ASSET PURCHASE AGREEMENT

Exhibit 10.26

ASSET PURCHASE AGREEMENT

This ASSET PURCHASE AGREEMENT (the “ Agreement ”) is dated the 23rd day of June, 2009 and made effective as of the “Effective Date” (as hereinafter defined), by and between eRESEARCHTECHNOLOGY, INC. , a Delaware corporation (the “ Seller ”) and OMNICOMM SYSTEMS, INC. , a Delaware corporation (the “ Buyer ”).

RECITALS

WHEREAS, the Seller is a large enterprise with multiple lines of business, one of which is engaged principally in the business of developing and providing electronic data capture (EDC) solutions to collect, interpret and distribute data for clinical studies (the “ EDC Business ”); and

WHEREAS, the Buyer acknowledges, subject to the express limitations set forth in Section 13.2(a), that the Seller uses and will use other solutions similar to EDC as part of its other lines of business and that these other solutions fall outside of the EDC Business and the Purchased Assets (as defined herein); and

WHEREAS, subject to the terms and conditions set forth herein, the Seller desires to sell to the Buyer, and the Buyer desires to purchase from the Seller, certain assets used in the EDC Business and referred to herein as the “Purchased Assets” (as hereinafter defined) and to enter into other agreements as more specifically set forth herein.

NOW, THEREFORE, in consideration of the premises and the mutual covenants of the parties hereinafter expressed and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto, each intending to be legally bound, agree as follows:

ARTICLE I

RECITALS, EXHIBITS, SCHEDULES

The foregoing recitals are true and correct and, together with the Schedules and Exhibits referred to hereafter, are hereby incorporated into this Agreement by this reference.

ARTICLE II

DEFINITIONS

For purposes of this Agreement, except as otherwise expressly provided or unless the context otherwise requires, the terms defined in this Agreement shall have the meanings assigned to them in this Article as follows:

2.1 “ Acceptable Confidentiality Agreement ” shall have the meaning set forth in Section 8.8(a).

 

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2.2 “ Affiliate ” means, with respect to a Person, any other Person directly or indirectly controlling, controlled by, or under common control with, such Person at any time during the period for which the determination of affiliation is being made. For purposes of this definition, the term “ control ” means, with respect to any Person, the possession, directly or indirectly, of the power to direct or cause the direction of management policies of such Person, whether through the ownership of voting securities, by contract or otherwise.

2.3 “ Applicable Employees ” means all employees of the Seller that work exclusively with respect to the Seller’s EDC Business as of the Effective Date and set forth on Schedule 2.3 hereto.

2.4 “ Assumed Contracts ” means those Contracts of Seller included within the Purchased Assets and specifically set forth in Schedule 2.4 hereof.

2.5 “ Assumed Liabilities ” means only those Obligations of the Seller expressly identified on Schedule 2.5 hereof.

2.6 “ Break-Up Fee ” shall have the meaning set forth in Section 12.2(c).

2.7 “ Buyer Balance Sheets ” shall mean the interim consolidated balance sheets of the Buyer set forth in Buyer’s Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2009.

2.8 “ Buyer Financial Statements ” shall have the meaning set forth in Section 7.6.

2.9 “ Buyer Indemnified Parties ” shall have the meaning set forth in Section 15.1.

2.10 “ Buyer SEC Documents ” shall mean all reports, schedules, forms, statements and other documents (including exhibits and all other information incorporated therein) required to be filed by the Buyer under the Securities Act or the Exchange Act.

2.11 “ Buyer Stock ” means 8,100,000 shares of common stock, $0.001 par value per share, of Buyer.

2.12 “ Claims ” means any Proceedings, Judgments, Obligations, threats, losses, damages, deficiencies, settlements, assessments, charges, costs and expenses of any nature or kind.

2.13 “ Closing ” means the consummation of the transactions contemplated by this Agreement.

2.14 “ Closing Date ” means the date of the Closing.

2.15 “ Confidentiality Agreement ” means that certain Confidentiality Agreement dated April 15, 2009 between Seller and Buyer.

2.16 “ Consent ” means any consent, approval, order or authorization of, or any declaration, filing or registration with, or any application or report to, or any waiver by, or any other action (whether similar or dissimilar to any of the foregoing) of, by or with, any Person, which is necessary in order to take a specified action or actions, in a specified manner and/or to achieve a specific result.

 

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2.17 “ Contract ” means any written contract, agreement, order or commitment of any nature whatsoever, including, any sales order, purchase order, lease, sublease, license agreement, services agreement, loan agreement, mortgage, security agreement, guarantee, management contract, employment agreement, consulting agreement, partnership agreement, buy-sell agreement, option, warrant, subscription, call or put.

2.18 “ Copyrights ” shall have the meaning set forth in Section 6.11(a)(i).

2.19 “ Customers ” shall have the meaning set forth in Section 6.12(a).

2.20 “ Data ” shall have the meaning set forth in Section 6.11(o).

2.21 “ EDC Business ” shall have the meaning set forth in the Recitals.

