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The development services agreement is a contract between the client and the service provider. It outlines all of the responsibilities each party has, including payments for work completed and termination procedures if necessary.
A development services agreement is sometimes called a DSA. It can be tailored to suit individual needs because it's just like any other contract where terms are negotiable depending on their importance. A DSA will include project scope, payment and fees, and what will happen if the project is terminated.
Below is a list of common sections included in Development Services Agreements. These sections are linked to the below sample agreement for you to explore.
Portions of this exhibit marked [*] are requested to be treated confidentially.
MASTER DEVELOPMENT SERVICES AGREEMENT
T HIS M ASTER D EVELOPMENT S ERVICES A GREEMENT (the “Agreement” ) is made and entered into as of , 2010 (the “Effective Date” ) by and between PPD D EVELOPMENT , LP , a Texas limited partnership, with its principal executive offices located at 929 North Front Street, Wilmington, North Carolina 28401 ( “PPD” ), and F URIEX P HARMACEUTICALS , I NC . , a Delaware corporation with its principal executive offices located at 3900 Paramount Parkway, Suite 150, Morrisville, North Carolina 27560 ( “Sponsor” ).
WHEREAS, Sponsor is engaged in the development, manufacture, distribution and sale of pharmaceutical products; and
WHEREAS, PPD is a clinical research organization engaged in the business of managing clinical research programs and providing clinical development and other related services; and
WHEREAS, Subject to the terms and conditions of this Agreement, Sponsor will retain PPD from time to time to perform services in connection with certain programs Sponsor is conducting (individually, a “Project” ), in which case the terms and conditions for each such Project shall be set forth in a written agreement to be attached to this Agreement and incorporated herein by reference (individually, a “Project Addendum” and collectively, the “Project Addenda” ); and
WHEREAS, PPD is willing to provide such services to Sponsor in accordance with the terms and conditions of this Agreement and the attached Project Addenda.
NOW, THEREFORE, for good and valuable consideration contained herein, the exchange, receipt and sufficiency of which are acknowledged, the parties agree as follows:
| 1. | P REFERRED P ROVIDER . |
1.1 PPD shall provide Clinical Development Activities for Sponsor and except as noted in Section 1.2, Sponsor agrees to award all Clinical Development Activities to PPD or a PPD Affiliate. The term “Clinical Development Activities” shall mean and refer to phase I-IV clinical development services, pre-clinical services, post-approval services, program management, general drug development consulting, biostatistics and data management services, medical communications, regulatory consulting, laboratory services, including, but not limited to, analytical, bioanalytical, central laboratory and vaccine testing services, and such other services as Sponsor may from time to time require for drug development.
1.2 Notwithstanding anything to the contrary herein, Sponsor may award Clinical Development Activities to a third party other than PPD or a PPD Affiliate in the following instances:
| 1.2.1 | If after consulting with PPD and reviewing PPD’s experience and capabilities in a certain area Sponsor reasonably and in good faith concludes that PPD does not have the expertise and capabilities to provide part or all of the Clinical Development Activities for a Project in said area, Sponsor may engage a third party to provide such Clinical Development Activities required by the Project which Sponsor has reasonably determined that PPD cannot provide. With respect to Clinical Development Activities relating to phase I studies involving dermatology related compounds, expertise and capabilities shall includes PPD’s prior experience designing and implementing clinical development programs in an indication. |
| 1.2.2 | If PPD is in material breach of its obligations to provide Services under a Project Addendum and does not cure such breach within thirty (30) days after receipt of written notice of such breach from Sponsor (or if the breach cannot reasonably be so cured, diligent efforts to effect such cure are commenced during that period and are continued until the cure is completed within a reasonable time period), Sponsor may terminate all or a portion of the Project Addendum and engage a third party to provide the Services covered under such Project Addendum. |
PPD PROPRIETARY AND CONFIDENTIAL
| 1.2.3 | If PPD and Sponsor mutually agree in writing that Sponsor may award Clinical Development Activities or a portion thereof to a third party. |
| 2. | P ROJECT A DDENDA AND C HANGE O RDERS |
2.1 Project Addendum . PPD and Sponsor shall execute a Project Addendum evidencing the Services to be provided by PPD. Each Project Addendum shall be incorporated into and made a part of this Agreement by reference, and each such Project Addendum and this Agreement shall constitute the entire agreement for the applicable Services. To the extent any terms set forth in a Project Addendum conflict with the terms set forth in this Agreement, the terms of this Agreement shall control unless otherwise specifically set forth in the Project Addendum.
