EX-10.7 8 file008.htm HARTE EMPLOYMENT AGREEMENT


                                                                    EXHIBIT 10.7

                             [eTRIALS LOGO OMITTED]

                              EMPLOYMENT AGREEMENT
                              --------------------


This EMPLOYMENT AGREEMENT (the "Agreement") is entered into by and between
etrials Worldwide, Inc., a Delaware corporation that from and after the
Effective Time shall have a principal place of business at 4000 Aerial Center
Parkway, Suite 100, Morrisville, NC 27560 (the "COMPANY"), and Michael Harte,
(the "EXECUTIVE"). This Agreement is entered into on August 22, 2005, but shall
be effective solely upon the Closing of the Merger pursuant to that certain
Merger Agreement by and among the COMPANY, CEA Acquisition Corporation, etrials
Acquisition, Inc., and certain stockholders of ETRIALS dated of even date
herewith (the "Merger Agreement"). Capitalized terms not otherwise defined
herein shall have the meanings assigned to them in the Merger Agreement.

1. EMPLOYMENT.
--------------

The COMPANY hereby employs the EXECUTIVE, and the EXECUTIVE hereby agrees to
accept employment from the COMPANY as its Senior Vice President of Strategic
Accounts. The EXECUTIVE will report to the Chief Executive Officer of the
COMPANY, and he agrees during the term of his employment under this Agreement to
perform the duties and responsibilities of such position as may be assigned him
from time to time by the Chief Executive Officer. The EXECUTIVE shall perform
his duties in a manner that is consistent with the requirements of the Delaware
General Corporation Law and the policies of the COMPANY. The EXECUTIVE further
agrees to use his best efforts to promote the interests of the COMPANY and to
devote his full


                                       1



business time and energies to the business and affairs of the COMPANY. The
EXECUTIVE may, however, engage in civic and not-for-profit activities for which
no compensation (other than reimbursement of his actual expenses incurred in
performance of such activities) is paid to him, so long as such activities do
not materially interfere with the performance of his duties to the COMPANY
hereunder.

2. TERM OF EMPLOYMENT.
----------------------

The employment under this Agreement shall commence on the Closing Date and shall
continue for a period of two (2) years thereafter, unless earlier terminated
pursuant to the provisions of this Agreement; and it shall be renewed for
successive periods of one (1) year unless either party shall give notice of
non-renewal, within sixty (60) days of the expiration of the initial two-year
term or any such one-year renewal term.

3. COMPENSATION.
----------------

         (a) BASE SALARY. As compensation for services provided to the COMPANY,
         the EXECUTIVE shall receive a salary at the annual rate of one hundred
         sixty thousand dollars ($160,000), (the "Base Salary") to be paid as
         and when other employees of the COMPANY are paid, less such payroll and
         withholding taxes as required by law to be deducted and such other
         deductions as the EXECUTIVE shall authorize in writing. The Base Salary
         shall be pro-rated for any partial month at either the commencement or
         termination of the employment. Such Base Salary shall be reviewed, and
         any increases in the amount thereof shall be determined, by the Board
         of Directors in its sole discretion at the end of each twelve-month
         period of employment during the term hereof. There shall be no decrease
         in the amount of the Base Salary below the amount stated above.

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         (b) COMMISSION. The EXECUTIVE shall be eligible for a sales commission
         payments, based upon factors and terms to be determined, in writing, by
         the COMPANY's Chief Executive Officer on an annual basis, with the
         approval of the COMPANY's Board of Directors.

         (c) PAYMENT. Notwithstanding anything in this Agreement to the
         contrary, the parties shall use commercially reasonable efforts to make
         all payments made pursuant to this Agreement at such times as shall not
         result in additional taxation to the EXECUTIVE pursuant to the
         provisions of Section 409A of the Internal Revenue Code of 1986, as
         amended.