2.22 “ Effective Date ” means the date upon which this Agreement becomes fully executed by Buyer and Seller.

2.23 “ Encumbrance ” means any lien, security interest, pledge, mortgage, easement, leasehold, assessment, covenant, restriction, reservation, conditional sale, prior assignment, or any other encumbrance, claim, burden or charge of any nature whatsoever.

2.24 “ Equipment ” means all equipment, devices, computer hardware and other computer systems used exclusively in connection with Seller’s EDC Business and specifically identified in Schedule 2.24 hereto, including all other documents or items relating to such Equipment and all warranties related thereto.

2.25 “ Exchange Act ” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.

2.26 “ Excluded Liabilities ” shall have the meaning set forth in Section 4.3.

2.27 “ GAAP ” means generally accepted accounting principles, methods and practices set forth in the opinions and pronouncements of the Accounting Principles Board and the American Institute of Certified Public Accountants, and statements and pronouncements of the Financial Accounting Standards Board, the SEC or of such other Person as may be approved by a significant segment of the U.S. accounting profession, in each case as of the date or period at issue, and as applied in the U.S. to U.S. companies.

2.28 “ Governmental Authority ” means any foreign, federal, state or local government, or any political subdivision thereof, or any court, agency or other body, organization or group exercising any executive, legislative, judicial, quasi-judicial, regulatory or administrative function of government.

2.29 “ Indemnitee ” shall have the meaning set forth in Section 15.6(a).

2.30 “ Indemnitor ” shall have the meaning set forth in Section 15.6(b).

2.31 “ Inspected Party ” shall have the meaning set forth in Section 17.2.

2.32 “ Intellectual Property ” shall have the meaning set forth in Section 6.11.

2.33 “ Judgment ” means any order, writ, injunction, fine, citation, award, decree, or any other judgment of any nature whatsoever of any Governmental Authority.

 

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2.34 “ Law ” means any provision of any law, statute, ordinance, code, constitution, charter, treaty, rule or regulation of any Governmental Authority.

2.35 “ Lock-Up Agreement ” shall have the meaning set forth in Section 16.5.

2.36 “ Major Suppliers ” shall have the meaning set forth in Section 6.12(b).

2.37 “ Marks ” shall have the meaning set forth in Section 6.11(b)(i).

2.38 “ Notice Period ” shall have the meaning set forth in Section 8.8(d)(i).

2.39 “ Obligation ” means any debt, liability or obligation of any nature whatsoever, whether secured, unsecured, recourse, nonrecourse, liquidated, unliquidated, accrued, absolute, fixed, contingent, ascertained, unascertained, known, unknown or obligations under executory Contracts.

2.40 “ Ordinary Course of Business ” means the ordinary course of business consistent with past custom and practice (including with respect to quantity, quality and frequency).

2.41 “ Patents ” shall have the meaning set forth in Section 6.11(b)(ii).

2.42 “ Permit ” means any license, permit, approval, waiver, order, authorization, right or privilege of any nature whatsoever, granted, issued, approved or allowed by any Governmental Authority.

2.43 “ Permitted Encumbrances ” means minor imperfections of title, none of which, individually or in the aggregate, detract from the value of the affected assets or properties, or impairs the use of the affected assets or properties or liens for taxes that are not yet due or payable.

2.44 “ Person ” means any individual, sole proprietorship, joint venture, partnership, company, corporation, association, cooperation, trust, estate, Governmental Authority, or any other entity of any nature whatsoever.

2.45 “ Prevailing Party ” shall have the meaning set forth in Section 18.13.

2.46 “ Proceeding ” means any demand, claim, suit, action, litigation, investigation, study, arbitration, administrative hearing, or any other proceeding of any nature whatsoever.

2.47 “ Products ” shall have the meaning set forth in Section 6.11(a)(iii).

2.48 “ Public Software ” shall have the meaning set forth in Section 6.11(h)(iv).

2.49 “ Purchased Assets ” means all right, title and interest of Seller in and to: (i) the Equipment; (ii) the Products specifically set forth on Schedule 6.11(h) and the Intellectual Property related to such Products; (iii) the Assumed Contracts, including any accounts receivable under such Assumed Contracts unpaid as of Closing, whether or not invoiced by Seller as of the Closing Date, but applicable to services to be rendered or performed on or after the Closing Date; (iv) all Claims that Seller may have against any Person relating to or arising out of any Purchased Assets, including rights to recover damages, settlements, rights to refunds, Claims of infringement or past infringement of any Intellectual Property rights and royalty or similar rights

 

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related to any Intellectual Property; (v) $1,150,000 in cash; (vi) the prepaid software licenses and prepaid software maintenance listed on Schedule 6.11(h)(ix) ; (vii) other assets that are owned by Seller and used by Seller in the EDC Business specifically identified in Schedule 2.49 hereto; and (viii) all goodwill of the Seller’s EDC Business associated with the foregoing enumerated Purchased Assets; provided, that, for the avoidance of doubt, any accounts receivables pertaining to the EDC Business or any Assumed Contract applicable to services rendered or performed by Seller before the Closing Date shall not be included in the Purchased Assets and shall be remain by the sole property of Seller.

