FRAMEWORK DEVELOPMENT CONTRACT

   Publication    18 April 2023  |  0

Between the undersigned

1The company [[name of the COMPANY A]
 [[owner society form]] with a capital of [[share capital of the owner]], with its registered office at [[head office owner]] registered in [[TCR city owner]] Trade and Companies Register under number [[TCR number owner]] Represented by [[rep name owner]] in his/her capacity as [[rep capacity owner]]   Hereinafter referred to as “COMPANY A”
 Of the first part,
  
2The company [[name of the COMPANY B]]
 [[transferee society form]] with a capital of [[share capital of the transferee]], with its registered office at [[head office transferee]] registered in [[TCR city transferee]] Trade and Companies Register under number [[TCR number transferee]] Represented by [[rep name transferee]] in his/her capacity as [[rep capacity transferee]]   Hereinafter referred to as “COMPANY B”
 Of the second part

Hereinafter referred to as “the Parties”

WHEREAS

  1. Company A is a company whose purpose is Pharmaceutical Research and Development mainly on [[What is the focus of A’s pharmaceutical R&D]].

The scientific approaches used are [[what are the scientific approaches used]]

[[Description of molecule used]]

2.        For its part, Company B offers services in the development and pharmaceutical production of [[which element(s) does B’s pharmaceutical R&D focus on]] Company B’s team has the skills, experience and infrastructure to meet the specific needs required for pharmaceutical development and clinical batch manufacturing in accordance with the requirements of current Good Manufacturing Practices (GMP).

3.        In the context of the development of its Product, Company A has approached B from [[from which date A approached B]], in consideration of its resources, equipment and know-how, for a series of services with a view to the semi-industrial scale manufacture of the Product.

Option 1 (if confidentiality agreement prior to the contract) :

Until now, the contractual relationship has only been governed by a Confidentiality Agreement (Annex [[Confidentiality Agreement]])

Option 2 (if concluded simultaneously with the contract):

In parallel to this contract, the parties have concluded a Confidentiality Agreement. (Annex [[Confidentiality Agreement]]).

The Parties have therefore decided to enter into this Development Agreement in order to continue and frame their business relationship.

4.        The preamble is an integral part of the Contract and expressly reflects the will of the Parties.

THE FOLLOWING HAS BEEN AGREED AND STIPULATED

1. DEFINITIONS

1.1 “SCHEDULE OF PERFORMANCE”: means the schedule of deadlines for the performance of the services provided for in this contract as set out in the Appendix [[Schedule of Performance]].

1.2 “SIGNED QUOTATIONS” means the quotations issued by Company B and signed by Company A for the performance of the services and specifying the nature of the services, the timeframe and the corresponding remuneration. In the event of contradiction between the Signed Quotations and this Contract, the provisions contained herein shall prevail.

1.3 “ACTIVE INGREDIENT” means [[define active ingredient]].

1.4 “GMP” means the current “Good Manufacturing Practices” required by the provisions of European Commission Directive 2003/94/EC, together with any applicable implementing legislation and the Good Manufacturing Practices Guide published by the European Commission in 1992 (ISBN 92-82 6-3180-X), together with any other legislation, recommendations or directives (whether binding or not) of the competent authorities in Europe and all applicable rules, regulations, orders and guidance, as they may be amended from time to time.

1.5 “PRODUCTS” [[define products, specifics to be attached]] as described in Annex [[Product Description]].

1.6 “CONFIDENTIALITY AGREEMENT” means the agreement entered into between the parties on [[DATE of signature of the Confidence Agreement]].

1.7 “QUALITY AGREEMENT OR SPECIFICATIONS” means the document set out in Annex [[Specifications/Quality Agreement]] detailing the basic specifications for the development, manufacture and distribution of the Product and any legitimate expectations of compliance with applicable standards.

1.8 [COMPANY KNOW-HOW]]

2. PURPOSE

2.1 The purpose of this Agreement is to govern the relationship between the Parties and to determine the conditions under which Company A entrusts to Company B all of the Development Services described in each of the quotations countersigned by Company A (hereinafter the “Services”), in particular, the manufacture of clinical batches, their analysis and staging.

