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Contract Issues for Biotech Attorneys

Contract Issues for Biotech Attorneys. Massachusetts Biotechnology Council March 12, 2009. Overview. Pre-Agreement Documents Overlooked Provisions Odds and Ends Discussion. Pre-Agreement Documents.

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Contract Issues for Biotech Attorneys

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  1. Contract Issues for Biotech Attorneys Massachusetts Biotechnology Council March 12, 2009

  2. Overview • Pre-Agreement Documents • Overlooked Provisions • Odds and Ends • Discussion Nutter McClennen & Fish LLP • www.nutter.com

  3. Pre-Agreement Documents • Letter of Agreement, Letter of Intent, Memorandum of Understanding, Non-Disclosure Agreements, Term Sheets • When to use • How long to negotiate • Appropriate provisions • Inappropriate provisions Nutter McClennen & Fish LLP • www.nutter.com

  4. Non- Disclosure Agreements • Should be mutual, and include data released to specific third parties • Don’t give anything beforehand, but if you do, capture it • Marking/reducing to writing requirements • Term • Venue for enforcement and legal fees Nutter McClennen & Fish LLP • www.nutter.com

  5. LOI, LOA, MOU, Term Sheets • What are you trying to accomplish – • A proposal? • A memorialization of parties’ discussions so far? • Roadmap for further discussions? • Binding agreement to begin work prior to definitive, executed agreement? Nutter McClennen & Fish LLP • www.nutter.com

  6. Pre-Agreement Documents • Should not take forever to negotiate • Negotiations can give you a preview of what negotiating the definitive agreement may be like, and may also help you hone in on what’s important to the parties • Be clear if you have agreed to something in an LOA that you absolutely would not agree to in the definitive agreement Nutter McClennen & Fish LLP • www.nutter.com

  7. Appropriate Provisions in Pre-Agreement Documents • What happens if the parties do not move forward with a definitive agreement • Termination and effect of termination provisions • Credit for advance payments • Confidentiality • Non-solicitation Nutter McClennen & Fish LLP • www.nutter.com

  8. Inappropriate Provisions in Pre-Agreement Documents • Indemnification • Elaborate IP provisions (but you might need some, e.g., tech transfer) • Forfeit of payments made Nutter McClennen & Fish LLP • www.nutter.com

  9. Term, Termination and the Effects of Termination • How do I get out of this Agreement? • When can I get out of this Agreement? • What happens upon notice of termination – wind down, financial reconciliation, return of materials and confidential information, tech transfer, replacement services, etc. • How do they get out of the Agreement? • What provisions survive termination? Nutter McClennen & Fish LLP • www.nutter.com

  10. Data Security • Do they have access to your systems? • What is their data security policy? Whose policy applies? • Minimum requirements, e.g., encryption • What about their contractors? • Data storage Nutter McClennen & Fish LLP • www.nutter.com

  11. Sometimes Forgotten Provisions • Returned of loaned items/equipment • Exclusion/debarment/disqualification • Assignment • Warranties – disclaim, disclaim, disclaim • Read the Agreement from back to front Nutter McClennen & Fish LLP • www.nutter.com

  12. Odds and Ends • Performance Guarantees, Letter of Credit, Due Diligence – Is this vendor, partner financially sound? • Letter of Assurance for Homeland Security compliance • Be careful about setting yourself up for breach and/or indemnification liability with reps and warranties– “to the best of Company ’s knowledge and using commercial best efforts” • Compliance with foreign laws Nutter McClennen & Fish LLP • www.nutter.com

  13. Negotiating Terms with the 800lb Gorilla • At a minimum know what you are agreeing to • Doesn’t hurt to ask • Mark it up • Can we talk? Email? • Business objectives Nutter McClennen & Fish LLP • www.nutter.com

  14. Resources • Association of American Medical Colleges January 2004 publication “Clinical Trial Contracts” – www.aamc.org • Onecle – Sample contracts http://contracts.onecle.com/ • Model Agreement Group Initiative (“MAGI”) - http://www.magiworld.org/documents/ Nutter McClennen & Fish LLP • www.nutter.com

  15. Questions • Maria D. Buckley • Nutter, McClennen & Fish, LLP617-439-2709mbuckley@nutter.com • Thank you. Nutter McClennen & Fish LLP • www.nutter.com

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