EMPLOYMENT AGREEMENT
Exhibit
99.E.6
THIS
EMPLOYMENT AGREEMENT (the "Agreement"), made and entered into as of the 15th day
of August, 2008 (the “Effective Date”), by and between etrials, Inc., a Delaware
corporation (the "Company") (where the context permits, references to the
Company also shall include etrials Worldwide, Inc., a Delaware corporation, of
which etrials, Inc. is a wholly-owned subsidiary, and etrials Worldwide Limited,
a corporation of England and Wales which is a sister company to etrials, Inc.,
and any future direct or indirect subsidiary of etrials Worldwide, Inc.); and
Xxxxxxx Xxxxxxx ("Employee");
W I T N E
S S E T H :
WHEREAS,
the Company is an eClinical software and services company providing software and
system solutions to the pharmaceutical, biotechnology, and medical device
industries (the "Company's Business"); and,
WHEREAS,
the Company presently employs Employee as Chief Financial Officer;
and,
WHEREAS,
during the course of Employee's employment with the Company, the Company has
made and shall continue to make available to Employee confidential information
relating to the Company's Business, and in this connection, the Company and
Employee have reached an agreement concerning a confidentiality and
noncompetition arrangement and desire to set forth their agreement in
writing.
NOW,
THEREFORE, for and in consideration of Employee's continued employment with the
Company, the consideration set forth below in Sections 2, 3, and 4(a), and other
good and valuable considerations, the receipt and sufficiency of which are
hereby acknowledged, the Company and Employee hereby agree as
follows:
1. Relationship and
Duties.
(a) Employment. The
Company agrees to employ Employee, and Employee accepts employment with the
Company, upon the terms and conditions stated herein. As an employee
of the Company, Employee will (i) serve as the Company's Chief Executive
Officer and, in such position, shall be subject to the direction of the
Company's Board of Directors; (ii) perform such duties and exercise such
authority as is customary for persons holding such position; and (iii) have
such other duties and responsibilities as shall be assigned to him from
time-to-time.
(b) Standards of Performance and
Conduct. During his employment, Employee shall
(i) faithfully and diligently discharge his duties and responsibilities
under this Agreement; (ii) perform in a reasonably competent manner the
duties associated with his position with the Company; (iii) use his best
efforts to implement the policies and procedures of the Company currently in
effect or as established from time-to-time by the Company; and (iv) devote
his full working time, attention, and efforts to the diligent performance of his
duties herein specified and not accept employment with any other individual,
corporation, or other entity, or engage as a corporate officer or employee in
any other venture for profit, which may interfere in any way with Employee's
performance of his duties hereunder; provided, however, that
Employee shall not be restricted from personally and for his own account dealing
and investing in real estate, securities, and other forms of investments for his
own benefit.
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In the
execution of his duties under this Agreement, Employee shall comply at all times
and in all material respects with any code of conduct or other personnel
policies and procedures adopted by the Company, as the same are in effect and as
amended or supplemented from time-to-time, and with all applicable federal and
state statutes and all rules, regulations, administrative orders, statements of
policy, and other pronouncements or standards promulgated
thereunder.
2. Term. Unless
sooner terminated as provided in Section 4, the term of Employee's employment
with the Company under this Agreement shall begin on August 15, 2008 and shall
continue thereafter until February 14, 2010 (the "Initial Term"). If,
following the Initial Term, Employee remains employed by the Company, such
employment shall be on an "at will" basis subject to termination as provided in
Section 4.
3. Compensation.
(a) Base
Salary. For all services rendered by Employee under this
Agreement, the Company shall pay to Employee a salary of One Hundred Eighty
Thousand and No/100 Dollars ($180,000.00) per year (the "Base Salary"), such
Base Salary to be payable on a monthly basis or as otherwise mutually
agreed.
(b) Commissions. In
addition to the Base Salary described above, Employee shall be eligible for such
commissions as form time to time may be approved by the Board of
Directors.
(c) Withholding. All
compensation hereunder shall be subject to customary deductions and withholding
taxes and such other deductions and withholdings as are required by
law.