In case of contradiction between this Agreement and any quotation signed by Company A, the provisions hereof shall prevail.

2.2 Company B undertakes, in particular in accordance with the deadlines set out in the Implementation Schedule (Appendix [[Implementation Schedule]]), and possibly specified by mutual agreement in the Signed Quotations, as well as the service level commitments set out in the Specifications/Quality Agreement (Appendix [[Specifications/Quality Agreement]]), to provide Company A with the main stages of the development, which, in accordance with the Implementation Schedule, are divided into the following phases:        [development phase]]

If the files are to be written in English in order to be registered at European level through the mutual recognition procedure:

The files will have to be written in English to be able to be registered at European level through the mutual recognition procedure.

2.3 Company B expressly acknowledges that its Services shall be supervised by Company A notwithstanding anything to the contrary herein.

3. DURATION

The present contract is concluded for an indefinite period. Consequently, each of the Parties may terminate it at any time, without having to justify its decision, provided that a notice of termination is given three (3) months before the effective termination of the contractual relations, starting from the receipt of the notification sent to signify the termination of the contract, by registered letter with acknowledgement of receipt, to the co-contractor, by the Party having taken the initiative of the termination.

In this case, the Parties undertake to continue to fulfil the Signed Quotations in progress at the time of the breach, until they are fully executed.

4.        GENERAL TERMS AND CONDITIONS OF PERFORMANCE

The Parties agree to cooperate closely and in good faith.

If during the performance of the Services a difficulty should arise, the Parties undertake to work together to find a suitable solution to resolve the difficulty as soon as possible, giving priority to the necessary continuity of the Services and maximum responsiveness.

 The Parties declare and acknowledge that they are and will remain throughout the duration of this Contract independent commercial and professional partners, each assuming the risks of their own operations and acting in complete independence.

The work of Company B shall be organised in consultation with Company A and in compliance with the provisions of this Contract.

In this respect, Company B’s personnel assigned to carry out the Services shall in any event remain under the hierarchical and disciplinary authority of Company B, which shall be responsible for the technical authority, administrative, accounting, disciplinary and social management of its personnel.

The fact that Company A transmits its instructions to the project manager appointed by Company B can in no way be interpreted as creating a subordinate relationship between Company A and these project managers.

5.        OBLIGATIONS OF COMPANY B

5.1 Regulations

5.1.1 Company B shall carry out, under its own responsibility, all the work, experimental batches, analyses, stabilities, reports, or other detailed in the attached specifications according to the model in Appendix [[Specifications]], for which it is responsible in accordance with the requirements of the Public Health Code in force.

Any new regulatory requirement relating to the development occurring during the performance of this Contract and entailing additional work shall be the subject of an amendment to this Contract under the conditions defined in Article 5.5. Hereafter.

5.1.2 Company B shall provide Company A with the files in accordance with the regulations in force, the works, the experimental batches and the study reports. Stability studies in progress, if any, shall be made available to Company A together with the results on the delivery date set out in the Schedule of Performance (Appendix [[Schedule of Performance]]).

5.2 Terms and conditions of performance of the Services

5.2.1 Company B undertakes to take all the care required by professional diligence, GMP and good practice in the performance of the Services. It shall be responsible for the proper execution of the Services and in particular for the personnel it may assign to its performance, for the quality of the Services and for compliance with the deadlines set for it in the Performance Schedule (Appendix [[Performance Schedule]]).

5.2.2 Throughout the term of this Agreement, Company B undertakes to ensure that the Services are performed by employees with the required skills and level of training.

5.2.3 The performance of this Development Agreement shall be the subject of ongoing collaboration between Company B and Company A.

