10-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-K

þ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended June 30, 2007

OR

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ___to ___

Commission file number 0-27058

PAREXEL INTERNATIONAL CORPORATION

(Exact name of registrant as specified in its Charter)

MASSACHUSETTS
(State or other jurisdiction of
incorporation or organization) 04-2776269
(I.R.S. Employer
Identification Number)

200 WEST STREET
WALTHAM, MASSACHUSETTS	02451
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code (781) 487-9900

SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:

Name of Each Class:	Name of Each Exchange on Which Registered:
Common Stock, $.01 par value per share	Nasdaq Global Select Market

SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes þ No o

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes o No þ

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 75 days. YES þ NO o.

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act. (Check one):

Large Accelerated Filer þ Accelerated Filer o Non-Accelerated Filer o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act. Yes o No þ

The aggregate market value of Common Stock held by non-affiliates as of December 31, 2006 was approximately $775,626,962, based on the closing price of the registrant’s Common Stock as reported on the Nasdaq Global Select Market on December 31, 2006, the last business day of the registrant’s most recently completed second fiscal quarter. The registrant has assumed that all holders of 10% or more of its Common Stock, if any, are affiliates solely for purposes of calculating the aggregate market value of Common Stock held by non-affiliates.

Indicate the number of shares outstanding of each of the registrant’s classes of common stock, as of the latest practicable date:

As of August 17, 2007 there were 27,637,811 shares of Common Stock outstanding.

DOCUMENTS INCORPORATED BY REFERENCE

Specified portions of the Registrant’s Proxy Statement for the Annual Meeting of Stockholders to be held on December 13, 2007 are incorporated by reference into Items 10, 11, 12, 13, and 14 of Part III of this report.

PAREXEL INTERNATIONAL CORPORATION

FORM 10-K ANNUAL REPORT

INDEX

	PAGE
PART I
Item 1. Business		3
Item 1A. Risk Factors		14
Item 1B. Unresolved Staff Comments		22
Item 2. Properties		22
Item 3. Legal Proceedings		23
Item 4. Submission of Matters to a Vote of Security Holders		23
PART II
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity Securities		23
Item 6. Selected Financial Data		25
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations		26
Item 7A. Quantitative and Qualitative Disclosures About Market Risk		40
Item 8. Financial Statements and Supplementary Data		41
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure		72
Item 9A. Controls and Procedures		72
Item 9B. Other Information		72
PART III
Item 10. Directors, Executive Officers and Corporate Governance of the Registrant		72
Item 11. Executive Compensation		72
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters		73
Item 13. Certain Relationships and Related Transactions, and Director Independence		73
Item 14. Principal Accountant Fees and Services		73
PART IV
Item 15. Exhibits and Financial Statement Schedule		73
SIGNATURES		74
EX-10.12.5 Fifth Amendment dated as of June 29, 2007 to Lease date June 14, 1991
EX-10.15.2 First Amendment dated June 29, 2007 to Lease dated November 17, 1998
EX-10.24 Tender Agreement, dated as of June 7, 2007
EX-21.1 List of subsidiaries of the Company
EX-23.1 Consent of Ernst & Young LLP
EX-31.1 Section 302 Certification of CEO
EX-31.2 Section 302 Certification of CFO
EX-32.1 Section 906 Certification of CEO
EX-32.2 Section 906 Certification of CFO

PART I

This annual report on Form 10-K includes forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and Section 27A of the Securities Act of 1933, as amended. For this purpose, any statements contained in this report regarding PAREXEL International Corporation’s (“PAREXEL,” the “Company”, “we,” “us,” “ours” or “its”) strategy, future operations, financial position, future revenue, projected costs, prospects, plans, goals, and objectives of management, other than statements of historical facts, are forward-looking statements. The words “anticipates,” “believes,” “estimates,” “expects,” “intends,” “may,” “plans,” “projects,” “will,” “would,” “targets,” and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. The Company cannot guarantee that they actually will achieve the plans, intentions or expectations expressed or implied in its forward-looking statements. There are a number of important factors that could cause actual results, levels of activity, performance or events to differ materially from those expressed or implied in the forward-looking statements the Company makes. These important factors are described under “Critical Accounting Policies and Estimates” and under “Risk Factors” set forth below. Although the Company may elect to update forward-looking statements in the future, it specifically disclaims any obligation to do so, even if its estimates change, and readers should not rely on forward-looking statements in this document as representing the Company’s views as of any date subsequent to the date of this annual report.

ITEM 1. BUSINESS

GENERAL

PAREXEL is a leading bio/pharmaceutical services company, providing a broad range of expertise in clinical research, medical communications services, consulting, and informatics and advanced technology products and services to the worldwide pharmaceutical, biotechnology, and medical device industries. The Company’s primary objective is to provide solutions for managing the bio/pharmaceutical product lifecycle with the goal of reducing the time, risk, and cost associated with the development and commercialization of new therapies. Since its incorporation in 1983, PAREXEL has developed significant expertise in processes and technologies supporting this strategy. The Company’s product and service offerings include: clinical trials management, data management, biostatistical analysis, medical communications services, clinical pharmacology, patient recruitment, regulatory and product development consulting, health policy and reimbursement, performance improvement, industry training and publishing, medical imaging services, interactive voice response systems (“IVRS”), clinical trial management systems (“CTMS”), web-based portals, systems integration, patient diary applications, and other drug development services. The Company believes that its comprehensive services, depth of therapeutic area expertise, global footprint and related access to patients, and sophisticated information technology, along with its experience in global drug development and product launch services, represent key competitive strengths.

The Company’s services complement the research and development (“R&D”) and marketing functions of pharmaceutical, biotechnology, and medical device companies. Through its clinical research and product launch services, PAREXEL seeks to help clients maximize the return on their significant investments in research and development by reducing the time, risk, and cost of clinical development and launch of new products. For large pharmaceutical and biotechnology companies, outsourcing these types of services to PAREXEL provides those companies with a variable cost alternative to the fixed costs associated with internal drug development. In addition, these large companies can benefit from PAREXEL’s technical resource pool, broad therapeutic area expertise, global infrastructure designed to expedite parallel, multi-country clinical trials, and other advisory services focused on accelerating time-to-market. For smaller companies, PAREXEL provides access to expertise and a virtual network that enables them to develop their new drugs. The Company’s vision is to integrate and build critical mass in the complementary businesses of clinical research, medical communications services, drug development and process optimization consulting, as well as information technology products and integration services. The Company’s goal is to provide significant benefits to sponsor clients from this strategy, namely, a faster and less expensive development and launch process, as well as a clinical development strategy and expertise that support the marketing strategy for new medical products. The Company believes that the outsourcing of these services has increased in the past and should continue to increase in the future because of several factors, which are placing increased pressure on clients. These factors include the need to more tightly manage costs, capacity limitations, reductions in exclusivity periods, and the desire to speed up patient recruitment and reduce development time, increased globalization and virtualization of clinical trials, productivity issues, upcoming patent expirations, and more stringent government regulations. With increased levels of investment continuing to be required and with development times being extended, the Company believes these trends will continue to create opportunities for companies like PAREXEL that are focused on improving the efficiency of the drug development process.

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The Company is one of the largest bio/pharmaceutical services companies in the world, based upon annual service revenue. Headquartered near Boston, Massachusetts, the Company manages 56 locations and has 6,485 employees throughout 43 countries around the world. The Company has operations in major health care markets around the world, including the United States (“U.S.”), Canada, Japan, Germany, the United Kingdom (“U.K.”), France, Italy, Spain, Sweden, Australia, South Africa, Argentina, Brazil, Chile, Mexico, Israel, Norway, Belgium, The Netherlands, Denmark, Finland, India, and Central and Eastern Europe including Russia, Poland, the Czech Republic, Lithuania, Hungary, Romania, and Ukraine. During fiscal year 2007, PAREXEL derived 64.0% of its service revenue from its international operations and 36.0% from the United States. See Note 17 to the notes to the consolidated financial statements included in Item 8 of this annual report for Geographic and Segment information. The Company was incorporated in 1983 as a regulatory affairs consulting firm and is a Massachusetts corporation. Josef H. von Rickenbach, Chairman of the Board and Chief Executive Officer of PAREXEL, was a co-founder. Since its inception, the Company has executed a focused growth strategy embracing internal expansion as well as strategic acquisitions to expand or enhance the Company’s portfolio of services, geographic presence, therapeutic area knowledge, information technology capabilities, and client relationships. Acquisitions have been, and may continue to be, an important component of PAREXEL’s growth strategy. The Company has completed seven acquisitions over the past five fiscal years.

On November 15, 2006, PAREXEL acquired substantially all of the assets of Behavioral and Medical Research, LLC (“BMR”) and caused the transfer of all of the outstanding stock of California Clinical Trials Medical Group, Inc. (“CCT”). Established in 1981 with headquarters in San Diego, BMR/CCT provided a broad range of specialty Phase I – IV clinical research services through four clinical sites in California.

The acquisition expanded PAREXEL’s global Clinical Pharmacology capacity to over 450 beds. It also brought new expertise to the Company’s service offerings in the area of bridging studies, especially Japanese bridging studies, and added depth to existing expertise in central nervous system clinical trials, neuroscience drug development services and sleep studies.

On June 29, 2007, the Company, through a wholly owned indirect subsidiary, initiated an offer (the “Tender Offer”) to purchase all of the issued and outstanding shares of common stock of Apex International Clinical Research Co., LTD (“Apex”). Apex is a clinical research company based in Taiwan.

Pursuant to the terms of a prospectus and subject to regulatory approval in Taiwan, the Company has agreed to purchase up to 100% of the issued and outstanding shares of Apex, on a fully diluted basis, at a per share price of NT$82.94 in the Tender Offer, representing a total purchase price of approximately NT$1,794,240,938 or approximately $54.7 million. As a condition to the closing of the Tender Offer, the minimum number of shares tendered to the Company by shareholders was 7,138,890, representing approximately 33% of the total issued and outstanding shares of Apex, on a fully diluted basis (the “Minimum Threshold”). The Minimum Threshold has been satisfied.

The Tender Offer was scheduled to expire on August 20, 2007, but due to the meeting schedule of the regulators, the Company made announcements and filed relevant reports with the Financial Supervisory Commission to extend the Tender Offer period to the 3^rd business day following the receipt of the relevant foreign investment approvals from the Investment Commission, Ministry of Economic Affairs, but not later than September 19, 2007. If all of the conditions to the Tender Offer are satisfied, the Company expects that it would complete the purchase of all shares tendered in the Tender Offer within five business days following the expiration of the tender offer period.

DESCRIPTION OF BUSINESS

The Company provides a broad range of expertise in clinical research, medical communications services, consulting and informatics and advanced technology services to the worldwide pharmaceutical, biotechnology, and medical device industries. The Company is managed through three business segments, namely, Clinical Research Services (“CRS”), PAREXEL Consulting and Medical Communications Services (“PCMS”), and Perceptive Informatics, Inc. (“Perceptive”).

• CRS constitutes the Company’s core business and includes clinical trials management and biostatistics, data management and clinical pharmacology, as well as related medical advisory and investigator site services.

• PCMS provides technical expertise and advice in such areas as drug development, regulatory affairs, and bio/pharmaceutical process and management consulting. In addition, PCMS provides a full spectrum of market development, product development, and targeted communications services in support of product launch. PCMS consultants also identify alternatives and propose solutions to address clients’ product development, registration, and commercialization issues. In addition, PCMS provides health policy consulting and strategic reimbursement services.

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• Perceptive provides information technology solutions designed to improve clients’ product development processes. Perceptive offers a portfolio of products and services that includes medical imaging services, IVRS, CTMS, web-based portals, systems integration, and patient diary applications.

CLINICAL RESEARCH SERVICES

The Company’s CRS business segment provides clinical trials management and biostatistics, data management and clinical pharmacology, as well as related medical advisory and investigator site services. This segment generated revenues of $548.8 million, or 74.0% of the Company’s consolidated service revenue in fiscal year 2007, $442.5 million, or 72.0% of the Company’s consolidated service revenue in fiscal year 2006 and $379.3 million, or 69.6% in fiscal year 2005.

The CRS business segment offers complete services for the design, initiation and management of clinical trials programs, a critical element in obtaining regulatory approval for bio/pharmaceutical products. The Company has performed services in connection with trials in most therapeutic areas, including Cardiology, Oncology, Infectious Diseases, Neurology, Allergy/Immunology, Endocrinology/Metabolism, Gastroenterology, Obstetrics/Gynecology, Orthopedics, Pediatrics, Psychiatry, and Transplantation. PAREXEL’s multi-disciplinary clinical trials group examines a product’s existing preclinical and clinical data to design clinical trials to provide evidence of the product’s safety and efficacy.

PAREXEL’s CRS business segment can manage many aspects of clinical trials, including study and protocol design, Case Report Form (“CRF”) design, site and investigator recruitment, patient enrollment, study monitoring and data collection, data analysis, report writing, and medical services.

Clinical trials are monitored and conducted by CRS in strict adherence with Good Clinical Practice (“GCP”). The design of efficient CRFs, detailed operations manuals, and site monitoring by the Company’s clinical research associates seek to ensure that clinical investigators and their staff follow established study protocols. The Company has adopted standard operating procedures (“SOPs”), which are intended to satisfy regulatory requirements and serve as a tool for controlling and enhancing the quality of PAREXEL’s worldwide clinical services.

Clinical trials represent one of the most expensive and time-consuming parts of the overall bio/pharmaceutical development process. The information generated during these trials is critical to gaining marketing approval from the Food and Drug Administration (“FDA”), the European Agency for the Evaluation of Medicinal Products (“EMEA”), and other comparable regulatory agencies as well as market acceptance by clinicians, patients, and payors. CRS clinical trial management services involve many phases of clinical trials, including Phases I, II, III, and IV. See “Government Regulations” for additional information regarding processes involved in clinical trials.

• CLINICAL PHARMACOLOGY (Phases I — IIa)

Clinical pharmacology encompasses the early stages of clinical testing, when the product is first evaluated to prove safety and efficacy. These tests vary from “first in man” to “proof of concept” to “dose-ranging” studies in Phases I and IIa of development. The Clinical Pharmacology group of CRS provides drug development consulting, drug administration and monitoring, bioanalytical services, and patient recruitment. PAREXEL’s international network of clinical pharmacology operations includes operations in Berlin, Germany; Baltimore, Maryland (U.S.); Glendale, Culver City, Paramount, and San Diego, California (U.S.); Bloemfontein and George, South Africa; and Harrow, U.K.; and bioanalytical laboratories in Poitiers, France and Bloemfontein. These bioanalytical laboratories perform analyses according to Good Laboratory Practices (“GLP”) principles. With these locations, the Clinical Pharmacology group offers clinical pharmacology services (including bioanalytical services) with a total of 453 dedicated beds (cooperating partners not included) on three continents.

• PHASES II – IV

CRS assists clients with one or more of the following aspects of clinical trials as shown below. CRS performs both full-service and single-/multi-service trials. As a result, PAREXEL’s involvement may range from being involved in just one aspect of a clinical trial to all aspects of a clinical trial. These services include:

Study Protocol Design - The protocol defines the medical issues the study seeks to examine and the statistical tests that will be conducted. Accordingly, the protocol specifies the frequency and type of laboratory and clinical measures that are to be tracked and analyzed, the number of patients required to produce a statistically valid result, the period of time over which they must be tracked and the frequency and dosage of drug administration. The study’s success depends on the protocol’s ability to predict correctly the requirements of the regulatory authorities.

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CRF Design — Once the study protocol has been finalized, the CRF must be developed. The CRF is the critical source document for collecting the necessary clinical data as dictated by the study protocol. The CRF may change at different stages of a trial. CRFs for one patient in a given study may consist of 100 or more pages.

Site and Investigator Recruitment — The product under investigation is administered to patients by third-party physicians, serving as independent contractors, referred to as investigators, at hospitals, clinics, or other locations, referred to as sites. Medical devices are implemented or tested by investigators in similar settings. Potential investigators may be identified and solicited by the product sponsor. A significant portion of a trial’s success depends on the successful identification and recruitment of experienced investigators with an adequate base of patients who satisfy the requirements of the study protocol. The Company has access to several thousand investigators who have conducted clinical trials for the Company. The Company provides additional services at the clinical investigator site to assist physicians and expedite the clinical research process.

Patient Enrollment — The investigators, usually with the assistance of a clinical research organization (“CRO”), find and enroll patients suitable for the study. The speed with which trials can be completed is significantly affected by the rate at which patients are enrolled. Prospective patients are required to review information about the drug and its possible side effects, and sign an informed consent form to record their knowledge and acceptance of potential side effects. Patients also undergo a medical examination to determine whether they meet the requirements of the study protocol. Patients then receive the product and are examined by the investigator as specified by the study protocol. Investigators are responsible for administering the products to patients, as well as examining patients and conducting necessary tests.

Study Monitoring and Data Collection — As patients are examined and tests are conducted in accordance with the study protocol, data are recorded on CRFs. CRFs are collected from study sites by specially trained persons known as monitors. Monitors visit sites regularly to ensure that the CRFs are completed correctly and to verify that the study has been conducted in compliance with the protocol and GCP. The monitors send completed CRFs to the study coordination site, where the CRFs are reviewed for consistency and accuracy before their data are entered into an electronic database. The Company offers several electronic data capture (“EDC”) technologies, which significantly enhance both the quality and timeliness of clinical data collection while achieving significant efficiency savings. The Company’s study monitoring and data collection services are designed to comply with the FDA’s and other relevant regulatory agencies’ adverse events reporting guidelines.

Data Management — PAREXEL’s data management professionals provide a broad array of services to support the accurate collection, organization, validation, and analysis of clinical data. For instance, they assist in the design of CRFs and investigator training manuals to ensure that data are collected in an organized and consistent format in compliance with the study protocol. Databases are designed according to the analytical specifications of the project and the particular needs of the client. Prior to data entry, PAREXEL personnel screen the data to detect errors, omissions, and other deficiencies in completed CRFs. The use of scanning and imaging of the CRFs and the use of EDC technologies to gather and report clinical data expedites data exchange while minimizing data collection errors by permitting the verification of data integrity in a more timely manner. After the data is entered, the data management team performs an array of data abstraction, data review, medical coding, serious adverse event reconciliations, loading of electronic data (such as laboratory data), database verification, and editing and resolution of data problems. The data are then submitted to the sponsor in a customized format prescribed by the sponsor.

The CRS business segment has extensive experience throughout the world in the creation of scientific databases for all phases of the drug development process, including the creation of customized databases to meet client-specific formats, integrated databases to support new drug application (“NDA”) and equivalent submissions and databases in strict accordance with FDA, European, Asian and other regulatory specifications.

Biostatistics and Programming — PAREXEL’s biostatistics professionals assist clients with all phases of drug development, including biostatistical consulting, database design, data analysis, and statistical reporting. These professionals develop and review protocols, design appropriate analysis plans, and design report formats to address the objectives of the study protocol as well as the client’s individual objectives. Working with programming staff, biostatisticians perform appropriate analyses and produce tables, graphs, listings, and other applicable displays of results according to an analysis plan. The CRS business segment biostatisticians may also represent clients during panel hearings at the FDA and other regulatory agencies.

Report Writing — A description of the study conducted, along with the statistical analysis findings for data collected during the trial and other clinical data are presented and summarized in a final report generated for inclusion in a regulatory document.

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Medical Services - Throughout the course of a development program, PAREXEL’s physicians provide a wide range of medical research and consulting services to improve the speed and quality of clinical research and to monitor patient safety, including medical supervision of clinical trials, medical monitoring of patient safety, review and reporting of adverse events, medical writing, and strategy and product development.

Project Management — Throughout the entire spectrum of activities described above, CRS provides project management services. These services entail providing overall leadership to the PAREXEL project team, acting as the main client liaison, project planning, managing progress against study goals and deliverables, budget management, progress and metrics reporting, and issue resolution. These project management services are offered on all types of trials – single-service, multi-service, or full-service.

PAREXEL CONSULTING AND MEDICAL COMMUNICATIONS SERVICES

PCMS provides technical expertise and advice in such areas as drug development, regulatory affairs, and bio/pharmaceutical process and management consulting. It also provides a full spectrum of market development, product development, and targeted communications services in support of product launch. PCMS consultants identify alternatives and propose solutions to address clients’ product development, registration, and commercialization issues. PCMS also provides health policy consulting, strategic reimbursement services and a broad range of educational and training services. Service revenue from the PCMS business segment represented $120.6 million, or 16.2% of consolidated service revenue in fiscal year 2007, $117.1 million, or 19.0% of consolidated service revenue in fiscal year 2006, and $122.6 million, or 22.5% of consolidated service revenue in fiscal year 2005. PCMS offers drug development, regulatory, manufacturing compliance, business process consulting, and marketing expertise consultation to the pharmaceutical, bio/pharmaceutical and medical device industries in the U.S., Europe, and Asia.

Drug Development Consulting (“DDC”) – DDC provides comprehensive drug development and regulatory consulting services for pharmaceutical, biotechnology, and medical device companies in major jurisdictions in the U.S., Europe, and Japan. These services include drug development and regulatory strategy design, scientific and technical evaluation, writing and review services, regulatory application preparation and review, regulatory training for client personnel, and expert liaison with the FDA and other regulatory agencies.

DDC works closely with clients to design drug development and regulatory strategies and comprehensive registration programs. The Company’s drug development and regulatory experts (including persons who have joined PAREXEL from the bio/pharmaceutical industry and regulatory agencies such as the FDA and the United Kingdom, German and French Agencies) review existing published literature and regulatory precedents, evaluate the scientific and technical data of a product, assess the competitive and regulatory environment, identify deficiencies, and define the steps necessary to obtain regulatory authority approvals in the most expeditious manner. Through these services, the Company helps its clients obtain regulatory approval for particular products or product lines in certain specific markets and participates fully in the product development process.

Strategic Compliance and Operational Performance Excellence (“SCOPE”) – The SCOPE group offers a range of specialized clinical development and manufacturing consulting services for clients in the life sciences industry. SCOPE’s services are designed to help pharmaceutical, biotechnology, and medical device companies achieve regulatory compliance, product quality, and process excellence. These services include clinical and manufacturing strategy design, metrics assessment and development, risk management, GCP and good manufacturing practice (“GMP”) audits, process optimization, organizational alignment, training, and change management.

SCOPE offers its clients experienced regulatory and industry professionals—formerly from the FDA and other regulatory agencies and/or biotech, pharmaceutical, and medical device companies.

Medical Communications Services (“MedCom”) – The MedCom group assists clients in achieving optimal market penetration for their products by providing customized, integrated, and expert pre-launch and launch services in the U.S., Europe, and other areas of the world. MedCom’s experience indicates that clients need assistance in creating awareness and understanding of their products in the marketplace and in addressing rapid acceptance of their products by opinion leaders, physicians, managed care organizations, and patient groups leading to accelerated product acceptance and market penetration. MedCom designs and implements integrated communication plans that include market and opinion leader development, market preparation, and targeted communications support for clients. An integrated communications plan can detail external and internal strategies, including communications objectives, target audiences, communications priorities and timing, key messages, key meetings and events, and target publications and media. Other services include planning of meetings and exhibitions. Independent of the Company’s promotional activities are continuing medical education (“CME”) programs to help keep medical professionals apprised of current medical developments.

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Health Policy & Strategic Reimbursement (“HPSR”) – HPSR offers strategies for bio/pharmaceutical companies regarding reimbursement from insurance companies and managed care providers and telecommunications and call center support for patient assistance programs.

Barnett Educational Services (“Barnett”) –Barnett offers a broad range of educational and training services in the Clinical and GMP arena. Services range from live and webcast seminars with well-known experts to customized on-site training at the clients’ sites.

PERCEPTIVE INFORMATICS, INC.

Perceptive was formed by the Company in fiscal year 2000. Perceptive provides information technology solutions designed to improve clients’ product development processes. Service revenue from the Perceptive business represented $72.5 million, or 9.8%, of consolidated service revenue in fiscal year 2007, $55.3 million, or 9.0%, of consolidated service revenue in fiscal year 2006, and $42.8 million, or 7.9%, of consolidated service revenue in fiscal year 2005. Perceptive offers a portfolio of products and services that includes medical imaging services, IVRS, CTMS, web-based portals, systems integration, and patient diary applications.

Medical Imaging Services — Perceptive’s medical imaging services coordinate the use of a variety of medical imaging modalities (e.g., radiographs, ultrasound, computed topography, and magnetic resonance imaging) to evaluate product safety and efficacy.

IVRS — IVRS is a voice and web-based system being used to randomize patients and manage study drug inventory. Perceptive’s IVRS service utilizes an application service provider model under which Perceptive designs, develops, deploys, hosts, and supports an application for each trial. Participating investigators call a toll free number to enroll patients in a trial, and are able to interact with the system in their native language. The system confirms enrollment and assigns a drug kit for the patient. The system is also capable of monitoring drug inventory at investigator sites and triggering drug shipments as needed.

CTMS — Perceptive’s Clinical Trial Management System solutions are software packages that assist bio/pharmaceutical companies with the complex process of planning and managing clinical trials. These include IMPACT^®, INITIATOR™, and INVESTIGATOR™ software packages. Perceptive’s flagship IMPACT software product, is an enterprise-wide CTMS used to plan studies, track progress, support monitoring activities, monitor costs, and track clinical supplies. The system is used by approximately 34 bio/pharmaceutical companies and by approximately 25,000 users worldwide. It is primarily used for Phase II, III and IV studies. The INITIATOR product is a separate software package offered by Perceptive to assist in the management and conduct of Phase I trials. Perceptive also offers the INVESTIGATOR, a database tool, used to maintain up-to-date information concerning investigators and their performance on prior trials. Sponsor companies use the tool to help select investigators when initiating a new clinical trial.

Web-Based Portal — Perceptive’s web-based portal allows secure access to critical, real-time information over the web. The portal supports clinical trials management, communications, collaboration, and the viewing of metrics and clinical trial data.

Integration Services Group — Through its Integration Services Group, Perceptive provides services in support of its software packages including implementation, deployment, validation, hosting, and integration with other customer systems.

Patient Diary Applications — Perceptive also offers solutions for the electronic collection of patient diary information, often referred to by the industry as ePRO, for electronic Patient Reported Outcomes. Perceptive offers clients solutions that include capturing data from patients using handheld technology or over the telephone using Perceptive’s IVRS technology.

Perceptive performs ongoing market surveillance to identify and support new technologies that benefit clients as well as the Company’s internal processes.

INFORMATION TECHNOLOGY

PAREXEL is committed to investing in information technology designed to help the Company provide high quality services and competitively advantageous client facing solutions in a cost-effective manner and to continue to better manage its internal resources. The Company has built its information technology solutions by developing proprietary technology as well as purchasing and integrating commercially available information systems that address critical aspects of its business, such as project proposals/budget generation, time information management, revenue and resource forecasting, clinical data entry and management, clinical trial management, project management, quality management, and procurement/expense processing.

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The Company maintains an internal information technology group that is responsible for technological planning and procurement, applications development, program management, technical operations, and management of the Company’s worldwide computer infrastructure and voice and data networks. The Company’s information systems are designed to function in support of and reinforce the Company’s policies and procedures. The Company’s information technology system is open and flexible, allowing it to be adapted to the multiple needs of different clients and regulatory systems. This system also enables the Company to respond quickly to client inquiries regarding progress on projects and, in some cases, to gain direct access to client data on client owned systems.

SALES AND MARKETING

PAREXEL’s sales and marketing personnel carry out the Company’s global business development activities. In addition to significant selling experience, most of these individuals have technical and/or scientific backgrounds. The Company’s senior executives and project team leaders also participate in maintaining key client relationships and engaging in business development activities.

Each of the Company’s three business segments has a business development team that focuses on its particular market segment, and while all teams may work with the same client companies, the individual clients they work with within the Company can vary. In many cases, however, the business segment selling teams work together in order to provide clients with the most appropriate service offering to meet their needs.

Each business development employee is generally responsible for a specific client segment or group of clients and for strengthening and expanding an effective relationship with that client. Each individual is responsible for developing his or her client base, responding to client requests for information, developing and defending proposals, and making presentations to clients.

The business development group is supported by PAREXEL’s marketing personnel. The Company’s marketing activities consist primarily of market information development and analysis, strategic planning, competitive analysis, brand management, collateral development, participation in industry conferences, advertising, e-marketing, publications, and website development and maintenance. The marketing team focuses both on supporting the individual business development teams for their specific market segments as well as promoting an integrated marketing strategy and communications plan for PAREXEL as a whole.

CLIENTS

The Company has in the past derived, and may in the future derive, a significant portion of its service revenue from a core group of major projects or clients. Concentrations of business in the bio/pharmaceutical services industry are not uncommon and the Company expects to experience such concentration in future years. In fiscal year 2007, the Company’s five largest clients accounted for 28% of its consolidated service revenue. In fiscal year 2006, the Company’s five largest clients accounted for 25% of its consolidated service revenue. No single client accounted for 10% or more of consolidated service revenues in fiscal years 2007, 2006 or 2005.

BACKLOG

Backlog represents anticipated service revenue from work not yet completed or performed under signed contracts, letters of intent, and certain verbal commitments. Once work commences, revenue is generally recognized over the life of the contract as services are provided. Backlog at June 30, 2007 was $1,506.9 million, compared with $1,093.5 million at June 30, 2006. The Company anticipates that approximately $617.8 million of the backlog as of June 30, 2007 will be recognized as service revenue in fiscal year 2008.

The Company believes that its backlog as of any date is not necessarily a meaningful predictor of future results. Projects under contracts included in backlog are subject to termination, revision, or delay. As detailed more fully in the “Risk Factors” section of this annual report, clients terminate, delay, or change the scope of projects for a variety of reasons including, among others, the failure of products being tested to satisfy safety requirements, unexpected or undesirable clinical results of the product, the clients’ decision to forego a particular study, insufficient patient enrollment or investigator recruitment, or production problems resulting in shortages of the drug. Generally, the Company’s contracts can be terminated upon thirty to sixty days notice by the client. The Company typically is entitled to receive certain fees and, in some cases, a termination fee for winding down a delayed or terminated project.

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COMPETITION

The Company competes with other bio/pharmaceutical services companies and other organizations that provide one or more of the services currently being offered by the Company. Some of the larger bio/pharmaceutical services companies, such as Quintiles Transnational Corporation, Covance Inc., and Pharmaceutical Product Development Inc., offer services that compete directly with the Company’s services at many levels.

PAREXEL believes that the synergies arising from integrating the products and services offered by its different business units, coupled with its global infrastructure (and related rapid access to patients), technological expertise, and depth of experience differentiate it from its competitors. Although there are no guarantees that the Company will continue to do so, the Company believes that it competes favorably in all of its business areas.

CRS

The clinical outsourcing services industry is very fragmented, with several hundred providers offering varying levels of service, skills, and capabilities. The Company’s CRS group primarily competes against in-house departments of pharmaceutical companies, other full service bio/pharmaceutical services companies, small specialty CROs, and to a lesser extent, universities, teaching hospitals, and other site organizations. The primary competitors for the CRS business include Quintiles Transnational Corporation, Covance Inc., Pharmaceutical Product Development Inc., PRA International, Kendle International Inc., and ICON PLC.

CRS generally competes on the basis of:

• previous experience with a client or in a specific therapeutic area;

• medical and scientific expertise in a specific therapeutic area;

• quality of services;

• breadth of services;

• the ability to organize and manage large-scale clinical trials on a global basis;

• the ability to manage large and complex medical databases;

• the ability to provide statistical and regulatory services;

• the ability to quickly recruit investigators and patients;

• the ability to integrate information technology with systems to improve the efficiency of clinical research;

• an international presence with strategically located facilities;

• financial strength and stability; and

• price.

The Company believes CRS’s key competitive strengths are its global footprint and related rapid access to patients, therapeutic expertise, technological expertise and its experience in global drug development.

PCMS

PCMS competes with a large and diverse group of specialty service providers, including major consulting firms with pharmaceutical industry practices, large and small bio/pharmaceutical services companies, individual consultants, specialist medical communications services companies, large international advertising companies, medical public relation firms, and small and large bio/pharmaceutical services companies.

The Company believes that it is different from its competitors in that no other company provides the unique fusion of expertise (scientific, regulatory and business expertise) that PCMS offers. The Company considers PCMS’s key competitive strengths to include a combination of deep expertise in early stage drug development, regulatory strategy and submissions, manufacturing compliance, business process optimization, reimbursement, and global marketing and communications strategies.

The Company believes PCMS’s combination of industry, medical/scientific, regulatory, and manufacturing and business process expertise, uniquely qualifies it to help its clients get the right product to market in an efficient and effective manner.

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PERCEPTIVE

The Perceptive business competes primarily with bio/pharmaceutical services companies, information technology companies, and software companies. Companies in this segment compete based on the strength and usability of their technology offerings, their expertise and experience, and their understanding of the clinical development process. Perceptive’s key competitive strength is its combination of technological expertise and knowledge of clinical development. The Company believes that its strategy of collaborating with other technology companies to implement certain tools, rather than developing its own, allows Perceptive to adapt to new technologies more quickly than many of its competitors. Perceptive’s market position may be affected over time by competitors’ efforts to develop and market new information technology products and services.

INTELLECTUAL PROPERTY

The Company’s trademark “PAREXEL”, is of material importance to the Company. This and other trademarks have been registered in the U.S. and many foreign countries. The duration of trademark registrations varies from country to country. However, trademarks generally may be renewed indefinitely as long as they are in use and/or their registrations are properly maintained, and as long as they have not been found to have become generic.

EMPLOYEES

As of June 30, 2007, the Company had 6,485 full-time equivalent employees. Approximately 33.6% of the employees are located in North America and 66.4% are located throughout Europe, Asia, Africa, and South America. The Company believes that its relations with its employees are good.

The success of the Company’s business depends on its ability to attract and retain qualified professional, scientific, and technical staff. The level of competition among employers in the U.S. and overseas for skilled personnel, particularly those with Ph.D., M.D., or equivalent degrees, is high. The Company believes that its brand name recognition and its multinational presence, which allows for international transfers, are an advantage in attracting employees. In addition, the Company believes that the wide range of clinical trials in which it participates allows the Company to offer broad experience to clinical researchers.

GOVERNMENT REGULATIONS

PAREXEL provides clinical trial and diverse consulting services to the pharmaceutical, biotechnology, and medical device industries. Lack of success in obtaining approval for the conduct of clinical trials in the countries where PAREXEL manages clinical trials on behalf of its clients can adversely affect PAREXEL. PAREXEL makes no guarantees to its clients with regard to successful outcomes of the regulatory process, including the success of clinical trial applications or marketing applications.

Clinical research services provided by PAREXEL in the U.S. are subject to ongoing FDA regulation. The Company is obligated to comply with FDA requirements governing activities such as obtaining patient informed consents, verifying qualifications of investigators, reporting patients’ adverse reactions to products, and maintaining thorough and accurate records. The Company is also required to ensure that the computer systems it uses to process human data from clinical trials are validated in accordance with the electronic records regulations 21 CFR Part 11 that apply to the pharmaceutical and CRO industries. The Company must maintain source documents for each study for specified periods, and such documents may be reviewed according to GCP standards by the study sponsor and the FDA during audits and inspections. Non-compliance with GCP can result in the disqualification of data collected during a clinical trial and in non-approval of a product application submitted to the FDA.

The clinical investigation of new drugs, biologics, and medical devices is highly regulated by government agencies. The standard for the conduct of clinical research and development studies comprises GCP, which stipulates procedures designed to ensure the quality and integrity of data obtained from clinical testing and to protect the rights and safety of clinical trial participants. The FDA and many other regulatory authorities require that study results submitted to such authorities be based on studies conducted in accordance with GCP. The European Union (“EU”) established as of May 1, 2004 the Clinical Trials Directive (the “Directive”) in an attempt to harmonize the regulatory requirements of the member states of the EU for the conduct of clinical trials in its territory. The Directive requires sponsors of clinical trials to submit formal applications to national ethics committees and regulatory authorities prior to the initiation of clinical trials in any of the 27 member states of the EU. Whereas some member states, prior to the implementation of the Directive, had minimal requirements for clinical trial initiation, all member states are now subject to the same stringent requirements of the Directive. As in the United States, clinical trials in the EU are expected to be carried out in compliance with detailed requirements for GCP. The international regulatory approval process includes all of the risks and potential delays associated with the FDA approval process.

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Because the FDA’s regulatory requirements have served as the model for much of the regulation of new drug development worldwide, regulatory requirements similar to those of the FDA exist in the other countries in which the Company operates. The Company’s regulatory capabilities include knowledge of the specific regulatory requirements of numerous countries. The Company has managed simultaneous regulatory submissions in more than one country for a number of drug sponsors during each of the past ten years. Beginning in 1991, the FDA and corresponding regulatory agencies of the EU and Japan commenced discussions to develop harmonized standards for preclinical and clinical studies and the format and content of applications for new drug approvals through a process known as the International Conference on Harmonisation (“ICH”) of Technical Requirements for Registration of Pharmaceuticals for Human use. Data from multinational studies adhering to GCP are now generally acceptable to the FDA and Canadian, EU and Japanese regulators. The ICH process has sanctioned a single common format for drug and biologic marketing applications, known as the Common Technical Document (“CTD”) in the U.S., Europe, Japan and Canada. On July 1, 2003 the CTD format became mandatory in Europe and Japan and highly recommended by the FDA in the U.S. and by the Canadian regulatory authorities. The Company has developed the expertise to prepare CTDs for its clients in both paper and electronic form.

REGULATION OF DRUGS AND BIOLOGICS

Before a new drug or biologic may be approved and marketed, the drug or biologic must undergo extensive testing and regulatory review in order to determine that the drug or biologic is safe and effective. It is not possible to estimate the time in which preclinical, Phases I, II and III studies will be completed with respect to a given product, if at all, although the time period may last many years. Using the U.S. regulatory environment as an example, the stages of this development process are generally as follows:

Preclinical Research (approximately 1 to 3.5 years) — In vitro (“test tube”) and animal studies in accordance with GLP to establish the relative toxicity of the drug or biologic over a wide range of doses and to detect any potential to cause a variety of adverse conditions and diseases, including birth defects or cancer. If results warrant continuing development of the drug or biologic, the results of the studies are submitted to the FDA by the manufacturer as part of an Investigational New Drug Application (“IND”), which must be reviewed by the FDA before proposed clinical testing can begin. An IND must include, among other things, preclinical data, chemistry, manufacturing and control information, and an investigational plan, and must be activated by the FDA before such trials may begin. There can be no assurance that submission of an IND will result in the ability to commence clinical trials.

Clinical Trials (approximately 3.5 to 6 years)

                - Phase I consists of basic safety and pharmacology testing in approximately 20 to 80 human subjects, usually healthy or stable patient volunteers, and includes studies to determine metabolic and pharmacologic action of the product in humans, how the drug or biologic works, how it is affected by other drugs, how it is tolerated and absorbed, where it goes in the body, how long it remains active, and how it is broken down and eliminated from the body.

               - Phase II includes basic efficacy (effectiveness) and dose-range testing, sometimes in 100 to 200 patients afflicted with a specific disease or condition for which the product is intended for use, further safety testing, evaluation of effectiveness, and determination of optimal dose levels, dose schedules, and routes of administration. If Phase II studies yield satisfactory results and no hold is placed on further studies by the FDA, Phase III studies can be commenced.

                - Phase III includes larger scale, multi-center, comparative clinical trials conducted with patients afflicted by a target disease in order to provide enough data for a valid statistical test of safety and effectiveness required by the FDA and others and to provide a basis for product labeling. When results from Phase II or Phase III show special promise in the treatment of a serious condition for which existing therapeutic options are nonexistent, limited, or of minimal value, the FDA may allow the sponsor to make the new drug available to a larger number of patients through the regulated mechanism of a Treatment Investigational New Drug (“TIND”), which may span late Phase II, Phase III, and FDA review. Although TINDs may enroll and collect a substantial amount of data from tens of thousands of patients, they are not granted in all cases.

The FDA receives reports on the progress of each phase of clinical testing and may require the modification, suspension, or termination of clinical trials if, among other things, an unreasonable risk is presented to patients or if the design of the trial is insufficient to meet its stated objective.

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NDA or Biologic License Application (“BLA”) Preparation and Submission — Upon completion of Phase III trials, the sponsor assembles the statistically analyzed data from all phases of development, along with the chemistry and manufacturing and pre-clinical data and the proposed labeling, among other things, into a single large document, the NDA or BLA (in CTD format as of July 1, 2003), which today comprises, on average, roughly 100,000 pages.

FDA Review of NDA or BLA — The FDA carefully scrutinizes data from all phases of development (including a TIND) to confirm that the manufacturer has complied with regulations and that the drug or biologic is safe and effective for the specific use (or “indication”) under study. The FDA may refuse to accept the NDA or BLA for filing and substantive review if certain administrative and content criteria are not satisfied and even after accepting the submission for review, the FDA may also require additional testing or information before approval of an NDA or BLA. The FDA must deny approval of an NDA or BLA if applicable regulatory requirements are not ultimately satisfied.

Post-Marketing Surveillance and Phase IV Studies — Federal regulation requires the sponsor to collect and periodically report to the FDA additional safety and efficacy data on the drug or biologic for as long as the manufacturer markets the product (post-marketing surveillance). If the product is marketed outside the U.S., these reports must include data from all countries in which the product is sold. Additional studies (Phase IV) may be undertaken after initial approval to find new uses for the product, to test new dosage formulations, or to confirm selected non-clinical benefits, e.g., increased cost-effectiveness or improved quality of life. Product approval may be withdrawn if compliance with regulatory standards is not maintained or if problems occur following initial marketing. In addition, the FDA and other major regulatory agencies are now asking sponsor companies to prepare risk management plans for approved and marketed drugs and biologics, aimed at assessing areas of drug risk and plans for managing such risks should they materialize.

REGULATION OF MEDICAL DEVICES

Unless a medical device is exempted from pre-market application, which is described below, FDA approval or clearance of the device is required before the product may be marketed in the United States. In order to obtain clearance for marketing, a manufacturer must demonstrate substantial equivalence to a similar legally marketed product by submitting a premarket notification, 510(k), to the FDA. The FDA may require preclinical and clinical data to support a substantial equivalence determination, and there can be no assurance the FDA will find a device substantially equivalent. Clinical trials can take extended periods of time to complete. In addition, if the FDA requires an approved Investigational Device Exemption (“IDE”) before clinical device trials may commence, there can be no guarantee that the agency will approve the IDE. An IDE approval process could also result in significant delays.

After submission of a premarket notification containing, among other things, any data collected, the FDA may find the device substantially equivalent and the device may be marketed. If the FDA finds that a device is not substantially equivalent, the manufacturer may request that the FDA make a risk-based classification to place the device in Class I or Class II. However, if a timely request for risk-based classification is not made, or if the FDA determines that a Class III designation is appropriate, an approved pre-market approval application (“PMA”) will be required before the device may be marketed.

The PMA approval process is lengthy, expensive, and typically requires, among other things, extensive data from preclinical testing and a well-controlled clinical trial or trials that demonstrate a reasonable assurance of safety and effectiveness. There can be no assurance that review will result in timely or any PMA approval. There may also be significant conditions associated with the approval, including limitations on labeling and advertising claims and the imposition of post-market testing, tracking, or surveillance requirements.

HEALTH INSURANCE PORTABILITY AND ACCOUNTABILITY ACT OF 1996

Laws protecting confidential medical information could impact the manner in which the Company conducts certain components of its business. On August 14, 2002, the Department of Health and Human Services issued final modifications to privacy regulations (the “Privacy Rule”) under the Health Insurance Portability and Accountability Act of 1996 (“HIPAA”). These regulations impose restrictions governing the disclosure of confidential medical information in the U.S.

The failure on the part of the Company, its clients and/or the physician investigators from whom the Company receives confidential medical information to comply with the Privacy Rule could result in the termination of ongoing research or the disqualification of data for submission to regulatory authorities.

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POTENTIAL LIABILITY AND INSURANCE

PAREXEL’s clinical research services focus on the testing of experimental drugs and devices on human volunteers pursuant to study protocols and in accordance with laws and regulations which govern clinical trials. Clinical research involves a risk of liability for personal injury or death to patients due, among other reasons, to possible unforeseen adverse side effects or improper administration of the new drug or medical device. PAREXEL does not provide healthcare services directly to patients. Rather, PAREXEL physicians or third party physician investigators are responsible for administering drugs and evaluating the study patients. Many of these patients are already seriously ill and are at risk of further illness or death, such as patients who are enrolled in a Phase III or IV clinical trial. Other studies, such as Phase I first-in-man studies, enroll healthy volunteers.

The Company believes that the risk of liability to patients in clinical trials is mitigated by various regulatory requirements, including the role of institutional review boards (“IRBs”) and the need to obtain each patient’s informed consent and the oversight by applicable regulatory authorities. The FDA, the Medicines and Healthcare products Regulatory Agency in the U.K. and regulatory authorities in other countries require each human clinical trial to be reviewed and approved by the IRB at each study site. An IRB is an independent ethics committee that includes both medical and non-medical personnel and is obligated to protect the interests of patients enrolled in the trial. The IRB monitors the protocol and measures designed to protect patients, such as the requirement to obtain informed consents.