4. PARTICIPATION IN BENEFIT PLANS, REIMBURSEMENT OF BUSINESS EXPENSES.
----------------------------------------------------------------------

         (a) BENEFIT PLANS. During the term of this Agreement, the EXECUTIVE
         shall be provided with medical insurance, life and disability
         insurance, vacation benefits (four (4) weeks), sick leave benefits,
         holidays, car allowance of seven hundred fifty dollars ($750) per month
         and other benefits which are not less than, and on terms no less
         favorable than, those that the COMPANY provides generally to its other
         executive employees, if any. EXECUTIVE (and any dependents) must meet
         the eligibility requirements of any such plans as a condition to his
         (and their) participation.

         (b) REIMBURSEMENT OF BUSINESS EXPENSES. During the term of this
         Agreement, the COMPANY shall reimburse the EXECUTIVE promptly for all
         reasonable expenditures fees incurred by the EXECUTIVE in the course of
         performing services pursuant to this Agreement, which expenses may
         include, but are not limited to, travel (but excluding expenses arising
         in connection with the use of EXECUTIVE's personal automotive vehicles,
         which are intended to be covered by the allowance referred to in
         paragraph (a), above), entertainment, meetings, parking, publications,
         association dues, and conference, provided

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         that the EXECUTIVE provides proper evidence of such expenses and
         submits his requests for reimbursement in accordance with the policies
         and procedures of the COMPANY then in effect.

5. TERMINATION OF EMPLOYMENT.
-----------------------------

The EXECUTIVE'S employment hereunder may be terminated only as follows:

         (a) WITHOUT CAUSE BY THE COMPANY. The COMPANY may terminate the
         EXECUTIVE'S employment hereunder without Cause (as defined in paragraph
         (b), below), only upon action by the COMPANY's Board of Directors, and
         upon not less than ten (10) days' prior written notice to the
         EXECUTIVE.

         (b) FOR CAUSE, BY THE COMPANY. The COMPANY (which for purposes of this
         paragraph (b) shall include ETRIALS) may terminate the EXECUTIVE'S
         employment hereunder for Cause immediately and with prompt notice to
         the EXECUTIVE, which Cause shall be determined in good faith solely by
         the COMPANY's Board of Directors, after providing the EXECUTIVE with
         written notice and an opportunity to be heard. "Cause" for termination
         shall include the following conduct of the EXECUTIVE:

                  (i) Material breach of this Agreement by the EXECUTIVE, which
                  breach shall not have been cured by the EXECUTIVE within
                  thirty (30) days of receipt of written notice of said breach;

                  (ii) Willful misconduct as an employee of the COMPANY that
                  results in material economic detriment to the COMPANY,
                  including but not limited to: intentionally misappropriating
                  any funds or property of the COMPANY; attempting to willfully
                  obtain any personal profit from any transaction in which the
                  EXECUTIVE has an interest with is adverse to the interests of
                  the COMPANY; or any other act or omission which substantially
                  impairs the COMPANY'S ability to conduct its business in its
                  usual manner;

                  (iii) Neglect or unreasonable refusal to perform the material
                  duties and responsibilities assigned to the EXECUTIVE by the
                  Board of Directors or pursuant to this Agreement after written
                  warning from the COMPANY specifying the duties or
                  responsibilities which the EXECUTIVE has failed to perform;


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                  (iv) Actions by the EXECUTIVE which expose the COMPANY to
                  substantial liability such, including, without limitation,
                  discrimination or sexual harassment;

                  (v) Violations of any written policy of the COMPANY, including
                  its insider trading policy and ethics policy, if the EXECUTIVE
                  knows or should know the action or omission of EXECUTIVE which
                  constitutes a violation of these policies;

                  (vi) Violation of, by the EXECUTIVE, or causing the COMPANY to
                  violate, any securities laws, rules or regulations or
                  violation of any whistleblower protection policy of the
                  COMPANY or applicable law;

