EXHIBIT 2.4(b)(vi)

 

[*****] Text omitted for confidential treatment. The redacted information has
been excluded because it is both (i) not material and (ii) would be
competitively harmful if publicly disclosed.

 

 

 

 

 

 

 

 

 

 

TRANSITION SERVICES AGREEMENT

 

BY AND BETWEEN

 

JANSSEN RESEARCH & DEVELOPMENT, LLC

 

AND

 

XBIOTECH USA, INC.

 

DATED AS OF DECEMBER 30, 2019

 

 

 

 

 

 

 

 

 

 

ARTICLE I   DEFINITIONS 1 Section 1.1.   Definitions 1 Section 1.2.   Glossary
of Defined Terms 2 ARTICLE II   SERVICES 2 Section 2.1.   Services 2 Section
2.2.   Performance of Services 2 Section 2.3.   Use of Services 3 Section
2.4.   Transitional Nature of Services 3 Section 2.5.   Use of Third Parties to
Provide Services 3 ARTICLE III   OTHER ARRANGEMENTS 4 Section 3.1.   Access 4
Section 3.2.   Seller Manager and Buyer Manager 4 ARTICLE IV   FEES; TAXES;
BOOKS AND RECORDS 4 Section 4.1.   Fees for Services 4 Section 4.2.   Invoices 5
Section 4.3.   Taxes 5 Section 4.4.   No Set-Off 5 Section 4.5.   Books and
Records; Audit Rights 5 ARTICLE V   TERM AND TERMINATION 6 Section 5.1.   Term 6
Section 5.2.   Termination 6 Section 5.3.   Effect of Termination 6

 

 -i- 

 

ARTICLE VI   CONFIDENTIALITY 7 Section 6.1.   Confidentiality 7 ARTICLE
VII   DISPUTE RESOLUTION 7 Section 7.1.   Dispute Resolution; Generally 7
Section 7.2.   Mediation 7 Section 7.3.   Arbitration 8 ARTICLE
VIII   INDEMNIFICATION; NO WARRANTY; SPECIFIC PERFORMANCE 10 Section
8.1.   Incorporation of Purchase Agreement Indemnification Provisions 10 Section
8.2.   NO WARRANTY 10 Section 8.3.   Specific Performance 10 ARTICLE
IX   MISCELLANEOUS 10 Section 9.1.   License to Intellectual Property 10 Section
9.2.   Notices 11 Section 9.3.   Governing Law 11 Section 9.4.   Assignment 11
Section 9.5.   Relationship of the Parties 11 Section 9.6.   Force Majeure 11
Section 9.7.   Severability 12 Section 9.8.   Waiver and Non-Exclusion of
Remedies 12 Section 9.9.   Further Assurances 12 Section 9.10.   Headings 12
Section 9.11.   Construction 12 Section 9.12.   Counterparts 13

 

 -ii- 

 

Section 9.13.   Entire Agreement; Amendments 13

 

 

 

 

 

 

 

 

 

 

 

 

 

 -iii- 

 

EXHIBITS

 

EXHIBIT A – Services

 

EXHIBIT B – Seller Manager and Buyer Manager

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 -iv- 

 

This TRANSITION SERVICES AGREEMENT (this “Agreement”), dated as of December 30,
2019, is by and between Janssen Research & Development, LLC, a New Jersey
limited liability company (“JRD”), and XBiotech USA, Inc., a Delaware
corporation (“Service Provider”). JRD and Service Provider are sometimes
individually referred to herein as a “Party” and are sometimes collectively
referred to herein as the “Parties”.

 

R E C I T A L S:

 

WHEREAS, on December 7, 2019, Janssen Biotech, Inc., a Pennsylvania corporation
(“Buyer”), and XBiotech Inc., a corporation existing under the laws of the
Province of British Columbia (“Seller”), entered into that certain Asset
Purchase Agreement (the “Purchase Agreement”), pursuant to which, among other
things, Seller agreed to sell, and Buyer agreed to purchase, all of Seller’s and
its Affiliates’ right, title and interest in, to and under the Purchased Assets,
upon the terms and subject to the conditions set forth therein; and

 

WHEREAS, following the Closing, Service Provider desires to provide or make
available certain Services (as defined below) to JRD and its Affiliates.

 

NOW, THEREFORE, in consideration of the mutual agreements, provisions and
covenants contained in this Agreement and the Purchase Agreement, the Parties
hereby agree as follows:

 

ARTICLE I

 

DEFINITIONS

 

Section 1.1.          Definitions. Capitalized terms used and not defined in
this Agreement have the meanings assigned to them in the Purchase Agreement. In
addition, for the purpose of this Agreement, the following terms shall have the
meanings set forth below.

 

“Force Majeure Event” means any event beyond the reasonable control of the
affected Party, which may include embargoes; war or acts of war, including
terrorism; insurrections, riots, or civil unrest; strikes, lockouts or other
labor disturbances; epidemics, fire, floods, earthquakes or other acts of
nature; acts, omissions or delays in acting by any Governmental Authority (other
than delays incident to the ordinary course of drug development); and failure of
plant or machinery.