2.2 Out of Scope Services . If PPD is requested or required to perform services for a Project not specifically set forth in the Project Addendum (“ Out of Scope Services ”), such Out of Scope Services and a compensation schedule therefore (the “Out of Scope Amendment” ) shall be mutually agreed upon by the parties. The Out of Scope Amendment shall be deemed an amendment to the Project Addendum. PPD shall not provide any Out of Scope Services without the authorization of Sponsor (e-mail is sufficient). Sponsor has no obligation to pay for Out of Scope Services that have not been authorized by Sponsor (e-mail is sufficient). The terms and conditions of this Section 2.2 shall be subject to Section 7.2.6.
| 3. | S ERVICES . |
3.1 Services to be Provided by PPD .
| 3.1.1 | PPD agrees to provide to Sponsor the Clinical Development Activities identified and described in each Project Addendum or as otherwise requested by Sponsor and agreed upon by PPD ( “Services” ) and provide deliverables set forth in a Project Addendum (“ Deliverable ”). |
| 3.1.2 | PPD shall perform the Services set forth in the applicable Project Addendum in compliance with (i) the specifications set forth in a Project Addendum, (ii) the study protocol for the Project and any amendments thereto ( “Protocol” ), which shall be attached to and made a part of the Project Addendum, (iii) the terms and conditions of this Agreement, (iv) the terms and conditions of the applicable Project Addendum, (v) PPD’s standard operating procedures ( “SOPs” ), which have been approved by Sponsor, or Sponsor’s SOPs if mutually agreed upon by the parties in a Project Addendum, and (vi) all applicable laws, rules, regulations and guidelines which may apply in the location of performance of Services. Sponsor agrees that PPD is responsible only for those Services set forth on a properly executed Project Addendum. |
| 3.1.3 | PPD acknowledges that timely performance and completion of Services under a Project Addendum are important for each Project. Timelines set forth in a Project Addendum are good faith estimates and PPD shall use commercially reasonable efforts to meet such timelines. PPD shall immediately notify Sponsor when PPD becomes aware of any circumstance that could reasonably be expected to result in a delay in the performance or completion of any Service or of PPD meeting a timeline. |
PPD PROPRIETARY AND CONFIDENTIAL
| 3.1.4 | In the event that there is a material failure by PPD in the performance of a Service in accordance with the terms of this Agreement or a Project Addendum, PPD shall, at Sponsor’s sole option, (i) re-perform such Services at no additional cost to Sponsor, (ii) take prompt corrective action to rectify the material failure including the use of additional resources at no additional cost to Sponsor, or (iii) if PPD fails to cure such material failure within the applicable cure period, terminate the relevant Project Addendum pursuant to Section 8.2 and assist Sponsor in the transfer of the Project to a third party service provider delegated by Sponsor at no additional cost to Sponsor. |
| 3.1.5 | PPD shall not assign, delegate or subcontract any Services to another entity without Sponsor’s prior written approval. Any such approval shall not relieve PPD of its obligations under this Agreement or the relevant Project Addendum. |
3.2 Sponsor Cooperation . Sponsor will cooperate with PPD in providing information to PPD, taking action and executing documents, as appropriate, to achieve the objectives of this Agreement. Sponsor acknowledges and agrees that PPD’s performance under this Agreement is dependant on Sponsor’s timely and effective cooperation with PPD. Accordingly, Sponsor acknowledges that any delay by Sponsor may result in PPD being released from an obligation or schedule deadline or in Sponsor having to pay extra fees in order for PPD to meet a specific obligation or deadline despite the delay. Sponsor shall comply with all applicable laws, rules and regulations governing the performance of its obligations hereunder and the subject matter of this Agreement, including without limitation, Sponsor’s Property (as defined below).
3.3 Serious Adverse Event and Medical Management Plan . Notwithstanding anything to the contrary herein, in the event PPD and Sponsor agree upon a serious adverse event and medical management plan relating to a specific Project ( “SMMP” ), the parties shall comply with the terms and conditions of any such SMMP. In the event of any conflict between the terms and conditions of the SMMP and the relevant Project Addendum, the terms and conditions of the SMMP shall control. Sponsor shall be responsible for any additional costs associated with compliance with the SMMP.
| 4. | M ED DRA AND WHOD RUG D ICTIONARY L ICENSE . |
The parties acknowledge that MedDRA and Uppsala Monitoring Centre product licenses are required by all parties who wish to distribute or receive MedDRA or WHODrug dictionary terminology. Each party represents and warrants that it possesses a current MedDRA and/or Uppsala Monitoring Centre product license. In the event Sponsor requests that PPD perform services which require PPD to distribute MedDRA terminology or WHODrug dictionary to third parties, Sponsor shall be responsible for ensuring that all such third parties possess the necessary MedDRA and/or Uppsala Monitoring Centre product licenses.
| 5. | P ATIENT E NROLLMENT . |
Any patient enrollment projections are good faith estimates and PPD shall exercise commercially reasonable efforts to meet such enrollment projections.
| 6. | F INAL P ROTOCOL . |
The parties agree that Sponsor shall be solely responsible for the final review, approval and adoption of the Protocol and PPD shall not be liable for such Protocol.