                  (vii) Any attempt to mislead, or unduly influence, whether or
                  not successful, the independent auditors of the COMPANY, if
                  the Board of Directors determines the action or omission was
                  intentional;

                  (viii) Failure to maintain internal financial processes,
                  systems and controls consistent with the recommendations of
                  the independent auditors, the members of the Audit Committee
                  or the Board of Directors or applicable law, rules or
                  regulations;

                  (ix) Any failure to disclose a material fact about the COMPANY
                  to the Board of Directors, if the Board of Directors
                  determines the failure was intentional;

                  (x) Causing the COMPANY to take any action which would cause
                  EXECUTIVE to earn any bonus, if the Board of Directors
                  determines the action was taken in bad faith; and

                  (xi) Conviction of a felony.

         (c) FOR GOOD REASON BY THE EXECUTIVE. The EXECUTIVE may terminate
         employment hereunder for Good Reason immediately and with prompt notice
         to the COMPANY, subject to Section 11 of this Agreement. "Good Reason"
         for termination by the EXECUTIVE shall be limited to the following
         conduct of the COMPANY:

                  (i) Material breach of any provision of this Agreement by the
                  COMPANY, which breach shall not have been cured by the COMPANY
                  within thirty (30) days of receipt of written notice of said
                  breach; and

                  (ii) The assignment to the EXECUTIVE of duties inconsistent
                  with the EXECUTIVE'S position, authority, duties or
                  responsibilities as contemplated by Section 1 of the
                  Agreement, or any other action by the COMPANY which results in
                  a material diminution of such position, authority, duties or
                  responsibilities, or which materially impair the EXECUTIVE'S
                  ability to function, excluding for this purpose

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                  any isolated action not taken in bad faith and which is
                  promptly remedied by the COMPANY after receipt of written
                  notice thereof given by the EXECUTIVE. Notwithstanding the
                  foregoing, suspension of the EXECUTIVE while the Board of
                  Directors conducts any investigation into the conduct of the
                  EXECUTIVE or the removal of authority or responsibility of the
                  EXECUTIVE over any matter or person or any action to avoid or
                  decrease liability exposure, taken on advice of legal counsel
                  to the COMPANY shall not constitute Good Reason.

         (d) DEATH. The period of employment of the EXECUTIVE hereunder shall
         terminate automatically in the event of his death.

         (e) DISABILITY. In the event that the EXECUTIVE shall be unable to
         perform the duties hereunder for a period of one hundred eighty (180)
         consecutive days by reason of disability as a result of illness,
         accident or other physical or mental incapacity or disability, the
         COMPANY may, in its discretion, by giving written notice to the
         EXECUTIVE, terminate the EXECUTIVE'S employment hereunder as long as
         the EXECUTIVE is still disabled on the effective date of such
         termination.

6. COMPENSATION IN THE EVENT OF TERMINATION.
--------------------------------------------

In the event that the EXECUTIVE'S employment pursuant to this Agreement
terminates prior to the end of the Term of this Agreement for a reason provided
in Section 5 hereof, or in the event the Term is not renewed pursuant to Section
2 hereto, the COMPANY shall pay the EXECUTIVE compensation as set forth below:

         (a) TERMINATION BY THE EXECUTIVE FOR GOOD REASON OR BY THE COMPANY
         WITHOUT CAUSE. In the event that the EXECUTIVE'S employment hereunder
         is terminated (i) by the COMPANY without Cause, (ii) by the EXECUTIVE
         for Good Reason, (iii) by the EXECUTIVE refusing to renew this
         Agreement for Good Reason, or (iv) by the COMPANY refusing to renew
         this Agreement without Cause, then the COMPANY shall provide the
         EXECUTIVE the following severance benefits (the "Severance Benefits"):

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                  (i) Annual Base Salary and other Compensation as set forth in
                  Section 3 hereof that was earned up until the date of
                  termination, as well as any unreimbursed expenses;

                  (ii) Base Salary at one hundred percent (100%) of the
                  annualized rate in effect on the date of termination, for
                  twelve (12) months after termination of employment (the
                  "Salary Continuation Period") payable as and when employees of
                  the COMPANY are paid in accordance with normal payroll
                  procedures; provided that in the event such termination is as
                  a result of a Change in Control as defined in Section 6(b),
                  below, then the Salary Continuation Period shall be eighteen
                  (18) months.

