EXHIBIT 10.4
MANAGEMENT SERVICES AGREEMENT
DATED AS OF _________, 2002,
BY AND BETWEEN
ICN PHARMACEUTICALS, INC.
AND
RIBAPHARM INC.
MANAGEMENT SERVICES AGREEMENT
This MANAGEMENT SERVICES AGREEMENT (this "Agreement") is
made and entered into as of ________, 2002, by and between ICN Pharmaceuticals,
Inc., a Delaware corporation ("ICN"), and Ribapharm Inc., a Delaware corporation
and a wholly owned subsidiary of ICN ("Ribapharm"). Certain capitalized terms
used herein are defined in Section 1 of this Agreement.
RECITALS
WHEREAS, the Board of Directors of ICN has determined that it would be in
the best interests of ICN and its stockholders to separate certain assets and
businesses from ICN;
WHEREAS, ICN has caused Ribapharm to be incorporated in order to effect
such separation;
WHEREAS, ICN has, pursuant to resolutions of its Board of Directors
adopted on August 7, 2000, contributed to Ribapharm, certain assets, including
its nucleoside analog library, subject to certain consents, and the Exclusive
License and Supply Agreement between ICN and Schering-Plough Ltd. dated July 28,
1995, as amended;
WHEREAS, Ribapharm has previously filed the IPO Registration Statement (as
herein defined) with the Securities and Exchange Commission but it has not yet
become effective;
WHEREAS, immediately following the consummation of the Initial Public
Offering (as herein defined), ICN will own in excess of 80% of the outstanding
shares of Common Stock, par value $.01 per share, of Ribapharm (the "Ribapharm
Common Stock");
WHEREAS, ICN has heretofore, directly or indirectly, provided certain
administrative and corporate support services to Ribapharm;
WHEREAS, on the terms and subject to the conditions set forth herein,
Ribapharm desires to retain ICN as an independent contractor on a transitional
basis to provide, directly or indirectly, certain services set forth in Schedule
I hereto to Ribapharm after the Initial Public Offering and Ribapharm desires to
provide certain regulatory affairs services to ICN; and
WHEREAS, on the terms and subject to the conditions set forth herein, ICN
desires to provide, directly or indirectly, certain services set forth in
Schedule I hereto to Ribapharm and ICN desires to retain Ribapharm as an
independent contractor on a transitional basis to provide certain regulatory
affairs services.
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NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, ICN and Ribapharm, for themselves,
their successors and assigns, hereby agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01. DEFINITIONS. As used in this Agreement, the following terms
will have the following meanings, applicable both to the singular and the plural
forms of the terms described:
"Affiliation Agreement" means the Affiliation Agreement dated as of the
date hereof by and between ICN and Ribapharm.
"Agreement" has the meaning ascribed thereto in the preamble hereto, as
such agreement may be amended and supplemented from time to time in accordance
with its terms.
"Business Day" means any day other than a Saturday, a Sunday, or a day on
which banking institutions located in the State of California are authorized or
obligated by law or executive order to close.
"Claim" has the meaning ascribed thereto in Section 4.04.
"Disputes" has the meaning ascribed thereto in Section 6.01.
"Dispute Notice" means written notice of any dispute between ICN and
Ribapharm arising out of or relating to this Agreement, which shall set forth,
in reasonable detail, the nature of the dispute.
"ICN" has the meaning ascribed thereto in the preamble.
"ICN Entities" means ICN and its Subsidiaries and "ICN Entity" shall mean
any of the ICN Entities.
"ICN Indemnified Person" has the meaning ascribed thereto in Section 4.01.
"Indemnifying Party" means a Person that is obligated to provide
indemnification under this Agreement.
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"Indemnitee" means a Person that is entitled to seek indemnification under
this Agreement.
"Indemnity Payment" means an amount that an Indemnifying Party is required
to pay to an Indemnitee under this Agreement.
"Initial Public Offering" means the initial public offering by ICN of
shares of Ribapharm Common Stock as contemplated by the IPO Registration
Statement.
"Initial Term" has the meaning ascribed thereto in Section 5.01(a).
"Insurance Proceeds" means the payment received by an insured from an
insurance carrier or paid by an insurance carrier on behalf of the insured, net
of any applicable premium adjustment and tax effect.
"IPO Registration Statement" means the Registration Statement on Form S-1,
Registration No. 333-39350, of Ribapharm, as supplemented and amended from time
to time.
