-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, K5po3HewQxgCbWIC3G7zMK3kbpRgVI4+PGl9SiMN4hTxB+eUWJr/waaXEpIFUuC3 C+WSwE9yQvZKaeZ6Vys56g== 0000929638-09-001256.txt : 20090727 0000929638-09-001256.hdr.sgml : 20090727 20090727135544 ACCESSION NUMBER: 0000929638-09-001256 CONFORMED SUBMISSION TYPE: SC 13D/A PUBLIC DOCUMENT COUNT: 2 FILED AS OF DATE: 20090727 DATE AS OF CHANGE: 20090727 GROUP MEMBERS: AIDAN KING GROUP MEMBERS: CADUCEUS PRIVATE INVESTMENTS III, LP GROUP MEMBERS: ENA PROSSER GROUP MEMBERS: ERIC P. BUATOIS GROUP MEMBERS: FOUNTAIN HEALTHCARE PARTNERS FUND 1, L.P. GROUP MEMBERS: FOUNTAIN HEALTHCARE PARTNERS LTD. GROUP MEMBERS: ICHAEL F. POWELLL, PH.D. GROUP MEMBERS: JAMES I. HEALY, M.D., PH.D. GROUP MEMBERS: JULIET TAMMENOMS BAKKER GROUP MEMBERS: JUSTIN LYNCH GROUP MEMBERS: LONGITUDE CAPITAL ASSOCIATES, L.P. GROUP MEMBERS: LONGITUDE CAPITAL PARTNERS, LLC GROUP MEMBERS: LONGITUDE VENTURE PARTNERS, L.P. GROUP MEMBERS: MANUS ROGAN GROUP MEMBERS: ORBIMED ADVISORS LLC GROUP MEMBERS: ORBIMED ASSOCIATES III, LP GROUP MEMBERS: ORBIMED CAPITAL GP III LLC GROUP MEMBERS: PATRICK ENRIGHT GROUP MEMBERS: SAMUEL D. ISALY GROUP MEMBERS: SOFINNOVA MANAGEMENT VII, L.L.C. SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: AMARIN CORP PLC\UK CENTRAL INDEX KEY: 0000897448 STANDARD INDUSTRIAL CLASSIFICATION: PHARMACEUTICAL PREPARATIONS [2834] IRS NUMBER: 000000000 FISCAL YEAR END: 0831 FILING VALUES: FORM TYPE: SC 13D/A SEC ACT: 1934 Act SEC FILE NUMBER: 005-52399 FILM NUMBER: 09964188 BUSINESS ADDRESS: STREET 1: FIRST FLOOR, BLOCK 3, THE OVAL, STREET 2: SHELBOURNE ROAD, BALLSBRIDGE CITY: DUBLIN STATE: L2 ZIP: 00000 BUSINESS PHONE: 353 1 6699 020 MAIL ADDRESS: STREET 1: FIRST FLOOR, BLOCK 3, THE OVAL, STREET 2: SHELBOURNE ROAD, BALLSBRIDGE CITY: DUBLIN STATE: L2 ZIP: 00000 FORMER COMPANY: FORMER CONFORMED NAME: AMARIN PHARMACEUTICALS PLC DATE OF NAME CHANGE: 20000201 FORMER COMPANY: FORMER CONFORMED NAME: ETHICAL HOLDINGS PLC DATE OF NAME CHANGE: 19930322 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: SOFINNOVA VENTURE PARTNERS VII L P CENTRAL INDEX KEY: 0001380734 IRS NUMBER: 000000000 FILING VALUES: FORM TYPE: SC 13D/A BUSINESS ADDRESS: STREET 1: 140 GEARY ST 10TH FL CITY: SAN FRANCISCO STATE: CA ZIP: 94108 BUSINESS PHONE: 415-228-3390 MAIL ADDRESS: STREET 1: 140 GEARY ST 10TH FL CITY: SAN FRANCISCO STATE: CA ZIP: 94108 SC 13D/A 1 sofinnova_sc13da124jul09.htm SC 13D/A

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 13D

Under the Securities Exchange Act of 1934

(AMENDMENT NO. 1)*

 

 

 

Amarin Corporation plc

(Name of Issuer)

 

Ordinary Shares, 50 pence par value per share

(Title of Class of Securities)

 

02311107

(CUSIP Number)

 

Nathalie Auber
Sofinnova Ventures, Inc.
140 Geary Street, 10th Floor
San Francisco, CA 94108
(415) 228-3393

(Name, Address and Telephone Number of Person Authorized to
Receive Notices and Communications)

 

July 22, 2009

(Date of Event which Requires Filing of this Statement)

 

If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of §§240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following box.