 

“Service Period” means, with respect to any Service, the period commencing on
the Closing Date and ending at the close of business on the earlier of (i) the
date on which such Service is terminated in accordance with Section 5.2 and (ii)
the date on which all of the Specified Clinical Trials shall have been completed
(including any Services which, by their nature, are completed following any
Specified Clinical Trials).

 

“Specified Clinical Trials” means the (i) Phase 2(b) clinical trials for the
Compound with respect to the treatment of atopic dermatitis and hidradenitis
suppurativa and (ii) the investigator-initiated studies for the Compound with
respect to the treatment of systemic sclerosis and pancreatic cancer, in each of
cases (i) and (ii), that are ongoing as of the date hereof.

 

 

Section 1.2.          Glossary of Defined Terms. The following terms have the
meanings set forth in the Sections set forth below:

 

Definition Section “Agreement” Preamble “Buyer” Recitals “Buyer Manager” 3.3(b)
“CPR Mediation Procedure” 7.2(a) “CPR Rules” 7.3(a) “Dispute” 7.1 “Fees” 4.1
“JRD” Preamble “Party” or “Parties” Preamble “Pass-Through Costs” 4.1 “Protocol”
7.3(h) “Purchase Agreement” Recitals “Seller” Recitals “Seller Manager” 3.3(a)
“Service Provider” Preamble “Services” 2.1 “Term” 5.1

 

ARTICLE II

 

SERVICES

 

Section 2.1.          Services. Commencing on the Closing Date and for the
remainder of the applicable Service Period, Service Provider shall provide, or
shall cause one or more of its Affiliates to provide, to JRD and its Affiliates,
the services described on Exhibit A (the “Services”). If, during the Term, JRD
identifies any service that is not a Service, which was provided by Service
Provider or any of its Affiliates to the Business during the Reference Period
and which JRD determines in good faith it needs to continue to operate the
Business, then JRD may request that Service Provider provide such service, and
Service Provider and JRD shall negotiate in good faith to determine whether
Service Provider will provide such service. Upon mutual agreement of the
Parties, such service will be added to Exhibit A, and will thereafter be
considered a “Service” hereunder.

 

Section 2.2.          Performance of Services.

 

(a)               Service Provider shall perform, or caused to be performed, all
Services in a manner that is substantially similar in nature, frequency and
quality to the analogous services provided during the Reference Period by
Service Provider and its Affiliates to the Business. Service Provider shall
perform its duties and responsibilities hereunder in good faith and in
compliance with applicable Law and, in the provision of the Services, shall
comply with all applicable clinical trial agreements with respect to the
Specified Clinical Trials and shall not deviate from any of the clinical trial
protocols applicable to the Specified Clinical Trials or make any material
changes to, or material determinations with respect to, the conduct of the
Specified Clinical Trials (including with respect to study design, budget or
headcount), in each case without the consent of JRD.

 -2- 

 

(b)               Each of Service Provider and JRD agrees to cooperate and use
commercially reasonable efforts to obtain any necessary third-party consents
required for the provision of any Services hereunder. If, with respect to a
Service, Service Provider and JRD, despite the use of their respective
commercially reasonable efforts, are unable to obtain a required consent or the
performance of such Service by Service Provider or its Affiliates would
constitute a violation of applicable Laws, Service Provider shall in good faith
use its commercially reasonable efforts to devise an alternative arrangement for
the provision of such Services (which may include, subject to JRD’s consent,
retaining any Contract that would have otherwise been assigned or transferred to
Buyer as an Assumed Contract until the expiration or termination of the
applicable Service Period).

 

(c)               Each Party shall be responsible for its own compliance with
any and all Laws applicable to its performance under this Agreement. No Party
shall take any action in violation of any such applicable Law that results in
Liability being imposed on the other Party.

 

(d)               JRD agrees to cooperate in good faith with Service Provider to
facilitate the performance of the Services by Service Provider. In furtherance
of the foregoing, JRD agrees that Service Provider shall not be deemed to be in
breach of its obligations hereunder to the extent a failure to perform such
obligations is caused by any failure or delay of JRD or its Affiliates to
satisfy its obligations under this Agreement. Neither Service Provider nor any
of its Affiliates shall be liable for any action or inaction to the extent taken
or omitted to be taken by it pursuant to the instructions received from JRD or
its Affiliates.

 

Section 2.3.          Use of Services. Service Provider shall be required to
provide the Services only to JRD and its Affiliates and only in connection with
the conduct by JRD and its Affiliates of the Business.

 

Section 2.4.          Transitional Nature of Services. Each of Service Provider
and JRD acknowledges the transitional nature of the Services, and Service
Provider agrees to cooperate in good faith with JRD and to use commercially
reasonable efforts to effectuate a smooth transition of the Services from
Service Provider to JRD (or its designee).