                  (iii) Any unpaid bonus the Board of Directors previously
                  determined was earned by the EXECUTIVE, unless at the time of
                  such determination the Board of Directors was not aware of
                  facts which it reasonably would have taken into account had
                  such facts been known.

                  (iv) Continuing coverage for the EXECUTIVE and his eligible
                  dependents, under all of the COMPANY'S medical and dental
                  benefit plans, programs and policies in effect as of the date
                  of termination if permitted under the COMPANY'S plans until
                  the earlier of the Salary Continuation Period or the date, or
                  dates, that he becomes eligible for equivalent coverage and
                  benefits under the plans and programs of a subsequent
                  employer, provided that if by the terms of such benefit plans,
                  the EXECUTIVE or his family cannot be covered after
                  termination of employment, the COMPANY shall make reasonable
                  efforts to obtain or pay for equivalent coverage for the
                  EXECUTIVE, provided the EXECUTIVE and his family are insurable
                  and further provided that the COMPANY shall not be required to
                  pay more than $10,000.

                  (vi) Notwithstanding any COMPANY policy to the contrary,
                  payment of up to sixty (60) days of accrued but unused
                  vacation time for the period from the commencement of
                  EXECUTIVE's employment with the COMPANY through the
                  EXECUTIVE'S effective date of termination.

                  (vii) All unvested stock options granted to the EXECUTIVE that
                  are scheduled to vest within a one (1) year period after the
                  termination date shall immediately vest and remain exercisable
                  for a period of one (1) year from the termination date and all
                  other unvested options shall immediately terminate. Any vested
                  options shall be exercisable on a cashless basis for a period
                  of ninety (90) days following the termination date.

                  (viii) The EXECUTIVE shall not be required to mitigate the
                  amount of any payment provided for in this Section 6(a) by
                  seeking employment or otherwise.

         (b) TERMINATION BY THE COMPANY IN EVENT OF A CHANGE IN CONTROL. In the
         event that during the period beginning three (3) months before the
         occurrence of a "Change in Control"

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         (as such term is defined in Section 8 hereof) and ending one (1) year
         after a Change in Control the EXECUTIVE'S employment is terminated: (i)
         by the EXECUTIVE for Good Reason, (ii) by the COMPANY (or its successor
         or acquirer) without Cause, (iii) by expiration of this Agreement due
         to the EXECUTIVE refusing to renew this Agreement for Good Reason, or
         (iv) by expiration of this Agreement due to COMPANY (or its successor
         or acquirer) refusing to renew this Agreement without Cause, then in
         addition to the benefits provided for in Section 6(a) above, and
         notwithstanding any terms to the contrary of applicable agreements
         pursuant to the Performance Equity Plan executed by the COMPANY (or its
         parent company) and the EXECUTIVE, all of the EXECUTIVE'S outstanding
         stock options and restricted stock will immediately become vested and
         exercisable, and any provision of such options which provides for
         termination of the option upon, or within a stated time after
         termination of employment, shall become void and such option shall
         become a nonqualified stock option for tax purposes if it was not
         already a nonqualified option. The options shall remain exercisable for
         a period of one (1) year from the termination date; any such options
         shall be exercisable on a cashless basis for a period of ninety (90)
         days following the termination date.