Note: Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See §240.13d-7 for other parties to whom copies are to be sent.

*The remainder of this cover page shall be filled out for a reporting person’s initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page.

The information required on the remainder of this cover page shall not be deemed to be “filed” for the purpose of Section 18 of the Securities Exchange Act of 1934 (“Act”) or otherwise

 

subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes).

 

SCHEDULE 13D

This Amendment No. 1 to Schedule 13D relates to the beneficial ownership of ordinary shares, 50 pence par value per share (each, an “Ordinary Share,” and, collectively, the “Ordinary Shares”), of Amarin Corporation plc (the “Issuer”), each ordinary share represented by one American Depositary Share (each, an “ADS,” and, collectively, the “ADSs ”). The ADSs are listed on the Nasdaq Capital Market (“Nasdaq”). This Amendment No. 1 to Schedule 13D amends and restates Items 4, 6 and 7 of the Schedule 13D filed by the Reporting Persons on July 8, 2009 (the “Schedule 13D”) to update the information contained therein. This Amendment No. 1 to Schedule 13D does not restate or amend any of the other information disclosed in the Schedule 13D. Capitalized terms not defined in this Amendment No. 1 to Schedule 13D have the meanings ascribed to them in the Schedule 13D.

ITEM 4.

Purpose of Transaction.

Pursuant to a Securities Purchase Agreement (the “SPA”), dated May 13, 2008, by and among the Issuer, the Purchaser Reporting Persons, and the four other purchaser parties to the SPA (the “Other 2008 Purchasers” and collectively with the Purchaser Reporting Persons, the “2008 Investors”), the Issuer sold, as part of a first tranche under the SPA (the “First Tranche”), an aggregate of 12,173,914 Ordinary Shares (each Ordinary Share represented by one ADS) and 8 preference shares (the “Preference Shares”) for an aggregate purchase price of $28,000,002.02. This First Tranche closed on May 19, 2008, and was part of a private placement under the SPA for up to $58,000,000. The 2008 Investors have the option, exercisable at any time through the completion or waiver of agreed milestones, to purchase Ordinary Shares in an amount up to approximately $28,000,000 in a second tranche (the “Second Tranche”). The number of Ordinary Shares acquired, and amounts paid, by  each of the 2008 Investors as part of the First Tranche are set forth in Item 3 of the 2008 Schedule 13D. If the Second Tranche occurs, the per share purchase price for each Ordinary Share purchased in the Second Tranche will equal the lesser of (a) $2.60 and (b) the product of (i) the average of the volume weighted average prices as published on the HP screen on Bloomberg of the ADSs as reported on Nasdaq (symbol AMRN) for each of the thirty (30) trading days immediately prior to the closing date of the Second Tranche and (ii) 1.13.

Under the terms of the SPA, and subject to certain terms and exceptions, each of the 2008 Investors has a right of first refusal to purchase up to its pro rata share of any offering by the Issuer of Ordinary Shares or any other class or series of its capital stock, or any other securities convertible into or exchangeable for Ordinary Shares or any other class or series of capital stock.

Pursuant to the terms of the Preference Shares (attached as Exhibit D to the SPA), (a) the Preference Shares entitle the holders thereof to vote for the election of four (4) or, under certain circumstances, five (5) members of the Issuer’s Board of Directors (the “Board”), and (b) a majority of the directors appointed by the holders of Preference Shares have the right to approve the composition of any committee of the Board, provided that any such committee shall have an equal number of directors appointed by the holders of the Preference Shares and directors other than directors appointed by the holders of the Preference Shares.

 

In connection with the transactions contemplated by the SPA, the 2008 Investors (other than Fountain) entered into a Voting Agreement (included as Exhibit C to the Schedule 13D) (the “Voting Agreement (Investors)”), pursuant to which each 2008 Investor (other than Fountain) agreed to vote all Ordinary Shares and Preference Shares held by such 2008 Investor in such manner as may be necessary to elect (and maintain in office) as members of the Board one (1) director designated by each of (a) OrbiMed (and its affiliates), (b) Sofinnova (and its affiliates), (c) Panorama Capital, L.P. (and its affiliates), and (d) Thomas McNerney & Partners II, L.P. (and its affiliates) (for a total of four (4) directors), for so long as each such party (and its affiliates) continues to hold at least thirty three (33%) of the Ordinary Shares purchased by such party (and its affiliates) in the First Tranche and the Second Tranche (if it occurs) under the SPA.