To reduce its potential liability, PAREXEL generally seeks to incorporate indemnity provisions into its contracts with clients to protect PAREXEL from any negligent acts by the study Sponsor and/or third party physician investigators. These indemnities generally do not, however, protect PAREXEL against certain of its own actions, such as those involving negligence. Moreover, these indemnities are contractual arrangements that are subject to negotiation with individual clients, and the terms and scope of such indemnities can vary from client to client and from study to study. Finally, the financial performance of these indemnities is not secured, so that the Company bears the risk that an indemnifying party may not have the financial ability to fulfill its indemnification obligations. PAREXEL could be materially and adversely affected if it were required to pay damages or incur defense costs in connection with an uninsured claim that is outside the scope of an indemnity or where the indemnity, although applicable, is not performed in accordance with its terms.

The Company currently maintains an errors and omissions professional liability insurance policy, subject to deductibles and coverage limits. There can be no assurance that this insurance coverage will be adequate, or that insurance coverage will continue to be available on terms acceptable to the Company.

AVAILABLE INFORMATION

The Company’s Internet website is http://www.parexel.com. The Company makes available through its website the Company’s annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to those reports filed pursuant to Sections 13(a) and 15(d) of the Securities Exchange Act of 1934, as amended. The Company makes these reports available free of charge through its website as soon as reasonably practicable after they have been electronically filed with, or furnished to, the Securities and Exchange Commission (“SEC”). Any materials the Company files with the SEC may also be read and copied at the SEC’s public reference room located at 100 F Street, N.E. Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 for further information on the public reference room. The Company’s SEC filings are also available to the public on the SEC’s Internet website at www.sec.gov.

ITEM 1A. RISK FACTORS

In addition to other information in this report, the following risk factors should be considered carefully in evaluating our Company and our business. These risk factors could cause actual results to differ from those indicated by forward-looking statements made in this report, including in the section of this report entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and other forward-looking statements that we may make from time to time. If any of the following risks occur, our business, financial condition, or results of operations would likely suffer.

Additional risks not currently known to us or other factors not perceived by us to present significant risk to our business at this time also may impair our business operations.

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THE LOSS, MODIFICATION, OR DELAY OF LARGE OR MULTIPLE CONTRACTS MAY NEGATIVELY IMPACT OUR FINANCIAL PERFORMANCE

Our clients generally can terminate their contracts with us upon 30 to 60 days notice or can delay the execution of services. The loss or delay of a large contract or the loss or delay of multiple contracts could adversely affect our operating results, possibly materially. We have in the past experienced contract cancellations, which have adversely affected our operating results, including a Phase III cancellation during the second quarter of fiscal year 2007.

Clients terminate or delay their contracts for a variety of reasons, including:

– merger or potential merger related activities involving the client;

– failure of products being tested to satisfy safety requirements;

– failure of products being tested to satisfy efficacy criteria;

– products having unexpected or undesired clinical results;

– client cost reductions as a result of budgetary limit or changing priorities;

– client decisions to forego a particular study, perhaps for economic reasons;

– insufficient patient enrollment in a study;

– insufficient investigator recruitment;

– clinical drug manufacturing problems resulting in shortages of the product;

– product withdrawal following market launch; and

– shut down of manufacturing facilities.

In addition, clients may determine to proceed with fewer clinical trials or conduct them without the assistance of bio/pharmaceutical services companies if they are trying to reduce costs as a result of budgetary limits or changing priorities. These factors may cause such clients to cancel contracts with us.

WE FACE INTENSE COMPETITION IN MANY AREAS OF OUR BUSINESS; IF WE DO NOT COMPETE EFFECTIVELY, OUR BUSINESS WILL BE HARMED

The bio/pharmaceutical services industry is highly competitive and we face numerous competitors in many areas of our business. If we fail to compete effectively, we may lose clients, which would cause our business to suffer.

We primarily compete against in-house departments of pharmaceutical companies, other full service clinical research organizations, or CROs, small specialty CROs, and to a lesser extent, universities, teaching hospitals, and other site organizations. Some of the larger CROs against which we compete include Quintiles Transnational Corporation, Covance, Inc. and Pharmaceutical Product Development Inc. In addition, our PCMS business competes with a large and fragmented group of specialty service providers, including advertising/promotional companies, major consulting firms with pharmaceutical industry groups and smaller companies with pharmaceutical industry focus. Perceptive competes primarily with CROs, information technology companies and other software companies. Some of these competitors, including the in-house departments of pharmaceutical companies, have greater capital, technical and other resources than us. In addition, our competitors that are smaller specialized companies may compete effectively against us because of their concentrated size and focus.

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THE FIXED RATE NATURE OF OUR CONTRACTS COULD HURT OUR OPERATING RESULTS

Approximately 90% of our contracts are fixed rate. If we fail to adequately price our contracts or if we experience significant cost overruns, our gross margins on the contracts would be reduced and we could lose money on contracts. In the past, we have had to commit unanticipated resources to complete projects, resulting in lower gross margins on those projects. We might experience similar situations in the future.

IF GOVERNMENTAL REGULATION OF THE DRUG, MEDICAL DEVICE AND BIOTECHNOLOGY INDUSTRY CHANGES, THE NEED FOR OUR SERVICES COULD DECREASE

Governmental regulation of the drug, medical device and biotechnology product development process is complicated, extensive, and demanding. A large part of our business involves assisting pharmaceutical and biotechnology companies through the regulatory approval process. Changes in regulations, that, for example, streamline procedures or relax approval standards, could eliminate or reduce the need for our services. If companies regulated by the FDA or similar foreign regulatory authorities needed fewer of our services, we would have fewer business opportunities and our revenues would decrease, possibly materially.

In the United States, the FDA and the Congress have attempted to streamline the regulatory process by providing for industry user fees that fund the hiring of additional reviewers and better management of the regulatory review process. In Europe, governmental authorities have approved common standards for clinical testing of new drugs throughout the European Union by adopting standards for GCP and by making the clinical trial application and approval process more uniform across member states. The FDA has had GCP in place as a regulatory standard and requirement for new drug approval for many years and Japan adopted GCP in 1998.

The U.S., Europe and Japan have also collaborated for 15-years on the ICH, the purpose of which is to eliminate duplicative or conflicting regulations in the three regions. The ICH partners have agreed upon a common format (the Common Technical Document) for new drug marketing applications that reduces the need to tailor the format to each region. Such efforts and similar efforts in the future that streamline the regulatory process may reduce the demand for our services.

Parts of our PCMS business advises clients on how to satisfy regulatory standards for manufacturing and clinical processes and on other matters related to the enforcement of government regulations by the FDA and other regulatory bodies. Any reduction in levels of review of manufacturing or clinical processes or levels of regulatory enforcement, generally, would result in fewer business opportunities for our business in this area.

IF WE FAIL TO COMPLY WITH EXISTING REGULATIONS, OUR REPUTATION AND OPERATING RESULTS WOULD BE HARMED

Our business is subject to numerous governmental regulations, primarily relating to worldwide pharmaceutical product development and regulatory approval and the conduct of clinical trials. If we fail to comply with these governmental regulations, it could result in the termination of our ongoing research, development or sales and marketing projects, or the disqualification of data for submission to regulatory authorities. We also could be barred from providing clinical trial services in the future or could be subjected to fines. Any of these consequences would harm our reputation, our prospects for future work and our operating results. In addition, we may have to repeat research or redo trials. If we are required to repeat research or redo trials, we may be contractually required to do so at no further cost to our clients, but at substantial cost to us.

WE MAY LOSE BUSINESS OPPORTUNITIES AS A RESULT OF HEALTH CARE REFORM AND THE EXPANSION OF MANAGED-CARE ORGANIZATIONS

Numerous governments, including the U.S. government and governments outside of the U.S. have undertaken efforts to control growing health care costs through legislation, regulation and voluntary agreements with medical care providers and drug companies. If these efforts are successful, drug, medical device and biotechnology companies may react by spending less on research and development. If this were to occur, we would have fewer business opportunities and our revenues could decrease, possibly materially. In addition, new laws or regulations may create a risk of liability, increase our costs or limit our service offerings.

For instance, in 2003 the U.S. Congress enacted sweeping health care reform legislation, which is still in the early stages of implementation. Over time, this law may reduce our business opportunities if drug companies reduce their clinical development programs and expenditures. The proposals were generally intended to expand health care coverage for the uninsured and reduce the growth of total health care expenditures. While the U.S. Congress has not yet adopted any comprehensive reform proposals, members of Congress may raise similar proposals in the future. We are unable to predict the likelihood that health care reform proposals will be enacted into law.

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In addition to health care reform proposals, the expansion of managed-care organizations in the health care market and managed-care organizations’ efforts to cut costs by limiting expenditures on pharmaceuticals and medical devices could result in pharmaceutical, biotechnology and medical device companies spending less on research and development. If this were to occur, we would have fewer business opportunities and our revenues could decrease, possibly materially.

BECAUSE WE DEPEND ON A SMALL NUMBER OF INDUSTRIES AND CLIENTS FOR ALL OF OUR BUSINESS, THE LOSS OF BUSINESS FROM A SIGNIFICANT CLIENT COULD HARM OUR BUSINESS, REVENUE AND FINANCIAL CONDITION

The loss of, or a material reduction in the business of, a significant client could cause a substantial decrease in our revenue and adversely affect our business and financial condition, possibly materially. In fiscal year 2007, our five largest clients accounted for approximately 28% of our consolidated service revenue. In fiscal year 2006, our five largest clients accounted for approximately 25% of our consolidated service revenue. In fiscal years 2007, 2006 and 2005, no single client accounted for 10% or more of consolidated service revenue. We expect that a small number of clients will continue to represent a significant part of our consolidated revenue. Our contracts with these clients generally can be terminated on short notice. We have in the past experienced contract cancellations with significant clients.

IF WE DO NOT KEEP PACE WITH RAPID TECHNOLOGICAL CHANGES, OUR PRODUCTS AND SERVICES MAY BECOME LESS COMPETITIVE OR OBSOLETE, ESPECIALLY IN OUR PERCEPTIVE BUSINESS

The biotechnology, pharmaceutical and medical device industries generally, and clinical research specifically, are subject to increasingly rapid technological changes. Our competitors or others might develop technologies, products or services that are more effective or commercially attractive than our current or future technologies, products or services, or render our technologies, products or services less competitive or obsolete. If competitors introduce superior technologies, products or services and we cannot make enhancements to our technologies, products and services necessary to remain competitive, our competitive position would be harmed. If we are unable to compete successfully, we may lose clients or be unable to attract new clients, which could lead to a decrease in our revenue.

IF OUR PERCEPTIVE BUSINESS IS UNABLE TO MAINTAIN CONTINUOUS, EFFECTIVE, RELIABLE AND SECURE OPERATION OF ITS COMPUTER HARDWARE, SOFTWARE AND INTERNET APPLICATIONS AND RELATED TOOLS AND FUNCTIONS, ITS BUSINESS WILL BE HARMED

Our Perceptive Informatics business involves collecting, managing, manipulating and analyzing large amounts of data, and communicating data via the Internet. In our Perceptive Informatics business, we depend on the continuous, effective, reliable and secure operation of computer hardware, software, networks, telecommunication networks, Internet servers and related infrastructure. If the hardware or software malfunctions or access to data by internal research personnel or customers through the Internet is interrupted, our Perceptive Informatics business could suffer. In addition, any sustained disruption in Internet access provided by third parties could adversely impact our Perceptive Informatics business.

Although the computer and communications hardware used in our Perceptive Informatics business is protected through physical and software safeguards, it is still vulnerable to fire, storm, flood, power loss, earthquakes, telecommunications failures, physical or software break-ins, and similar events. In addition, the Perceptive Informatics software products are complex and sophisticated, and could contain data, design or software errors that could be difficult to detect and correct. If Perceptive fails to maintain and further develop the necessary computer capacity and data to support the needs of our Perceptive Informatics customers, it could result in a loss of or a delay in revenue and market acceptance.

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IF WE CANNOT RETAIN OUR HIGHLY QUALIFIED MANAGEMENT AND TECHNICAL PERSONNEL, OUR BUSINESS WOULD BE HARMED

We rely on the expertise of our Chairman and Chief Executive Officer, Josef H. von Rickenbach, and it would be difficult and expensive to find a qualified replacement with the level of specialized knowledge of our products and services and the bio/pharmaceutical services industry. We are a party to an employment agreement with Mr. von Rickenbach, which may be terminated by us or Mr. von Rickenbach upon notice to the other party.

In addition, in order to compete effectively, we must attract and maintain qualified sales, professional, scientific, and technical operating personnel. Competition for these skilled personnel, particularly those with a medical degree, a Ph.D. or equivalent degrees, is intense. We may not be successful in attracting or retaining key personnel.

WE MAY HAVE SUBSTANTIAL EXPOSURE TO PAYMENT OF PERSONAL INJURY CLAIMS AND MAY NOT HAVE ADEQUATE INSURANCE TO COVER SUCH CLAIMS

Our CRS business primarily involves the testing of experimental drugs and medical devices on consenting human volunteers pursuant to a study protocol. Clinical research involves a risk of liability for personal injury or death to patients who participate in the study or who use a product approved by regulatory authorities after the clinical research has concluded, due to, among other reasons, possible unforeseen adverse side effects or improper administration of the drug or device by physicians. In some cases, these patients are already seriously ill and are at risk of further illness or death.

In order to mitigate the risk of liability, we seek to include indemnity provisions in our CRS contracts with clients and with investigators. However, we are not able to include indemnity provisions in all of our contracts. In addition, if we are unable to include an indemnity provision in our contracts, the indemnity provisions would not cover our exposure if:

– we had to pay damages or incur defense costs in connection with a claim that is outside the scope of an indemnity; or

– a client failed to indemnify us in accordance with the terms of an indemnity agreement because it did not have the financial ability to fulfill its indemnification obligation or for any other reason.

We also carry insurance to cover our risk of liability. However, our insurance is subject to deductibles and coverage limits and may not be adequate to cover claims. In addition, liability coverage is expensive. In the future, we may not be able to maintain or obtain liability insurance on reasonable terms, at a reasonable cost, or in sufficient amounts to protect us against losses due to claims.

In March 2006, we conducted a Phase I clinical trial on behalf of TeGenero AG, a German pharmaceutical company. During the trial, six participants experienced adverse reactions to the TeGenero compound being tested. Through June 30, 2007, we have recorded approximately $1.8 million in legal fees and other incremental costs in connection with the incident. To date, none of the participants in the clinical trial have filed suit against us. We carry insurance to cover risks such as this, but our insurance is subject to deductibles and coverage limits and may not be adequate to cover claims against us. While we believe that TeGenero is responsible to indemnify us with respect to claims related to this matter, TeGenero filed for insolvency in July 2006, which likely will limit any recovery by us from them. In addition, while TeGenero carried insurance with respect to this type of matter, this insurance also is subject to deductibles and coverage limits.

OUR BUSINESS IS SUBJECT TO INTERNATIONAL ECONOMIC, POLITICAL, AND OTHER RISKS THAT COULD NEGATIVELY AFFECT OUR RESULTS OF OPERATIONS OR FINANCIAL POSITION

We provide most of our services on a worldwide basis. Our service revenue from non-U.S. operations represented approximately 64.0% of total consolidated service revenue for the fiscal year ended June 30, 2007 and approximately 64.6% of total consolidated service revenue for the fiscal year ended June 30, 2006. More specifically, our service revenue from operations in the United Kingdom represented 16.0% of total consolidated service revenue for the fiscal year ended June 30, 2007 and 17.0% of total consolidated service revenue for the fiscal year ended June 30, 2006. Our service revenue from operations in Germany represented 19.8% of total consolidated service revenue for the fiscal year ended June 30, 2007 and 20.2% of total consolidated service revenue for the fiscal year ended June 30, 2006. Accordingly, our business is subject to risks associated with doing business internationally, including:

– changes in a specific country’s or region’s political or economic conditions, including Western Europe, in particular;

– potential negative consequences from changes in tax laws affecting our ability to repatriate profits;

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– difficulty in staffing and managing widespread operations;

– unfavorable labor regulations applicable to its European or other international operations;

– changes in foreign currency exchange rates; and

– longer payment cycles of foreign customers and difficulty of collecting receivables in foreign jurisdictions.

OUR REVENUE AND EARNINGS ARE EXPOSED TO EXCHANGE RATE FLUCTUATIONS

Approximately 64.0% of our total consolidated service revenue for the fiscal year ended June 30, 2007 and approximately 64.6% of our total consolidated service revenue for the fiscal year ended June 30, 2006 were from non-U.S. operations. Our financial statements are denominated in U.S. dollars. As a result, changes in foreign currency exchange rates could have and have had a significant effect on our operating results. For example, as a result of year-over-year foreign currency fluctuation, service revenue for fiscal year 2007 was positively impacted by approximately $21.6 million as compared to fiscal year 2006. Exchange rate fluctuations between local currencies and the U.S. dollar create risk in several ways, including:

– Foreign Currency Translation Risk. The revenue and expenses of our foreign operations are generally denominated in local currencies, primarily the British pound and the Euro, and then are translated into U.S. dollars for financial reporting purposes. For the fiscal year ended June 30, 2007, 16.0% of total consolidated service revenue was denominated in British pounds and approximately 36.4% of total consolidated service revenue was denominated in Euros. For the fiscal year ended June 30, 2006, 17.0% of total consolidated service revenue was denominated in British pounds and approximately 37.0% of total consolidated service revenue was denominated in Euros. Accordingly, changes in exchange rates between foreign currencies and the U.S. dollar will affect the translation of foreign results into U.S. dollars for purposes of reporting our consolidated results.

– Foreign Currency Transaction Risk. We may be subjected to foreign currency transaction risk when our foreign subsidiaries enter into contracts or incur liabilities denominated in a currency other than the foreign subsidiaries functional (local) currency. To the extent we are unable to shift the effects of currency fluctuations to the clients, foreign exchange fluctuations as a result of foreign currency exchange losses could have a material adverse effect on our results of operations.

Although we try to limit these risks through exchange rate fluctuation provisions stated in our service contracts, or by hedging transaction risk with foreign currency exchange contracts, we may still experience fluctuations in financial results from our operations outside of the U.S., and may not be able to favorably reduce the currency transaction risk associated with our service contracts.

OUR OPERATING RESULTS HAVE FLUCTUATED BETWEEN QUARTERS AND YEARS AND MAY CONTINUE TO FLUCTUATE IN THE FUTURE, WHICH COULD AFFECT THE PRICE OF OUR COMMON STOCK

Our quarterly and annual operating results have varied and will continue to vary in the future as a result of a variety of factors. For example, our income from operations totaled $11.3 million for the fiscal quarter ended September 30, 2006, $13.9 million for the fiscal quarter ended December 31, 2006, $15.5 million for the fiscal quarter ended March 31, 2007, and $16.9 million for the fiscal quarter ended June 30, 2007. Factors that cause these variations include:

– the level of new business authorizations in a particular quarter or year;

– the timing of the initiation, progress, or cancellation of significant projects;

– exchange rate fluctuations between quarters or years;

– restructuring charges;

– seasonality;

– the mix of services offered in a particular quarter or year;

– the timing of the opening of new offices;

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– timing, costs and the related financial impact of acquisitions;

– the timing of internal expansion;

– the timing and amount of costs associated with integrating acquisitions;

– the timing and amount of startup costs incurred in connection with the introduction of new products, services or subsidiaries; and

– the dollar amount of changes in contract scope finalized during a particular period.

Many of these factors, such as the timing of cancellations of significant projects and exchange rate fluctuations between quarters or years, are beyond our control.

Approximately 60-65% of our operating costs are fixed in the short term with a significant portion of those costs related to personnel. Total personnel costs are estimated to have accounted for approximately 80% of our total operating costs in fiscal year 2007. As a result, the effect on our revenues of the timing of the completion, delay or loss of contracts, or the progress of client projects, could cause our operating results to vary substantially between reporting periods.

If our operating results do not match the expectations of securities analysts and investors, the trading price of our common stock will likely decrease.

OUR EFFECTIVE INCOME TAX RATE MAY FLUCTUATE FROM QUARTER-TO-QUARTER, WHICH MAY AFFECT EARNINGS AND EARNINGS PER SHARE

Our quarterly effective income tax rate is influenced by our projected profitability in the various taxing jurisdictions in which we operate. Changes in the distribution of profits and losses among taxing jurisdictions may have a significant impact on our effective income tax rate, which in turn could have a material adverse effect on our net income and earnings per share. Factors that affect the effective income tax rate include, but are not limited to:

– the requirement to exclude from our quarterly worldwide effective income tax calculations losses in jurisdictions where no tax benefit can be recognized;

– actual and projected full year pretax income;

– changes in tax laws in various taxing jurisdictions;

– audits by taxing authorities; and

– the establishment of valuation allowances against deferred tax assets if it is determined that it is more likely than not that future tax benefits will not be realized.

Fluctuations in our effective income tax rate could cause fluctuations in our earnings and earnings per share, which can affect our stock price.

OUR BUSINESS HAS EXPERIENCED SUBSTANTIAL EXPANSION IN THE PAST AND SUCH EXPANSION AND ANY FUTURE EXPANSION COULD STRAIN OUR RESOURCES IF NOT PROPERLY MANAGED

We have expanded our business substantially in the past. Future rapid expansion could strain our operational, human and financial resources. In order to manage expansion, we must:

– continue to improve operating, administrative, and information systems;

– accurately predict future personnel and resource needs to meet client contract commitments;

– track the progress of ongoing client projects; and

– attract and retain qualified management, sales, professional, scientific and technical operating personnel.

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If we do not take these actions and are not able to manage the expanded business, the expanded business may be less successful than anticipated, and we may be required to allocate additional resources to the expanded business, which we would have otherwise allocated to another part of our business.

We may face additional risks in expanding our foreign operations. Specifically, we may find it difficult to:

– assimilate differences in foreign business practices, exchange rates and regulatory requirements;

– operate amid political and economic instability;

– hire and retain qualified personnel; and

– overcome language, tariff and other barriers.

WE MAY MAKE ACQUISITIONS IN THE FUTURE, WHICH MAY LEAD TO DISRUPTIONS TO OUR ONGOING BUSINESS

We have made a number of acquisitions and will continue to review new acquisition opportunities. If we are unable to successfully integrate an acquired company, the acquisition could lead to disruptions to our business. The success of an acquisition will depend upon, among other things, our ability to:

– assimilate the operations and services or products of the acquired company;

– integrate acquired personnel;

– retain and motivate key employees;

– retain customers;

– identify and manage risks facing the acquired company; and

– minimize the diversion of management’s attention from other business concerns.

Acquisitions of foreign companies may also involve additional risks, including assimilating differences in foreign business practices and overcoming language and cultural barriers.

In the event that the operations of an acquired business do not meet our performance expectations, we may have to restructure the acquired business or write-off the value of some or all of the assets of the acquired business.

OUR CORPORATE GOVERNANCE STRUCTURE, INCLUDING PROVISIONS OF OUR ARTICLES OF ORGANIZATION, BY-LAWS, SHAREHOLDER RIGHTS PLAN, AS WELL AS MASSACHUSETTS LAW, MAY DELAY OR PREVENT A CHANGE IN CONTROL OR MANAGEMENT THAT STOCKHOLDERS MAY CONSIDER DESIRABLE

Provisions of our articles of organization, by-laws and our shareholder rights plan, as well as provisions of Massachusetts law, may enable our management to resist acquisition of us by a third party, or may discourage a third party from acquiring us. These provisions include the following:

– we have divided our board of directors into three classes that serve staggered three-year terms;

– we are subject to Section 8.06 of the Massachusetts Business Corporation Law which provides that directors may only be removed by stockholders for cause, vacancies in our board of directors may only be filled by a vote of our board of directors and the number of directors may be fixed only by our board of directors;

– we are subject to Chapter 110F of the Massachusetts General Laws which limits our ability to engage in business combinations with certain interested stockholders;

– our stockholders are limited in their ability to call or introduce proposals at stockholder meetings; and

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– our shareholder rights plan would cause a proposed acquirer of 20% or more of our outstanding shares of common stock to suffer significant dilution.

These provisions could have the effect of delaying, deferring, or preventing a change in control of us or a change in our management that stockholders may consider favorable or beneficial. These provisions could also discourage proxy contests and make it more difficult for stockholders to elect directors and take other corporate actions. These provisions could also limit the price that investors might be willing to pay in the future for shares of our stock.

In addition, our board of directors may issue preferred stock in the future without stockholder approval. If our board of directors issues preferred stock, the holders of common stock would be subordinate to the rights of the holders of preferred stock. Our board of directors’ ability to issue the preferred stock could make it more difficult for a third party to acquire, or discourage a third party from acquiring, a majority of our stock.

OUR STOCK PRICE HAS BEEN AND MAY IN THE FUTURE BE VOLATILE, WHICH COULD LEAD TO LOSSES BY INVESTORS

The market price of our common stock has fluctuated widely in the past and may continue to do so in the future. On August 17, 2007, the closing sale price of our common stock on the Nasdaq Global Select Market was $43.79 per share. During the period from July 1, 2005 to June 30, 2007, our common stock traded at prices ranging from a high of $42.60 per share to a low of $18.85 per share. Investors in our common stock must be willing to bear the risk of such fluctuations in stock price and the risk that the value of an investment in our stock could decline.

Our stock price can be affected by quarter-to-quarter variations in a number of factors including, but not limited to:

– operating results;

– earnings estimates by analysts;

– market conditions in the industry;

– prospects of health care reform;

– changes in government regulations;

– general economic conditions, and

– our effective income tax rate.

In addition, the stock market has from time to time experienced significant price and volume fluctuations that are not related to the operating performance of particular companies. These market fluctuations may adversely affect the market price of our common stock. Since our common stock has traded in the past at a relatively high price-earnings multiple, due in part to analysts’ expectations of earnings growth, the price of the stock could quickly and substantially decline as a result of even a relatively small shortfall in earnings from, or a change in, analysts’ expectations.

ITEM 1B. UNRESOLVED STAFF COMMENTS

The Company does not have any unresolved comments to its periodic or current reports under the Securities Exchange Act of 1934, as amended, from the staff of the Securities and Exchange Commission.

ITEM 2. PROPERTIES

As of June 30, 2007, the Company occupied approximately 1,440,000 square feet of building space in 63 locations in 29 countries. Except for 26,600 square feet of building space in Poitiers, France, the Company does not own any properties, but leases space under various leases that expire between 2007 and 2022.

The Company’s U.S. facilities account for approximately 466,200 square feet. In particular, the Company occupies approximately 399,600 square feet in various locations in the Northeast, 4,500 square feet in various Mid-Atlantic locations and 62,100 square feet in various Western locations.

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The Company’s non-U.S. facilities account for approximately 973,800 square feet. In particular, the Company occupies approximately 164,000 square feet in various locations in the United Kingdom, 324,000 square feet in various locations in Germany, and 118,000 square feet in South Africa.

The Company’s principal facilities are set forth below:

Facility	Sq. Ft.		Use of Facility	Lease Expiration
Headquarters in Waltham, MA		85,000	CRS, Perceptive, and Corporate	2009-2019
Lowell, MA		108,000	PCMS, CRS, Perceptive, and General & Administrative (“G&A”)		2011
Uxbridge, UK		75,000	CRS, PCMS, and G&A		2022
Berlin, Germany		250,000	CRS, PCMS, Perceptive and G&A		2016

The following table indicates the approximate square footage of property attributable to each of the Company’s operating segments:

	Total Sq. Ft.
CRS		711,000
PCMS		338,000
Perceptive		148,000
General and Administrative		243,000

See Note 15 to the consolidated financial statements included in Item 8 of this annual report for further information regarding the Company’s lease obligations.

ITEM 3. LEGAL PROCEEDINGS

The Company periodically becomes involved in various claims and lawsuits that are incidental to its business. The Company believes, after consultation with counsel, that no matters currently pending would, in the event of an adverse outcome, have a material impact on its consolidated financial position, results of operations, or liquidity.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

No matters were submitted to a vote of security holders during the fourth quarter of fiscal year 2007.

PART II

ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS, AND ISSUER PURCHASES OF EQUITY SECURITIES

MARKET INFORMATION AND HOLDERS

The Company’s common stock is traded on the Nasdaq Global Select Market under the symbol “PRXL”. The table below shows the high and low sales prices of the common stock for each quarter of the fiscal years ended June 30, 2007 and 2006, respectively, on the Nasdaq Global Select Market.

	2007				2006
	High		Low		High		Low
First Quarter	$	37.68	$	26.76	$	20.62	$	18.85
Second Quarter	$	35.52	$	27.35	$	22.00	$	18.85
Third Quarter	$	36.10	$	28.00	$	27.59	$	19.21
Fourth Quarter	$	42.60	$	35.62	$	30.83	$	23.55

As of August 17, 2007 there were approximately 69 stockholders of record of the Company’s common stock. The number does not include stockholders for which shares were held in a “nominee” or “street” name.

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DIVIDENDS

The Company has never declared or paid any cash dividends on its capital stock nor does it anticipate paying any cash dividends in the foreseeable future. The Company intends to retain future earnings for the development and expansion of its business.

In addition, the ability of the Company and certain of its subsidiaries to pay cash dividends are subject to limitations contained in the $100 million unsecured senior revolving credit facility in place between the Company, certain of its subsidiaries and JPMorgan Chase Bank, N.A.

COMPANY STOCK PERFORMANCE GRAPH

The following performance graph and related information shall not be deemed “soliciting material” or to be “filed” with the SEC, nor shall such information be incorporated by reference into any future filing under the Securities Act of 1933 or Securities Exchange Act of 1934, each as amended, except to the extent the Company specifically incorporates it by reference.

The Company’s common stock is listed for trading on the Nasdaq Global Select Market under the symbol “PRXL”. The Stock Price Performance Graph set forth below compares the cumulative total stockholder return on the Company’s common stock for the period from June 30, 2002 through June 30, 2007, with the cumulative total return of the Nasdaq U.S. Stock Index and the Nasdaq Health Services Index over the same period. The comparison assumes $100 was invested on June 30, 2002 in the Company’s common stock, in the Nasdaq U.S. Stock Index and in the Nasdaq Health Services Index and assumes reinvestment of dividends, if any.

	Fiscal Years Ended June 30,
Total Return Index For:	2002		2003		2004		2005		2006		2007
PAREXEL International Stock	$	100.00	$	100.29	$	142.34	$	142.49	$	207.41	$	302.37
Nasdaq U.S. Stock Index	$	100.00	$	111.02	$	139.95	$	141.46	$	150.42	$	179.30
Nasdaq Health Services Index	$	100.00	$	105.27	$	156.31	$	197.53	$	226.58	$	265.69

The stock price performance shown on the graph above is not necessarily indicative of future price performance. Information used in the graph was obtained from The Nasdaq Stock Market, a source believed to be reliable, but the Company is not responsible for any errors or omissions in such information.

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ITEM 6. SELECTED FINANCIAL DATA

The following selected consolidated financial data of the Company for the five years ended June 30, 2007 are derived from the consolidated financial statements of the Company. The information set forth below should be read in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included as Item 7 and the consolidated financial statements and related footnotes included as Item 8 in this annual report.

	For the years ended June 30,
	(in thousands, except per share data and number of employees)
	2007		2006			2005			2004			2003
OPERATIONS
Service revenue	$	741,955	$	614,947		$	544,726		$	540,983		$	518,936
Income (loss) from operations	$	57,566	$	39,855	(1)	$	(276	)(2)	$	18,373	(3)	$	17,228	(4)
Net income (loss)	$	37,289	$	23,544		$	(35,177	)	$	13,791		$	10,662
Basic earnings (loss) per share	$	1.37	$	0.89		$	(1.35	)	$	0.53		$	0.42
Diluted earnings (loss) per share	$	1.33	$	0.87		$	(1.35	)	$	0.51		$	0.42
FINANCIAL POSITION
Cash, cash equivalents, and marketable securities	$	96,677	$	92,749		$	88,622		$	95,607		$	82,724
Working capital	$	118,746	$	131,552		$	120,301		$	145,408		$	134,346
Total assets	$	680,013	$	538,633		$	475,736		$	502,996		$	464,237
Borrowings under line of credit	$	30,463	$	498			—			—			—
Long-term debt	$	277	$	705		$	1,115		$	471		$	644
Stockholders’ equity	$	316,616	$	248,763		$	205,571		$	246,760		$	227,100
OTHER DATA
Purchases of property and equipment	$	40,855	$	29,763		$	31,814		$	27,823		$	29,985
Depreciation and amortization	$	30,855	$	26,035		$	29,618		$	25,762		$	20,656
Number of employees		6,485		5,600			5,140			4,875			5,095
Weighted average shares used in computing:
Basic earnings (loss) per share		27,316		26,557			26,065			26,010			25,371
Diluted earnings (loss) per share		28,108		27,013			26,065			26,795			25,683

(1)

Income from operations for the year ended June 30, 2006 reflects $1.6 million of compensation expense in conjunction with the acquisition of the Perceptive minority interest as discussed in Note 3 to the consolidated financial statements included in Item 8 of this annual report. Additionally, the Company recorded a $2.6 million reduction to the existing restructuring reserve as a result of execution of sub-lease agreements and changes in assumptions of leased facilities, which was offset by $1.8 million in severance-related restructuring expenses incurred during fiscal year 2006 in association with the fourth quarter fiscal year 2005 restructuring plan. See Note 7 to the consolidated financial statements included in Item 8 of this annual report for further detail.

(2)

Loss from operations for the year ended June 30, 2005 reflects $24.3 million in restructuring charges recorded in the quarter ended June 30, 2005, consisting of $4.3 million for severance expense associated with the elimination of 123 managerial and staff positions and $20.5 million related to eleven newly-abandoned leased facilities (or newly abandoned sections of previously partially abandoned facilities), partially offset by $0.5 million related to changes in assumptions for leased facilities which were abandoned in June 2001 and in March 2004. Additionally, the Company recorded in fiscal year 2005 $2.7 million of impairment charges associated with abandoned leased facilities and other fixed assets, and $0.5 million related to other special charges. See Note 7 to the consolidated financial statements included in Item 8 of this annual report for further detail.

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(3)

Income from operations for the year ended June 30, 2004 reflects $10.8 million in restructuring charges recorded in the quarter ended March 31, 2004, consisting of $3.9 million for severance expense associated with the elimination of 157 managerial and staff positions, $5.6 million related to seven newly-abandoned leased facilities, and $1.3 million related to changes in assumptions for leased facilities, which were abandoned in June 2001. See Note 7 to the consolidated financial statements included in Item 8 of this annual report for further detail.

(4)

Income from operations for the year ended June 30, 2003 reflects $9.4 million in facilities-related restructuring charges related to changes in assumptions for leased facilities, which were previously abandoned in June 2001. The changes in assumptions were caused by the deterioration in the commercial real estate market.

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

OVERVIEW

The Company is a leading bio/pharmaceutical services company, providing a broad range of expertise in clinical research, medical communications services, consulting and informatics and advanced technology products and services to the worldwide pharmaceutical, biotechnology, and medical device industries. The Company’s primary objective is to provide solutions for managing the bio/pharmaceutical product lifecycle with the goal of reducing the time, risk, and cost associated with the development and commercialization of new therapies. Since its incorporation in 1983, PAREXEL has developed significant expertise in processes and technologies supporting this strategy. The Company’s product and service offerings include: clinical trials management, data management, biostatistical analysis, medical communications services, clinical pharmacology, patient recruitment, regulatory and product development consulting, health policy and reimbursement, performance improvement, industry training and publishing, medical imaging services, IVRS, CTMS, web-based portals, systems integration, patient diary applications, and other drug development consulting services. The Company believes that its comprehensive services, depth of therapeutic area expertise, global footprint and related access to patients, and sophisticated information technology, along with its experience in global drug development and product launch services, represent key competitive strengths.

The Company is managed through three business segments, namely, CRS, PCMS and Perceptive.

• CRS constitutes the Company’s core business and includes clinical trials management and biostatistics, data management and clinical pharmacology, as well as related medical advisory and investigator site services.

• PCMS provides technical expertise and advice in such areas as drug development, regulatory affairs, and bio/pharmaceutical process and management consulting; and provides a full spectrum of market development, product development, and targeted communications services in support of product launch. PCMS consultants identify alternatives and propose solutions to address clients’ product development, registration, and commercialization issues. PCMS also provides health policy consulting and strategic reimbursement services.

• Perceptive provides information technology solutions designed to improve clients’ product development processes. Perceptive offers a portfolio of products and services that includes medical imaging services, IVRS, CTMS, web-based portals, systems integration, and patient diary applications.

The Company conducts a significant portion of its operations in foreign countries. Approximately 64.0% and 64.6% of the Company’s consolidated service revenue for the fiscal years ended June 30, 2007 and 2006, respectively, were from non-U.S. operations. Because the Company’s financial statements are denominated in U.S. dollars, changes in foreign currency exchange rates can have a significant effect on its operating results. For the fiscal year ended June 30, 2007, 16.0% of total consolidated service revenue was denominated in British Pounds and approximately 36.4% of total consolidated service revenue was denominated in Euros. For the fiscal year ended June 30, 2006, 17.0% of total consolidated service revenue was denominated in British Pounds and approximately 37.0% of total consolidated service revenue was denominated in Euros. As a result of the weakening U.S. dollar against the British Pound and the Euro in fiscal year 2007, the Company’s revenues and the Company’s costs increased in fiscal year 2007 as compared with the amounts in fiscal year 2006, translated using the fiscal year 2006 foreign currency exchange rates.

Approximately 90.0% of the Company’s contracts are fixed rate, with some variable components, and range in duration from a few months to several years. Cash flows from these contracts typically consist of a down payment required to be paid at the time of contract execution with the balance due in installments over the contract’s duration, usually on a milestone achievement basis. Revenue from these contracts is generally recognized as work is performed. As a result, cash receipts do not necessarily correspond to costs incurred and revenue recognized on contracts.

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Generally, the Company’s clients can terminate their contracts with the Company upon thirty to sixty days notice or can delay execution of services. Clients may terminate or delay contracts for a variety of reasons, including: merger or potential merger-related activities involving the client, the failure of products being tested to satisfy safety requirements or efficacy criteria, unexpected or undesired clinical results of the product, client cost reductions as a result of budgetary limits or changing priorities, the client’s decision to forego a particular study, insufficient patient enrollment or investigator recruitment, or clinical drug manufacturing problems resulting in shortages of the product.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

The discussion and analysis of the Company’s financial condition and results of operations are based on the Company’s consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the U.S. The preparation of these financial statements requires the Company to make estimates and assumptions that affect the reported amounts of assets and liabilities, revenues and expenses, and other financial information. On an ongoing basis, the Company evaluates its estimates and judgments. The Company bases its estimates on historical experience and on various other factors that it believes to be reasonable under the circumstances. Actual results may differ from these estimates under different assumptions or conditions.

The Company regards an accounting estimate underlying its financial statements as a “critical accounting estimate” if the nature of the estimate or assumption is material due to the level of subjectivity and judgment involved or the susceptibility of such matter to change and if the impact of the estimate or assumption on financial condition or operating performance is material. The Company believes that the following accounting policies are most critical to aid in fully understanding and evaluating its reported financial results:

REVENUE RECOGNITION

Service revenue on fixed-price contracts is recognized as services are performed. The Company measures progress for fixed-price contracts using the concept of proportional performance based upon a unit-based output method. Changes in the scope of work generally result in a renegotiation of contract pricing terms. Renegotiated amounts are not included in net revenues until earned and realization is assured. Costs are not deferred in anticipation of contracts being awarded, but instead are expensed as incurred. Historically, there have not been any significant variations between contract estimates provided to clients and the actual cost incurred that were not recovered from clients.

BILLED ACCOUNTS RECEIVABLE, UNBILLED ACCOUNTS RECEIVABLE AND DEFERRED REVENUE

Billed accounts receivable represent amounts for which invoices have been sent to clients. Unbilled accounts receivable represent amounts recognized as revenue for which invoices have not yet been sent to clients. Deferred revenue represents amounts billed or payments received for which revenue has not yet been earned. The Company maintains a provision for losses on receivables based on historical collectability and specific identification of potential problem accounts. In the event the Company is unable to collect portions of its outstanding billed or unbilled receivables, there may be a material impact to the Company’s consolidated results of operations and financial position.

INCOME TAXES

The Company’s global provision for corporate income taxes is determined in accordance with Statement of Financial Accounting Standards (“SFAS”) No. 109, “Accounting for Income Taxes”, which requires that deferred tax assets and liabilities be recognized for the effect of temporary differences between the book and tax basis of recorded assets and liabilities. A valuation allowance is established if it is more likely than not that future tax benefits from the deferred tax assets will not be realized. Income tax expense is based on the distribution of profit before tax among the various taxing jurisdictions in which the Company operates, adjusted as required by the tax laws of each taxing jurisdiction. Changes in the distribution of profits and losses among taxing jurisdictions may have a significant impact on the Company’s effective tax rate.

Interim tax provision calculations are prepared during the year based on estimates. Differences between these interim estimates and the final results for the year could materially impact the Company’s effective tax rate and its consolidated results of operations and financial position. The Company is required under Financial Interpretation No. 18, “Accounting for Income Taxes in Interim Periods – an Interpretation of APB Opinion No. 28” to exclude from its quarterly worldwide effective income tax rate calculation losses in jurisdictions where no tax benefit can be recognized. As a result, the Company’s effective tax rate may fluctuate significantly on a quarterly basis.

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The amount of income taxes the Company pays is subject to ongoing audits by federal, state and foreign tax authorities, which may result in proposed assessments. The Company’s estimate for the potential outcome for any uncertain tax issue is based on judgment. The Company believes it has adequately provided for any reasonably foreseeable outcome related to these matters. However, future results may include favorable or unfavorable adjustments to the Company’s estimated tax liabilities in the period assessments are made or resolved or when statutes of limitation on potential assessments expire.

GOODWILL

Goodwill represents the excess of the cost of an acquired business over the fair value of the related net assets at the date of acquisition. Under SFAS No. 142, “Goodwill and Other Intangible Assets”, goodwill is subject to annual impairment testing or more frequent testing if an event occurs or circumstances change that would more likely than not reduce the carrying value of the reporting unit below its fair value. The impairment testing involves determining the fair market value of each of the reporting units with which the goodwill was associated and comparing that value with the reporting unit’s carrying value. Based on this assessment, there have been no required adjustments to the carrying value of goodwill at any of the Company’s reporting units. Any future impairment of goodwill could have a material impact to the Company’s financial position or its results of operations.

RESULTS OF OPERATIONS

QUARTERLY OPERATING RESULTS (UNAUDITED)

The following is a summary of unaudited quarterly results of operations for the years ended June 30, 2007 and 2006:

	For the year ended June 30, 2007
	(in thousands, except per share data)
	First		Second		Third		Fourth		Total
	Quarter		Quarter		Quarter		Quarter		Year
Service revenue	$	165,057	$	180,474	$	191,215	$	205,209	$	741,955
Gross profit		55,836		60,398		65,903		72,618		254,755
Income from operations		11,321		13,867		15,475		16,903		57,566
Net income		6,977		9,080		10,797		10,435		37,289
Diluted earnings per share	$	0.25	$	0.32	$	0.38	$	0.37	$	1.33

	For the year ended June 30, 2006
	(in thousands, except per share data)
	First		Second		Third		Fourth		Total
	Quarter		Quarter		Quarter		Quarter		Year
Service revenue	$	138,380	$	149,762	$	157,320	$	169,485	$	614,947
Gross profit		44,757		51,226		53,969		58,754		208,706
Income from operations		5,015		10,578		11,192		13,070		39,855
Net income		3,318		5,043		6,754		8,429		23,544
Diluted earnings per share	$	0.13	$	0.19	$	0.25	$	0.31	$	0.87

ACQUISITIONS AND IMPACT OF RESTRUCTURING AND OTHER CHARGES

ACQUISITIONS

BMR/CCT

On November 15, 2006, PAREXEL acquired substantially all of the assets of Behavioral and Medical Research, LLC (“BMR”) and caused the transfer of all of the outstanding stock of California Clinical Trials Medical Group, Inc. (“CCT”) as previously announced on October 12, 2006. Established in 1981 with headquarters in San Diego, BMR/CCT provided a broad range of specialty Phase I – IV clinical research services through four clinical sites in California. In connection with the transaction, PAREXEL entered into a long-term management agreement with CCT.

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The acquisition expanded PAREXEL’s global Clinical Pharmacology capacity to over 450 beds. It also brings new expertise to the Company’s service offerings in the area of bridging studies, especially Japanese bridging studies, and adds depth to existing expertise in central nervous system clinical trials, neuroscience drug development services and sleep studies.

The acquisition has been accounted for using the purchase method in accordance with SFAS No. 141, “Business Combinations”, and accordingly, the results of operations of BMR/CCT have been included in the accompanying consolidated statements of operations as of the date of acquisition.

Total purchase price has been allocated to the tangible and intangible assets and liabilities acquired based on fair value, with any excess recorded as goodwill. Goodwill is expected to be deductible for income tax purposes.

The components of the purchase price allocation are as follows (in thousands):

Purchase Price:
Cash paid, net of cash acquired	$	66,480
Transaction costs		2,028
	$	68,508
Allocations:
Current assets	$	11,884
Property and equipment, net		1,477
Goodwill		35,474
Other intangible assets, net		23,621
Other assets		79
Total assets acquired		72,535
Current liabilities		4,027
Total liabilities assumed		4,027
Net assets acquired	$	68,508

This acquisition was initially financed with borrowings from a line of credit. The Company subsequently repaid the line of credit with proceeds from an executed $100 million unsecured senior revolving credit facility on January 12, 2007.

