Nutter McClennen & Fish LLP World Trade Center West 155 Seaport Boulevard Boston, Massachusetts Telephone Contract Issues for Biotech Attorneys Massachusetts Biotechnology Council March 12, 2009

Nutter McClennen & Fish LLP Overview Pre-Agreement Documents Overlooked Provisions Odds and Ends Discussion

Nutter McClennen & Fish LLP 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 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 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 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 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 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 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 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 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 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 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? ? Business objectives

Nutter McClennen & Fish LLP Resources Association of American Medical Colleges January 2004 publication “Clinical Trial Contracts” – Onecle – Sample contracts Model Agreement Group Initiative (“MAGI”) -

Nutter McClennen & Fish LLP Questions Maria D. Buckley Nutter, McClennen & Fish, LLP Thank you.