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 This Consulting Services Agreement involves

ADVANCED LIFE SCIENCES HOLDINGS, INC. | Covance Central Laboratory Services LP | Advanced Life Sciences Inc.

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Date: 11/23/2005

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Exhibit 10.3




This Laboratory Service Agreement (“Agreement”) is effective as of November 22, 2005 (“Effective Date”), by and between Covance Central Laboratory Services LP (“Covance”) , an Indiana limited partnership, with offices at 8211 SciCor Drive, Indianapolis, Indiana 46214, and Advanced Life Sciences Inc. (“ALSI”), with offices at 1440 Davey Road, Woodridge, IL 60517.




WHEREAS, Covance is engaged in the business of providing laboratory testing, data management, protocol management and information management services for pharmaceutical clinical trials (“Services”); and


WHEREAS, ALSI desires for Covance to perform such Services in accordance with and subject to the terms and conditions of this Agreement.


NOW, THEREFORE, in consideration of the foregoing recitals and the mutual promises and covenants contained herein, and each act done pursuant thereto, ALSI and Covance agree as follows:




(a)  Definitions - The following terms, as used herein (unless a clear contrary interpretation appears), have the following meanings:


“Clinical Trial” means a Study or the scientific evaluation of a Drug or Medical Device on the terms and conditions of a Protocol.


 “Drug” means a new or existing drug provided by ALSI and which is the subject of a Clinical Trial or Study under this Agreement.


“FDA” means the United States Food and Drug Administration or any other government body or agency that succeeds it.


“Project” means a Study or Clinical Trial, or any other clinical trial, project or assignment between Covance and ALSI.


“Protocol” means the document which specifies the laboratory testing procedures as written by ALSI as applicable for the performance of a Study or Clinical Trial and is provided to Covance.


“Study” means a Clinical Trial or the scientific evaluation of a Drug or Medical Device on the terms and conditions of the Protocol.


(b)                                  Interpretation - In this Agreement, unless a clear contrary intention appears:


i.                               the singular number includes the plural and vice versa ;




ii.                            reference to any person or entity includes such person’s or entity’s successors and assigns;


iii.                         reference to this Agreement means such agreement as amended, modified or supplemented from time to time in accordance with the terms hereof;


iv.                        reference to any law, rule, regulation, order, decree, requirement, policy, guideline, directive or interpretation means as amended, modified, codified, replaced or reenacted in whole or in part, and in effect on the determination date, including rules and regulations promulgated thereunder;


v.                           “hereunder”, “hereof”, “hereto” and words of similar import shall be deemed references to this Agreement as a whole and not to any particular Section or other provision hereof;


vi.                        “including” (and with correlative meaning “include”) means including without limiting the generality of any description preceding such term; and


vii.                     relative to the determination of any period of time, “from” means “from and including to” and “to” means “to but excluding”.


2.                SERVICES


Covance hereby agrees to perform Services for ALSI’s protocol                     , pursuant to the terms and conditions contained in this Agreement, the Protocol, the Statement of Work (“SOW”), the Quote for Services (“Budget”), and all other applicable documents.   


3.               FEES AND BILLING


Fees for the Project are set forth in the attached Budget.  The Budget contains all of the applicable discounts and Services that will be provided for that Project.


ALSI agrees make an advance payment equal to 10% of the Budget (“Advance Payment”).  Covance will invoice the Advance Payment when this Agreement has been signed by both parties.  ALSI will pay the Advance Payment invoice within thirty (30) days after receipt. 


Each month, Covance will invoice ALSI for all fees due and expenses incurred while providing Services during the previous month.  Payment is due thirty (30) days from the date of the invoice.   After invoices have reached 90% of the Budget, Covance will begin applying funds from the Advance Payment to the monthly invoices.  Should the Study be terminated before the Advance Payment is exhausted, and assuming all prior invoices have been paid, Covance will apply Advance Payment funds to the final invoice and refund any remaining Advance Payment funds to ALSI within thirty (30) days. 


Upon written notification by ALSI that the Clinical Trial has been concluded or six months after the non-receipt of any kits (whichever comes first), Covance will issue a final invoice for any Services rendered to identify amounts due to Covance or refund due to ALSI.




Covance will hold prices unchanged for twelve (12) months from Project start up.  Thereafter, fees may be adjusted annually by Covance upon thirty (30) days written notice to ALSI.  However, should global political, logistical or economic changes take place which increase Covance’s purchase prices, Covance may assess additional charges to ALSI upon thirty (30) days’ prior written notice.


If ALSI requests a material change to the Project at any time which would affect the Services, Covance will revise fees to reflect the change in the SOW and/or Budget. 