2.50 “ Purchase Price ” means the Buyer Stock.

2.51 “ Purchase Transaction ” shall have the meaning set forth in Section 8.8(b).

2.52 “ Restrictive Covenants ” shall have the meaning set forth in Section 13.2(b).

2.53 “ SEC ” shall mean the Securities and Exchange Commission.

2.54 “ Securities Act ” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.

2.55 “ Seller Employer Liabilities ” shall mean any Obligations or other claims, liabilities, costs, expenses or compensation that exist, that arise by reason of, or that are in any way connected with or based on: (i) an employee’s employment relationship with Seller and/or the termination of such relationship, including any Contract of employment with any employee of Seller; (ii) violations of any Law as applied to employees of Seller, including Title VII of the Civil Rights Act of 1964 and/or the Civil Rights Act of 1991 and/or 42 U.S.C. §1981, the Age Discrimination in Employment Act of 1967, the Age Discrimination Claims Assistance Act of 1988 and/or the Older Workers’ Benefit Protection Act, any federal, state or local handicap or disability discrimination Laws, including the Rehabilitation Act of 1973 and the Americans with Disabilities Act, the Worker Adjustment and Retraining Notification Act, in each case as amended from time to time, and in each case to include any required notices to any Governmental Authorities as may be required under such Laws; (iii) interference with and/or breach of contract with employees of Seller; (iv) retaliatory or wrongful discharge of any employee of Seller; (v) intentional or negligent infliction of emotional distress or mental anguish upon employees of Seller; (vi) interference with business relationships, contractual relationships or employment relationships involving employees of Seller and any third party; (vii) breach of duty, fraud, fraudulent inducement to contract, breach of right of privacy, libel, slander, or tortuous conduct of any kind with respect to or involving employees of Seller; (viii) discriminatory or wrongful acts against employees of Seller; (ix) violations of the Employee Retirement Income Security Act of 1974, the Family and Medical Leave Act, or the Fair Labor Standards Act, in each case as amended, with respect to employees of Seller or any Obligations arising under any deferred compensation, incentive compensation, equity compensation plans, “welfare” plans, funds or programs (within the meaning of ERISA), “pension” plans, funds or programs (within the meaning of ERISA), other employee benefit plans, funds, programs, agreements or arrangements, in any case, that are sponsored, maintained or contributed to or required to be contributed to by Seller or with respect to which Seller could have any Obligation for the benefit of any employee or former employee, contractor or former contractor, director, shareholder, or any dependent of such; or (x) violations of the workers’ compensation or unemployment compensation Laws by Seller; provided, however, that “Seller Employer Liabilities” shall not include any such Obligations or other Claims, liabilities, costs, expenses or compensation to the extent any such Obligations or other Claims, liabilities, costs, expenses or compensation first arise during the period from and after the Closing with respect to any such employee employed by Buyer on or after the Closing.

 

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2.56 “ Seller Indemnified Parties ” shall have the meaning set forth in Section 15.2.

2.57 “ Software ” shall have the meaning set forth in Section 6.11(a)(ii).

2.58 “ Superior Proposal ” shall have the meaning set forth in Section 8.8(c).

2.59 “ Tax ” means (i) any foreign, federal, state or local income, profits, gross receipts, franchise, sales, use, occupancy, general property, real property, personal property, intangible property, transfer, fuel, excise, accumulated earnings, personal holding company, unemployment compensation, social security, withholding taxes, payroll taxes, or any other tax of any nature whatsoever, (ii) any foreign, federal, state or local organization fee, qualification fee, annual report fee, filing fee, occupation fee, assessment, rent, or any other fee or charge of any nature whatsoever, or (iii) any deficiency, interest or penalty imposed with respect to any of the foregoing.

2.60 “ Technical Documentation ” means all technical and descriptive materials in all media relating to the acquisition, design, development, use or maintenance of Intellectual Property, including any compilers, tools, libraries, debuggers and higher level or proprietary language.

2.61 “ Third Party Components ” shall have the meaning set forth in Section 6.11(h)(ix).

2.62 “ Transaction Ancillary Documents ” means the Transition Services Agreement, the Lock-Up Agreement and the other agreements and documents executed and delivered by any party at Closing.

2.63 “ Transfer ” shall have the meaning set forth in Section 16.2.

2.64 “ Trade Secrets ” means information of the Seller which (i) derives economic value, actual or potential, from not being generally known to, and not being readily ascertainable by proper means by, other Persons who can obtain economic value from its disclosure or use; and (ii) is the subject of efforts that are reasonable under the circumstances to maintain its secrecy and which is used exclusively in connection with or otherwise exclusively applicable to or affecting the Purchased Assets, without regard to form, including technical or nontechnical data, formulas, patterns, compilations, programs, devices, methods, techniques, drawings, processes, financial data, financial plans, product plans, or a list of actual or potential customers or suppliers which is not commonly known by or available to the public.