4. Termination.
(a) By the Company Without
Cause. The Company may terminate this Agreement and Employee's
employment under this Agreement at any time without stated cause upon at least
two (2) weeks' written notice to Employee (the "Notice Period"). The
Company, in its sole discretion, may elect for Employee not to serve out part or
all of the Notice Period. Upon any such termination by the Company
under this Section 4, Employee shall be entitled to receive compensation earned
through the effective date of such termination and, thereafter, the Company
shall have no further obligations hereunder; provided, however, if the
Company terminates this Agreement prior to the expiration of the Initial Term,
then the Company shall:
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(i) pay
Employee an amount equal to Employee's Base Salary for six (6) months payable in
accordance with the Company's normal payroll schedule over the six-month period
following the effective date of termination (the "Severance Period"), subject to
customary deductions and withholding taxes and such other deductions and
withholdings as are required by law; and,
(ii) provide
continuing coverage for Employee and his eligible dependents, under the
Company's medical and dental benefit plans, programs, and policies then in
effect if permitted until the earlier of the expiration of the Severance Period
or the date that Employee becomes eligible for substantially equivalent coverage
and benefits under the plan and programs of a subsequent employer, provided that
if by the terms of such benefit plans, Employee or his family cannot be covered
after termination of employment, and if Employee chooses to exercise his rights
to purchase continued health insurance coverage under the Company's health
insurance plan pursuant to the Consolidated Omnibus Budget Reconciliation Act
("COBRA"), then the Company shall reimburse Employee for the cost of such
continued insurance coverage until the earlier of the expiration of the
Severance Period or the date that Employee becomes eligible for substantially
equivalent coverage and benefits under the plan and programs of a subsequent
employer.
(b) By the Company For
Cause. The Company may terminate this Agreement and Employee's
employment under this Agreement at any time for cause (as defined
below). Upon any such termination by the Company, Employee shall have
no further rights under this Agreement and shall be entitled only to receive
compensation earned under this Agreement through the effective date of such
termination. For purposes of this Agreement, the Company shall have
"cause" to terminate this Agreement upon:
(i) A
determination by the Company, in good faith, that Employee (A) has breached
in any material respect any of the terms or conditions of this Agreement or any
the Company policy or has discriminated against any employee, customer, or other
person covered by any anti-discrimination laws, regulations, or policies;
(B) has failed in any material respect to perform or discharge his duties
or responsibilities of employment in the manner provided herein; or (C) is
engaging or has engaged in conduct involving moral turpitude, willful
misconduct, or conduct which is detrimental in any material respect to the
standing, reputation, or business prospects of the Company or which has had, or
likely will have, a material adverse effect on the Company's Business or
reputation;
(ii) The
commission during Employee's employment with the Company of a felony or any act
of fraud, embezzlement, theft, or personal dishonesty (whether or not such act
or charge results in criminal indictment, charges, prosecution, or
conviction);
(iii) The
unauthorized use of alcohol by Employee during working hours or any use of
alcohol by Employee during nonworking hours that adversely affects his job
performance or reflects negatively upon the Company, his ability to fulfill the
responsibilities of his position, or the safety of himself or others;
or
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(iv) Employee's
use of any addictive drug (except pursuant to the direction of a physician) or
use of any controlled substance, as defined at 21 U.S.C. § 802 and
listed on Schedules I through V of 21 U.S.C. § 812, as revised from
time-to-time, or as defined by other federal or state laws or
regulations.
(c) By
Employee. Employee may terminate this Agreement and his
employment under this Agreement at any time without stated cause upon thirty
(30) days' written notice to the Company. The Company, in its sole
discretion, may elect for Employee not to serve out part or all of the notice
period, in which case Employee's employment shall terminate
immediately. Upon any termination under this Section 4(c), Employee
shall be entitled only to compensation earned through the final day of
Employee's active employment and, thereafter, the Company shall have no further
obligations hereunder.
(d) Death or Permanent
Disability. Subject to the Company's obligations and
Employee's rights under Title I of the Americans with Disabilities Act and the
Family and Medical Leave Act, if applicable, and any other applicable federal or
state laws, this Agreement and Employee's employment hereunder shall terminate
automatically upon Employee's death or permanent disability. Upon any
termination under this Section 4(d), Employee or his estate, as appropriate,
shall be entitled to receive any compensation Employee shall have earned prior
to the date of termination but which remains unpaid. Permanent
disability for purposes of this Agreement shall mean a physical or mental
condition of Employee which renders Employee incapable of performing his normal
and regular employment duties and which condition shall be medically determined
to be of permanent duration as defined by the Company's group disability policy
(or, if no such policy is in effect, as defined by the
Company). Employee agrees to submit to such medical examinations as
may be requested by the Company or the Company's disability insurer with regard
to the issue of disability of Employee.
