Exclusive Marketing Agreement Sample

Confidential Treatment
Exhibit 10.1

PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE SECRETARY OF THE COMMISSION PURSUANT TO REGISTRANT’S APPLICATION OBJECTING TO DISCLOSURE AND REQUESTING CONFIDENTIAL TREATMENT UNDER RULE 24b-2. THE OMITTED PORTIONS HAVE BEEN MARKED WITH BRACKETS.

EXCLUSIVE MARKETING AGREEMENT

     This Exclusive Marketing Agreement (this “ Agreement ”) is made this 27th day of November, 2007, by and between Covance Inc., a Delaware corporation (“ Parent ”), and eResearchTechnology, Inc., a Delaware corporation (“ eRT ”).

     WHEREAS, eRT is engaged in the provision of the Services (as hereinafter defined); and

     WHEREAS, eRT and Parent desire to enter into an agreement relating to the joint marketing of the Services, the potential referral of other business between Parent and its subsidiaries (collectively, “ Covance ”) and eRT, non-competition and the other matters referred to herein.

     NOW THEREFORE, for and in consideration of the mutual promises contained herein, and other good and valuable consideration, the receipt and legal sufficiency of which is hereby acknowledged by the parties, the parties agree as follows:

1.		Definitions .
		As used in this Agreement, the following terms, whether used in the singular or the plural, shall have the following respective meanings:

	1.1		“Affiliate” shall mean any Person, from to time, which directly or indirectly through one or more intermediaries either controls, or is controlled by or is under common control with, the Person specified.
	1.2		“Audit” shall mean an audit of the Services, in the case of eRT, and an audit of any services provided by Covance, in the case of Covance.
	1.3		“Backlog” means each written Contract identified on Section 3.4(g) of the Disclosure Schedule of that certain Share Purchase Agreement by and among eRT, Parent, Covance Central Laboratory Services Limited Partnership and the Company dated as of the date hereof. For the avoidance of doubt, the “Backlog” does not include any Contracts entered into after September 30, 2007; provided, that, only Revenues received after the effective date of this Agreement may be deemed Relevant Revenues.
	1.4		“Business” shall mean eRT’s ongoing efforts to sell the Services, but shall not include any other business activities engaged in by eRT from time to time.
	1.5		“Claims” shall have the meaning specified in Section 5.
	1.6		“Company” shall mean Covance Cardiac Safety Services Inc., a Pennsylvania corporation.
	1.7		“Confidential Information” shall have the meaning specified in Section 7.
	1.8		“Covance Relationship Manager” shall mean the individual appointed by Covance from time to time pursuant to Section 2.3.1. The initial Covance Relationship Manager shall be identified on Schedule 2.3.1 to this Agreement.