2.65 “ Transition Services Agreement ” means that certain Transition Services Agreement between Seller and Buyer to be entered into as of Closing substantially in the form attached hereto as Exhibit “A” .

2.66 “ Use Right ” shall have the meaning set forth in Section 6.11(m).

2.67 “ Virus ” shall have the meaning set forth in Section 6.11(h)(iii).

 

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ARTICLE III

INTERPRETATION

In this Agreement, unless the express context otherwise requires: (i) the words “herein,” “hereof” and “hereunder” and words of similar import refer to this Agreement as a whole and not to any particular provision of this Agreement; (ii) references to the words “Article” or “Section” refer to the respective Articles and Sections of this Agreement, and references to “Exhibit” or “Schedule” refer to the respective Exhibits and Schedules annexed hereto; (iii) references to a “party” mean a party to this Agreement and include references to such party’s permitted successors and permitted assigns; (iv) references to a “third party” mean a Person not a party to this Agreement; (v) the terms “dollars” and “$” means U.S. dollars; (vi) wherever the word “include,” “includes” or “including” is used in this Agreement, it will be deemed to be followed by the words “without limitation.”

ARTICLE IV

PURCHASE AND SALE OF ASSETS

4.1 Purchase and Sale . In exchange for the payment of the Purchase Price, and subject to the terms and conditions hereof, the Seller hereby agrees to sell, transfer, convey and deliver to the Buyer, and the Buyer hereby agrees to purchase from the Seller, on the Closing Date, all of the Purchased Assets, free and clear of all Encumbrances other than Permitted Encumbrances, and the Assumed Liabilities.

4.2 Assumption of Liabilities . Effective as of the Closing Date, the Buyer shall assume the Assumed Liabilities, including those arising on the Closing Date.

4.3 Excluded Liabilities . Notwithstanding anything to the contrary contained in this Agreement, except for the Assumed Liabilities, the Buyer does not and will not assume, nor shall the Buyer be responsible for or in any manner undertake to pay, perform, satisfy or discharge, any Obligations of the Seller, including (collectively, the “ Excluded Liabilities ”):

(a) any Obligation of Seller of any nature or kind that is not specifically enumerated as an Assumed Liability;

(b) any Obligation for the payment of any Tax with respect to the EDC Business arising during any period (whether complete or partial) ending before the Closing Date;

(c) any Obligation resulting from violations of any applicable Law, breach of any Contract, or environmental, health and safety matters or any other actual or alleged failure of Seller to perform, comply with, undertake or abide by any Obligation, in each case to the extent arising out of, or relating to: (i) events that have occurred; (ii) services performed; or (iii) the operation of the Seller’s EDC Business, in each case before the Closing Date;

(d) for time periods before the Closing Date, any Obligations arising out of, or in connection with, Claims that any of the Purchased Assets infringe upon or have misappropriated the rights or interests of any other Person, other than any Claim made by DataSci, LLC, which shall be, as set forth on Schedule 2.5 , included in the Assumed Liabilities; and

(e) any Seller Employer Liabilities that are not Assumed Liabilities, whether or not such Seller Employer Liability arises prior to, on or following the Closing Date.

4.4 Excluded Liabilities Further Defined . The Excluded Liabilities shall include all Proceedings relating to any or all of the matters in the foregoing Section 4.3 and all costs and expenses in connection therewith.

 

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4.5 Closing Date . The Closing shall occur and take place through the use of overnight courier services on the second (2nd) business day following the satisfaction or waiver of all conditions to the obligations of the parties to consummate the transactions contemplated hereby (other than conditions with respect to actions the respective parties will take at the Closing itself) or such other date as Buyer and Seller may mutually determine; provided , however , that the parties shall use their commercially reasonable efforts to cause the Closing Date to occur no later than June 30, 2009.

ARTICLE V

PURCHASE PRICE

5.1 Purchase Price . In exchange for the Purchased Assets, Buyer agrees, subject to the terms, conditions and limitations set forth in this Agreement, to pay to or for the account of Seller, the Purchase Price.

5.2 Payment of Purchase Price . The Purchase Price shall be paid by Buyer to Seller at Closing, by Buyer’s delivery to Seller of the Buyer Stock as more fully set forth in Section 11.2(a) hereof.

ARTICLE VI

REPRESENTATIONS AND WARRANTIES OF THE SELLER

The Seller hereby makes the following representations and warranties to the Buyer, each of which the Seller hereby represents to be true and correct on the date hereof and each of which shall be deemed made again as of the Closing Date and represented by the Seller to be true and correct in all material respects on the Closing Date.

6.1 Organization . Seller is a corporation duly organized, validly existing and in good standing under the Laws of the State of Delaware. Seller has the full corporate power and authority to: (i) enter into and execute this Agreement and the Transaction Ancillary Documents and to perform all of its Obligations hereunder and thereunder; (ii) own, lease, operate and transfer the Purchased Assets and to conduct and carry on the EDC Business to the extent now conducted. Seller is duly qualified to transact business and is in good standing as a foreign corporation in each jurisdiction where the character of its EDC Business or the ownership or use and operation of the Purchased Assets requires such qualification, except where the failure to be in good standing would not reasonably be expected to have a material adverse effect on the EDC Business or the Purchased Assets.