 

Section 2.5.          Use of Third Parties to Provide Services. Service Provider
may perform its obligations to provide a Service through agents, subcontractors,
independent contractors or other Third Parties; provided, however, that (a) the
delegation of performance of the applicable Service does not impact the nature,
frequency or quality of such Service and (b) any increased costs resulting from
such delegation shall be borne by Service Provider. Nothing in this Section 2.5
shall relieve Service Provider of its obligations under this Agreement by use of
such agents, subcontractors or independent contractors and a breach of this
Agreement by any such agents, subcontractors, independent contractors or other
Third Parties shall be deemed to constitute a breach of this Agreement by
Service Provider.

 -3- 

 

ARTICLE III

 

OTHER ARRANGEMENTS

 

Section 3.1.          Access. If, in the course of its performance of the
Services hereunder, any of Service Provider or its Affiliates or any of their
respective Representatives is granted by JRD or any of its Affiliates access to
JRD’s or its Affiliates’ locations, systems and information, Service Provider
agrees to comply, and cause its Affiliates to comply, in all material respects
with JRD’s or its Affiliates’ reasonable policies and to permit its personnel to
be appropriately supervised or accompanied during such access as reasonably
required by JRD.

 

Section 3.2.          Seller Manager and Buyer Manager.

 

(a)               During the Term, Service Provider shall designate one
employee, who initially shall be the individual identified on Exhibit B, as the
individual who shall have overall responsibility for managing and coordinating,
as applicable, the provision of the Services (the “Seller Manager”) and who
shall coordinate and consult with the Buyer Manager with regard to the Services.
Service Provider may, from time to time at its reasonable discretion and upon
written notice to JRD, designate other individuals to serve in the capacity of
the Seller Manager.

 

(b)               During the Term, JRD shall designate one employee, who
initially shall be the individual identified on Exhibit B, as the individual who
shall have overall responsibility for managing and coordinating, as applicable,
the receipt of the Services (the “Buyer Manager”) and who shall coordinate and
consult with the Seller Manager with regard to the Services. JRD may, from time
to time at its reasonable discretion and upon written notice to Service
Provider, designate other individuals to serve in the capacity of the Buyer
Manager.

 

(c)               The Seller Manager and the Buyer Manager shall serve as the
respective primary points of contact for Service Provider, JRD and each of their
respective Affiliates with respect to the subject matter of this Agreement.

 

ARTICLE IV

 

FEES; TAXES; BOOKS AND RECORDS

 

Section 4.1.          Fees for Services. In consideration for all of the
Services to be provided hereunder, for each calendar quarter during the Term,
JRD shall pay Service Provider a fee for such quarter equal to all Pass-Through
Costs (as defined below) incurred by Service Provider during such calendar
quarter [*****] (collectively, the “Fees”). For purposes of this Agreement,
“Pass-Through Costs” shall mean those reasonable documented amounts and fees
paid to [*****] during the applicable Service Periods, together with such
[*****] in each case under the [*****] during the applicable Service Periods.
For the avoidance of doubt, Pass-Through Costs shall not include any internal
costs or expenses of Service Provider or its Affiliates.

 

[*****] Text omitted for confidential treatment. The redacted information has
been excluded because it is both (i) not material and (ii) would be
competitively harmful if publicly disclosed.

 

 -4- 

 

Section 4.2.          Invoices. Invoices with respect to each calendar quarter
(or partial calendar quarter), together with reasonably detailed supporting
documentation therefor, shall be provided to JRD within [*****] days following
the last day of such calendar quarter (or, if earlier, the expiration of the
Term). Payment terms will be net [*****] days after JRD’s receipt of an
undisputed invoice from Service Provider; provided, however, the actual payment
to Service Provider from JRD or its designee will not be made until the next
scheduled payment run as set forth at www.ap.jnj.com. JRD may contest any
invoice or portion thereof if it reasonably believes that the charges reflected
therein are inappropriate or questionable. Once the matter is resolved, JRD
shall pay the appropriate charges. Service Provider shall continue to perform
its obligations under this Agreement during such dispute. If an invoice is
disputed in part, Service Provider may issue a new invoice in compliance with
this Section 4.2 reflecting solely the undisputed charges, and any such invoice
shall be payable within [*****] days after receipt thereof; provided, however,
the actual payment to Service Provider from JRD or its designee will not be made
until the next scheduled payment run as set forth at www.ap.jnj.com.

 

Section 4.3.          Taxes. JRD shall bear any sales, use, value-added and
similar Taxes imposed by any Taxing Authority attributable to the Services
provided hereunder. Notwithstanding anything in this Agreement to the contrary,
JRD and its Affiliates shall be entitled to deduct and withhold from any amount
payable pursuant to this Agreement such amounts as JRD believes in good faith
are required to be deducted and withheld with respect to the making of such
payment under any provision of federal, state or local (in each case, whether
domestic or foreign) Tax Law. To the extent that amounts are deducted and
withheld and paid over to the appropriate Taxing Authority, such amounts shall
be treated for all purposes of this Agreement as having been paid to the Person
in respect of which such deduction and withholding was made.