In this respect, Company B has a duty to advise and warn Company A and undertakes to :

(i) ask Company A for any information or data that it deems necessary for the provision of the Services;

(ii) notify Company A in writing as soon as it becomes aware of any element, event or act that may affect the proper performance of its obligations;

5.3 Deadlines

Company B undertakes to comply strictly with the deadlines defined in the Execution Schedule (Appendix [[Execution Schedule]]) and in the Signed Quotations.

These deadlines are imperative for Company A and constitute one of the essential elements of the order without which Company B would not have contracted.

If penalties: (and therefore display penalties article if yes)

As such, these performance deadlines are binding on Company B. Failure to comply with them by Company B may give rise to the application of penalties in accordance with the provisions of Appendix [[Performance Schedule]] and Article 12 below.

Company B undertakes to notify Company A immediately of any delay in relation to the Performance Schedule (Appendix [[Performance Schedule]]).

Company B shall at its own expense take all useful measures to make up or limit the delays observed for which it alone is responsible or for which its possible subcontractors are responsible.

Only the signature by the Parties of an amendment will be able to modify the Implementation Schedule (Appendix [[Implementation Schedule]]), to the exclusion of any exchange of letters.

If “yes” penalties

In the absence of Company A’s express agreement to modify the Performance Schedule (Appendix [[Performance Schedule]]) by way of an amendment, the penalties for delay shall remain applicable.

5.4 Quality

Company B undertakes to perform the Services in strict compliance with the quality indicators defined in the Quality Agreement (Annex [[Specifications/Quality Agreement]]) and more generally by the GMP and the rules of the trade.

5.5 Additional work

5.5.1 In the event that ANSM or the competent authorities in the contract territory request additional work and/or information, Company A alone shall decide what action to take on these requests and Company B shall ensure, in collaboration with Company A, the successful completion of the assignment.

5.5.2 In this case, Company B shall carry out the additional work requested for Company A with regard to [[what concerns the additional work requested for A]]. The Parties shall meet to decide by mutual agreement on the terms and conditions for taking charge of this work. An estimate shall be drawn up by Company B and approved by Company A, prior to the implementation of the additional work. 

5.6 Commitments

All computer media provided and/or transmitted to Company A by Company B in the context of the performance of its Services must be free of viruses. To this end, Company B certifies by signing this Contract that it has implemented all technical anti-virus solutions to ensure the security of computer exchanges with Company A.

6.        OBLIGATIONS OF COMPANY A

Company A undertakes to provide Company B with all information and documents necessary for the performance of the Services.

Company A undertakes to co-operate in order to complete the project within the time limit and according to the terms of the Contract and its Annexes.

7.        STEERING COMMITTEE

The role of the Steering Committee is to promote the proper execution of the Contract.

The Steering Committee is a body for the operational monitoring of the Contract. Its purpose is to examine in greater detail the technical, functional or organizational points of the Contract.

The Steering Committee is made up of the Project Manager of each Party as designated below and any other person necessary, taking into account the agenda:

  • Company A’s Project Manager: [[contact details for Manager A]]
  • Project Manager of Company B: [[contact details of Manager B]].

The Steering Committee will meet regularly throughout the duration of the Contract, and at least once (1) a week, in order to monitor the execution of the Services, to study any problems that arise, to take operational decisions and to allow a regular exchange of information.

In the event of conflict or disagreement between the Parties on the execution of the Contract, the Project Managers of the Parties shall meet to try to resolve the dispute.

Under no circumstances may the minutes of the Steering Committee meeting, even if approved, justify a change in the Price or Company B’s commitments in the context of a constant project scope.

8.        RECEIPT OF SERVICES

If necessary, the Services may be subject to a contradictory acceptance procedure.

The purpose of the receipts is to verify the compliance of the Services performed by Company B with its commitments as defined in the Contract and in the Specifications.

In any event, Company B undertakes to take into account the comments and requests for modifications or adjustments made by Company A that are necessary to bring the Services into compliance with their specifications as defined in the Contract and in the Contract Documents.

Furthermore, Company B undertakes to resolve, at its own expense, under the conditions set out in the Contract, any anomaly (including any non-conformity with the specifications defined in the Contract Documents) noted by Company B.