In accordance with the terms of the SPA and the Voting Agreement (Investors) and in furtherance of the rights granted to the holders of the Preference Shares in connection with, and effective upon, the closing of the First Tranche, the following four individuals were elected to the Board on behalf of the 2008 Investors (other than Fountain): Dr. James Healy, Dr. Carl L. Gordon, Dr. Eric Aguiar and Dr. Srinivas Akkaraju. Dr. Aguiar and Dr. Akkaraju have since resigned as directors and their vacancies have not been filled by the holders of the Preference Shares.

The foregoing description of the Voting Agreement (Investors) is qualified in its entirety by the Voting Agreement (Investors) which is included as Exhibit C to the Schedule 13D and is incorporated herein by reference.

Under the SPA, the Issuer agreed that, in advance of its next Annual General Meeting, the Board would propose such amendments to the Issuer’s Memorandum and Articles of Association (“Articles”) as were necessary to (a) ensure to the maximum extent permitted by English law that the Preference Shares held by the 2008 Investors (other than Fountain) would entitle them to vote as a separate class without the vote of the holders of Ordinary Shares in all general, extraordinary, annual, or special meetings of the shareholders of the Issuer, and whether or nor adjourned or postponed, for the election of four (4) or five (5) (as the case may be) directors to the Board as they are entitled to elect pursuant to the terms of the Preference Shares, and (b) generally to bring the Articles current with the 2006 amendments to the Companies Act. These amendments to the Articles were adopted.

In connection with the transactions contemplated by the SPA, the 2008 Investors (other than Fountain) entered into a Voting Agreement (attached as Exhibit D to the Schedule 13D) (the “Voting Agreement (Directors)”) with certain directors of the Issuer (and/or such directors’ affiliates), pursuant to which each such director and/or affiliate agreed to vote at any meeting of the holders of Ordinary Shares, however called, all Ordinary Shares and ADSs held by such director and/or affiliate in favor of: (a) amendments to the Articles as are necessary to ensure to the maximum extent permitted by English law that the Preference Shares held by the 2008 Investors (other than Fountain) would entitle them to vote as a separate class without the vote of the holders of Ordinary Shares for the election of four (4) or five (5) (as the case may be) directors to the Board as they are entitled to elect pursuant to the terms of the Preference Shares, (b) the Second Tranche under the SPA, ratifying the execution, delivery and performance of the SPA and the approval and adoption of the terms thereof and each of the other actions

 

 

2

 

contemplated therein, and (c) such amendments to the Articles as necessary generally to bring the Articles current with the 2006 amendments to the Companies Act.

The foregoing description of the Voting Agreement (Directors) is qualified in its entirety by the Voting Agreement (Directors) which is included as Exhibit D to the Schedule 13D and is incorporated herein by reference.

On July 6, 2009, the Purchaser Reporting Persons and the Issuer executed a non-binding Memorandum of Terms for Equity Financing summarizing the material terms of a proposed equity financing in which the Purchaser Reporting Persons would act as lead investors to organize other potential investors to provide for a new equity financing of up to $55 million in the aggregate (the “Proposed Financing”). On July 22, 2009, the Purchaser Reporting Persons and the Issuer executed a revised non-binding Memorandum of Terms (the “Memorandum of Terms”).

Pursuant to two binding provisions of the Memorandum of Terms, the Issuer has agreed to pay the expenses of the Purchaser Reporting Persons incurred in connection with the Proposed Financing and the issuer is prohibited, with certain exceptions relating to the fiduciary duties of the Issuer’s Board, from soliciting, engaging in any discussions regarding, or entering into an agreement with respect to the sale of any securities or material assets of the Issuer.

The Memorandum of Terms states that the Proposed Financing would be consummated in a single closing to occur on or before August 31, 2009.  The Purchaser Reporting Persons, together with other potential investors that have expressed strong interest, would invest an aggregate of up to $30 million, with the $25 million balance reserved for other investors mutually acceptable to the Purchaser Reporting Persons and the Issuer.

In the Proposed Financing, the Issuer would issue units (each a “Unit”) consisting of one Ordinary Share and one warrant (each a “Warrant”) to purchase one Ordinary Share for every two Ordinary Shares purchased at the closing of the Proposed Financing. The purchase price per Unit would be $1.00. The exercise price of the Warrants would be $1.50 per Ordinary Share. The Warrants would have a five-year term and customary anti-dilution provisions.

In the Proposed Financing, the Issuer’s employee option pool would be expanded to yield 10% unallocated options on a fully diluted basis in order to provide incentive compensation to key employees of the Issuer.