The following table presents the details of the intangible assets purchased in the BMR/CCT acquisition as of June 30, 2007 (in thousands):

	Weighted Average			Accumulated
	Useful Life	Cost		Amortization		Net
Backlog	7.5 months	$	1,881	$	1,881	$	—
Non-competition and non- solicitation agreements	3 years		126		26		100
Customer relationships	15 years		21,614		901		20,713
Total intangible assets purchased		$	23,621	$	2,808	$	20,813

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The estimated amortization expense of intangible assets purchased in the BMR/CCT acquisition for the current fiscal year, including amounts amortized to date, and in future years will be recorded in the consolidated statements of operations as follows (in thousands):

Fiscal Year	Amortization
2007	$	2,808
2008		1,483
2009		1,483
2010		1,457
2011		1,441
2012		1,441

The following (unaudited) pro forma consolidated results of operations have been prepared as if the acquisition of BMR/CCT had occurred at July 1, 2005, the beginning of PAREXEL’s fiscal year 2006 (in thousands, except per share data):

	For the fiscal year ended
	June 30, 2007
	PRXL		BMR/ CCT**		Total
Service revenue	$	741,955	$	20,484	$	762,439
Net income*	$	37,289	$	505	$	37,794
Basic EPS*	$	1.37	$	0.01	$	1.38
Diluted EPS*	$	1.33	$	0.01	$	1.34

	For the fiscal year ended
	June 30, 2006
	PRXL		BMR/ CCT**			Total
Service revenue	$	614,947	$	31,261		$	646,208
Net income (loss)*	$	23,544	$	(489	)	$	23,055
Basic EPS*	$	0.89	$	(0.02	)	$	0.87
Diluted EPS*	$	0.87	$	(0.01	)	$	0.86

*	Inclusive of the interest expense that would have been incurred related to the $50 million in borrowings at an annual interest rate of 6.25% and amortization expense that would have been incurred in connection with the customer relationship and non-competition and non-solicitation agreements.
**	Represents four and a half months of financial results in fiscal year 2007 and twelve months of financial results in fiscal year 2006, prior to PAREXEL’s acquisition of BMR/CCT.

Synchron

Effective June 15, 2006, the Company entered into a joint venture arrangement with Synchron Research Services Private Limited, under which Synchron transferred its clinical trial business operations located in Bangalore, India to a newly-formed entity, PAREXEL International Synchron Private Limited. The Company acquired a majority equity interest of 75.0% in the newly-formed entity. In addition, the Company paid approximately $2.4 million for a minority interest in Synchron’s Phase I business.

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Perceptive

On August 22, 2005, the Company acquired all of the equity interests held by minority stockholders of Perceptive, and now owns all of the outstanding capital stock of Perceptive. This acquisition was effected through a “short-form” merger of Perceptive with PIC Acquisition, Inc., an indirect subsidiary of PAREXEL and, prior to the merger, the owner of 97.8% of the outstanding common stock of Perceptive. Under the terms of the merger, PAREXEL agreed to pay an aggregate of approximately $3.2 million in cash to the minority stockholders (including option holders upon exercise of stock options) for their shares of common stock of Perceptive. Certain executive officers and directors of PAREXEL held shares of Perceptive common stock prior to the merger.

In addition, under the terms of the merger, PAREXEL assumed all outstanding stock options under Perceptive’s stock incentive plan. As a result, the holders of in-the-money Perceptive stock options as of August 22, 2005 are entitled to receive upon exercise of such stock options $1.65 in cash, without interest, for each share of Perceptive common stock that was subject to such stock options immediately prior to the merger. None of the other terms and conditions of the Perceptive stock options changed. The stock options will continue to be exercisable only upon payment of the exercise price of such options and to be subject to the vesting schedule to which such stock options were subject immediately prior to the merger. Certain executive officers and directors of PAREXEL held stock options to purchase Perceptive common stock prior to the merger.

Additionally, under the terms of the merger, PAREXEL made payments totaling $1.6 million to certain employees of Perceptive on the first anniversary of the effective date of the merger, including $500,000 to Mark Goldberg, President of CRS & Perceptive.

The terms and conditions of the merger were established and approved by a special committee of the Board of Directors of PAREXEL consisting of two independent directors of PAREXEL having no interests in Perceptive. Pro forma results of Perceptive operations have not been presented because the effect of this acquisition was not material.

Qdot

Effective July 1, 2005, the Company acquired the assets of Qdot PHARMA (“Qdot”), a Phase I and IIa “Proof of Concept” clinical pharmacology business located in George, South Africa for approximately $5.7 million, net of liabilities assumed. Under the agreement, the Company agreed to make maximum additional payments of approximately $3.0 million in contingent purchase price if Qdot achieves certain established financial targets through June 30, 2008. In September 2006, the Company paid $0.8 million in contingent earn-out payment. As a result of management responsibility changes, the Company reached an agreement with Qdot in December 2006 and amended the earn-out agreement to pay a fixed additional amount of approximately $2.1 million (approximately $0.9 million was paid in January 2007 and approximately $1.2 million is to be paid by December 31, 2007). As of June 30, 2007, the Company recorded approximately $4.9 million of excess cost over the fair value of the interest in the net assets acquired as goodwill. Pro forma results of Qdot operations have not been presented because the effect of this acquisition was not material.

IMC

Effective October 1, 2004, the Company acquired 100% of the outstanding stock of Integrated Marketing Concepts (“IMC”), a provider of specialty professional marketing and communications services in Whitehall, Pennsylvania for approximately $1.5 million in cash. Under the agreement, the Company agreed to make additional payments of up to $2.9 million in contingent purchase price if IMC achieves certain established financial targets through March 31, 2008. As of June 30, 2007, the Company had paid $0.6 million in earn-out payments under the terms of the agreement. Pro forma results of IMC’s operations have not been presented because the effect of this acquisition was not material.

RESTRUCTURING CHARGES

During the year ended June 30, 2007, the Company recorded a $59,000 increase to existing restructuring reserves due to changes in assumptions on leased facilities based on current market conditions, which was offset by a $93,000 reduction in severance-related restructuring expense associated with the fourth quarter fiscal year 2005 restructuring plan.

During the year ended June 30, 2006, the Company recorded a $2.6 million reduction to the existing restructuring reserve as a result of execution of sub-lease agreements and changes in assumptions of leased facilities, which was offset by $1.8 million in severance-related restructuring expenses incurred during fiscal year 2006 in association with the fourth quarter fiscal year 2005 restructuring plan.

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During the year ended June 30, 2005, the Company recorded restructuring charges totaling $24.3 million, consisting of $4.3 million for severance expense associated with the elimination of 123 managerial and staff positions and $20.5 million related to eleven abandoned leased facilities, partially offset by $0.5 million related to changes in assumptions for leased facilities, which were abandoned in June 2001 and March 2004. In addition, in fiscal year 2005, the Company recorded $2.7 million of impairment charges associated with abandoned leased facilities and other fixed assets.

ANALYSIS BY SEGMENT

The Company evaluates its segment performance and allocates resources based on service revenue and gross profit (service revenue less direct costs), while other operating costs are allocated and evaluated on a geographic basis. Accordingly, the Company does not include the impact of selling, general, and administrative expenses, depreciation and amortization expense, interest income (expense), other income (expense), and income tax expense in segment profitability. The Company attributes revenue to individual countries based upon the number of hours of services performed in the respective countries and inter-segment transactions are not included in service revenue. Furthermore, PAREXEL has a global infrastructure supporting its business segments and therefore, assets are not identified by reportable segment. Service revenue, direct costs, and gross profit on service revenue for fiscal years 2007, 2006, and 2005 were as follows:

					2007 vs. 2006								2006 vs. 2005
					Increase			%					Increase			%
($ IN THOUSANDS)	2007		2006		(Decrease)			Change			2005		(Decrease)			Change
Service revenue:
CRS	$	548,838	$	442,512	$	106,326			24.0	%	$	379,292	$	63,220			16.7	%
PCMS		120,636		117,129		3,507			3.0	%		122,587		(5,458	)		-4.5	%
Perceptive		72,481		55,306		17,175			31.1	%		42,847		12,459			29.1	%
	$	741,955	$	614,947	$	127,008			20.7	%	$	544,726	$	70,221			12.9	%
Direct costs:
CRS	$	359,749	$	292,221	$	67,528			23.1	%	$	251,183	$	41,038			16.3	%
PCMS		86,612		81,549		5,063			6.2	%		85,319		(3,770	)		-4.4	%
Perceptive		40,839		32,471		8,368			25.8	%		23,542		8,929			37.9	%
	$	487,200	$	406,241	$	80,959			19.9	%	$	360,044	$	46,197			12.8	%
Gross profit:
CRS	$	189,089	$	150,291	$	38,798			25.8	%	$	128,109	$	22,182			17.3	%
PCMS		34,024		35,580		(1,556	)		-4.4	%		37,268		(1,688	)		-4.5	%
Perceptive		31,642		22,835		8,807			38.6	%		19,305		3,530			18.3	%
	$	254,755	$	208,706	$	46,049			22.1	%	$	184,682	$	24,024			13.0	%

FISCAL YEAR ENDED JUNE 30, 2007 COMPARED WITH THE FISCAL YEAR ENDED JUNE 30, 2006

Service revenue increased by $127.0 million, or 20.7%, to $742.0 million for the fiscal year ended June 30, 2007 from $614.9 million for the fiscal year ended June 30, 2006. As a result of year-over-year foreign currency fluctuations, service revenue was favorably impacted by approximately $21.6 million. On a geographic basis, service revenue for the fiscal year ended June 30, 2007 was distributed as follows: United States $266.8 million (36.0%), Europe $418.6 million (56.4%), and Asia and Other $56.5 million (7.6%). Service revenue for the fiscal year ended June 30, 2006 was distributed as follows: United States $217.8 million (35.4%), Europe $358.1 million (58.2%), and Asia and Other $39.0 million (6.4%).

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On a segment basis, CRS service revenue increased by $106.3 million, or 24.0%, to $548.8 million for the fiscal year ended June 30, 2007 from $442.5 million in fiscal year 2006. Of the total $106.3 million increase, $21.3 was related to incremental business from the BMR/CCT acquisition completed in November 2006, approximately $17.7 million was attributed to foreign currency fluctuations, while the remaining $67.3 million was the result of business growth across all phases of the business. PCMS service revenue increased by $3.5 million, or 3.0%, to $120.6 million in fiscal year 2007 from $117.1 million in fiscal year 2006. Of the total $3.5 million increase, approximately $1.9 million was attributed to foreign currency fluctuations and $8.4 million was the result of strong performance in the consulting business, offset by a $6.8 million decline caused by weakness in the MedCom business. Perceptive service revenue increased by $17.2 million, or 31.1%, to $72.5 million in fiscal year 2007 from $55.3 million in fiscal year 2006. Of the total $17.2 million increase, approximately $2.0 million resulted from foreign currency fluctuations, with the remaining $15.2 million increase attributed to strong business growth across all business lines, most notably in the medical imaging business.

Reimbursement revenue consists of reimbursable out-of-pocket expenses incurred on behalf of, and reimbursable by, clients. It does not yield any gross profit to the Company, nor does it have an impact on net income.

Direct costs increased by $81.0 million, or 19.9%, to $487.2 million in fiscal year 2007 from $406.2 million in fiscal year 2006. As a result of year-over-year foreign currency fluctuations, direct costs were unfavorably impacted by approximately $15.8 million. On a segment basis, CRS direct costs increased by $67.5 million, or 23.1%, to $359.7 million in fiscal year 2007 from $292.2 million in fiscal year 2006. Of the total $67.5 million increase, approximately $13.3 was attributed to foreign currency fluctuations, with the remaining $54.2 million primarily due to higher labor and related costs incurred to support the higher revenue levels. As a percentage of service revenue, CRS direct costs decreased by 0.5 point to 65.5% in fiscal year 2007 from 66.0% in fiscal year 2006. PCMS direct costs increased by $5.1 million, or 6.2%, to $86.6 million in fiscal year 2007 from $81.5 million in fiscal year 2006. Of the total $5.1 million increase, approximately $3.1 million was attributed to foreign currency fluctuations, with the remaining $2.0 million primarily due to higher labor costs incurred to support a higher volume of business. As a percentage of service revenue, PCMS direct costs for the year ended June 30, 2007 increased by 2.2 points to 71.8% in fiscal year 2007 from 69.6% in fiscal year 2006, as a result of lower productivity levels and $1.1 million in severance costs. Perceptive direct costs increased by $8.3 million, or 25.8%, to $40.8 million in fiscal year 2007 from $32.5 million in fiscal year 2006. Of the total $8.3 million increase, approximately $1.1 million was attributed to foreign currency fluctuations, with the remaining $7.2 million primarily due to higher labor costs associated with increased staffing needs to support business growth. As a percentage of service revenue, Perceptive’s direct costs for the year ended June 30, 2007 decreased by 2.4 points to 56.3% in fiscal year 2007 from 58.7% in fiscal year 2006 primarily due to improvements in productivity, a more favorable revenue mix, and no current year counterpart to recording compensation expense in conjunction with the buyback of the minority interest in Perceptive in the first quarter of fiscal year 2006.

Selling, general and administrative (“SG&A”) expenses increased by $22.7 million, or 15.8%, to $166.4 million in fiscal year 2007 from $143.7 million in fiscal year 2006. Of the total $22.7 million increase, $3.3 million was attributed to incremental expense associated with the BMR/CCT acquisition completed in November 2006, $4.4 million to higher selling and promotions costs, $3.3 million to increased research and development spending, approximately $5.2 million related to foreign exchange fluctuations, and the remaining $6.5 million was primarily due to the investments made in information systems, higher facilities costs, and increased bonus accruals. As a percentage of service revenue, SG&A decreased by 1 point to 22.4% in fiscal year 2007 from 23.4% in fiscal year 2006.

Depreciation and amortization (“D&A”) expenses increased by $4.8 million, or 18.5%, to $30.8 million in fiscal year 2007 from $26.0 million in fiscal year 2006, partly due to incremental amortization expense associated with the BMR/CCT acquisition completed in November 2006 and foreign currency fluctuations. As a percentage of service revenue, D&A remained at 4.2% in both fiscal years 2007 and 2006.

Income from operations increased by $17.7 million, to $57.6 million in fiscal year 2007 from $39.9 million in fiscal year 2006 due primarily to the reasons noted in the preceding paragraphs.

Total other income remained relatively flat at $2.0 million in fiscal year 2007 and $1.9 million in fiscal year 2006.

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The Company had effective tax rates of 37.4% and 46.3% for the fiscal years ended June 30, 2007 and 2006, respectively. The reduction in the tax rate was primarily attributable to realized profitability improvements in the U.S. and other previously underperforming jurisdictions as well as favorable resolution of several tax audit matters in the Netherlands resulting in the recognition of tax benefits related to prior years. The Company had also recorded a higher level of tax reserves in fiscal year 2006 related to on-going reviews by taxing authorities. The Company’s tax rate is a function of the relative levels of profitability in the various taxing jurisdictions in which the Company does business. Any future changes in the mix of taxable income in the different jurisdictions in which the Company operates could materially impact the Company’s effective tax rate and its consolidated results of operations and financial position.

FISCAL YEAR ENDED JUNE 30, 2006 COMPARED WITH THE FISCAL YEAR ENDED JUNE 30, 2005

Service revenue increased by $70.2 million, or 12.9%, to $614.9 million for the fiscal year ended June 30, 2006 from $544.7 million for the fiscal year ended June 30, 2005. As a result of year-over-year foreign currency fluctuations, service revenue was unfavorably impacted by approximately $18.7 million. On a geographic basis, service revenue for the fiscal year ended June 30, 2006 was distributed as follows: United States $217.8 million (35.4%), Europe $358.1 million (58.2%), and Asia and Other $39.0 million (6.4%). Service revenue for the fiscal year ended June 30, 2005 was distributed as follows: United States $202.9 million (37.3%), Europe $313.1 million (57.4%), and Asia and Other $28.7 million (5.3%). The year-over-year shift of revenue from the United States to areas outside of the U.S. was primarily attributed to U.S. revenue weakness in the PCMS segment and an increasing proportion of clinical business awards being won in the U.S. for work to be conducted outside of the U.S.

On a segment basis, CRS service revenue increased by $63.2 million, or 16.7%, to $442.5 million for the fiscal year ended June 30, 2006 from $379.3 million in fiscal year 2005. Of the total $63.2 million increase, $49.7 million is attributable to business growth in activities related to Phase II-III clinical trials, $8.6 million reflects by year-over-year growth in the Phase I business and incremental revenue from the Qdot acquisition completed in July 2005, and $4.9 million driven by other components of the CRS business. PCMS service revenue decreased by $5.5 million, or 4.5%, to $117.1 million in fiscal year 2006 from $122.6 million in fiscal year 2005. The year-over-year decrease was caused by a variety of factors including cancellations and delays, a decline in work being performed for one major client within the medical communications services business and the impact of exiting low margin portions of the business. Of the total $5.5 million decrease, $6.2 million was attributed to the medical communications services business, which was offset by a $0.7 million increase in the consulting business. Perceptive service revenue increased by $12.5 million, or 29.1%, to $55.3 million in fiscal year 2006 from $42.8 million in fiscal year 2005 driven by gains in all operating units, most notably in medical imaging.

Reimbursement revenue consists of reimbursable out-of-pocket expenses incurred on behalf of, and reimbursable by, clients. It does not yield any gross profit to the Company, nor does it have an impact on net income.

Direct costs increased by $46.2 million, or 12.8%, to $406.2 million in fiscal year 2006 from $360.0 million in fiscal year 2005. As a result of year-over-year foreign currency fluctuation, direct costs were favorably impacted by approximately $13.4 million. On a segment basis, CRS direct costs increased by $41.0 million, or 16.3%, to $292.2 million in fiscal year 2006 from $251.2 million in fiscal year 2005. The year-over-year increase in CRS direct costs was primarily due to costs incurred to support a higher volume of business, including increased hiring, training and incentive costs, as well as $0.5 million in unrecoverable reimbursable out-of-pocket expenses related to the bankruptcy of a client, TeGenero. As a percentage of service revenue, CRS direct costs for fiscal year 2006 remained relatively flat at 66.0% in fiscal year 2006 and 66.2% in fiscal year 2005. PCMS direct costs decreased $3.8 million, or 4.4%, to $81.5 million in fiscal year 2006 from $85.3 million in fiscal year 2005. The year-over-year decrease in PCMS direct costs was a result of lower labor costs directly tied to lower volume of business. As a percentage of service revenue, PCMS direct costs for the year ended June 30, 2006 remained flat at 69.6% in both fiscal years 2006 and 2005. Perceptive direct costs increased by $9.0 million, or 37.9%, to $32.5 million in fiscal year 2006 from $23.5 million in fiscal year 2005. The year-over-year increase in Perceptive direct costs was primarily due to higher labor costs associated with increased staffing needs to support business growth and $0.5 million of non-recurring costs deemed to be compensation expense in conjunction with PAREXEL’s purchase of the minority interest in Perceptive. As a percentage of service revenue, Perceptive’s direct costs for the year ended June 30, 2006 increased by 3.8 points to 58.7% in fiscal year 2006 from 54.9% in fiscal year 2005 primarily due to (1) the need to record compensation expense in conjunction with the buyback of the minority interest in Perceptive and (2) inefficiencies in the medical imaging portion of the business, which the Company addressed by making further investments in underlying technologies and improving utilization of resources.

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SG&A expenses increased by $12.6 million, or 9.6%, to $143.6 million in fiscal year 2006 from $131.0 million in fiscal year 2005. The $12.6 million increase was primarily attributable to $7.7 million in higher management incentive, commission and benefits costs, $5.5 million in increased facility related expense, $3.8 million in higher professional fees and travel expense, $3.5 million for stock-based compensation expense related to the adoption of SFAS 123(R), and $1.1 million related to non-recurring costs deemed to be compensation expense in conjunction with PAREXEL’s purchase of the minority interest in Perceptive, which were offset by approximately $9.0 million related to the benefits of past restructuring activity. As a percentage of service revenue, SG&A decreased 0.7 points to 23.4% in fiscal year 2006 from 24.1% in fiscal year 2005.

D&A expenses decreased by $3.6 million, or 12.1%, to $26.0 million in fiscal year 2006 from $29.6 million in fiscal year 2005 primarily as a result of writing off certain impaired assets in June 2005 and the impact of foreign exchange fluctuations. As a percentage of service revenue, D&A decreased by 1.2 points to 4.2% in fiscal year 2006 versus 5.4% in fiscal year 2005.

During fiscal year 2006, the Company recorded a $2.6 million reduction to the existing restructuring reserve as a result of execution of sub-lease agreements and changes in assumptions for leased facilities, which was offset by $1.8 million in severance-related restructuring expenses incurred during fiscal year 2006 in association with the fourth quarter fiscal year 2005 restructuring plan.

Income from operations increased by $40.2 million, to $39.9 million in fiscal year 2006 from a loss of $0.3 million in fiscal year 2005 due primarily to the benefit of past restructuring activities and the reasons noted in the preceding paragraphs.

Total other income increased by $0.9 million, or 88.9%, to $1.9 million in fiscal year 2006 from $1.0 million in fiscal year 2005. The increase was due primarily to higher interest income which was offset by a $1.2 million write-off of long-term investments deemed permanently impaired in fiscal year 2005.

In fiscal year 2006 the Company had an effective tax rate of 46.3%. In fiscal year 2005, the Company’s effective tax rate was extremely high primarily as a result of $37.4 million in tax valuation reserves recorded during the quarter ended June 30, 2005 in conjunction with (1) net operating losses of certain subsidiaries and (2) the recording of valuation reserves on a portion of the Company’s deferred tax assets resulting from the loss position of certain PAREXEL subsidiaries, mainly in the United States. The Company’s tax rate is a function of the relative levels of profitability in the various taxing jurisdictions in which the Company does business. Any future changes in the mix of taxable income in the different jurisdictions in which the Company operates could materially impact the Company’s effective tax rate and its consolidated results of operations and financial position.

LIQUIDITY AND CAPITAL RESOURCES

Since its inception, the Company has financed its operations and growth, including acquisitions, with cash flow from operations and proceeds from the sale of equity securities. Investing activities primarily reflect acquisition costs and capital expenditures for information systems enhancements and leasehold improvements.

Approximately 90.0% of the Company’s contracts are fixed rate, with some variable components, and range in duration from a few months to several years. Cash flows from these contracts typically consist of a down payment required to be paid at the time of contract execution with the balance due in installments over the contract’s duration, usually on a milestone achievement basis. Revenue from these contracts is generally recognized as work is performed. As a result, cash receipts do not necessarily correspond to costs incurred and revenue recognized on contracts.

Generally, the Company’s clients can terminate their contracts with the Company upon thirty to sixty days notice or can delay execution of services which could negatively impact the Company’s liquidity. Clients may terminate or delay contracts for a variety of reasons, including, among others: merger or potential merger-related activities involving the client, the failure of products being tested to satisfy safety requirements or efficacy criteria, unexpected or undesired clinical results of the product, client cost reductions as a result of budgetary limits or changing priorities, the client’s decision to forego a particular study, insufficient patient enrollment or investigator recruitment, or clinical drug manufacturing problems resulting in shortages of the product.

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DAYS SALES OUTSTANDING

The Company’s operating cash flow is heavily influenced by changes in the levels of billed and unbilled receivables and deferred revenue. These account balances as well as days sales outstanding (“DSO”) in accounts receivable, net of deferred revenue, can vary based on contractual milestones and the timing and size of cash receipts. DSO was 49 days at both June 30, 2007 and June 30, 2006. Accounts receivable, net of provision for losses on receivables, totaled $325.0 million ($189.8 million in billed accounts receivable and $135.2 million in unbilled accounts receivable) at June 30, 2007 and $272.1 million ($152.2 million in billed accounts receivable and $119.9 million in unbilled accounts receivable) at June 30, 2006. Deferred revenue was $170.7 million at June 30, 2007 and $139.8 million at June 30, 2006. DSO is calculated by adding the end-of-period balances for billed and unbilled account receivables, net of deferred revenue and the provision for losses on receivables, then dividing the resulting amount by the sum of total revenue plus investigator fees billed for the most recent quarter, and multiplying the resulting fraction by the number of days in the quarter.

CASH FLOWS

Net cash provided by operating activities for fiscal year 2007 totaled $69.2 million and was generated by net income of $37.3 million, $30.9 million related to non-cash charges for depreciation and amortization expense, $15.3 million from increased liabilities, $5.0 million from deferred income taxes, and $4.3 million related to non-cash charges for stock-based compensation, offset by $13.5 million from increased prepaid expenses, current assets and other assets, $6.4 million decrease in accounts payable, and $3.7 million from increased accounts receivable (net of provision for losses on receivables and deferred revenue).

Net cash provided by operating activities for fiscal year 2006 totaled $28.2 million and was generated by net income of $23.5 million, $26.0 million related to non-cash charges for depreciation and amortization expense, $19.9 million from increased liabilities (primarily related to management incentives and income taxes payable), $4.4 million related to non-cash charges for stock-based compensation, $4.2 million from deferred income taxes and $2.6 million in increased accounts payable, offset by $45.4 million from increased accounts receivable (net of provision for losses on receivables and deferred revenue), $6.1 million from increased prepaid expenses and other assets, and $0.9 million from other sources, primarily related to the Company’s minority interest benefit.

Net cash used in investing activities for fiscal year 2007 totaled $101.3 million resulting from $70.7 million used for acquisitions and $40.9 million used to purchase property and equipment (primarily computer software and hardware, leasehold improvements and analytical equipment), offset by $10.0 million of net proceeds from the sale of marketable securities and $0.3 million from proceeds from sale of assets. Net cash used by investing activities for fiscal year 2006 totaled $43.1 million resulting from purchases of property and equipment totaling $29.8 million, $7.4 million used for acquisitions, and $5.9 million used for net purchases of marketable securities.

Net cash provided by financing activities for fiscal year 2007 totaled $39.7 million, and consisted of $65.0 million in borrowings under lines of credit, $10.2 million from proceeds from the issuance of common stock in connection with the Company’s stock option and employee stock purchase plans, offset by $35.5 million used in repayments under lines of credit and capital lease obligations. Net cash provided by financing activities for fiscal year 2006 totaled $8.0 million and consisted of $16.9 million from proceeds from the issuance of common stock in connection with the Company’s stock option and employee stock purchase plans, offset by $8.0 million used to repurchase the Company’s common stock pursuant to its stock repurchase program and $0.9 million in repayments under lines of credit and long term debt.

LINES OF CREDIT

On January 12, 2007, the Company entered into a five-year, $100 million unsecured senior revolving credit facility (the “Credit Agreement”) with a group of lenders (including and managed by JPMorgan Bank, N.A.) (“Bank”). The Credit Agreement permits borrowing at interest rates equal to LIBOR plus a margin to be agreed by the Bank and the Company, or rates to be set in any other manner as agreed between the Bank and the Company. The Credit Agreement is guaranteed by certain of the Company’s U.S. subsidiaries. A portion of the loan amount is available for swingline loans of up to $20 million to be made by JPMorgan Chase Bank, N.A. The Company has an option to increase the maximum amount that may be borrowed under the Credit Agreement by $50 million. The Company is subject to certain financial covenants under this facility. The balance outstanding under this Credit Agreement was $30 million at June 30, 2007 at an interest rate of 6.125%, as determined based on LIBOR plus a margin. The remaining $70 million is available and subject to the annual commitment fee (Unused Fees) on the unused commitment amount ranging from 0.125% to 0.300% based on the total leverage ratio. See Note 8 to the Consolidated Financial Statements for additional information.

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The Company has a line of credit with ABN AMRO Bank, NV in the amount of Euro 12.0 million. This line of credit is not collateralized, is payable on demand, and bears interest at a rate ranging between 5% and 7%. The line of credit may be revoked or canceled by the bank at any time at its discretion. The Company primarily entered into this line of credit to facilitate business transactions with the bank. At June 30, 2007, the Company had Euro 12.0 million available under this line of credit.

The Company has other foreign lines of credit with banks totaling approximately $2.0 million. These lines of credit are used as overdraft protection and bear interest at rates ranging from 6% to 8%. The lines of credit are payable on demand and are supported by PAREXEL International Corporation. At June 30, 2007, the Company had approximately $2.0 million available under these arrangements.

The Company has a cash pooling arrangement with ABN AMRO Bank. Pooling occurs when debit balances are offset against credit balances and the net position is used as a basis by the bank for calculating interest. Each legal entity owned by the Company and party to this arrangement remains the owner of either a credit or debit balance. Therefore, interest income is earned in legal entities with credit balances, while interest expense is charged to legal entities with debit balances. Based on the pool’s overall balance, the Bank then (1) recalculates the overall interest to be charged or earned, (2) compares this amount with the sum of previously charged/earned interest amounts per account and (3) additionally pays/charges the difference.

FINANCING NEEDS

The Company’s primary cash needs are for the payment of salaries and fringe benefits, hiring and recruiting expenses, business development costs, acquisition-related costs, capital expenditures, and facility-related expenses. The Company’s principal source of cash is from contracts with clients. If the Company were unable to generate new contracts with existing and new clients or if the level of contract cancellations increased, the Company’s revenue and cash flow would be adversely affected (see “Risk Factors” for further detail). Absent a material adverse change in the level of the Company’s new business bookings or contract cancellations, PAREXEL believes that its existing capital resources together with cash flow from operations and borrowing capacity under existing lines of credit will be sufficient to meet its foreseeable cash needs over the next twelve months and on a longer term basis.

In the future, the Company expects to continue to acquire businesses to enhance its service and product offerings, expand its therapeutic expertise, and/or increase its global presence. Any such acquisitions may require additional external financing, and the Company may from time to time seek to obtain funds from public or private issuances of equity or debt securities. The Company may be unable to secure such financing on terms acceptable to the Company.

On June 29, 2007, the Company, through a wholly owned indirect subsidiary, initiated an offer (the “Tender Offer”) to purchase all of the issued and outstanding shares of common stock of Apex International Clinical Research Co., LTD (“Apex”). Apex is a clinical research company based in Taiwan.

Pursuant to the terms of a prospectus and subject to regulatory approval in Taiwan, the Company has agreed to purchase up to 100% of the issued and outstanding shares of Apex, on a fully diluted basis, at a per share price of NT$82.94 in the Tender Offer, representing a total purchase price of approximately NT$1,794,240,938 or approximately $54.7 million. As a condition to the closing of the Tender Offer, the minimum number of shares tendered to the Company by shareholders was 7,138,890, representing approximately 33% of the total issued and outstanding shares of Apex, on a fully diluted basis (the “Minimum Threshold”). The Minimum Threshold has been satisfied.

The Tender Offer was scheduled to expire on August 20, 2007, but due to the meeting schedule of the regulators, the Company made announcements and filed relevant reports with the Financial Supervisory Commission to extend the Tender Offer period to the 3^rd business day following the receipt of the relevant foreign investment approvals from the Investment Commission, Ministry of Economic Affairs, but not later than September 19, 2007. If all of the conditions to the Tender Offer are satisfied, the Company expects that it would complete the purchase of all shares tendered in the Tender Offer within five business days following the expiration of the tender offer period.

The Company expects capital expenditures to total approximately $40 million in fiscal year 2008, primarily for computer software and hardware and leasehold improvements.

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On September 9, 2004, the Board of Directors approved a stock repurchase program authorizing the purchase of up to $20.0 million of the Company’s common stock to be repurchased in the open market subject to market conditions. Unless terminated earlier by resolution of the Company’s Board of Directors, this repurchase program will expire when the entire amount authorized has been fully utilized. As of June 30, 2007, the Company had acquired 620,414 shares at a total cost of $14.0 million under this program.

CONTRACTUAL OBLIGATIONS, CONTINGENT LIABILITIES AND GUARANTEES

The Company’s contractual obligations with scheduled maturities for fiscal years subsequent to June 30, 2007 are as follows:

			Less than 1		1 – 3		3 – 5		More than
($ IN THOUSANDS)	Total		year		years		years		5 years
Operating leases	$	237,535	$	42,013	$	58,980	$	39,054	$	97,488
Obligations under capital leases		258		166		92		—		—
Purchase obligations		16,568		7,691		4,076		4,562		239
Total	$	254,361	$	49,870	$	63,148	$	43,616	$	97,727

In connection with the IMC acquisition during fiscal year 2005, as discussed in Note 3 to the Consolidated Financial Statements included in Item 8 of this annual report, the Company agreed to make additional payments of up to $2.9 million in contingent purchase price if IMC achieves certain established financial targets through March 31, 2008. As of June 30, 2007, the Company had paid $0.6 million in earn-out payments under the terms of the IMC acquisition.

In connection with the Qdot acquisition, as discussed in Note 3 to the Consolidated Financial Statements included in Item 8 of this annual report, the Company agreed to make additional payments of up to approximately $3.0 million in contingent purchase price if Qdot achieved certain established financial targets through June 30, 2008. In September 2006, the Company paid $0.8 million in contingent earn-out payment. As a result of management responsibility changes, the Company reached an agreement with Qdot in December 2006 and amended the earn-out agreement to pay a fixed additional approximate amount of $2.1 million ($0.9 million was paid in January 2007, with the remaining $1.2 million to be paid by December 31, 2007).

The Company has letter-of-credit agreements with banks totaling approximately $6.9 million guaranteeing performance under various operating leases and vendor agreements.

The Company has an unsecured senior revolving credit facility for $100 million with a group of lenders (including and managed by JPMorgan Chase Bank, N.A.) that is guaranteed by certain of the Company’s U.S. subsidiaries.

As of June 30, 2007, the Company had approximately $16.6 million in purchase obligations with various vendors for the purchase of computer software and recruiting services through October 31, 2011.

OFF-BALANCE SHEET ARRANGEMENTS

The Company has no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on the Company’s financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to the Company’s investors.

INFLATION

The Company believes the effects of inflation generally do not have a material adverse impact on its operations or financial condition.

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RELATED PARTY TRANSACTIONS

As discussed in Note 3 to the consolidated financial statements included in Item 8 of this annual report, on August 22, 2005, the Company acquired all of the equity interests held by minority stockholders of Perceptive Informatics, Inc., and now owns all of the outstanding common stock of Perceptive. This acquisition was effected through a “short-form” merger of Perceptive with PIC Acquisition, Inc., an indirect subsidiary of PAREXEL and, prior to the merger, the owner of 97.8% of the outstanding common stock of Perceptive. Under the terms of the merger, PAREXEL agreed to pay an aggregate of approximately $3.2 million in cash to the minority stockholders (including option holders upon exercise of stock options) for their shares of common stock of Perceptive. Certain executive officers and directors of PAREXEL held shares of Perceptive common stock prior to the merger.

In addition, under the terms of the merger, PAREXEL assumed all outstanding stock options under Perceptive’s stock incentive plan. As a result, the holders of in-the-money Perceptive stock options as of August 22, 2005 are entitled to receive upon exercise of such stock options $1.65 in cash, without interest, for each share of Perceptive common stock that was subject to such stock options immediately prior to the merger. None of the other terms and conditions of the Perceptive stock options have changed. The stock options will continue to be exercisable only upon payment of the exercise price of such options and to be subject to the vesting schedule to which such stock options were subject immediately prior to the merger. Certain executive officers and directors of PAREXEL held stock options to purchase Perceptive common stock prior to the merger.

Additionally, under the terms of the merger, PAREXEL made payments totaling $1.6 million to certain employees of Perceptive on the first anniversary of the effective date of the merger, including $500,000 to Mark Goldberg, President of CRS & Perceptive. These payments were not conditioned on these employees remaining as employees of Perceptive on the first anniversary of the effective date of the merger.

The terms and conditions of the merger were established and approved by a special committee of the Board of Directors of PAREXEL consisting of two independent directors of PAREXEL having no interests in Perceptive.

RECENTLY ISSUED ACCOUNTING STANDARDS

In February 2007, the Financial Accounting Standards Board (“FASB”) issued Statement of Financial Accounting Standards (“SFAS”) No. 159, “The Fair Value Option for Financial Assets and Financial Liabilities — including an amendment of FASB Statement No. 115” (“SFAS 159”). SFAS 159 creates a “fair value option” under which an entity may elect to record certain financial assets or liabilities at fair value upon their initial recognition. Subsequent changes in fair value would be recognized in earnings as those changes occur. The election of the fair value option would be made on a contract-by-contract basis and would need to be supported by concurrent documentation or a preexisting documented policy. SFAS 159 requires an entity to separately disclose the fair value of these items on the balance sheet or in the footnotes to the financial statements and to provide information that would allow the financial statement user to understand the impact on earnings from changes in the fair value. SFAS 159 is effective as of the beginning of an entity’s first fiscal year that begins after November 15, 2007 and will be in effect for PAREXEL beginning on July 1, 2008. The Company is currently evaluating the potential impact that the adoption of SFAS 159 will have on its consolidated financial statements.

In September 2006, the FASB issued SFAS No. 157, “Fair Value Measurements” (“SFAS 157”). SFAS 157 provides guidance for using fair value to measure assets and liabilities. The standard also responds to investors’ requests for more information about (1) the extent to which companies measure assets and liabilities at fair value, (2) the information used to measure fair value, and (3) the effect that fair-value measurements have on earnings. SFAS 157 will apply whenever another standard requires (or permits) assets or liabilities to be measured at fair value. The standard does not expand the use of fair value to any new circumstances. SFAS 157 is effective for financial statements issued for fiscal years beginning after November 15, 2007, and interim periods within those fiscal years and will be in effect for PAREXEL beginning on July 1, 2008. The Company is currently evaluating the potential impact that the adoption of SFAS 157 will have on its consolidated financial statements.

In July 2006, the FASB issued FASB Interpretation No. 48, “Accounting for Uncertainty in Income Taxes” (“FIN 48”). FIN 48 clarifies the accounting for uncertain income tax positions that are recognized in a company’s financial statements in accordance with the provisions of FASB Statement No. 109, “Accounting for Income Taxes”. FIN 48 prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. FIN 48 also provides guidance on the derecognition of uncertain positions, financial statement classification, accounting for interest and penalties, accounting for interim periods and new disclosure requirements. FIN 48 is effective for fiscal years beginning after December 15, 2006 and is in effect for PAREXEL as of July 1, 2007. The Company is currently evaluating the potential impact that the adoption of FIN 48 will have on its consolidated financial statements.

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ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

MARKET RISK

Market risk is the potential loss arising from adverse changes in market rates and prices, such as foreign currency rates, interest rates, and other relevant market rates or price changes. In the ordinary course of business, the Company is exposed to market risk resulting from changes in foreign currency exchange rates, and the Company regularly evaluates its exposure to such changes. The Company’s overall risk management strategy seeks to balance the magnitude of the exposure and the costs and availability of appropriate financial instruments.

FOREIGN CURRENCY EXCHANGE RATES

The Company derived approximately 64.0% of its consolidated service revenue for the fiscal year ended June 30, 2007 from operations outside of the U.S., of which 16.0% was denominated in British pounds and approximately 36.4% was denominated in Euros. The Company derived approximately 64.6% of its consolidated service revenue for the fiscal year ended June 30, 2006 from operations outside of the U.S., of which 17.0% was denominated in British pounds and approximately 37.0% was denominated in Euros. The Company does not have significant operations in countries in which the economy is considered to be highly inflationary. The Company’s financial statements are denominated in U.S. dollars. Accordingly, changes in exchange rates between foreign currencies and the U.S. dollar will affect the translation of financial results into U.S. dollars for purposes of reporting the Company’s consolidated financial results.

The Company may be subjected to foreign currency transaction risk when the Company’s foreign subsidiaries enter into contracts or incur liabilities denominated in a currency other than the foreign subsidiary’s functional (local) currency. To the extent the Company is unable to shift the effects of currency fluctuations to its clients, foreign exchange fluctuations as a result of currency exchange losses could have a material effect on the Company’s results of operations. The Company has a derivative hedging policy to hedge certain foreign denominated accounts receivable and intercompany payables, as well as variable to fixed interest rate swaps. Under this policy, derivatives are accounted for in accordance with SFAS No. 133, “Accounting for Derivative Instruments and Hedging Activities” (“SFAS 133”). The notional contract amount of these outstanding foreign currency exchange contracts totaled approximately $86.5 million at June 30, 2007.

Occasionally, the Company enters into other foreign currency exchange contracts to offset the impact of currency fluctuations. These foreign currency exchange contracts are entered into as economic hedges, but are not designated as hedges for accounting purposes as defined under SFAS 133. The notional contract amount of these outstanding foreign currency exchange contracts was approximately $87.5 million at June 30, 2007. The potential change in the fair value of these foreign currency exchange contracts that would result from a hypothetical change of 10% in exchange rates would be approximately $1.0 million. During the fiscal year ended, 2007 and 2006, the Company recorded foreign exchange gain of $0.7 million and a loss of $0.3 million, respectively. The Company acknowledges its exposure to additional foreign exchange risk as it relates to assets and liabilities that are not part of the economic hedge program, but quantification of this risk is very difficult to assess at any given point in time.

INTEREST RATES

The Company’s exposure to interest rate changes relates primarily to the level of short-term and long-term debts and marketable securities. Short-term debts were approximately $30.5 million at June 30, 2007 and approximately $0.5 million at June 30, 2006. Long-term debts were approximately $0.3 million at June 30, 2007 and approximately $0.7 million at June 30, 2006. Marketable securities were $0 at June 30, 2007 and $10.0 million at June 30, 2006.

In connection with the borrowings under our credit facilities in Note 8 to the consolidated financial statements included in Item 8 of this annual report, the Company entered into interest rate exchange agreements to swap, at specified intervals, the difference between fixed and variable interest amounts calculated by reference to an agreed-upon notional principal amount. These hedges are considered perfectly effective since the critical terms of the debt and the interest rate exchange match and the other conditions of SFAS No. 133, “Accounting for Derivative Instruments and Hedging Activities,” are met. The mark-to-market values of both the hedge instrument and underlying debt obligations are recorded as equal and offsetting amounts in interest expense. The Company had interest rate exchange agreements with a notional amount of $20 million at June 30, 2007.

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ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

PAREXEL INTERNATIONAL CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)

	For the years ended June 30,
	2007			2006			2005
Service revenue	$	741,955		$	614,947		$	544,726
Reimbursement revenue		176,149			145,007			126,811
Total revenue		918,104			759,954			671,537
Costs and expenses:
Direct costs		487,200			406,241			360,044
Reimbursable out-of-pocket expenses		176,149			145,007			126,811
Selling, general and administrative		166,368			143,652			131,025
Depreciation		26,546			24,473			27,790
Amortization		4,309			1,562			1,828
Restructuring (benefit) charges		(34	)		(836	)		24,315
Total costs and expenses		860,538			720,099			671,813
Income (loss) from operations		57,566			39,855			(276	)
Interest income		12,750			9,354			6,320
Interest expense		(11,764	)		(7,064	)		(4,508	)
Other income (loss), net		982			(371	)		(796	)
Total other income, net		1,968			1,919			1,016
Income before provision for income taxes and minority interest (benefit) expense		59,534			41,774			740
Provision for income taxes		22,277			19,328			35,566
Minority interest (benefit) expense, net of tax		(32	)		(1,098	)		351
Net income (loss)	$	37,289		$	23,544		$	(35,177	)
Earnings (loss) per share:
Basic	$	1.37		$	0.89		$	(1.35	)
Diluted	$	1.33		$	0.87		$	(1.35	)
Weighted average shares:
Basic		27,316			26,557			26,065
Diluted		28,108			27,013			26,065

The accompanying notes are an integral part of the consolidated financial statements.

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PAREXEL INTERNATIONAL CORPORATION
CONSOLIDATED BALANCE SHEETS
(in thousands, except share data)

	As of June 30,
	2007		2006
ASSETS
Current assets:
Cash and cash equivalents	$	96,677	$	82,749
Marketable securities		—		10,000
Billed and unbilled accounts receivable, net		325,021		272,063
Prepaid expenses		15,484		11,258
Deferred tax assets		4,984		934
Other current assets		10,974		8,074
Total current assets		453,140		385,078
Property and equipment, net		97,233		78,386
Goodwill		90,766		50,112
Other intangible assets, net		27,361		7,832
Non-current deferred tax assets		1,145		10,495
Other assets		10,368		6,730
Total assets	$	680,013	$	538,633
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Notes payable and current portion of long-term debt	$	30,463	$	498
Accounts payable		12,942		17,185
Deferred revenue		170,718		139,836
Accrued expenses		20,431		20,117
Accrued restructuring charges, current portion		4,337		5,190
Accrued employee benefits and withholdings		55,296		46,385
Current deferred tax liabilities		16,889		12,645
Income tax payable		12,109		7,498
Other current liabilities		11,209		4,172
Total current liabilities		334,394		253,526
Long-term debt, net of current portion		277		705
Non-current deferred tax liabilities		12,183		16,780
Long-term accrued restructuring charges, less current portion		5,970		10,967
Other liabilities		8,247		5,569
Total liabilities		361,071		287,547
Commitments and contingencies (Note 15)
Minority interest in subsidiary		2,326		2,323
Stockholders’ equity:
Preferred stock—$.01 par value; shares authorized: 5,000,000; Series A junior participating preferred stock - 50,000 shares designated, none issued and outstanding Common stock—$.01 par value; shares authorized: 75,000,000 and 50,000,000 at June 30, 2007 and 2006, respectively shares issued and outstanding: 27,565,633 and 26,920,119 at June 30, 2007 and 2006, respectively		289		283
Additional paid-in capital		191,835		177,309
Retained earnings		102,564		65,275
Accumulated other comprehensive income		21,928		5,896
Total stockholders’ equity		316,616		248,763
Total liabilities and stockholders’ equity	$	680,013	$	538,633

The accompanying notes are an integral part of the consolidated financial statements.