5. Noncompetition.
(a) General. Employee
hereby acknowledges and agrees that (i) the Company's Business, which is
Internet-based, operates in a national, international, and global market; (ii)
the Company will make a significant investment in the development of its
business in this region, and specifically in the geographic area identified as
the "Relevant Market" (as defined below) and, as a result, will have a valuable
economic interest in its business in the Relevant Market which it is entitled to
protect; (iii) in the course of Employee's service as an employee of the
Company, Employee has been and will continue to be exposed to, and has and will
continue to gain substantial knowledge of and familiarity with, Information (as
defined below), all of which constitutes valuable assets and privileged
information belonging to the Company; and (iv) in order to protect the Company's
interest in its business, it is reasonable and necessary to place certain
restrictions on Employee's ability to compete against the
Company. For that purpose, and in consideration of the Company's
agreements contained herein, Employee covenants and agrees as provided
below.
(b) Covenant Not to
Compete. During the "Restriction Period" (as defined below),
Employee shall not "Compete" (as defined below), directly or indirectly, with
the Company in the Relevant Market.
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(c) Definitions.
(i) Compete. The
term "Compete" means to engage in or assist any person or entity whose business
is competitive with the Company's Business, whether as a director, officer,
partner, member, manager, owner, employee, agent, consultant, or otherwise, in
employment or other work similar to Employee's duties with the Company during
the one-year period immediately preceding the termination of Employee's
employment with the Company.
(ii) Restriction
Period. The term "Restriction Period" means the period of
Employee's employment with the Company and the one (1) year period commencing on
the effective date of any termination of Employee's employment with the Company,
whether such termination is voluntary or involuntary or with or without cause,
and whether such termination occurs during or after the Initial
Term.
(iii) Relevant
Market. The term "Relevant Market" shall be defined as the
following divisible and severable territorial divisions:
A. the
state or states within the United States in which the Company has engaged or
engages in the Company's Business and in which Employee has performed services
on behalf of the Company;
B. the
state or states within the United States in which the Company has engaged or
engages in the Company's Business;
C. the
United States and its territories;
D. the
United States and its territories, the United Kingdom, Ireland, and any other
country in which the Company has engaged or engages in the Company's
Business;
E. the
world.
(iv) Information. The
term "Information" shall be defined as all confidential and proprietary
information (whether in written, electronic, visual, oral, or other form)
relating to the Company's Business, including but not limited to:
A. all
program code and documentation, software, research and development,
specifications, design concepts, copyrights, trademarks, trade secrets, patents,
inventions, development tools and procedures, internal reports and
communications, test data, the nature and results of research and development
activities, and plans for the development or acquisition of future products or
product enhancements by the Company or its customer(s);
B. the
nature and type of the service rendered by the Company and the fees paid by the
Company's customers for products and services;
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C. marketing
techniques, marketing plans, mailing lists, purchasing information, price lists,
pricing policies, quoting procedures, financial information, customer and
prospect names and requirements, customer data and preferences, customer site
information, pricing strategies, and other materials or information relating to
the manner in which the Company or its customer does business;
D. any
other materials or information related to the activities of the Company or the
Company's Business which are not generally known to others engaged in similar
businesses or activities;
E. any
other materials or information that have been created, discovered, or developed
by, or otherwise become known to, the Company that have commercial value in the
business in which the Company is engaged; and,
F. any
materials or information received by the Company or Employee from third parties
in confidence (or subject to nondisclosure covenants).
6. Nonsolicitation and
Nondisclosure.