	1.9		“Covance Sales Manager” shall mean the individual appointed by Covance from time to time pursuant to Section 2.3.2. The initial Covance Sales Manager shall be identified on Schedule 2.3.2 to this Agreement.
	1.10		“Critical Finding” shall mean, with respect to any Party, a finding made in an audit report, based on the results of an Audit, with respect to Services, in the case of eRT, and any services provided by Covance, in the case of Covance, prepared by the other Party, its Affiliates or any third party which is characterized as critical, and which (i) identifies any deficiency of such Party posing a threat to patient safety, (ii) is reasonably likely to result in materially adverse regulatory action by any Governmental Authority with respect to such Party, (iii) is reasonably likely to invalidate the acceptability of any Study involving the Services, in the case of eRT, or any services provided by Covance with respect to such Study, in the case of Covance, to any Customer or to any Governmental Authority; provided, however, that neither Covance nor any Person shall be permitted to characterize as critical, for purposes of the definition of “Critical Finding,” (a) any conduct of the business of the Company after the effective date of this Agreement, relating to a study set forth in the Backlog, that eRT reasonably believes to be consistent with the manner the Company conducted its business before the effective date of this Agreement, including, for the sake of clarity, conduct of the Company after the effective date of this Agreement consistent with the finding of any regulatory audit before the effective date of this Agreement or (b) any finding with respect to Services provided by the Company, unless such finding represents a meaningful and material degradation that occurred after the effective date of this Agreement.
	1.11		“Cure Period Expiration Date” shall have the meaning specified in Section 8.1.1.
	1.12		“Customer” shall mean any customer or prospective customer of Covance or its Affiliates.
	1.13		" Damages Cap ” shall have the meaning specified in Section 6.2.
	1.14		“Documented Lead” shall mean any lead or other information, based on a request by a Customer, for Services that is communicated in writing by Covance to eRT that subsequently results in verifiable Relevant Revenues to eRT, other than leads or other information known to eRT at the time of such communication as demonstrated by eRT’s prior written records. eRT shall be deemed to have knowledge of any lead or other information concerning any opportunity known to a member of its sales force as demonstrated by eRT’s prior written records. For purposes of tracking Documented Leads, the Relationship Managers will meet weekly (or as otherwise determined by the Parties) to review a list of trials and other potential sources of leads, and will maintain a process for identifying and tracking Documented Leads.
	1.15		“eRT Excluded Customer” shall mean the Persons identified on Schedule 1.15.
	1.16		“eRT Relationship Manager” shall mean the individual appointed by eRT from time to time pursuant to Section 2.4.1. The initial eRT Relationship Manager shall be identified on Schedule 2.4.1 to this Agreement.
	1.17		“Exclusivity Period” shall have the meaning specified in Section 3.7.
	1.18		“FDA” shall mean the United States Food and Drug Administration.
	1.19		“Governmental Authority” shall mean any governmental department, commission, board, bureau, agency, court or other instrumentality of the United States or any other country, including but not limited to federal, state, district, territory, possession or commonwealth thereof, as well as any entity with the authority to grant or issue licenses or permits necessary to competently perform the Services.
	1.20		“Implementation Plan” shall have the meaning specified in Section 3.4.

	1.21		“Independent Third-Party Auditor” shall mean an auditor, not an Affiliate of either of the Parties, and experienced in quality assurance and other audits related to the provision of services in clinical trials, appointed by Covance for the purposes set forth in Section 8.1.1 of this Agreement and approved by eRT in its reasonable discretion; provided, however, that in the event that eRT does not, in its reasonable discretion, approve any auditor chosen by Covance for the purposes set forth in Section 8.1.1, then, within thirty (30) days following the date that Covance originally designated such potential auditor, each of Covance and eRT shall request that their independent public accountants engage a mutually acceptable auditor to act as the Parties auditor with respect to Section 8.1.1. The findings of any Independent Third-Party Auditor designated pursuant to this Agreement shall be final, binding and conclusive on the Parties.
	1.22		“Joint Bid” shall mean any response to request for proposal, bid or other offer of services by Covance which includes, subject to Section 3.1, Services to be provided by eRT.
	1.23		“Losses” shall have the meaning specified in Section 5.
	1.24		“Party” shall mean eRT or Covance.
	1.25		“Person” shall mean an individual, a corporation, a limited liability company, a partnership (including without limitation a joint venture), an unincorporated association, a trust or any other entity or organization, including but not limited to a government or political subdivision or any agency or instrumentality thereof.
	1.26		“Potential Termination Event” shall mean the occurrence and continuation beyond any available cure period of any event, circumstance or condition set forth in Section 8.1 or 8.1.1.
	1.27		“Relationship Managers” shall mean the eRT Relationship Manager and the Covance Relationship Manager.
	1.28		“Relevant Revenues” shall mean Revenues when and to the extent received by eRT or the fair value of other compensation received by eRT resulting from Documented Leads from Covance or Joint Bids, as reduced by sales taxes, value added taxes or other similar taxes, and excluding all pass-through charges; provided, however, that Relevant Revenues shall exclude amounts received by eRT on account of Backlog. To the extent that the customer identified on Schedule 1.28 (the “ Schedule 1.28 Customer ”) enters into a written and legally binding contract with respect to the study and for a dollar amount within thirty-three percent (33%) of, or more than, the dollar value of Services (identified on Schedule 1.28 with such study), and eRT recognizes any ECG Revenues under such contract, on or before May 31, 2008 (the “ Contract Date ”), “Relevant Revenues” shall be deemed to include Revenues received by eRT in accordance with the definition of “Relevant Revenues” on or after the date hereof, and eRT shall pay to Covance, on or before April June 30, 2008, any referral fees then owed to Covance on account of such Relevant Revenues received by eRT between and including the date hereof and on and including December 31, 2007. In the event that the Schedule 1.28 Customer does not enter into a written and legally binding contract on or before the Contract Date, “Relevant Revenues” shall be deemed to include Revenues received by eRT in accordance with the definition of “Relevant Revenues” after December 31, 2007.
	1.29		“Revenues” means revenues received or the fair value of other compensation received, as reduced by sales taxes, value added taxes or other similar taxes, and excluding all pass-through charges, as such is in accordance with GAAP applied consistently with prior periods.
	1.30		“Services” shall mean centralized electrocardiogram, Holter monitoring, diagnostic services and other similar centralized diagnostic services, in each case to the extent involving, in whole or in part, the measurement and/or interpretation of human electrophysiological or other cardiac signals as applicable in the conduct of clinical trials (including “for fee” cardiologist, protocol design,

