INDEMNIFICATION OUTLINE
Unless Sponsor requests an indemnification from Institution, offer a form of indemnity that only runs one-way, from Sponsor to Institution.
a. Must include the proper parties (no exceptions):
"The University of Texas System ("System"), the University, their Regents, officers, agents and employees"
a. Should cover all kinds of claims:
"claims, demands, costs or judgments against them"
b. May, under proper circumstances, be limited to "claims for personal injury, including death, and damage to property." (See Indemnity 5.)
a. Should cover us if we perform exactly as they request:
"arising out of the activities to be carried out pursuant to the obligations of this Agreement"
b. May, under proper circumstances, be limited to claims "arising directly out of administration of the study compound pursuant to the obligations of this Agreement." (See Indemnity Clause 12.2.)
c. Should also cover claims resulting from their use of the results of the Study:
"including, but not limited to, the use by Sponsor of the results obtained from the activities performed by University under this Agreement"
a. Sponsor may except from its obligations causes of action arising from our negligence:
"the negligent failure of Institution to substantially comply with any applicable governmental requirements or to adhere to the terms of the protocol attached hereto as Exhibit A; or
"the negligence or willful malfeasance by a Regent, officer, agent, or employee of Institution or System."
a. If the protocol is ours, we may require only a mutual negligence indemnity or no indemnity at all from Sponsor. (See Indemnity 3.)
a. Only the Institution, not the System, indemnifies Sponsor. The System is not a party to the Agreement.
a. The Institution only indemnifies Sponsor "to the extent authorized under the Constitution and laws of the State of Texas"
a. The Constitution and laws of the State of Texas only permit us to indemnify Sponsor with respect to claims resulting from the negligence of our parties to the agreement, since the State of Texas has only waived its sovereign immunity with respect to negligence claims:
"liability resulting from the negligent acts or omissions of Institution, its agents or employees pertaining to the activities to be carried out pursuant to the obligations of this Agreement"
a. We except from our obligations causes of action arising from "the negligence or willful malfeasance of Sponsor, its officers, agents, or employees, or any person or entity not subject to Institution's supervision or control." (See Clause 2.1.)
If notice provisions are included, be sure they are reasonable. Limitations to fewer than thirty (30) days are not generally reasonable and it is preferable to simply say that we will "promptly" give notice. (See Indemnity 5, Clause 12.1 and Indemnity 10.)
a. If Sponsor requests control of and/or our full cooperation with its defense, inform Sponsor that the Texas Attorney General has a duty to defend us but that there are mechanisms whereby he will permit us to be represented by outside counsel
b. Some Sponsor insurance carriers will not provide coverage if the Attorney General steps in. Please consult with OGC if you encounter this problem.
Many examples of appropriate conditions to Sponsor's obligation to Indemnify are contained in Indemnities 5 and 10. As a general rule, conditions should be limited in number and limited to those with which we would ordinarily and routinely comply even were we not required to do so by the terms of the Agreement. Other conditions should be evaluated on a case-by-case basis. Failure to comply with a condition should not affect Sponsor's obligation to indemnify if such non-compliance does not contribute to the injury for which we are seeking indemnification. (See last paragraph of Indemnity 10.)
[This is the basic one-way Sponsor indemnity, including liability for claims arising from our performance of our obligations and Sponsor's use of the study results.]
1.1 Sponsor agrees to indemnify and hold The University of Texas System ("System"), the University, their Regents, officers, agents and employees harmless from any liability, loss or damage they may suffer as a result of claims, demands, costs or judgments against them arising out of the activities to be carried out pursuant to the obligations of this Agreement, including, but not limited to, the use by Sponsor of the results obtained from the activities performed by University under this Agreement; provided, however, that any such liability, loss or damage resulting from the following Subsections "a" or "b" is excluded from this Agreement to indemnify and hold harmless:
a. the negligent failure of University to substantially comply with an applicable FDA or other governmental requirements; or
b. the negligence or willful malfeasance of any Regent, officer, agent or employee of University or System.
[This is a standard mutual indemnification: we indemnify Sponsor with respect to our negligence; Sponsor indemnifies us with respect to our performance of the protocol and Sponsor's use of the results of the study. It should be offered as our first position regarding indemnification where a one-way indemnification from Sponsor to Institution has already been rejected by Sponsor.]
2.1 Institution shall, to the extent authorized under the Constitution and laws of the State of Texas, indemnify and hold Sponsor harmless from liability resulting from the negligent acts or omissions of Institution, its agents or employees pertaining to the activities to be carried out pursuant to the obligations of this Agreement; provided, however, that Institution shall not hold Sponsor harmless from claims arising out of the negligence or willful malfeasance of Sponsor, its officers, agents, or employees, or any person or entity not subject to Institution's supervision or control.