6.2 Authority and Approval of Agreement; Binding Effect . The execution and delivery by Seller of this Agreement and the Transaction Ancillary Documents, and the performance by Seller of all of its Obligations hereunder and thereunder, have been duly and validly authorized and approved by Seller and no other corporate action on the part of Seller is necessary to execute this Agreement and consummate the transactions contemplated herein. This Agreement and each of the Transaction Ancillary Documents have been (or will be as of the Closing Date, as applicable) duly and validly executed by Seller (and the officer executing this Agreement and all such other Transaction Ancillary Documents is duly authorized to act and execute same on behalf of Seller) and constitute the valid and legally binding agreements of Seller, enforceable against Seller in accordance with their respective terms, except as such enforcement may be limited by applicable bankruptcy, insolvency, moratorium or similar Laws affecting the enforcement of creditors rights generally and by general principles of equity.

 

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6.3 No Violations . Neither the execution, delivery nor performance of this Agreement, nor any of the Transaction Ancillary Documents, nor the consummation of the transactions contemplated hereby and thereby by Seller constitutes a violation of, or a default or breach under (either immediately, upon notice, upon lapse of time, or both): (i) the certificate of incorporation, bylaws or any other governing documents of Seller; (ii) any provision of any Contract to which Seller is a party that relates exclusively to the EDC Business or by which any of the Purchased Assets may be bound; (iii) any Judgment; or (iv) any Law, except for violations, defaults or breaches that would not materially and adversely affect the consummation of the transactions contemplated hereby or would not have a material adverse effect on the EDC Business or the Purchased Assets.

6.4 Financial Statements . Attached hereto under Schedule 6.4 are true, correct and complete copies of the schedules of revenues and direct expenses relating to the EDC Business for the fiscal year ended December 31, 2008 and for the three months ended March 31, 2009, which schedules are a good faith reflection of the revenues and direct expenses relating to the EDC Business for the periods set forth therein. The Seller makes no representation that the schedules of revenues and direct expenses set forth in Schedule 6.4 have been prepared in accordance with GAAP.

6.5 Title to Assets . Except as set forth in Schedule 6.5 hereto, Seller is the sole and unconditional owner and has good title to all of the Purchased Assets, free and clear of all Encumbrances or restrictions on the transfer or use of same, other than Permitted Encumbrances. Except for cash, accounts receivable and bank accounts, the Purchased Assets constitute all of the assets and properties that are used exclusively to operate the EDC Business as it is presently conducted by Seller. At Closing, upon tender of the Purchase Price, legal and beneficial ownership of the Purchased Assets will be vested in the Buyer, free and clear of all Encumbrances, other than Permitted Encumbrances and the Assumed Liabilities.

6.6 Assumed Contracts . Set forth in Schedule 2.4 hereto is an accurate and complete list of the Assumed Contracts. An accurate and complete copy of each of the Assumed Contracts has been made available to Buyer. Each of the Assumed Contracts is in full force and effect and is a valid and binding Obligation of the Seller and, to Seller’s knowledge, the other parties thereto in accordance with the terms and conditions thereof, except as would not materially and adversely affect the EDC Business as presently conducted. Except as set forth in 4Schedule 6.6 , there are no outstanding offers, bids, proposals or quotations made by Seller which, if accepted, would create a Contract with Seller that would affect or bind the Purchased Assets. With respect to each Assumed Contract, Seller is not, and to the knowledge of Seller, no other party thereto, is in material default with respect to any term or condition thereof. No event has occurred which, through the passage of time or the giving of notice, or both, would constitute a default under any Assumed Contract by Seller, and to the knowledge of Seller, any other party thereto, or would cause the acceleration or modification of any Obligation of Seller or, to the knowledge of Seller, any other party thereto or the creation of any Encumbrance upon any of the Purchased Assets. Further, Seller has received no written notice of any pending or contemplated termination of any of the Assumed Contracts. Except for the Consents required as set forth in Schedule 6.8 , none of the Assumed Contracts requires consent or waiver for its assignment to and assumption by Buyer.

6.7 Proceedings . Except as set forth in Schedule 6.7 hereto, Seller is not a party to, the subject of, or, to the Seller’s knowledge, threatened with, any Proceeding which could materially and adversely affect the Purchased Assets.

 

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6.8 Consents . Schedule 6.8 hereto lists all Consents required to be obtained by Seller in connection with the execution, delivery and performance by Seller of this Agreement or the Transaction Ancillary Documents and the consummation of the transactions contemplated herein and therein, including any Consent required for the assignment of any of the Assumed Contracts to Buyer.