"LIBOR Rate" means, for any day, the rate for six-month U.S. Dollar
deposits which appears on Telerate Page 3750 (as defined in the International
Swaps and Derivatives Association, Inc. 1991 Interest Rate and Currency Exchange
Definitions), or such page as may replace Telerate Page 3750, as of 11:00 a.m.
(London time) on such date, or, if neither such page is so published, a
comparable rate as determined in good faith by ICN.
"Losses" means all losses, liabilities, claims, obligations, demands,
judgments, damages, dues, penalties, assessments, fines (civil or criminal),
costs, liens, expenses, forfeitures, settlements, or fees, reasonable attorneys'
fees and court costs, of any nature or kind, whether or not the same would
properly be reflected on a balance sheet, and "Loss" means any of these.
"Notice" means any notice, request, claim, demand, or other communication
under this Agreement.
"Outsourced Service" has the meaning ascribed thereto in Section 2.03.
"Person" means any individual, partnership, limited liability company,
joint venture, corporation, trust, unincorporated organization, government (and
any department or agency thereof) or other entity.
"Request" has the meaning ascribed thereto in Section 4.04.
"Ribapharm" has the meaning ascribed thereto in the preamble.
"Separate Counsel" has the meaning ascribed thereto in Section 4.03(b).
"Service Agent" means (i) for ICN, The Corporation Trust Company, with
offices on the date hereof at ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ of ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇; and (ii) for Ribapharm, The Corporation Trust Company,
with offices on the date hereof at ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ of ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇.
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"Service Charges" has the meaning ascribed thereto in Section 3.01(c).
"Services" means the services provided by ICN to Ribapharm as described in
Schedule I hereto and regulatory affairs services provided by Ribapharm to ICN.
"Subsidiary" means, as to any Person, any corporation, association,
partnership, joint venture or other business entity of which more than 50% of
the voting capital stock or other voting ownership interests is owned or
controlled directly or indirectly by such Person or by one or more of the
Subsidiaries of such Person or by a combination thereof; provided, however, that
any reference in this Agreement to a Subsidiary or Subsidiaries of ICN shall not
include Ribapharm and its Subsidiaries.
"Tax" or "Taxes" has the meaning set forth in the Tax Sharing Agreement.
"Tax-Related Losses" means (i) all federal, state and local Taxes
(including interest and penalties thereon) imposed pursuant to any settlement,
final determination, judgment or otherwise; (ii) all accounting, legal and other
professional fees, and court costs incurred in connection with such taxes; and
(iii) all costs and expenses that may result from adverse tax consequences to
ICN payable by an ICN Entity.
"Tax Sharing Agreement" means the Tax Sharing Agreement between ICN and
Ribapharm dated as of the date hereof.
"Third-Party Claim" means any claim, suit, arbitration, inquiry,
proceeding or investigation by or before any court, governmental or other
regulatory or administrative agency or commission or any arbitration tribunal
asserted by a Person other than ICN or Ribapharm or any of their respective
Subsidiaries and affiliates which gives rise to a right of indemnification
hereunder.
Section 1.02. INTERNAL REFERENCES. Unless the context indicates otherwise,
references to the parties shall mean the parties to this Agreement.
ARTICLE II
PURCHASE AND SALE OF SERVICES
Section 2.01. PURCHASE AND SALE OF SERVICES. On the terms and subject to
the conditions set forth in this Agreement and in consideration of the Service
Charges described below, ICN agrees to provide to Ribapharm, and Ribapharm
agrees to purchase from ICN, the services described on Schedule I hereto and
Ribapharm agrees to provide to ICN, and ICN agrees to purchase from Ribapharm
certain regulatory affairs services. Unless otherwise specifically agreed by ICN
and Ribapharm, the Services to be provided hereunder shall be substantially
similar in scope, quality and nature to those provided prior to the Initial
Public Offering and shall be performed by the same or similarly qualified
personnel; provided, however, that the selection of personnel to perform the
Services shall be at the reasonable discretion of the party providing the
Service.
Section 2.02. ADDITIONAL SERVICES. In addition to the Services to be
provided by ICN pursuant to Section 2.01, if requested by Ribapharm, and to the
extent that ICN and
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Ribapharm may mutually agree in writing, ICN shall provide additional services
to Ribapharm. The scope of any such services, as well as the term, costs and
other terms and conditions applicable to such services, shall be as mutually
agreed by ICN and Ribapharm. Nothing herein shall create any obligation on the
part of ICN to provide any additional services.