2.2 Sponsor shall indemnify and hold System, Institution, their Regents, officers, agents and employees harmless from any liability or loss resulting from judgments or claims against them arising out of the activities to be carried out pursuant to the obligations of this Agreement, including but not limited to the use by Sponsor of the results of the Study; provided, however, that the following is excluded from Sponsor's obligation to indemnify and hold harmless:
a. the negligent failure of Institution to substantially comply with any applicable governmental requirements or to adhere to the terms of the protocol attached hereto as Exhibit A; or
b. the negligence or willful malfeasance by a Regent, officer, agent, or employee of Institution or System.
[This is a mutual indemnity with respect to each party's negligence and further provides that the Sponsor will indemnify University regarding claims arising from its use of the results of the study. It may only be used where the protocol or procedure being used is the University's. The second paragraph (Sponsor's indemnification) can be used independently if Sponsor is not requiring an indemnification from us. If Sponsor is providing drug, material, etc., the product liability indemnification may be better suited. With some minor modifications, the first paragraph can be "mirrored" to create an interagency (for example, component to component) or state university to state university mutual indemnification.]
To the extent authorized by the Constitution and laws of the State of Texas, Institution shall indemnify and hold Sponsor harmless against any and all claims, demands, damages, liabilities and costs incurred by Sponsor which directly or indirectly result from, or arise in connection with, any negligent act or omission of Institution, its agents, or employees, pertaining to its activities and obligations under this Agreement.
Sponsor shall indemnify and hold Institution, System, their Regents, officers, agents, and employees harmless against any and all claims, demands, damages, liabilities and costs which directly or indirectly result from, or arise in connection with, any negligent act or omission of Sponsor, its agents, or employees, pertaining to its activities and obligations under this Agreement or from Sponsor's use of the results of the Research Project.
[Under certain unusual circumstances, it may be appropriate not to require an indemnity from the Sponsor. Always confer with OGC regarding this conclusion and never offer this position; we should only accept this position under the appropriate circumstances and only after any form of indemnity from the Sponsor, such as the negligence indemnity above, has been rejected. Given (i) a Protocol that is ours, (ii) a study drug that will be used for an FDA approved use, (iii) that almost all conceivable negligence would be ours, and (iv) that any injuries resulting from the drug itself would most probably result in product liability claims from which the Institution would be immune (the State would most likely not waive sovereign immunity with respect thereto), the minimal risks would not justify requiring an indemnity from the Sponsor.]
[This is a one-way Sponsor indemnity for the use of results only, for when the protocol is ours and Sponsor is not providing drugs, materials or devices, or such drugs, materials or devices are being supplied for already approved (FDA) uses.]
4.1 Sponsor agrees to indemnify and hold The University of Texas System ("System"), the University, their Regents, officers, agents and employees harmless from any liability, loss or damage they may suffer as a result of claims, demands, costs or judgments against them arising out of use by Sponsor of the results obtained from the activities performed by University under this Agreement; provided, however, that any such liability, loss or damage resulting from the following Subsections "a" or "b" is excluded from this Agreement to indemnify and hold harmless:
a. the negligent failure of University to substantially comply with any applicable FDA or other governmental requirements; or
b. the negligence or willful malfeasance of any Regent, officer, agent or employee of University or System.
[This is more or less a standard indemnification except that Sponsor limits its liability to claims for personal injury or death and places several conditions upon its obligation to indemnify: (1) proper conduct of the study, (2) notification, and (3) right to control defense. The indemnification also gives us a right to select our own counsel.]
5.1 Institution shall, to the extent authorized under the Texas Constitution and the Texas Tort Claims Act, TEX. CIV. PRAC. & REM. CODE ANN., Title 5, 101 et. seq., indemnify and hold Sponsor harmless from liability resulting from the negligent acts or omissions of Institution, its agents, or employees pertaining to the activities to be carried out pursuant to the obligations of this Agreement; provided, however, that Institution shall not hold Sponsor harmless from claims arising out of the negligence of Sponsor, its officers, agents, or any person or entity not subject to Institution supervision or control.