No acceptance may be deemed to be tacitly pronounced.

Only the signature by the authorised representative of Company A of the acceptance report shall be deemed to be acceptance of the acceptance of the Services with the consequences attached thereto.

Company A may not refuse to sign the acceptance reports without legitimate reason.

9.        FINANCIAL CONSIDERATION AND TERMS OF PAYMENT

9.1 In consideration of the perfect and complete performance of the Services, and the transfer of the intellectual property rights referred to in Article 11 below, Company B shall receive from Company A the sums provided for each stage of development, the details of the remuneration appearing in each signed Quotation.

If the remuneration does not include the purchase of the IP to be supplied by A :

The remuneration does not include the purchase of the active ingredient to be supplied by Company A.

9.2 Company B shall invoice its Services in accordance with the schedule mentioned in the Signed Quotations.

9.3 Payments shall be made by bank transfer sixty (60) days from the issue of the corresponding invoice by Company B.

10.      CONFIDENTIALITY AND NON-COMPETITION UNDERTAKING

Company A and Company B have formalised a confidentiality agreement in [[DATE of signature of confidentiality agreement]] (Annex [[Confidentiality agreement]]), the provisions of which are applicable to the present.

The following clauses shall be added to the Confidentiality Agreement as necessary.

Company B undertakes not to take an interest and/or participate, directly or indirectly, or through an intermediary, in any undertaking or research operation having a purpose identical to that of this Development Contract, as defined in the Contract. Company B undertakes in particular not to develop for its own account or for the account of a third party a product such as those defined in this Contract.

Furthermore, Company B agrees that all information of any kind, whether it concerns in particular products, formulas, methods, studies, suppliers or others, without this list being limitative, of which it has had or will have knowledge during the collaboration between the Parties and the implementation of the present Contract, shall be considered as confidential information.

Accordingly, Company B expressly undertakes, without any condition, limitation or restriction whatsoever, to:

a) Use the Confidential Information solely for the purposes of this Agreement;

b) to consider the confidential information as being intended for its own use only, as well as for the use of persons and companies that it will be called upon to work or have work done under its responsibility in the context of this Contract and after having made the said persons and companies subscribe to a similar confidentiality undertaking and an undertaking to refrain from having recourse to other third party companies in their turn;

c) Unless Company A has given its prior written consent to proceed otherwise, it shall not in any way whatsoever

  • Disclose to any person or company other than those necessary for the performance of the work defined herein and in the Signed Quotations, any part of the terms and conditions and results of the study and development project covered by the Contract; and
  • Disclose the status of the study and development project which is the subject of the Contract.

For the purposes of this Contract, it is agreed, however, that the obligation of confidentiality to which Company B subscribes by signing this Contract shall not cover information which for the purposes hereof should be considered confidential information but which :

a) At the time they were disclosed to the Parties had already fallen into the public domain; or

b) falls into the public domain after it has been disclosed to the Parties, as a result of its normal use in the performance of this Agreement.

These non-competition and confidentiality undertakings are made for the entire duration of this Agreement and for the fifteen (15) years following its expiry, unless otherwise agreed between the Parties.

11.      OWNERSHIP OF RESULTS AND PUBLICATION

11.1 Ownership of existing technologies at the time of signing this contract

Company B shall remain the sole owner and holder of the intellectual and industrial property rights relating to its technology described above (Product Technology), this contract not involving any transfer to Company A of the property rights described above belonging to Company B.

11.2 Ownership of developments :

All developments, whether patentable or not, made by Company B in execution of the specifications (Annex [[Specifications/Quality Agreement]] ) relating to Company B’s know-how or Product Technology shall be considered the intellectual property of Company B.

11.3 Ownership of stability studies

Payment by Company A of Company B’s invoices shall imply the exclusive and automatic transfer, as and when the work progresses, by Company B of the intellectual property rights to the stability studies. The rights thus assigned shall include, but not be limited to: reproduction, adaptation, translation, exploitation and representation rights. This transfer is granted for the legal duration of protection of the property rights relating to these studies and for the whole world. At the same time as the above-mentioned rights are transferred to him, the documents or materials that will be the support for them will become the property of Company A. 