Section 2.03. SERVICES PERFORMED BY THIRD PARTIES. At its option, ICN may
cause any Service it is required to provide hereunder to be provided by any
third party that is providing, or may from time to time provide, the same or
similar services for ICN (an "Outsourced Service"). ICN shall remain
responsible, in accordance with the terms of this Agreement, for performance of
any Service it causes to be so provided.
Section 2.04. IMPRACTICABILITY AND FORCE MAJEURE. ICN shall not be
required to provide any Service to the extent the performance of such Service
becomes impracticable as a result of a cause or causes outside the control of
ICN or to the extent the provision of such Service would require ICN to violate
any applicable laws, rules or regulations. ICN shall have no obligation to
perform or cause the Services to be performed if its failure to do so is caused
by or results from any act of God, governmental action, natural disaster,
strike, failure of essential equipment or any other cause or circumstance beyond
the control of ICN or, if applicable, third party providers of services to ICN.
ICN will notify Ribapharm of any such event affecting its Services to Ribapharm.
ICN agrees that following any such event, Ribapharm shall have no obligation to
pay for the Services affected thereby and ICN will use its reasonable best
efforts to restore such Services.
ARTICLE III
SERVICE CHARGES
Section 3.01. SERVICE CHARGES. (a) The charge for each Service provided
hereunder directly by Ribapharm or ICN shall be equal to all costs reasonably
incurred by Ribapharm or ICN in providing such Service. Such costs shall
include, but are not limited to, appropriate allocation of overhead costs,
personnel costs (e.g., compensation and fringe benefits), travel, and office
costs associated with functions performing such Services.
(b) The charge for each Outsourced Service provided to Ribapharm hereunder
shall be equal to all costs reasonably incurred by ICN in providing such
Outsourced Service, including, without limitation, any reasonable third-party
costs and expenses incurred by ICN on behalf of Ribapharm. If ICN incurs
third-party costs or expenses on behalf of Ribapharm as well as any ICN Entity,
ICN will allocate any such costs or expenses in good faith between Ribapharm and
the various ICN Entities on behalf of which such costs or expenses were
incurred. ICN shall apply usual and accepted accounting conventions in making
such allocations and ICN or its agents shall keep and maintain such books and
records as may be reasonably necessary to make such allocations. ICN shall make
copies of such books and records available to Ribapharm upon request and with
reasonable notice.
(c) The parties intend that the Service charges referred to in paragraphs
(a) and (b) above (collectively, the "Service Charges") will allow ICN to
recover the fully allocated costs of providing the Services and Outsourced
Services hereunder plus all out-of-pocket, third-party costs, charges and
expenses, but without any profit to ICN.
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Section 3.02. INVOICING AND SETTLEMENT OF COSTS. (a) The party providing
each Service shall invoice the party receiving the Service for all Service
Charges for each calendar month within thirty (30) days following the end of
such month, provided that any failure to provide an invoice within such time
period shall not relieve the party receiving such Service of its obligation to
pay an invoice received after such date. All invoices shall include a reasonably
detailed description of the Services performed.
(b) Subject to Section 3.02(c) below, the party receiving such Service
shall pay within 30 days following its receipt of any invoice pursuant to
paragraph (a), without set-off, all amounts invoiced during the preceding
calendar month. If the party receiving such Service fails to pay any monthly
payment within 60 days following its receipt of any invoice pursuant to
paragraph (a), such party shall pay, in addition to the amount indicated in such
invoice, a rate of interest equal to the LIBOR Rate plus 200 basis points per
annum on such amount for the period such amount remains unpaid.
(c) In the event of a dispute as to the propriety of any amount invoiced
pursuant to paragraph (a) above, the party receiving the Service shall pay all
undisputed amounts, but shall be entitled to withhold payment of any amount in
dispute (and shall not be obligated to pay interest on the amount so withheld)
and shall endeavor to notify the party providing the Service within 10 Business
Days from receipt of any disputed invoice of the disputed amount and the reasons
each such charge is disputed by the party receiving the Service, provided that
the failure to so notify the party providing the Service within such time period
shall not prevent the party receiving the Service from disputing such invoice.
The party providing the Service shall provide to the party receiving the
Service, or shall cause its Subsidiaries to so provide, records relating to the
disputed amount so as to enable the parties to resolve the dispute. The parties
shall use reasonable efforts to resolve any such dispute promptly.