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PAREXEL INTERNATIONAL CORPORATION
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(in thousands, except share data)

																Accum.
																Other
	Common Stock															Compre-			Total			Compre-
							Additional			Treasury						hensive			Stock-			hensive
	Number			Par			Paid-in			Stock,			Retained			Income			holders’			Income
	Of Shares			Value			Capital			At Cost			Earnings			(Loss)			Equity			(Loss)
Balance at June 30, 2004		26,077,078		$	275		$	175,126		$	(8,056	)	$	76,908		$	2,507		$	246,760		$	19,151
Reclassification of treasury stock								(8,056	)		8,056									—
Shares repurchased in the open market		(476,344	)		(5	)		(9,737	)											(9,742	)
Shares issued under stock option/ employee stock purchase plans		552,600			5			6,553												6,558
Shares issued under subsidiary option plan								35												35
Net unrealized loss on marketable securities and derivative instruments																	(356	)		(356	)		(356	)
Foreign currency translation adjustment																	(2,507	)		(2,507	)		(2,507	)
Net loss														(35,177	)					(35,177	)		(35,177	)
Balance at June 30, 2005		26,153,334			275			163,921			—			41,731			(356	)		205,571			(38,040	)
Shares repurchased in the open market		(344,570	)		(3	)		(7,997	)											(8,000	)
Shares issued under stock option/ employee stock purchase plans		1,111,355			11			16,943												16,954
Stock-based compensation								4,442												4,442
Net unrealized gain on marketable securities and derivative instruments																	712			712			712
Foreign currency translation adjustment																	5,540			5,540			5,540
Net income														23,544						23,544			23,544
Balance at June 30, 2006		26,920,119			283			177,309			—			65,275			5,896			248,763			29,796
Shares issued under stock option/ employee stock purchase plans		645,514			6			10,199												10,205
Stock-based compensation								4,327												4,327
Net unrealized gain on derivative instruments																	172			172			172
Foreign currency translation adjustment																	15,860			15,860			15,860
Net income														37,289						37,289			37,289
Balance at June 30, 2007		27,565,633		$	289		$	191,835			—		$	102,564		$	21,928		$	316,616		$	53,321

The accompanying notes are an integral part of the consolidated financial statements.

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PAREXEL INTERNATIONAL CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)

	For the years ended June 30,
	2007			2006			2005
Cash flow from operating activities:
Net income (loss)	$	37,289		$	23,544		$	(35,177	)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Minority interest (benefit) expense, net of tax		(32	)		(1,098	)		351
Depreciation and amortization		30,855			26,035			29,618
Stock-based compensation		4,327			4,442			—
Loss on disposal of assets		72			156			85
Deferred income taxes		4,947			4,164			29,607
Provision for losses on receivables, net		247			1,098			(1,844	)
Changes in assets and liabilities, net of effects from acquisitions:
Accounts receivable		(33,927	)		(54,111	)		6,215
Prepaid expenses and other current assets		(6,743	)		(3,545	)		(2,870	)
Other assets		(6,770	)		(2,545	)		3,409
Accounts payable		(6,436	)		2,608			(1,556	)
Deferred revenue		30,008			7,595			(13,168	)
Other current liabilities		17,640			25,948			7,186
Other liabilities		(2,321	)		(6,047	)		9,131
Net cash provided by operating activities		69,156			28,244			30,987
Cash flow from investing activities:
Purchases of marketable securities		(120,125	)		(79,075	)		(60,300	)
Proceeds from sale of marketable securities		130,125			73,075			91,221
Purchases of property and equipment		(40,855	)		(29,763	)		(31,814	)
Acquisition of businesses		(70,695	)		(7,425	)		(1,461	)
Proceeds from sale of assets		300			121			392
Net cash used in investing activities		(101,250	)		(43,067	)		(1,962	)
Cash flow from financing activities:
Proceeds from issuance of common stock		10,205			16,954			6,558
Payments to repurchase common stock		—			(8,000	)		(9,742	)
Borrowings under lines of credit		65,000			(916	)		369
Repayments under lines of credit		(35,089	)		—			—
Repayments under long-term debt		(428	)		—			—
Proceeds from issuance of subsidiary’s common stock		—			—			35
Net cash provided by(used in) financing activities		39,688			8,038			(2,780	)
Effect of exchange rate changes on cash and cash equivalents		6,334			4,912			(2,309	)
Net increase (decrease) in cash and cash equivalents		13,928			(1,873	)		23,936
Cash and cash equivalents at beginning of year		82,749			84,622			60,686
Cash and cash equivalents at end of year	$	96,677		$	82,749		$	84,622

The accompanying notes are an integral part of the consolidated financial statements.

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PAREXEL INTERNATIONAL CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)
(in thousands)

	For the years ended June 30,
	2007			2006			2005
Supplemental disclosures of cash flow information
Net cash paid during the year for:
Interest	$	9,554		$	7,064		$	4,508
Income taxes, net of refunds	$	13,942		$	2,631		$	7,131
Supplemental disclosures of investing activities
Fair value of assets acquired and goodwill	$	74,722		$	8,227		$	2,820
Liabilities assumed		(4,027	)		(802	)		(1,359	)
Cash paid for acquisitions	$	70,695		$	7,425		$	1,461

The accompanying notes are an integral part of the consolidated financial statements.

- 45 -

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1. DESCRIPTION OF BUSINESS

The Company is a leading bio/pharmaceutical services company, providing a broad range of expertise in clinical research, medical communications services, consulting and informatics, and advanced technology products and services to the worldwide pharmaceutical, biotechnology, and medical device industries. The Company’s primary objective is to provide solutions for managing the bio/pharmaceutical product lifecycle with the goal of reducing the time, risk, and cost associated with the development and commercialization of new therapies. Since its incorporation in 1983, PAREXEL has developed significant expertise in processes and technologies supporting this strategy. The Company’s product and service offerings include: clinical trials management, data management, biostatistical analysis, medical communications services, clinical pharmacology, patient recruitment, regulatory and product development consulting, health policy and reimbursement, performance improvement, industry training and publishing, medical imaging services, IVRS, CTMS, web-based portals, systems integration, patient diary applications, and other drug development consulting services. The Company believes that its comprehensive services, depth of therapeutic area expertise, global footprint and related access to patients, and sophisticated information technology, along with its experience in global drug development and product launch services, represent key competitive strengths.

NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation and Principles of Consolidation

The consolidated financial statements include the accounts of PAREXEL International Corporation, its wholly-owned and majority-owned subsidiaries. All significant inter-company accounts and transactions have been eliminated.

Reclassifications

Certain immaterial fiscal year 2006 and 2005 amounts have been reclassified to conform to the fiscal year 2007 presentation.

Use of Estimates

The Company prepares its financial statements in conformity with generally accepted accounting principles which require the Company to make estimates and assumptions that affect the amounts reported in the financial statements. Estimates are used in accounting for, among other items, long term contracts, allowance for credit losses or receivables, the Company’s periodic impairment reviews of goodwill, and the valuations of long-term assets. The Company’s estimates are based on the facts and circumstances available at the time estimates are made, historical experience, risk of loss, general economic conditions, trends, and assessments of the probable future outcomes of these matters. Actual results could differ from those estimates. Estimates and assumptions are reviewed periodically, and the effects of changes, if any, are reflected in the statement of operations in the period in which they are determined.

Fair Values of Financial Instruments

The fair value of the Company’s cash and cash equivalents, accounts receivable, accounts payable, and debt approximates the carrying value of these financial instruments. The Company determines the estimated fair values of other financial instruments, including debt, equity and risk management instruments, using available market information and valuation methodologies, primarily discounted cash flow analysis or input from independent investment bankers.

Revenue Recognition

In the Company’s CRS, PCMS, and Perceptive business segments, fixed-price contract revenue is recognized as services are performed. The Company measures progress for fixed price contracts using the concept of proportional performance based upon a unit-based output method. Under the unit-based output method, output units are pre-defined in the contract and revenue is recognized based upon completion of such output units.

PAREXEL’s arrangements with customers generally involve multiple elements. The deliverables in the arrangement are evaluated to determine whether they represent separate units of accounting under Emerging Issues Task Force (“EITF”) 00-21, “Revenue Arrangements with Multiple Deliverables”, at contract inception. The total fee for the arrangement is allocated to each unit of accounting based on its relative fair value, taking into consideration any performance, cancellation or termination provisions. Fair value for each element is established generally based on the sales price charged when the same or similar services are sold separately to our customers. Revenue is recognized when revenue recognition criteria for each unit of accounting are met.

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In the Company’s CTMS operating unit of the Perceptive business segment, software revenue is recognized on a proportional performance basis in accordance with Statement of Position (“SOP”) 97-2 “Software Revenue Recognition” and the relevant guidance provided by SOP 81-1 “Accounting for Performance of Construction-Type and Certain Production-Type Contracts”, due to the significant nature of customization of each project.

Revenue related to contract modifications is recognized when realization is assured and the amounts are reasonably determinable. Adjustments to contract cost estimates are made in the periods in which the facts that require the revisions become known. When the revised estimates indicate a loss, such loss is recognized in the current period in its entirety. Unbilled accounts receivable represent revenue recognized in excess of amounts billed. Deferred service revenue represents amounts billed in excess of revenue recognized.

Reimbursable out-of-pocket expenses are reflected in the Company’s Consolidated Statements of Operations under “Reimbursement revenue” and “Reimbursable out-of-pocket expenses”.

As is customary in the industry, the Company routinely subcontracts on behalf of its clients with independent physician investigators in connection with clinical trials. The related investigator fees are not reflected in PAREXEL’s Service revenue, Reimbursement revenue, Reimbursable out-of-pocket expenses, and/or Direct costs, since such fees are reimbursed by clients on a “pass through basis”, without risk or reward to the Company. The amounts of these investigator fees were $126.0 million, $92.7 million, and $64.1 million for the fiscal years ended June 30, 2007, 2006, and 2005, respectively.

Cash, Cash Equivalents and Marketable Securities

The Company considers all highly liquid investments purchased with original maturities of 90 days or less to be cash equivalents. Marketable securities include securities purchased with original maturities of greater than 90 days. Marketable securities are classified as available for sale and are carried at fair market value, which approximates amortized cost. Unrealized gains and losses on these securities, net of taxes, are recorded in stockholders’ equity.

Concentration of Credit Risk

Financial instruments, which may potentially expose the Company to concentrations of credit risk, include trade accounts receivable. However, the Company maintains reserves for potential credit losses and such losses, in the aggregate, have not exceeded management expectations. In fiscal years 2007 and 2006, the Company’s largest client accounted for 7% of consolidated service revenue and in fiscal year 2005, the Company’s largest client accounted for 8% of consolidated service revenue.

Provision for Losses on Receivables

PAREXEL records a loss provision based on historical collectability and specific identification of potential problem accounts.

Property and Equipment

Property and equipment is stated at cost. Depreciation is provided using the straight-line method based on estimated useful lives of 40 years for buildings, 3 to 8 years for computer hardware and software, and 5 years for office furniture, fixtures and equipment. Leasehold improvements are amortized over the lesser of the estimated useful lives of the improvements or the remaining lease term. Charges resulting from the amortization of assets recorded under capital leases are included with depreciation expense. Repair and maintenance costs are expensed as incurred.

Development of Software for Internal Use

The Company accounts for the costs of computer software developed or obtained for internal use in accordance with Statement of Position (“SOP”) 98-1, “Accounting for the Costs of Computer Software Developed or Obtained for Internal Use” (“SOP 98-1”). The Company capitalizes costs of materials, consultants and payroll and payroll related costs for employees incurred in developing internal-use software. These costs are included in computer software in Note 6 below. The amounts related to internal use software totaled $55.1 million at June 30, 2007 and $49.8 million at June 30, 2006. Costs incurred during the preliminary project and post-implementation stages are charged to expense.

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Research and Development Costs

The Company incurs ongoing research and development costs related to core technologies used internally as well as software and technology sold externally. Unless eligible for capitalization, these costs are expensed as incurred. Research and development expense was $9.7 million, $6.4 million, and $4.6 million in fiscal years 2007, 2006, and 2005, respectively, and is included in selling, general and administrative expenses in the consolidated statements of operations.

Advertising Costs

All advertising costs are expensed as incurred. Advertising expense was $1.1 million, $0.9 million, and $2.3 million in fiscal years 2007, 2006, and 2005, respectively.

Goodwill

The Company follows the provisions of SFAS No. 142, “Goodwill and Other Intangible Assets”. Under this statement, goodwill as well as certain other intangible assets, determined to have an indefinite life, are not amortized. Instead, these assets are reviewed for impairment at least annually or more frequently if an event occurs or circumstances change that would more likely than not reduce the carrying value of the reporting unit below its fair value. The Company has performed its annual impairment test, with no evidence of impairment of the Company’s goodwill balance for fiscal years 2007, 2006 and 2005.

The changes in the carrying amount of goodwill balances for fiscal years 2007, 2006 and 2005 were as follows (in thousands):

Carrying amount as of June 30, 2004	$	41,002
Add: IMC		1,951
Final purchase accounting adjustments		(635	)
Effect of changes in rates used for translation and adjustments		497
Carrying amount as of June 30, 2005		42,815
Add: Qdot		2,773
Perceptive		3,080
Synchron		(40	)
IMC		647
Effect of changes in rates used for translation and adjustments		837
Carrying amount as of June 30, 2006		50,112
Add: BMR/CCT		35,474
Perceptive		48
Qdot		2,139
Effect of changes in rates used for translation and adjustments		2,993
Carrying amount as of June 30, 2007	$	90,766

PAREXEL records Goodwill to the business segment affected by the transaction. Goodwill balances by segment at June 30, 2007 are as follows:

($ IN 000’s)	CRS		PCMS		PERCEPTIVE		TOTAL
Goodwill	$	69,375	$	4,449	$	16,942	$	90,766

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Intangible Assets

Intangible assets consist primarily of technology and customer lists acquired through acquisitions completed by the Company in prior periods. Intangible assets are amortized over their expected period of benefit, which generally ranges from 3 to 15 years.

As of December 31, 2007, intangible assets consisted of the following (in thousands):

	Weighted Average			Accumulated
	Useful Life	Cost		Amortization		Net
Non-competition and non- solicitation agreements	3 years	$	188	$	60	$	128
Technology	5 years		2,379		2,101		278
Customer relationships	10 years		33,332		6,377		26,955
Total intangible assets purchased		$	35,899	$	8,538	$	27,361

As of December 31, 2006, intangible assets consisted of the following (in thousands):

	Weighted Average			Accumulated
	Useful Life	Cost		Amortization		Net
Non-competition and non- solicitation agreements	3 years	$	62	$	22	$	40
Technology and other	5 years		2,187		1,486		701
Customer relationships	10.7 years		10,950		3,859		7,091
Total intangible assets purchased		$	13,199	$	5,367	$	7,832

The changes in the carrying amount of intangible assets for fiscal years 2007 and 2006 were as follows (in thousands):

Carrying amount as of June 30, 2004	$	10,636
Add: IMC		585
Less: Amortization		(1,828	)
Effect of changes in rates used for translation and adjustments		(165	)
Carrying amount as of June 30, 2005		9,228
Less: Amortization		(1,562	)
Add: Effect of changes in rates used for translation and adjustments		166
Carrying amount as of June 30, 2006		7,832
Add: BMR/CCT		23,621
Effect of changes in rates used for translation and adjustments		217
Less: Amortization		(4,309	)
Carrying amount as of June 30, 2007	$	27,361

Amortization expense was $4.3 million, $1.6 million, and $1.8 million for the fiscal years ended June 30, 2007, 2006, and 2005, respectively. Estimated amortization expense for the next five years is as follows (in thousands):

2008	$	3,229
2009	$	2,794
2010	$	2,133
2011	$	2,114
2012	$	2,114

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Investments

The Company has investments in privately held entities in the form of equity instruments that are not publicly traded and for which fair values are not readily determinable. The Company records its investments in private entities under the cost method of accounting and assesses the net realizable value of these entities on a quarterly basis to determine if there has been a decline (other than temporary) in the fair value of these entities. The quarterly assessment includes an evaluation of the market condition of the overall industry, historical and projected financial performance, expected cash needs and recent funding events. The balance of the investments recorded under the cost method was approximately $3.8 million as of June 30, 2007 and $3.6 million as of June 30, 2006.

Income Taxes

Deferred income tax assets and liabilities are recorded for the expected future tax consequences (utilizing current tax rates) of temporary differences between the carrying amounts and the tax bases of assets and liabilities. Deferred tax assets are recognized for the estimated future tax benefits of deductible temporary differences and tax operating loss and credit carryforwards and are net of valuation allowances established in jurisdictions where the realization of those benefits is questionable. Deferred income tax expense represents the change in the net deferred tax asset and liability balances.

Foreign Currency

Assets and liabilities of the Company’s international operations are translated into U.S. dollars at exchange rates that are in effect on the balance sheet date and equity accounts are translated at historical exchange rates. Income and expense items are translated at average exchange rates, which are in effect during the year. Translation adjustments are accumulated in other comprehensive income (loss) as a separate component of stockholders’ equity in the consolidated balance sheet. Transaction gains and losses are included in other income in the consolidated statements of operations. Transaction gains (losses) were $0.7 million, $(0.3) million, and $(0.2) million in fiscal years 2007, 2006, and 2005, respectively.

Earnings Per Share

Earnings per share has been calculated in accordance with SFAS No. 128, “Earnings per Share.” Basic earnings per share is computed by dividing net income for the period by the weighted average number of common shares outstanding during the period. Diluted earnings per share is computed by dividing net income by the weighted average number of common shares plus the dilutive effect of outstanding stock options and shares issuable under the employee stock purchase plan.

Stock-Based Compensation

Prior to July 1, 2005, the Company accounted for employee stock-based compensation using the intrinsic value based method as prescribed by Accounting Principles Board Opinion No. 25, “Accounting for Stock Issued to Employees” (“APB 25”), as described by FASB Interpretation No. 44 “Accounting for Certain Transactions Involving Stock Compensation — an interpretation of APB Opinion No. 25”. Accordingly, no compensation expense was required to be recognized as long as the exercise price of the Company’s stock options was equal to the market price of the underlying stock on the date of grant.

Effective July 1, 2005, the Company adopted SFAS No. 123(R) “Share-Based Payment” (“SFAS No. 123(R)”) under the modified prospective method as described in SFAS No. 123(R). Under this transition method, compensation expense recognized in the year ended June 30, 2006 includes compensation expense for all stock-based payments granted during the fiscal year ended June 30, 2006 and for all stock-based payments granted prior to, but not yet vested as of July 1, 2005, based on the grant date fair value estimated in accordance with the original provisions of SFAS No. 123. Accordingly, prior period financials were not restated. For the year ended June 30, 2006, the amount of compensation expense recognized was $4.4 million, of which, $0.9 million was recorded in direct costs and $3.5 million was recorded in selling, general and administrative expense in the consolidated statement of operations. The adoption of SFAS No. 123(R) had no effect on cash flow for the fiscal year ended June 30, 2006.

As a result of adopting the new accounting guidance for the year ended June 30, 2006, the Company’s income from continuing operations before income taxes and minority interest, net income, basic earnings per share and diluted earnings per share were $4.4 million, $4.2 million, $0.16 and $0.16 lower, respectively, than if the Company had continued to account for share-based compensation under APB 25.

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No compensation expense related to stock-based grants was recorded in the consolidated statement of operations for the year ended June 30, 2005, as all of the shares granted had an exercise price equal to the market value of the underlying stock on the date of grant. Prior period results were not restated with the adoption of SFAS No. 123(R).

The following table illustrates the effect on net loss and loss per share if PAREXEL had applied the fair-value recognition provisions required by SFAS No. 123 at the beginning of fiscal year 2005:

($ in thousands, except per share data)	2005
Net loss, as reported	$	(35,177	)
Deduct total stock-based compensation, net of tax		(3,211	)
Pro forma net loss	$	(38,388	)
Basic loss per share – as reported	$	(1.35	)
Basic loss per share – pro forma	$	(1.47	)

Stock Options

The stock option compensation cost calculated under the fair value approach is recognized on a pro rata basis over the vesting period of the stock options (averaged over four years). All stock option grants are subject to graded vesting as services are rendered. The fair value for granted options was estimated at the time of the grant using the Black-Scholes option-pricing model. Expected volatilities are based on implied and historical volatilities and PAREXEL uses historical data to estimate option exercise behavior.

The following assumptions were used in PAREXEL’s Black-Scholes option-pricing model for awards issued during the respective periods:

	For the years ended June 30,
	2007			2006			2005
Dividend yield		0.0	%		0.0	%		0.0	%
Expected volatility		39.4	%		40.4	%		39.0	%
Risk-free interest rate		4.88	%		4.01	%		3.52	%
Expected term (in years)		4.33			4.77			5.0

The following table summarizes information related to stock option activity for the respective periods:

	For the years ended June 30,
($ in thousands, except per share data)	2007		2006		2005
Weighted-average fair value of options granted per share	$	12.15	$	8.27	$	8.26
Intrinsic value of options exercised	$	8,184	$	8,208	$	3,065
Cash received from options exercised	$	9,034	$	15,618	$	3,853

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Stock option activities for the three years ended June 30, 2007, 2006 and 2005 were as follows:

				Weighted-
				Average
	Number of			Exercise
	Options			Price
FY 2007
Outstanding at beginning of period		2,432,745		$	16.71
Granted		337,500		$	31.16
Exercised		(524,369	)	$	17.23
Canceled		(135,737	)	$	23.12
Outstanding at end of period		2,110,139		$	18.48
Exercisable at end of period		1,194,713		$	14.07
FY 2006
Outstanding at beginning of period		3,093,194		$	16.53
Granted		787,000		$	20.47
Exercised		(1,001,994	)	$	15.59
Canceled		(445,455	)	$	24.63
Outstanding at end of period		2,432,745		$	16.71
Exercisable at end of period		1,509,132		$	14.78
FY 2005
Outstanding at beginning of period		3,245,425		$	15.70
Granted		343,000		$	20.28
Exercised		(343,348	)	$	11.22
Canceled		(151,883	)	$	18.65
Outstanding at end of period		3,093,194		$	16.53
Exercisable at end of period		2,552,441		$	16.66

Options that were outstanding and exercisable as of June 30, 2007 are as follows:

					Weighted-
			Weighted-		Average		Aggregate
			Average		Remaining		Intrinsic
	Number of		Exercise		Contractual		Value
	Options		Price		Life In Years		(In Thousands)
Outstanding at end of period		2,110,139	$	18.48		4.47	$	38,998
Exercisable at end of period		1,194,713	$	14.07		2.79	$	16,815

Restricted Stock

On December 16, 2005, PAREXEL awarded an aggregate of 317,000 shares of “restricted stock” to retain executive officers of the Company and an aggregate of 150,000 shares to non-employee members of the Board of Directors. An additional 7,000 and 35,000 shares were awarded to certain executive officers of the Company on March 3, 2006 and May 8, 2006, respectively. Valuation of the restricted stock is calculated under the Monte Carlo simulation modeling method for valuing a contingent claim on stock with characteristics that depend on the trailing stock price path. The shares granted to executive officers vest based on whether during the period between the date of grant and December 31, 2008 the closing price of a share of Common Stock on the Nasdaq Global Select Market meets or exceeds specified targets for five consecutive trading days within specified time frames. In addition, any portion of any such award that has not vested by December 31, 2008 will automatically be forfeited to PAREXEL and, in the event a participant ceases to be employed by PAREXEL prior to December 31, 2008, such participant’s award will automatically be forfeited to PAREXEL. For the awards granted on December 16, 2005, the probability of vesting was 57.0%. The derived vesting period was 0.759 years for shares issued to the members of the Board of Directors and 3.044 years for the shares issued to the executive officers. For the awards granted on March 3, 2006, the probability of vesting was 85.6% and the derived vesting period was 2.833 years. For the awards granted on May 8, 2006, the probability of vesting was 87.0% and the derived vesting period was 3.148 years.

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On December 14, 2006, PAREXEL awarded 25,043 shares of restricted stock to certain members of the Board of Directors. Valuation of these shares was calculated under the same methodology as the shares granted in the prior fiscal year. These shares will vest based on whether during the period between the date of grant and December 31, 2008 the closing price of a share of Common Stock on the Nasdaq Global Select Market meets or exceeds specified targets for five consecutive trading days within specified time frames, and that he/she must still be a director of the Company on December 31, 2008.

Restricted stock activity under the Plan during the year ended June 30, 2007 was as follows:

				Weighted-
				Average
				Grant-Date
	Shares			Fair Value
Outstanding at beginning of period		365,333		$	14.25
Granted		25,043		$	19.32
Vested		(83,333	)	$	12.62
Outstanding at end of period, non-vested		307,043		$	15.11

Restricted stock activity under the Plan during the year ended June 30, 2006 was as follows:

				Weighted-
				Average
				Grant-Date
	Shares			Fair Value
Outstanding at beginning of period		—			-
Granted		509,000		$	13.79
Vested		(50,000	)	$	12.62
Forfeited		(93,667	)	$	12.62
Outstanding at end of period, non-vested		365,333		$	14.25

As of June 30, 2007, unearned stock-based compensation expense related to unvested awards (stock options and restricted stock) was approximately $9.2 million, which will be recognized over a weighted-average period of 4 years.

Derivative Financial Instruments

The Company utilizes derivative financial instruments to reduce currency exposures related to certain foreign currency denominated accounts receivable and intercompany payables. Derivatives are accounted for in accordance with SFAS No. 133, “Accounting for Derivative Instruments and Hedging Activities”. The Company recognizes derivative instruments as either assets or liabilities in the balance sheet and measures them at fair value. If the derivative instruments are designated as cash flow hedges, the corresponding effective portion of the changes in fair value is recorded in stockholders equity as a component of other comprehensive income (“OCI”). These amounts are reclassified from OCI and recognized in earnings when either the forecasted transaction occurs or it becomes probable that the forecasted transaction will not occur. The amount recorded in OCI at June 30, 2007 will be reclassified to earnings within twelve months. Changes in the ineffective portion of a derivative instrument are recognized in earnings in the periods in which they are identified. There were no losses recognized in earnings due to hedge ineffectiveness in fiscal year 2007. In fiscal year 2006, approximately $0.2 million of losses were recognized in earnings due to hedge ineffectiveness.

From time to time, the Company enters into foreign currency exchange contracts to hedge foreign currency exposures. These foreign currency exchange contracts are entered into as economic hedges, but are not designated as hedges for accounting purposes as defined under SFAS 133.

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In connection with the borrowings under our credit facilities discussed in Note 8 of these consolidated financial statements, the Company entered into interest rate exchange agreements to swap, at specified intervals, the difference between fixed and variable interest amounts calculated by reference to an agreed-upon notional principal amount. These hedges are considered perfectly effective since the critical terms of the debt and the interest rate exchange match and the other conditions of SFAS No. 133, “Accounting for Derivative Instruments and Hedging Activities,” are met. The mark-to-market values of both the hedge instrument and underlying debt obligations are recorded as equal and offsetting amounts in interest expense. The Company had interest rate exchange agreements with a notional amount of $20 million at June 30, 2007.

Recently Issued Accounting Standards

In February 2007, the Financial Accounting Standards Board (“FASB”) issued Statement of Financial Accounting Standards (“SFAS”) No. 159, “The Fair Value Option for Financial Assets and Financial Liabilities — including an amendment of FASB Statement No. 115” (“SFAS 159”). SFAS 159 creates a “fair value option” under which an entity may elect to record certain financial assets or liabilities at fair value upon their initial recognition. Subsequent changes in fair value would be recognized in earnings as those changes occur. The election of the fair value option would be made on a contract-by-contract basis and would need to be supported by concurrent documentation or a preexisting documented policy. SFAS 159 requires an entity to separately disclose the fair value of these items on the balance sheet or in the footnotes to the financial statements and to provide information that would allow the financial statement user to understand the impact on earnings from changes in the fair value. SFAS 159 is effective as of the beginning of an entity’s first fiscal year that begins after November 15, 2007 and will be in effect for PAREXEL beginning on July 1, 2008. The Company is currently evaluating the potential impact that the adoption of SFAS 159 will have on its consolidated financial statements.

In September 2006, the FASB issued SFAS No. 157, “Fair Value Measurements” (“SFAS 157”). SFAS 157 provides guidance for using fair value to measure assets and liabilities. The standard also responds to investors’ requests for more information about (1) the extent to which companies measure assets and liabilities at fair value, (2) the information used to measure fair value, and (3) the effect that fair-value measurements have on earnings. SFAS 157 will apply whenever another standard requires (or permits) assets or liabilities to be measured at fair value. The standard does not expand the use of fair value to any new circumstances. SFAS 157 is effective for financial statements issued for fiscal years beginning after November 15, 2007, and interim periods within those fiscal years and will be in effect for PAREXEL beginning on July 1, 2008. The Company is currently evaluating the potential impact that the adoption of SFAS 157 will have on its consolidated financial statements.

In July 2006, the FASB issued FASB Interpretation No. 48, “Accounting for Uncertainty in Income Taxes” (“FIN 48”). FIN 48 clarifies the accounting for uncertain income tax positions that are recognized in a company’s financial statements in accordance with the provisions of FASB Statement No. 109, “Accounting for Income Taxes”. FIN 48 prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. FIN 48 also provides guidance on the derecognition of uncertain positions, financial statement classification, accounting for interest and penalties, accounting for interim periods and new disclosure requirements. FIN 48 is effective for fiscal years beginning after December 15, 2006 and is in effect for PAREXEL as of July 1, 2007. The Company is currently evaluating the potential impact that the adoption of FIN 48 will have on its consolidated financial statements.

NOTE 3. ACQUISITIONS

Fiscal Year 2007

BMR/CCT

On November 15, 2006, PAREXEL acquired substantially all of the assets of Behavioral and Medical Research, LLC (“BMR”) and caused the transfer of all of the outstanding stock of California Clinical Trials Medical Group, Inc. (“CCT”) as previously announced on October 12, 2006. Established in 1981 with headquarters in San Diego, BMR/CCT provided a broad range of specialty Phase I – IV clinical research services through four clinical sites in California. In connection with the transaction, PAREXEL entered into a long-term management agreement with CCT.

The acquisition expanded PAREXEL’s global Clinical Pharmacology capacity to over 450 beds. It also brought new expertise to the Company’s service offerings in the area of bridging studies, especially Japanese bridging studies, and added depth to existing expertise in central nervous system clinical trials, neuroscience drug development services and sleep studies.

The acquisition has been accounted for using the purchase method in accordance with SFAS No. 141, “Business Combinations”, and accordingly, the results of operations of BMR/CCT have been included in the accompanying consolidated statements of operations as of the date of acquisition.

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Total purchase price has been allocated to the tangible and intangible assets and liabilities acquired based on fair value, with any excess recorded as goodwill. Goodwill is expected to be deductible for income tax purposes.

The components of the purchase price allocation are as follows (in thousands):

Purchase Price:
Cash paid, net of cash acquired	$	66,480
Transaction costs		2,028
	$	68,508
Allocations:
Current assets	$	11,884
Property and equipment, net		1,477
Goodwill		35,474
Other intangible assets, net		23,621
Other assets		79
Total assets acquired		72,535
Current liabilities		4,027
Total liabilities assumed		4,027
Net assets acquired	$	68,508

This acquisition was initially financed with borrowings from a line of credit. The Company subsequently repaid the line of credit with proceeds from an executed $100 million unsecured senior revolving credit facility on January 12, 2007 (see Note 8).

The following table presents the details of the intangible assets purchased in the BMR/CCT acquisition as of June 30, 2007 (in thousands):

	Weighted Average			Accumulated
	Useful Life	Cost		Amortization		Net
Backlog	7.5 months	$	1,881	$	1,881	$	—
Non-competition and non- solicitation agreements	3 years		126		26		100
Customer relationships	15 years		21,614		901		20,713
Total intangible assets purchased		$	23,621	$	2,808	$	20,813

The estimated amortization expense of intangible assets purchased in the BMR/CCT acquisition for the current fiscal year, including amounts amortized to date, and in future years will be recorded on the consolidated statements of operations as follows (in thousands):

Fiscal Year	Amortization
2007	$	2,808
2008		1,483
2009		1,483
2010		1,457
2011		1,441
2012		1,441

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The following (unaudited) pro forma consolidated results of operations have been prepared as if the acquisition of BMR/CCT had occurred at July 1, 2005, the beginning of PAREXEL’s fiscal year 2006 (in thousands, except per share data):

	For the fiscal year ended
			June 30, 2007
	PRXL		BMR/ CCT**		Total
Service revenue	$	741,955	$	20,484	$	762,439
Net income*	$	37,289	$	505	$	37,794
Basic EPS*	$	1.37	$	0.01	$	1.38
Diluted EPS*	$	1.33	$	0.01	$	1.34

	For the fiscal year ended
			June 30, 2006
	PRXL		BMR/ CCT**			Total
Service revenue	$	614,947	$	31,261		$	646,208
Net income (loss)*	$	23,544	$	(489	)	$	23,055
Basic EPS*	$	0.89	$	(0.02	)	$	0.87
Diluted EPS*	$	0.87	$	(0.01	)	$	0.86

*	Inclusive of the interest expense we would have incurred related to the $50 million in borrowings at an annual interest rate of 6.25% and amortization expense we would have incurred in connection with the customer relationship and non-competition and non-solicitation agreements.
**	Represents four and a half months of financial results in fiscal year 2007 and twelve months of financial results in fiscal year 2006, prior to PAREXEL’s acquisition of BMR/CCT.

Fiscal Year 2006

Synchron

Effective June 15, 2006, the Company entered into a joint venture arrangement with Synchron Research Services Private Limited, under which Synchron transferred its clinical trial business operations located in Bangalore, India to a newly-formed entity, PAREXEL International Synchron Private Limited. The Company acquired a majority equity interest of 75.0% in the newly-formed entity. In addition, the Company paid approximately $2.4 million for a minority interest in Sychron’s Phase I business, which is accounted for as a cost method investment.

Perceptive

On August 22, 2005, the Company acquired all of the equity interests held by minority stockholders of Perceptive Informatics, Inc. (“Perceptive”), and now owns all of the outstanding capital stock of Perceptive. This acquisition was effected through a “short-form” merger of Perceptive with PIC Acquisition, Inc., an indirect subsidiary of PAREXEL and, prior to the merger, the owner of 97.8% of the outstanding common stock of Perceptive. Under the terms of the merger, PAREXEL agreed to pay an aggregate of approximately $3.2 million in cash to the minority stockholders (including option holders upon exercise of stock options) for their shares of common stock of Perceptive. Certain executive officers and directors of PAREXEL held shares of Perceptive common stock prior to the merger.

In addition, under the terms of the merger, PAREXEL assumed all outstanding stock options under Perceptive’s stock incentive plan. As a result, the holders of in-the-money Perceptive stock options as of August 22, 2005 are entitled to receive upon exercise of such stock options $1.65 in cash, without interest, for each share of Perceptive common stock that was subject to such stock options immediately prior to the merger. None of the other terms and conditions of the Perceptive stock options have changed. The stock options will continue to be exercisable only upon payment of the exercise price of such options and to be subject to the vesting schedule to which such stock options were subject immediately prior to the merger. Certain executive officers and directors of PAREXEL held stock options to purchase Perceptive common stock prior to the merger.

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Additionally, under the terms of the merger, PAREXEL made payments totaling $1.6 million to certain employees of Perceptive on the first anniversary of the effective date of the merger, including $500,000 to Mark Goldberg, President of CRS & Perceptive.

The terms and conditions of the merger were established and approved by a special committee of the Board of Directors of PAREXEL consisting of two independent directors of PAREXEL having no interests in Perceptive. Pro forma results of Perceptive operations have not been presented because the effect of this acquisition was not material.

Qdot

Effective July 1, 2005, the Company acquired the assets of Qdot PHARMA (“Qdot”), a Phase I and IIa “Proof of Concept” clinical pharmacology business located in George, South Africa for approximately $5.7 million, net of liabilities assumed. Under the agreement, the Company agreed to make additional payments of up to approximately $3.0 million in contingent purchase price if Qdot achieved certain established financial targets through June 30, 2008. In September 2006, the Company paid an $0.8 million contingent earn-out payment. As a result of management responsibility changes, the Company reached an agreement with Qdot in December 2006 and amended the earn-out agreement to pay a fixed additional amount of approximately $2.1 million (approximately $0.9 million was paid in January 2007 and approximately $1.2 million is to be paid by December 31, 2007). As of June 30, 2007, the Company recorded approximately $4.9 million of excess cost over the fair value of the interest in the net assets acquired as goodwill. Pro forma results of Qdot operations have not been presented because the effect of this acquisition was not material.

Fiscal Year 2005

IMC

Effective October 1, 2004, the Company acquired 100% of the outstanding stock of IMC, a provider of specialty professional marketing and communications services in Whitehall, Pennsylvania for approximately $1.5 million in cash. Under the agreement, the Company agreed to make additional payments of up to $2.9 million in contingent purchase price if IMC achieves certain established financial targets through March 31, 2008. As of June 30, 2007, the Company had paid $0.6 million in earn-out payments under the terms of the agreement. Pro forma results of IMC’s operations have not been presented because the effect of this acquisition was not material.

NOTE 4. MARKETABLE SECURITIES

Available-for-sale securities included in marketable securities at June 30, 2006 consisted entirely of municipal debt securities. At June 30, 2007, there were no marketable securities.

The Company’s marketable securities are reflected at fair market value, which approximates amortized cost. During fiscal year 2007, gross realized gains were $3.2 million and gross realized losses were $1.1 million. During fiscal year 2006, gross realized gains were $2.3 million and gross realized losses were $2.0 million. During fiscal year 2005, gross realized gains were $2.9 million and gross realized losses were $2.1 million.

NOTE 5. BILLED AND UNBILLED ACCOUNTS RECEIVABLE

Accounts receivable at June 30, 2007 and 2006 consisted of the following:

($ IN THOUSANDS)	2007			2006
Billed	$	192,143		$	154,270
Unbilled		136,594			121,262
Provision for losses on receivables		(3,716	)		(3,469	)
	$	325,021		$	272,063

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NOTE 6. PROPERTY AND EQUIPMENT

Property and equipment at June 30, 2007 and 2006 consisted of the following:

($ IN THOUSANDS)	2007			2006
Owned assets:
Computer software	$	73,183		$	73,001
Computer and office equipment		62,205			78,423
Leasehold improvements		31,734			26,045
Medical equipment		18,674			15,476
Furniture and fixtures		16,385			17,612
Buildings		4,952			4,649
Other		3,528			2,695
		210,661			217,901
Less: accumulated depreciation		(114,229	)		(140,523	)
		96,432			77,378
Assets held under capital lease:
Computer software		1,603			1,999
Less: accumulated amortization		(802	)		(991	)
		801			1,008
	$	97,233		$	78,386

Depreciation and amortization expense relating to property and equipment, including amortization of assets recorded under capital leases, was $26.5 million, $24.5 million, and $27.8 million, for the years ended June 30, 2007, 2006, and 2005, respectively. Depreciation expense for the year ended June 30, 2005 included $2.7 million in accelerated depreciation for certain impaired assets including amounts related to unamortized leasehold improvements on abandoned leased facilities.

During the year ended June 30, 2007, the company retired $57.9 million of fully-depreciated assets.

NOTE 7. RESTRUCTURING CHARGES

During the year ended June 30, 2007, the Company recorded a $59,000 increase to existing restructuring reserves due to changes in assumptions on leased facilities based on current market conditions, which was offset by a $93,000 reduction in severance-related restructuring expense associated with the fourth quarter fiscal year 2005 restructuring plan.

During the year ended June 30, 2006, the Company recorded a $2.6 million reduction to the existing restructuring reserve as a result of execution of sub-lease agreements and changes in assumptions of leased facilities, which was offset by $1.8 million in severance-related restructuring expenses incurred during the year ended June 30, 2006 in association with the fourth quarter fiscal year 2005 restructuring plan.

During the year ended June 30, 2005, the Company recorded restructuring charges totaling $24.3 million consisting of $4.3 million for severance expense associated with the elimination of 123 managerial and staff positions and $20.5 million related to eleven newly-abandoned leased facilities, partially offset by $0.5 million related to changes in assumptions for leased facilities, which were previously abandoned. In addition, in fiscal year 2005, the Company recorded $2.7 million of impairment charges associated with abandoned leased facilities and other fixed assets.

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Changes in the restructuring accrual during fiscal years 2007, 2006, and 2005 are summarized below:

						Payments/
	Balance at		Provisions/			Foreign Currency			Balance at
($ IN THOUSANDS)	June 30, 2006		Adjustments			Exchange			June 30, 2007
Employee severance costs	$	734	$	(93	)	$	(418	)	$	223
Facilities-related charges		15,423		59			(5,398	)	$	10,084
	$	16,157	$	(34	)	$	(5,816	)	$	10,307

						Payments/
	Balance at		Provisions/			Foreign Currency			Balance at
	June 30, 2005		Adjustments			Exchange			June 30, 2006
Employee severance costs	$	3,694	$	1,765		$	(4,725	)	$	734
Facilities-related charges		27,310		(2,601	)		(9,286	)		15,423
	$	31,004	$	(836	)	$	(14,011	)	$	16,157

					Payments/
	Balance at		Provisions/		Foreign Currency			Balance at
	June 30, 2004		Adjustments		Exchange			June 30, 2005
Employee severance costs	$	1,503	$	4,300	$	(2,109	)	$	3,694
Facilities-related charges		11,923		20,015		(4,628	)		27,310
	$	13,426	$	24,315	$	(6,737	)	$	31,004

NOTE 8. CREDIT ARRANGEMENTS

Effective November 15, 2006, the Company amended the $15 million uncommitted line of credit it had with JPMorgan Chase Bank, N.A. (“Bank”) with a new $70 million maximum borrowing amount with a maturity date of January 31, 2007. The amended line of credit permitted borrowing at interest rates equal to LIBOR (ranging from 5.32% to 5.37% at December 31, 2006) plus a margin to be agreed by the Bank and the Company, or rates to be set in any other manner as agreed between the Bank and the Company. The Company entered into the amended line of credit to provide short-term financing for the acquisition of BMR/CCT (see Note 3).

Subsequently, on January 12, 2007, the Company entered into a five-year, $100 million unsecured senior revolving credit facility (the “Credit Agreement”) with a group of lenders (including and managed by JPMorgan Bank, N.A.) and terminated the $70 million line of credit. The Credit Agreement is guaranteed by certain of the Company’s U.S. subsidiaries. A portion of the loan amount is available for swingline loans of up to $20 million to be made by JPMorgan Chase Bank, N.A. The Company has an option to increase the maximum amount that may be borrowed under the Credit Agreement by $50 million. The Company is subject to certain financial covenants under this facility.

At closing on January 12, 2007, the Company borrowed $50 million and repaid the entire balance outstanding under the $70 million line of credit plus all associated interest and fees. The balance outstanding under this Credit Agreement was $30 million at June 30, 2007 at an interest rate of 6.125%, as determined based on LIBOR plus a margin. The remaining $70 million is available and subject to the annual commitment fee (Unused Fees) on the unused commitment amount ranging from 0.125% to 0.300% based on the total leverage ratio.

The Company has a line of credit with ABN AMRO Bank, NV in the amount of Euro 12.0 million. This line-of-credit is not collateralized, is payable on demand, and bears interest at a rate ranging between 5% and 7%. The line of credit may be revoked or canceled by the Bank at any time at its discretion. The Company primarily entered into this line of credit to facilitate business transactions with the bank. At June 30, 2007, the Company had Euro 12.0 million available under this line-of-credit.

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The Company has other foreign lines of credit with banks totaling approximately $2.0 million. These lines of credit are used as overdraft protection and bear interest at rates ranging from 6% to 8%. The lines of credit are payable on demand and are supported by PAREXEL International Corporation. At June 30, 2007, the Company had approximately $2.0 million available under these arrangements.

The Company has a cash pooling arrangement with ABN AMRO Bank. Pooling occurs when debit balances are offset against credit balances and the net position is used as a basis by the bank for calculating interest. Each legal entity owned by the Company and party to this arrangement remains the owner of either a credit or debit balance. Therefore, interest income is earned in legal entities with credit balances, while interest expense is charged in legal entities with debit balances. Based on the pool’s overall balance, the bank then (1) recalculates the overall interest to be charged or earned, (2) compares this amount with the sum of previously charged/earned interest amounts per account and (3) additionally pays/charges the difference. Interest income and interest expense are recorded separately in the Company’s consolidated statement of operations.

NOTE 9. STOCKHOLDERS’ EQUITY

As of June 30, 2007 and 2006, there were 5,000,000 shares of preferred stock, $0.01 par value, authorized. Of the total shares authorized, 50,000 shares have been designated as Series A Junior Participating Preferred Stock, but none were issued or outstanding. Preferred stock may be issued at the discretion of the Board of Directors (without stockholder approval) with such designations, rights and preferences as the Board of Directors may determine.

On September 9, 2004, the Board of Directors approved a stock repurchase program authorizing the purchase of up to $20.0 million of the Company’s common stock to be repurchased in the open market subject to market conditions. Unless terminated earlier by resolution of the Company’s Board of Directors, this repurchase program will expire when the entire amount authorized has been fully utilized. Through June 30, 2007, the Company had acquired 620,414 shares at a total cost of $14.0 million under this program.

2003 Preferred Stock Rights

On March 27, 2003, the Company adopted a Shareholder Rights Plan. Under this Plan, one Right for each outstanding share was distributed to stockholders of record as of April 7, 2003. The Rights trade with the underlying common stock and initially are not exercisable. Subject to limited exceptions, the Rights will become exercisable if a person or a group acquires 20 percent or more of the Company’s common stock or commences a tender offer for 20 percent or more of the Company’s outstanding stock. If the Rights become exercisable, the type and amount of securities receivable upon exercise of each Right will depend on the circumstances at the time of exercise. Each Right will initially entitle each stockholder to purchase one one-thousandth of a share of newly created Series A Junior Participating Preferred Stock at an exercise price of $98.00. The adoption of this Plan did not impact the Company’s financial position or results of its operations.