PPD PROPRIETARY AND CONFIDENTIAL
| 7. | C OMPENSATION AND P AYMENT . |
7.1 Charges for Services . Sponsor shall pay PPD for the Services performed under this Agreement and any Project Addendum ( “Direct Fees” ) in accordance with the rates or unit prices for such Services set forth in such Project Addendum. Sponsor shall also reimburse PPD for the reasonable out-of-pocket expenses incurred in connection with the performance of the Services with respect to a Project, including, without limitation, investigator grants and fees, travel expenses, shipping and postage costs, copying and printing fees, copyright fees, third party drug storage and distribution fees, required Institutional Review Board or similar board or committee fees, and other “pass through” expenses incurred in connection with performing the Services (collectively, the “Pass Through Costs” ). PPD shall obtain the approval of Sponsor, not to be unreasonably withheld or delayed, prior to incurring any Pass Through Costs that exceed the Pass Through Costs specified in a Project Addendum by more than [*] percent ([*]%). Except as otherwise expressly provided in a Project Addendum, PPD shall submit to Sponsor for each Project a monthly invoice describing the Services performed on such Project, the Direct Fees due for such Services, and all Pass Through Costs. Sponsor shall pay the undisputed portion of a monthly invoice within thirty (30) days of receipt of said invoice. In the event that Sponsor disputes an item in a monthly invoice, Sponsor shall notify PPD of the nature and amount of the dispute within thirty (30) days of receipt of such invoice. If Sponsor fails to notify PPD of a dispute within such thirty (30) day period, all such disputes shall be deemed waived and Sponsor shall pay the invoice in full. The parties shall, promptly and in good faith, reconcile the dispute, and Sponsor shall pay reconciled amounts within ten (10) days of reconciliation.
PPD shall have no obligation to pay subcontractor costs or investigator grant payments to any subcontractor or investigator site (the “Site” ) for conduct of services related to a Project until PPD has received payment of such Pass Through Costs from Sponsor. Notwithstanding anything to the contrary contained herein, Sponsor acknowledges and agrees that certain vendor and subcontractor contracts, including without limitation, contracts for investigator meetings and patient recruitment services, must be advanced and paid in advance by Sponsor. PPD shall be under no obligation to incur any such vendor or subcontractor fees until such fees are received by Sponsor. In addition, in certain circumstances PPD may require investigator grants to be advanced by Sponsor at the timeframes mutually agreed upon by the parties.
7.2 Phase II-IV Services . The provisions in this Section 7.2 apply only to the provision of Phase II-IV Services. “Phase II-IV Services” shall be defined as (i) all non-laboratory Clinical Development Activities relating to a phase II, phase III or phase IV clinical trial, including, but not limited to, monitoring, data management, and biostatistics; (ii) medical communications Services and (iii) all non-laboratory consulting Services, including, but not limited to, regulatory consulting and general drug development consulting. Phase II-IV Services shall not include any Non-Phase II-IV Services.
| 7.2.1 | Project budgets; Rates. At the beginning of each year, PPD will provide Sponsor with PPD’s standard labor rates for Direct Fees and unit prices that will be used by PPD to construct the budget in each Project Addendum for that calendar year (“Standard Pricing”). The Standard Pricing will not change during the calendar year in which such Standard Pricing was issued. Until such time as PPD has provided the Standard Pricing for a calendar year, the budget for each Project Addendum will be based on the Standard Pricing for the previous calendar year with an adjustment based on the inflation forecast published in the Mercer’s index for each region. PPD’s standard labor rates for Direct Fees will be applied to the mutually agreed upon unit builds for certain activities to achieve the unit prices. Sponsor and PPD agree to negotiate in good faith if it is determined that the hours or resources used to build a unit price require modification. Unless otherwise agreed, the budget in each Project Addendum will include a breakdown of Direct Fees and Pass Through Costs into [*]. |
| 7.2.2 | Inflation. Subject to the inflationary adjustment noted in this Section 7.2.2, the standard labor rates for Direct Fees and unit prices specified in a budget will remain fixed for the duration of a Project Addendum. In the event the Services in a Project Addendum extend beyond the year in which the Services were awarded, PPD will apply the inflation rates specified in each Project Addendum to the unit prices, and to the extent the Services are not captured in unit pricing, the inflation rates shall apply to the standard labor rates for Direct Fees. If a Project Addendum does not specify an inflation rate, PPD will apply inflation to the applicable unit prices, and to the extent the Services are not captured in unit pricing, inflation shall apply to the standard labor rates for Direct Fees, based upon the inflation forecast published in the Mercer’s index for each region. |
| [*] | Confidential treatment requested; certain information omitted and filed separately with the SEC. |
PPD PROPRIETARY AND CONFIDENTIAL
| 7.2.3 | Discount . PPD will provide Sponsor a discount of seven percent (7%) off of PPD’s Standard Pricing (“ Discount ”) in all Project Addenda that apply PPD’s Standard Pricing. The Discount will be reflected as a line item in the budget of each Project Addendum. |
| 7.2.4 | Fixed Price . Unless otherwise provided in a Project Addendum and except as otherwise provided in this Agreement, the Direct Fees in the budget of a Project Addendum represent the fixed price payable for the tasks specified in the budget and Sponsor is not responsible for any additional Direct Fees. This Section 7.2.4 shall not apply to Pass Through Costs. |
Notwithstanding anything to the contrary herein, PPD shall only be responsible for additional Direct Fees for a time period to be agreed upon by the parties and specified in the Project Addendum (the “Fixed Price Period”). In the event Sponsor and PPD cannot agree upon the length of the Fixed Price Period, the Fixed Price Period shall be [*] days. PPD shall only be responsible for additional Direct Fees during the Fixed Price Period and Sponsor shall be responsible for all Direct Fees after the Fixed Price Period. The Fixed Price Period will be calculated cumulatively and shall not be interpreted to mean a delay of consecutive days. By way of example, if the Fixed Price Period is [*] days, in the event of a [*] day delay in meeting one timeline and a [*] days delay in meeting another timeline, the Fixed Price Period would be met. PPD will continue to provide Services to the same extent and to the same standard during any Fixed Price Period as such Services were provided during the period of time prior to any Fixed Price Period.