(d) Any invoice or payment not disputed in writing by either party within
180 days of such invoice or payment, as the case may be, shall be considered
final and no longer subject to adjustment.
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ARTICLE IV
LIMITATION OF LIABILITY; INDEMNIFICATION
Section 4.01. LIMITATION OF LIABILITY. (a) Ribapharm agrees that ICN and
each of its Subsidiaries and their respective directors, officers, agents and
employees (each, an "ICN Indemnified Person") shall only be liable to Ribapharm
for or in connection with the Services rendered or to be rendered by any ICN
Indemnified Person pursuant to this Agreement, the use by ICN of the ICN Space
or the ICN Common Areas, the transactions contemplated hereby or any ICN
Indemnified Person's actions or inactions in connection with any such Services
or transactions for claims, damages, losses, obligations, liabilities, costs and
expenses (including, without limitation, reasonable attorneys' fees) resulting
from, or arising out of, breach of contract, negligence or willful misconduct on
the part of any ICN Indemnified Person.
(b) ICN agrees that Ribapharm and its respective directors, officers,
agents and employees (each, an "Ribapharm Indemnified Person") shall only be
liable to ICN for or in connection with the Services rendered or to be rendered
by any Ribapharm Indemnified Person pursuant to this Agreement, the transactions
contemplated hereby or any Ribapharm Indemnified Person's actions or inactions
in connection with any such Services or transactions for claims, damages,
losses, obligations, liabilities, costs and expenses (including, without
limitation, reasonable attorneys' fees) resulting from, or arising out of,
breach of contract, negligence or willful misconduct on the part of any
Ribapharm Indemnified Person.
Section 4.02. INDEMNIFICATION. (a) Ribapharm agrees to indemnify and hold
harmless each ICN Indemnified Person from and against any claims, damages,
losses, obligations, liabilities, costs and expenses (including, without
limitation, reasonable attorneys' fees) arising out of or in connection with
Services rendered or to be rendered by any ICN Indemnified Person pursuant to
this Agreement, the transactions contemplated hereby or any ICN Indemnified
Person's actions or inactions in connection with any such Services or
transactions except for claims, damages, losses, obligations, liabilities, costs
and expenses (including, without limitation, reasonable attorneys' fees)
resulting from, or arising out of, breach of contract, negligence or willful
misconduct on the part of any ICN Indemnified Person.
(b) ICN agrees to indemnify and hold harmless each Ribapharm Indemnified
Person from and against any claims, damages, losses, obligations, liabilities,
costs and expenses (including, without limitation, reasonable attorneys' fees)
arising out of or in connection with Services rendered or to be rendered by any
Ribapharm Indemnified Person pursuant to this Agreement, the transactions
contemplated hereby or any Ribapharm Indemnified Person's actions or inactions
in connection with any such Services or transactions except for claims, damages,
losses, obligations, liabilities, costs and expenses (including, without
limitation, reasonable attorneys' fees) resulting from, or arising out of,
breach of contract, negligence or willful misconduct on the part of any
Ribapharm Indemnified Person.
Section 4.03. PROCEDURE FOR INDEMNIFICATION INVOLVING THIRD-PARTY CLAIMS.
(a) Notice of Claim. If any Indemnitee receives notice of the assertion of any
Third-Party Claim with respect to which an Indemnifying Party is obligated under
this Agreement to
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provide indemnification, such Indemnitee shall give such Indemnifying Party
notice thereof (together with a copy of such Third-Party Claim, process or other
legal pleading) promptly after becoming aware of such Third-Party Claim;
provided, however, that the failure of any Indemnitee to give notice as provided
in this Section shall not relieve any Indemnifying Party of its obligations
under this Article IV (or any other indemnification provision of this
Agreement), except to the extent that such Indemnifying Party is actually
prejudiced by such failure to give notice. Such notice shall describe such
Third-Party Claim in reasonable detail.