The securities purchase agreement for the Proposed Financing (the “New SPA”) would have customary representations, warranties and covenants including a right of the Issuer to terminate the New SPA if necessary for the Board to comply with applicable fiduciary duties.

The signing of the New SPA and the closing of the Proposed Financing would be subject to customary conditions including that (i) the holders of the notes issued to certain investors in a bridge financing transaction in June 2009 must agree to convert their notes into Ordinary Shares, (ii) each of the eight outstanding Preference Shares must be converted into one Ordinary Share and the SPA must be amended to eliminate the Second Tranche option (thereby eliminating the pre-emptive rights and Board nomination rights of the 2008 Investors), (iii) the Board shall have adopted and begun to implement a plan which will include rationalization and consolidation of resources, and (iv) the Purchaser Reporting Persons shall have completed their due diligence investigation of the Issuer.

 

 

3

 

In addition to the closing conditions described above, the Memorandum of Terms contemplates that the Purchaser Reporting Persons must be satisfied with the composition of the management of the Issuer at the time of the closing of the Proposed Financing which could result in severance agreements and/or the resignation of certain members of management and the entering into of employment agreements with new or existing members of management. The New SPA would provide for a Board of nine directors. Each of Fountain, Longitude, Sofinnova and Orbimed would be entitled to designate one director for so long as it beneficially owns at least 50% of the Ordinary Shares purchased by it in the closing of the Proposed Financing. In addition, for so long as the Purchaser Reporting Persons beneficially own in the aggregate 25% or more of the issued and outstanding Ordinary Shares of the Issuer, they would also be entitled to nominate two other directors, both of whom must be independent directors. One Board seat would be held by the chief executive officer of the Issuer.

The Memorandum of Terms contemplates that the New SPA would provide that the Ordinary Shares acquired by the purchasers in the Proposed Financing (the "Financing Investors"), including those acquired upon exercise of Warrants, would be registered by the Issuer subsequent to the closing of the Proposed Financing. The Issuer would be required to file a registration statement within 60 days after the closing of the Proposed Financing and use its best efforts to cause the registration statement to become effective within 90 days after the date of filing. The Financing Investors would also have piggy-back registration rights with respect to any registration statement filed by the Issuer and the right to consent to the Issuer’s granting of any other registration rights unless such rights are subordinate to those of the Financing Investors.

The Memorandum of Terms also states that each Purchaser Reporting Person, for so long as it holds at least 50% of the Ordinary Shares it purchased at the closing of the Proposed Financing, would have the right to purchase its pro-rata share of any future equity financing (other than underwritten public offerings) and the Issuer would be prohibited from granting participation rights, rights of first refusal, rights of first offer or similar rights to any holder or prospective holder of securities of the Issuer on terms more favorable than the rights granted to the Purchaser Reporting Persons.

The foregoing summary of the Memorandum of Terms is qualified in its entirety by the Memorandum of Terms which is attached hereto as Exhibit E and is incorporated herein by reference.

Except as described in this Item 4, the Reporting Persons have no present plans or proposals which relate or would result in: (a) the acquisition by any person of additional securities of the Issuer, or the disposition of securities of the Issuer, (b) an extraordinary corporate transaction such as a merger, reorganization or liquidation, involving the Issuer or any of its subsidiaries, (c) a sale or transfer of a material amount of assets of the Issuer or any of its subsidiaries, (d) any change in the present board of directors or management of the Issuer, including any plans or proposals to change the number or term of directors or to fill any existing vacancies on the board, (e) any material change to the present capitalization or dividend policy of the Issuer, (f) any other material change in the Issuer’s business or corporate structure, (g) changes in the Issuer’s charter, bylaws or instruments corresponding thereto or other actions which may impede the acquisition of control of the Issuer by any person, (h) causing a class of securities of the Issuer to be delisted from a national securities exchange or to cease to be

 

 

4

 

authorized to be quoted on an inter-dealer quotation system of a registered national securities association, (i) a class of equity securities of the Issuer becoming eligible for termination of registration pursuant to Section 12(g)(4) of the Securities Exchange Act of 1934, as amended, or (j) any actions similar to any of those enumerated above.

ITEM 6.

Contracts, Arrangements, Understandings or Relationships with Respect to Securities of the Issuer.

Please see the descriptions of the SPA, the Voting Agreement (Investors), Voting Agreement (Directors) and Memorandum of Terms in Item 4 above which are incorporated herein by reference.

ITEM 7.

Material to be Filed as Exhibits.

 

Exhibit No.