6.9 Judgments . There are no outstanding Judgments materially and adversely affecting any of the Purchased Assets.

6.10 Compliance with Laws . To the knowledge of the Seller, the Seller is in compliance with all Laws applicable to the Purchased Assets, except where the failure to comply therewith would not have a material adverse effect on the EDC Business or the Purchased Assets.

6.11 Intellectual Property .

(a) Definition of Intellectual Property . The term “ Intellectual Property ” means:

(i) all copyrightable works, all copyrights, and all applications (U.S. and foreign), registrations, and renewals in connection therewith, including, in all cases, the right to sue for past infringement thereof and to collect any past or future royalties or other payments in connection therewith, in each case only to the extent applicable to or otherwise related to Seller’s EDC Business (collectively, “ Copyrights ”);

(ii) all computer software (in both source code and object code) applicable to or otherwise related to Seller’s EDC Business, including: (A) any and all software implementations of algorithms, models and methodologies, whether in source code or object code; (B) databases and compilations, including any and all data and collections of data, whether machine readable or otherwise; (C) descriptions, flow-charts and other work product used to design, plan, organize and develop any of the foregoing; (D) design documentation and procedures for product generation and testing of all computer software and firmware; and (E) rules, algorithms, flowcharts, Trade Secrets, know-how, copyrights, designs, technical processes, works of authorship, Technical Documentation or manuals included in or relating to any of the foregoing (collectively, the “ Software ”);

(iii) all products related to or incorporating any Intellectual Property, including all proposed or unimplemented developments or improvements thereof, and the Trade Secrets, know-how, copyrights, mask works, designs, technical processes, works of authorship and technical data included in or relating to the same in each case only to the extent applicable to or otherwise related to Seller’s EDC Business (“ Products ”); and

(iv) all other know-how, “Proprietary Information” (as defined in the Confidentiality Agreement) of Seller, Trade Secrets, customer and vendor lists, technical information, data, technology, research records, plans, drawings, schematics, compilations, devices, formulas, designs, prototypes, methods, techniques, processes, procedures, programs, or codes, whether tangible or intangible, in each case to the extent applicable to or otherwise related to Seller’s EDC Business.

(b) Exclusion from “Intellectual Property”. Notwithstanding Section 6.11(a) above, Intellectual Property does not include:

(i) Any trademarks, service marks, trade names, corporate names, trade dress, product names, slogans and logos, and corresponding applications (U.S. and foreign), marks, including without limitation ERT, EXPERT, and ERESEARCHTECHNOLOGY, GETTING IT DONE. RIGHT., and rights thereto, of the Seller (collectively, “ Marks ”); and

 

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(ii) Any patents and patent applications (U.S. and foreign), including, without limitation, any foreign counterpart patents, patent applications or utility model claiming priority therefrom, and any continuation, continuation-in-part, divisional, reissue or reexamined patent, and any intellectual property rights thereto (collectively, “ Patents ”).

(c) No Use of Marks or Patents . Seller is not under any obligation to grant any right, license or permission to use any Marks or Patents, and the consummation of the Closing will not grant or create any obligation to grant any right, license or permission to use any such item.

(d) Ownership and Use of Intellectual Property . The Seller owns, or has the right to use pursuant to licenses, sublicenses, agreements, or permissions, all Intellectual Property. The consummation of the transactions contemplated by this Agreement will not result in the loss or impairment of any such Intellectual Property, and, except as set forth on Schedule 6.11(d) , each item of Intellectual Property owned or used by Seller immediately prior to the Closing Date will be owned or available for use by the Buyer on identical terms and conditions immediately subsequent to the Closing Date.

(e) Infringement of Third Party Intellectual Property Rights . Seller has not interfered with, infringed upon, misappropriated, or otherwise come into conflict with any intellectual property rights or interests of third parties and the operation of the Seller’s EDC Business as currently conducted does not , to the Seller’s knowledge, interfere with, infringe upon, misappropriate or otherwise come into conflict with any intellectual property rights or interests of third parties, or constitute unfair competition or trade practices under any Laws. Seller has not received any written notice or other Claim alleging any such interference, infringement, misappropriation, or violation (including any Claim or notice that Seller must license or refrain from using any intellectual property rights or interests of any third party), nor, to the Seller’s knowledge, is there any basis therefor.

(f) Infringement of Seller Intellectual Property Rights . To the Seller’s knowledge, no third party (including any present or former employee, consultant, or shareholder) has interfered with, infringed upon, misappropriated, or otherwise come into conflict with any rights or interests of Seller in and to any Intellectual Property. Seller has made available to Buyer all infringement, misappropriation or similar studies, including opinions of counsel, prepared by or on behalf of Seller with respect to any of the Intellectual Property.

(g) Copyrights .  Schedule 6.11(g) identifies each Copyright that Seller owns, and whether such Copyright has been registered, or whether Seller has applied for registration of any Copyright, with any Governmental Authority. Seller has made available to Buyer correct and complete copies of all such Copyrights, each as amended to date, and has made available to Buyer correct and complete copies of all other written documentation evidencing ownership and prosecution (if applicable) of each Copyright, including all applications, registrations and prosecution materials, if any. With respect to each Copyright required to be identified in Schedule 6.11(g) :

(i) Except as set forth on Schedule 6.11(g)(i) , Seller possesses all right, title, and interest in and to each Copyright, free and clear of any and all Encumbrances, other than Permitted Encumbrances.