(b) Obligation of Indemnifying Party. An Indemnifying Party, at such
Indemnifying Party's own expense and through counsel chosen by such Indemnifying
Party (which counsel shall be reasonably acceptable to the Indemnitee), may
elect to defend any Third-Party Claim. If an Indemnifying Party elects to defend
a Third-Party Claim, then, within ten Business Days after receiving notice of
such Third-Party Claim (or sooner, if the nature of such Third-Party Claim so
requires), such Indemnifying Party shall notify the Indemnitee of its intent to
do so, and such Indemnitee shall cooperate in the defense of such Third-Party
Claim. Such Indemnifying Party shall pay such Indemnitee's reasonable
out-of-pocket expenses incurred in connection with such cooperation. Such
Indemnifying Party shall keep the Indemnitee reasonably informed as to the
status of the defense of such Third-Party Claim. After notice from an
Indemnifying Party to an Indemnitee of its election to assume the defense of a
Third-Party Claim, such Indemnifying Party shall not be liable to such
Indemnitee under this Article IV (or any other indemnification provision of this
Agreement) for any legal or other expenses subsequently incurred by such
Indemnitee in connection with the defense thereof other than those expenses
referred to in the preceding sentence; provided, however, that such Indemnitee
shall have the right to employ one law firm as counsel, together with a separate
local law firm in each applicable jurisdiction ("Separate Counsel"), to
represent such Indemnitee in any action or group of related actions (which firm
or firms shall be reasonably acceptable to the Indemnifying Party) if, in such
Indemnitee's reasonable judgment at any time, either a conflict of interest
between such Indemnitee and such Indemnifying Party exists in respect of such
claim, or there may be defenses available to such Indemnitee which are different
from or in addition to those available to such Indemnifying Party and the
representation of both parties by the same counsel would be inappropriate, and
in that event the reasonable fees and expenses of such Separate Counsel shall be
paid by such Indemnifying Party (it being understood, however, that the
Indemnifying Party shall not be liable for the expenses of more than one
Separate Counsel (excluding local counsel) with respect to any Third-Party Claim
(even if against multiple Indemnitees)). If an Indemnifying Party elects not to
defend against a Third-Party Claim, or fails to notify an Indemnitee of its
election as provided in this Article IV within the period of ten Business Days
described above, the Indemnitee may defend, compromise, and settle such
Third-Party Claim and shall be entitled to indemnification hereunder (to the
extent permitted hereunder) on an as incurred basis; provided, however, that no
such Indemnitee may compromise or settle any such Third-Party Claim without the
prior written consent of the Indemnifying Party, which consent shall not be
unreasonably withheld or delayed. Notwithstanding the foregoing, the
Indemnifying Party shall not, without the prior written consent of the
Indemnitee, (i) settle or compromise any Third-Party Claim or consent to the
entry of any judgment which does not include as an unconditional term thereof
the delivery by the claimant or plaintiff to the Indemnitee of a written release
from all liability in respect of such Third-Party Claim or (ii) settle or
compromise any Third-Party Claim in any manner that would be reasonably likely
to have a material adverse effect on the Indemnitee.
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(c) Joint Defense of Certain Claims. Notwithstanding the provisions of
Section 5.05(b), ICN and Ribapharm shall jointly control the defense of, and
cooperate with each other with respect to defending, any Third-Party Claim with
respect to which each party is claiming that it is entitled to indemnification
under this Article IV (or any other indemnification provision of this
Agreement). If either ICN or Ribapharm fails to defend jointly any such
Third-Party Claim, the other party shall solely defend such Third-Party Claim
and the party failing to defend jointly shall use all commercially reasonable
efforts to cooperate with the other party in its defense of such Third-Party
Claim; provided, however, that neither party may compromise or settle any such
Third-Party Claim without the prior written consent of the other party, which
consent shall not be unreasonably withheld or delayed. All costs and expenses of
either party in connection with, and during the course of, the joint control of
the defense of any such Third-Party Claim shall be initially paid by the party
that incurs such costs and expenses. Such costs and expenses shall be
reallocated and reimbursed in accordance with the respective indemnification
obligations of the parties on a periodic basis (but in no event later than the
conclusion of the defense of such Third-Party Claim).
Section 4.04. PROCEDURE FOR INDEMNIFICATION NOT INVOLVING THIRD-PARTY
CLAIMS. If any Indemnitee desires to assert against an Indemnifying Party any
claim for indemnification under this Article IV other than a Third-Party Claim
(a "Claim"), the Indemnitee shall deliver to the Indemnifying Party notice of
its demand for satisfaction of such Claim (a "Request"), specifying in
reasonable detail the amount of such Claim and the basis for asserting such
Claim. Within 30 days after the Indemnifying Party has been given a Request, the
Indemnifying Party shall either (i) satisfy the Claim requested to be satisfied
in such Request by delivering to the Indemnitee payment by wire transfer or a
certified or bank cashier's check payable to the Indemnified Party in
immediately available funds in an amount equal to the amount of such Claim, or
(ii) notify the Indemnitee that the Indemnifying Party contests such Claim by
delivering to the Indemnitee a Dispute Notice, stating that the Indemnifying
Party objects to such Claim and specifying in reasonable detail the basis for
contesting such Claim. Any dispute described in clause (ii) of this Section 4.04
shall be subject to the provisions of Section 6.01.