 

Section 4.4.          No Set-Off. Except as mutually agreed to in writing by
Service Provider and JRD, no Party or any of its Affiliates shall have any right
of set off or other similar rights with respect to (a) any amounts invoiced or
paid pursuant to this Agreement or (b) any other amounts claimed to be owed to
the other Party or any of its Affiliates arising out of this Agreement.

 

[*****] Text omitted for confidential treatment. The redacted information has
been excluded because it is both (i) not material and (ii) would be
competitively harmful if publicly disclosed.

 

 -5- 

 

Section 4.5.          Books and Records; Audit Rights. Service Provider and its
Affiliates shall keep complete and accurate records relating to the Services
provided hereunder and the related Fees. JRD shall have the right, not more
frequently than once a year, at its own expense, to have an independent,
certified public accountant selected by JRD and reasonably acceptable to Service
Provider, review any such records of Service Provider and its Affiliates upon
thirty (30) days prior written notice and during regular business hours and
under obligation of confidence and subject in all cases to any confidentiality
obligations Service Provider and its Affiliates have to Third Parties, for the
sole purpose of verifying the Fees related to Services performed by or on behalf
of Service Provider and its Affiliates under this Agreement. The report of the
independent public accountant shall be shared with Service Provider at least
fifteen (15) days prior to distribution of the final report to JRD, such that
Service Provider can provide the independent public accountant with justifying
remarks for inclusion in the report prior to sharing the conclusions of such
independent public audit with JRD. The final audit report will be shared with
Service Provider and JRD at the same time and specify whether the Fees paid to
Service Provider were consistent with Service Provider’s and its Affiliates’
Pass-Through Costs incurred in the performance of Services, or, if inconsistent,
the amount of any underpayment or overpayment. If the review of such records
reveals an inconsistency, then JRD shall promptly pay to Service Provider any
underpaid amounts that should have been invoiced to JRD and Service Provider
shall promptly pay to JRD any overpaid amounts that should not have been
invoiced to JRD. If any such discrepancies are an overpayment of amounts due
under this Agreement greater than [*****] percent [*****] of the amounts
actually due for any prior [*****] month period, Service Provider shall pay all
reasonable costs incurred in conducting such review. Once JRD has conducted a
review and audit of Service Provider in respect of any given period, it may not
subsequently re-inspect Service Provider’s or its Affiliates’ records in respect
of such period, unless a subsequent audit of a separate reporting period
uncovers fraud on the part of Service Provider or its Affiliates that is
reasonably expected to have been occurring during the prior audited period.

 

ARTICLE V

 

TERM AND TERMINATION

 

Section 5.1.          Term. The term of this Agreement (the “Term”) shall
commence on the Closing Date and, unless earlier terminated pursuant to Section
5.2, shall terminate upon the earlier to occur of: (a) the termination of all
Service Periods; or (b) the mutual written agreement of the Parties to terminate
this Agreement in its entirety. JRD may request, subject to Service Provider’s
consent (not to be unreasonably withheld, conditioned or delayed), to extend the
Service Period with respect to any or all of the Services as may be agreed to by
the Parties.

 

[*****] Text omitted for confidential treatment. The redacted information has
been excluded because it is both (i) not material and (ii) would be
competitively harmful if publicly disclosed.

 

 -6- 

 

Section 5.2.          Termination.

 

(a)               Subject to Section 5.3 and without prejudice to JRD’s rights
with respect to a Force Majeure Event, JRD may from time to time terminate this
Agreement with respect to the entirety of any individual Service or a portion
thereof for any reason or no reason, by the giving of written notice to Service
Provider of such Service specifying the date such termination shall be
effective, which shall in no event be less than thirty (30) days after receipt
by Service Provider of such notice.

 

(b)               Service Provider may terminate this Agreement in its entirety
or with respect to any individual Service or a portion thereof at any time upon
written notice to JRD if JRD has failed to perform any of its material
obligations under this Agreement, including making payment of Fees for any
Service when due (other than amounts under dispute in accordance with Section
4.2), and such failure shall continue uncured for a period of thirty (30) days
after receipt by JRD of a written notice of such failure from Service Provider.

 

Section 5.3.          Effect of Termination. Upon the termination of any Service
pursuant to this Agreement, Service Provider shall have no further obligation to
provide the terminated Service to JRD, and JRD shall have no obligation to pay
any future Fees relating to any such Service; provided, however, that JRD shall
remain obligated to Service Provider for the Fees owed and payable in respect of
Services provided prior to the effective date of termination for such Service.
In connection with the termination of any Service, the provisions of this
Agreement not relating solely to such terminated Service shall survive any such
termination, and in connection with a termination of this Agreement in its
entirety, Article I, Section 4.5, this Article V, Article VII and Article VIII,
all confidentiality obligations under this Agreement (including Article VI) and
Liability for all due and unpaid Fees, shall survive such termination. The
termination of this Agreement shall not relieve the Parties of any liability or
obligation which accrued hereunder prior to the effective date of such
termination.