(a) General. During
the course of Employee's employment with the Company, Employee has been and
shall continue to be given, and has obtained and shall continue to obtain,
Information pertaining to the Company's customers and prospective customers for
the purpose of furthering the Company's Business, and has contacted and
solicited and will continue to contact and solicit the Company's customers and
prospective customers, who or which are located throughout the United States of
America and the world. Employee also acknowledges that the Company has spent and
shall continue to spend considerable amounts of time, effort, and company
resources in providing Employee with, and that Employee has and will continue to
participate in the development of, Information. Employee acknowledges
and agrees that the Company has a right to and does regard all such Information
as proprietary, and a trade secret or confidential, and has a right to protect
it from disclosure and misuse. To protect the Company from Employee's
use, disclosure, or exploitation of the Information, and to provide assurance to
the Company that it safely may continue to provide Employee with Information
relating to the Company's customers, prospective customers, and the Company's
Business, Employee expressly covenants and agrees that Employee shall not do any
of the following without the Company's prior written consent (which may be
withheld in the Company's sole discretion).
(b) Covenant of
Nonsolicitation. During the Restriction Period, either
directly, indirectly, or through any person or entity, other than on behalf of
the Company, Employee shall not:
(i) solicit
or accept any business similar to the Company's Business from any person or
entity who or which was or is a customer of the Company and with whom or which
Employee had or has had "Material Contact" (as defined below) on behalf of the
Company within the one-year period immediately preceding the termination of
Employee's employment with the Company (a "Serviced Customer");
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(ii) solicit
or accept any business similar to the Company's Business from any person or
entity who or which was or is a prospective customer of the Company and with
whom or which Employee had or has had Material Contact on behalf of the Company
within the one-year period immediately preceding the termination of Employee's
employment with the Company (a "Marketed Prospective Customer");
(iii) divert
or attempt to divert any Serviced Customer or Marketed Prospective Customer to
any person or business entity competitive with the Company; or,
(iv) employ
or seek to employ, retain or seek to retain, or advise or recommend to any other
person or business entity that such person/entity employ or seek to employ or
retain or seek to retain, any employee or consultant of the Company, or solicit,
induce, recruit, or encourage any such employee or consultant to terminate his
or her relationship with the Company.
For
purposes of this Agreement, Employee will be deemed to have had "Material
Contact" with a person or business entity if, in the course of Employee's
employment with the Company, Employee obtained Information concerning the person
or entity, or Employee had personal dealings with the person or entity regarding
matters related to the Company's Business.
(c) Covenant of
Nondisclosure. Directly or indirectly, at any time, whether
during Employee's employment with the Company or after the termination of
Employee's employment with the Company for any reason, Employee shall not
divulge, use, disclose, publish, or communicate to any person or entity, any
confidential information of any kind, nature, or description relating to the
Company's Business, including but not limited to the
Information; provided, however, that during
Employee's employment with the Company, Employee may disclose such information
as permitted by the Company for the limited purpose of performing Employee's job
duties, but only to the extent authorized by the Company, or as is required by
law to be disclosed. During Employee's employment with the Company or
after the termination of Employee's employment with the Company for any reason,
Employee shall not use the Information to the detriment of the Company or its
principals, shareholders, officers, directors, or employees, particularly in any
manner competitive with the Company, in any unlawful manner, or to interfere
with or attempt to terminate or otherwise adversely affect any business
relationship of the Company with a customer or prospective
customer.
The
foregoing obligation of confidentiality and nondisclosure shall not apply
when:
(i) Public
Domain. The Information was in the public domain at the time
of disclosure to Employee, or at any time after disclosure has become a part of
the public domain by publication or otherwise through sources other than
Employee, directly or indirectly, and without fault on the part of Employee in
failing to keep such Information confidential;
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(ii) Requirement of Law or
Order. Disclosure is required by law or court order, provided
Employee gives the Company prior written notice of any such disclosure so that
the Company may seek to contest such disclosure or seek a protective
order;
(iii) Agreement. Disclosure
is made with the prior written agreement of the senior management of the
Company; or,
(iv) Third Party
Disclosure. The Information is lawfully disclosed to Employee
after the termination of Employee's employment by a third party who is under no
obligation of confidentiality to the Company with respect to such
Information.