         (c) TERMINATION DUE TO THE EXECUTIVE'S DEATH, OR BY THE COMPANY UPON
         THE EXECUTIVE'S DISABILITY. In the event of the EXECUTIVE'S death or if
         the COMPANY shall terminate the EXECUTIVE'S employment hereunder for
         disability pursuant to Section 5 (d) hereof, the COMPANY shall pay the
         EXECUTIVE, or his personal representative, as applicable:

                  (i) Annual Base Salary and other compensation as set forth in
                  Section 3 hereof that was earned up until the date of
                  termination, as well as any unreimbursed expenses;

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                  (ii) Base Salary at the annualized rate in effect on the date
                  of termination for a period of three (3) months in the event
                  of termination because of the EXECUTIVE'S death, and the
                  period between the date of termination as a result of the
                  EXECUTIVE'S disability until the effective date of the
                  EXECUTIVE'S eligibility for the benefits pursuant to any
                  applicable long-term disability insurance policy that may be
                  in effect, up to a maximum of six (6) months;

                  (iii) Notwithstanding any COMPANY policy to the contrary,
                  payment of up to sixty (60) days of accrued but unused
                  vacation time for the period from the commencement of
                  EXECUTIVE's employment with the COMPANY through the
                  EXECUTIVE'S effective date of termination.

         (d) TERMINATION BY THE COMPANY FOR CAUSE OR BY THE EXECUTIVE WITHOUT
         GOOD REASON. In the event that the COMPANY shall terminate the
         EXECUTIVE'S employment hereunder for Cause, or the EXECUTIVE shall
         terminate employment hereunder without Good Reason, the COMPANY shall
         pay the EXECUTIVE's Base Salary and other compensation as set forth in
         Section 3 hereof that was earned up until the date of termination, as
         well as any unreimbursed expenses, and accrued but unused vacation
         time, up to the number of days afforded all employees under the
         COMPANY's vacation policy in effect on the date of termination of
         employment.

         (e) LIABILITY RELEASE. The COMPANY may withhold any payment or other
         benefit following termination of employment, unless the EXECUTIVE
         executes and delivers to the COMPANY a written mutual liability release
         for in form and substance reasonably acceptable to the COMPANY and the
         EXECUTIVE.

7. NON-COMPETITION, CONFIDENTIALITY, AND CONFLICTS OF INTEREST.

         (a) CONFIDENTIALITY. The EXECUTIVE acknowledges that as a result of his
         current and prior employment with the COMPANY, (i) EXECUTIVE has
         obtained and will obtain secret and confidential information concerning
         the business of the COMPANY and its subsidiaries and affiliates
         (referred to collectively in this paragraph (a) as the COMPANY),
         including,

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         without limitation, financial information, proprietary rights, trade
         secrets and "know-how," strategic plans and partners, customers and
         sources ("Confidential Information"); (ii) the COMPANY will suffer
         substantial damage which will be difficult to compute if, during the
         period of his employment with the COMPANY or thereafter, the EXECUTIVE
         should enter a business competitive with the COMPANY or divulge
         Confidential Information; and (iii) the provisions of this Section 7
         are reasonable and necessary for the protection of the business of the
         COMPANY. Accordingly, the EXECUTIVE agrees that he will not at any
         time, either during the term of this AGREEMENT or thereafter, divulge
         to any person or entity any CONFIDENTIAL INFORMATION obtained or
         learned by him as a result of his employment with the COMPANY, except:
         (i) in the course of performing his duties hereunder; (ii) with the
         COMPANY's express written consent; (iii) to the extent that any such
         information is in the public domain other than as a result of the
         EXECUTIVE's breach of any of his obligations hereunder; or (iv) where
         required to be disclosed by court order, subpoena or other government
         process. If the EXECUTIVE is required to make a disclosure pursuant to
         the provisions of clause (iv) of the preceding sentence, he shall
         promptly, but in no event more than seventy-two (72) hours after
         learning of such subpoena, notify the COMPANY of such court order,
         subpoena or government process. At the COMPANY's expense, the EXECUTVE
         shall: (i) take all reasonably necessary and lawful steps required by
         the COMPANY to defend against the enforcement of such court order,
         subpoena or other government process; and (ii) permit the COMPANY to
         intervene and participate with counsel of its choice in any proceeding
         relating to the enforcement thereof.