11.4 – Other products of Company B

Company A acknowledges that the business of Company B or companies belonging to the group to which Company B belongs involves the use of its know-how and Product Technology for many other products, and that Company B reserves the right to apply such know-how and Product Technology to other products and to manufacture, use or sell such products.

If “yes” penalties: p6

12.      PENALTIES

In the event that Company B is late in fulfilling its obligations with regard to the duration of the various stages of development for which it is responsible in accordance with the schedule in Appendix [[Schedule of execution]] and any amendments thereto, which is directly attributable to a breach by Company B, Company B may be subject to penalties by Company A calculated on the basis of the number of working days of delay in relation to the estimated duration of the stage, as follows:

  • Delays of 0 to 10 working days: no penalty
  • Delays of 11 to 20 working days: 10% of the total amount of the development stage concerned
  • Delays of 21 to 30 working days: 15% of the total amount of the development stage concerned
  • From the 31st working day of delay: 20% of the total amount of the development stage concerned.

These penalties will run automatically from the moment Company A notes the breach, without prior formal notice or other notification.

The penalties are intended exclusively as a reminder to compel Company B to comply with its contractual obligations.

Thus, the penalties do not have a liberating character and can never be considered as lump-sum compensation for damage and/or prejudice suffered by Company A.

The penalties are independent of each other and therefore cumulative.

The payment of penalties does not release Company B from its obligation to perform the Services and/or any other obligation for which it is responsible under the Contract.

Company A’s decision to demand or waive the payment of penalties does not mean that it waives its right to subsequently invoke the breach in question against Company B.

The application of the penalties is independent of any other measures, rights or remedies for the benefit of Company A to which the application of the Contract may give rise, in particular its termination and the right to claim damages before the competent courts.

Without prejudice to any other method of recovery, the amount of the penalties may be, by operation of law, either set off by Company A against any sums due or to be paid to Company B, or be the subject of an invoice by Company A. In the absence of future invoicing, Company B shall pay Company A the amount of the late payment penalties plus the VAT in force on the day of invoicing, said payment having to be received by Company A within forty-five (45) days of receipt of the penalty invoice.

In the event of failure to pay the late payment penalties within the period referred to above, the unpaid sums shall give rise to the payment of late payment penalties, calculated on the basis of three (3) times the legal interest rate.

If “no” penalties: p6

ARTICLE 12 PENALTIES

The Parties have not agreed on any penalties.

13.      LIABILITY, WARRANTY AND INSURANCE

13.1 Each party agrees to be liable for and to indemnify the other party for all damages of whatever nature resulting directly or indirectly from a failure of either party to perform its obligations under this contract, except to the extent that the claims or damages result from a fault of the other party.

13.2 Company B undertakes to guarantee and indemnify Company A against the financial consequences resulting from any actions or claims that may be brought by any third party, for any damage, attributable to Company B, to any person acting on its behalf or to the things in its custody.

13.3 By signing this Contract, Company B certifies that it holds any necessary insurance policy guaranteeing the financial consequences of its civil liability for any damage it may cause during the performance of its Services. At the request of Company A, it shall provide a certificate from its insurance company specifying the amount of cover and proving payment of the premiums for the duration of the present contract.

14.      AUDIT

14.1 Company A may, at any time, carry out or have carried out audits of the Services performed by Company B. Company A shall be free to engage any independent experts and auditors of its choice.

14.2 Company B, after having been informed in good time of the identity of the auditor, the dates and the content of the audit, shall assist in the proper conduct of the audit. In particular, it will make available to Company A and/or the auditor all documents requested.

14.3 In the event of an audit that calls into question the reliability and/or validity of the Services, Company A may immediately terminate the Contract by registered letter with acknowledgement of receipt, without payment of compensation and without prejudice to any damages that may be claimed from Company B.