 

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(ii) No Proceeding is pending (nor, to the knowledge of the Seller, is any Proceeding threatened) that challenges the legality, validity, enforceability, use, or ownership of each Copyright.

(iii) Each Copyright is not subject to any Judgment, nor, to the Seller’s knowledge, is any such Judgment threatened against any Copyright.

(iv) Except as set forth in Schedule 6.11(g)(iv) attached hereto, Seller is not under any obligation to grant any right, license or permission to use any Copyright, and the consummation of the Closing will not grant or create any Obligation to grant any right, license or permission to use any Copyright.

(v) Seller has not agreed to indemnify any Person from or against any interference, infringement, misappropriation or other violation with respect to any Copyright.

(h) Software and Products .  Schedule 6.11(h) identifies all Software and Products owned by Seller. Seller has made available to Buyer correct and complete copies of all Software and Products, as amended to date, and has made available to Buyer correct and complete copies of all other written documentation evidencing ownership and prosecution (if applicable) of each such items. All Software and Products owned by Seller and used to conduct the Seller’s EDC Business as currently conducted has adequate capability and capacity for the Seller’s EDC Business and performs in conformity with its intended use and purpose and the specifications set forth in its Technical Documentation. With respect to each item of Intellectual Property required to be identified on Schedule 6.11(h) :

(i) Except under the terms of any of the Assumed Contracts, Seller has no Obligation of any kind to provide maintenance or support services with respect to any such item to any third party.

(ii) Seller has not entered into any source code escrow or similar arrangement under which a third party would have the right to obtain the source code for any such item.

(iii) Seller employs commercially reasonable measures to ensure that such item does not contain any viruses. For the purposes of this Agreement, “ virus ” means any computer code intentionally designed to disrupt, disable or harm in any manner the operation of any software or hardware or to allow a third party to have access to the user’s computer or network without such user’s authority.

(iv) Except as set forth on Schedule 6.11(h)(iv) , such item does not contain any “Public Software” (as hereinafter defined). For purposes of this Agreement, “ Public Software ” means any software that contains, includes or incorporates, or is derived in any manner (in whole or in part) from, any software that is distributed as free software, open source software (e.g., Linux) or similar licensing or distribution models, including software licensed or distributed under any of the following licenses or distribution models, or licenses or distribution models similar to any of the following: (A) GNU’s General Public License (GPL) or Lesser/Library GPL (LGPL); (B) the Artistic License (e.g., PERL); (C) the Mozilla Public License; (D) the Netscape Public License; (E) the Sun Community Source License (SCSL); (F) the Sun Industry Standards License (SISL); (G) the BSD License; and (H) the Apache License.

 

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(v) No Proceeding is pending (nor, to the knowledge of the Seller, is any Proceeding threatened) that challenges the legality, validity, enforceability, use, or ownership of any such item.

(vi) The item is not subject to any Judgment, nor, to the Seller’s knowledge, is any such Judgment threatened against any such item.

(vii) Except under the terms of any of the Assumed Contracts, Seller is not under any Obligation to grant any right, license or permission to use any such item, and the consummation of the Closing will not grant or create any Obligation to grant any right, license or permission to use any such item.

(viii) Except under the terms of any of the Assumed Contracts, Seller has not agreed to indemnify any Person from or against any interference, infringement, misappropriation or other violation with respect to any such item.

(ix) Schedule 6.11(h)(ix) sets forth a true, accurate and complete list of all third party software, programming or other components and materials (either embedded or non-embedded) not owned by Seller that are required to use and operate the Software and Products in accordance with their intended purposes and use and in accordance with their Technical Documentation (collectively “ Third Party Components ”). Seller has validly and effectively obtained the right and license to use, copy, modify and distribute the Third Party Components contained in the Software and Products pursuant to a “Use Right” as identified in Section 6.11(m) below. Except as set forth in Schedule 6.11(h)(ix) , the Software and Products do not require any other Third Party Components to be used and operated in accordance with their intended purposes and use and in accordance with their Technical Documentation. Except as set forth in Schedule 6.11(h)(ix) , the Software and the Products do not contain: (A) any other Third Party Components which a third party may claim superior, joint, or common ownership over; or (B) any derivative works not owned in their entirety by Seller.