Section 4.05. EXCLUSIVE REMEDIES. Except for the right to pursue equitable
remedies, the remedies provided in this Article IV shall be deemed the sole and
exclusive remedies of the parties with respect to the subject matters of the
indemnification provisions of this Agreement.
ARTICLE V
TERM AND TERMINATION
Section 5.01. TERM. (a) This Agreement shall commence on the date of the
Initial Public Offering and shall terminate on December 31, 2003 (the "Initial
Term"); provided, however, that ICN and Ribapharm may, by mutual agreement,
provide for the continuation of certain services after the Initial Term.
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(b) The obligation of ICN to provide legal Services under this Agreement
shall automatically terminate on the date that ICN ceases to own at least 50% of
the voting power of the outstanding shares of Ribapharm Common Stock.
(c) Either party may terminate this Agreement with respect to any one or
more of the Services if the other party shall have failed to perform any of its
material obligations under this Agreement relating to any such Service or
Services, the aggrieved party has notified the other party in writing of such
failure, and such failure shall have continued for a period of 30 days after
receipt by the other party of notice of such failure.
(d) Ribapharm may terminate any one of the Services listed on Schedule I
hereto individually upon 30 days written notice to ICN and such termination will
not effect the obligations of the parties under this Agreement regarding any
other Services listed on Schedule I hereto.
(e) The provisions of Article IV shall commence and terminate as
provided therein.
Section 5.02. EFFECT OF TERMINATION. Other than as required by law, upon
termination of any Service pursuant to Section 6.01, ICN will have no further
obligation to provide the terminated Service (or any Service, in the case of
termination of this Agreement) and Ribapharm will have no obligation to pay any
fees relating to such Service or make any other payments hereunder; provided,
however, that notwithstanding such termination, (i) Ribapharm shall remain
liable to ICN for fees owed and payable in respect of any Service provided prior
to the effective date of the termination and (ii) the provisions of Articles
III, IV, V, and VI shall survive any such termination.
ARTICLE VI
MISCELLANEOUS
Section 6.01. DISPUTE RESOLUTION. Resolution of any and all disputes
arising from or in connection with this Agreement, whether based on contract,
tort, or otherwise (collectively, "Disputes"), shall be exclusively governed by
and settled in accordance with the provisions of this Section 6.01. The parties
hereto shall use all commercially reasonable efforts to settle all Disputes
without resorting to mediation, arbitration, litigation or other third party
dispute resolution mechanisms. If any Dispute remains unsettled, the parties
hereby agree to mediate such Dispute using a mediator reasonably acceptable to
all parties involved in such Dispute. If the parties are unable to resolve such
dispute through mediation, each party will be free to commence litigation
proceedings for the resolution thereof. No party shall be entitled to
consequential, special, exemplary or punitive damages.
Section 6.02. AUTHORITY. Each of the parties hereto represents and
warrants to the other that (a) it has the corporate power and authority to
execute, deliver and perform this Agreement, (b) the execution, delivery and
performance of this Agreement by it has been duly authorized by all necessary
corporate action, (c) it has duly and validly executed and delivered this
Agreement, and (d) this Agreement is a legal, valid and binding obligation,
enforceable
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against it in accordance with its terms subject to applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws affecting
creditors' rights generally and general equity principles. The representations
and warranties contained in this Section 6.02 shall survive the execution and
delivery hereof until the expiration of all applicable statutes of limitations.
Section 6.03. COMPLETE AGREEMENT. Except as otherwise set forth in this
Agreement, this Agreement and the exhibits hereto shall constitute the entire
agreement between the parties hereto with respect to the subject matter hereof
and shall supersede all prior agreements and understandings, whether written or
oral, between the parties with respect to such subject matter. Notwithstanding
anything to the contrary contained herein, Ribapharm shall not be charged
anything under this Agreement for any Services that are specifically required to
be performed under any other agreement between ICN and Ribapharm and any such
other Services shall be performed and charged for in accordance with the terms
of such other agreement.