5.2 Sponsor shall indemnify and hold System, Institution, their Regents, officers, agents, and employees harmless from any liability or loss resulting from judgments or claims for personal injury, including death, and property damage against them arising out of the activities to be carried out pursuant to the obligations of this Agreement, including but not limited to the use by Sponsor of the results of the Study; provided, however:
a. that the Study is conducted in accordance with the protocol, all written instructions delivered by Sponsor concerning administration of the study drug and control drug, regulations set forth in FDA Form 1572, 21 CFR Part 50 and Part 56, and such other requirements as may be published by FDA from time to time, and in the exercise of Investigator's own medical judgment;
b. that Sponsor is notified promptly but in no event later than thirty (30) working days after receipt of notice of the injury or claim of suit, with same identified so as to advise Institution that it is related to the Study; and
c. that, to the extent to which Sponsor is required hereunder to provide an indemnification for any claim or suit, to the extent permitted by law, and subject to the statutory duties of the Texas Attorney General, Sponsor shall have the right to select defense counsel and to direct the defense or settlement of any such claim or suit.
In the event that representation of indemnitees and Sponsor by the same counsel would be a conflict of interest for such counsel, indemnitees may select independent counsel without relieving Sponsor of its obligations of indemnification and defense as set forth above.
5.3 The following is excluded from Sponsor's obligation to indemnify and hold harmless:
a. the negligent failure of Institution to comply with any applicable governmental requirements or to adhere to the terms of the Protocol attached hereto as Exhibit ; or
b. the negligence or willful malfeasance by a Regent, officer, agent, or employee of Institution or System.
[This indemnification is for use in materials transfer agreements, University transferring.]
Recipient shall be liable for any damages resulting from any use or application of the Biological Material(s) and other related materials, and shall defend, hold harmless and indemnify University, System, their Regents, officers, employees and agents, against any and all claims, suits, actions, costs, counsel fees, expenses, damages, judgments and decrees, by reason of any person or property being injured or damaged directly or indirectly by use or application of the Biological Materials or activities arising therefrom. Each party hereto agrees to notify the other as soon as one party becomes aware of a claim or action under this Agreement.
[This indemnity is for use in materials transfer agreements - University receiving. Please see our Material Transfer Agreement Checklist for information about indemnification and other issues arising in this context.]
Institution, to the extent permitted by the law and constitution of the State of Texas, will hold Sponsor harmless from any claims or liability resulting from use of the Product(s) in accordance with Texas Civil Practice and Remedies Code, Title 5, Section 101, et. seq., except insofar as such claims or liability arise out of the negligence or wrongdoing of the Product(s) provider.
[This indemnity is for use in patent and technology license agreements.]
Licensee shall hold harmless and indemnify Board, System, University, its Regents, officers, employees and agents from and against any claims, demands, or causes of action whatsoever, including without limitation those arising on account of any injury or death of persons or damage to property caused by, or arising out of, or resulting from, the exercise or practice of the license granted hereunder by Licensee, its Subsidiaries or their officers, employees, agents or representatives.
[This indemnification is for use in Software License Agreements where Institution is the developer/licensor of the software and licensee has the right to modify, enhance and/or make derivative works from the software.]
9.1 To the extent authorized by the Constitution and laws of the State of Texas, Institution shall indemnify, hold harmless and defend Licensee against any action brought against Licensee to the extent that such action is based on a claim that the unmodified [Software], when used in accordance with this Agreement, infringes a United States copyright and Institution shall pay all costs, settlements and damages finally awarded; provided, that Licensee promptly notifies Institution in writing of any claim, gives Institution sole control of the defense and settlement thereof and provides all reasonable assistance in connection therewith. If any [Software] is finally adjudged to so infringe, or in Institution's opinion is likely to become the subject of such a claim, Institution shall, at its option, either: (i) procure for Licensee the right to continue using the [Software], (ii) modify or replace the [Software] to make it noninfringing, or (iii) refund the fee paid, less reasonable depreciation, upon return of the [Software]. Institution shall have no liability regarding any claim arising out of: (w) use of other than a current, unaltered release of the [Software], unless the infringing portion is also in the then current, unaltered release, (x) use of the [Software] in combination with non-Institution software, data or equipment if the infringement was caused by such use or combination, (y) any modification or derivation of the [Software] not specifically authorized in writing by Institution, or (z) use of third party software. THE FOREGOING STATES THE ENTIRE LIABILITY OF INSTITUTION AND THE EXCLUSIVE REMEDY FOR LICENSEE RELATING TO INFRINGEMENT OR CLAIMS OF INFRINGEMENT OF ANY COPYRIGHT OR OTHER PROPRIETARY RIGHT BY THE [SOFTWARE].