NOTE 10. EARNINGS PER SHARE

Basic earnings per share is computed by dividing net income for the period by the weighted average number of common shares outstanding during the period. Diluted earnings per share is computed by dividing net income by the weighted average number of common shares plus the dilutive effect of outstanding common stock equivalents. Outstanding options to purchase approximately 0.1 million shares of common stock were excluded from the calculation of diluted earnings per share for the years ended June 30, 2007 and 2006, because they were anti-dilutive. There were no anti-dilutive shares outstanding for the fiscal year ended June 30, 2005 as a result of the net loss for the year.

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The following table outlines the basic and diluted earnings per common share computations:

	Years ended June 30,
($ IN THOUSANDS, EXCEPT PER SHARE DATA)	2007		2006		2005
Net income (loss) attributable to common shares	$	37,289	$	23,544	$	(35,177	)
Weighted average number of shares outstanding, used in computing basic earnings per share		27,316		26,557		26,065
Dilutive common stock equivalents		792		456		—
Weighted average shares used in computing diluted earnings per share		28,108		27,013		26,065
Basic earnings (loss) per share	$	1.37	$	0.89	$	(1.35	)
Diluted earnings (loss) per share	$	1.33	$	0.87	$	(1.35	)

NOTE 11. ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

Comprehensive income (loss) has been calculated by the Company in accordance with SFAS No. 130 “Reporting Comprehensive Income”. The reconciliation of the components of accumulated other comprehensive income (loss) was as follows:

				Unrealized gain
				(loss) on available
				for sale securities
	Foreign currency			and derivative
($ IN THOUSANDS)	translation			instruments			Total
Balance as of June 30, 2004	$	2,605		$	(98	)	$	2,507
Changes during the year		(2,507	)		(356	)		(2,863	)
Balance as of June 30, 2005		98			(454	)		(356	)
Changes during the year		5,540			712			6,252
Balance as of June 30, 2006		5,638			258			5,896
Changes during the year		15,860			172			16,032
Balance as of June 30, 2007	$	21,498		$	430		$	21,928

NOTE 12. STOCK AND EMPLOYEE BENEFIT PLANS

The Compensation Committee of the Board of Directors is responsible for administration of the Company’s stock option plans and determines the term of each option, the option exercise price, the number of option shares granted, and the rate at which options become exercisable.

On May 26, 2005, the Compensation Committee of the Board of Directors of the Company approved the acceleration of vesting of certain unvested out-of-the-money stock options previously awarded to current employees, including executive officers, and non-employee directors, effective as of the close of business on June 30, 2005 in accordance with the provisions of the Company’s Second Amended and Restated 1995 Stock Option Plan, 1998 Non-qualified, Non-Officer Stock Option Plan and the 2001 Stock Incentive Plan. A stock option was considered out-of-the-money if the option exercise price was greater than the closing price per share of Common Stock of the Company on the Nasdaq Stock Market on June 30, 2005. Such actions were taken primarily to eliminate any future compensation expense the Company would have otherwise recognized in its income statement upon adoption of SFAS 123(R). There were 281,000 stock options that vested as a result of the acceleration on June 30, 2005. The closing price on June 30, 2005 was $19.82 per share. No compensation expense was recorded as a result of this acceleration.

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2005 Stock Incentive Plan

In September 2005, the Company adopted the 2005 Stock Incentive Plan (“2005 Plan”), which provides for the grant of incentive stock options, non-statutory stock options, stock appreciation rights, restricted stock, restricted stock units and other stock-based award grants of up to an aggregate of 1,000,000 shares of common stock to employees, officers, directors, consultants, and advisors. The granting of Awards under the Plan is discretionary and the individuals who may become participants and receive awards under the Plan, and the number of shares they may acquire, are not determinable.

On December 16, 2005, the Compensation Committee of the Board of Directors voted to award an aggregate of 317,000 shares of restricted stock to certain executive officers of the Company and an aggregate of 150,000 shares of restricted stock to the members of the Board of Directors. On March 3, 2006 and May 8, 2006, 7,000 shares and 35,000 shares, respectively, of restricted stock were awarded to certain executive officers of the Company. On December 14, 2006, an additional 25,043 shares of restricted stocks were awarded to certain members of the Board of Directors.

2001 Stock Incentive Plan

In September 2001, the Company adopted the 2001 Stock Incentive Plan, (“2001 Plan”) which provides for the grant of incentive and non-qualified stock options for the purchase of up to an aggregate of 1,000,000 shares of common stock to employees, officers, directors, consultants, and advisors (and any individuals who have accepted an offer for employment) of the Company. Options under the 2001 Plan expire no more than ten years from the date of grant and the expiration date and vesting period may vary at the Board of Directors’ discretion.

1998 Stock Plan

In February 1998, the Company adopted the 1998 Non-qualified, Non-officer Stock Option Plan (the “1998 Plan”) which provides for the grant of non-qualified options to purchase up to an aggregate of 500,000 shares of common stock to any employee or consultant of the Company who is not an executive officer or director of the Company. In January 1999, the Company’s Board of Directors approved an increase in the number of shares issuable under the 1998 Plan to 1,500,000 shares. Options under the 1998 Plan expire eight years from the date of grant and vest at dates ranging from the issuance date to five years.

1995 Stock Plan

The 1995 Stock Plan (“1995 Plan”) provides for the grant of incentive and non-qualified stock options for the purchase of up to an aggregate of 3,028,674 shares of common stock to directors, officers, employees, and consultants to the Company. Options under the 1995 Plan expire eight years from the date of grant and vest over ninety days to five years. The 1995 Plan expired on September 13, 2005, except for options outstanding on that date.

Employee Stock Purchase Plan

In March 2000, the Board of Directors of the Company adopted the 2000 Employee Stock Purchase Plan (the “2000 Purchase Plan”). Under the 2000 Purchase Plan, employees had the opportunity to purchase common stock at 85% of the average market value on the first day of each opening period or last day of each purchase period (as defined by the 2000 Purchase Plan), whichever was lower, up to specified limits. The 2000 Purchase Plan was amended in May 2005 for offering periods commencing on or after June 1, 2005 to purchase common stock at 95% of the fair market value of the stock on the last day of each purchase period (as defined by the Purchase Plan). An aggregate of approximately 1,800,000 shares may be issued under the 2000 Purchase Plan.

During fiscal year 2007, there were 37,741 shares purchased at a range of $26.37 to $38.21 per share and; during fiscal year 2006, there were 59,361 shares purchased at a range of $19.54 to $27.27 per share and; during fiscal year 2005, there were 209,252 shares purchased at a range of $10.59 to $16.82 per share.

Perceptive Stock Incentive Plan

In August 2000, Perceptive Informatics, Inc., adopted the 2000 Stock Incentive Plan (“the Perceptive Plan”), which was amended in March 2003 to grant rights to purchase up to an aggregate of 7,030,000 shares of Perceptive common stock. Under the Perceptive Plan, Perceptive was able to grant to its employees, officers, directors, consultants and advisors, options, restricted stock awards, or other stock-based awards. As of June 30, 2005, Perceptive was not publicly traded and options to purchase 4,206,535 shares were outstanding under this plan and the options to purchase 137,250 shares had been exercised as of June 30, 2005.

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As discussed in Note 3, on August 22, 2005, PAREXEL acquired all of the equity interests held by minority stockholders of Perceptive, and now owns all of the outstanding common stock of Perceptive. Under the terms of the merger, PAREXEL assumed all outstanding stock options under Perceptive’s stock incentive plan. As a result, the holders of in-the-money Perceptive stock options as of August 22, 2005 are entitled to receive upon exercise of such stock options $1.65 in cash, without interest, for each share of Perceptive common stock that was subject to such stock options immediately prior to the merger. None of the other terms and conditions of the Perceptive stock options have changed. The stock options will continue to be exercisable only upon payment of the exercise price of such options and to be subject to the vesting schedule to which such stock options were subject immediately prior to the merger. Certain executive officers and directors of PAREXEL held stock options to purchase Perceptive common stock prior to the merger.

401(k)

The Company sponsors an employee savings plan (“the Plan”) as defined by Section 401(k) of the Internal Revenue Code of 1986, as amended. The Plan covers substantially all employees in the U.S. who elect to participate. Participants have the opportunity to invest on a pre-tax basis in a variety of mutual fund options and PAREXEL stock. The Company matches 100% of each participant’s voluntary contributions up to 3% of gross salary per payroll period subject to an annual cap of $3,000. Company contributions vest to the participants in 20% increments for each year of employment and become fully vested after five years of continuous employment. Company contributions to the Plan were approximately $2.5 million for the year ended June 30, 2007 and approximately $2.3 million for each of the years ended June 30, 2006 and 2005.

NOTE 13. FINANCIAL INSTRUMENTS

As of June 30, 2007 and 2006, the Company had entered into foreign currency exchange contracts to exchange foreign currencies to the U.S. dollar. The notional contract amount of outstanding foreign currency exchange contracts was approximately $174.0 million and $36.2 million at June 30, 2007 and 2006, respectively.

While it is not the Company’s intention to terminate the above financial instruments, fair values were estimated based on market rates, which represented the amounts that the Company would receive or pay if the instruments were terminated at the balance sheet date. The fair values of foreign currency exchange contracts were approximately $174.0 million at June 30, 2007 and $36.8 million at June 30, 2006.

At June 30, 2007, maturities of the Company’s foreign currency exchange contracts ranged from one to eleven months.

NOTE 14. INCOME TAXES

Domestic and foreign income (loss) before income taxes for the three years ended June 30, 2007, 2006 and 2005 were as follows:

($ IN THOUSANDS)	2007			2006			2005
Domestic	$	(1,199	)	$	(9,201	)	$	(30,366	)
Foreign		60,733			50,975			31,106
	$	59,534		$	41,774		$	740

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Provisions for income taxes for the three years ended June 30 were as follows:

($ IN THOUSANDS)	2007			2006		2005
Current:
Federal	$	100		$	1,345	$	(692	)
State		714			732		152
Foreign		17,335			13,280		10,342
		18,149			15,357		9,802
Deferred:
Federal		(249	)		—		16,439
State		(31	)		—		3,570
Foreign		4,408			3,971		5,755
		4,128			3,971		25,764
	$	22,277		$	19,328	$	35,566

The Company’s consolidated effective income tax rate differed from the U.S. federal statutory income tax rate as set forth below:

($ IN THOUSANDS)	2007			%			2006			%			2005			%
Income tax expense computed at the federal statutory rate	$	20,837			35.0	%	$	14,621			35.0	%	$	259			35.0	%
State income taxes, net of federal benefit		360			0.6	%		215			0.5	%		99			13.3	%
Foreign rate differential		(2,958	)		-4.9	%		(1,700	)		-4.0	%		(955	)		-129.4	%
Change in valuation allowances		347			0.5	%		3,052			7.3	%		36,555			4,940.1	%
Additions to reserves		710			1.2	%		2,233			5.3	%		185			25.0	%
Research and development		(1,175	)		-2.0	%		(1,082	)		-2.6	%		(955	)		-128.9	%
Other non-deductible expenses		3,194			5.4	%		790			1.9	%		235			31.8	%
Other		962			1.6	%		1,199			2.9	%		143			19.3	%
	$	22,277			37.4	%	$	19,328			46.3	%	$	35,566			4,806.2	%

Provision has not been made for U.S. or additional foreign taxes on undistributed earnings of foreign subsidiaries as those earnings have been indefinitely reinvested. Undistributed earnings of foreign subsidiaries that have been indefinitely reinvested are approximately $124 million and $104 million at June 30, 2007 and 2006 respectively. It is not practical to estimate the amount of income taxes payable on the earnings that are indefinitely reinvested in foreign operations.

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Significant components of the Company’s net deferred tax assets as of June 30, 2007 and 2006 were as follows:

($ IN THOUSANDS)	2007			2006
Deferred tax assets:
U.S. loss carryforwards	$	15,859		$	5,301
Foreign loss carryforwards		12,563			13,028
Accrued expenses		14,307			10,953
Tax credit carryforwards		7,501			4,558
Provision for losses on receivables		588			613
Deferred compensation		1,985			1,736
Deferred revenue		—			9,392
Other		4,015			4,249
Gross deferred tax assets		56,818			49,830
Deferred tax asset valuation allowance		(47,588	)		(42,586	)
Total deferred tax assets		9,230			7,244
Deferred tax liabilities:
Property and equipment		(6,002	)		(5,820	)
Deferred revenue		(9,525	)		—
Intangible assets		(5,539	)		(1,445	)
Foreign risk reserve		(1,100	)		(1,839	)
Foreign work-in-process valuation		(5,578	)		(11,274	)
Other		(4,429	)		(4,862	)
Total deferred tax liabilities		(32,173	)		(25,240	)
	$	(22,943	)	$	(17,996	)

The net deferred tax assets and liabilities included in the consolidated balance sheets as of June 30, 2007 and 2006 were as follows:

($ IN THOUSANDS)	2007			2006
Current deferred tax assets	$	4,984		$	934
Non-current deferred tax assets		1,145			10,495
Current deferred tax liabilities		(16,889	)		(12,645	)
Non-current deferred tax liabilities		(12,183	)		(16,780	)
	$	(22,943	)	$	(17,996	)

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At June 30, 2007, the Company had U.S. state, federal and foreign loss carryforwards, tax effected, of $2.5 million, $13.3 million and $12.6 million, respectively that are available to offset future liabilities for income taxes. Use of these loss carryforwards is limited based on the future income of certain subsidiaries. The state and federal net operating losses expire in the years 2009 through 2026. Of the non-U.S. loss carryforwards, $1.1 million will expire between 2015 and 2019, the remainder does not expire. The Company also has U.S. foreign tax credit carryforwards of $7.5 million which expire in the years 2015 through 2017. U.S. foreign tax credit and loss carryforwards may be limited due to the change in ownership provisions of the internal revenue code. A valuation allowance has been established for certain future income tax benefits related to net operating loss carryforwards, foreign tax credit carryforwards and temporary tax adjustments based on an assessment that it is more likely than not that these benefits will not be realized. In fiscal year 2007, the valuation allowance increased principally resulting from increases in net operating loss and foreign tax credit carryforwards. The Company is subject to on-going reviews by taxing authorities. The Company has evaluated the likelihood of unfavorable adjustments arising from these on-going reviews of prior year tax returns and believes that adequate provisions have been made in the income tax provision.

NOTE 15. COMMITMENTS, CONTINGENCIES AND GUARANTEES

The Company leases its facilities under operating leases that include renewal and escalation clauses. Total rent expense, net of sublease income was $35.4 million, $30.1 million, and $35.6 million for fiscal years 2007, 2006, and 2005, respectively. Additionally, the Company has assets under capital leases. Future minimum lease payments due under non-cancelable leases are as follows:

($ IN THOUSANDS)	2008			2009			2010			2011		2012		Thereafter		Total
Operating and capital leases	$	42,179		$	34,549		$	24,523		$	21,011	$	18,043	$	97,488	$	237,793
Less: sublease income		(3,896	)		(5,596	)		(464	)		—		—		—		(9,956	)
Purchase Commitments		7,691			3,182			894			4,301		261		239		16,568
Total	$	45,974		$	32,135		$	24,953		$	25,312	$	18,304	$	97,727	$	244,405

In connection with the IMC acquisition during fiscal year 2005, as discussed in Note 3 above, the Company agreed to make additional payments of up to $2.9 million in contingent purchase price if IMC achieves certain established financial targets through March 31, 2008. As of June 30, 2007, the Company had paid $0.6 million in earn-out payments under the terms of the IMC acquisition.

In connection with the Qdot acquisition as discussed in Note 3 above, the Company agreed to make maximum additional payments of approximately $3.0 million in contingent purchase price if Qdot achieves certain established financial targets through June 30, 2008. In September 2006, the Company paid $0.8 million in contingent earn-out payment. As a result of management responsibility changes, the Company reached an agreement with Qdot in December 2006 and amended the earn-out agreement to pay a fixed additional approximate amount of $2.1 million ($0.9 million was paid in January 2007, with the remaining $1.2 million is to be paid by December 31, 2007).

The Company has letter-of-credit agreements with banks totaling approximately $6.9 million guaranteeing performance under various operating leases and vendor agreements. The Company has an unsecured senior revolving credit facility for $100 million with a group of lenders (including and managed by JPMorgan Chase Bank, N.A.) that is guaranteed by certain of the Company’s U.S. subsidiaries.

As of June 30, 2007, the Company had approximately $16.6 million in purchase obligations with various vendors for the purchase of computer software and recruiting services through October 31, 2011.

In March 2006, we conducted a Phase I clinical trial on behalf of TeGenero AG, a German pharmaceutical company. During the trial, six participants experienced adverse reactions to the TeGenero compound being tested. Through June 30, 2007, we have recorded approximately $1.8 million in legal fees and other incremental costs in connection with the incident. To date, none of the participants in the clinical trial have filed suit against us. We carry insurance to cover risks such as this, but our insurance is subject to deductibles and coverage limits and may not be adequate to cover claims against us. While we believe that TeGenero is responsible to indemnify us with respect to claims related to this matter, TeGenero filed for insolvency in July 2006, which likely will limit any recovery by us from them. In addition, while TeGenero carried insurance with respect to this type of matter, this insurance also is subject to deductibles and coverage limits.

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NOTE 16. RELATED PARTY TRANSACTIONS

As discussed in Note 3, on August 22, 2005, the Company acquired all of the equity interests held by minority stockholders of Perceptive, and now owns all of the outstanding common stock of Perceptive. This acquisition was effected through a “short-form” merger of Perceptive with PIC Acquisition, Inc., an indirect subsidiary of PAREXEL and, prior to the merger, the owner of 97.8% of the outstanding common stock of Perceptive. Under the terms of the merger, PAREXEL agreed to pay an aggregate of approximately $3.2 million in cash to the minority stockholders (including option holders upon exercise of stock options) for their shares of common stock of Perceptive. Certain executive officers and directors of PAREXEL held shares of Perceptive common stock prior to the merger.

In addition, under the terms of the merger, PAREXEL assumed all outstanding stock options under Perceptive’s stock incentive plan. As a result, the holders of in-the-money Perceptive stock options as of August 22, 2005 are entitled to receive upon exercise of such stock options $1.65 in cash, without interest, for each share of Perceptive common stock that was subject to such options immediately prior to the merger. None of the other terms and conditions of the Perceptive stock options have changed. The stock options will continue to be exercisable only upon payment of the exercise price of such options and to be subject to the vesting schedule to which such stock options were subject immediately prior to the merger. Certain executive officers and directors of PAREXEL held stock options to purchase Perceptive common stock prior to the merger.

Additionally, under the terms of the merger, PAREXEL made payments totaling $1.6 million to certain employees of Perceptive on the first anniversary of the effective date of the merger, including $500,000 to an executive officer. These payments were not conditioned on these employees remaining as employees of Perceptive on the first anniversary of the effective date of the merger.

The terms and conditions of the merger were established and approved by a special committee of the Board of Directors of PAREXEL consisting of two independent directors of PAREXEL having no interests in Perceptive.

NOTE 17. GEOGRAPHIC AND SEGMENT INFORMATION

Financial information by geographic area for the three years ended June 30, 2007, 2006, and 2005 were as follows:

($ IN THOUSANDS)	2007			2006			2005
Service revenue:
United States	$	266,835		$	217,778		$	202,924
Europe		418,590			358,108			313,114
Asia and Other		56,530			39,061			28,688
	$	741,955		$	614,947		$	544,726
Income (loss) from operations:
United States	$	(970	)	$	(5,801	)	$	(33,357	)
Europe		47,686			45,613			32,474
Asia and Other		10,850			43			607
	$	57,566		$	39,855		$	(276	)
Tangible long-lived assets:
United States	$	40,719		$	32,825		$	30,981
Europe		61,156			49,755			43,522
Asia and Other		4,640			2,536			2,462
	$	106,515		$	85,116		$	76,965

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The Company is managed through three business segments, namely, CRS, PCMS and Perceptive. CRS constitutes the Company’s core business and includes clinical trials management and biostatistics, data management and clinical pharmacology, as well as related medical advisory and investigator site services. PCMS provides technical expertise and advice in such areas as drug development, regulatory affairs, and bio/pharmaceutical process and management consulting; and provides a full spectrum of market development, product development, and targeted communications services in support of product launch. PCMS consultants identify alternatives and propose solutions to address clients’ product development, registration, and commercialization issues. PCMS also provides health policy consulting and strategic reimbursement services. Perceptive provides information technology solutions designed to improve clients’ product development processes. Perceptive offers a portfolio of products and services that includes medical imaging services, IVRS, CTMS, web-based portals, systems integration, and patient diary applications.

The Company evaluates its segment performance and allocates resources based on service revenue and gross profit (service revenue less direct costs), while other operating costs are allocated and evaluated on a geographic basis. Accordingly, the Company does not include the impact of selling, general, and administrative expenses, depreciation and amortization expense, interest income (expense), other income (expense), and income tax expense in segment profitability. The accounting policies of the segments are the same as those described in Note 2. The Company attributes revenue to individual countries based upon the number of hours of services performed in the respective countries and inter-segment transactions are not included in service revenue. Furthermore, PAREXEL has a global infrastructure supporting its business segments, and therefore, assets are not identified by reportable segment.

($ IN THOUSANDS)	CRS		PCMS		PERCEPTIVE		TOTAL
Service revenue:
2007	$	548,838	$	120,636	$	72,481	$	741,955
2006	$	442,512	$	117,129	$	55,306	$	614,947
2005	$	379,292	$	122,587	$	42,847	$	544,726
Gross profit on service revenue:
2007	$	189,089	$	34,024	$	31,642	$	254,755
2006	$	150,291	$	35,580	$	22,835	$	208,706
2005	$	128,109	$	37,268	$	19,305	$	184,682

NOTE 18. OTHER EVENT

On June 29, 2007, the Company, through a wholly owned indirect subsidiary, initiated an offer (the “Tender Offer”) to purchase all of the issued and outstanding shares of common stock of Apex International Clinical Research Co., LTD (“Apex”). Apex is a clinical research company based in Taiwan.

Pursuant to the terms of a prospectus and subject to regulatory approval in Taiwan, the Company has agreed to purchase up to 100% of the issued and outstanding shares of Apex, on a fully diluted basis, at a per share price of NT$82.94 in the Tender Offer, representing a total purchase price of approximately NT$1,794,240,938. As a condition to the closing of the Tender Offer, the minimum number of shares tendered to the Company by shareholders was 7,138,890, representing approximately 33% of the total issued and outstanding shares of Apex, on a fully diluted basis (the “Minimum Threshold”). The Minimum Threshold has been satisfied.

The Tender Offer was scheduled to expire on August 20, 2007, but due to the meeting schedule of the regulators, the Company made announcements and filed relevant reports with the Financial Supervisory Commission to extend the Tender Offer period to the 3^rd business day following the receipt of the relevant foreign investment approvals from the Investment Commission, Ministry of Economic Affairs, but not later than September 19, 2007. If all of the conditions to the Tender Offer are satisfied, the Company expects that it would complete the purchase of all shares tendered in the Tender Offer within five business days following the expiration of the tender offer period.

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MANAGEMENT’S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING

The management of PAREXEL International Corporation is responsible for establishing and maintaining adequate internal control over financial reporting for the Company. Internal control over financial reporting is defined in Rule 13a-15(f) or 15d-15(f) promulgated under the Securities Exchange Act of 1934 as a process designed by, or under the supervision of, the Company’s principal executive and principal financial officers and effected by the Company’s board of directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles and includes those policies and procedures that:

• Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the Company;

• Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and

• Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

The Company’s management assessed the effectiveness of the Company’s internal control over financial reporting as of June 30, 2007. In making this assessment, the Company’s management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control-Integrated Framework.

Based on the assessment, management concluded that, as of June 30, 2007, the Company’s internal control over financial reporting is effective based on those criteria.

The Company’s independent registered public accounting firm, Ernst & Young LLP, has issued an audit report on management’s assessment of the Company’s internal control over financial reporting. This report appears on page 71.

/s/ Josef H. von Rickenbach Josef H. von Rickenbach	/s/ James F. Winschel, Jr. James F. Winschel, Jr.
Chairman of the Board and Chief Executive Officer	Senior Vice President and Chief Financial Officer
(principal executive officer)	(principal financial officer)

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Report of Independent Registered Public Accounting Firm

The Board of Directors and Stockholders of PAREXEL International Corporation

We have audited the accompanying consolidated balance sheets of PAREXEL International Corporation (the Company) as of June 30, 2007 and 2006, and the related consolidated statements of operations, stockholders’ equity, and cash flows for each of the three years in the period ended June 30, 2007. Our audits also included the financial statement schedule listed in the Index at Item 15. These financial statements and schedule are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements and schedule based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of PAREXEL International Corporation at June 30, 2007 and 2006, and the consolidated results of its operations and its cash flows for each of the three years in the period ended June 30, 2007, in conformity with U.S. generally accepted accounting principles. Also, in our opinion, the related financial statement schedule, when considered in relation to the basic financial statements taken as a whole, presents fairly in all material respects the information set forth therein.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the effectiveness of PAREXEL International Corporation’s internal control over financial reporting as of June 30, 2007, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated August 24, 2007 expressed an unqualified opinion thereon.

                /s/ Ernst & Young LLP

Boston, Massachusetts
August 24, 2007

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Report of Independent Registered Public Accounting Firm

The Board of Directors and Stockholders of PAREXEL International Corporation

We have audited management’s assessment, included in the accompanying Management’s Report on Internal Control over Financial Reporting, that PAREXEL International Corporation (the Company) maintained effective internal control over financial reporting as of June 30, 2007, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (the COSO criteria). PAREXEL International Corporation’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting. Our responsibility is to express an opinion on management’s assessment and an opinion on the effectiveness of the Company’s internal control over financial reporting based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, evaluating management’s assessment, testing and evaluating the design and operating effectiveness of internal control, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

In our opinion, management’s assessment that PAREXEL International Corporation maintained effective internal control over financial reporting as of June 30, 2007, is fairly stated, in all material respects, based on the COSO criteria. Also, in our opinion, PAREXEL International Corporation maintained, in all material respects, effective internal control over financial reporting as of June 30, 2007, based on the COSO criteria.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheets of PAREXEL International Corporation as of June 30, 2007 and 2006, and the related consolidated statements of operations, stockholders’ equity, and cash flows for each of the three years in the period ended June 30, 2007 and our report dated August 24, 2007 expressed an unqualified opinion thereon.

               /s/ Ernst & Young LLP

Boston, Massachusetts
August 24, 2007

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ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

Not applicable

ITEM 9A. CONTROLS AND PROCEDURES

The Company’s management, with the participation of the Company’s chief executive officer and chief financial officer, evaluated the effectiveness of the Company’s disclosure controls and procedures as of June 30, 2007. The term “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, means controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the company’s management, including its principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure. Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Based on the evaluation of the Company’s disclosure controls and procedures as of June 30, 2007, the Company’s chief executive officer and chief financial officer concluded that, as of such date, the Company’s disclosure controls and procedures were effective at the reasonable assurance level.

Changes in Internal Control Over Financial Reporting

No change in the Company’s internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) occurred during the fiscal quarter ended June 30, 2007 that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

ITEM 9B. OTHER INFORMATION

Not applicable.

PART III

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE OF THE REGISTRANT

Information with respect to this item may be found under the captions “Elections of Directors,” “Corporate Governance”, “Executive Officers” and “Section 16(a) Beneficial Ownership Reporting Compliance” in the Proxy Statement for the Company’s 2007 Annual Meeting of Stockholders. Such information is incorporated herein by reference.

CODE OF ETHICS

The Company has adopted a code of business conduct and ethics applicable to all of its employees, including its principal executive officers and principal financial officer. The code of business conduct and ethics is available on the Company’s website (www.parexel.com) under the category “Investor Relations-Corporate Governance”.

ITEM 11. EXECUTIVE COMPENSATION

Information with respect to this item may be found under the captions “Directors’ Compensation,” “Compensation Committee Interlocks and Insider Participation,” “Executive Compensation,” “Employment Agreements” and “Compensation Committee and Committee Report on Executive Compensation” in the Proxy Statement for the Company’s 2007 Annual Meeting of Stockholders. Such information is incorporated herein by reference.

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ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

Information with respect to this item may be found under the caption “Security Ownership of Certain Beneficial Owners and Management” and “Equity Compensation Plan Information” in the Proxy Statement for the Company’s 2007 Annual Meeting of Stockholders. Such information is incorporated herein by reference.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

Information with respect to this item may be found under the captions “Certain Relationships and Related Transactions” in the Proxy Statement for the Company’s 2007 Annual Meeting of Stockholders. Such information is incorporated herein by reference.

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES

Information with respect to this item may be found under the caption “Fees Paid to Independent Registered Public Accounting Firm” in the Proxy Statement for the Company’s 2007 Annual Meeting of Stockholders. Such information is incorporated herein by reference.

PART IV

ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

(a) The following documents are filed as part of this report:

  (1) FINANCIAL STATEMENTS

The following financial statements and supplementary data are included in Item 8 of this annual report:

FINANCIAL STATEMENTS	FORM 10-K PAGES
Reports of Independent Registered Public Accounting Firm for the years ended June 30, 2007, 2006 and 2005		70-71
Consolidated Statements of Operations for each of the three years ended June 30, 2007, 2006 and 2005		41
Consolidated Balance Sheets at June 30, 2007 and 2006		42
Consolidated Statements of Stockholders’ Equity for each of the three years ended June 30, 2007, 2006 and 2005		43
Consolidated Statements of Cash Flows for each of the three years ended June 30, 2007, 2006 and 2005		44-45
Notes to Consolidated Financial Statements		46-68
(2) FINANCIAL STATEMENT SCHEDULES
For the three years ended June 30, 2007:
Schedule II — Valuation and Qualifying Accounts and Reserves		78

All other schedules are omitted because they are not applicable or the required information is shown in the Consolidated Financial Statements or Notes thereto.

  (3) EXHIBITS

The list of Exhibits filed as a part of this Annual Report on Form 10-K are set forth on the Exhibit Index immediately preceding such Exhibits, and is incorporated herein by this reference.

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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

PAREXEL INTERNATIONAL CORPORATION

By: /s/ Josef H. von Rickenbach	Dated: August 27, 2007
Josef H. von Rickenbach
Chairman of the Board and Chief Executive Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

Signatures	Title(s)	Date
/s/ Josef H. von Rickenbach
Josef H. von Rickenbach	Chairman of the Board and Chief Executive Officer (principal executive officer)	August 27, 2007
/s/ James F. Winschel, Jr.
James F. Winschel, Jr.	Senior Vice President and Chief Financial Officer (principal financial and accounting officer)	August 27, 2007
/s/ A. Dana Callow, Jr.
A. Dana Callow, Jr.	Director	August 27, 2007
/s/ Patrick J. Fortune
Patrick J. Fortune	Director	August 27, 2007
/s/ Richard L. Love
Richard L. Love	Director	August 27, 2007
/s/ Ellen M. Zane
Ellen M. Zane	Director	August 27, 2007
/s/ Christopher J. Lindop
Christopher J. Lindop	Director	August 27, 2007

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EXHIBIT INDEX

EXHIBIT NO.	DESCRIPTION
3.1	Amended and Restated Articles of Organization of the Company, as amended. (filed as Exhibit 3.1 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended December 31, 2006 and incorporated herein by this reference).
3.2	Amended and Restated By-laws of the Company (filed as Exhibit 4.2 to the Company’s Registration Statement on Form S-8 (File No. 333-104968) and incorporated herein by this reference).
4.1	Specimen certificate representing the Common Stock of the Company (filed as Exhibit 4.1 to the Company’s Registration Statement on Form S-1 (File No. 33-97406) and incorporated herein by this reference).
4.2	Rights Agreement dated March 27, 2003 between the Corporation and Equiserve Trust Company, N.A., as Rights Agent, which includes as Exhibit A the Form of Certificate of Vote of Series A Junior Participating Preferred Stock, as Exhibit B the Form of Rights Certificate and as Exhibit C the Summary of Rights to Purchase Common Stock (filed as Exhibit 4.1 to the Company’s Current Report on Form 8-K/A dated March 31, 2003 and incorporated herein by this reference).
10.1*	Form of Stock Option Agreement of the Company (filed as Exhibit 10.9 to the Company’s Registration Statement on Form S-1 (File No. 333-1188) and incorporated herein by reference).
10.2*	Form of Stock Option Agreement under the Company’s Second Amended and Restated 1995 Stock Plan (filed as Exhibit 99.1 to the Company’s current Report on Form 8-K dated September 2, 2004 and incorporated herein by this reference).
10.3*	Form of Stock Option Agreement for Executive Officers under the Company’s Second Amended and Restated 1995 Stock Plan (filed as Exhibit 10.3 to the Company’s Annual Report on Form 10-K for the year ended June 30, 2004 and incorporated herein by this reference).
10.4*	Form of Stock Option Agreement under the Company’s 2001 Stock Incentive Plan (filed as Exhibit 10.4 to the Company’s Annual Report on Form 10-K for the year ended June 30, 2004 and incorporated herein by this reference).
10.5*	Second Amended and Restated 1995 Stock Plan of the Company (filed as Exhibit 10.9 to the Company’s Annual Report on Form 10-K for the year ended June 30, 1998 and incorporated herein by this reference).
10.6*	1995 Non-Employee Director Stock Option Plan of the Company (filed as Exhibit 10.14 to the Company’s Registration Statement on Form S-1 (File No. 33-97406) and incorporated herein by this reference).
10.7.1*	2001 Stock Incentive Plan of the Company (filed as Exhibit 10.7.1 to the Company’s Annual Report on Form 10-K for the year ended June 30, 2006 and incorporated herein by this reference).
10.7.2*	Amendment No. 1 to 2001 Stock Incentive Plan of the Company (filed as Exhibit 10.7.2 to the Company’s Annual Report on Form 10-K for the year ended June 30, 2006 and incorporated herein by this reference).
10.8*	2005 Stock Incentive Plan of the Company (filed as Exhibit 10.8 to the Company’s Annual Report on Form 10-K for the year ended June 30, 2006 and incorporated herein by this reference).
10.9*	Form of Restricted Stock Agreement for non-employee directors under the Company’s 2005 Stock Incentive Plan (filed as Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the quarter ended December 31, 2005 and incorporated herein by this reference).

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EXHIBIT NO.	DESCRIPTION
10.10*	Form of Restricted Stock Agreement for executive officers under the Company’s 2005 Stock Incentive Plan (filed as Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q for the quarter ended December 31, 2005 and incorporated herein by this reference).
10.11*	Corporate Plan for Retirement of the Company (filed as Exhibit 10.16 to the Company’s Registration Statement on Form S-1 (File No. 33-97406) and incorporated herein by this reference).
10.12.1	Lease dated June 14, 1991 between 200 West Street Limited Partnership and the Company (filed as Exhibit 10.19 to the Company’s Annual Report on Form 10-K for the year ended June 30, 2000 and incorporated herein by this reference).
10.12.2	First Amendment dated as of January 3, 1992 to the Lease dated June 14, 1991 between 200 West Street Limited Partnership and the Company (filed as Exhibit 10.25 to the Company’s Registration Statement on Form S-1 (File No. 33-97406) and incorporated herein by this reference).
10.12.3	Second Amendment dated as of June 28, 1993 to the Lease dated June 14, 1991 between 200 West Street Limited Partnership and the Company (filed as Exhibit 10.28 to the Company’s Registration Statement on Form S-1 (File No. 33-97406) and incorporated herein by this reference).
10.12.4	Third Amendment to Lease dated November 17, 1998 between Boston Properties Limited Partnership and the Company (filed as Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the quarter ended December 31, 1998 and incorporated herein by this reference).
10.12.5	Fifth Amendement dated as of June 29, 2007 to the lease dated June 14, 1991 by and between Boston Properties Limited Partnership and PAREXEL International, LLC (filed herewith).
10.13*	1998 Non-Qualified, Non-Officer Stock Option Plan, as amended (filed as Exhibit 10.16 to the Company’s Annual Report on Form 10-K for the year ended June 30, 1999 and incorporated herein by this reference).
10.14*	Amended and Restated Employment Agreement dated December 6, 1999 between Josef H. von Rickenbach and the Company (filed as Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the quarter ended December 31, 1999 and incorporated herein by this reference).
10.15.1	Lease dated November 17, 1998 between Boston Properties Limited Partnership and the Company (filed as Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q for the quarter ended December 31, 1998 and incorporated herein by this reference).
10.15.2	First Amendment dated as of June 29, 2007 to the lease dated November 17, 1998 by and between Boston Properties Limited Partnership and PAREXEL International LLC (filed herewith).
10.16*	Employment Agreement, dated February 21, 2005, between Ulf Schneider and PAREXEL GmbH (filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K dated February 21, 2005 and incorporated herein by this reference).
10.17	Fourth Amendment dated August 28, 2000 to the lease dated November 17, 1998 between Boston Properties Limited Partnership and the Company (filed as Exhibit 10.22 to the Company’s Annual Report on Form 10-K for the year ended June 30, 2000 and incorporated herein by this reference).
10.18.1*	Change of Control/Severance Agreement, dated as of April 3, 2001, by and between the Company and James F. Winschel, Jr. (filed as Exhibit 10.23 to the Company’s Annual Report on Form 10-K for the year ended June 30, 2001 and incorporated herein by this reference).
10.18.2*	Amendment No. 1 to Change of Control/Severance Agreement, dated as of February 7, 2006, by and between the Company and James F. Winschel, Jr. (filed as Exhibit 10.5 to the Company’s Quarterly Report on Form 10-Q for the quarter ended December 31, 2005 and incorporated herein by this reference).
10.19.1*	Change of Control/Severance Agreement, dated as of December 16, 2005, by and between the Company and Mark A. Goldberg (filed as Exhibit 10.4 to the Company’s Quarterly Report on Form 10-Q for the quarter ended December 31, 2005 and incorporated herein by this reference).

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EXHIBIT NO.	DESCRIPTION
10.19.2*	Amendment No. 1 to Change of Control /Severance Agreement, dated as of February 7, 2006, by and between the Company and Mark A. Goldberg (filed as Exhibit 10.6 to the Company’s Quarterly Report on Form 10-Q for the quarter ended December 31, 2005 and incorporated herein by reference).
10.20	PAREXEL International Nonqualified Deferred Compensation Plan (filed as Exhibit 10.21 to the Company’s Annual Report on Form 10-K for the year ended June 30, 2002 and incorporated herein by this reference).
10.21	ABN – AMRO Cash Pooling Agreement, dated as of September 14, 2001 (filed as Exhibit 10.21 to the Company’s Annual Report on Form 10-K for the year ended June 30, 2003 and incorporated herein by this reference ).
10.22	Lease dated April 10, 2002 between API (No. 23) Limited, Arlington Property Investments Limited, PAREXEL International Limited and the Company (filed as Exhibit 10.22 to the Company’s Annual Report on Form 10-K for the year ended June 30, 2003 and incorporated herein by this reference).
10.23*	Change of Control/Severance Agreement, dated as of July 6, 2006, by and between the Company and Douglas A. Batt (filed as Exhibit 10.26 to the Company’s Annual Report on Form 10-K for the year ended June 30, 2006 and incorporated herein by this reference).
10.24	Tender Agreement, dated as of June 7, 2007, by and between PAREXEL (Taiwan), Inc. and Albert Liou (filed herewith).
10.25	Credit Agreement, dated as of January 12, 2007, between and among the Company, JP Morgan ChaseBank, N.A., as Administrative Agent, J.P. Morgan Securities Inc., as Sole Bookrunner and Sole Lead Arranger, ABN Amro Bank N.V., as Syndication Agent, Wachoria Bank, N.A., as Documentation Agent and a Syndicate of banks (filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K dated January 12, 2007 and incorporated herein by this reference).
21.1	List of subsidiaries of the Company
23.1	Consent of Ernst & Young LLP
31.1	CEO certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2	CFO certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1	CEO certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2	CFO certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

* denotes management contract or any compensatory plan, contract or arrangement

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SCHEDULE II

PAREXEL INTERNATIONAL CORPORATION
VALUATION AND QUALIFYING ACCOUNTS AND RESERVES

	Balance at		Charged to		Recovery			Balance at
	beginning		costs and		(Deductions)			end of
($ IN THOUSANDS)	of year		expenses		and (write-offs)			year
Provision for losses on receivables:
Year ended June 30, 2005	$	4,215	$	926	$	(2,770	)	$	2,371
Year ended June 30, 2006	$	2,371	$	1,293	$	(195	)	$	3,469
Year ended June 30, 2007	$	3,469	$	4	$	243		$	3,716

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EX-10.12.5

Exhibit 10.12.5

FIFTH AMENDMENT TO LEASE

     FIFTH AMENDMENT TO LEASE dated as of this 29^th day of June, 2007 by and between BOSTON PROPERTIES LIMITED PARTNERSHIP, a Delaware limited partnership (“Landlord”) (as successor-in-interest to 200 West Street Limited Partnership) and PAREXEL INTERNATIONAL LLC, a Delaware limited liability company (as successor-in-interest to PAREXEL International Corporation, “Tenant”).

RECITALS

     WHEREAS, by lease dated June 14, 1991 (as amended by the First Amendment, Second Amendment, Third Amendment and Fourth Amendment and affected by the Consent Agreement referred to below, the “Lease”), Landlord did lease to Tenant and Tenant did hire and lease from Landlord certain premises (the “Initial Premises”) in the building known as and numbered 195 West Street, Waltham, Massachusetts (the “Building”) containing a total of 48,258 square feet of rentable floor area (the “Rentable Floor Area of the Initial Premises”).

     WHEREAS, by First Amendment to Lease dated January 3, 1992 (the “First Amendment”), Tenant exercised its right pursuant to Section 2.1.1.1 of the Lease to lease from Landlord certain additional premises in the Building (the “Additional Premises”) containing a total of 15,242 square feet of rentable floor area (the “Rentable Floor Area of the Additional Premises”) upon the terms and conditions contained in the First Amendment. The Initial Premises and the Additional Premises are hereinafter referred to collectively as the “Premises,” and the Rentable Floor Area of the Initial Premises and the Rentable Floor Area of the Additional Premises are hereinafter referred to collectively as the “Rentable Floor Area of the Premises” and shall contain a total of 63,500 square feet of rentable floor area.

     WHEREAS, by Second Amendment to Lease dated June 28, 1993 (the “Second Amendment”), Tenant leased from Landlord an additional 660 square feet in the basement of the Building (the “Tenant’s Storage Space”) upon the terms and conditions contained in the Second Amendment.

     WHEREAS, by Third Amendment to Lease dated November 17,1998 (the “Third Amendment”), Landlord provided Tenant with the option of extending the Term of the Lease so that it would be coterminus with the 200 West Street Lease Term (as that term is defined in the Third Amendment).

     WHEREAS, by Fourth Amendment to Lease dated August 28, 2000 (the “Fourth Amendment”), the Term of the Lease was extended for the Interim Extended Term (as that term is defined in the Fourth Amendment).

     WHEREAS, by Consent Agreement by and between Landlord, Tenant and Salary.com (“Subtenant”) dated February 7, 2006 (the “Consent Agreement”), Landlord consented to the sublease of approximately 51,291 square feet of the Rentable Floor Area of the Premises by

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Tenant to Subtenant. Pursuant to a letter agreement dated April 25, 2006, Landlord, Tenant and Subtenant acknowledged and agreed that Subtenant subsequently subleased all of the Premises.

     WHEREAS, Landlord and Tenant have agreed to extend the Term of the Lease for one (1) period of one hundred twenty-four (124) months upon all of the same terms and conditions set forth in the Lease except as set forth in this Fifth Amendment to Lease (the “Fifth Amendment”).

     WHEREAS, Landlord and Tenant are entering into this instrument to set forth said extension of the Term of the Lease and to amend the Lease.

     NOW, THEREFORE, in consideration of One Dollar ($1.00) and other good and valuable consideration in hand this date paid by each of the parties to the other, the receipt and sufficiency of which are hereby severally acknowledged, and in further consideration of the mutual promises herein contained, Landlord and Tenant hereby agree to and with each other as follows:

     1. (A) The Term of the Lease, which but for this Fifth Amendment is scheduled to expire on April 30, 2009, is hereby extended for one (1) period of one hundred twenty-four (124) months commencing on May 1, 2009 and expiring on August 31, 2019 (the “Fifth Amendment Extended Term”) unless sooner extended or terminated in accordance with the provisions of the Lease, upon all the same terms and conditions contained in the Lease as herein amended.

          (B) Landlord and Tenant acknowledge and agree that the extension option contained in Section 2.4.1 of the Lease (as affected by Section 1(B) of the Fourth Amendment) shall be deleted in its entirety and Tenant shall have no further option to extend the Term upon the expiration of the Fifth Amendment Extended Term except as provided in Section 9 of this Fifth Amendment.

     2. (A) Prior to the commencement of the Fifth Amendment Extended Term, Annual Fixed Rent for both the Premises and the Tenant’s Storage Space shall continue to be payable as set forth in the Lease.