 

ARTICLE VI

 

CONFIDENTIALITY

 

Section 6.1.          Confidentiality.

 

Service Provider will, and will cause its Affiliates and its and their
Representatives, to keep confidential and not disclose to any Person (i) the
terms of this Agreement or (ii) any non-public, confidential or proprietary
information of JRD or its Affiliates (including information relating to the
Business) obtained pursuant to or in connection with this Agreement and to not
use any such information other than in furtherance of the performance of the
Services. The obligations of Service Provider under this Section 6.1 shall not
apply to information to the extent such information (a) becomes generally
available to the public without breach of Service Provider's or its Affiliates’
obligations under this Section 6.1 or under the Purchase Agreement or any
Related Document or (b) is required to be disclosed by Law or any Order;
provided, however, that in the case of the foregoing clause (b), to the extent
not prohibited by such Law or Order, Service Provider shall notify JRD as early
in advance of such disclosure as is practicable to allow JRD to take appropriate
measures (and Service Provider shall reasonably cooperate, at the expense of
JRD, in the taking of such measures) to preserve the confidentiality of such
information.

 -7- 

 

ARTICLE VII

 

DISPUTE RESOLUTION

 

Section 7.1.          Dispute Resolution; Generally. The Parties recognize that
a dispute may arise relating to this Agreement (a “Dispute”). Any Dispute,
including Disputes that may involve the parent company, subsidiaries or
Affiliates under common control of any Party, shall be resolved in accordance
with this Article VII; provided that in no event is anything in this Article VII
intended to limit, or shall be construed to limit, in any manner, the Parties’
rights to seek specific performance pursuant to Section 8.3.

 

Section 7.2.          Mediation.

 

(a)               The Parties shall first attempt in good faith to resolve any
Dispute by confidential mediation in accordance with the then current Mediation
Procedure of the International Institute for Conflict Prevention and Resolution
(“CPR Mediation Procedure”) (www.cpradr.org) before initiating arbitration. The
CPR Mediation Procedure shall control, except where it conflicts with these
provisions, in which case these provisions control. The mediator shall be chosen
pursuant to CPR Mediation Procedure. The mediation shall be held in New York,
New York.

 

(b)               Either Party may initiate mediation by written notice to the
other Party of the existence of a Dispute. The Parties agree to select a
mediator within twenty (20) days of the notice and the mediation will begin
promptly after the selection. The mediation will continue until the mediator, or
either Party, declares in writing, no sooner than after the conclusion of one
(1) full day of a substantive mediation conference attended on behalf of each
Party by a senior business person with authority to resolve the Dispute, that
the Dispute cannot be resolved by mediation. In no event, however, shall
mediation continue more than sixty (60) days from the initial notice by a Party
to initiate mediation unless the Parties agree in writing to extend that period.

 

(c)               Any period of limitations that would otherwise expire between
the initiation of mediation and its conclusion shall be extended until twenty
(20) days after the conclusion of the mediation.

 

Section 7.3.          Arbitration.

 

(a)               If the Parties fail to resolve the Dispute in mediation, and a
Party desires to pursue resolution of the Dispute, the Dispute shall be
submitted by either Party for resolution in arbitration pursuant to the then
current CPR Non-Administered Arbitration Rules (“CPR Rules”) (www.cpradr.org),
except where they conflict with these provisions, in which case these provisions
control. The arbitration will be held in New York, New York. All aspects of the
arbitration shall be treated as confidential.

 -8- 

 

(b)               The arbitrators will be chosen form the CPR Panel of
Distinguished Neutrals, unless a candidate not on such panel is approved by both
Parties. Each arbitrator shall be a lawyer with at least fifteen (15) years’
experience with a law firm or corporate law department of over twenty-five (25)
lawyers or who was a judge of a court of general jurisdiction. To the extent
that the Dispute requires special expertise, the Parties will so inform CPR
prior to the beginning of the selection process.

 

(c)               The arbitration tribunal shall consist of three (3)
arbitrators, of whom each Party shall designate one in accordance with the
“screened” appointment procedure provided in CPR Rule 5.4. The chair will be
chosen in accordance with CPR Rule 6.4.

 

(d)               If, however, the aggregate award sought by the Parties is less
than $5 million and equitable relief is not sought, a single arbitrator shall be
chosen in accordance with the CPR Rules.

 

(e)               Candidates for the arbitrator position(s) may be interviewed
by representatives of the Parties in advance of their selection, provided that
all Parties are represented.