| 7.2.5 | Material Change . Notwithstanding anything to the contrary in this Agreement, including, but not limited to Section 7.2.4, Sponsor shall be responsible for any increases to the Direct Fees resulting from any of the following (each a “Material Change”): |
| 7.2.5.1 | “Disabilities” as defined in Section 17.5 of this Agreement; |
| 7.2.5.2 | delays or additional costs attributable to Sponsor or other activities beyond the reasonable control of PPD, including, but not limited to, any change in the standard of care or technique; any actual or potential safety concerns or issues regarding the study drug or a Project; any unfavorable ruling, determination, order, guidance or other statement issued by a government health or safety ruling body, ethics committee, IRB or other similar entity; any deviation or change to the Protocol; regulatory approvals or rejections; drug packaging, availability and/or distribution; or delays in enrollment; or |
| 7.2.5.3 | changes in the Project specifications requested by Sponsor, including, but not limited to, the number or location of Sites or the number of CRFs or CRF pages. |
| [*] | Confidential treatment requested; certain information omitted and filed separately with the SEC. |
PPD PROPRIETARY AND CONFIDENTIAL
| 7.2.6 | Out of Scope Amendment Threshold . Notwithstanding the provisions of Section 2.2, the Direct Fees associated with a Material Change(s) shall not be incorporated into an Out of Scope Amendment unless and until the value of the Direct Fees associated with such Material Change(s) equal or exceed $50,000 (“Out of Scope Amendment Threshold”). For Material Changes that do not meet the Out of Scope Amendment Threshold, PPD shall keep a log of such Material Changes (“Material Changes Log”) and such Material Changes shall be deemed to meet the Out of Scope Amendment Threshold and incorporated into an Out of Scope Amendment when (i) the next Out of Scope Amendment is prepared containing a Material Change(s) that equal or exceed $50,000, or (ii) the collective monetary value of the Material Changes on the Material Changes Log equal or exceed $50,000. By way of example, if there is a Material Change resulting in $35,000 in additional Direct Fees in November 2010 and another Material Change resulting in $15,000 in additional Direct Fees in January 2011, PPD and Sponsor will enter into an Out of Scope Amendment in January 2011 covering both Material Changes for a total of $50,000 in Direct Fees. Upon execution of the Out of Scope Amendment in January 2011, the value of the Material Changes in the Material Changes Log shall be reset back to $0.00. In the event Services are completed prior to Material Change(s) meeting the Out of Scope Amendment Threshold, Sponsor shall not be responsible for the Direct Fees associated with such Material Changes. |
| 7.2.7 | During the course of providing Services, notwithstanding the allocation of resources specified in the budget, PPD shall have the right in its sole discretion to manage and alter its resources, including, but not limited to, study personnel labor schedules and FTEs, provided that such resourcing decisions are calculated in PPD’s reasonable discretion, to accomplish the objectives of the Project and are consistent with Sponsor’s ability to approve substitute “Key Personnel” as provided in Section 9.1.3 and 9.1.4 of this Agreement. |
| 7.2.8 | Payment Schedule . Unless otherwise agreed upon by Sponsor and PPD, Direct Fees will be paid pursuant to a payment schedule incorporated into a Project Addendum. The payment schedule shall allocate the Direct Fees as follows: [*]. Sponsor and PPD will use good faith efforts to agree upon the milestones to be incorporated into the Project Addendum and the definition of the final Deliverable to be provided by PPD. The parties agree that milestones shall not be based upon the enrollment of subjects into a study. The payment of Pass Through Costs, including, but not limited to, investigator grants, shall not be tied to milestones or any fixed monthly payments. |
| 7.2.9 | Payment Upon Completion . PPD will issue an invoice for the full value of each milestone in a payment schedule when the milestone is achieved and Sponsor shall pay such invoices as specified in Section 7.1. There will be no reconciliation between the actual units completed and the number of units specified in the budget of a Project Addendum. Provided that the Services are not completed more than [*] months earlier than the timeline in a Project Addendum, PPD will be entitled to all of the Direct Fees in the Project Addendum budget upon completion of the final milestone in the payment schedule including, but not limited to, any remaining unpaid monthly payments. By way of example, if a payment schedule specified monthly payments in September, October and November 2010 and Services are completed in September 2010, PPD shall invoice Sponsor for the monthly payments for September, October and November. |
| [*] | Confidential treatment requested; certain information omitted and filed separately with the SEC. |
PPD PROPRIETARY AND CONFIDENTIAL
In the event Services are completed more than [*] months earlier than the timeline in a Project Addendum (“Accelerated Project”), Sponsor shall pay PPD for the following: (i) all units completed; (ii) all project management units in the Project Addendum budget; and (iii) fifty percent (50%) of the remaining Direct Fees in the Project Addendum budget. For each Accelerated Project, PPD shall provide Sponsor with a reconciliation of the Direct Fees upon completion of Services showing the difference (if any) between the Direct Fees paid to PPD for the Services and the amount payable by Sponsor as noted in (i), (ii) and (iii) above. In the event the amounts in (i), (ii) and (iii) above are greater than the Direct Fees previously paid to PPD, PPD shall invoice and Sponsor shall pay the difference. In the event the amounts in (i), (ii) and (iii) above are less than the Direct Fees previously paid to PPD, PPD will refund Sponsor the difference.