          (B) Annual Fixed Rent for the Premises shall be payable during the Fifth Amendment Extended Term as follows:

Time Period	Rate PSF		Annual Amount
5/1/09—8/31/09	$	0	$	0
9/1/09—8/31/12	$	36.50	$	2,317,750.00
9/1/12—8/31/15	$	37.50	$	2,381,250.00
9/1/15—8/31/19	$	38.50	$	2,444,750.00

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          (C) Annual Fixed Rent for the Tenant’s Storage Space shall be payable during the Fifth Amendment Extended Term at the annual rate of $6,600.00.

          (D) Annual Fixed Rent for the Premises and Tenant’s Storage Space during the Extended Term (as defined in Section 8 below) (if exercised) shall be determined as provided in Section 9 below.

          (E) Effective as of the date of this Fifth Amendment, and until notice of some other designation is given, fixed rent and all other charges for which provision is herein made shall be paid by remittance to or for the order of Boston Properties Limited Partnership either (i) by mail to P.O. Box 3557, Boston, Massachusetts 02241-3557, (ii) by wire transfer to Bank of America in Dallas, Texas, Bank Routing Number 0260-0959-3 or (iii) by ACH transfer to Bank of America in Dallas, Texas, Bank Routing Number 111 000 012, and in the case of (ii) or (iii)referencing Account Number 3756454460, Account Name of Boston Properties, LP, Tenant’s name and the Property address.

     3. (A) For the purposes of computing the Tenant’s payments for Operating Expenses Allocable to the Premises during the Fifth Amendment Extended Term pursuant to Section 2.6 of the Lease (as amended by Section 6 of the First Amendment and Section 3 of the Fourth Amendment), the definition of “Base Operating Expenses” contained in said Section 2.6 shall be deleted in its entirety and replaced with the following:

‘“Base Operating Expenses’ shall mean Landlord’s Operating Expenses for calendar year 2009, being the period from January 1, 2009 through December 31, 2009; provided, however, that for the purposes of determining Base Operating Expenses, the amount to be included in such Base Operating Expenses for maintenance and repair of the Building elevators and heating, ventilation and air conditioning systems shall be $33,363.20 (being the product of (x) 52¢ and (y) the sum of the square feet of (aa) the Rentable Floor Area of the Premises and (bb) the Tenant’s Storage Space).”

For the portion of the Lease Term prior to the commencement of the Fifth Amendment Extended Term, the definition of Base Operating Expenses shall remain unchanged for such purposes.

          (B) Notwithstanding anything contained in the Lease to the contrary, in determining the amount of Landlord’s Operating Expenses for any calendar year or portion thereof falling within the Fifth Amendment Extended Term (including, without limitation, calendar year 2009 for the purposes of determining the amount of Base Operating Expenses for the Fifth Amendment Extended Term) and the Extended Term (as defined in Section 9 below), if exercised, if less than one hundred percent (100%) of the Total Rentable Floor Area of the Building shall have been occupied by tenants at any time during the period in question, then those components of Landlord’s Operating Expenses that vary based on occupancy for such period shall be adjusted to equal the amount such components of Landlord’s Operating Expenses would have been for such period had occupancy been one hundred percent (100%) throughout such period.

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          (C) Notwithstanding anything contained in the Lease to the contrary, for the purposes of determining the amount of Landlord’s Operating Expenses during the Fifth Amendment Extended Term, neither Base Operating Expenses nor Operating Expenses Allocable to the Premises shall include (i) any costs associated with the repair, maintenance or replacement of the Building’s roof, structural foundation or structural walls or (ii) any costs associated with the replacement (as opposed to the maintenance or repair) of the Building’s masonry facade, elevators or heating, ventilation and air conditioning systems (it being understood and agreed that the costs associated with the maintenance and repair of the items listed in this subsection (ii) may be included within Base Operating Expenses and/or Operating Expenses Allocable to the Premises, subject to and in accordance with the provisions of Section 2.6 of the Lease). In addition and notwithstanding anything contained in the Lease to the contrary, (x) the costs includable in Base Operating Expenses and Landlord’s Operating Expenses during the Fifth Amendment Extended Term associated with the maintenance and repair of the Building elevators and heating, ventilation and air conditioning systems (collectively, the “Elevator and HVAC Costs”) shall be limited to so-called “hard costs” of maintenance and repair (e.g., preventative maintenance contracts with outside vendors, annual inspection fees mandated by state and local authorities, water treatment costs for cooling towers, general supplies and parts, etc.) and shall not include any wages paid to Landlord’s personnel (other than fees associated with the monitoring of the energy management system for the Building) and (y) for purposes of determining Landlord’s Operating Expenses solely for calendar year 2010, Tenant shall only be required to pay Elevator and HVAC Costs in excess of $46,195.20 (being the product of (1) 72¢ and (2) the sum of the square feet of (aa) the Rentable Floor Area of the Premises and (bb) the Tenant’s Storage Space).

     4. For the purposes of computing Tenant’s payments for Landlord’s Tax Expenses Allocable to the Premises during the Fifth Amendment Extended Term pursuant to Section 2.7 of the Lease (as amended by Section 6 of the First Amendment and Section 3 of the Fourth Amendment), the definition of “Base Taxes” contained in said Section 2.7 shall be deleted in its entirety and replaced with the following:

‘“Base Taxes’ shall mean Landlord’s Tax Expenses for fiscal tax year 2009, being the period from July 1, 2008 through June 30, 2009.”

For the portion of the Lease Term prior to the commencement of the Fifth Amendment Extended Term, the definition of Base Taxes shall remain unchanged for such purposes.

     5. Effective as of May 1, 2009, Section 2.2.1 of the Lease shall be amended as follows:

(i) By deleting the first sentence in its entirety and substituting the following therefor: “In addition, for so long as Tenant shall be directly (which shall include any permitted sublease or assignment under this Lease) leasing the entirety of the Premises and the Storage Space demised to Tenant under the Fifth Amendment to Lease, Tenant shall have the exclusive right to use all of the parking spaces

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	located in the basement of the Building and on the surface parking areas of the Site (collectively, “Tenant’s Parking Spaces”).
(ii)	By deleting the words “Tenant’s Basement Spaces” where they appear in the second and third sentences of said Section 2.2.1 and substituting the words “Tenant’s Parking Spaces” therefor.

     6. Effective as of May 1, 2009, Section 2.8 of the Lease shall be deleted in its entirety and the following substituted therefor:

“Effective as of May 1, 2009 and continuing throughout the Term, for so long as Tenant shall be directly (which shall include any permitted sublease or assignment under this Lease) leasing the entirety of the Premises and the Storage Space demised to Tenant under the Fifth Amendment to Lease, Tenant covenants and agrees to make application to the appropriate utility company or utility provider for electrical service to the Building in the quantum required for Tenant’s use of the Building and to make any deposit (including but not limited to, such letters of credit) as such utility company or provider shall require. Tenant covenants and agrees to pay, punctually as and when due, all electricity charges and rates for and relating to the Building and from time-to-time if requested by Landlord to provide Landlord with evidence of payment to, and good standing with, such utility company or provider as Landlord may reasonably require. Tenant further covenants and agrees to defend, save harmless and, indemnify Landlord against all liability, cost and damage arising out of or in any way connected to the payment, nonpayment or late payment of any and all charges or deposits to such utility company or provider. The provisions of this Section 2.8 shall survive the expiration or termination of this Lease for a period of twelve (12) full calendar months.”

In addition, as of May 1, 2009, all references in the Lease (including, without limitation, in Sections 2.5 and 2.6 thereof) to separate payments by Tenant to Landlord on account of tenant electricity shall be deleted in their entirety, it being understood and agreed that from and after May 1, 2009, Tenant shall be fully responsible for making all payments regarding electric service to the Building directly to the utility company as set forth in Section 2.8 of the Lease (as amended hereby).

     7. (A) Tenant shall accept the Premises and the Storage Space in their as-is condition without any obligation on Landlord’s part to perform any additions, alterations, improvements, demolition or other work therein or pertaining thereto except as expressly provided in this Section 7 or in Section 8 below. Notwithstanding the foregoing, it is contemplated that certain work will be performed in the Premises pursuant to construction drawings to be submitted by Tenant and reviewed by Landlord in accordance with the terms and provisions of the Lease (the “Tenant Improvement Work”). The Tenant Improvement Work shall be performed by a general contractor to be mutually agreed upon by Landlord and Tenant (the parties hereby agreeing to cooperate with each other in good faith in the selection of such general contractor).

     In the event that the agreed-upon general contractor is a union contractor, Landlord shall enter into the general contract with such contractor (hereinafter, “Landlord’s General

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Contractor”) and shall be responsible for performing the Tenant Improvement Work on Tenant’s behalf. The Tenant Improvement Work shall be performed by Landlord’s General Contractor on an “open book” basis, and Landlord shall provide Tenant with copies of all construction budgets and bids. Landlord shall bid the project to several general contractors before selecting Landlord’s General Contractor, and shall require Landlord’s General Contractor once selected to obtain a minimum of three (3) bids for any subcontract in excess of $50,000.00.

     In the event that the agreed-upon general contractor is a non-union contractor, Tenant shall enter into a general contract with such contractor (hereinafter, “Tenant’s General Contractor”) (the form of which general contract shall be subject to Landlord’s approval, not to be unreasonably withheld, conditioned or delayed) and shall be responsible for performing the Tenant Improvement Work; provided, however, that Landlord shall provide construction management consulting services to Tenant in connection with the Tenant Improvement Work in accordance with a Consulting Services Agreement in the form attached hereto as Exhibit A to be entered into by Landlord and Tenant.

     In either event, Tenant shall have the right, at its sole cost and expense, to retain a third-party construction manager in connection with the performance of the Tenant Improvement Work. In the event that Tenant’s General Contractor is performing the Tenant Improvement Work and Landlord is providing consulting services in accordance with the immediately preceding paragraph, such third-party construction manager shall be in addition to, and not in lieu of, Landlord. In the event that Landlord’s General Contractor is performing the Tenant Improvement Work, Landlord shall provide such third-party construction manager with full access to the project, including without limitation all construction budgets and bids, as well as all job meetings and discussions concerning the review and progress of construction.

          (B) Landlord shall provide to Tenant a special allowance of One Million Six Hundred Four Thousand and 00/100 Dollars ($1,604,000.00) (the “Tenant Allowance”), being the product of (x) $25.00 and (y) the sum of the square feet of (aa) the Rentable Floor Area of the Premises and (bb) the Tenant’s Storage Space. The Tenant Allowance shall be used and applied by Landlord solely on account of the cost of Tenant Improvement Work. In no event shall Landlord’s obligations to pay or reimburse Tenant for any of the costs of the Tenant Improvement Work exceed the sum of (x) the total Tenant Allowance and (y) the “Supplemental Allowance” (as defined in subsection (C) below), to the extent requested by Tenant. Notwithstanding the foregoing, Landlord shall be under no obligation to apply or provide any portion of the Tenant Allowance for any purposes other than as provided in this Section 7(B). In addition, in the event that (i) Tenant is in default under the Lease and Landlord has provided Tenant with written notice thereof or (ii) there are any liens which are not bonded to the reasonable satisfaction of Landlord against Tenant’s interest in the Lease or against the Building or the Site arising out of any work performed by Tenant or any litigation in which Tenant is a party, then, from and after the date of such event (“Event”) until the circumstances giving rise to such Event under either subsection (i) or (ii) above have been cured, Landlord shall have no further obligation to fund any portion of the Tenant Allowance and Tenant shall be obligated to pay, as additional rent, all costs of the Tenant Improvement Work in excess of that portion of the Tenant Allowance (and the Supplemental Allowance, if requested) funded by Landlord through the date of the Event. In addition, if the Tenant Improvement Work is performed by Tenant’s

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General Contractor rather than Landlord’s General Contractor, Landlord shall only disburse the Tenant Allowance to Tenant within thirty (30) days after (x) Tenant has completed the Tenant Improvement Work in accordance with the terms of the Lease, has paid for all of such Tenant Improvement Work in full and has delivered to Landlord lien waivers from all persons who might have a lien as a result of such work, in the recordable forms attached hereto as Exhibit B, and (y) Tenant has delivered to Landlord its certificate specifying the cost of such Tenant Improvement Work and all contractors, subcontractors and supplies involved with the Tenant Improvement Work, together with evidence of such cost in the form of paid invoices, receipts and the like.

     Irrespective of whether the Tenant Improvement Work is performed by Landlord’s General Contractor or by Tenant’s General Contractor, the Tenant Allowance shall only be applied towards the cost of leasehold improvements and in no event shall Landlord be required to make application of any portion of the Tenant Allowance towards Tenant’s personal property, trade fixtures or moving expenses or on account of any supervisory fees, overhead, management fees or other payments to Tenant, any partner or affiliate of Tenant or any third-party construction manager retained by Tenant. In no event shall Landlord be deemed to have assumed any obligations, in whole or in part, of Tenant to any contractors, subcontractors, suppliers, workers or materialmen. In the event that the costs of the Tenant Improvement Work are less than the Tenant Allowance, Tenant shall not be entitled to any payment or credit nor shall there be any application of the same toward Annual Fixed Rent or additional rent owed by Tenant under the Lease. Tenant acknowledges that any portion of the Tenant Allowance which has not been utilized on or before October 31, 2010 shall be forfeited by Tenant.

     Landlord shall be entitled to deduct from the Tenant Allowance a construction management fee equal to:

(1)	four percent (4%) of the cost of the Tenant Improvement Work up to $1,604,000.00;
(2)	three percent (3%) of the cost of the Tenant Improvement Work between $1,604,001.00 and $2,245,601.00; and
(3)	two percent (2%) of the cost of the Tenant Improvement Work in excess of $2,245,601.00.

          (C) In addition, Tenant shall have the right to request that Landlord provide Tenant with an additional allowance of up to Six Hundred Forty-One Thousand Six Hundred and 00/100 Dollars ($641,600.00), being the product of (x) $10.00 and (y) the sum of the square feet of (aa) the Rentable Floor Area of the Premises and (bb) the Tenant’s Storage Space (the “Supplemental Allowance”). Tenant may exercise its right to require Landlord to provide the Supplemental Allowance by giving to Landlord, on or before April 1, 2009, written notice advising Landlord that Tenant intends to use the Supplemental Allowance, which such notice shall set forth the amount of the Supplemental Allowance which Tenant desires to be made available to Tenant in accordance with this Section 7 (such amount being hereinafter referred to as the “Amortization Amount”). Tenant acknowledges that any portion of the Supplemental

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Allowance which has not been requested by Tenant on or before April 1, 2009 shall be forfeited by Tenant. The Supplemental Allowance shall be disbursed in accordance with the procedures set forth in subsection (B) above, and shall be used solely for the purposes set forth in said subsection (B).

     Tenant shall reimburse Landlord, as additional rent, for the Amortization Amount amortized on a direct reduction basis over one hundred twenty (120) months at an interest rate of ten percent (10%) per annum in one hundred twenty (120) monthly payments (“Monthly Improvement Cost Payments”) payable on the first day of each month commencing on September 1, 2009 in the same manner as provided in the Lease for the payment of Annual Fixed Rent. Neither the Amortization Amount nor the Monthly Improvement Cost Payments shall be abated or reduced for any reason whatsoever (including, without limitation, untenantability of the Premises or termination of the Lease). Without limiting the foregoing, the rent abatement provisions of Article VI of the Lease shall not apply to the Amortization Amount or the Monthly Improvement Cost Payments. If there is any default (beyond the expiration of any applicable grace periods) of any of Tenant’s obligations under the Lease (including, without limitation, its obligation to pay the Monthly Improvement Cost Payments) or if the Term of the Lease is terminated for any reason whatsoever prior to the expiration of the Term of the Lease, Tenant shall pay to Landlord, within ten (10) days following demand therefor, the unamortized balance of the Amortization Amount. Tenant’s obligation to pay the unamortized balance of the Amortization Amount shall be in addition to all other rights and remedies which Landlord has based upon any default of Tenant under the Lease, and Tenant shall not be entitled to any credit or reduction in such payment based upon amounts collected by Landlord from reletting the Premises after the default of Tenant.

               (D) Tenant shall be fully responsible for all costs of the Tenant Improvement Work in excess of the Tenant Allowance (and the Supplemental Allowance, if requested) (such excess costs being hereinafter referred to as the “Tenant Plan Excess Costs”). In the event that the Tenant Improvement Work is being performed by Landlord’s General Contractor, Tenant shall pay Landlord, as additional rent, fifty percent (50%) of any Tenant Plan Excess Costs prior to the commencement of the Tenant Improvement Work, with the balance of the Tenant Plan Excess Costs due upon substantial completion of the Tenant Improvement Work; provided, however, that in the event the Tenant Plan Excess Costs exceed $50,000.00 (the “Maximum Amount”), then Tenant shall pay to Landlord, as additional rent, prior to the commencement of the Tenant Improvement Work, one hundred percent (100%) of the Tenant Plan Excess Costs in excess of the Maximum Amount. For the purposes of this Section 7(D), the Tenant Improvement Work shall be deemed to be “substantially complete” on the later of: (i) the date on which the Tenant Improvement Work has been completed except for items of work and adjustment of equipment and fixtures which can be completed after occupancy has been taken without causing substantial interference with Tenant’s use of the Premises (i.e. so-called “punch list” items); or (ii) the date when permission has been obtained from the applicable governmental authority for occupancy by Tenant of the Premises for the Permitted Use, but only to the extent required by law in connection with the performance and completion of the Tenant Improvement Work (it being understood and agreed that if such permission is required but cannot be obtained as a result of a delay in the completion of the Base Building Work caused by the act or wrongful

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failure to act of Tenant, the Tenant Improvement Work will nonetheless be deemed to be substantially complete so long as the conditions set forth in subsection (i) above have been met).

          (E) With respect to any future alterations, additions or improvements made to the Premises subsequent to the Tenant Improvement Work, Tenant shall pay to Landlord as a fee for Landlord’s review of any work or plans, an amount equal to the sum of: (i) $150.00 per hour plus (ii) third party expenses incurred by Landlord to review Tenant’s plans and Tenant’s work. Such fee shall be payable by Tenant as additional rent within thirty (30) days after receipt of an invoice from Landlord therefor.

     8. (A) Landlord shall, at its sole cost and expense, perform the work described on Exhibit C (the “Base Building Work”). It is understood and agreed that Landlord may be performing the Base Building Work (and the Tenant Improvement Work, if and when requested by Tenant) while Tenant is in possession of the Premises, and Landlord and Tenant accordingly agree to cooperate with each other in good faith so as to enable Landlord to perform the Base Building Work (and the Tenant Improvement Work, as applicable) in an efficient and cost-effective manner while at the same time minimizing any unreasonable interference with Tenant’s business operations in the Premises (consistent with the nature of the work being undertaken by Landlord). Subject to events beyond Landlord’s reasonable control and to delays caused by Tenant or Tenant’s agents, contractors or employees (including, without limitation, Tenant’s use of non-union labor in connection with the construction of the Tenant Improvement Work), Landlord shall use commercially reasonable efforts to substantially complete such Base Building Work prior to May 1, 2009; provided, however, that Landlord shall not be liable to Tenant for the failure to complete the Base Building Work by any specific date except as expressly provided in this Section 8.

          (B) In the event that Landlord shall have failed to substantially complete the Base Building Work on or before September 1, 2009 (which date shall be extended automatically for such periods of time as Landlord is prevented from proceeding with or completing the same as the result of events beyond Landlord’s reasonable control or any act or wrongful failure to act of Tenant which interferes with Landlord’s construction of the Base Building Work, including, without limitation, Tenant’s use of non-union labor in connection with the construction of the Tenant Improvement Work), Tenant shall receive a rent credit equal to one-half (1/2) of the Annual Fixed Rent otherwise payable by Tenant under Section 2(B) above on a per diem basis for each day beyond September 1, 2009 (as so extended) that Landlord thus fails to substantially complete the Base Building Work. In the event that Landlord shall have failed to substantially complete the Base Building Work on or before November 1, 2009 (which date shall be extended automatically for such periods of time as Landlord is prevented from proceeding with or completing the same as the result of events beyond Landlord’s reasonable control or any act or wrongful failure to act of Tenant which interferes with Landlord’s construction of the Base Building Work, including, without limitation, Tenant’s use of non-union labor in connection with the construction of the Tenant Improvement Work), Tenant shall receive a rent credit equal to the Annual Fixed Rent otherwise payable by Tenant under Section 2(B) above on a per diem basis for each day beyond November 1, 2009 (as so extended) that Landlord thus fails to complete the Base Building Work. The foregoing rent abatements shall be Tenant’s sole and

PAREXEL Fifth Amendment (195 WS) (f)

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exclusive remedy at law or in equity or otherwise for Landlord’s failure to complete the Base Building Work within the time periods set forth above.

          (C) For the purposes of this Section 8, the Base Building Work (and/or individual components thereof, if applicable in a particular context) shall be deemed to be “substantially complete” on the later of: (i) the date on which the Base Building Work has been completed except for items of work and adjustment of equipment and fixtures which can be completed after occupancy has been taken without causing substantial interference with Tenant’s use of the Premises (i.e. so-called “punch list” items); or (ii) the date when permission has been obtained from the applicable governmental authority for occupancy by Tenant of the Premises for the Permitted Use, but only to the extent required by law in connection with the performance and completion of the Base Building Work (it being understood and agreed that (x) in the event that the Tenant Improvement Work is being performed by Landlord’s General Contractor, if such permission is required but cannot be obtained as the result of a delay in the completion of the Tenant Improvement Work caused by any act or wrongful failure to act of Tenant, the Base Building Work will nonetheless be deemed to be substantially complete so long as the conditions set forth in subsection (i) above have been met and (y) in the event that the Tenant Improvement Work is being performed by Tenant’s General Contractor, if such permission is required but cannot be obtained as the result of a delay in the completion of the Tenant Improvement Work except to the extent such delay is caused by any act or wrongful failure to act of Landlord, the Base Building Work will nonetheless be deemed to be substantially complete so long as the conditions set forth in subsection (i) above have been met).

     9. (A) On the conditions (which conditions Landlord may waive by written notice to Tenant) that both at the time of exercise of the herein described option to extend and as of the commencement of the Extended Term (as defined below) (i) there exists no Event of Default and there have been no more than three (3) Event of Default occurrences during the Fifth Amendment Extended Term, (ii) this Lease is still in full force and effect, and (iii) Tenant has neither assigned this Lease nor sublet more than forty percent (40%) of the Rentable Floor Area of the Premises (except for an assignment or subletting permitted without Landlord’s consent under Section 5.6.1 of the Lease), Tenant shall have the right to extend the Term hereof upon all the same terms, conditions, covenants and agreements herein contained (except for the Annual Fixed Rent which shall be adjusted during the option period as hereinbelow set forth and except that mere shall be no further option to extend) for one (1) period of five (5) years as hereinafter set forth. The option period is sometimes herein referred to as the “Extended Term.” Notwithstanding any implication to the contrary, Landlord has no obligation to make any additional payment to Tenant in respect of any construction allowance or the like or to perform any work to the Premises and/or the Storage Space as a result of the exercise by Tenant of any such option.

          (B) If Tenant desires to exercise said option to extend the Term, then Tenant shall give notice (the “Exercise Notice”) to Landlord, not earlier than fifteen (15) months nor later than thirteen (13) months prior to the expiration of the Fifth Amendment Extended Term exercising such option to extend. Promptly after Landlord’s receipt of the Exercise Notice, Landlord shall provide Landlord’s quotation to Tenant of a proposed annual rent for the Premises and the Storage Space for the Extended Term (“Landlord’s Rent Quotation”). If at the expiration

PAREXEL Fifth Amendment (195 WS) (f)

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of thirty (30) days after the date when Landlord provides such quotation to Tenant (the “Negotiation Period”), Landlord and Tenant have not reached agreement on a determination of an annual rental for the Extended Term and executed a written instrument extending the Term of this Lease pursuant to such agreement, then Tenant shall have the right, for ten (10) business days following the expiration of the Negotiation Period, to either (x) make a request to Landlord for a broker determination (the “Broker Determination”) of the Prevailing Market Rent (as defined in Exhibit D) for the Extended Term, which Broker Determination shall be made in the manner set forth in Exhibit D, or (y) rescind the Exercise Notice without any further obligation. If Tenant timely shall have requested the Broker Determination, then the Annual Fixed Rent for the Extended Term shall be the greater of (a) the Prevailing Market Rent as determined by the Broker Determination or (b) the Annual Fixed Rent for the Premises and the Storage Space in effect during the last twelve (12) month period of the Lease Term immediately prior to the Extended Term. If Tenant does not timely request the Broker Determination, then Tenant shall be deemed to have rescinded its Exercise Notice.

          (C) Upon the first to occur of (x) the agreement by Landlord and Tenant during the Negotiation Period on an annual rental for the Extended Term or (y) the timely request by Tenant for the Broker Determination, then this Lease and the Lease Term hereof shall automatically be deemed extended, for the Extended Term, without the necessity for the execution of any additional documents, except that Landlord and Tenant agree to enter into an instrument in writing setting forth the Annual Fixed Rent for the Extended Term as determined in the relevant manner set forth in this Section 9; and in such event all references herein to the Lease Term or the term of this Lease shall be construed as referring to the Lease Term, as so extended, unless the context clearly otherwise requires, and except that there shall be no further option to extend the Lease Term. Notwithstanding anything contained herein to the contrary, in no event shall the Lease Term hereof be extended for more than five (5) years after the expiration of the Fifth Amendment Extended Term.

     10. Effective as of May 1, 2009, Section 4.1 of the Lease is hereby, amended as follows: (i) by deleting the words “high quality” in third (3^rd) line of Section 4.1.1 and substituting the words “Class A office” therefor; and (ii) by deleting the word “similar” in the tenth (10^th) line of Section 4.1.3 and substituting the words “Class A office” therefor.

     11. Section 5.6.5 of the Lease is hereby amended by adding the following new subsection (E):

     “(E) Notwithstanding the provisions of Section 5.6 above, in the event Tenant desires

(i)	to assign this Lease, or
(ii)	to sublet such portion of the Premises (the “Sublease Portion”) as would bring the total amount of the Premises then being subleased to fifty percent (50%) or more,

Landlord shall have the right at its sole option, to be exercised within thirty (30) days after receipt of Tenant’s notice under Section 5.6.2 above (the “Acceptance

PAREXEL Fifth Amendment (195 WS) (f)

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Period”), to (x) terminate this Lease in the case of a proposed assignment, or (y) terminate this lease with respect to the Sublease Portion in the case of a proposed sublease, as of a date specified in a notice to Tenant, which date shall not be earlier than sixty (60) days nor later than one hundred and twenty (120) days after Landlord’s notice to Tenant. In the case of an assignment, upon the termination date as set forth in Landlord’s notice, all obligations relating to the period after such termination date (but not those relating to the period before such termination date) shall cease and promptly upon being billed therefor by Landlord, Tenant shall make final payment of all Annual Fixed Rent and Additional Rent due from Tenant through the termination date. In the case of a sublease, all obligations relating to the Sublease Portion for the period after such termination date (but not those relating to a period before such termination date, or to portions of the Premises other than the Sublease Portion) shall cease. In the event that Landlord shall not exercise its termination rights as aforesaid, or shall fail to give any or timely notice pursuant to this Section 5.6.5(E), the provisions of Sections 5.6.2-5.6.5 shall be applicable. This Section 5.6.5(E) shall not be applicable to an assignment or sublease pursuant to Section 5.6.1.”

     12. Subject to events beyond Landlord’s reasonable control and for temporary periods as may be necessary for required maintenance (with respect to which Tenant shall be given reasonable prior notice except in the event of an emergency), Tenant shall have access to the Premises, including elevators, twenty-four (24) hours a day, seven (7) days a week, fifty-two (52) weeks a year. Landlord hereby agrees to provide Tenant with any access codes, electronic passes or keys for access to the Premises and shall allow Tenant (at Tenant’s sole cost and expense) to modify such codes, passes or keys upon Tenant’s reasonable request and upon reasonable prior notice.

     13. (A) Tenant warrants and represents that Tenant has not dealt with any broker in connection with the consummation of this Fifth Amendment other than Richards Barry Joyce & Partners (the “Broker”); and in the event any claim is made against Landlord relative to dealings by Tenant with brokers other than the Broker, Tenant shall defend the claim against Landlord with counsel of Tenant’s selection first approved by Landlord (which approval shall not be unreasonably withheld) and save harmless and indemnify Landlord on account of any loss, cost or damage which may arise by reason of such claim.

          (B) Landlord warrants and represents that Landlord has not dealt with any broker in connection with the consummation of this Fifth Amendment other than the Broker; and in the event any claim is made against Tenant relative to dealings by Landlord with brokers other than the Broker, Landlord shall defend the claim against Tenant with counsel of Landlord’s selection first approved by Tenant (which approval shall not be unreasonably withheld) and save harmless and indemnify Tenant on account of any loss, cost or damage with may arise by reason of such claim. Landlord agrees that it shall be solely responsible for the payment of the brokerage commission to the Broker in connection with this Fifth Amendment.

     14. As an inducement to Landlord to enter into this Fifth Amendment, Tenant hereby represents and warrants that: (i) Tenant is not, nor is it owned or controlled directly or indirectly

PAREXEL Fifth Amendment (195 WS) (f)

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by, any person, group, entity or nation named on any list issued by the Office of Foreign Assets Control of the United States Department of the Treasury (“OFAC”) pursuant to Executive Order 13224 or any similar list or any law, order, rule or regulation or any Executive Order of the President of the United States as a terrorist, “Specially Designated National and Blocked Person” or other banned or blocked person (any such person, group, entity or nation being hereinafter referred to as a “Prohibited Person”); (ii) Tenant is not (nor is it owned, controlled, directly or indirectly, by any person, group, entity or nation which is) acting directly or indirectly for or on behalf of any Prohibited Person; and (iii) from and after the effective date of the above-referenced Executive Order, Tenant (and any person, group, or entity which Tenant controls, directly or indirectly) has not conducted nor will conduct business nor has engaged nor will engage in any transaction or dealing with any Prohibited Person in violation of the U.S. Patriot Act or any OFAC rule or regulation, including without limitation any assignment of the Lease or any subletting of all or any portion of the Premises or the making or receiving of any contribution of funds, goods or services to or for the benefit of a Prohibited Person in violation of the U.S. Patriot Act or any OFAC rule or regulation. In connection with the foregoing, it is expressly understood and agreed that (x) any breach by Tenant of the foregoing representations and warranties shall be deemed an immediate Event of Default by Tenant under Section 7.1 of the Lease (without the benefit of notice or grace) and shall be covered by the indemnity provisions of Section 5.7 of the Lease, and (y) the representations and warranties contained in this subsection shall be continuing in nature and shall survive the expiration or earlier termination of the Lease.

     15. Except as otherwise expressly provided herein, all capitalized terms used herein without definition shall have the same meaning as set forth in the Lease.

     16. Except as herein amended the Lease shall remain unchanged and in full force and effect. All references to the “Lease” shall be deemed to be references to the Lease as heretofore amended and as amended hereby.

[page ends here]

-13 -

EXECUTED as a sealed instrument as of the date and year first above written.

WITNESS:	LANDLORD:
	BOSTON PROPERTIES LIMITED
	PARTNERSHIP
	By:	/s/ BOSTON PROPERTIES, INC.,
		its general partner
		By:
		Name:
		Title:

TENANT:
PAREXEL INTERNATIONAL LLC
By:
Name:
Title:	(President or Vice President)
	Hereto duly authorized

ATTEST:
By:	/s/ W. Brett Davis	By:	/s/ James F. Winschel Jr.
Name:	W. Brett Davis	Name:	JAMES F. WINSCHEL, JR.
Title:	(Assistant Secretary)	Title:	(Treasurer)
			Hereto duly authorized
			(CORPORATE SEAL)

PAREXEL Fifth Amendment (195 WS) (f)

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EX-10.15.2

Exhibit 10.15.2

FIRST AMENDMENT TO LEASE

     THIS FIRST AMENDMENT TO LEASE dated as of this 29^th day of June, 2007 by and between BOSTON PROPERTIES LIMITED PARTNERSHIP, a Delaware limited partnership (“Landlord”) and PAREXEL INTERNATIONAL LLC, a Delaware limited liability company (as successor-in-interest to Parexel International Corporation “Tenant”).

RECITALS

     WHEREAS, by lease dated November 17, 1998 (as amended by the letter agreement described below, the “Lease”) Landlord did lease to Tenant and Tenant did hire and lease from Landlord certain premises containing 129,199 square feet of rentable floor area (the “Rentable Floor Area of the Initial Premises”) in the building (the “Building”) known as and numbered 200 West Street, Waltham, Massachusetts (referred to in the Lease as the “Premises” or “Tenant’s Space” and hereinafter sometimes referred to as the “Initial Premises”).

     WHEREAS, Landlord and Tenant entered into a certain letter agreement dated June 15, 2001 regarding Tenant’s leasing of an additional 18,545 square feet of rentable floor area (the “Rentable Floor Area of the Expansion Premises”) located on the first (1^st) floor of the Building (the “Expansion Premises”) pursuant to Section 2.1.3 of the Lease. The Initial Premises and the Expansion Premises are hereinafter referred to collectively as the “Existing Premises” and the Rentable Floor Area of die Initial Premises and the Rentable Floor Area of the Expansion Premises are hereinafter referred to collectively as the “Rentable Floor Area of the Existing Premises.”

     WHEREAS, on or about the date hereof, Landlord and Tenant have executed or will execute a certain lease amendment (the “195 West Street Lease Amendment”) with respect to Tenant’s existing premises in the building known as and numbered 195 West Street, Waltham, Massachusetts (the “195 West Street Premises”).

     WHEREAS, to provide Tenant with a period of time within which to complete certain tenant improvements in the 195 West Street Premises, Landlord and Tenant have agreed to extend the Term of the Lease upon all of the same terms and conditions set forth in the Lease except as set forth in this First Amendment to Lease (the “First Amendment”).

     WHEREAS, Tenant has requested that Landlord reduce the size of the Existing Premises during the extension period described in the immediately preceding paragraph by subtracting therefrom the 56,494 square feet of rentable floor area (the “Rentable Floor Area of the Relinquished Premises”) shown on Exhibit A attached hereto as the relinquished premises (the “Relinquished Premises”) so that the remaining space demised to Tenant under the Lease shall be the 91,250 square feet of rentable floor area (the “Rentable Floor Area of the Remaining Premises”) shown on said Exhibit A as the remaining premises (the “Remaining Premises”).

1

     Landlord and Tenant are entering into this instrument to set forth said agreement to extend the Term of the Lease, to reduce the size of the Existing Premises and to further amend the Lease.

     NOW, THEREFORE, in consideration of One Dollar ($1.00) and other good and valuable consideration in hand this date paid by each of the parties to the other, the receipt and sufficiency of which are hereby severally acknowledged, and in further consideration of the mutual promises herein contained, Landlord and Tenant hereby agree to and with each other as follows:

     1. (a) The Term of the Lease, which but for this First Amendment is scheduled to expire on April 30, 2009, is hereby extended for a period commencing on May 1, 2009 and expiring on August 31, 2009 (the “Extended Term”), unless sooner terminated in accordance with the provisions of the Lease or extended pursuant to the provisions of subsection (b) below, upon all the same terms and conditions contained in the Lease as herein amended.

          (b) Notwithstanding the foregoing, in the event that Landlord has not provided Tenant with written notice that it has “substantially completed” (as that term is defined in Section 8(C) of the 195 West Street Lease Amendment) the components of the Base Building Work (as that term is defined in Section 8(A) of the 195 West Street Lease Amendment) described under the headings “HVAC System,” “Building FaVade” and “Main Exterior Building Entrance” in Exhibit C to the 195 West Street Lease Amendment (such components being hereinafter referred to collectively as the “195 West Street Landlord’s Work”) on or before August 1, 2009, the Extended Term shall expire on the date that is thirty (30) days after the date on which Landlord has provided Tenant with such notice that the 195 West Street Landlord’s Work has been substantially completed; provided, however, that:

(i)

If the 195 West Street Landlord’s Work has not been substantially completed on or before August 1, 2009 other than as the result of (x) events beyond Landlord’s reasonable control or (y) any act or wrongful failure to act of Tenant which interferes with Landlord’s completion of the 195 West Street Landlord’s Work (including, without limitation, Tenant’s use of non-union labor in connection with the construction of the Tenant Improvement Work, as that term is defined in the 195 West Street Lease Amendment), Tenant shall not be required to pay any Annual Fixed Rent, Operating Expenses Allocable to the Premises or Landlord’s Tax Expenses Allocable to the Premises under the Lease for the period commencing on September 1, 2009 through the expiration of the Extended Term.

(ii)

If the 195 West Street Landlord’s Work has not been substantially completed on or before August 1, 2009 as the result of (x) events beyond Landlord’s reasonable control or (y) any act or wrongful failure to act of Tenant which interferes with Landlord’s

2

completion of the 195 West Street Landlord’s Work (including, without limitation, Tenant’s use of non-union labor in connection with the construction of the Tenant Improvement Work), Annual Fixed Rent, Operating Expenses Allocable to the Premises and Landlord’s Tax Expenses Allocable to the Premises shall continue to be payable by Tenant for the period commencing on September 1, 2009 through the expiration of the Extended Term as set forth in Section 5 below.

It is understood and agreed that the provisions of this Section l(b) shall not be deemed to in any way modify the provisions of the 195 West Street Lease Amendment relating to the completion of the Base Building Work by Landlord or the payment of annual fixed rent by Tenant with respect to the 195 West Street Premises.

     2. Landlord and Tenant acknowledge and agree that the extension options contained in Section 2.4.1 of the Lease shall be deleted in their entirety and Tenant shall have no further option to extend the Term upon the expiration of the Extended Term.

     3. As of May 1, 2009 (the “Reduction Date”), the Relinquished Premises shall be deleted from the space demised from Landlord to Tenant under the Lease, so that the remaining space demised under the Lease shall consist of the Remaining Premises and the term “Premises” as used in the Lease shall thereafter be deemed to refer to the Remaining Premises only.

     4. On or prior to the Reduction Date, Tenant shall quit and vacate the Relinquished Premises and surrender same in the condition required by the Lease upon the expiration or earlier termination of the Lease Term.

     5. (a) For the portion of the Lease Term prior to the Reduction Date, Tenant shall continue to pay Annual Fixed Rent as provided in the Lease.

          (b) For the period on and after the Reduction Date, Annual Fixed Rent shall be payable by Tenant for the Remaining Premises at the annual rate of $3,011,250.00 (being the product of (i) $33.00 and (ii) the Rentable Floor Area of the Remaining Premises (being 91,250 square feet)).

     6. For the purpose of computing Operating Expenses Allocable to the Premises pursuant to Section 2.6 of the Lease, Landlord’s Tax Expenses Allocable to the Premises pursuant to Section 2.7 of the Lease and Tenant’s payments for electricity (as determined pursuant to Sections 2.5 and 2.8 of the Lease), for the portion of the Lease Term on and after the Reduction Date, the “Rentable Floor Area of the Premises” shall be reduced by the Rentable Floor Area of the Relinquished Premises (being 56,494 square feet) to become the Rentable Floor Area of the Remaining Premises (being 91,250 square feet). For the portion of the Lease Term prior to the Reduction Date, the “Rentable Floor Area of the Premises” shall continue to be the Rentable Floor Area of the Existing Premises for such purposes.

     7. Section 2.1.3 of the Lease is hereby deleted in its entirety, it being acknowledged

3

and agreed that the Expansion Premises has previously been delivered to Tenant.

     8. Effective as of the Reduction Date, the second grammatical paragraph of Section 2.7 of the Lease shall be deleted from the Lease in its entirety and shall be null and void and of no further force and effect.

     9. Effective as of the Reduction Date, Section 4.6 of the Lease shall be deleted from the Lease in its entirety and shall be null and void and of no further force and effect.

     10. Effective as of the Reduction Date, Section 8.22 of the Lease shall be deleted from the Lease in its entirety and shall be null and void and of no further force and effect, it being understood and agreed that (x) Tenant shall have the exclusive right to use the ground floor level of the Parking Structure during the Extended Term (such parking rights being hereinafter referred to as “Tenant’s Exclusive Parking”), (y) Tenant shall have the right to use the remainder of the Parking Structure in common with other occupants of the Building, subject to Landlord’s reasonable rules and regulations regarding such use (including, without limitation, Landlord’s right to provide other Building occupants with exclusive parking rights within the Parking Structure) and (z) the Number of Parking Spaces to which Tenant shall be entitled under Sections 1.1 and 2.2.1 of the Lease shall be reduced to Three Hundred Forty-Seven (347) (being 3.8 spaces per 1,000 square feet of the Rentable Floor Area of the Remaining Premises), which number shall not include Tenant’s Exclusive Parking but shall include both surface parking and parking in the remainder of the Parking Structure (to the extent the same is not reserved for the exclusive use of any other Building occupants).

Landlord shall not grant to anyone other than Tenant the right to use Tenant’s Exclusive Parking and will use reasonable efforts, by the use of signs and markings, to designate such space to be used exclusively by Tenant, however, Landlord shall not be otherwise obligated to police the use of Tenant’s Exclusive Parking, which Tenant recognizes is to be operated on a self parking basis.

In addition, it is understood and agreed that the parking rights described in this Section 10 shall be provided to Tenant free of charge during the Extended Term.

     11. All capitalized terms used herein shall have the same meaning as are set forth in the Lease unless specifically otherwise provided herein.

     12. Except as herein amended the Lease shall remain unchanged and in full force and effect. All references to the “Lease” shall be deemed to be references to the Lease as herein amended.

[page ends here]

4

EXECUTED as a sealed instrument as of the date and year first above written.

WITNESS:	LANDLORD:
	BOSTON PROPERTIES LIMITED
	PARTNERSHIP,
	By:	BOSTON PROPERTIES, INC.,
		its general partner
		By:
		Name:
		Title:

TENANT:
PAREXEL INTERNATIONAL LLC
By:
Name:
Title:	(President or Vice President)
	Hereto duly authorized

ATTEST:
By:	/s/ W. Brett Davis	By:	/s/ James F. Winschel Jr.
Name:	W. Brett Davis	Name:	JAMES F. WINSCHEL, JR.
Title:	(Assistant Secretary)	Title:	(Treasurer)
			Hereto duly authorized
			(CORPORATE SEAL)

5

EX-10.24

Exhibit 10.24

Execution

TENDER AGREEMENT

between

ALBERT LIOU

and

PAREXEL (TAIWAN), INC.

TABLE OF CONTENTS

		Page
ARTICLE I	AGREEMENT TO TENDER		1
1.1.	Tender of the Shares by the Stockholder		1
1.2.	Further Assurances		2
ARTICLE II	REPRESENTATIONS OF THE STOCKHOLDER REGARDING THE SHARES		2
2.1.	Title		2
2.2.	Authority		2
2.3.	Regulatory Approvals		3
2.4.	Brokers		3
ARTICLE III	REPRESENTATIONS OF THE STOCKHOLDER REGARDING THE COMPANY		3
3.1.	Organization, Qualification and Corporate Power		3
3.2.	Capitalization		4
3.3.	Noncontravention		4
3.4.	Subsidiaries		5
3.5.	Financial Statements		5
3.6.	Absence of Certain Changes		6
3.7.	Undisclosed Liabilities		6
3.8.	Tax Matters		6
3.9.	Assets		7
3.10.	Owned Real Property		7
3.11.	Real Property Leases		7
3.12.	Intellectual Property		8
3.13.	Contracts		9
3.14.	Accounts Receivable		11
3.15.	Powers of Attorney		11
3.16.	Insurance		11
3.17.	Litigation		11
3.18.	Warranties		12
3.19.	Employees		12
3.20.	Employee Benefits		12
3.21.	Environmental Matters		14
3.22.	Legal Compliance		14
3.23.	Customers and Suppliers		14
3.24.	Permits		14
3.25.	Certain Business Relationships With Affiliates		14
3.26.	Brokers’ Fees		14
3.27.	Disclosure		15
3.28.	Regulatory Compliance		15
3.29.	Patient Information		16

i

		Page
ARTICLE IV	REPRESENTATIONS OF THE BUYER		17
4.1.	Organization, Qualification and Corporate Power		17
4.2.	Authorization of Transaction		17
4.3.	Noncontravention		17
4.4.	Brokers’ Fees		17
ARTICLE V	COVENANTS		18
5.1.	Closing Efforts		18
5.2.	Governmental and Third Party Notices and Consents		18
5.3.	Operation of Business		18
5.4.	Access to Information		20
5.5.	Notice of Breaches		21
5.6.	Exclusivity		21
From the date of this Agreement until the end of the Interim Period:			21
5.7.	Expenses		22
5.8.	Cooperation With Other Stockholders		22
5.9.	Necessary Corporate Actions		22
5.10.	Repurchase of Shares in Apex Korea		23
5.11.	Employee Stock Options		23
5.12.	Board Observation Rights		23
ARTICLE VI	INDEMNIFICATION		23
6.1.	Indemnification by the Stockholder		23
6.2.	Indemnification by the Buyer		24
6.3.	Indemnification Claims		24
6.4.	Survival of Representations and Warranties		26
6.5.	Limitations		26
ARTICLE VII	Post-Closing Agreements		27
7.1.	No Solicitation or Hiring of Former Employees		27
ARTICLE VIII Termination of Agreement			27
8.1.	Automatic Termination		27
8.2.	Termination by Agreement of the Parties		28
8.3.	Termination by Reason of Breach		28
8.4.	Effect of Termination		28
ARTICLE IX	Dispute Resolution		28
9.1.	General		28
9.2.	Consent of the Parties		28
9.3.	Arbitration		29
ARTICLE X	DEFINITIONS		29
ARTICLE XI	MISCELLANEOUS		35
11.1.	Press Releases and Announcements		35
11.2.	Notices		35

ii

		Page
11.3.	Successors and Assigns		36
11.4.	Entire Agreement; Amendments; Attachments		36
11.5.	Severability		37
11.6.	No Third Party Beneficiaries		37
11.7.	Governing Law		37
11.8.	Section Headings		37
11.9.	Counterparts and Facsimile Signature		37

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TENDER AGREEMENT

     This Tender Agreement (the “Agreement”) entered into as of June 7, 2007, by and between Parexel (Taiwan), Inc., a corporation organized under the laws of the Republic of China (the “Buyer”) and Albert Liou (the “Stockholder”).