COVANCE will provide each Investigator site with project and visit specific specimen collection supplies needed to collect and ship specimens. The kits include test tubes, pipettes, collection needles, and other required materials, in addition to instructions for collection and shipment. The kits shall also have a test requisition form designated for the Project. Each kit and collection tube will be bar coded to ensure tracking and testing audit trails upon its return to Covance.  Should a kit be lost through no fault of Covance, or should a kit expire at the Investigator site, or should a kit otherwise need to be replaced through no fault of Covance, Covance will supply replacement kits for those that need to be replaced.  The charge for any replacement kit which is lost, expires, or otherwise needs to be replaced through no fault of Covance, will be an amount equal to the price listed in the Budget per kit for the same kit/visit as is being replaced.


4.               PROPERTY OWNERSHIP


All materials, documents, information, programs and suggestions of every kind and description supplied to Covance by or on behalf of ALSI or prepared or developed by Covance pursuant to this Agreement (except for Covance procedural manuals, personnel data and Covance developed technology and software) shall be the sole and exclusive property of ALSI.  Strategic insight and proposed Project design and scope provided in any Covance proposal shall remain the property of Covance and may only be used by ALSI to assess whether it wishes to pursue such work with Covance.


5.               PATENT RIGHTS


Covance will disclose promptly to ALSI or its nominee any and all patentable inventions, discoveries and improvements conceived or made by Covance in the course of the Clinical Trial and/or while providing Services to ALSI pursuant to this Agreement, and Covance agrees to assign all its interests therein to ALSI or its nominee; provided ALSI requests such assignment within one year of notification of such invention; provided , further , that Covance shall retain all rights to any data, processes, software (including codes), technology, means, know-how and delta flags developed by Covance relating to laboratory testing or data management.  When requested by ALSI, Covance will execute any and all applications, assignments or other instruments and give testimony which ALSI deems necessary to apply for and obtain any Letters of Patent of the United States of America or of any foreign country or to otherwise protect ALSI’s interest therein.  ALSI shall compensate Covance for the time devoted to said activities and reimburse Covance for expenses incurred.  These obligations shall continue beyond the termination of this Agreement with respect to patentable inventions, discoveries and improvements conceived or made by Covance while providing Services to ALSI pursuant to this Agreement, and shall be binding upon Covance’s assignees.






Covance agrees that all materials, documents and information provided to it by ALSI and, except as provided in Section 4, all test information, data and records developed by Covance exclusively in connection with the performance of its Services pursuant to this Agreement is and shall be the sole property of ALSI and considered confidential (collectively, “Confidential Information”).  Covance agrees to hold Confidential Information in confidence and in a manner consistent with the way in which Covance maintains the confidentiality of its own proprietary information.  Covance shall disclose the Confidential Information to Investigators and Covance employees, officers, directors and representatives only on a need-to-know basis.  Covance agrees that, except as necessary to fulfill its obligations under this Agreement, it will not use or disclose to any other third party any Confidential Information; provided , however , that Covance has no obligations with respect to any Confidential Information that is:


(a)           now or later becomes publicly available through no fault of Covance;

(b)          obtained by Covance from a third party not under obligation to ALSI with respect to such Confidential Information;

(c)           already in Covance’s possession as indicated in its written records; or

(d)          required to be disclosed by any law, rule, regulation, order, decree or subpoena, in which event Covance will give ALSI, if practicable, advance written notice to permit ALSI to seek a protective order or other similar order with respect to such Confidential Information. 


The foregoing obligations of non-use and confidentiality will extend for five (5) years beyond the date of disclosure or generation of such Confidential Information.


Should Covance be obligated to provide testimony or records regarding any Study, Protocol or Clinical Trial in any legal or administrative proceeding, then ALSI shall reimburse Covance its out-of-pocket costs therefore plus an hourly fee for its employees or representatives equal to the internal fully burdened cost to Covance of such employee or representative.


Nothing contained in this Section 6 shall be interpreted to limit the rights and obligations of the parties under Section 4 hereof and to the extent that any conflict arises in applying the provisions of Sections 4 and 6, the provisions of Section 4 shall control.


7.               COMPLIANCE


Performance - Covance will perform its Services in accordance with the current state of the laboratory art. All of Covance’s tests, assays and other activities undertaken under this Agreement shall comply in all material respects with College of American Pathologists (“CAP”).  CLIA (Clinical Laboratory Improvement Act) certification is obtained through compliance with CAP requirements.  This Agreement contains all the conditions under which Covance will provide Services. Covance makes no other express or implied commitments or warranties concerning the performance of the Clinical Trial.


Change in Requirements - Should government regulatory requirements be changed, Covance will make every reasonable effort to satisfy the new requirements.  In the event that compliance with such new regulatory requirements necessitates a change in this Agreement, Covance will submit to ALSI a revised technical and cost proposal for ALSI’s acceptance prior to performing Services.


Conflicts - In the event of a conflict in government regulation, ALSI will designate the applicable regulations to be followed by Covance in the performance of its Services.




8.               LABORATORY VISITS


ALSI’s representatives may visit Covance’s facility with reasonable frequency during normal business hours to observe the progress of a Clinical Trial. All such visits shall be scheduled in advance by ALSI. ALSI agrees that al

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