9.2 Except for the foregoing infringement claims, Licensee shall indemnify and hold harmless System, Institution, their Regents, officers, agents and employees from and against any claims, demands, or causes of action whatsoever, including without limitation those arising on account of Licensee's modification or enhancement of the [Software] or otherwise caused by, or arising out of, or resulting from, the exercise or practice of the license granted hereunder by Licensee, its Subsidiaries or their officers, employees, agents or representatives.
[This is a detailed and highly negotiated indemnification containing conditions which should only be accepted when firmly required by Sponsor. These conditions should be viewed as examples of what is acceptable; however, every effort should be made to limit the number of conditions imposed. This indemnification stands, perhaps, as an example of an unfavorable, but acceptable, indemnification provision.]
10.1 Sponsor will defend, subject to the statutory duty of the Texas Attorney General, and indemnify the Institution, the System, their Regents, officers, employees, agents and the members of its Institutional Review Board against all claims and suits against them for personal injury, including death, allegedly arising out of: (1) administration pursuant to the Protocol of any Medication (as herein defined) supplied by or required by Sponsor, (2) the performance of any procedure called for by and administered pursuant to the Protocol or (3) the use by Sponsor of the results of the Study; provided that all of the conditions set forth below shall have been fully complied with.
Conditions
a. All "Medication" (which term includes any drug or other substance required to be administered to patients pursuant to the Protocol, the investigational drug, and control drugs, including placebo, furnished by Sponsor) shall be administered to patients, and all procedures shall be conducted pursuant to the Protocol, except for such slight deviations as (i) arise out of necessity, or (ii) do not contribute to the alleged injury;
b. Except for the deviations set forth in clause "a." above, all changes or modifications to the Protocol shall have been approved in writing by Sponsor;
c. The injury shall have been caused by Medication or a procedure called for by and administered pursuant to the Protocol unless the cause relates to the use by Sponsor of the results of the Study;
d. In performing the Investigation, the Institution and officers, agents, employees, members of the Institutional Review Board, and the Investigator(s) shall have complied with all local, state and federal laws and regulations pertaining to the administration of drugs and the conduct of clinical investigations, including but not limited to the Federal Food, Drug and Cosmetic Act;
e. The Institution shall have obtained, when required or appropriate, written, informed consent statements from the patient or the patient's legal representative;
f. The Institution shall have advised all persons performing any acts or duties related to the conduct of the Investigation, including but not limited to its officers, appropriate employees, agents, members of its Institutional Review Board and the Investigator(s), of its obligations under the terms of this Agreement;
g. Sponsor shall have been promptly notified in writing of adverse reactions encountered during the Investigation, and of any claims or suits brought against the Institution, the System, their Regents, officers, employees, agents and members of the Institutional Review Board with respect to the Investigation. The Institution will permit Sponsor at it discretion to settle any claim or suite indemnified by Sponsor hereunder, with the approval of the System and the Institution, which approval will not be unreasonably withheld, and agrees, subject to the statutory duty of the Texas Attorney General, to the complete control of such defense by Sponsor. Any settlement offer negotiated by Sponsor pursuant to this Agreement shall (i) be a bona fide offer of settlement that releases with prejudice all claims and liabilities against the Institution, the System, their Regents, officers, employees, agents and members of the Institutional Review Board, arising out of the claim or suit for which indemnity is sought; (ii) be made in good faith by Sponsor; (iii) be reviewed by, and discussed with the Institution and the System; and (iv) not include any terms or conditions which impose on the Institution, the System, their Regents, officers, employees, agents or members of the Institutional Review Board any obligation to perform or refrain from any act which would have a significant financial, operational or medical impact to them and which would not be reimbursed by Sponsor as part of the proposed settlement (hereinafter the "Offer"). Where Sponsor has obtained plaintiff's written approval of the Offer, and where subsequently the Institution or the System does not approve the Offer within ten (10) days after it is communicated to the Institution and the System, or such shorter period as may be required under the circumstances to effectuate such settlement (the "Approval Period"), Sponsor's obligation to further defend such claim or suit and to indemnify the Institution, the System, their Regents, officers, employees, agents and members of the Institutional Review Board shall cease upon expiration of the Approval Period. No such claim or suit shall be settled without the prior written consent of Sponsor, and Sponsor shall not be responsible for any legal fees or other costs incurred other than as provided in this Agreement;
h. Subject to the statutory duty of the Texas Attorney General, the Institution, the System, their Regents, officers, employees, agents, members of its Institutional Review Board and the Investigator(s) shall cooperate fully with Sponsor and its legal representatives in the investigation and defense of any claims or suits covered by this Agreement; and
i. There were no negligent actions or omissions or willful misconduct on the part of the Institution, the System, their Regents, officers, employees, agents, members of its Institutional Review Board or the Investigator(s) and that the Investigator(s) have not been otherwise negligent in the handling or administration of the Medication or in the conduct of the procedures outlined in the Protocol.