statistical, and reporting consultation services used specifically in the business of eRT as currently conducted), and any technical or other innovations to any of the foregoing, such as web-based data access. Services shall not include any non-centralized diagnostic services performed by any Clinical Research Unit as part of routine safety patient monitoring. However, notwithstanding the limitation contained in the immediately preceding sentence, in all cases, without limitation, Thorough QT/QTc electrocardiology trials (TQT as defined by FDA ICH E14 Guidance) and intensive as well as routine electrocardiogram trials will be included in Services.

	1.31		“Study” shall mean any clinical trial or study, as expanded, contracted or otherwise modified from time to time.
	1.32		“Subcontracting Agreement” shall have the meaning specified in Section 3.3.
	1.33		“Term” shall have the meaning specified in Section 8.
	1.34		“$” shall mean United States dollars.
	1.35		“Work Order” shall have the meaning specified in Section 3.3.

2.

Marketing of Services .

2.1

Marketing of eRT Services .

	2.1.1		During the Term, Covance agrees, and shall cause its Affiliates, to (i) use eRT for all Services provided or otherwise used by Covance and any of its Affiliates and (ii) recommend eRT as the exclusive provider of Services to Customers, and market, and cooperate with eRT in the marketing of, eRT’s Services to Customers, as described in the Implementation Plan.
	2.1.2		Covance’s and its Affiliates’ marketing obligations pursuant to Section 2.1.1 shall not apply (i) to any Study for any Customer in which case such Customer has informed Covance that such Customer will not use eRT to provide Services for such Study (and, in such case, Covance shall provide to eRT (a) notice that any Customer has so informed Covance, which notice shall identify the Customer, the Study and the reason why the Customer stated it will not work with eRT, to the extent of information available to the Covance Relationship Manager, unless and only to the extent that disclosure of the foregoing information is prohibited by provisions of a written confidentiality agreement to which Covance is bound and was entered into before the time such Customer so informs Covance, and (b) any Customer feedback regarding such Customer’s decision to the extent information regarding such feedback is available to the Covance Relationship Manager), or (ii) following any Potential Termination Event.

2.2

Exclusivity .

	2.2.1		Covance agrees that during the Term, neither Covance nor any Affiliate of Covance shall perform any Services, or recommend to any Customer any Person, other than eRT, as a provider of Services, except (i) with the prior written consent of eRT, (ii) following any Potential Termination Event, or (iii) under circumstances in which, pursuant to the provisions of Section 2.1.2, Covance’s and its Affiliates’ marketing obligations under Section 2.1.1 do not apply.
	2.2.2		Nothing contained in this Agreement shall prevent Covance (or any Affiliate thereof) from (i) owning up to five percent (5%) of the outstanding voting stock of a publicly traded corporation or (ii) subject to the provisions of the side letter of even date herewith between eRT and Covance, acquiring any Person whose principal line of business is not the provision of the Services.