(i) Agreements With Personnel . All current personnel and all former personnel who have separated from Seller since January 1, 2005, including employees, agents, consultants and contractors, who have contributed to or participated in any manner in the conception, reduction to practice or development of the Intellectual Property on behalf of Seller either: (i) have executed legally binding written “work-for-hire” agreements or other similar arrangements with Seller, in accordance with applicable Law, that have accorded to Seller full, effective, exclusive and original ownership of, and all right, title and interest in and to, all tangible and intangible property rights thereby arising; or (ii) have executed appropriate instruments of assignment in favor of Seller, as assignee, that have conveyed to Seller full, effective and exclusive ownership of all right, title and interest in and to all tangible and intangible property rights arising thereby. True, correct and complete copies of such agreements have been delivered to the Buyer. To the knowledge of Seller, no current personnel and no former personnel who have separated from Seller since January 1, 2005, including employees, agents, consultants and contractors, who have contributed to or participated in any manner in the conception, reduction to practice or development of the Intellectual Property on behalf of Seller has entered into any agreement that restricts or limits in any way the scope or type of work in which the employee, consultant or contractor may be engaged or requires the employee to transfer, assign or disclose information concerning his, her or its work to anyone other than Seller. No Intellectual Property used by Seller to conduct the EDC Business as currently conducted or as contemplated to be conducted is owned by or registered in the name of any employee, consultant or contractor.

 

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(j) Trade Secrets . Seller has taken commercially reasonable precautions to protect the secrecy, confidentiality, and value of its Trade Secrets and all trade secrets disclosed by any third party to the Seller.

(k) Proprietary Legends . Schedule 6.11(k) sets forth the form and placement of the proprietary legends and copyright notices displayed in or on the Software or any Products. To the Seller’s knowledge, in no instance has the eligibility of the Software or any Products for protection under applicable Law been forfeited to the public domain by omission of any required legend, notice or any other action.

(l) Licenses of Intellectual Property by the Sellers . Except under the terms of the Assumed Contracts, Seller has not granted any license, agreement or other permission with respect to its Intellectual Property to any third party.

(m) Licenses of Intellectual Property to the Sellers .  Schedule 6.11(m) identifies each item of Intellectual Property that any third party owns and that Seller uses to conduct the Seller’s EDC Business as it is currently conducted (including any Third Party Components), and Schedule 6.11(m) designates with reasonable detail whether Seller’s right to use such Intellectual Property is under a license, sublicense, or other kind of agreement or permission (collectively, “ Use Right ”) and the pertinent material terms of any such Use Right. The Seller has delivered to Buyer true, correct and complete copies of all such Use Rights, as amended to date. The Seller has not obtained any Use Rights in any Intellectual Property under any oral agreement or understanding. Seller has, pursuant to each Use Right, obtained the full, unrestricted and legal right and license to use, make, have made, copy, publicly display, publicly perform, modify and distribute each item of Intellectual Property owned by a third party pursuant to the Use Right.  Schedule 6.11(m) includes a summary of any license fee, royalty or other payment obligations of the Seller under the applicable Use Right. With respect to each item of Intellectual Property required to be identified in Schedule 6.11(m) :

(i) the Use Right covering the item is legal, valid, binding, enforceable, and in full force and effect;

(ii) the Use Right will continue to be legal, valid, binding, enforceable, and in full force and effect on identical terms following the consummation of the transactions contemplated by this Agreement;

(iii) no party to the Use Right is in breach or default, and no event has occurred which with notice or lapse of time, or both, would constitute a breach or default or permit termination, modification, or acceleration under the Use Right;

(iv) no party to the Use Right has repudiated any provision thereof;

(v) with respect to each Use Right that is a sublicense, to the Seller’s knowledge, the representations and warranties set forth in Section 6.11(m)(i) through (iv) are true and correct with respect to the underlying license; and

(vi) no Proceeding is pending (nor, to the knowledge of the Seller, is any Proceeding threatened) that challenges the legality, validity, enforceability, use, or ownership of any Use Right.

(n) Royalties and other Payment Obligations . Seller is not obligated to make any payments by way of any royalties, fees or otherwise to any owner, licensor or other claimant to any intellectual property rights for the ownership, transfer or use thereof other than as expressly required under any Use Right expressly disclosed on Schedule 6.11(n) .

 

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(o) Data . The data and information used by the Seller in providing products or services to its customers (collectively, the “ Data ”): (i) does not violate the privacy rights of any Person; (ii) to the Seller’s knowledge, does not infringe upon, misappropriate, conflict with or violate the rights of any Person; (iii) was collected and acquired in accordance with all applicable Laws (including the standards set forth in the International Conference on Harmonization and Good Clinical Practices (ICH-GCP), the guidelines of 21 CFR Part 11 - Electronic Records and Electronic Signatures, and the guidelines and standards of the U.S. Food and Drug Administration, including the “Guidance: Computerized Systems Used in Clinical Trial) and any agreements with any other Person; and (iv) when used by the Seller, in the manner in which the Data was used by Seller prior to the date hereof and in its EDC Business as presently conducted, does not violate any applicable Law (including the standards set forth in the International Conference on Harmonization and Good Clinical Practices (ICH-GCP), the guidelines of 21 CFR Part 11 - Electronic Records and Electronic Signatures, and the guidelines and standards of the U.S. Food and Drug Administration, including the “Guidance: Computerized Systems Used in Clinical Trial) or any agreement