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Global Financial Crisis -- Practical Implications for addressing legal issues

Global Financial Crisis -- Practical Implications for addressing legal issues . Sara Jensen Deputy General Counsel, Promega Corporation March 2009, Madison, Wisconsin. Promega. Private biotechnology company Biological reagents used for life science research and human identity testing

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Global Financial Crisis -- Practical Implications for addressing legal issues

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  1. Global Financial Crisis -- Practical Implications for addressing legal issues Sara Jensen Deputy General Counsel, Promega Corporation March 2009, Madison, Wisconsin

  2. Promega • Private biotechnology company • Biological reagents used for life science research and human identity testing • Over 2,000 tangible products • Key assets include intangible intellectual property Promega Worldwide Headquarters Madison, Wisconsin

  3. Background • 920 employees worldwide • ISO 13485 certified • Manufacturing in U.S., Korea and Shanghai • 14 international subsidiaries

  4. Sales by Region of the World

  5. Implications of reduced cash flow What does it mean for an in house Legal Department?

  6. Cash is tight…So what? • Vendors/Suppliers and customers might fail • Your business might fail • Mergers and Acquisitions will decrease • Export compliance issues may increase in importance • Cost cutting pressures • Your Code of Conduct matters

  7. Vendors and customers may fail… • Litigation is costly • Look for practical solutions • Require or hold safety stock for key supplies • Require key suppliers to transfer manufacturing rights in event of failure. Consider escrow of manufacturing know how • Obtain letters of credit or advancement payment from customers • Secure your interests • Put arbitration language in international contracts

  8. You may fail • Plan for exit strategies • Link price increases to a reasonable index • Force Majeure clauses matter • Limit your damages • Look for indemnities • Insure • Weigh risk • Is it better to ask for forgiveness or permission?

  9. M&A will decrease • Look for alternatives to acquisitions • Joint Ventures • Collaborations • Licenses • Milestone Payments • Escrow for unknown liabilities • Consider assignment clauses in all key contracts • What if your partner is sold to your competitor?

  10. Export compliance may matter more • Looking for new markets • Cuba? • Understand new markets • What your Distributor Agreement says and what local law requires may be totally different • If U.S. exports decrease, Bureau of Industry and Security may have more time to audit you • Know the rules, have a policy, enforce the policy • Recommended free training at: www.bis.doc.gov/seminarsandtraining/index.htm • Beware of the International Trafficking in Arms Regulations

  11. Cost cutting pressures • Reductions in force – understand local laws • Reduce Outside Counsel Expenses – more pressure to settle, more opportunity to settle • Beware of bad judgment • Desperate times lead to desperate measures…

  12. Code of Conduct…Need it now more than ever • FCPA compliance • Antitrust compliance • FAR compliance • Federal Sentencing Guidelines • Look for best practices… • Promote it • Train employees globally • Provide multiple channels for reporting concerns (including anonymous hotlines) • Have defined investigation processes • Audit compliance

  13. Questions Welcome

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