Description

Exhibit A (1)

Agreement of Joint Filing

Exhibit B (2)

Securities Purchase Agreement

Exhibit C (1)

Voting Agreement (Investors)

Exhibit D (1)

Voting Agreement (Directors)

Exhibit E (1)

Memorandum of Terms for Equity Financing, dated July 6, 2009

Exhibit F*

Memorandum of Terms for Equity Financing, dated July 22, 2009

 

* Filed herewith.

(1)

Incorporated by reference to Exhibits A, C, D and E of the Schedule 13D filed by the Reporting Persons on July 8, 2009.

(2)

Incorporated by reference to Exhibit 4.81 of the Issuer’s Form 20-F filed with the Securities and Exchange Commission on May 19, 2008.

 

 

5

 

SIGNATURES

After reasonable inquiry and to the best of our knowledge and belief, we certify that the information set forth in this statement is true, complete and correct.

Date: July     27

, 2009

SOFINNOVA VENTURE PARTNERS VII, L.P.

a Delaware Limited Partnership

By: Sofinnova Management VII, L.L.C.

a Delaware Limited Liability Company

Its: General Partner

 

By:

/s/ Natalie Auber

Name: Natalie Auber

Title: Attorney-in-Fact

SOFINNOVA MANAGEMENT VII, L.L.C.

a Delaware Limited Liability Company

 

By:

/s/ Natalie Auber

Name: Natalie Auber

Title: Attorney-in-Fact

JAMES I. HEALY, M.D., PH.D.

 

By:

/s/ Natalie Auber

Name: Natalie Auber

Title: Attorney-in-Fact

MICHAEL F. POWELL, PH.D.

 

By:

/s/ Natalie Auber

Name: Natalie Auber

Title: Attorney-in-Fact

ERIC P. BUATOIS

 

By:

/s/ Natalie Auber

Name: Natalie Auber

Title: Attorney-in-Fact

 

 

6

 

CADUCEUS PRIVATE INVESTMENTS III, LP

a Delaware Limited Partnership

 

By:

OrbiMed Capital GP III LLC

a Delaware Limited Liability Company

Its: General Partner

 

By:

/s/ Samuel D. Isaly

Name: Samuel D. Isaly

Title: Managing Partner

ORBIMED CAPITAL GP III LLC

a Delaware Limited Liability Company

 

By:

/s/ Samuel D. Isaly

Name: Samuel D. Isaly

Title: Managing Partner

SAMUEL D. ISALY

 

By:

/s/ Samuel D. Isaly

Name: Samuel D. Isaly

ORBIMED ASSOCIATES III, LP

a Delaware Limited Partnership

 

By:

OrbiMed Advisors LLC

a Delaware Limited Liability Company

Its: General Partner

 

By:

/s/ Samuel D. Isaly

Name: Samuel D. Isaly

Title: Managing Partner

ORBIMED ADVISORS LLC

a Delaware Limited Liability Company

 

By:

/s/ Samuel D. Isaly

Name: Samuel D. Isaly

Title: Managing Partner

LONGITUDE VENTURE PARTNERS, L.P.

a Delaware Limited Partnership

 

By:

Longitude Capital Partners, LLC

a Delaware Limited Liability Company

Its: General Partner

 

 

7

 

 

By:

/s/ Patrick Enright

Name: Patrick Enright

Title: Managing Member

LONGITUDE CAPITAL PARTNERS, LLC

a Delaware Limited Liability Company

 

By:

/s/Patrick Enright

Name: Patrick Enright

Title: Managing Member

PATRICK ENRIGHT

 

By:

/s/ Patrick Enright

Name: Patrick Enright

JULIET TAMMENOMS BAKKER

 

By:

/s/ Juliet Tammenoms Bakker

Name: Juliet Tammenoms Bakker

LONGITUDE CAPITAL ASSOCIATES, L.P.

a Delaware Limited Partnership

 

By:

Longitude Capital Partners, LLC

a Delaware Limited Liability Company

Its: General Partner

 

By:

/s/ Patrick Enright

Name: Patrick Enright

Title: Managing Member

FOUNTAIN HEALTHCARE PARTNERS FUND 1, L.P.

an Irish Limited Partnership

 

By:

Fountain Healthcare Partners Ltd.

an Irish Limited Company

Its: General Partner

 

By:

/s/ Manus Rogan

Name: Manus Rogan

Title: Managing Partner

 

 

8

 

FOUNTAIN HEALTHCARE PARTNERS LTD.

an Irish Limited Company

 

By:

/s/Manus Rogan

Name: Manus Rogan

Title: Managing Partner

MANUS ROGAN

 

By:

/s/Manus Rogan

Name: Manus Rogan

AIDAN KING

 

By:

/s/Aidan King

Name: Aidan King

ENA PROSSER

 

By:

/s/Ena Prosser

Name: Ena Prosser

JUSTIN LYNCH

 

By:

/s/Justin Lynch

Name: Justin Lynch

 

 

9

 

 

 EX-99 2 sofinnova_sc13da1exf24jul09.htm

MEMORANDUM OF TERMS FOR EQUITY FINANCING OF

 

Amarin Corporation, plc.