         (b) RESTRICTIVE COVENANT. During the term of this Agreement and for
         twelve (12) months following the later of (i) the termination date of
         the EXECUTIVE'S employment under this

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         Agreement, and (ii) if this Agreement is terminated by the COMPANY for
         Cause, the expiration of the then-current term of this Agreement, the
         EXECUTIVE shall not, without first obtaining the prior written approval
         of the COMPANY, directly or indirectly engage in any activities in
         competition with the COMPANY, or accept employment or establish a
         business relationship with a business engaged in competition with the
         COMPANY, in any geographical area in which the COMPANY, as of the
         termination date, either is conducting or has made known to the
         EXECUTIVE prior to his termination that it has plans to conduct
         business. The EXECUTIVE hereby agrees that the COMPANY'S business,
         which is Internet based, is currently conducted throughout the United
         States and in many countries of the world, notwithstanding that COMPANY
         does not have a physical location in all these places. For these
         purposes, the COMPANY'S business shall be deemed to include (i) the
         business actually conducted by the COMPANY immediately prior to
         termination of employment, and (ii) any business the COMPANY took
         active steps (including, without limitation, business planning, market
         research, or product development efforts) prior to termination of
         employment to conduct after termination of employment. In the event
         that the EXECUTIVE undertakes any such activities without written
         permission from COMPANY, then in addition to any other remedy the
         COMPANY may otherwise have, COMPANY'S obligation to pay EXECUTIVE
         severance compensation under this Agreement shall cease.

         (c) CONFLICTS OF INTEREST. During his employment, the EXECUTIVE agrees
         not to acquire, assume or participate in, directly or indirectly, any
         position or interest known by him to be adverse or antagonistic to the
         COMPANY, its business or prospects. If, after a position or interest is
         acquired or assumed or after participation therein commences, such
         position or interest becomes adverse or antagonistic to the COMPANY,
         the EXECUTIVE shall use

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         reasonable commercial efforts to terminate or dispose of such position
         or interest as promptly as practicable.

         (d) NON-INTERFERENCE. While employed by the COMPANY, and for a period
         of twelve (12) months immediately following the later of (i) the
         termination of his employment under this Agreement, and (ii) if this
         Agreement is terminated by the COMPANY for Cause, the expiration of the
         then-current term of this Agreement, the EXECUTIVE will not interfere
         with the business of the COMPANY by:

                  (i) Soliciting, attempting to solicit, inducing or otherwise
                  causing any employee of the COMPANY to terminate his or her
                  employment; or

                  (ii) Directly or indirectly soliciting the business of any
                  customer or prospective customer of the COMPANY which at the
                  time of termination or one (1) year prior thereto was listed
                  on the COMPANY'S customer list or records, which solicitation,
                  if successful, would result in the loss of business or
                  potential business for the COMPANY so long as the potential
                  business is within the COMPANY'S business or is a logical
                  extension of such business as it exists at the time of the
                  EXECUTIVE'S termination.

         (e) RETURN OF MATERIALS. Upon termination of his employment with the
         COMPANY, the EXECUTIVE shall promptly deliver to the COMPANY all
         memoranda, notes, records, reports, manuals, drawings, blueprints and
         other documents (and all copies thereof) relating to the business of
         the COMPANY and all property associated therewith, which he may then
         possess or have under his control; provided, however, that the
         EXECUTIVE shall be entitled to retain copies of such documents
         reasonably necessary to document his financial relationship with the
         COMPANY.

