Amarin Corp Plc (AMRN)

[HDGabor]

As promised the drug for Kiwi's paranoia

PURCHASE AND SALE AGREEMENT (Key elements)

Summary:

- the quarterly payments is limited and linked to Net Sales (currently 10%, no available information for future %, but usually – and in other BioPharma agreement also – it’s constant)
- BioPharma does not own the patents and could sell them under certain circumstances only – “Event of Default”. (If any of these occurs, it means the game is already over for Amarin.)

Detailed:

BIOPHARMA SECURED DEBT FUND II HOLDINGS CAYMAN LP, a Cayman Islands exempted limited partnership, and its permitted successors and assigns (“Purchaser”) purchased the rights for 100M to receive 150M as scheduled.

Scheduled Quarterly Amount (in the event it is not a Quarterly Cap Event Quarter):
- in the last two Calendar Quarters of 2013: $2,500,000
- in 2014: $8,000,000
- in 2015: $10,000,000
- in 2016: $15,000,000
- in the first Calendar Quarter of 2017: (in the event no prior Quarterly Cap Event Quarter): $13,000,000

Scheduled Quarterly Amount (in the event there is or has been a Quarterly Cap Event Quarter)
- in the first Calendar Quarter of 2017 (in the event of a prior or current Quarterly Cap Event Quarter): the lesser of (1) the Outstanding Threshold Amount and (2) [***]
- in the second Calendar Quarter of 2017 and thereafter (only in the event of a prior Quarterly Cap Event Quarter): the lesser of (1) the Outstanding Threshold Amount and (2) [***]

However

Each Calendar Quarter during the Payment Period, the Scheduled Quarterly Amount payable by Seller and its Affiliates pursuant to Section 2.1(a) will be subject to [***] (each, a “Quarterly Cap”), amounts in excess of which will not constitute a Scheduled Quarterly Amount and, thus, will not be payable by Seller or its Affiliates to Purchaser pursuant to Section 2.1(a). The attainment of a Quarterly Cap in any Calendar Quarter during the Payment Period shall hereinafter be referred to as a “Quarterly Cap Event Quarter”

“Payment Period” means the period of time commencing on October 1, 2013 and ending on the Threshold Date.
“Threshold Date” means the date on which Purchaser has actually received an aggregate amount of payments on account of the Scheduled Quarterly Payments equal to the Threshold Amount.
“Threshold Amount” equals $150,000,000.

so the Quarterly Cap applicable for all quarters before, during and after Q1 2017.

***(currently) is the 10% of Net Sale. It’s not available in public documents, but could be calculated based on 10-K 2013 and 10-Q1 2014

'For the three months ended September 30, 2013 and December 31, 2013, our revenues were below the contractual threshold amount such that we made a cash payment of $0.8 million in November 2013 based on $8.4 million in revenue recognized in the third quarter of 2013 and we will make a cash payment of $1.0 million in February 2014 based on $10.1 million in revenue recognized in the fourth quarter of 2013, reflecting the calculated optional reduction amount as opposed to the contractual threshold payments of $2.5 million for each quarterly period'

'The Company currently estimates that its Vascepa revenue levels will not be high enough in each quarter to support repayment to BioPharma in accordance with the threshold amounts in the repayment schedule. For the quarters ended September 30, 2013, December 31, 2013, and March 31, 2014, revenues were below the contractual threshold amount such that cash payments were calculated for each period reflecting the optional reduction amount as opposed to the contractual threshold payment due for each quarterly period. The payment of $1.1 million for the first quarter of 2014 is due in May 2014. In accordance with the agreement with BioPharma, quarterly differences between the calculated optional reduction amounts and the repayment schedule amounts are rescheduled for payment beginning in the second quarter of 2017. Any such deferred repayments will remain subject to continued application of the quarterly ceiling in amounts due established by the calculated threshold limitation based on quarterly Vascepa revenues. No additional interest expense or liability is incurred as a result of such deferred repayments.'

The Purchaser did not purchase, does not own the patens. The patents are part of the Collateral.

Seller hereby grants to Purchaser a security interest in all of Seller’s right, title and interest in, to and under the Additional Collateral, to secure the prompt and complete payment and performance when due of all obligations

“Collateral” means the Additional Collateral…
“Additional Collateral” means …(a) all Vascepa Product Rights …
“Vascepa Product Rights” means …: (A) Vascepa Patent Rights …
“Vascepa Patent Rights” means (i) the Patents and patent applications listed in Schedule 3.1(m) …
“Patents” means all patents and patent applications existing as of the Effective Date and all patent applications filed or patents issued hereafter …

4.9 SECURITY INTEREST IN ADDITIONAL COLLATERAL; REMEDIES contains the Purchaser rights, including in case of Event of Default.

Seller agrees that, upon the occurrence and during the continuance of an Event of Default, Purchaser will have the right, subject to Applicable Law and subsection (n) below, to sell or otherwise dispose of all or any part of the Collateral, at public or private sale, for cash, upon credit or for future delivery as Purchaser shall deem appropriate. Each purchaser at any such sale shall hold the property sold absolutely, free from any claim or right on the part of Seller

“Event of Default” means each of the following events or occurrences:
(a) failure of Seller to deliver or cause to be delivered to Purchaser any Scheduled Quarterly Amount or Quarterly Cap, as applicable, when and as such payment is due and payable in accordance with the terms of this Agreement and such failure is not cured within 30 days after written notice thereof is given to Seller by Purchaser;
(b) failure of Seller to deliver any of the deliverables to Purchaser in accordance with Section 2.2 and such failure is not cured within [***] after written notice thereof is given to Seller by Purchaser;
(c) Breach of the covenants in Section 4.4(a) (or, solely as it relates thereto, Section 4.4(e)) and such Breach is not cured within [***] of the occurrence of such Breach;
(d) An Amarin Party becomes subject to a Bankruptcy Event; and
(e) Purchaser shall fail to have a first-priority perfected security interest (subject to Permitted Encumbrances) under the UCC (or any comparable law) of all applicable jurisdictions in the United States and Ireland in any of the Additional Collateral to the extent required under the Transaction Documents and such first-priority perfected security interest is not restored within [***] after written notice thereof is given to Seller by Purchaser.

http://www.sec.gov/Archives/edgar/data/897448/000119312513084191/d456797dex1076.htm