 

This Memorandum of Terms summarizes the principal terms of a proposed Common Stock and Warrant Financing (the “Financing”) of Amarin Corporation, plc. Except for the provisions set out under the headings “Exclusivity and Expenses,” “Confidentiality,” “Governing Law” , “Counterparts” and pargraph (b) of "Bridge Arrangements" below, this Memorandum of Terms is non-binding and strictly for discussion purposes only; there is no obligation on the part of any party unless and until definitive agreements are signed by all parties. This Memorandum of Terms does not constitute either an offer to sell or an offer to purchase securities.

 

 

Issuer:

Amarin Corporation, plc (the “Company”). All references to the Company set forth herein would also be deemed to include references to any subsidiary of the Company, where applicable.

 

Type of Security;
Purchase Price:

Units (each, a “Unit” and collectively, the “Units”) consisting of one ordinary share (the “Common Stock” and, collectively, the “Common Shares”) and a warrant (each, a “Warrant” and, collectively, the “Warrants”) to purchase 0.50 of a share of Common Stock (collectively, the “Warrant Shares”). The purchase price per Unit would be $1.00.

 

Amount to be Raised:

Pursuant to a securities purchase agreement containing customary representations, warranties and covenants (the “Purchase Agreement”), investors (the “Investors”) would purchase Units from the Company in the aggregate amount of up to $55 million (the “Financing”). Fountain Healthcare Partners , Sofinnova Ventures, Orbimed Advisors and Longitude Capital (collectively, the “Lead Investors”) would each be Investors in the Financing. The Lead Investors, together with other potential investors that have expressed strong interest are expected to invest an aggregate of up to $30 million in the Financing. Other Investors, mutually acceptable to the Company and the Lead Investors, may also participate in the Financing under the same terms as the Lead Investors. In connection with the Financing, the option pool will also be expanded to yield 10% unallocated options on a fully diluted basis in order to provide incentive compensation to key employees in the Company.

 

 

 

 

Signing and Closing:

The Purchase Agreement is anticipated to be executed by all parties on or before August 31, 2009 (the "Closing").

 

Bridge Arrangements

 

 

 


 

Warrants:

(a) The Company will seek to execute a new bridge financing ("New Bridge Financing") with investors in an amount of not less than $1 million upon the terms set forth in Appendix A.  It is anticipated that a term sheet for the New Bridge Financing will be signed on or before July 20, 2009 and that substantive documentation relating thereto will be executed on or before July 24, 2009.

(b) The Company will agree with the current bridge investors to extend the due date for the existing bridge financing to August 31, 2009.

The exercise price per Warrant Share would be equal to $1.50 per share. The Warrants would have a five-year term and may be exercised for cash or net exercised if such a feature is possible. The warrants will contain anti-dilution protection customary for a transaction of this type. Each Warrant would contain a clause specifying that there are no circumstances whereby such Warrant could be required by the Company to be settled in cash, and such other provisions deemed reasonably necessary in consultation with the Company’s auditors to avoid the application of “liability accounting” rules.

 

Securities Purchase Agreement:

The Purchase Agreement would include Company representations, warranties and covenants (and would provide for indemnification of the Investors for the breach of such representations, warranties and covenants) to the extent customary in transactions of this kind by public companies.

 

Conditions to Closing:

1) Each of the representations and warranties of the Company in the Securities Purchase Agreement shall be true and correct and the Company shall have performed in all material respects each of its covenants therein.

 

 

2) Any necessary regulatory approvals and third party consents shall have been obtained.

 

 

3) Legal opinions (opining to, among other things, the due authorization and validity of the securities issued in the Financing) shall have been delivered to the Investors.

 

 

4) The Board will have adopted and begun to implement a plan which will include rationalization and consolidation of resources. Such plan, including a detailed timeline and estimate of associated expenses, shall require the prior approval of the Lead Investors.

5) The Lead Investors shall completed their due diligence exercise and be satisfied with the results therefrom.