7.3 Non Phase II-IV . The provisions in this Section 7.3 apply to the provision of all Non-Phase II-IV Services. “Non-Phase II-IV Services” shall be defined as (i) pre-clinical Services; (ii) all laboratory Services, including, but not limited to, central laboratory Services, vaccine testing Services, bioanalytical laboratory Services and GMP laboratory Services; and (iii) Clinical Development Activities relating to a phase I clinical trial. With respect to central laboratory Services, Sponsor shall be entitled to a seven percent (7%) discount off of PPD’s standard labor rates for Direct Fees for the year in which those Services were awarded (the “GCL Service Discount”). With respect to all other Non-Phase II-IV Services, Sponsor shall be entitled to a [*] percent ([*]%) discount off of PPD’s standard labor rates for Direct Fees for the year in which those Services were awarded (“Additional Service Discount”). The GCL Service Discount and the Additional Service Discount will be applied at the time of the budget proposal. In the event the Services in a Project Addendum extend beyond the year in which the Services were awarded, PPD will apply a mutually agreeable inflation rate to such Direct Fees.
7.4 Payment after Termination . Upon termination of any Project Addendum or this Agreement pursuant to Section 8, Sponsor shall pay PPD all Direct Fees and Pass Through Costs for all Services, and any portion of Services, performed through the termination date. In addition, Sponsor shall reimburse PPD for all future non-cancelable obligations to third parties (where such obligations were created as a result of a Project being authorized by the Sponsor). With respect to Project Addenda with payment schedules, Sponsor pay PPD the monthly payment for any partially completed month on a pro rata basis and shall compensate PPD for all partially complete milestones. Any funds held by PPD which are unearned at the date of termination shall be returned to Sponsor within thirty (30) days after the termination date of the Project Addendum or this Agreement, whichever is applicable.
7.5 Pre-Execution Services . In the event Sponsor requests PPD to begin providing Services for a Project prior to the execution by Sponsor of a Project Addendum, Out of Scope Amendment, or other mutually agreed upon writing, Sponsor agrees that PPD shall be compensated for Services performed at Sponsor’s request in accordance with the PPD proposal for such Services, or, if there is no such PPD proposal, in accordance with the Rate Card.
7.6 Payments . Unless otherwise set forth in a Project Addendum, all payments to PPD under this Agreement or any Project Addendum shall be made as follows:
If made by check, payment mailed to:
If made by wire transfer, payment wired to:
| [*] | Confidential treatment requested; certain information omitted and filed separately with the SEC. |
PPD PROPRIETARY AND CONFIDENTIAL
Any changes to the payee information set forth above requires a writing signed by PPD’s treasurer or chief financial officer.
| 8. | T ERM AND T ERMINATION . |
8.1 Term . The term of this Agreement shall commence on the Effective Date and shall continue for a period of three (3) years unless extended by mutual written agreement by the parties.
8.2 Early Termination. Any Project Addendum may be terminated with or without cause by Sponsor upon thirty (30) days prior written notice. In addition, Sponsor may terminate this Agreement in the event: (i) during any consecutive twelve (12) month period, PPD on two or more occasions fails to remedy a material breach under a Project Addendum within thirty (30) days after receipt of written notice of such breach from Sponsor (or if the breach cannot reasonably be so cured, diligent efforts to effect such cure are commenced during that period and are continued until the cure is completed within a reasonable time), or (ii) during any consecutive twelve (12) month period, PPD on two or more occasions fails to remedy a material breach of the terms of this Agreement (other than a material breach of PPD’s obligations to provide Services with respect to a Project Addendum which is governed by section (i) above), which is not cured within thirty (30) days after PPD’s receipt of notice of said breach from Sponsor (or, if the breach cannot reasonably be so cured, diligent efforts to effect such cure are commenced during that period and are continued until the cure is completed within a reasonable time).
With the exception of a material breach by Sponsor associated with the nonpayment of invoices, PPD may terminate any Project Addendum upon Sponsor’s material breach with [*] months prior written notice if Sponsor fails to cure such breach within the [*] month notice period. PPD may terminate any Project Addendum upon Sponsor’s failure to pay invoices with thirty (30) days prior written notice if Sponsor fails to cure such breach within the thirty (30) day notice period. In the event of a breach associated with the nonpayment of invoices, [*]. All Post Termination Services shall be subject to this Agreement.