Section 6.04. GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of California (without giving
effect tot he conflict of laws principals thereof) as to all matters, including
matters of validity, construction, effect, performance and remedies.
Section 6.05. NOTICES. All Notices and other communications hereunder
shall be in writing and shall be delivered in person, by telecopy, by express or
overnight mail delivered by a nationally recognized air courier (delivery
charges prepaid), or by registered or certified mail (postage prepaid, return
receipt requested) to the respective parties as follows:
(a) If to ICN, to:
ICN Pharmaceuticals, Inc.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, Esq.
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(b) If to Ribapharm, to:
Ribapharm Inc.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
or to such other address as the party to whom notice is given may have
previously furnished to the others in writing in the manner set forth above. Any
notice or communication delivered in person shall be deemed effective on
delivery or when delivery is refused. Any notice or communication sent by
telecopy or by air courier shall be deemed effective on the first Business Day
at the place at which such notice or communication is received following the day
on which such notice or communication was sent.
Section 6.0.6. AMENDMENT AND MODIFICATION. This Agreement may not be
amended or modified in any respect except by a written agreement signed by both
of the parties hereto.
Section 6.0.7. BINDING EFFECT; ASSIGNMENT. This Agreement and all of the
provisions hereof shall be binding upon the parties hereto and inure to the
benefit of the parties hereto and their respective successors and permitted
assigns. Except with respect to a merger of either party with another Person,
neither this Agreement nor any of the rights, interests or obligations hereunder
shall be assigned by either party hereto without the prior written consent of
the other party.
Section 6.08. THIRD PARTY BENEFICIARIES. The Indemnitees and their
respective successors shall be third party beneficiaries of the indemnification
provisions of Article IV, as applicable, and shall be entitled to enforce those
provisions and in connection with such enforcement shall be subject to Section
6.05, in each such case as fully and to the same extent as if they were parties
to this Agreement. Except as provided in the previous sentence, nothing in this
Agreement, express or implied, is intended to or shall confer upon any Person
any legal or equitable right, benefit or remedy of any nature whatsoever under
or by reason of this Agreement, and no Person (other than as provided in the
previous sentence) shall be deemed a third party beneficiary under or by reason
of this Agreement. Ribapharm acknowledges that the Services shall be provided
only with respect to the business of Ribapharm and its Subsidiaries as currently
operated and as currently projected to be operated or as mutually agreed by the
parties hereto. Ribapharm shall not request performance of any Service for the
benefit of any entity other than Ribapharm and its Subsidiaries. Ribapharm
represents and agrees that Ribapharm will use the Services only in accordance
with all applicable federal, state and local laws and regulations, and in
accordance with past practices. ICN reserves the right to take all actions,
including termination of any particular Service, that ICN reasonably believes to
be necessary to assure compliance with applicable laws and regulations. ICN will
notify Ribapharm promptly of the reasons for any such termination of Services.
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Section 6.09. COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument. The Agreement may be
executed by facsimile signature.
Section 6.10. WAIVER. The observance of any term of this Agreement may be
waived (either generally or in a particular instance and either retroactively or
prospectively) by the party entitled to enforce such term, but such waiver shall
be effective only if it is in writing signed by the party against which such
waiver is to be asserted. Unless otherwise expressly provided in this Agreement,
no delay or omission on the part of any party in exercising any right or
privilege under this Agreement shall operate as a waiver thereof, nor shall any
waiver on the part of any party of any right or privilege under this Agreement
operate as a waiver of any other right or privilege under this Agreement nor
shall any single or partial exercise of any right or privilege preclude any
other or further exercise thereof or the exercise of any other right or
privilege under this Agreement. No failure by either party to take any action or
assert any right or privilege hereunder shall be deemed to be a waiver of such
right or privilege in the event of the continuation or repetition of the
circumstances giving rise to such right unless expressly waived in writing by
the party against whom the existence of such waiver is asserted.