 

 

 

 

 

6) Prior to the Closing, the Investors shall have completed a review of the budget and the budget shall be satisfactory to the Lead Investors (the “Budget Review”). The Budget Review shall utilize consultants and independent experts representing the Lead Investors to confirm that the size of the Financing is sufficient to execute the clinical development plan.

 

 

7) There shall not have been a material adverse event to the Company.

 

 

8) The holders of the notes from the June 2009 bridge financing agree to convert their notes into equity in the Financing.

 

 

9) The shareholders in the May 2008 financing (i) either exercise or waive their pre-emptive rights, (ii) agree to convert their Series A Preference Shares into Common Stock on a one-for-one basis and (iii) agree to cancel the second tranche of the May 2008 financing.

10) The full $55 million will be funded by the Investors at the Closing.

 

 

11) Other customary closing conditions, including without limitation, the approval of each Investor’s investment committee.

The conditions set forth under clauses 4, 5, 6, 8  and 9 will be satisfied prior to the execution of the Purchase Agreement, provided that the effectiveness of the agreements of the May 2008 investors executed pursuant to clause 9 will be contingent on the consummation of the Closing.

 

Board Composition and Representation:

The Company’s board of directors will be set at nine members. Assuming each of the Lead Investors invests at least i) $5 million or ii) their pro rata share based on existing shareholding, each Lead Investor will be entitled to nominate one member of the Company's board of directors. 

The Company will covenant that for as long as each such Investor holds in the aggregate at least 50% of the number of Common Shares it purchased in the Closing, the Company will nominate the designee determined by such Investor and use its best efforts to have such designee elected.

As of the Closing and for so long as they beneficially own in the aggregate 25% or more of the issued and outstanding Common Stock of the Company, the Lead Investors will also be entitled to nominate two other members of the board of directors, both of whom will be independent.

The remaining seat will be occupied by the CEO.

 

 

 

 

The Company will enter into standard indemnification agreements with each member of the board of directors.

Directors’ and Officers’ Liability Insurance:

The Company would use its reasonable efforts to obtain and maintain directors’ and officers’ liability insurance in an amount reasonably acceptable to the board of directors and consistent with industry practice.

Registration Rights:

The Common Shares and the Warrant Shares acquired by the Investors at each Closing (the “Registrable Securities”) will be registered for resale promptly following Closing. Accordingly, the Purchase Agreement will provide that, among other things, a registration statement would be filed within 60 days following Closing, and the Company would use its best efforts to cause the registration statement to become effective within 90 days following the date of filing of the relevant registration statement. The Company will cause the registration statement to remain effective until all of the Registrable Securities registered under such registration statement are available for resale through Rule 144 under the Securities Act of 1933, as amended, or any successor provision thereto, without any volume limitations.

The holders of Registrable Securities will be entitled to unlimited piggyback registration rights, subject to pro rata cutback, if applicable. All expenses (including reasonable expenses of one counsel to the selling Investors) will be paid by the Company (excluding underwriting commissions).

Until the Registrable Securities are registered, the Company will not grant any additional registration rights without the approval of the holders of a majority of the Registrable Securities unless such rights are subordinate to the rights of the Investors.

 

 

 

 

Participation Rights:

Each Lead Investor, for so long as it holds at least 50% of the original number of Common Shares that it purchased in the Financing, will have the right to purchase its pro rata share (based on its ownership of the Company’s outstanding Common Stock on a fully diluted basis) of any future equity offering by the Company. Underwritten public offerings will be excluded from this right. The Company will be prohibited from offering participation rights, rights of first refusal, rights of first offer or similar rights to any holder or prospective holder of any Company securities on terms more favorable than, or in preference to, the rights granted to the Lead Investors without the prior approval of the Lead Investors.

 

Access to Information:

From the date hereof until the Closing, the Company will permit access to, and will make available to the Investors’ representatives, consultants and their respective counsels for inspection, such information and documents as the Investors reasonably request, and will make available at reasonable times and to a reasonable extent officers and employees of the Company to discuss the business and affairs of the Company; provided that, the Company will not be obligated to share material non-public information with any Investor in the absence of a suitable confidentiality agreement.

 

Financing Fee:

The Lead Investors will not be entitled to any fee for arranging the Financing. A financial expert may be retained by the board of directors to provide a fairness opinion and the board of directors will consider what additional assistance it requires from third parties to close the Financing.  Any fee arrangement for the financial expert will be subject to the prior approval of the Lead Investors.