8.3 Insolvency . Either party hereto may terminate this Agreement immediately upon the occurrence of an “Insolvency Event” with respect to the other party. For purposes of this Agreement, “Insolvency Event” shall mean (i) a party shall commence a voluntary proceeding seeking liquidation, reorganization or other relief with respect to itself or its debts under any bankruptcy, insolvency or other similar law or seeking the appointment of a trustee, receiver, liquidator, custodian or other similar official of it or any substantial part of its property, or shall consent to any such relief or to the appointment of or taking possession by any such official in an involuntary case or other proceeding commenced against it, or shall make a general assignment for the benefit of creditors, or shall fail generally to pay its debts as they become due, or shall take any action to authorize any of the foregoing; (ii) an involuntary case or other proceeding shall be commenced against a party or any of its subsidiaries seeking liquidation, reorganization or other relief with respect to it or its debts under bankruptcy, insolvency or other similar law or seeking the appointment of a trustee, receiver, liquidator, custodian or other similar official of it or any substantial part of its property, and such involuntary case or other proceeding shall remain undismissed and unstayed for a period of sixty (60) days; or (iii) an order for relief shall be entered against a party or any of its subsidiaries under bankruptcy laws now or hereafter in effect.
8.4 Effect of Termination . The termination of this Agreement by either party shall automatically terminate all Project Addenda, unless otherwise agreed in writing.
| [*] | Confidential treatment requested; certain information omitted and filed separately with the SEC. |
PPD PROPRIETARY AND CONFIDENTIAL
8.5 Wind Down . Upon the termination of this Agreement or a Project Addendum, PPD shall cooperate with Sponsor to provide for an orderly wind-down of the Services provided by PPD hereunder. Upon notice of termination of a Project Addendum or this Agreement, PPD shall use commercially reasonable efforts to expeditiously conclude or transfer any uncompleted Services as directed by Sponsor. PPD shall not perform any additional work or enter into any commitments that incur additional expenses with regard to any Service without written mutual agreement of the parties.
8.6 Invoices . PPD shall invoice Sponsor for payments due for Services completed and for reimbursement for non-cancelable expenses incurred in accordance with the relevant Project Addendum. If, upon the effective date of termination, Sponsor has advanced funds which are unearned by PPD, PPD shall repay such funds within thirty (30) days of the effective date of termination.
8.7 Return of Materials . Within fifteen (15) days, or a period of time mutually agreed to in writing by the parties, after the effective date of termination of this Agreement or a Project Addendum, PPD shall deliver to Sponsor all Study materials, data, Sponsor Confidential Information, Sponsor Inventions, and all other information and documents that are Sponsor’s property as defined in this Agreement or the relevant Project Addendum. PPD agrees that this obligation is not conditioned upon Sponsor’s prior payment of amounts due or agreement to pay any amounts in dispute.
8.8 Provisions Surviving Termination . The obligations of the parties contained in Sections 7.1, 7.4, 8.4, 8.5, 8.6, 8.7, 8.8, 9.3, 10, 11, 12, 15.3, and 17 hereof and herein shall survive termination of this Agreement.
| 9. | P ERSONNEL . |
9.1 Project Personnel .
| 9.1.1 | PPD shall only use appropriately qualified personnel for performance of Services under a Project Addendum. PPD shall propose personnel for performance of Services and provide Sponsor with the credentials of each proposed person. Sponsor shall have the right to select PPD personnel to perform Services based on such credentials, such selection not to be unreasonably withheld, conditioned or delayed. |
| 9.1.2 | The Services with respect to each Project shall be performed by PPD under the direction of the person identified as the Project Manager in the applicable Project Addendum or such other person acceptable to Sponsor as PPD may from time to time designate as the Project Manager, such Sponsor acceptance of the designated Project Manager not to be unreasonably withheld or delayed in all instances. The Project Manager shall be the primary contact for PPD and shall timely address all issues and concerns raised by Sponsor, as well as provide to Sponsor all information reasonably requested by Sponsor concerning this Agreement or the Services. |
| 9.1.3 | If Sponsor requests in writing the replacement of the Project Manager or any other PPD Personnel identified in a relevant Project Addendum (“Key Personnel”) due to performance or conduct concerns, PPD will promptly remove such person from the Project and assign a qualified and experienced person at no additional cost to Sponsor and without affecting Project timelines. Subject to Section 9.1(d), PPD agrees to obtain the consent of Sponsor to any changes to the PPD Key Personnel, which consent shall not be unreasonably withheld, conditioned or delayed. |
| 9.1.4 | In the event PPD becomes aware that PPD Key Personnel on a Project plans to leave the employment of PPD, is promoted, or shall otherwise be unable to complete the Services, PPD shall give prompt written notice of the same to Sponsor, together with the replacement personnel of similar qualification. Sponsor shall review and approve such replacement personnel, such approval not to be unreasonably withheld, conditioned or delayed. |
PPD PROPRIETARY AND CONFIDENTIAL
| 9.1.5 | PPD will provide Project-specific training to replace PPD personnel at its own expense. |
9.2 Personnel Retention . In the event of delays in the performance of the Study, i.e., after PPD is authorized to commence work, that are beyond the control of PPD, and where Sponsor desires for PPD to keep PPD Study personnel assigned to the Study, in addition to any other sums payable to PPD hereunder, Sponsor agrees that Sponsor shall pay a personnel fee calculated on an FTE-day basis. Said personnel fees shall be invoiced by PPD on a monthly basis, and shall be due and payable by Sponsor within 30 days of receipt of invoice . Such retention fee shall not be owed by Sponsor in the event PPD is unable to replace such personnel with new personnel of equivalent quality and experience upon re-commencement of the Study.