Section 6.11. SEVERABILITY. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof. Any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
Section 6.12. REMEDIES. Each of ICN and Ribapharm shall be entitled to
enforce its rights under this Agreement specifically, to recover damages and
costs (including reasonable attorneys' fees) caused by any breach of any
provision of this Agreement and to exercise all other rights existing in its
favor. Each of ICN and Ribapharm acknowledges and agrees that under certain
circumstances the breach by ICN or any of its Affiliates or Ribapharm or any of
its Affiliates of a term or provision of this Agreement will materially and
irreparably harm the other party, that money damages will accordingly not be an
adequate remedy for such breach and that the non-defaulting party, in its sole
discretion and in addition to its rights under this Agreement and any other
remedies it may have at law or in equity, may apply to any court of law or
equity of competent jurisdiction (without posting any bond or deposit) for
specific performance and/or other injunctive relief in order to enforce or
prevent any breach of the provisions of this Agreement.
Section 6.13. PERFORMANCE; NO AGENCY. Each of the parties hereto shall use
all commercially reasonable efforts to cause to be performed all actions,
agreements and obligations set forth herein to be performed by any Affiliate of
such party. Nothing in this Agreement shall constitute or be deemed to
constitute a partnership or joint venture between the parties hereto or
constitute or be deemed to constitute any party the agent or employee of the
other party for any purpose whatsoever and neither party shall have authority or
power to bind the other or to contract in the name of, or create a liability
against, the other in any way or for any purpose.
Section 6.14. REFERENCES; CONSTRUCTION. The table of contents and the
section and other headings and subheadings contained in this Agreement and the
exhibits hereto are
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solely for the purpose of reference, are not part of the agreement of the
parties hereto, and shall not in any way affect the meaning or interpretation of
this Agreement or any exhibit hereto. All references to days or months shall be
deemed references to calendar days or months. Unless the context otherwise
requires, any reference to an "Article," "Section" or "Schedule" shall be deemed
to refer to an article, section or schedule of or to this Agreement. The words
"hereof," "herein" and "hereunder" and words of similar import referring to this
Agreement refer to this Agreement as a whole and not to any particular provision
of this Agreement. Whenever the words "include," or "including" are used in this
Agreement, unless otherwise specifically provided, they shall be deemed to be
followed by the words "without limitation." This Agreement shall be construed
without regard to any presumption or rule requiring construction or
interpretation against the party drafting or causing the document to be drafted.
Section 6.15. EFFECTIVENESS. This Agreement shall become effective upon
the time of purchase of the Firm Shares, as defined in the Underwriting
Agreement, by and among ICN, Ribapharm and the underwriters named therein,
dated ________ 2002, relating to the Initial Public Offering.
* * * * *
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered as of the date and year first written above.
RIBAPHARM INC.
By _______________________________
Name _______________________________
Title: _______________________________
ICN PHARMACEUTICALS, INC.
By _______________________________
Name _______________________________
Title: _______________________________
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SCHEDULE I
ICN Pharmaceuticals, Inc. ("ICN")
Ribapharm Inc. ("Ribapharm")
MANAGEMENT SERVICES
POST IPO
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SERVICE DESCRIPTION
AREA
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Corporate Continue to provide general corporate affairs services
Affairs commensurate with past efforts.
--------------------------------------------------------------------------------
Information Continue to provide information services commensurate with past
Services efforts.
--------------------------------------------------------------------------------
Legal Continue to provide general corporate, intellectual property, and
legal management services commensurate with past efforts.
--------------------------------------------------------------------------------
Human Continue to provide general human resources services
Resources commensurate with past efforts. Assistance setting up all
Ribapharm benefit plans.
--------------------------------------------------------------------------------
Finance Continue to provide general finance services commensurate with
past efforts.
--------------------------------------------------------------------------------
Investor Communication of Ribapharm's strategy and performance to
Relations investor community.
--------------------------------------------------------------------------------
Tax Continue to provide general tax services commensurate with past
efforts.
--------------------------------------------------------------------------------
Treasury Provide advice on other treasury-related issues (FX mgmt,
leasing, letters of credit, investments/pension, bank
relationships). Put in place cash mgmt structure and systems
(collection & disbursements). Open bank accounts in the U.S. and
abroad.
--------------------------------------------------------------------------------
Controller Ribapharm compliance reporting (government and SEC filings, debt
covenants). Accounting policies and procedures, U.S. GAAP, and
technical accounting guidance. Ad hoc SEC reporting guidance.
Coordination of ICN & Ribapharm earnings release and SEC filings.
--------------------------------------------------------------------------------
Insurance Management and allocation of corporate insurance to Ribapharm,
including but not limited to, excess liability, general
liability, workers comp, fire & business interruption and
automobile premiums.
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