         (f) SPECIFIC ENFORCEMENT. The EXECUTIVE acknowledges that a remedy at
         law for any breach or threatened breach by him of the provisions of
         this Section 7 would be inadequate to protect the COMPANY against the
         consequences of such breach, and he therefore agrees that (i) the
         COMPANY shall be entitled to injunctive relief in case of any such
         breach or

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         threatened breach without posting any bond and (ii) the EXECUTIVE 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 Section 7. Nothing in this provision
         shall be construed to prevent the EXECUTIVE from continuing to use the
         knowledge and information that he possessed prior to commencing
         employment with the COMPANY or ETRIALS, or any non-Confidential
         Information he acquired during his employment, in any lawful manner
         following termination of his employment hereunder.

8. CHANGE IN CONTROL

The term "Change in Control" as used in the Agreement shall mean the first to
occur, after the Closing Date, of any of the following:

         (a) The effective date or date of consummation of any transaction or
         series of transactions (other than a transaction to which only the
         COMPANY and one or more of its subsidiaries are parties) pursuant to
         which the COMPANY or CEA Acquisition Corporation, the COMPANY's parent
         from and after the Closing ("CEA"):

                  (i) Becomes a subsidiary of another corporation;

                  (ii) Is merged or consolidated with or into another
                  corporation;

                  (iii) Engages in an exchange of shares with another
                  corporation; or

                  (iv) Transfers, sells or otherwise disposes of all or
                  substantially all of its assets to a single purchaser (other
                  than the EXECUTIVE) or a group of purchasers (none of whom is
                  the EXECUTIVE);

         Provided, however, that this Subsection (a) shall not be applicable to
         a transaction or series of transactions in which a majority of the
         capital stock of the other corporation, following such transaction or
         series of transactions, is owned or controlled by the holders of a
         majority

                                      -13-


         of the COMPANY'S or CEA's outstanding capital stock, as applicable,
         immediately before such sale, transfer or disposition; or

         (b) The date upon which any person (other than the EXECUTIVE), group of
         associated persons acting in concert (none of whom is the EXECUTIVE) or
         corporation becomes a direct or indirect beneficial owner of shares of
         stock of the COMPANY or CEA, representing an aggregate of more than
         fifty percent (50%) of the votes then entitled to be cast at an
         election of directors of the COMPANY or CEA; provided, however, that
         this paragraph (b) shall not be applicable to a transaction or series
         of transactions in which the entity acquiring such ownership in excess
         of fifty percent (50%) is a person or entity who is eligible, pursuant
         to Rule 13d-1(b) under the Securities Exchange Act of 1934, as amended,
         to file a statement on Schedule 13G with respect to its beneficial
         ownership of the COMPANY'S or CEA's capital stock, whether or not such
         person or entity shall have filed a Schedule 13G (unless such person or
         entity shall have filed a Schedule 13D with respect to beneficial
         ownership of fifteen percent (15%) or more of the COMPANY'S or CEA's
         capital stock); and provided, further, that the acquisition of shares
         in a bona fide public offering or private placement of securities by an
         investor who is acquiring such shares for passive investment purposes
         only shall not constitute a "Change in Control;" or

         (c) The date upon which the persons who were members of the Board of
         Directors of the COMPANY or CEA immediately after the Closing (the
         "Current Directors") cease to constitute a majority of the Board of
         Directors; provided, however, that any new director whose nomination or
         selection has been approved by the affirmative vote of at least a
         majority of the Current Directors then in office shall also be deemed a
         Current Director.

9. NOTICES.

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For purposes of this Agreement, notices and other communications provided for in
the Agreement shall be in writing (whether or not specifically required
elsewhere in this Agreement to be in writing) and shall be deemed to have been
duly given when delivered or mailed by United States Registered or Certified
Mail, return receipt requested, postage prepaid, addressed as follows:

     If to the EXECUTIVE:       at the address on the signature page

     If to ETRIALS:             etrials Worldwide, Inc.
                                Attn: Chief Financial Officer
                                4000 Aerial Center Parkway
                                Morrisville, NC 27560

or at such other address as any party may have furnished to the other in writing
subsequent to the execution of this Agreement.

10. APPLICABLE LAW.

This Agreement is covered by the laws of the State of North Carolina.