9.3 Covenant Not to Interfere . Neither party will solicit for employment any employee of the other party during the term of this Agreement, or for one (1) year thereafter. As used in this section “solicit” means the initiation by a party or its agent of a contact with any of the other party’s then current employees who are performing services under this Agreement for the purpose of offering employment to such employees, but shall not include the circumstance where any such employee initiates a contact with the other party for the purpose of obtaining employment whether in response to a general advertisement of employment or where such contact is initiated by a third party who was not instructed to contact such employee by the hiring party.
| 10. | C ONFIDENTIALITY . |
10.1 Sponsor Confidential Information . Sponsor holds a proprietary interest in Study materials and in any written and oral information that Sponsor discloses to PPD under this Agreement. Sponsor considers all such materials and information supplied to PPD by Sponsor, or generated by PPD under this Agreement to be confidential information of Sponsor ( “Sponsor Confidential Information” ). As used herein, the Sponsor Confidential Information shall also include the Deliverables, Sponsor Inventions, and any other data, methods, results, conclusions, information and/or other deliverables made, conceived, reduced to practice or otherwise generated in connection with this Agreement, whether by Sponsor or PPD. PPD shall treat all Sponsor Confidential Information as the confidential and exclusive property of Sponsor, including all tangible and intangible forms of such information.
10.2 PPD Confidential Information . Sponsor shall treat all information obtained from PPD including, without limitation, any PPD bids or proposals, standard operating procedures, personnel information, all PPD Property (as defined below) and any revisions, improvements or enhancements thereto ( “PPD Confidential Information” ) as the confidential and exclusive property of PPD. In addition, any information disclosed, obtained, or observed by Sponsor during an audit of PPD or an Affiliate of PPD, or the facilities of either, with the exception of Sponsor Confidential Information, shall be treated as confidential by Sponsor in accordance with the terms contained herein.
10.3 Use of Sponsor Confidential Information and PPD Confidential Information . Each party shall use the other’s Confidential Information solely for the purposes contemplated by this Agreement and for no other purpose without the prior written consent of the other party. Neither party shall publish, disseminate or otherwise disclose Confidential Information of the other to any third party without first obtaining the written consent of such other party. Each party shall restrict the dissemination of the other’s Confidential Information with its organization to only those persons who have a need to know, and shall ensure that all of its directors, officers, employees, agents, representatives and advisors (collectively, “Agents” ) are aware of this Agreement and bound by the terms of confidentiality stated herein.
PPD PROPRIETARY AND CONFIDENTIAL
10.4 Exceptions to Confidential Information . The above provisions of confidentiality shall not apply to that part of disclosing party’s Confidential Information which the receiving party is able to demonstrate by documentary evidence: (i) was in the receiving party’s possession prior to receipt from the disclosing party or is independently developed by the receiving party; (ii) was in the public domain at the time of receipt from disclosing party; (iii) subsequently becomes a part of the public domain through no fault of the receiving party or its Agents; and (iv) is lawfully received by the receiving party from a third party having a right of further disclosure.
10.5 Disclosure Required by Law . The non-disclosure obligations pursuant to this Agreement shall not apply to Confidential Information that a receiving party is required to disclose pursuant to any law, stock exchange regulation, judicial action, or order of the court or other governmental agency; provided, however, that the receiving party shall make all reasonable efforts to notify the disclosing party prior to the disclosure of Confidential Information and allow the disclosing party the opportunity to contest and avoid such disclosure, and further provided that the receiving party shall disclose only that portion of such Confidential Information that it is legally required to disclose.
10.6 Return of PPD Information . Upon the disclosing party’s written request, the receiving party shall return, and shall cause its Agents to return, all documentary, electronic or other tangible forms of Confidential Information provided by the disclosing party including, without limitation, any and all copies thereof, or, at the disclosing party’s request, destroy all or such parts of the disclosing party’s Confidential Information as the disclosing party shall direct. Notwithstanding the foregoing, the receiving party may retain copies of such of the disclosing party’s Confidential Information as is reasonably necessary for regulatory and business archival purposes, subject to the ongoing obligation to maintain the confidentiality of such information.
10.7 Remedy . Each party agrees that its obligations hereunder are necessary and reasonable in order to protect the other party and the other party’s business, and expressly agrees that monetary damages would be inadequate to compensate the other party for any breach of the terms of this Agreement. Accordingly, each party agrees and acknowledges that any such violation or threatened violation will cause irreparable injury to the other party, and that, in addition to any other remedies that may be available, in law, in equity or otherwise, the other party shall be entitled to obtain injunctive relief against the threatened breach of this Agreement or a Project Addendum or the continuation of any such breach, without the necessity of proving actual damages.
10.8 Privacy Laws . All information containing personal data shall be handled in accordance with all applicable privacy laws, rules and regulations, including, without limitation, the European Data Protection Directive [EC/95/46] and Health Insurance Portability Accountability Act (HIPAA).
| 11. | I NTELLECTUAL P ROPERTY . |
11.1 No License . Neither anything contained herein, or the delivery of any information to a party hereto, shall be deemed to grant the receiving party any right or license under any patent or patent application or to any know-how, technology or invention of the disclosing party.