7. Records. All
notes, data, tapes, reference materials, sketches, drawings, memoranda, models,
records, any other documentation in any way relating to any of the information
referred to in Sections 5 and 6 hereof (including without limitation, any
Information) or to the Company's Business shall belong exclusively to the
Company, and Employee agrees to turn over to the Company all such materials and
all copies of such materials in Employee's possession or then under Employee's
control at the request of the Company or, in the absence of such request, upon
the termination of Employee's employment with the Company.
8. Reasonableness and
Enforceability. EMPLOYEE HAS READ AND CAREFULLY CONSIDERED THE
TERMS OF THIS AGREEMENT, HAS HAD THE OPPORTUNITY TO CONTACT EMPLOYEE'S OWN LEGAL
COUNSEL TO ADVISE EMPLOYEE REGARDING THE TERMS OF THIS AGREEMENT, AND EMPLOYEE
NOW AGREES THAT THE TERMS OF THIS AGREEMENT ARE FAIR AND REASONABLE AND ARE
REASONABLY REQUIRED FOR THE PROTECTION OF THE INTEREST OF THE COMPANY AND THE
COMPANY’S STOCKHOLDERS. EMPLOYEE FURTHER AGREES THAT THE RESTRICTIONS
AND COVENANTS OF THIS AGREEMENT WILL NOT IMPAIR THE ABILITY OF EMPLOYEE TO
SECURE EMPLOYMENT SO AS TO BE ABLE TO MAKE A REASONABLE LIVING. The
provisions of this Agreement shall be enforceable notwithstanding the existence
of any claim or cause of action of Employee against the Company whether
predicated on this Agreement or otherwise.
9. Arbitration.
Any dispute or claim arising
out of or in connection with any provision of this Agreement shall be resolved
exclusively by an arbitration committee applying the laws of North Carolina
whose decision shall be binding on the parties without further action or
recourse. The parties agree that the arbitration committee shall be
comprised of three (3) individuals, each of whom shall be a resident of the
State of North Carolina. Each party shall name one (1) person to
serve on the arbitration committee, and the two (2) persons so selected shall
choose a third person to serve on the committee. The decision of any
two (2) members of the committee shall be the decision of the
committee. In the event that the members of the arbitration committee
for any reason are not chosen within thirty (30) days from the date a party
hereto gives notice of claim for arbitration, any party hereto thereafter shall
have the right to apply to an appropriate court for the appointment by the
court, pursuant to N.C. Gen. Stat. § 1-569.11, to the committee of three (3)
qualified and disinterested arbitrators. To assist the committee in
its function as arbitrator, the committee may engage an attorney, certified
public accountant, and any other person to be of assistance in the arbitration
of any matter before the committee. The expenses of the committee,
including those of persons engaged to be of assistance to the committee, shall
be shared by the parties in proportions to be determined by the arbitration
committee. The arbitration award shall not include punitive damages,
factual findings, or conclusions of law, but such arbitration award may include
attorney fees in an amount determined by the arbitration
committee. Any award rendered by the arbitration committee shall be
final and binding and judgment may be entered upon it in any North Carolina
court of competent jurisdiction. Except as herein provided, the
provisions of Article 45C of Chapter 1 of the North Carolina General Statutes
shall apply in arbitration proceedings. Notwithstanding the
foregoing, the parties may apply to any court of competent jurisdiction for
preliminary or interim equitable relief, or to compel arbitration in accordance
with this section, without breach of this arbitration provision.
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10. Specific Enforcement;
Damages; Attorneys' Fees. Employee acknowledges that a remedy
at law for any breach or threatened breach by Employee of the provisions of this
Agreement would be inadequate to protect the Company against the consequences of
such breach, and Employee therefore agrees that (a) the Company shall be
entitled to injunctive relief in case of any such breach or threatened breach
without posting any bond, and (b) Employee shall account for and pay over to the
Company all monetary damages suffered by the Company as the result of any
transactions constituting a breach of any of the provisions of this
Agreement. Employee further agrees that in the event he breaches this
Agreement, Employee shall pay all reasonable attorneys' fees allowed by law
incurred by the Company in enforcing the terms of this Agreement and in seeking
damages for its breach, or both, together with all court costs.
11. Waiver. The
failure of any party to enforce at any time any of the provisions of this
Agreement shall not be construed as a waiver of such provisions or of the right
of such party thereafter to enforce any such provisions. Waiver by
any party hereto of any breach or default by the other parties of any of the
terms and provisions of this Agreement shall not operate as a waiver of any
other breach or default, whether similar to or different from the breach or
default waived.