11. SEVERABILITY AND SECTION 7 SURVIVAL.

The provisions of Section 7 of this Agreement shall survive any termination or
expiration of this Agreement whether by the EXECUTIVE for Good Reason or without
Good Reason or by the COMPANY for Cause or without Cause or otherwise. If the
geographic scope of Section 7(b) is determined to be too broad, the geographic
scope shall be modified to be the smaller of (i) the United States, or (ii) such
other geographic location as the court deems reasonable. If any provision of
this Agreement is determined to be invalid or is in any way modified by any
governmental agency, tribunal or court of competent jurisdiction, such
determination shall be considered as relating only to a separate, distinct, and
independent part of this Agreement and shall not affect the validity or
enforceability of any of the remaining provisions of this Agreement.

12. SUCCESSOR RIGHTS AND ASSIGNMENT.

                                      -15-


This Agreement shall bind, inure to the benefit of and be enforceable by the
EXECUTIVE's personal or legal representatives, executors, administrators,
successors, heirs, distributees, and legatees. The rights and obligations of the
COMPANY (including, without limitation, Section 7) under this Agreement may be
assigned by the COMPANY, in which event it shall be binding upon, and inure to
the benefit of, the person(s) or entity to whom it is assigned. The EXECUTIVE
may not assign his duties hereunder and he may not assign any of his rights
hereunder without the written consent of the COMPANY.

13. REPRESENTATIONS OF THE EXECUTIVE.

The EXECUTIVE represents and warrants that his entry into and the performance of
the duties and obligations called for herein do not breach or otherwise violate
any legal obligation of the EXECUTIVE, whether common law, statutory or
contractual.

14.  DISPUTES.

Any disputes related to this Agreement shall be resolved by binding arbitration
to be held in Raleigh, North Carolina under the rules of the American
Arbitration Association that pertain to commercial disputes, provided, however,
that nothing herein shall prevent the COMPANY from seeking and obtaining
remedies in the courts for, or to prevent, any violation of Section 7 by the
EXECUTIVE and for any matter that also constitutes a violation of law. The
decision of the arbitrators shall be final and binding and non-appealable.

15. ENTIRE AGREEMENT, AMENDMENTS; WAIVERS.

This Agreement contains the entire agreement of the parties concerning the
EXECUTIVE'S employment and all promises, representation, understandings,
arrangements and prior agreements on such subject are merged herein and
superseded hereby. The provisions of this Agreement may not be amended,
modified, repealed, waived, extended or discharged except by an agreement in
writing

                                      -16-


signed by the party against whom enforcement of any amendment, modification,
repeal, waiver, extension or discharge is sought. No person acting other than
pursuant to a resolution of the Board of Directors of the COMPANY shall have
authority on behalf of the COMPANY to agree to, amend modify, repeal, waive,
extend or discharge any provision of this Agreement or anything in reference
thereto or to exercise any of the COMPANY'S rights to terminate or fail to
extend this Agreement. Notwithstanding the foregoing, the approval by the
EXECUTIVE shall not be necessary for any amendment or waiver of any provision
which upon advice of legal counsel is inconsistent with any existing or future
law, rule or regulation, including those of stock exchanges and other quotation
services on which the COMPANY'S stock is traded, quoted or listed.





                         [Signatures on following page.]





                                      -17-


IN WITNESS WHEREOF, the EXECUTIVE and the COMPANY have signed this Agreement on
the dates indicated below.


                                          EXECUTIVE:



Dated: August 22, 2005                    s/  Michael Harte
                                          --------------------------------------
                                          Michael Harte
                                          Address:  5573 Geddes Way
                                          Pipersville, Pennsylvania   18947



                                          ETRIALS WORLDWIDE, INC.


Dated: August 22, 2005                  By: s/James W. Clarke, Jr.
                                            ------------------------------------
                                            James W. Clark, Jr.
                                            Vice President and
                                            Chief Financial Officer












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