 

(f)                The Parties agree to select the arbitrator(s) within
forty-five (45) days of initiation of the arbitration. The hearing will be
concluded within nine (9) months after selection of the arbitrator(s) and the
award will be rendered within sixty (60) days of the conclusion of the hearing,
or of any post-hearing briefing, which briefing will be completed by both sides
within forty-five (45) days after the conclusion of the hearing. In the event
the Parties cannot agree upon a schedule, then the arbitrator(s) shall set the
schedule following the time limits set forth above as closely as practical.

 

(g)               The hearing will be concluded in ten (10) hearing days or
less. Multiple hearing days will be scheduled consecutively to the greatest
extent possible. A transcript of the testimony adduced at the hearing shall be
made and shall be made available to each Party.

 

(h)               The arbitrator(s) shall be guided, but not bound, by the CPR
Protocol on Disclosure of Documents and Presentation of Witnesses in Commercial
Arbitration (www.cpradr.org) (“Protocol”). The Parties will attempt to agree on
modes of document disclosure, electronic discovery, witness presentation, etc.
within the parameters of the Protocol. If the Parties cannot agree on discovery
and presentation issues, the arbitrator(s) shall decide on presentation modes
and provide for discovery within the Protocol, understanding that the Parties
contemplate reasonable discovery.

 

(i)                 The arbitrator(s) shall decide the merits of any Dispute in
accordance with the law governing this Agreement, without application of any
principle of conflict of laws that would result in reference to a different law.
The arbitrator(s) may not apply principles such as “amiable compositeur” or
“natural justice and equity.”

 

(j)                 The arbitrator(s) are expressly empowered to decide
dispositive motions in advance of any hearing and shall endeavor to decide such
motions as would a United States District Court Judge sitting in the
jurisdiction whose substantive law governs.

 -9- 

 

(k)               The arbitrator(s) shall render a written opinion stating the
reasons upon which the award is based. The Parties consent to the jurisdiction
of the United States District Court for the district in which the arbitration is
held for the enforcement of these provisions and the entry of judgment on any
award rendered hereunder. Should such court for any reason lack jurisdiction,
any court with jurisdiction may act in the same fashion.

 

(l)                 Each Party has the right to seek from the appropriate court
provisional remedies such as attachment, preliminary injunction, replevin, etc.
to avoid irreparable harm, maintain the status quo, or preserve the subject
matter of the Dispute. Rule 14 of the CPR Rules does not apply to this
Agreement.

 

(m)             EACH PARTY HERETO WAIVES: (1) ITS RIGHT TO TRIAL OF ANY ISSUE BY
JURY, (2) WITH THE EXCEPTION OF RELIEF MANDATED BY STATUTE OR RESULTING FROM THE
WILLFUL MATERIAL BREACH OF THIS AGREEMENT, ANY CLAIM TO PUNITIVE, EXEMPLARY,
MULTIPLIED, INDIRECT, CONSEQUENTIAL OR LOST PROFITS/REVENUES DAMAGES (EXCEPT, IN
EACH CASE, TO THE EXTENT AWARDED TO A THIRD PARTY), AND (3) ANY CLAIM FOR
ATTORNEY FEES, COSTS AND PREJUDGMENT INTEREST.

 

ARTICLE VIII

 

INDEMNIFICATION; NO WARRANTY; SPECIFIC PERFORMANCE

 

Section 8.1.          Incorporation of Purchase Agreement Indemnification
Provisions. This Agreement shall be deemed to be a “Related Document” for the
purposes of Article VII of the Purchase Agreement, and Article VII of the
Purchase Agreement will govern the indemnification obligations of the Parties
with respect to any “Losses”, as such term is defined in the Purchase Agreement,
arising under this Agreement (including, for the avoidance of doubt, with
respect to any “Losses” arising from, relating to or otherwise in connection
with any breach of or failure to perform any covenant or agreement of Service
Provider or JRD, as applicable, contained in this Agreement).

 

Section 8.2.          NO WARRANTY. JRD HEREBY ACKNOWLEDGES THAT SERVICE PROVIDER
AND ITS AFFILIATES DO NOT ORDINARILY PROVIDE TO THIRD PARTIES SERVICES SUCH AS
THE SERVICES AS PART OF THEIR RESPECTIVE BUSINESS ACTIVITIES. JRD ACKNOWLEDGES
AND AGREES THAT ALL SERVICES ARE PROVIDED ON AN “AS IS” BASIS AND THAT JRD
ASSUMES ALL RISK AND LIABILITY ARISING FROM OR RELATING TO ITS USE OF AND
RELIANCE UPON THE SERVICES. ACCORDINGLY, EXCEPT AS EXPRESSLY PROVIDED IN THIS
AGREEMENT, NONE OF SERVICE PROVIDER OR ITS AFFILIATES MAKES ANY REPRESENTATIONS
OR WARRANTIES OF ANY KIND WHATSOEVER, EXPRESS OR IMPLIED, AT LAW OR IN EQUITY,
IN CONNECTION WITH OR WITH RESPECT TO ANY OF THE SERVICES. SERVICE PROVIDER
SPECIFICALLY DISCLAIMS ANY OTHER WARRANTIES, WHETHER WRITTEN OR ORAL, OR EXPRESS
OR IMPLIED, INCLUDING ANY WARRANTY OF QUALITY, MERCHANTABILITY, OR FITNESS FOR A
PARTICULAR USE OR PURPOSE OR THE NON-INFRINGEMENT OF ANY INTELLECTUAL PROPERTY
RIGHTS OF THIRD PARTIES.