Preliminary Statement

     1. The Stockholder is the beneficial owner of 6,201,497 of the issued and outstanding shares of Common Stock (the “Shares”) in Apex International Clinical Research Co., Ltd. (the “Company”), a company incorporated under the laws of the Republic of China which constitutes, in the aggregate, not less than 29% of the issued and outstanding shares of Common Stock of the Company.

     2. The Buyer is interested in acquiring the Company pursuant to a tender offer to acquire all of the outstanding shares of the Company at a price of NT$82.94 per share, and subsequently merge the Company with and into the Buyer.

     3. As a condition to the willingness of the Buyer to further pursue the acquisition of the Company, the Buyer and the Stockholder both agree to enter into this Agreement.

     NOW, THEREFORE, in consideration of the representations, warranties and covenants herein contained, the Parties agree as follows:

ARTICLE I
AGREEMENT TO TENDER

     1.1. Tender of the Shares by the Stockholder. Promptly after the Buyer obtains the agreement of stockholders of the Company representing not less than 63%, on a fully diluted basis, of the issued and outstanding Common Stock of the Company (or such lesser percentage as the Buyer shall specify in a notice to the Stockholder) to accept a tender offer of NT$82.94 per share of Common Stock, the Buyer agrees to launch such tender offer to acquire all of the issued and outstanding shares of Common Stock of the Company (the “Tender Offer”) after making applicable filings with the Securities and Futures Bureau, Financial Supervisory Commission (the “FSC”) of the ROC and making a public announcement in accordance with the ROC Regulations Governing Tender Offers for Purchase of Securities of a Public Company (the “Tender Offer Regulations”), it being understood that the Buyer’s success in such efforts requires the recommendation of the Board of Directors of the Company, the approval of the Buyer’s Board of Directors at its sole discretion and the fulfillment of certain other conditions. The Stockholder agrees to accept the Tender Offer and tender all the Shares pursuant to the Tender Offer launched in accordance with the applicable ROC laws and regulations. Such tender shall be made immediately following the commencement of the Tender Offer on the date of such commencement. The Stockholder agrees that he shall not withdraw any Shares tendered pursuant to the Tender Offer unless this Agreement terminates pursuant to Section 8.1. The Stockholder further agrees that he will cooperate with the Buyer, as and to the extent reasonably

requested by the Buyer, to effect the transfer of the Shares to the Buyer pursuant to the Tender Offer as contemplated by this Agreement. The Stockholder’s obligations under this Agreement are subject to the Buyer’s compliance with this Agreement and all other ancillary agreements entered into between the parties in connection with the Tender Offer.

     1.2. Further Assurances.

          (a) Within two (2) business days after launching the Tender Offer, the Stockholder shall use his Reasonable Best Efforts to take, or cause to be taken, all actions, and to do, or cause to be done and cooperate with the Buyer in order to do, all things necessary, proper or advisable under the applicable laws or otherwise to express his support to the Tender Offer, including, without limitation, to cause the Board of Directors of the Company to adopt an affirmative resolution to this effect.

          (b) From and after the date hereof and until this Agreement terminates pursuant to Section 8.1, at any meeting of the Board of Directors of the Company, however called, relating to any proposed action with respect to any matters relevant to the transactions contemplated by this Agreement, the Stockholder shall cause his representatives in the Board of Directors to appear at each Board of Directors meeting and cast votes at the meeting in a manner to further the purpose contemplated by this Agreement.

          (c) From time to time after the launching of the Tender Offer, at the Buyer’s request and without further consideration, the Stockholder shall promptly execute and deliver such instruments of sale, transfer, conveyance, assignment and confirmation, and take all such other action as the Buyer may reasonably request, to transfer, convey and assign to the Buyer, and to confirm the Buyer’s title to, the Shares and to use Reasonable Best Effort to assist the Buyer in exercising all rights with respect thereto and to carry out the purpose and intent of this Agreement.

ARTICLE II
REPRESENTATIONS OF THE STOCKHOLDER REGARDING THE SHARES

     The Stockholder represents and warrants to the Buyer that the statements contained in this Article II are true and correct as of the date of this Agreement and will be true and correct as of the Closing as though made as of the Closing.

     2.1. Title. The Stockholder has good and marketable title to the Shares which are to be transferred to the Buyer by the Stockholder pursuant hereto, free and clear of any and all covenants, conditions, restrictions, voting trust arrangements, liens, charges, encumbrances, options and adverse claims or rights whatsoever.

     2.2. Authority. The Stockholder has the full right, power and authority to enter into this Agreement and to transfer, convey and sell to the Buyer at the Closing the Shares to be sold

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by the Stockholder hereunder and upon consummation of the purchase contemplated hereby, the Buyer will acquire from the Stockholder good and marketable title to such Shares, free and clear of all covenants, conditions, restrictions, voting trust arrangements, liens, charges, encumbrances, options and adverse claims or rights whatsoever. This Agreement has been duly and validly executed and delivered by the Stockholder and constitutes a valid and binding obligation of the Stockholder, enforceable against the Stockholder in accordance with its terms.

     2.3. Regulatory Approvals. The Stockholder is not a party to, subject to or bound by any agreement or any judgment, order, writ, prohibition, injunction or decree of any court or other governmental body which would prevent the execution or delivery of this Agreement by the Stockholder or the transfer, conveyance and sale of the Shares to be sold by the Stockholder to the Buyer pursuant to the terms hereof.

     2.4. Brokers. The Stockholder has no liability or obligation to pay any fees or commissions to any broker, finder or agent with respect to the transactions contemplated by this Agreement.

ARTICLE III
REPRESENTATIONS OF THE STOCKHOLDER REGARDING THE COMPANY

          The Stockholder represents and warrants to the Buyer that, except as set forth in the Disclosure Schedule, the statements contained in this Article III are true and correct as of the date of this Agreement and will be true and correct as of the Closing as though made as of the Closing, except to the extent such representations and warranties are specifically made as of a particular date (in which case such representations and warranties will be true and correct as of such date). The Disclosure Schedule shall be arranged in sections and subsections corresponding to the numbered and lettered sections and subsections contained in this Article III. The representations and warranties set forth in this Article III shall be qualified by the Disclosure Schedule, and to the extent such information is disclosed, shall not form a basis for claims for indemnification pursuant to Article VI. Notwithstanding anything to the contrary contained in the Disclosure Schedule or in this Agreement, the information and disclosures contained in any section of the Disclosure Schedule shall be deemed to be disclosed and incorporated by reference in any other section of the Disclosure Schedule as though fully set forth in such other section for which the applicability of such information and disclosure is reasonably apparent on the face of such information or disclosure. For purposes of this Article III, the phrase “to the knowledge of the Stockholder” or any phrase of similar import shall be deemed to refer to the actual knowledge of the Stockholder after reasonable inquiry of appropriate employees and agents of the Company with respect to the matter in question.

     3.1. Organization, Qualification and Corporate Power. The Company is a corporation duly organized, validly existing and good standing under the laws of the ROC. The Company is duly qualified to conduct business and is in good standing under the laws of each jurisdiction in which the nature of its business or the ownership or leasing of its properties requires such qualification, except to the extent that the failure to be so qualified or in good standing would not

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have a Company Material Adverse Effect. The Company has all requisite corporate power and authority to carry on the businesses in which it is engaged and to own and use the properties owned and used by it. The Company has furnished to the Buyer complete and accurate copies of its Articles of Incorporation and By-laws. The Company is not in default under or in violation of any provision of its Articles of Incorporation or By-laws.

     3.2. Capitalization.

          (a) The authorized capital stock of the Company consists of 55,000,000 shares of Common Stock, of which, as of the date of this Agreement, 20,999,999 shares were issued and outstanding.

          (b) All of the issued and outstanding shares of capital stock of the Company have been and on the Closing Date will be duly authorized, validly issued, fully paid and free of all preemptive rights. Except for stock options issued to employees exercisable for an aggregate of 633,000 shares of Common Stock of the Company, among which 195,000 have vested as of January 13, 2007 (on a fully converted basis), there are no outstanding or authorized options, warrants, rights, calls, convertible instruments, agreements or commitments to which the Company is a party or which are binding upon the Company providing for the issuance, disposition or acquisition of any of its capital stock. There are no agreements, voting trusts, proxies or understandings with respect to the voting, or registration of any shares of capital stock of the Company other than as contemplated by this Agreement. All of the issued and outstanding shares of capital stock of the Company were issued in compliance with all applicable laws.

     3.3. Noncontravention. Except as set forth in Section 3.3 of the Disclosure Schedule, the consummation of the transactions contemplated hereby, will not (a) conflict with or violate any provision of the Articles of Incorporation or By-laws of the Company or the charter, by-laws or other organizational document of any Subsidiary, (b) require on the part of the Company or any Subsidiary any notice to or filing with, or any permit, authorization, consent or approval of, any Governmental Entity except for the ROC reporting, filing and approval requirements to which the Buyer is subject, (c) conflict with, result in a breach of, constitute (with or without due notice or lapse of time or both) a default under, result in the acceleration of obligations under, create in any party the right to terminate, modify or cancel, or require any notice, consent or waiver under, any contract or instrument to which the Company or any Subsidiary is a party or by which the Company or any Subsidiary is bound or to which any of their respective assets is subject except for any such conflict, breach or default that would not have a Company Material Adverse Effect, (d) result in the imposition of any Security Interest upon any assets of the Company or any Subsidiary or (e) violate any order, writ, injunction, decree, statute, rule or regulation applicable to the Company, any Subsidiary or any of their respective properties or assets.

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     3.4. Subsidiaries.

          (a) Section 3.4 of the Disclosure Schedule sets forth: (i) the name of each Subsidiary; (ii) the number and type of outstanding equity securities of each Subsidiary and a list of the holders thereof; (iii) the jurisdiction of organization of each Subsidiary; (iv) the names of the officers and directors of each Subsidiary; and (v) the jurisdictions in which each Subsidiary is qualified or holds licenses to do business as a foreign corporation or other entity.

          (b) Each Subsidiary is a corporation duly organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation. Each Subsidiary is duly qualified to conduct business and is in good standing under the laws of each jurisdiction in which the nature of its businesses or the ownership or leasing of its properties requires such qualification except to the extent that the failure to be so qualified or in good standing would not have a Company Material Adverse Effect. Each Subsidiary has all requisite power and authority to carry on the businesses in which it is engaged and to own and use the properties owned and used by it. The Company has delivered to the Buyer complete and accurate copies of the Articles of Incorporation, By-laws or other organizational documents of each Subsidiary. No Subsidiary is in default under or in violation of any provision of its Articles of Incorporation, By-laws or other organizational documents. All of the issued and outstanding shares of capital stock of each Subsidiary are duly authorized, validly issued, fully paid, nonassessable and free of preemptive rights. Other than shares of APEX Korea Co., Ltd. (“Apex Korea”), all shares of each Subsidiary that are held of record or owned beneficially by either the Company or any Subsidiary are held or owned free and clear of any restrictions on transfer, claims, Security Interests, options, warrants, rights, contracts, calls, commitments, equities and demands. Other than in respect of the shares of Apex Korea, there are no outstanding or authorized options, warrants, rights, agreements or commitments to which the Company or any Subsidiary is a party or which are binding on any of them providing for the issuance, disposition or acquisition of any capital stock of any Subsidiary. There are no outstanding stock appreciation, phantom stock or similar rights with respect to any Subsidiary. There are no voting trusts, proxies or other agreements or understandings with respect to the voting of any capital stock of any Subsidiary.

          (c) Except for the offices in Thailand, India, Indonesia, Australia and New Zealand, the Company does not control directly or indirectly or have any direct or indirect equity participation or similar interest in any corporation, partnership, limited liability company, joint venture, trust or other business association or entity which is not a Subsidiary.

     3.5. Financial Statements. The Company has provided to the Buyer the Financial Statements of the Company. The Financial Statements have been prepared in accordance with GAAP applied on a consistent basis throughout the periods covered thereby, fairly present the consolidated financial condition, results of operations and cash flows of the Company and the Subsidiaries as of the respective dates thereof and for the periods referred to therein and are consistent with the books and records of the Company and the Subsidiaries.

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     3.6. Absence of Certain Changes. Except for the purchase of the shares of Apex Korea and except as set forth in Section 3.6 of the Disclosure Schedule, since the Most Recent Balance Sheet Date, (a) there has occurred no event or development which, individually or in the aggregate, has had, or could reasonably be expected to have in the future, a Company Material Adverse Effect, and (b) neither the Company nor any Subsidiary has taken any of the actions set forth in paragraphs (a) through (n) of Section 5.3 during the Interim Period.

     3.7. Undisclosed Liabilities. Except as set forth in Section 3.7 of the Disclosure Schedule, none of the Company or any of its Subsidiaries has any liability (whether known or unknown, whether absolute or contingent, whether liquidated or unliquidated and whether due or to become due), except for (a) liabilities shown on the Most Recent Balance Sheet, (b) liabilities which have arisen since the Most Recent Balance Sheet Date in the Ordinary Course of Business and (c) contractual and other liabilities incurred in the Ordinary Course of Business which are not required by GAAP to be reflected on a balance sheet and that are not in the aggregate material.

     3.8. Tax Matters.

          (a) Except as stated in the Section 3.8 Disclosure Schedule, each of the Company and the Subsidiaries has filed on a timely basis in each jurisdiction in which it is required by applicable law all Tax Returns that it was required to file, and all such Tax Returns were complete and accurate except for any such failure to be complete and accurate which will not result in a Company Material Adverse Effect. Each of the Company and the Subsidiaries has paid on a timely basis all Taxes that were due and payable. The unpaid Taxes of the Company and the Subsidiaries for tax periods through the Most Recent Balance Sheet Date do not exceed the accruals and reserves for Taxes (excluding accruals and reserves for deferred Taxes established to reflect timing differences between book and Tax income) set forth on the Most Recent Balance Sheet. Except as otherwise required in compliance with the applicable laws and regulations regarding the withholding of Taxes for employees, neither the Company nor any Subsidiary has any actual or potential liability for any Tax obligation of any taxpayer (including any affiliated group of corporations or other entities that included the Company or any Subsidiary during a prior period) other than the Company and the Subsidiaries. All Taxes that the Company or any Subsidiary is or was required by law to withhold or collect have been duly withheld or collected and, to the extent required, have been paid to the proper Governmental Entity.

          (b) The Company has delivered to the Buyer complete and accurate copies of all income Tax Returns, examination reports and statements of deficiencies assessed against or agreed to by the Company or any Subsidiary since December 31, 2001. The Tax Returns of the Company have been reviewed by the applicable Governmental Entity or are closed by the applicable statute of limitations for all taxable years through the taxable year specified in Section 3.8 of the Disclosure Schedule. No examination or audit of any Tax Return of the Company or any Subsidiary by any Governmental Entity is currently in progress or threatened or

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contemplated. Neither the Company nor any Subsidiary (to the knowledge of the Stockholder) has been informed by any jurisdiction that the jurisdiction believes that the Company or Subsidiary was required to file any Tax Return that was not filed. Neither the Company nor any Subsidiary has waived any statute of limitations with respect to Taxes or agreed to an extension of time with respect to a Tax assessment or deficiency.

          (c) Except as set forth in Section 3.8 of the Disclosure Schedule, the Company and each Subsidiary have complied with all applicable laws and regulations with respect to transfer pricing, including, without limitation, those relating to intercompany transactions, including those arising from historical subcontracting arrangements.

          (d) Except as set forth in Section 3.8 of the Disclosure Schedule, neither the Company nor any Subsidiary has any Tax liability arising from or in connection with (i) the disallowance of any deductions attributable to the write off of receivables or cancellation of indebtedness income, (ii) the failure to pay applicable stamp duties or (iii) any other disallowance of Tax deductions.

     3.9. Assets. The Company or the applicable Subsidiary is the true and lawful owner, and has good title to, all of the assets (tangible or intangible) purported to be owned by the Company or the Subsidiaries, free and clear of all Security Interests. Each of the Company and the Subsidiaries owns or leases all tangible assets sufficient for the conduct of its businesses as presently conducted and as presently proposed to be conducted. Each such tangible asset is free from material defects, has been maintained in accordance with normal industry practice, is in good operating condition and repair (subject to normal wear and tear) and is suitable for the purposes for which it presently is used.

     3.10. Owned Real Property. Neither the Company nor any Subsidiary owns any real property.

     3.11. Real Property Leases. Section 3.11 of the Disclosure Schedule lists all Leases and lists the term of such Lease, any extension and expansion options, and the rent payable thereunder. The Company has delivered to the Buyer complete and accurate copies of the Leases. With respect to each Lease:

          (a) such Lease is legal, valid, binding, enforceable and in full force and effect;

          (b) such Lease will continue to be legal, valid, binding, enforceable and in full force and effect immediately following the Closing in accordance with the terms thereof as in effect immediately prior to the Closing;

          (c) neither the Company nor any Subsidiary nor, to the knowledge of the Stockholder, any other party, is in breach or violation of, or default under, any such Lease, and no event has occurred, is pending or, to the knowledge of the Stockholder, is threatened, which, after the giving of notice, with lapse of time, or otherwise, would constitute a breach or default

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by the Company or any Subsidiary or, to the knowledge of the Stockholder, any other party under such Lease;

          (d) there are no disputes, oral agreements or forbearance programs in effect as to such Lease;

          (e) except for (i) the sublease of office space from CSM to the Company (located at 6F of the current building where the Company is located with the size of approximately 35 Pings), (ii) the sublease of a parking lot from CSM to a third party and (iii) the sublease of a parking lot from the Company to a third party, neither the Company nor any Subsidiary has assigned, transferred, conveyed, mortgaged, deeded in trust or encumbered any interest in the leasehold or subleasehold; and

          (f) to the knowledge of the Stockholder, all facilities leased or subleased thereunder are supplied with utilities and other services adequate for the operation of said facilities.

     3.12. Intellectual Property.

          (a) Section 3.12(a) of the Disclosure Schedule lists (i) each patent, patent application, copyright registration or application therefor, mask work registration or application therefor, and trademark, service mark and domain name registration or application therefor of the Company or any Subsidiary and (ii) each Customer Deliverable of the Company or any Subsidiary.

          (b) Each of the Company and the Subsidiaries owns or has the right to use all Intellectual Property necessary (i) to use, market and distribute the Customer Deliverables and (ii) to operate the Internal Systems. Each item of Company Intellectual Property will be owned or available for use by the Company or such Subsidiary immediately following the Closing on substantially identical terms and conditions as it was immediately prior to the Closing. The Company or the appropriate Subsidiary has taken all reasonable measures to protect the proprietary nature of each item of Company Intellectual Property, and to maintain in confidence all trade secrets and confidential information, that it owns or uses. No other person or entity has any rights to any of the Company Intellectual Property owned by the Company or the Subsidiaries (except pursuant to agreements or licenses specified in Section 3.12(d) of the Disclosure Schedule), and, to the knowledge of the Stockholder, no other person or entity is infringing, violating or misappropriating any of the Company Intellectual Property.

          (c) None of the Customer Deliverables, or the marketing, distribution, provision or use thereof, infringes or violates, or constitutes a misappropriation of, any Intellectual Property rights of any person or entity. None of the Internal Systems, or the use thereof, infringes or violates, or constitutes a misappropriation of, any Intellectual Property rights of any person or entity. Section 3.12(c) of the Disclosure Schedule lists any complaint, claim or notice, or written threat thereof, received by the Company or any Subsidiary alleging any such

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infringement, violation or misappropriation; and the Company has provided to the Buyer complete and accurate copies of all written documentation in the possession of the Company or any Subsidiary relating to any such complaint, claim, notice or threat. The Company has provided to the Buyer complete and accurate copies of all written documentation in the Company’s possession relating to claims or disputes known to the Company concerning any Company Intellectual Property.

          (d) Section 3.12(d) of the Disclosure Schedule identifies each license or other agreement pursuant to which the Company or a Subsidiary has licensed, distributed or otherwise granted any rights to any third party with respect to, any Company Intellectual Property. Except as described in Section 3.12(d) of the Disclosure Schedule, neither the Company nor any Subsidiary has agreed to indemnify any person or entity against any infringement, violation or misappropriation of any Intellectual Property rights with respect to any Customer Deliverables.

          (e) Section 3.12(e) of the Disclosure Schedule identifies each item of Company Intellectual Property that is owned by a party other than the Company or a Subsidiary, and the license or agreement pursuant to which the Company or a Subsidiary uses it (excluding off-the-shelf software programs licensed by the Company pursuant to “shrink wrap” licenses).

          (f) Except for the software set forth in Section 3.12(e) of the Disclosure Schedule, all of the copyrightable materials incorporated in or bundled with the Customer Deliverables have been created by employees of the Company or a Subsidiary within the scope of their employment by the Company or a Subsidiary or by independent contractors of the Company or a Subsidiary who have executed agreements expressly assigning all right, title and interest in such copyrightable materials to the Company or a Subsidiary. No portion of such copyrightable materials was jointly developed with any third party.

     3.13. Contracts.

          (a) Section 3.13 of the Disclosure Schedule lists the following agreements (written or oral) to which the Company or any Subsidiary is a party as of the date of this Agreement, and pursuant to which the Company or any Subsidiary has ongoing rights or obligations:

               (i) except for equipment leases related to copier machines, any agreement (or group of related agreements) for the lease of personal property from or to third parties;

               (ii) any agreement concerning the establishment or operation of a partnership, joint venture or limited liability company;

               (iii) any agreement (or group of related agreements) under which it has created, incurred, assumed or guaranteed (or may create, incur, assume or guarantee) indebtedness (including capitalized lease obligations) involving more than NT$2,000,000 or

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under which it has imposed (or may impose) a Security Interest on any of its assets, tangible or intangible;

               (iv) any agreement for the disposition of any significant portion of the assets or business of the Company or any Subsidiary (other than sales of products in the Ordinary Course of Business) or any agreement for the acquisition of the assets or business of any other entity (other than purchases of inventory or components in the Ordinary Course of Business);

               (v) any agreement concerning confidentiality or non-competition;

               (vi) any employment or consulting agreement, other than the Company’s standard form of offer letter;

               (vii) any agreement involving any current or former officer, director or stockholder of the Company or an Affiliate thereof;

               (viii) except for the service contracts with customers, any agreement under which the consequences of a default or termination would reasonably be expected to have a Company Material Adverse Effect;

               (ix) any agreement which contains any provisions requiring the Company or any Subsidiary to indemnify any other party (excluding indemnities contained in agreements for the purchase, sale or license of products or services entered into in the Ordinary Course of Business);

               (x) any agreement the Company has entered into pursuant to which the Company has agreed to render services to customers, including, but not limited to, agreements (whether oral arrangements or letters of intent) included in the Company’s backlog and not evidenced by an executed definitive written contract for clinical research services;

               (xi) except for the purchase of the shares of stock of Apex Korea, any other agreement (or group of related agreements) either involving more than US$150,000 or not entered into in the Ordinary Course of Business; and

               (xii) any agreement under which the Company or any Subsidiary has granted “most favored nation” pricing provisions.

          (b) Except for oral agreements, letters of intent or backlog not evidenced by an executed definitive written contract for clinical research services, the Company has delivered to the Buyer a complete and accurate copy of each agreement listed in Section 3.12 or Section 3.13 of the Disclosure Schedule in all material respects. With respect to each agreement so listed: (i) the agreement is legal, valid, binding and enforceable and in full force and effect; (ii) the agreement will continue to be legal, valid, binding and enforceable and in full force and effect immediately following the Closing in accordance with the terms thereof as in effect

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immediately prior to the Closing; and (iii) neither the Company nor any Subsidiary nor, to the knowledge of the Stockholder, any other party, is in breach or violation of, or default under, any such agreement, and no event has occurred, is pending or, to the knowledge of the Stockholder, is threatened, which, after the giving of notice, with lapse of time, or otherwise, would constitute a breach or default by the Company or any Subsidiary or, to the knowledge of the Stockholder, any other party under such agreement.

     3.14. Accounts Receivable. Except as set forth in 3.14 Disclosure Schedule, all accounts receivable of the Company and the Subsidiaries reflected on the Most Recent Balance Sheet (other than those paid since such date) are valid receivables subject to no setoffs or counterclaims and are current and collectible. All accounts receivable of the Company and the Subsidiaries that have arisen since the Most Recent Balance Sheet Date are valid receivables subject to no setoffs or counterclaims and are collectible. A complete and accurate list of the accounts receivable as of April 30, 2007, showing the aging thereof, is included in Section 3.14 of the Disclosure Schedule. Neither the Company nor any Subsidiary has received any written notice from an account debtor stating that any account receivable in an amount in excess of NT$330,000 is subject to any contest, claim or setoff by such account debtor. For the avoidance of doubt, there is no assurance that all accounts receivable will be fully collected.

     3.15. Powers of Attorney. There are no outstanding powers of attorney executed on behalf of the Company or any Subsidiary.

     3.16. Insurance. Section 3.16 of the Disclosure Schedule lists each material insurance policy (including fire, theft, casualty, comprehensive general liability, workers compensation, product liability and automobile insurance policies and bond and surety arrangements) to which the Company or any Subsidiary is a party, all of which are in full force and effect. Such insurance policies are of the type and in amounts customarily carried by organizations conducting businesses or owning assets similar to those of the Company and the Subsidiaries. There is no material claim pending under any such policy as to which coverage has been questioned, denied or disputed by the underwriter of such policy. All premiums due and payable under all such policies have been paid, neither the Company nor any Subsidiary may be liable for retroactive premiums or similar payments, and the Company and the Subsidiaries are otherwise in compliance in all material respects with the terms of such policies. The Stockholder has no knowledge of any threatened termination of, or premium increase with respect to, any such policy. Each such policy will continue to be enforceable and in full force and effect immediately following the Closing in accordance with the terms thereof as in effect immediately prior to the Closing.

     3.17. Litigation. There is no Legal Proceeding which is pending, or to the knowledge of the Stockholder, has been threatened in writing against the Company or any Subsidiary which (a) a third party seeks damages or equitable relief against the Company or any Subsidiary or (b) in any manner challenges or seeks to prevent, enjoin, alter or delay the transactions contemplated

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by this Agreement. There are no judgments, orders or decrees outstanding against the Company or any Subsidiary.

     3.18. Warranties. After the completion of the services based on the service contracts with customers, neither the Company nor any Subsidiary is obligated to re-perform any studies for a customer that it had previously conducted without charge or refund any portion of the fees collected pursuant to any studies previously performed.

     3.19. Employees.

          (a) Section 3.19 of the Disclosure Schedule contains a list of the top 10% highly compensated employees of the Company and each Subsidiary (on a consolidated basis), along with the position and the annual rate of compensation of each such person. Each current employee of the Company and past employee of the Company within the last three years has entered into a confidentiality/assignment of inventions agreement with the Company, a copy or form of which has previously been delivered to the Buyer. Section 3.19 of the Disclosure Schedule contains a list of all employees of the Company or any Subsidiary who are a party to a non-competition agreement with the Company or any Subsidiary. All of the agreements referenced in the two preceding sentences will continue to be legal, valid, binding and enforceable and in full force and effect immediately following the Closing in accordance with the terms thereof as in effect immediately prior to the Closing. To the knowledge of the Stockholder, except as set forth in Section 3.19 of the Disclosure Schedule, no key employee or group of employees has any plans to terminate employment with the Company or any Subsidiary.

          (b) Neither the Company nor any Subsidiary is a party to or bound by any collective bargaining agreement, nor has any of them experienced any strikes, grievances, claims of unfair labor practices or other collective bargaining disputes. The Stockholder has no knowledge of any organizational effort made or threatened, either currently or within the past two years, by or on behalf of any labor union with respect to employees of the Company or any Subsidiary.

          (c) All the employees of the Company have adopted the new pension scheme in accordance with the Labor Pension Act effective as of July 1, 2005.

     3.20. Employee Benefits.

          (a) Section 3.20(a) of the Disclosure Schedule contains a complete and accurate list of all Company Plans. Complete and accurate copies of all Company Plans which have been reduced to writing have been delivered to the Buyer.

          (b) Each Company Plan has been administered in all material respects in accordance with its terms and each of the Company and the Subsidiaries has in all material respects met its obligations with respect to each Company Plan and has made all required

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contributions thereto. The Company, each Subsidiary, and each Company Plan are in compliance in all material respects with the currently applicable provisions of applicable law. All filings and reports as to each Company Plan required to have been submitted by applicable law have been duly submitted.

          (c) There are no unfunded obligations under any Company Plan providing benefits after termination of employment to any employee of the Company or any Subsidiary (or to any beneficiary of any such employee), including but not limited to retiree health coverage and deferred compensation, if applicable.

          (d) No act or omission has occurred and no condition exists with respect to any Company Plan that would subject the Company or any Subsidiary to (i) any material fine, penalty, tax or liability of any kind, or (ii) any contractual indemnification or contribution obligation protecting any fiduciary, insurer or service provider with respect to any Company Plan.

          (e) Unless otherwise in compliance with laws and regulations, each Company Plan is amendable and terminable unilaterally by the Company at any time without liability or expense to the Company or such Company Plan as a result thereof (other than for benefits accrued through the date of termination or amendment and reasonable administrative expenses related thereto) and no Company Plan, plan documentation or agreement, summary plan description or other written communication distributed generally to employees by its terms prohibits the Company from amending or terminating any such Company Plan.

          (f) Section 3.20(f) of the Disclosure Schedule discloses each: (i) agreement with any stockholder, director, executive officer or other key employee of the Company or any Subsidiary (A) the benefits of which are contingent, or the terms of which are altered, upon the occurrence of a transaction involving the Company or any Subsidiary of the nature of any of the transactions contemplated by this Agreement, (B) providing any term of employment or compensation guarantee or (C) except for benefits to employees required by applicable labor standard laws and regulations, providing severance benefits or other benefits after the termination of employment of such director, executive officer or key employee, and agreement or plan binding the Company or any Subsidiary, including any stock option plan, stock appreciation right plan, restricted stock plan, stock purchase plan, severance benefit plan or Company Plan, any of the benefits of which will be increased, or the vesting of the benefits of which will be accelerated, by the occurrence of any of the transactions contemplated by this Agreement or the value of any of the benefits of which will be calculated on the basis of any of the transactions contemplated by this Agreement.

          (g) Section 3.20(g) of the Disclosure Schedule sets forth the policy of the Company and any Subsidiary with respect to accrued vacation, accrued sick time and earned time off and the amount of such liabilities as of April 30, 2007.

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     3.21. Environmental Matters. Each of the Company and the Subsidiaries has complied in all material respects with all Environmental Laws that are applicable to the Company’s business.

     3.22. Legal Compliance. Each of the Company and the Subsidiaries is currently conducting, and have at all times since formation conducted, their respective businesses in compliance with each applicable law (including rules and regulations thereunder) of any local or foreign government, or any Governmental Entity, except for any violations or defaults that, individually or in the aggregate, have not had and would not reasonably be expected to have a Company Material Adverse Effect. Neither the Company nor any Subsidiary has received any notice or communication from any Governmental Entity regarding the Company’s policies and practices or alleging noncompliance with any applicable law, rule or regulation. For the avoidance of doubt, the Company has not established any legal entities for its operations in Thailand, India, Indonesia, Australia or New Zealand.

     3.23. Customers and Suppliers. Except as set forth in the 3.23 Disclosure Schedule, no customer that accounted for more than 3% of the consolidated revenues of the Company during the last full fiscal year or the interim period through the Most Recent Balance Sheet Date or the sole supplier of any significant product or service to the Company or a Subsidiary has indicated within the past year that it will stop, or decrease the rate of, buying services or supplying services or products, as applicable, to the Company or any Subsidiary.

     3.24. Permits. Section 3.24 of the Disclosure Schedule sets forth a list of all Permits issued to or held by the Company or any Subsidiary. Such listed Permits are the only Permits that are required for the Company and the Subsidiaries to conduct their respective businesses as presently conducted. Each such Permit is in full force and effect; the Company or the applicable Subsidiary is in compliance with the terms of each such Permit; and, to the knowledge of the Stockholder, no suspension or cancellation of such Permit is threatened and there is no basis for believing that such Permit will not be renewable upon expiration. Each such Permit will continue in full force and effect immediately following the Closing.

     3.25. Certain Business Relationships With Affiliates. No Affiliate of the Company or of any Subsidiary (a) owns any property or right, tangible or intangible, which is used in the business of the Company or any Subsidiary, (b) has any claim or cause of action against the Company or any Subsidiary, or (c) owes any money to, or is owed any money by, the Company or any Subsidiary. Section 3.25 of the Disclosure Schedule describes any transactions or relationships between the Company or a Subsidiary and any Affiliate thereof which occurred or have existed since the beginning of the time period covered by the Financial Statements.

     3.26. Brokers’ Fees. Neither the Company nor any Subsidiary has any liability or obligation to pay any fees or commissions to any broker, finder or agent with respect to the transactions contemplated by this Agreement

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     3.27. Disclosure. No representation or warranty by the Stockholder contained in this Agreement, and no statement contained in the Disclosure Schedule or any other document, certificate or other instrument delivered or to be delivered by or on behalf of the Company or the Stockholder pursuant to this Agreement, contains or will contain any untrue statement of a material fact or omits or will omit to state any material fact necessary, in light of the circumstances under which it was or will be made, in order to make the statements herein or therein not misleading.

     3.28. Regulatory Compliance.

          (a) The Company and its Subsidiaries have conducted, and if still pending are conducting, all clinical trials in compliance, in all material respects, with (i) all customer protocols as approved by institutional review boards and similar authorities, (ii) procedures and controls pursuant to accepted professional and scientific standards and (iii) all laws, regulations, orders, guidances and policies applicable in the jurisdictions in which the Company and its Subsidiaries are conducting clinical trials and any international guidelines or regulations referenced in the contract or study protocol relating to clinical investigations, and pre- and post-marketing adverse drug experience reporting, and all other pre- and post-marketing reporting requirements, as applicable.

          (b) Neither the Company nor any Subsidiary has made any materially false statements on, or material omissions from, any representations, reports or other submissions, whether oral, written, or electronically delivered, to any customer or to any applicable Governmental Entity or in or from any other records and documentation prepared or maintained to comply with the requirements of any customer or any applicable Governmental Entity relating to any such clinical trial. Neither the Company nor any Subsidiary has committed any act, made any statement or failed to make any statement to any applicable Governmental Entity that would breach the requirements of such Governmental Entity.

          (c) None of the Company, any Subsidiary nor the facilities owned or used by the Company or any Subsidiary are subject to any adverse inspection, finding of deficiency, finding of non-compliance, regulatory or warning letter, investigation, notice, or other compliance or enforcement action, from or by any applicable Governmental Entity or any counterpart regulatory authority in any other applicable jurisdiction. There are no pending, or to the Stockholder’s knowledge, threatened civil, criminal or administrative actions, suits, demands, claims, hearings, investigations, demand letters, proceedings, complaints or requests for information by any applicable Governmental Entity or any counterpart regulatory authority related to the Company or any Subsidiary. There is no act, omission, event, or circumstance, to the knowledge of the Stockholder, that would reasonably be expected to give rise to any such action, suit, demand, claim, hearing, investigation, demand letter, proceeding, complaint or request for information or any such liability. Except for periodic inspections of clinical trial data from time to time in the Ordinary Course of Business (none of which has resulted in any penalty against the Company or any Subsidiary), neither any applicable Governmental Entity nor any

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counterpart regulatory authority has commenced, or to the knowledge of the Stockholder, threatened to initiate, any action to place a clinical hold order on, or otherwise terminate, delay or suspend, any proposed or ongoing clinical investigation conducted or proposed to be conducted by the Company or any Subsidiary. For the avoidance of doubt, the foregoing shall not apply to the termination, delay or suspension of any clinical investigation by the sponsor thereof unrelated to the acts or omissions of the Company or any Subsidiary.

          (d) None of the Company, any Subsidiary, nor to the knowledge of the Stockholder, any key employee of the Company, or any Subsidiary or other person for which the Company or any Subsidiary is responsible, has been convicted of any crime or engaged in any conduct that would reasonably be expected to result in debarment under any local or foreign law or regulation, and none of the Company, any Subsidiary or any such person has been so debarred.

          (e) For clinical trials conducted or being conducted by the Company or any Subsidiary, to the extent required by customers, the Company or such Subsidiary involved in the clinical trials has disclosed in writing to the Company’s customers any potential conflict of interest that may result in personal or family gain for the employees, financial or otherwise.

          (f) The Company and each Subsidiary has fulfilled its obligations relating to the monitoring of the procurement of any informed consent from each participant in a clinical trial being conducted by the Company or any Subsidiary in all material respects.

     3.29. Patient Information.

          (a) The Company and each Subsidiary are and have been in compliance with all applicable laws, regulations and contractual commitments concerning privacy, security, coding, and transaction standards for individually identifiable information pertaining to patients and/or research subjects (“Patient Information”).

          (b) Any Patient Information obtained by the Company or any Subsidiary was so obtained either (i) from the patient in connection with treatment, (ii) from a health care provider for treatment purposes, (iii) in accordance with a valid patient authorization under applicable law, (iv) pursuant to a waiver of such authorization under applicable law or (v) as a limited data set pursuant to applicable law. None of the Company, any Subsidiary or any other person for which the Company or any Subsidiary is responsible has conducted an unauthorized acquisition of Patient Information.

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ARTICLE IV
REPRESENTATIONS OF THE BUYER

          The Buyer represents and warrants to the Stockholder as follows:

     4.1. Organization, Qualification and Corporate Power. The Buyer is a corporation duly organized, validly existing and in good standing under the laws of the state of its incorporation. The Buyer is duly qualified to conduct business and is in corporate and tax good standing under the laws of each jurisdiction in which the nature of its businesses or the ownership or leasing of its properties requires such qualification, except where the failure to be so qualified or in good standing would not have a Buyer Material Adverse Effect. The Buyer has all requisite corporate power and authority to carry on the businesses in which it is engaged and to own and use the properties owned and used by it.

     4.2. Authorization of Transaction. The Buyer has all requisite power and authority to execute and deliver this Agreement and to perform its obligations hereunder. The execution and delivery by the Buyer of this Agreement and the consummation by the Buyer of the transactions contemplated hereby have been duly and validly authorized by all necessary corporate action on the part of the Buyer. This Agreement has been duly and validly executed and delivered by the Buyer and constitutes a valid and binding obligation of the Buyer, enforceable against it in accordance with its terms.

     4.3. Noncontravention. Neither the execution and delivery by the Buyer of this Agreement, nor the consummation by the Buyer of the transactions contemplated hereby will (a) conflict with or violate any provision of the Articles of Incorporation or By-laws of the Buyer, (b) require on the part of the Buyer any filing with, or permit, authorization, consent or approval of, any Governmental Entity, except (1) application(s) for the foreign investment approval(s) with the Investment Commission, Ministry of Economic Affairs; (2) a combination notification filing with the Taiwan Fair Trade Commission; and (3) a filing to the Securities and Futures Bureau for the Tender Offer, (c) conflict with, result in breach of, constitute (with or without due notice or lapse of time or both) a default under, result in the acceleration of obligations under, create in any party any right to terminate, modify or cancel, or require any notice, consent or waiver under, any contract or instrument to which the Buyer is a party or by which it is bound or to which its assets are subject, or (d) violate any order, writ, injunction, decree, statute, rule or regulation applicable to the Buyer or any of its properties or assets.

     4.4. Brokers’ Fees. The Buyer has no liability or obligation to pay any fees or commissions to any broker, finder or agent with respect to the transactions contemplated by this Agreement for which the Stockholder would be responsible.

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ARTICLE V
COVENANTS

     5.1. Closing Efforts. Each of the Parties shall use its Reasonable Best Efforts to take all actions and to do all things necessary, proper or advisable to consummate the transactions contemplated by this Agreement, including using its Reasonable Best Efforts to ensure that (i) its representations and warranties remain true and correct in all material respects through the Closing Date and (ii) the conditions to the obligations of the other Parties to consummate the transactions contemplated by this Agreement are satisfied.

     5.2. Governmental and Third Party Notices and Consents.

          (a) Each Party shall use its Reasonable Best Efforts to obtain, at its expense, all waivers, permits, consents, approvals or other authorizations from Governmental Entities, and to effect all registrations, filings and notices with or to Governmental Entities, as may be required for such Party to consummate the transactions contemplated by this Agreement and to otherwise comply with all applicable laws and regulations in connection with the consummation of the transactions contemplated by this Agreement.

          (b) The Stockholder shall use his Reasonable Best Efforts to obtain all such waivers, consents or approvals from third parties, and to give all such notices to third parties, as are required to be listed in the Disclosure Schedule, at the Company’s expense.

          5.3. Operation of Business. Except as contemplated by this Agreement, during the period from the date of this Agreement until the Buyer’s representatives are elected as the directors and supervisors of the Company and take control of the Board of Directors (the “Interim Period”), the Stockholder shall use his Reasonable Best Efforts to cause the Company (and to cause each Subsidiary) and to cause each of the Directors of the Company (and each of the Directors of each Subsidiary) to conduct the operations of the Company in the Ordinary Course of Business and in compliance with all applicable laws and regulations and, to the extent consistent therewith, use its Reasonable Best Efforts to preserve intact its current business organization, keep its physical assets in good working condition, keep available the services of its current officers and employees and preserve its relationships with customers, suppliers and others having business dealings with it to the end that its goodwill and ongoing business shall not be impaired in any material respect. Without limiting the generality of the foregoing, during the Interim Period, the Stockholder shall use his Reasonable Best Efforts to cause the Company not to (and to cause each Subsidiary not to) and to a cause each of the Directors of the Company not to, without the written consent of the Buyer:

          (a) except for the sale of shares of Apex Korea, issue or sell any stock or other securities of the Company or any Subsidiary or any options, warrants or rights to acquire any such stock or other securities (except pursuant to the conversion or exercise of options or warrants outstanding on the date hereof), or amend any of the terms of (including the vesting of) any options, warrants or restricted stock agreements, or repurchase or redeem any stock or other

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securities of the Company (except from former and current employees in accordance with agreements providing for the redemption of shares at NT$10 per unit of option);

          (b) split, combine or reclassify any shares of its capital stock; or declare, set aside or pay any dividend or other distribution (whether in cash, stock or property or any combination thereof) in respect of its capital stock;

          (c) create, incur or assume any indebtedness (including obligations in respect of capital leases); assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other person or entity; or make any loans or advances to any other person or entity;

          (d) enter into, adopt or amend any Employee Benefit Plan or any employment or severance agreement or arrangement of the type described in Section 3.20(g) or (except for normal increases in the Ordinary Course of Business for employees who are not Affiliates) increase in any manner the compensation or fringe benefits of, or materially modify the employment terms of, its directors, officers or employees, generally or individually, or pay any bonus or other benefit to its directors, officers or employees (except for existing payment obligations listed in Section 3.20 of the Disclosure Schedule) or hire any new officers or (except in the Ordinary Course of Business) any new employees;

          (e) except for the acquisition of the shares of the Apex Korea, acquire, sell, lease, license or dispose of any assets or property (including any shares or other equity interests in or securities of any Subsidiary or any corporation, partnership, association or other business organization or division thereof), other than purchases and sales of assets in the Ordinary Course of Business;

          (f) mortgage or pledge any of its property or assets or subject any such property or assets to any Security Interest;

          (g) discharge or satisfy any Security Interest or pay any obligation or liability other than in the Ordinary Course of Business;

          (h) amend its Articles of Incorporation, By-laws or other organizational documents;

          (i) change its accounting methods, principles or practices, except insofar as may be required by a generally applicable change in GAAP, or make any new elections, or changes to any current elections, with respect to Taxes (except for taxes in connection with sub-contracts of services to Subsidiaries)

          (j) enter into, amend, terminate, take or omit to take any action that would constitute a violation of or default under, or waive any rights under, any contract or agreement of

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a nature required to be listed in Section 3.11, Section 3.12 or Section 3.13 of the Disclosure Schedule;

          (k) appoint or change the auditors and auditing certified public accountants;

          (l) appoint or remove or settle the terms of appointment of any member of management reporting directly to the Board of Directors;

          (m) except for the acquisition of the shares of the Apex Korea, make or commit to make any capital expenditure or acquire any investment or asset in excess of US$10,000 per item or US$30,000 in the aggregate;

          (n) institute or settle any Legal Proceeding;

          (o) take any action or fail to take any action permitted by this Agreement with the knowledge that such action or failure to take action would result in any of the representations and warranties of the Company set forth in this Agreement becoming untrue;

          (p) commence any case, proceeding or other action (A) under any bankruptcy, insolvency or similar law seeking to have an order of relief entered with respect to it or seeking to adjudicate it as bankrupt or insolvent, or seeking reorganization, arrangement, adjustment, winding up, liquidation, dissolution, composition or other relief with respect to it or its debts, or (B) seeking appointment of a receiver, trustee, custodian or other similar official for it or all or substantial part of its property, make a general assignment for the benefit of its creditors; or admit in writing its inability to pay its debts when they become due; or

          (q) agree in writing or otherwise to take any of the foregoing actions.

