSC PMA Filing
                           precedes the twenty-four month anniversary of the BSC
                           IDE Approval Date, provided, however, that in no
                           event shall any fee calculated pursuant to this
                           Section 3.1(b)(ii) be less than $800,000; or

                  (iii)    if, and to the extent prior to the date of the BSC
                           PMA Filing, the FDA or similar authority in Europe or
                           Canada requires clinical follow-up in excess of nine
                           (9) months and BSC is unable to make the BSC PMA
                           Filing prior to the expiration of the "twenty-four
                           (24) month" period referenced in Section 3.1(b)(ii)
                           above, the amount of (x) $2,050,000, minus (y) the
                           product of $1,00,000 for each compete thirty (30)
                           day period by which the date of the BSC PMA Filing
                           precedes the Extended BSC PMA Filing Date, provided,
                           however, that in no event shall any fee calculated
                           pursuant to this Section 3.1(b)(iii) be less than
                           $800,000. For purposes of this paragraph," Extended
                           BSC PMA Filing Date" means the date which is
                           twenty-four (24) months following the BSC IDE
                           Approval Date plus the number of months of required
                           clinical follow-up in excess of nine (9) months.

2.       As between Angiotech and BSC, to add as Section 3.11 of the License
         Agreement, the following;

         3.11     NeoRx License Fee Effective December 17, 1998, Angiotech
                  entered into an exclusive license agreement (the "NeoRx
                  License) with NeoRx Corporation ("NeoRx") which grants
                  Angiotech an exclusive license, with right to sublicense,
                  certain NeoRx Technology (as defined in the NeoRx License)
                  relating to paclitaxel and its structural analogs for vascular
                  applications. Angiotech and BSC agree that the BSC License
                  shall be deemed to include a co-exclusive sublicense (with
                  Cook) of the NeoRx Technology granted under the NeoRx License
                  for the Field, are the terms and subject to the limitations
                  and reservations set out in Section 2.1. As partial
                  consideration of this sublicense, BSC agrees to pay to
                  Angiotech an additional license fee in the maximum aggregate
                  amount of Five Hundred Thousand Dollars ($500,000) as follows:

<PAGE>

                  (i)      Two Hundred Fifty Thousand Dollars ($250,000)
                           payable on December 15, 1999; and

                  (ii)     up to Two Hundred Fifty Thousand Dollars ($250,000)
                           as negotiated in good faith by the parties on or
                           prior to December 31, 2003.

                  Subject to the terms and conditions of the NeoRx License,
                  Angiotech will provide BSC with a reasonable opportunity to
                  review and provide input with respect to the preparation,
                  filing, prosecution and maintenance of the NeoRx Patents and
                  the NeoRx Interference. Angiotech, to the extent not
                  prohibited by the NeoRx License, will forward copies to BSC of
                  all materials available to it with respect to the NeoRx
                  Patents. Under no circumstances may Angiotech surrender to
                  NeoRx its rights to the NeoRx Patents, or any portion thereof,
                  to the extent they relate to the Licensed Field of Use without
                  the written consent of BSC.

3.       As between Angiotech and BSC, to replace Section 9.1(d) in its entirety
         with the following

         9.1(d)   Failure to Exploit. In the event that BSC shall have failed to
                  (i) file an Investigational Device Exemption ("IDE") with the
                  FDA or an equivalent filing in one or more European countries
                  or Canada or initiate a BSC sponsored human clinical trial
                  anywhere in the world, with respect to a product incorporating
                  or utilizing the Angiotech Technology prior to December 31,
                  2000 (the "BSC IDE Target Date"), or (ii) file a Pre-Market
                  Approval Application or Section 51O(k) Pre-Marketing
                  Notification (collectively, "PMA") with the FDA or equivalent
                  filing in one or more European countries or Canada or initiate
                  commercial sale anywhere in the world, with respect to a
                  product incorporating or utilizing Angiotech Technology prior
                  to December 31, 2003 (the "BSC PMA Target Date") then
                  Angiotech shall have the right, at its election, to terminate
                  any and all licenses granted by it to BSC under this Agreement
                  upon thirty (30) days prior written notice at any time prior
                  to such filing; provided however BSC may extend the BSC IDE
                  Target Date and/or the BSC PMA Target Date by up to twelve
                  (12) months by written notice to Angiotech, in which case the
                  next amount due of the BSC IDE Fee and the BSC PMA Fee shall
                  be increased by One Million Dollars ($1,000,000). In any
                  event, if clause (i) above is not satisfied by December 31,
                  2000, BSC shall pay Angiotech within twenty (20) business days
                  the amount of Five Hundred Thousand Dollars ($500,000).

         As between Angiotech and Cook, the original Section 9.1(d) shall remain
         in full force and effect until modified by Angiotech and Cook.

<PAGE>

4.       As between Angiotech and BSC, to replace Section 9.1(e) in its entirety
         with the following

         9.1(e)   Limitation on Stent Products. If, for a period of seven (7)
                  years during the term of this Agreement BSC or Cook is unable
                  to obtain approval for, and gain significant sales of, an
                  Eligible Stent Product in the United States, Angiotech shall
                  have the right, at its election, to terminate any and all
                  licenses in the United States granted by it to such party
                  under this Agreement upon thirty (30) days prior written
                  notice.

         As between Angiotech and Cook, the original Section 9.1(e) shall remain
         in full force and effect until modified by Angiotech and Cook.

5.       As between Angiotech and BSC, to add Section 9.1(f) as follows:

         9.1(f)   Unanticipated Regulatory Requirements. Both parties
                  acknowledge the necessity to meet all applicable regulatory
                  requirements in the major markets of the world (U.S., Europe
                  and Japan). Both parties also acknowledge the uncertain
                  regulatory requirements for a combination drug device product.
                  If regulatory requirements create significantly longer
                  timelines than currently anticipated (for instance, due to the
                  requirements of a separate and distinct dose finding trial in
                  a major market of the world), both parties shall meet to
                  review the impact on timelines and to negotiate in good faith
                  an extension to the BSC PMA Target Date and an extension to
                  the seven year period described in Section 9.1(e) above.

6.       Angiotech and BSC agree that, except as provided in this Agreement, the
         License Agreement shall remain unmodified and shall continue in full
         force and effect.

         IN WITNESS WHEREOF, the undersigned have duly executed this Agreement
as of the date first set forth above.

ANGIOTECH PHARMACEUTICALS, INC.

By: /s/ Kenneth Mellquist
    -------------------------
Name:  Kenneth Mellquist
Title: Senior VP, Corporate Affairs

BOSTON SCIENTIFIC CORPORATION

By: /s/ Lawrence C. Best
    -------------------------
Name:
Title:

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