Master Alliance Provisions Guide (MAPGuideⓇ)
Effects of Termination
This issue identifies provisions setting out actions to be taken upon termination of an agreement. These obligations may differ depending on the reason for termination. Provisions addressing the effects of termination are important, particularly in the event of a ‘for cause’ termination (i.e. because one party has not or will not fulfil its obligations), because they can have an impact on a party’s ability to continue development or manufacture of a product. This may in turn affect the achievement of access goals.
Questions to consider when developing effects of termination provisions
- What are the effects of termination or withdrawal by a party?
Example approaches found in the MAPGuide
- Any unspent amounts from upfront payments will be reimbursed to the purchaser/funder (with a deduction for any non-cancellable expenses).
- Each party will destroy the confidential information of the other party.
- Supply/Advance Purchase Agreements
- If the agreement is terminated due to breach then the supplier may be liable for damages incurred by the purchaser. No compensation for damages is due in the event of termination due to force majeure.
- If the agreement is terminated under certain circumstances, then the supplier will transfer or novate certain materials, equipment and/or services to the purchaser (this may include reserved CMO manufacturing capacity).
- Development Funding Agreements
- The license grant from the developer to the funder will survive termination and the developer will conduct a technology transfer to the funder of the technology necessary for the further development. The developer will have the right to complete the project with its own funding, and shall have the right to use all project intellectual property for commercial purposes.
- The funder will reimburse the developer for reasonably incurred expenses through to termination. In addition, if the agreement is terminated by the funder due to breach, insolvency, or the developer’s inability to discharge its obligations under the agreement, then the developer will user reasonable efforts to: (i) make project data publicly available; (ii) transfer project materials to the funder; (iii) transfer regulatory approvals to the funder; (iv) assign or novate third party contracts to the funder; and (v) perform technology transfer to an agreed third party.
- The developer will cease all work under the Agreement and assign to the all rights, title and interest (including that of its subawardees) to the funder.
- Also see Ensuring Continuity provisions for details of license grant and technology transfer obligations that may be triggered upon agreement termination.
- License & Collaboration Agreements
- The licensor may elect to research, develop, or sell the product in the applicable field and territory. The licensee will transfer all regulatory documentation for the product back to the licensor and provide transition assistance such as technology transfer and the transfer of inventory and third party agreements.