 -10- 

 

Section 8.3.          Specific Performance. The Parties agree that irreparable
damage would occur and that the Parties would not have any adequate remedy at
law in the event that any of the provisions of this Agreement were not performed
in accordance with their specific terms or were otherwise breached. It is
accordingly agreed that the Parties shall be entitled to an injunction or
injunctions to prevent breaches of this Agreement and to enforce specifically
the terms and provisions of this Agreement, this being in addition to any other
remedy to which they are entitled at law or in equity and as further set forth
in Article VII. For the avoidance of doubt, this Section 8.3 shall not restrict
any Party from asserting that the terms and provisions of this Agreement have
not been breached (or would not be breached) by the actions or omissions (or
intended actions or omissions) of such Party.

 

ARTICLE IX

 

MISCELLANEOUS

 

Section 9.1.          License to Intellectual Property. JRD shall grant to
Service Provider a nonexclusive, worldwide, royalty-free license to use
Intellectual Property Rights owned by Service Provider solely for the purpose
of, and only to the extent necessary for, providing the Services.

 

Section 9.2.          Notices. All notices given by one Party to the other Party
under this Agreement will follow the procedures and be delivered to the
addresses set forth in Section 9.2 of the Purchase Agreement.

 

Section 9.3.          Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, REGARDLESS OF
THE LAWS THAT MIGHT OTHERWISE GOVERN UNDER APPLICABLE PRINCIPLES OF CONFLICTS OF
LAWS THEREOF.

 

Section 9.4.          Assignment. Neither this Agreement nor any of the rights,
interests or obligations hereunder shall be assigned, in whole or in part,
without the prior written consent of the other Party, and any assignment without
such consent shall be null and void, except that JRD may, without the consent of
Service Provider, assign any or all of its rights and obligations under this
Agreement to any of its Affiliate (provided that JRD shall remain responsible
for the performance of such assignee Affiliate). Any successor or assignee of
rights and/or obligations permitted hereunder shall, in writing, expressly
assume performance of such rights and/or obligations.

 

Section 9.5.          Relationship of the Parties. It is expressly agreed that
Service Provider, on the one hand, and JRD on the other hand, are independent
contractors, and it is further agreed that the Parties fully intend and expect
that the relationship between the two Parties shall not constitute a
partnership, joint venture or agency. Except as expressly provided herein,
neither Service Provider nor JRD shall have the authority to make any
statements, representations or commitments of any kind, or to take any action
which shall be binding on the other, without the prior written consent of the
other Party to do so. All individuals employed by a Party shall be employees of
that Party and not of the other Party and all costs and obligations incurred by
reason of such employment shall be for the account and expense of such Party.

 -11- 

 

Section 9.6.          Force Majeure. The failure by Service Provider to perform
any term hereunder when caused by or resulting from a Force Majeure Event shall
not constitute a default or breach under any term of this Agreement; provided,
however, that Service Provider shall use its commercially reasonable efforts to
continue to perform its obligations under this Agreement and to minimize the
adverse effects arising from any Force Majeure Event. If any such excused delay
occurs, the Service Period shall be extended for a period equal to the time lost
by reason of the delay unless this Agreement has previously been terminated
under Article V or under this Section 9.6. Service Provider shall, as soon as
reasonably practicable after the occurrence of any such event, (a) provide
written notice to JRD of the nature and extent of any such Force Majeure Event;
and (b) use its commercially reasonable efforts to remove any such causes and
resume performance under this Agreement as soon as reasonably practicable unless
this Agreement has previously been terminated under Article V or under this
Section 9.6. During the period of a Force Majeure Event, (i) no Fees shall be
assessed or otherwise accrue for the duration of such Force Majeure Event to the
extent such Fees relate to Services Service Provider is unable to provide as a
result of such Force Majeure Event and (ii) JRD shall be entitled to permanently
terminate such Service(s) if a Force Majeure Event shall continue to exist for
more than thirty (30) consecutive days by delivering written notice of such
termination to Service Provider, it being understood that such termination may
be effective immediately upon delivery of such written notice.

 

Section 9.7.          Severability. If any one or more of the provisions of this
Agreement is held to be invalid or unenforceable by any court of competent
jurisdiction from which no appeal can be or is taken, the provision shall be
considered severed from this Agreement and shall not serve to invalidate any
remaining provisions hereof. The Parties shall make good faith efforts to
replace any invalid or unenforceable provision with a valid and enforceable one
such that the objectives contemplated by the Parties when entering this
Agreement may be realized.