14.4 This audit shall not give rise to any additional invoicing for any reason whatsoever.

15.      TERMINATION

15.1 Each of the Parties may terminate the Contract as of right, in the event of a breach by one of the Parties of any of its essential obligations under the Contract which is not remedied within a period of fifteen (15) calendar days following formal notice by registered letter with acknowledgement of receipt.

This early termination shall be without prejudice to the right of the non-defaulting Party to obtain compensation for its loss under the conditions provided for in the Contract.

16.      PROTECTION OF THE WORKFORCE

In accordance with the regulations on undeclared work, Company B undertakes to provide Company A, on first request, with the documents mentioned in the Labour Code, before the signing of this Contract and every six (6) months, until the end of the performance of this Contract, namely

  • A certificate of provision of social declarations from the social protection body responsible for collecting the social security contributions incumbent on Company B and dated less than six (6) months,
  • A K-bis extract less than three (3) months old proving registration in the Trade and Companies Register,

Company B declares on its honour, by signing this Contract, that it has made all the necessary declarations to the tax authorities and, if it employs employees, that they are legally employed in accordance with the Labour Code.

17.      FORCE MAJEURE AND ECONOMY OF THE CONTRACT

17.1 Neither Party shall be liable for the failure or non-fulfilment of its obligations due to force majeure within the meaning of the Civil Code and the case law of the French courts.

17.2 The performance of the obligations of the prevented Party shall be postponed for a period at least equal to that of the duration of the suspension due to force majeure.

17.3 However, after a period of sixty (60) calendar days of interruption due to force majeure, either Party may choose to terminate this Contract by registered letter with acknowledgement of receipt sent to the other Party, without compensation of any kind on either side. The termination of the Contract shall take effect upon receipt of this notification.

18.      INTUITU PERSONAE – SUBCONTRACTING

18.1 The Contract is concluded intuitu personae between the Parties and may not under any circumstances be the subject of a total or partial transfer, whether in return for payment or free of charge, by one of the Parties without the prior written consent of the other Party. By way of exception, this Contract may be freely assigned to any subsidiary company of Company B’s group.

18.2 Company B may not under any circumstances subcontract all or part of the Services without Company A’s prior and express consent.

18.3 In the event of Company A’s written agreement, Company B shall remain responsible for all obligations defined in the Contract and for the complete and perfect performance of the Services. Company A shall not be liable in any way whatsoever.

19.      MISCELLANEOUS

19.1 This Agreement and its annexes express the entire agreement between the Parties. It supersedes all previous discussions, proposals, agreements between the Parties, general terms and conditions of sale, general terms and conditions of purchase.

19.2 The division into articles and paragraphs has been adopted for convenience only and shall not be deemed to affect the meaning and scope of the clauses as a whole which form an indivisible whole.

19.3 If any provision of this Agreement is found to be invalid, such invalidity shall not affect the validity of the Agreement provided that such provision is not material.

19.4 Any amendment or supplement to this Agreement must be in writing and signed by the Parties in advance in order to be enforceable against them.

19.5 The Parties acknowledge that in the event of a contradiction or discrepancy between one or more provisions of the Annex(es), the provision(s) of the Contract shall prevail.

20.      APPLICABLE LAW AND COMPETENT COURTS

This Contract is governed by French law.

All disputes to which this Contract may give rise, concerning its validity, interpretation, performance, termination, consequences and consequences, shall be subject to the jurisdiction of the courts within the jurisdiction of the Paris Court of Appeal.

List of Annexes:

– Annex [[Confidentiality Agreement]]: Confidentiality Agreement

– Annex [[Quote]]: Quote

– Annex [[Product Description]]: Product Description

– Annex [[Specifications/Quality Agreement]]: Specifications/Quality Agreement

– Annex [[Execution schedule]]: Execution schedule

Done at [[city]] on [[date]], in two original copies, one for each of the Parties.

For Company A                             

[Company A]],

 [[item rep A]]

For Company B

[Company B rep]]

[[item rep B]]