 

 

 

Expenses:

As an inducement to the Lead Investors to arrange the proposed Financing and in consideration of the time and expense devoted and to be devoted by the Lead Investors to the Financing, the Company shall not (and will not permit any affiliate, employee, officer, director, stockholder, agent or other person acting on its behalf (each a “Representative”) to), from the date hereof until September 1st, 2009 (the “Exclusivity Period”), solicit or knowingly encourage any offers, engage in any discussions (other than to inform any initiating party that it is subject to this provision), entertain, or enter into any agreements or commitments with respect to the issuance of or a possible sale of all or any part of the Company’s securities, whether such transaction takes the form of a sale of stock, merger, scheme of arrangement, liquidation, dissolution, reorganization, investment, recapitalization, consolidation, or otherwise with respect to the possible sale of all or substantially all of the assets, or any material assets, of the Company or any subsidiary thereof (each a “Competitive Transaction”); provided, however, that: (i) during the Exclusivity Period the Company and its Representatives shall have the right to entertain and engage in discussions with respect to unsolicited offers for Competitive Transactions to the limited extent necessary for the Board to comply with its fiduciary duties under applicable law; (ii) during the Exclusivity Period the Company and its Representatives shall have the right to solicit and encourage commitments from third parties to become Investors and parties to this Memorandum of Terms for approximately $25 million of the Financing and to engage in discussions with said third parties related thereto and (iii) so long as the Company has not breached its obligations above, the Company shall have the right to terminate the Purchase Agreement, if executed, to permit the Company to enter into a binding agreement with persons other than the Investors if such termination is necessary for the Board to comply with its fiduciary duties under applicable law (a “Fiduciary Out Termination”).  Regardless of whether the Purchase Agreement shall be executed or the proposed Financing shall close, the Company will pay the amount equal to the Lead Investors’ out-of-pocket expenses (including for legal, accounting and other third party expert fees and expenses) incurred in connection with the proposed Financing.

 

 

 

 

Confidentiality:

Subject to required disclosure to governmental agencies and other disclosure required as a matter of law, the existence of this Memorandum of Terms, the identity of the Investors and the provisions contained herein, as well as the discussions between the parties hereto and their respective agents, will be held in confidence by the parties hereto and their agents and representatives, and each party will provide such information only to those third parties that a party hereto reasonably determines has a need to know of the existence of this Memorandum of Terms and the provisions herein (such receiving parties to be similarly subject to confidentiality agreements or duties). The Investors and the Company further agree they will not use any portion of the information and data provided to such party by the other party for any purpose other than the consummation of the transaction contemplated by this Memorandum of Terms. The existing confidentiality agreements between the parties shall remain in force. Except as already disclosed or as permitted by this Memorandum of Terms, no party hereto will make any public disclosure concerning the existence of this Memorandum of Terms, its contents or the status of the negotiations between the Investors and the Company with respect to the proposed investment without obtaining the prior written consent of the Company.

 

Binding Effect and Governing Law:

Except for the provisions set out under the headings “Expenses,” “Confidentiality,” “Binding Effect and Governing Law”  “Counterparts”, this Memorandum of Terms is non-binding and strictly for discussion purposes only; there is no obligation on the part of any party unless and until definitive agreements are signed by all parties. This Memorandum of Terms does not constitute either an offer to sell or an offer to purchase securities. This Memorandum of Terms will be governed by the internal laws of the State of New York.

 

Counterparts:

The Memorandum of Terms may be executed in counterparts, each of which will be deemed to constitute an original but all of which together will constitute one and the same instrument.

 

 

 

[Signature Page Follows]

 

AGREED AS OF JULY   , 2009:

Fountain Healthcare Partners I, L.P.

By: Fountain Healthcare Partners Ltd.

Its: General Partner

 

 

By: _____________________________________

Name: Manus Rogan

Title: Managing Partner

 

Sofinnova Venture Partners VII, L.P.

By: Sofinnova Management VII, L.L.C

Its: General Partner

 

By: _____________________________________

Name: James I. Healy

Title: Managing General Partner

 

 

 

Caduceus Private Investments III, LP

By: OrbiMed Capital GP III LLC

Its: General Partner

 

 

By: _____________________________________

Name: Carl L. Gordon

Title:

 

OrbiMed Associates III, LP

By: OrbiMed Advisors LLC

Its: General Partner

 

 

By: _____________________________________

Name: Carl L. Gordon

Title:

 

Longitude Venture Partners, L.P.

By: Longitude Capital Partners, LLC

Its: General Partner

 

By: _____________________________________

Name: David Hirsch

Title: Director

 

Amarin Corporation plc

 

 

By: _____________________________________

Name: William Mason

Title: Director

 

 

 

 

 

 

 

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