2.3

Covenants of Covance . During the Term, Covance shall:

	2.3.1		Appoint the Covance Relationship Manager, who shall be an employee of Covance with qualifications sufficient to meet the existing needs of the position as Covance may deem appropriate in its reasonable discretion, as relationship manager responsible for managing Covance’s relationship with eRT under this Agreement and facilitating the completion of tasks set forth in the Implementation Plan.
	2.3.2		Appoint the Covance Sales Manager, who shall be (i) a full-time, fully dedicated employee of Covance, (ii) knowledgeable in the sale of the Services and other cardiac safety services and (iii) suitable, in the reasonable discretion of Covance, for interaction with (a) other employees of Covance and its Affiliates responsible, directly and indirectly, for the performance by Covance of its obligations under this Agreement and (b) Customers in a manner expected, in the reasonable discretion of Covance, to enable the Covance Sales Manager to promote successfully to such employees and Customers the availability and value proposition for Services able to be provided by eRT. eRT shall pay to Covance a sum equal to fifty percent (50%) of the salary and benefits paid to such Covance Sales Manager which salary shall be mutually agreed upon annually by Covance and eRT. Such payment shall be made on a quarterly basis and shall be remitted by eRT within thirty (30) days after the end of each calendar quarter.
	2.3.3		Comply with and perform in all material respects Covance’s obligations set forth in the Implementation Plan.
	2.3.4		Cause the attendance at meetings either in-person or via teleconference with eRT’s chief executive officer and/or chief financial officer and the eRT Relationship Manager of at least three of the following individuals: (i) the president of late-stage development of Covance, (ii) the senior financial officer responsible for the late-stage development unit of Covance, (iii) the senior executive responsible for the Phase I unit (or, in case of any individual identified by clause (i), (ii) or (iii) of this Section 2.3.4, any other senior executive of Covance with similar responsibilities), (iv) the Covance Relationship Manager and (v) the Covance Sales Manager. Covance and eRT acknowledge that they shall make good faith reasonable efforts to (i) hold such meetings once during each calendar quarter during the Term, and shall be of sufficient duration and (ii) prepare adequately to enable productive discussion at such meetings of matters incident to the performance by the Parties of their respective obligations under this Agreement.

2.4

Covenants of eRT . During the Term, eRT shall:

	2.4.1		Appoint the eRT Relationship Manager, who shall be an employee of eRT with qualifications sufficient to meet the existing needs of the position as eRT may deem appropriate in its reasonable discretion, as relationship manager responsible for managing eRT’s relationship with Covance under this Agreement and facilitating the completion of tasks set forth in the Implementation Plan.
	2.4.2		Respond promptly to any request for proposal or other communication from Covance pursuant to this Agreement or the Implementation Plan;
	2.4.3		Keep proper books and records sufficient to demonstrate the basis for the calculation of amounts payable to Covance hereunder, and permit representatives of Covance, upon reasonable prior notice during normal business hours, to visit its facilities and any pending projects, examine and make copies of books and records and to discuss the information contained therein (or such other information as may be relevant to the calculation of amounts payable to Covance hereunder) with eRT’s officers and employees;

	2.4.4		Permit representatives of Covance or its Affiliates, upon reasonable prior notice during normal business hours, to have access to and inspect eRT’s facilities, to inspect, audit and make extracts from its books, records and files, and to meet with eRT officers, employees and representatives for the purpose of conducting quality assurance audits, including with respect to (i) the provision of the Services, (ii) compliance with regulations of any Governmental Authority and (iii) satisfaction of eRT’s other obligations under this Agreement;
	2.4.5		In the event that corrective action is required to address any issues identified by Covance or its Affiliates in connection with any audit pursuant to Section 2.4.4, eRT will respond promptly, but no longer than fifteen (15) business days following notification of such issues, with a plan reasonably calculated to provide such corrective action, and will implement such plan on a reasonable timetable as set forth therein;
	2.4.6		Notify Covance promptly of any material complaints received from Customers for which eRT is providing Services related to the provision of Services to such Customers;
	2.4.7		Inform the Covance Relationship Manager (or any other Covance employee appointed by Covance to receive such information) of any new Services offered by eRT from time to time, in order that Covance may inform those of its representatives dealing with Customers that such Services are available;
	2.4.8		Notify Covance promptly and, in any event, within seven (7) business days of the occurrence of any event, notice or condition which would i