11.2 Sponsor Property . Subject to Section 11.3 below, PPD agrees that Sponsor owns and PPD hereby assigns, without additional consideration, to Sponsor all right, title and interest PPD or its Agents may have in any Deliverables, discoveries, developments, inventions, improvements, technology, know-how, works of authorship, mask works, ideas, information or other intellectual property made or reduced to practice by PPD (i) a result of PPD’s provision of the Services or (ii) set forth as a deliverable under a Project Addendum (“Sponsor Inventions”). PPD shall promptly disclose Sponsor Inventions to Sponsor. PPD agrees that any Sponsor Inventions which are works of authorship subject to copyright shall be “works made for hire” of which Sponsor shall be deemed the author and owner of the rights comprised in copyright. PPD will execute and will cause its employees, agents and subcontractors to execute any instruments or testify as Sponsor deems necessary for Sponsor to protect Sponsor’s interest in a Sponsor Invention, at Sponsor’s sole cost and expense.
PPD PROPRIETARY AND CONFIDENTIAL
11.3 PPD Property . PPD possesses certain inventions, processes, technology, know-how, trade secrets, improvements, other intellectual property and assets, including, without limitation, those related to business or product plans or proposals, marketing strategies, standard operating procedures, data, composition of matter, research, experimental results, personnel data, financial information and conditions, pricing information, customer information, supplier/vendor information, raw materials, data collection and data management processes, laboratory analyses, analytical, biotechnology and clinical methods, procedures and techniques, computer technical expertise and software (including code) which have been independently developed without the benefit of any information provided by Sponsor (collectively, “PPD Property” ). Sponsor and PPD agree that any PPD Property or revisions, improvements or enhancements thereto shall be the sole and exclusive property of PPD, and Sponsor shall have no rights, title and interest to such PPD Property. PPD hereby grants to Sponsor a perpetual, fully paid, non-exclusive license, with the right to sublicense, to use any PPD Property contained in a Deliverable solely in connection with the use of such Deliverable as necessary for the full development and commercialization of the subject matter of the Project. Sponsor shall enforce the terms of any such sublicense as agreed upon by the PPD and Sponsor or as otherwise reasonably necessary to limit the use of the PPD Property as stated herein and/or to protect PPD’s interest in the PPD Property.
| 12. | I NDEMNIFICATION . |
12.1 Sponsor Indemnity . Sponsor shall indemnify, defend, and hold harmless PPD, PPD Affiliates (as that term is defined in Section 17.11), and their Agents ( “ PPD Indemnitees ” ) from and against any and all damages, liabilities, losses, fines, penalties, settlement amounts, costs and expenses of any kind or nature whatsoever, including, without limitation, reasonable attorneys’ fees, expert witness fees, court costs, and amounts incurred by PPD Indemnitees under indemnity obligations imposed upon it by a third party provider to a Project where such third party provider has been approved by Sponsor, incurred in connection with any claim, demand, action, proceeding, investigation or hearing (collectively, a “Claim” ) directly or indirectly relating to or arising from this Agreement or any Services provided by PPD Indemnitees hereunder, including but not limited to, Project related services provided by PPD at the request of Sponsor yet prior to finalization of the relevant Project Addendum; provided however, that Sponsor shall have no obligation of indemnity hereunder to the extent any Claim arose from the negligence, intentional misconduct or material breach of Agreement on the part of PPD or its Agents.
12.2 PPD Indemnity . PPD shall indemnify, defend and hold harmless Sponsor and its Agents from and against any and all damages, liabilities, losses, fines, penalties, settlement amounts, cost and expenses of any kind or nature whatsoever, including, without limitation, reasonable attorney’s fees, expert witnesses and court costs, incurred in connection with any Claim arising from the negligence, intentional misconduct, or material breach of Agreement of PPD or its Agents; provided however, that PPD shall have no obligation of indemnity hereunder to the extent any Claim arose from the negligence, intentional misconduct or material breach of Agreement on the part of Sponsor or its Agents.
12.3 Indemnification Procedure . Each indemnified party shall give the indemnifying party prompt notice of any Claim for which indemnification is sought hereunder. The indemnifying party shall have the right to control the defense and settlement of a Claim, provided the indemnifying party shall act reasonably and in good faith with respect to all matters relating to the settlement or disposition of the Claim, and the indemnified party shall reasonably cooperate in the investigation, defense and settlement of such Claim. Any indemnified party shall have the right to participate in, but not control, the defense and settlement of a Claim and to employ separate legal counsel of its own choice; provided, however, that such employment shall be at the indemnified party’s own expense, unless (i) the employment thereof has been specifically authorized by the indemnifying party, or (ii) the indemnifying party has failed to assume the defense and employ counsel (in which case the indemnified party shall control the defense and settlement of such Claim). The costs and expenses, including reasonable fees and disbursements of counsel, incurred by any indemnified party in connection with any Claim shall be reimbursed on a monthly basis by the indemnifying party subject to refund in the event the indemnifying party is ultimately held not to be obligated to indemnify the indemnified party.
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| 13. | R EPRESENTATIONS AND W ARRANTIES . |