     5.4. Access to Information. The Stockholder shall use his Reasonable Best Efforts to cause the Company (and to cause each Subsidiary) to permit representatives of the Buyer to have full access (at all reasonable times, and in a manner so as not to interfere with the normal business operations of the Company and the Subsidiaries) to all premises, properties, financial, tax and accounting records (including the work papers of the Company’s independent accountants), contracts, other records and documents, and personnel, of or pertaining to the Company and each Subsidiary. Notwithstanding anything to the contrary in this Agreement, the Stockholder and the Company and Subsidiaries shall not be required to disclose any information to the Buyer if such disclosure would, in the Stockholder’s sole discretion, (i) cause significant competitive harm to the Company if the transactions contemplated hereby are not consummated, (ii) jeopardize any attorney-client or other legal privilege, or (iii) contravene any applicable Laws, fiduciary duty or binding agreement entered into prior to the date hereof.

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     5.5. Notice of Breaches.

          (a) From the date of this Agreement until the Closing, the Stockholder shall promptly deliver to the Buyer supplemental information concerning events or circumstances occurring subsequent to the date hereof which would render any representation, warranty or statement in this Agreement or the Disclosure Schedule inaccurate or incomplete at any time after the date of this Agreement until the Closing. No such supplemental information shall be deemed to avoid or cure any misrepresentation or breach of warranty or constitute an amendment of any representation, warranty or statement in this Agreement or the Disclosure Schedule.

          (b) From the date of this Agreement until the Closing, the Buyer shall promptly deliver to the Stockholder supplemental information concerning events or circumstances occurring subsequent to the date hereof which would render any representation or warranty in this Agreement inaccurate or incomplete at any time after the date of this Agreement until the Closing. No such supplemental information shall be deemed to avoid or cure any misrepresentation or breach of warranty or constitute an amendment of any representation or warranty in this Agreement.

     5.6. Exclusivity.

          From the date of this Agreement until the end of the Interim Period:

          (a) the Stockholder shall not (and shall use his Reasonable Best Efforts to cause the Company not to) directly or indirectly, through any officer, director, employee, representative, agent or otherwise, (i) initiate, solicit, encourage or otherwise facilitate any inquiry, proposal, offer or discussion with any party (other than the Buyer) concerning any merger, reorganization, consolidation, recapitalization, business combination, liquidation, dissolution, share exchange, sale of stock, sale of material assets or similar business transaction involving the Company, any Subsidiary or any division of the Company, (ii) furnish any non-public information concerning the business, properties or assets of the Company, any Subsidiary or any division of the Company to any party (other than the Buyer) or (iii) engage in discussions or negotiations with any party (other than the Buyer) concerning any such transaction.

          (b) the Stockholder shall (and shall use his Reasonable Best Efforts to cause the Company to) immediately notify any party with which discussions or negotiations of the nature described in paragraph (a) above were pending that the Company is terminating such discussions or negotiations. If the Stockholder receives any inquiry, proposal or offer of the nature described in paragraph (a) above, the Stockholder shall, within one business day after such receipt, notify the Buyer of such inquiry, proposal or offer, including the identity of the other party and the terms of such inquiry, proposal or offer.

          (c) Except for participation in the Tender Offer, the Stockholder hereby agrees, while this Agreement is in effect, and except as expressly contemplated hereby, not to

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sell, transfer, pledge, encumber, assign, distribute, gift or otherwise dispose of (collectively, a “Transfer”) or enter into any contract, option or other arrangement or understanding with respect to any Transfer (whether by actual disposition or effective economic disposition due to hedging, cash settlement or otherwise) of, any of the Shares, any additional shares of the Company’s common stock and options to purchase shares of the Company’s common stock acquired beneficially or of record by the Stockholder after the date hereof, or any interest therein; provided, that the foregoing shall not restrict the Stockholder from making Transfers to effect estate planning and gifts so long as the transferee in such Transfer shall execute an agreement to be bound by the terms of this Agreement and such Transfer shall not result in the incurrence of any lien upon any Shares. The Stockholder agrees, while this Agreement is in effect, to notify the Buyer promptly in writing of the number of any additional shares of the Company’s Common stock, any options to purchase shares of the Company’s common stock or other securities of the Company acquired by the Stockholder, if any, after the date hereof.

     5.7. Expenses. Except as set forth in Article VI, each party shall pay its own costs and expenses (including legal and accounting fees and expenses) incurred in connection with this Agreement and the transactions contemplated hereby.

     5.8. Cooperation With Other Stockholders. At the Buyer’s request and without further consideration, the Stockholder shall use Reasonable Best Efforts to assist the Buyer in obtaining the agreement of stockholders of the Company representing not less than 62% of the issued and outstanding shares of Common Stock of the Company to accept the Tender Offer with respect to such other stockholders’ shares of Common Stock.

     5.9. Necessary Corporate Actions. The Stockholder shall, subject to the closing of the Tender Offer, procure the fulfillment of the following:

          (a) to convene a Board of Directors meeting within three (3) business days after the Buyer publicly announces the Tender Offer to adopt resolutions to convene an extraordinary shareholders meeting on or before the Closing Date to (i) approve a proposal for amendment of the Articles of Incorporation of the Company to, among others, reduce the number of the Company’s Directors from seven (7) to five (5), and supervisors from three (3) to two (2), as may be requested by the Buyer, and (ii) elect five (5) Directors and two (2) supervisors of the Company with persons designated by the Buyer in their personal capacity (collectively the “Required Shareholders’ Resolutions”). At the extraordinary shareholders meeting, the Stockholder shall vote his Shares and shall use Reasonable Best Efforts to obtain sufficient votes either by way of proxy or by personal votes of other shareholders to procure the adoption of the Required Shareholders’ Resolution;

          (b) to convene a separate Board of Directors meeting prior to the Closing and cause the Board of Directors of the Company to: (i) approve the merger of the Company with the Buyer; and (ii) to authorize the Stockholder to execute a merger agreement on behalf of the Company with the Buyer; and

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          (c) if the Required Shareholders Resolutions have not been successfully adopted pursuant to Paragraph (a) above on or prior to the Closing Date, to cause the Board of Directors of the Company to convene another extraordinary shareholders meeting on a date requested by the Buyer after the Closing to amend the Company’s Articles of Incorporation as requested by the Buyer and to replace and elect all the directors and supervisors of the Company with persons designated by the Buyer, and if necessary, to approve other matters adopted by the Board of Directors.

     5.10. Repurchase of Shares in Apex Korea. The Stockholder shall cause the Company to repurchase all issued and outstanding shares of Apex Korea, at a price per share not to exceed US$11.00, on or before the Closing Date, such that Apex Korea shall be a wholly owned subsidiary of the Company.

     5.11. Employee Stock Options. The Stockholder shall use his Reasonable Best Efforts to cause the Company to amend the Regulations for Issuance and Subscription of 2003 Employees Stock Options to allow the employees vested with the options to be entitled to convert all the options during the Tender Offer period, and obtain the approval from the Securities and Futures Bureau for the amendments. Moreover, the Stockholder shall use his Reasonable Best Efforts to have the employees execute agreements with the Buyer agreeing to tender the employees’ shares in the Tender Offer or sell the shares to the Buyer, at the Buyer’s request, at any time.

     5.12. Board Observation Rights. From and after the date of this Agreement, the Stockholder shall provide the Buyer with reasonable advance notice of any scheduled or unscheduled meetings of the Board of Directors of the Company. The Stockholder shall provide a representative of the Buyer with an opportunity to attend (in person or telephonically) any and all such meetings. The Buyer’s representative shall be permitted to observe and record the proceedings of meeting, but shall not be entitled to vote upon, or otherwise participate in, any matters that may arise at such meetings.

ARTICLE VI
INDEMNIFICATION

     6.1. Indemnification by the Stockholder. The Stockholder shall indemnify the Buyer, and hold it harmless against, any and all Damages incurred or suffered by the Buyer or any Affiliate thereof resulting from, relating to or constituting:

          (a) any breach, as of the date of this Agreement or as of the Closing Date, of any representation or warranty of the Stockholder contained in this Agreement or any other agreement or instrument furnished by the Company or the Stockholder to the Buyer pursuant to this Agreement; or

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          (b) any failure to perform any covenant or agreement of the Stockholder contained in this Agreement or any agreement or instrument furnished by the Company or the Stockholder to the Buyer pursuant to this Agreement.

     6.2. Indemnification by the Buyer. The Buyer shall indemnify the Stockholder in respect of, and hold him harmless against, any and all Damages incurred or suffered by the Stockholder resulting from, relating to or constituting:

          (a) any breach, as of the date of this Agreement or as of the Closing Date, of any representation or warranty of the Buyer contained in this Agreement or any other agreement or instrument furnished by the Buyer to the Stockholder pursuant to this Agreement; or

          (b) any failure to perform any covenant or agreement of the Buyer contained in this Agreement or any agreement or instrument furnished by the Buyer to the Stockholder pursuant to this Agreement.

     6.3. Indemnification Claims.

          (a) An Indemnified Party shall give written notification to the Indemnifying Party of the commencement of any Third Party Action. Such notification shall be given within 20 days after receipt by the Indemnified Party of notice of such Third Party Action, and shall describe in reasonable detail (to the extent known by the Indemnified Party) the facts constituting the basis for such Third Party Action and the amount of the claimed damages; provided, however, that no delay or failure on the part of the Indemnified Party in so notifying the Indemnifying Party shall relieve the Indemnifying Party of any liability or obligation hereunder except to the extent of any damage or liability caused by or arising out of such failure. Within 20 days after delivery of such notification, the Indemnifying Party may, upon written notice thereof to the Indemnified Party, assume control of the defense of such Third Party Action with counsel reasonably satisfactory to the Indemnified Party; provided that (i) the Indemnifying Party may only assume control of such defense if (A) it acknowledges in writing to the Indemnified Party that any damages, fines, costs or other liabilities that may be assessed against the Indemnified Party in connection with such Third Party Action constitute Damages for which the Indemnified Party shall be indemnified pursuant to this Article VI and (B) the ad damnum is less than or equal to the amount of Damages for which the Indemnifying Party is liable under this Article VI and (ii) the Indemnifying Party may not assume control of the defense of any Third Party Action involving criminal liability or in which equitable relief is sought against the Indemnified Party. If the Indemnifying Party does not, or is not permitted under the terms hereof to, so assume control of the defense of a Third Party Action, the Indemnified Party shall control such defense. The Non-controlling Party may participate in such defense at its own expense. The Controlling Party shall keep the Non-controlling Party advised of the status of such Third Party Action and the defense thereof and shall consider in good faith recommendations made by the Non-controlling Party with respect thereto. The Non-controlling Party shall furnish the Controlling Party with such information as it may have with respect to such Third Party Action (including copies of any summons, complaint or other pleading which may have been served on such party

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and any written claim, demand, invoice, billing or other document evidencing or asserting the same) and shall otherwise cooperate with and assist the Controlling Party in the defense of such Third Party Action. The fees and expenses of counsel to the Indemnified Party with respect to a Third Party Action shall be considered Damages for purposes of this Agreement if (i) the Indemnified Party controls the defense of such Third Party Action pursuant to the terms of this Section 6.3(a) or (ii) the Indemnifying Party assumes control of such defense and the Indemnified Party reasonably concludes that the Indemnifying Party and the Indemnified Party have conflicting interests or different defenses available with respect to such Third Party Action. The Indemnifying Party shall not agree to any settlement of, or the entry of any judgment arising from, any Third Party Action without the prior written consent of the Indemnified Party, which shall not be unreasonably withheld, conditioned or delayed. The Indemnified Party shall not agree to any settlement of, or the entry of any judgment arising from, any such Third Party Action without the prior written consent of the Indemnifying Party, which shall not be unreasonably withheld, conditioned or delayed.

          (b) In order to seek indemnification under this Article VI, an Indemnified Party shall deliver a Claim Notice to the Indemnifying Party.

          (c) Within 20 days after delivery of a Claim Notice, the Indemnifying Party shall deliver to the Indemnified Party a Response, in which the Indemnifying Party shall: (i) agree that the Indemnified Party is entitled to receive all of the Claimed Amount (in which case the Response shall be accompanied by a payment by the Indemnifying Party to the Indemnified Party of the Claimed Amount, by check or by wire transfer; (ii) agree that the Indemnified Party is entitled to receive the Agreed Amount (in which case the Response shall be accompanied by a payment by the Indemnifying Party to the Indemnified Party of the Agreed Amount, by check or by wire transfer; or (iii) dispute that the Indemnified Party is entitled to receive any of the Claimed Amount. The Buyer shall have the right to offset any Claimed Amount due to the Stockholder under that certain Non-Compete Agreement dated as of the date hereof by and between the Stockholder and the Company and under that certain Software Transfer Agreement dated as of the date hereof by and between the Stockholder and the Company. In the event the Stockholder contests the Buyer’s entitlement to any portion of the Claimed Amount, such disputed portion shall be paid to an escrow agent selected by the Buyer and reasonably approved by the Stockholder pending final resolution of such dispute.

          (d) Notwithstanding the other provisions of this Section 6.3, if a third party asserts (other than by means of a lawsuit) that an Indemnified Party is liable to such third party for a monetary or other obligation which may constitute or result in Damages for which such Indemnified Party may be entitled to indemnification pursuant to this Article VI, and such Indemnified Party reasonably determines that it has a valid business reason to fulfill such obligation, then (i) such Indemnified Party shall be entitled to satisfy such obligation, without prior notice to or consent from the Indemnifying Party, (ii) such Indemnified Party may subsequently make a claim for indemnification in accordance with the provisions of this Article VI, and (iii) such Indemnified Party shall be reimbursed, in accordance with the

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provisions of this Article VI, for any such Damages for which it is entitled to indemnification pursuant to this Article VI (subject to the right of the Indemnifying Party to dispute the Indemnified Party’s entitlement to indemnification, or the amount for which it is entitled to indemnification, under the terms of this Article VI).

     6.4. Survival of Representations and Warranties. All representations and warranties that are covered by the indemnification agreements in Section 6.1(a) and Section 6.2(a) shall (a) survive the Closing and (b) shall expire on the date 12 months following the Closing Date, except that (i) the representations and warranties set forth in Article II and Sections 3.1, 3.2, 4.1 and 4.2 shall survive the Closing without limitation and (ii) the representations and warranties set forth in Sections 3.8, 3.20 and 3.21 shall survive until 30 days following expiration of all statutes of limitation applicable to the matters referred to therein. If an Indemnified Party delivers to an Indemnifying Party, before expiration of a representation or warranty, either a Claim Notice based upon a breach of such representation or warranty, or an Expected Claim Notice based upon a breach of such representation or warranty, then the applicable representation or warranty shall survive until, but only for purposes of, the resolution of the matter covered by such notice. If the legal proceeding or written claim with respect to which an Expected Claim Notice has been given is definitively withdrawn or resolved in favor of the Indemnified Party, the Indemnified Party shall promptly so notify the Indemnifying Party. The rights to indemnification set forth in this Article VI shall not be affected by (i) any investigation conducted by or on behalf of an Indemnified Party or any knowledge acquired (or capable of being acquired) by an Indemnified Party, whether before or after the date of this Agreement or the Closing Date (including through supplements to the Disclosure Schedule permitted by Section 5.5, with respect to the inaccuracy or noncompliance with any representation, warranty, covenant or obligation which is the subject of indemnification hereunder or (ii) any waiver by an Indemnified Party of any closing condition relating to the accuracy of representations and warranties or the performance of or compliance with agreements and covenants.

     6.5. Limitations.

          (a) Notwithstanding anything to the contrary herein, (i) the aggregate liability of the Stockholder for Damages under Section 6.1(a) shall not exceed US$500,000 and (ii) the Stockholder shall not be liable under Section 6.1(a) unless and until the aggregate Damages for which he would otherwise be liable under Section 6.1(a) exceed US$250,000 (at which point the Stockholder shall become liable for the aggregate Damages under Section 6.1(a), and not just amounts in excess of US$250,000); provided that the limitation set forth in this sentence shall not apply to (1) a claim pursuant to Section 6.1(a) relating to a breach of the representations and warranties set forth in Article II or Sections 3.1, or 3.2 (2) a claim arising from fraud or willful misconduct or (3) a claim arising from any misrepresentation made by the Stockholder or omission of the Stockholder in connection with the trading of the Company’s shares as emerging stock in the GreTai Securities Market; and provided further that the limitation set forth in subsection (ii) of this sentence shall not apply to a claim pursuant to Section 6.1(a) relating to a breach of Sections 3.8 or 3.20. For purposes solely of this Article VI, all representations and

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warranties of the Stockholder in Articles II and III, other than those set forth in Section 3.6 and 3.27, shall be construed as if the term “material” and any reference to “Company Material Adverse Effect” (and variations thereof) were omitted from such representations and warranties.

          (b) Notwithstanding anything to the contrary herein, (i) the aggregate liability of the Buyer for Damages under Section 6.2(a) shall not exceed US$500,000, and (ii) the Buyer shall not be liable under Section 6.2(a) unless and until the aggregate Damages for which it would otherwise be liable under Section 6.2(a) exceed US$250,000 (at which point the Buyer shall become liable for the aggregate Damages under Section 6.2(a), and not just amounts in excess of US$250,000); provided that the limitation set forth in this sentence shall not apply to (1) a claim pursuant to Section 6.2(a) relating to a breach of the representations and warranties set forth in Sections 4.1 or 4.2. For purposes solely of this Article VI, all representations and warranties of the Buyer in Article IV shall be construed as if the term “material” and any reference to “Buyer Material Adverse Effect” (and variations thereof) were omitted from such representations and warranties.

          (c) Except with respect to claims based on fraud, after the Closing, the rights of the Indemnified Parties under this Article VI shall be the exclusive remedy of the Indemnified Parties with respect to claims resulting from or relating to any misrepresentation, breach of warranty or failure to perform any covenant or agreement contained in this Agreement.

ARTICLE VII
POST-CLOSING AGREEMENTS

          The Stockholder agrees that from and after the Closing Date:

     7.1. No Solicitation or Hiring of Former Employees. Except as provided by law, for a period of three (3) years after the Closing Date, neither the Stockholder nor any Affiliate thereof shall (a) solicit any person who was an employee of either the Company or any of the Subsidiaries on the date hereof or the Closing Date to terminate his employment with the Buyer (or the Company or any of the Subsidiaries, as the case may be) or to become an employee of the Stockholder or such Affiliate, or (b) hire any person who was such an employee on the date hereof or on the Closing Date.

ARTICLE VIII
TERMINATION OF AGREEMENT

     8.1. Automatic Termination. This Agreement shall terminate automatically, without any action on the part of any Party hereto, upon the earliest to occur of: (a) the Closing, (b) July 31, 2007, if the Tender Offer has not by then been publicly announced, (c) if the commencement of the Tender Offer period has not begun within five (5) business days after the public announcement referenced in the immediately preceding clause, (d) the ROC Fair Trade Commission disapproves the proposed combination of the Company with Buyer, or (e) the

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Tender Offer fails to result in the Buyer acquiring at least 33% of the shares of Common Stock of the Company.

     8.2. Termination by Agreement of the Parties. This Agreement may be terminated by the mutual written agreement of the parties hereto. In the event of such termination by agreement, the Buyer shall have no further obligation or liability to the Stockholder or the Company under this Agreement, and the Stockholder shall have no further obligation or liability to the Buyer under this Agreement.

     8.3. Termination by Reason of Breach.

          (a) This Agreement may be terminated by the Stockholder by giving written notice to the Buyer in the event the Buyer is in breach of any representation, warranty or covenant contained in this Agreement, and such breach, individually or in combination with any other such breach, is not cured within 30 days following delivery by the Stockholder to the Buyer of written notice of such breach.

          (b) This Agreement may be terminated by the Buyer by giving written notice to the Stockholder in the event that the Stockholder is in breach of any representation, warranty or covenant contained in this Agreement, and such breach, individually or in combination with any other such breach, is not cured within 30 days following delivery by the Buyer of written notice of such breach.

     8.4. Effect of Termination. If any Party terminates this Agreement pursuant to Section 8, all obligations of the Parties hereunder shall terminate without any liability of any Party to any other Party (except for any liability of any Party for willful breaches of this Agreement).

ARTICLE IX
DISPUTE RESOLUTION

     9.1. General. In the event that any dispute should arise between the Parties hereto with respect to any matter covered by this Agreement, including, without limitation, the occurrence of a breach of this Agreement prior to the Closing, the Parties hereto shall resolve such dispute in accordance with the procedures set forth in this Article IX.

     9.2. Consent of the Parties. In the event of any dispute between the Parties with respect to any matter covered by this Agreement, the parties shall first use their best efforts to resolve such dispute among themselves. If the parties are unable to resolve the dispute within 30 calendar days after the commencement of efforts to resolve the dispute, the dispute will be submitted to arbitration in accordance with Section 9.3 hereof.

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     9.3.Arbitration.

          (a) Either the Buyer or the Stockholder may submit any matter referred to in Section 9.2 hereof to arbitration by notifying the other party hereto, in writing, of such dispute. Within 10 days after receipt of such notice, the Buyer and the Stockholder shall each designate in writing one arbitrator to resolve the dispute, and the two arbitrators so designated shall designate a third arbitrator who shall serve as the chairperson of the arbitration panel; provided, that if the two arbitrators hereto cannot agree on the third arbitrator within 10 days after their appointments, whichever is later, the arbitrator in question shall be selected by the ROC Arbitration Association. An arbitrator so designated shall not be an employee, consultant, officer, director or stockholder of any Party hereto or any Affiliate of any Party to this Agreement.

          (b) The arbitration shall be governed by the ROC Arbitration Act and the rules of the ROC Arbitration Association; provided, that the arbitrators shall have sole discretion with regard to the admissibility of evidence.

          (c) The arbitrators shall use their best efforts to rule on each disputed issue within six (6) months after the completion of the hearings described in paragraph (c) above. The determination of the arbitrator as to the resolution of any dispute shall be binding and conclusive upon all parties hereto. All rulings of the arbitrator shall be in writing.

          (d) The prevailing party in any arbitration shall be entitled to an award of reasonable attorneys’ fees incurred in connection with the arbitration. The non-prevailing party shall pay such fees, together with the fees of the arbitrator and the costs and expenses of the arbitration.

          (e) Any arbitration pursuant to this Section 9.3 shall be conducted in Taipei City.

ARTICLE X
DEFINITIONS

     For purposes of this Agreement, each of the following terms shall have the meaning set forth below.

“Affiliate” means, with respect to any person, any person directly or indirectly controlling, controlled by or under common control with such other person.

“Agreed Amount” shall mean part, but not all, of the Claimed Amount.

“Apex Korea” shall have the meaning set forth in Section 3.4(b).

“Buyer” shall have the meaning set forth in the first paragraph of this Agreement.

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“Buyer Material Adverse Effect” shall mean any material adverse change, event, circumstance or development with respect to, or material adverse effect on, the business, assets, liabilities, capitalization, prospects, condition (financial or other), or results of operations of the Buyer. For the avoidance of doubt, the parties agree that the terms “material”, “materially” or “materiality” as used in this Agreement with an initial lower case “m” shall have their respective customary and ordinary meanings, without regard to the meaning ascribed to Buyer Material Adverse Effect.

“Claim Notice” shall mean written notification which contains (i) a description of the Damages incurred or reasonably expected to be incurred by the Indemnified Party and the Claimed Amount of such Damages, to the extent then known, (ii) a statement that the Indemnified Party is entitled to indemnification under Article VI for such Damages and a reasonable explanation of the basis therefor, and (iii) a demand for payment in the amount of such Damages.

“Claimed Amount” shall mean the amount of any Damages incurred or reasonably expected to be incurred by the Indemnified Party.

“Closing” shall mean the closing of the Tender Offer, upon which the Buyer shall settle the purchase price of the Shares with the Stockholder and the tender offer agent of the Buyer shall complete the transfer registration of the Shares.

“Closing Date” shall mean the date three (3) business days after the end of the Tender Offer period or otherwise stipulated in the prospectus for the Tender Offer, whichever is later.

“Common Stock” shall mean the shares of common stock, NT$10 par value per share, of the Company.

“Company” shall have the meaning set forth in the Preliminary Statement of this Agreement.

“Company Intellectual Property” shall mean the Intellectual Property owned by or licensed to the Company or a Subsidiary and covering, incorporated in, underlying or used in connection with the Customer Deliverables or the Internal Systems.

“Company Material Adverse Effect” shall mean any material adverse change, event, circumstance or development with respect to, or material adverse effect on, (i) the business, assets, liabilities, capitalization, prospects, condition (financial or other), or results of operations of the Company and the Subsidiaries, taken as a whole, or (ii) the ability of the Buyer to operate the business of the Company and each of the Subsidiaries immediately after the Closing. For the avoidance of doubt, the parties agree that the terms “material”, “materially” or “materiality” as used in this Agreement with an initial

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lower case “m” shall have their respective customary and ordinary meanings, without regard to the meaning ascribed to Company Material Adverse Effect.

“Company Plan” shall mean any Employee Benefit Plan maintained, or contributed to, by the Company or any Subsidiary.

“Controlling Party” shall mean the party controlling the defense of any Third Party Action.

“Customer Deliverables” shall mean the services that the Company or any Subsidiary (i) currently provides, or (ii) has provided within the previous three years.

“Damages” shall mean any and all debts, obligations and other liabilities (whether absolute, accrued, contingent, fixed or otherwise, or whether known or unknown, or due or to become due or otherwise), diminution in value, monetary damages, fines, fees, penalties, interest obligations, deficiencies, losses and expenses (including amounts paid in settlement, interest, court costs, costs of investigators, fees and expenses of attorneys, accountants, financial advisors and other experts, and other expenses of litigation), other than those costs and expenses of arbitration of a Dispute which are to be borne by the Indemnified Party and the Indemnifying Party as set forth in Section 6.3(e).

“Disclosure Schedule” shall mean the disclosure schedule provided by the Stockholder to the Buyer on the date hereof, as the same may be supplemented pursuant to Section 5.5.

“Dispute” shall mean the dispute resulting if the Indemnifying Party in a Response disputes its liability for all or part of the Claimed Amount.

“Employee Benefit Plan” shall mean any employee pension benefit plan and any other written or oral plan, agreement or arrangement involving direct or indirect compensation, including insurance coverage, severance benefits, disability benefits, deferred compensation, bonuses, stock options, stock purchase, or other forms of incentive compensation or post-retirement compensation.

“Environmental Law” shall mean any local or foreign law, statute, rule, order, directive, judgment, Permit or regulation or the common law relating to the environment, occupational health and safety, or exposure of persons or property to Materials of Environmental Concern, including any statute, regulation, administrative decision or order pertaining to: (i) the presence of or the treatment, storage, disposal, generation, transportation, handling, distribution, manufacture, processing, use, import, export, labeling, recycling, registration, investigation or remediation of Materials of Environmental Concern or documentation related to the foregoing; (ii) air, water and noise pollution; (iii) groundwater and soil contamination; (iv) the release, threatened release, or accidental release into the environment, the workplace or other areas of Materials of Environmental Concern, including emissions, discharges, injections, spills,

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escapes or dumping of Materials of Environmental Concern; (v) transfer of interests in or control of real property which may be contaminated; (vi) community or worker right-to-know disclosures with respect to Materials of Environmental Concern; (vii) the protection of wild life, marine life and wetlands, and endangered and threatened species; (viii) storage tanks, vessels, containers, abandoned or discarded barrels and other closed receptacles; and (ix) health and safety of employees and other persons.

“Expected Claim Notice” shall mean a notice that, as a result of a legal proceeding instituted by or written claim made by a third party, an Indemnified Party reasonably expects to incur Damages for which it is entitled to indemnification under Article VI.

“Financial Statements” shall mean:

     (a) the audited consolidated balance sheets and statements of income, changes in stockholders’ equity and cash flows of the Company as of the end of and for each of the last two fiscal years, and

     (b) the Most Recent Balance Sheet.

“FSC” shall have the meaning set forth in Section 1.1.

“GAAP” shall mean generally accepted accounting principles in the Republic of China.

“Governmental Entity” shall mean any court, arbitrational tribunal, administrative agency or commission or other governmental or regulatory authority or agency.

“Indemnified Party” shall mean a party entitled, or seeking to assert rights, to indemnification under Article VI.

“Indemnifying Party” shall mean the party from whom indemnification is sought by the Indemnified Party.

“Intellectual Property” shall mean all:

     (a) patents, patent applications, patent disclosures and all related continuation, continuation-in-part, divisional, reissue, reexamination, utility model, certificate of invention and design patents, patent applications, registrations and applications for registrations;

     (b) trademarks, service marks, trade dress, Internet domain names, logos, trade names and corporate names and registrations and applications for registration thereof;

     (c) copyrights and registrations and applications for registration thereof;

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     (d) mask works and registrations and applications for registration thereof;

     (e) computer software, data and documentation;

     (f) inventions, trade secrets and confidential business information, whether patentable or nonpatentable and whether or not reduced to practice, know-how, manufacturing and product processes and techniques, research and development information, copyrightable works, financial, marketing and business data, pricing and cost information, business and marketing plans and customer and supplier lists and information;

     (g) other proprietary rights relating to any of the foregoing (including remedies against infringements thereof and rights of protection of interest therein under the laws of all jurisdictions); and

     (h) copies and tangible embodiments thereof.

“Interim Period” shall have the meaning set forth in Section 5.3.

“Internal Systems” shall mean the internal systems of the Company or any Subsidiary that are used in its business or operations, including computer hardware systems, software applications and embedded systems.

“Lease” shall mean any lease or sublease pursuant to which the Company or a Subsidiary leases or subleases from another party any real property.

“Legal Proceeding” shall mean any action, suit, proceeding, claim, arbitration or investigation before any Governmental Entity or before any arbitrator.

“Materials of Environmental Concern” shall mean any: pollutants, contaminants or hazardous substances, pesticides, solid wastes and hazardous wastes, chemicals, other hazardous, radioactive or toxic materials, oil, petroleum and petroleum products (and fractions thereof), or any other material (or article containing such material) listed or subject to regulation under any law, statute, rule, regulation, order, Permit, or directive due to its potential, directly or indirectly, to harm the environment or the health of humans or other living beings.

“Most Recent Balance Sheet” shall mean the audited consolidated balance sheet of the Company as of the Most Recent Balance Sheet Date.

“Most Recent Balance Sheet Date” shall mean December 31, 2006.

“Non-controlling Party” shall mean the party not controlling the defense of any Third Party Action.

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“Ordinary Course of Business” shall mean the ordinary course of business consistent with past custom and practice (including with respect to frequency and amount).

“Parties” shall mean the Buyer and the Stockholder.

“Patient Information” shall have the meaning set forth in Section 3.30(a).

“Permits” shall mean all permits, licenses, registrations, certificates, orders, approvals, franchises, variances and similar rights issued by or obtained from any Governmental Entity (including those issued or required under Environmental Laws and those relating to the occupancy or use of owned or leased real property).

“Reasonable Best Efforts” shall mean best efforts, to the extent commercially reasonable.

“Required Shareholders’ Resolutions” shall have the meaning set forth in Section 5.9(a).

“Response” shall mean a written response containing the information provided for in Section 6.3(c).

“ROC” or “Taiwan” shall mean the Republic of China.

“Security Interest” shall mean any mortgage, pledge, security interest, encumbrance, charge or other lien (whether arising by contract or by operation of law), other than (i) mechanic’s, materialmen’s, and similar liens, (ii) liens arising under worker’s compensation, unemployment insurance, social security, retirement, and similar legislation and (iii) liens on goods in transit incurred pursuant to documentary letters of credit, in each case arising in the Ordinary Course of Business of the Company and not material to the Company.

“Shareholders Meeting” shall have the meaning set forth in Section 5.8.

“Shares” shall have the meaning set forth in the Preliminary Statement.

“Stockholder” shall have the meaning set forth in the first paragraph of this Agreement.

“Subsidiary” shall mean any corporation, partnership, trust, limited liability company or other non-corporate business enterprise in which the Company (or another Subsidiary) holds stock or other ownership interests representing (a) more than 50% of the voting power of all outstanding stock or ownership interests of such entity or (b) the right to receive more than 50% of the net assets of such entity available for distribution to the holders of outstanding stock or ownership interests upon a liquidation or dissolution of such entity.

“Taxes” shall mean all taxes, charges, fees, levies or other similar assessments or liabilities, including income, gross receipts, ad valorem, premium, value-added, excise,

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real property, personal property, sales, use, transfer, withholding, employment, unemployment, insurance, social security, business license, business organization, environmental, workers compensation, payroll, profits, license, lease, service, service use, severance, stamp, occupation, windfall profits, customs, duties, franchise and other taxes imposed by any local or foreign government, or any agency thereof, or other political subdivision of any such government, and any interest, fines, penalties, assessments or additions to tax resulting from, attributable to or incurred in connection with any tax or any contest or dispute thereof.

“Tax Returns” shall mean all reports, returns, declarations, statements or other information required to be supplied to a taxing authority in connection with Taxes.

“Tender Offer” shall have the meaning set forth in Section 1.1.

“Tender Offer Regulations” shall have the meaning set forth in Section 1.1.

“Third Party Action” shall mean any suit or proceeding by a person or entity other than a Party for which indemnification may be sought by a Party under Article VI.

“Transfer” shall have the meaning set forth in Section 5.6(c).

ARTICLE XI
MISCELLANEOUS

     11.1. Press Releases and Announcements. No Party shall issue any press release or public announcement relating to the subject matter of this Agreement without the prior written approval of the other Parties; provided, however, that any Party may make any public disclosure it believes in good faith is required by applicable law, regulation or stock market rule (in which case the disclosing Party shall use reasonable efforts to advise the other Parties and provide them with a copy of the proposed disclosure prior to making the disclosure).

     11.2. Notices. Any notices or other communications required or permitted hereunder shall be sufficiently given if delivered personally or sent by telex, federal express, registered or certified mail, postage prepaid, addressed as follows or to such other address of which the parties may have given notice:

To the Buyer:	c/o PAREXEL International Corporation
	200 West Street
	Waltham, MA 02451
	Facsimile: 602-445-2680
	Attn: Josef Von Rickenbach

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With a copy to:	c/o PAREXEL International Corporation
	200 West Street
	Waltham, MA 02451
	Facsimile: 781-434-5040
	Attn: C. Douglas Batt
With a copy to:	Wilmer Cutler Pickering Hale and Dorr LLP
	60 State Street
	Boston, MA 02109
	Facsimile: 617-526-5000
	Attn: Jeffrey A. Hermanson, Esq.
	David E. Redlick, Esq.
With a copy to:	Lee and Li, Attorneys at Law
	7F, No. 201, Tun Hua N. Road
	Taipei 105, Taiwan, R.O.C.
	Facsimile: 886-2-2713-3966
	Attn: Joyce Fan, Esq.
To the Stockholder:	Albert Liou
	6F, No. 78, Neijiang Street, Wanhua District,
	Taipei, Taiwan
With a copy to:	LCS & Partners
	5F, No. 8, Sinyi Rd., Taipei City, Taiwan
	Attn: Mark Harty

Unless otherwise specified herein, such notices or other communications shall be deemed received (a) on the date delivered, if delivered personally, or (b) three business days after being sent, if sent by registered or certified mail.

     11.3. Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the Parties hereto and their respective successors and assigns, except that the Buyer, on the one hand, and the Stockholder, on the other hand, may not assign their respective obligations hereunder without the prior written consent of the other Party; provided, however, that the Buyer may assign this Agreement, and its rights and obligations hereunder, to a subsidiary or Affiliate of the Buyer. Any assignment in contravention of this provision shall be void. No assignment shall release the Buyer or the Stockholder from any obligation or liability under this Agreement.

     11.4. Entire Agreement; Amendments; Attachments. This Agreement, all Schedules and Exhibits hereto, and all agreements and instruments to be delivered by the Parties pursuant hereto represent the entire understanding and agreement between the Parties hereto with respect to the subject matter hereof and supersede all prior oral and written and all contemporaneous oral negotiations, commitments and understandings between such Parties. The Buyer and the

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Stockholder may amend or modify this Agreement, in such manner as may be agreed upon, by a written instrument executed by the Buyer and the Stockholder. If the provisions of any Schedule or Exhibit to this Agreement are inconsistent with the provisions of this Agreement, the provisions of the Agreement shall prevail. The Exhibits and Schedules attached hereto or to be attached hereafter are hereby incorporated as integral parts of this Agreement.

     11.5. Severability. Any provision of this Agreement which is invalid, illegal or unenforceable in any jurisdiction shall, as to that jurisdiction, be ineffective to the extent of such invalidity, illegality or unenforceability, without affecting in any way the remaining provisions hereof in such jurisdiction or rendering that or any other provision of this Agreement invalid, illegal or unenforceable in any other jurisdiction.

     11.6. No Third Party Beneficiaries. This Agreement shall not confer any rights or remedies upon any person other than the Parties and their respective successors and permitted assigns; provided, however, that the provisions of Article VI concerning indemnification are intended for the benefit of the individuals specified therein.

     11.7. Governing Law. This Agreement (including the validity and applicability of the arbitration provisions of this Agreement, the conduct of any arbitration of a Dispute, the enforcement of any arbitral award made hereunder and any other questions of arbitration law or procedure arising hereunder) shall be governed by and construed in accordance with the laws of the ROC without giving effect to any choice or conflict of law provision or rule that would cause the application of laws of any jurisdictions other than those of the ROC.

     11.8. Section Headings. The section headings are for the convenience of the parties and in no way alter, modify, amend, limit, or restrict the contractual obligations of the parties.

     11.9. Counterparts and Facsimile Signature. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original but all of which together shall constitute one and the same instrument. This Agreement may be executed by facsimile signature.

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     IN WITNESS WHEREOF, this Agreement has been duly executed by the parties hereto as of and on the date first above written.

BUYER: PAREXEL (TAIWAN), INC.
By:	/s/ James F. Winschel, Jr.
	Name: James F. Winschel, Jr.
	Title:
STOCKHOLDER:
By:	/s/ Albert Liou
	Name: Albert Liou

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EX-21.1

EXHIBIT 21.1

PAREXEL INTERNATIONAL CORPORATION
LIST OF SUBSIDIARIES OF THE COMPANY
(As of June 30, 2007)

	PAREXEL
	OWNERSHIP*
PAREXEL International, LLC, a Delaware limited liability company	100%
PAREXEL Government Services, Inc., a Delaware corporation	100%
PAREXEL International Trust, a Massachusetts Business Trust	100%
PAREXEL Unternehmensbeteiligung GmbH, a corporation organized under the laws of Germany	100%
PAREXEL International GmbH, a Corporation organized under the laws of Germany	100%
PAREXEL International Limited, a corporation organized under the laws of the United Kingdom	100%
PAREXEL International SARL, a corporation organized under the laws of France	100%
PAREXEL International SRL, a corporation organized under the laws of Italy	100%
PAREXEL International Pty Ltd., a corporation organized under the laws of Australia	100%
PAREXEL International S.L., a corporation organized under the laws of Spain	100%
PAREXEL International Medical Marketing Services, Inc., a Virginia corporation	100%
PAREXEL International (Lansal) Limited, a corporation organized under the laws of Israel	100%
Perceptive Informatics, Inc., a Delaware corporation	100%
PAREXEL ETT, S.L., a corporation organized under the laws of Spain	100%
PAREXEL International Inc., a corporation organized under the laws of Japan	100%
PAREXEL International Holding BV, a corporation organized under the law of the Netherlands	100%
PAREXEL MMS Europe Limited, a corporation organized under the laws of the United Kingdom	100%
PPSI, Inc., a Connecticut corporation	100%
The Center for Bio-Medical Communication, Inc., a New Jersey corporation	100%
PAREXEL Nederland B.V., a corporation organized under the laws of the Netherlands	100%
Mirai Placebo B.V., a corporation organized under the laws of The Netherlands	100%
PAREXEL Polska SP z.o.o., a corporation organized under the laws of Poland	100%
PAREXEL Hungary Limited, a corporation organized under the laws of Hungary	100%
PAREXEL Baltics A/S, a corporation organized under the laws of Norway	100%
PAREXEL Norway A/S, a corporation organized under the laws of Norway	100%
PAREXEL Russia A/S, a corporation organized under the laws of Norway	100%
PAREXEL Sweden AB, a corporation organized under the laws of Sweden	100%
PAREXEL International, S.A., a corporation organized under the laws of Argentina	100%
FARMOVS PAREXEL Ltd., a corporation organized under the laws of South Africa	70%
PAREXEL International y Co Limitada, a corporation organized under the laws of Chile	100%
PAREXEL International Pesquisas Clinicas Limitada, a corporation organized under the laws of Brazil	100%
PAREXEL International Medical Marketing Services (NJ), LLC., a Delaware limited liability company	100%
PAREXEL Belgium B.V.B.A., a corporation organized under the laws of Belgium	100%
FWPS Group Ltd., a corporation organized under the laws of the United Kingdom	100%
Perceptive Informatics UK Ltd., a corporation organized under the laws of the United Kingdom	100%
FW Pharma Systems (Americas) Ltd., a corporation organized under the laws of the United Kingdom	100%
Fraser Williams (Midlands) Ltd., a corporation organized under the laws of the United Kingdom	98%
Broomco (2149) Ltd., a corporation organized under the laws of the United Kingdom	100%
MMSQI, Inc., a corporation organized under the laws of Delaware	100%
PAREXEL Ukraine LLC, a corporation organized under the laws the of Ukraine	100%
PAREXEL International Holding Corporation, a Delaware corporation	100%
PAREXEL International UAB, a corporation organized under the laws of Lithuania	100%
PAREXEL International Romania SRL, a corporation organized under the laws of Romania	100%
PAREXEL International (SA) Pty Ltd, a corporation organized under the laws of South Africa	100%
PAREXEL Finland OY, a corporation organized under the laws of Finland	100%
PAREXEL (IMC), Inc., a corporation organized under the laws of Pennsylvania	100%
PAREXEL International (Canada) Ltd, a corporation organized under the laws of New Brunswick, Canada	100%
PAREXEL International (UK) Ltd, a corporation organized under the laws of the United Kingdom	100%
Bio/pharm Accelerator Management Company LLC, a corporation organized under the laws of Deleware	100%
PAREXEL International (RUS) LLC, a corporation organized under the laws of Russia	100%
PAREXEL International Czech Republic S.R.O., a corporation organized under the laws of Czech Republic	100%
PAREXEL International Mexico SA DE CV, a corporation organized under the laws of Mexico	100%

	PAREXEL
	OWNERSHIP*
PAREXEL International Synchron Private Limited, a corporation organized under the laws of India	75%
PAREXEL International (India) Private Limited, a corporation organized under the laws of India	100%
PAREXEL (Taiwan), Inc., a corporation organized under the laws of the Republic of China	100%

* direct and indirect

EX-23.1

EXHIBIT 23.1

Consent of Independent Registered Public Accounting Firm

We consent to the incorporation by reference in the Registration Statements (Form S-8 Nos. 33-80301, 333-16205, 333-37138, 333-40276, 333-47033, 333-71151, 333-82752, 333-104968, 333-109317 and 333-131796) of PAREXEL International Corporation of our reports dated August 24, 2007, with respect to the consolidated financial statements and schedule of PAREXEL International Corporation, PAREXEL International Corporation’s management assessment of the effectiveness of internal control over financial reporting, and the effectiveness of internal control over financial reporting of PAREXEL International Corporation, included in this Annual Report (Form 10-K) for the year ended June 30, 2007.

/s/ Ernst & Young LLP  

Boston, Massachusetts
August 24, 2007

EX-31.1

EXHIBIT 31.1

CERTIFICATION

I, Josef H. von Rickenbach, certify that:

1.	I have reviewed this annual report on Form 10-K of PAREXEL International Corporation;
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.	The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c)	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d)	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Dated: August 27, 2007	/s/ Josef H. von Rickenbach
	Josef H. von Rickenbach
	Chairman of the Board and Chief Executive Officer (principal executive officer)

EX-31.2

EXHIBIT 31.2

CERTIFICATION

I, James F. Winschel, Jr., certify that:

1.	I have reviewed this annual report on Form 10-K of PAREXEL International Corporation;
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.	The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c)	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d)	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Dated: August 27, 2007	/s/ James F. Winschel, Jr.
	James F. Winschel, Jr.
	Senior Vice President and Chief Financial Officer (principal financial officer)

EX-32.1

EXHIBIT 32.1

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report on Form 10-K of PAREXEL International Corporation (the “Company”) for the fiscal year ended June 30, 2007 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), the undersigned, Josef H. von Rickenbach, Chief Executive Officer of the Company, hereby certifies, pursuant to 18 U.S.C. Section 1350, that:

(1)	The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2)	The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated: August 27, 2007	/s/ Josef H. von Rickenbach
	Josef H. von Rickenbach
	Chairman of the Board and Chief Executive Officer

A signed original of this written statement required by Section 906 has been provided to PAREXEL International Corporation and will be retained by PAREXEL International Corporation and furnished to the Securities and Exchange Commission or its staff upon request.

EX-32.2

EXHIBIT 32.2

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report on Form 10-K of PAREXEL International Corporation (the “Company”) for the fiscal year ended June 30, 2007 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), the undersigned, James F. Winschel, Jr., Chief Financial Officer of the Company, hereby certifies, pursuant to 18 U.S.C. Section 1350, that:

(1)	The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2)	The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated: August 27, 2007	/s/ James F. Winschel, Jr.
	James F. Winschel, Jr.
	Senior Vice President and Chief Financial Officer

A signed original of this written statement required by Section 906 has been provided to PAREXEL International Corporation and will be retained by PAREXEL International Corporation and furnished to the Securities and Exchange Commission or its staff upon request.