[This indemnity is for use in "off-label" (use of drug NOT approved by the FDA) clinical trial agreements.]
Sponsor shall be liable for any study related injury directly caused by a material defect in the design or manufacture of the study drug. Use by the investigators of the study drug for uses not included in the package insert shall not be considered a design defect.
NOTE: "Use of results" language must be included.
[This indemnity is for use in "on-label" (FDA approved use of drug) clinical trial agreements.]
Sponsor agrees to indemnify and hold harmless the Investigator, Institution, The University of Texas System, Board of Regents, officers, employees and agents (Indemnitees) from and against any and all liability, damages, losses, costs, expenses, judgments, and reasonable attorney fees arising out of Sponsor's failure to manufacture the Study Drug in accordance with FDA specifications. Notwithstanding anything to the contrary contained herein, Sponsor shall not have any obligation to defend, indemnify or hold Indemnitees harmless from claims, suits or damages arising as a result of, or in connection with, willful malfeasance or negligent acts or omissions of Indemnitees.
NOTE: No "use of results" language is needed.
[This indemnification is for use when Sponsor is obtaining our results, but the protocol is ours.]
To the extent authorized by the Constitution and laws of the State of Texas, Institution shall indemnify and hold Sponsor harmless against any and all claims, demands, damages, liabilities and costs incurred by Sponsor which directly or indirectly result from, or arise in connection with, any negligent act or omission of Institution, its agents, or employees, pertaining to its activities and obligations under this Agreement.
Sponsor shall indemnify and hold Institution, System, their Regents, officers, agents, and employees harmless against any and all claims, demands, damages, liabilities and costs which directly or indirectly result from, or arise in connection with defects in the design or manufacture of the Study Drug or from Sponsor's use of the results of the Study.
[This paragraph adds obligations concerning notification and defense of claims and cooperation. It may be added to any indemnification upon Sponsor's request or at the discretion of the component.]
13.1 Both parties agree that upon receipt of a notice of claim or action arising out of the activities to be carried out pursuant to the project described in Attachment A, the party receiving such notice will notify the other party promptly. Sponsor agrees, at its own expense, to provide attorneys to defend against any actions brought or filed against Institution, System, their Regents, officers, agents and/or employees with respect to the subject of the indemnity contained herein, whether such claims or actions are rightfully brought or filed, and, subject to the statutory duty of the Texas Attorney General, Institution agrees to cooperate with Sponsor in the defense of such claim or action.
[This paragraph may be used in place of the Sponsor's indemnity in an otherwise standard indemnity such as Paragraph 2.2 to create a limited Sponsor indemnity when the study drug is to be used in connection with highly dangerous procedures such as bone marrow transplantation. In such a situation, the Sponsor will only be liable for injuries arising from the use of the study drug and not from injuries arising from the bone marrow transplant procedure or other similar procedures.]
13.2 Sponsor shall indemnify and hold System, Institution, their Regents, officers, agents or employees harmless from any liability or loss resulting from judgments or claims against them arising directly out of administration of the study compound pursuant to the obligations of this Agreement or the use by Sponsor of the results of the Study; provided, however, that the following is excluded from Sponsor's obligation to indemnify and hold harmless:
a. the negligent failure of Institution to comply with any applicable governmental requirements or to adhere to the terms of the protocol attached hereto as Exhibit ; or
b. the negligence or willful malfeasance by a Regent, officer, agent or employee of Institution or System.
[This paragraph concerning Sponsor's insurance coverage can be added to any indemnification.]
13.3 Sponsor agrees to maintain reasonable coverage for such liabilities either through commercial insurance or a reasonable self-insurance mechanism, and information concerning commercial insurance of a reasonable self-insurance mechanism will be reasonably provided to the University.
[This paragraph concerning our self-insurance can be added to any indemnification.]
13.4 University, as a component of System, is an agency of the State of Texas and is self-insured pursuant to The University of Texas System Professional Medical Malpractice Self-Insurance Plan, under the authority of Section 59.01, Texas Education Code. University has and will maintain in force during the term of this Agreement adequate insurance to cover its indemnification obligations hereunder.
[This paragraph may be added when Sponsor insists upon a temporal limitation to its obligations to indemnify.]
13.5 This indemnification is effective with respect to any covered damage or liability occurring after the date of this Agreement and shall continue in effect after the expiration or earlier termination of the Agreement until the expiration of the personal injury statute of limitations in the State of Texas.
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