12. Successor
Employers. Employee hereby authorizes the Company to provide a
copy of this Agreement to any and all future employers, and to notify any and
all future employers that the Company intends to exercise its legal rights
arising out of or in conjunction with this Agreement and/or any breach or any
inducement of breach of it.
13. Reformation/Severability of
Agreement. If any provision of this Agreement shall for any
reason be adjudged by any court of competent jurisdiction or arbiter to be
illegal, invalid, or otherwise unenforceable, such judgment shall not affect,
impair, or invalidate the remainder of this Agreement but shall be confined in
its operation to the provision of this Agreement directly involved in the
controversy in which such judgment shall have been rendered. The
invalid or unenforceable provision shall be reformed so that each party shall
have the obligation to perform reasonably alternatively to give the other party
the benefit of its bargain. In the event the invalid or unenforceable
provision cannot be reformed, the other provisions or applications of this
Agreement shall be given full effect, and the invalid or unenforceable provision
shall be deemed struck.
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14. Binding Effect;
Assignment. This Agreement shall be binding upon and inure to
the benefit of the Company and Employee, their respective subsidiaries,
affiliates, principals, members, managers, directors, officers, successors and
assigns, heirs, legatees, executors, administrators, and personal
representatives, as applicable; provided, however, that the
agreements of Employee are personal to Employee, and Employee shall not assign
Employee's obligations, responsibilities, and benefits hereunder. The
Company shall have the right to assign its obligations, responsibilities, or
benefits hereunder.
15. Governing Law; Venue;
Consent to Personal Jurisdiction. This Agreement is executed
in the State of North Carolina, and Employee agrees that without regard to
principles of conflicts of laws, the internal laws of the State of North
Carolina shall govern and control the validity, interpretation, performance, and
enforcement of this Agreement. Any lawsuit brought under the terms of
this Agreement shall have exclusive venue in the state and federal courts of
Wake County, North Carolina; provided, however, that with
respect to any proceeding for injunctive relief the Company may, at its option,
bring the proceeding before a court where Employee resides at the time of such
proceeding. Employee hereby consents to the personal jurisdiction of
such courts.
16. Notice. Any
notice required hereunder shall be deemed sufficient and service thereof
completed upon receipt, refusal, or nondelivery of same if same shall be in
writing and hand-delivered or addressed to the addressee at the last known post
office address thereof, in the case of Employee, or the registered office of the
Company, in the case of the Company, and mailed certified or registered mail,
with return receipt requested, postage prepaid.
17. Entire
Agreement. This Agreement contains the entire agreement and
understandings by and between the Company and Employee with respect to the
covenants herein described, and no representations, promises, agreements, or
understandings, written or oral, not herein contained shall be of any force or
effect. No change or modification hereof shall be valid or binding
unless the same is in writing and signed by the parties hereto. No
waiver of any provision of this Agreement shall be valid unless the same is in
writing and signed by the party against whom such waiver is sought to be
enforced; moreover, no valid waiver of any other provision of this Agreement at
any time shall be deemed a waiver of any other provision of this Agreement at
such time nor will it be deemed a valid waiver of such provision at any other
time.
18. Section
Headings. The section headings are for convenience of
reference only and shall not be construed as terms of this
Agreement.
19. Survival of
Covenants. The provisions set forth in Sections 4 through 19
of this Agreement shall survive the termination of this Agreement and shall
survive termination of Employee's employment with the Company.
[Remainder
of page intentionally left blank. Signatures follow.]
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IN
WITNESS WHEREOF, the Company has caused this Agreement to be executed in its
corporate name in such form as to be binding, and Employee has executed this
Agreement by subscribing his name and adopting as his seal the typewritten word
"SEAL" appearing beside his name, all effective as of the Effective
Date.
ETRIALS,
INC.
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By: /s/
Xxxxxxx Xxxxxxxxxx
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Its: President
and CEO
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EMPLOYEE:
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/s/
Xxxxxxx
Xxxxxxx (SEAL)
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Xxxxxxx
Xxxxxxx
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Residence
Address:
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OMITTED
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