 

Section 9.8.          Waiver and Non-Exclusion of Remedies. Any term or
condition of this Agreement may be waived at any time by the Party that is
entitled to the benefit thereof, but no such waiver shall be effective unless
set forth in a written instrument duly executed by or on behalf of the Party
waiving such term or condition. The waiver by either Party of any right
hereunder or of the failure to perform or of a breach by the other Party shall
not be deemed a waiver of any other right hereunder or of any other breach or
failure by such other Party whether of a similar nature or otherwise. The rights
and remedies provided herein are cumulative and do not exclude any other right
or remedy provided by applicable Law or otherwise available except as expressly
set forth herein.

 

Section 9.9.          Further Assurances. Each Party shall duly execute and
deliver, or cause to be duly executed and delivered, such further instruments
and do and cause to be done such further acts and things, including the filing
of such assignments, agreements, documents, and instruments, as may be necessary
or as the other Party may reasonably request in connection with this Agreement
to carry out more effectively the provisions and purposes hereof.

 

Section 9.10.      Headings. The headings of each Article and Section in this
Agreement have been inserted for convenience of reference only and are not
intended to limit or expand on the meaning of the language contained in the
particular Article or Section.

 -12- 

 

Section 9.11.      Construction. Whenever this Agreement refers to a number of
days without using a term otherwise defined herein, such number refers to
calendar days, whether or not “calendar days” is expressly stated. Except where
the context otherwise requires, (a) wherever used, the singular shall include
the plural, the plural shall include the singular; (b) the use of any gender
shall be applicable to all genders; (c) the terms “including,” “include,”
“includes” and “for example” shall not limit the generality of any description
preceding such term and, as used herein, shall have the same meaning as
“including, but not limited to,” and “including, without limitation”; (d) the
words “herein”, “hereof” and “hereunder”, and words of similar import, refer to
this Agreement in its entirety and not to any particular provision hereof; (e)
the word “will” means “shall”; (f) if a period of time is specified and dates
from a given day or Business Day, or the day or Business Day of an act or event,
it is to be calculated exclusive of that day or Business Day; (g) “Dollar”,
“USD” or “$” means U.S. Dollars; (h) references to a particular Person include
such Person’s successors and assigns to the extent not prohibited by this
Agreement; (i) a capitalized term not defined herein but reflecting a different
part of speech than a capitalized term which is defined herein shall be
interpreted in a correlative manner; (j) any definition of or reference to any
agreement, instrument or other document herein shall be construed as referring
to such agreement, instrument or other document as from time to time amended,
supplemented or otherwise modified (subject to any restrictions on such
amendments, supplements or modifications set forth herein); (k) any provision
under this Agreement requiring the mutual agreement of the Parties or the
consent or approval of a Party shall only be satisfied if made in writing signed
by the relevant Party(ies) and (l) if this Agreement is terminated in accordance
with its terms, the “Term” shall be deemed to end on the effective date of such
termination. The language of this Agreement shall be deemed to be the language
mutually chosen by the Parties and no rule of strict construction shall be
applied against either Party. Each Party represents that it has been represented
by legal counsel in connection with this Agreement and acknowledges that it has
participated in the drafting hereof.

 

Section 9.12.      Counterparts. This Agreement may be executed in two (2) or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument. This Agreement may be
executed by .pdf or other electronically transmitted signatures and such
signatures shall be deemed to bind each Party as if they were the original
signatures.

 

Section 9.13.      Entire Agreement; Amendments. This Agreement, including the
Exhibits hereto, sets forth the complete, final and exclusive agreement and all
the covenants, promises, agreements, warranties, representations, conditions and
understandings between the Parties with respect to the subject matter hereof and
supersedes all prior and contemporaneous agreements and understandings between
the Parties with respect to the subject matter hereof. In the event of any
inconsistency between the body of this Agreement or any Exhibits to this
Agreement and the Asset Purchase Agreement or any other Related Document, this
Agreement shall govern and control with respect to the provision of Services and
the specific subject matter hereof, and the Asset Purchase Agreement and other
Related Documents shall govern and control with respect to all other matters.
There are no covenants, promises, agreements, warranties, representations,
conditions or understandings, either oral or written, between the Parties with
respect to the subject matter hereof other than as are set forth herein and
therein. No subsequent alteration, amendment, change or addition to this
Agreement shall be binding upon the Parties unless reduced to writing and signed
by an authorized officer of each Party.

 -13- 

 

* * * *

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 -14- 

 

IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed by
their duly authorized representatives.

 

JANSSEN RESEARCH & DEVELOPMENT, LLC

 

XBIOTECH USA, INC.

                            By: /s/ Darren Snellgrove   By:   /s/ John Simard  
  Name: Darren Snellgrove     Name: John Simard   Title: Chief Financial Officer
Janssen R&D     Title:

President & CEO

 

 

 

 

 

 

 

 

 

 

 

 

 

[Signature Page to Transition Services Agreement]