Exhibit
4.49


 


Amarin redraft


27th September


2004


 


 


SETTLEMENT AGREEMENT


 


 


BY AND BETWEEN


 


VALEANT
PHARMACEUTICALS INTERNATIONAL,


 


 


AND


 


AMARIN
CORPORATION PLC


 


AND


 


AMARIN PHARMACEUTICALS COMPANY LIMITED


 





















 


This Settlement Agreement, made
as of the 27th day of September 2004, by and between Valeant
Pharmaceuticals International (“Valeant”) and Amarin Corporation plc and Amarin
Pharmaceuticals Company Limited (together “Amarin”) (Valeant and Amarin
collectively referred to as the “Parties”):


 


WITNESSETH:


 


WHEREAS,
On February 11, 2004 the Parties entered into an Asset Purchase Agreement
and on February 25, 2004 the Parties entered into Amendment No. 1 to such
Asset Purchase Agreement (as so amended, the “Purchase Agreement”) (capitalized
terms used herein and not otherwise defined having the respective meanings
assigned to them in the Purchase Agreement);


 


WHEREAS,
the Purchase Agreement provided for, inter alia, the sale by Amarin to Valeant
of certain assets including Amarin’s rights to distribute certain pharmaceutical
products;


 


WHEREAS,
Section 2.7 of the Purchase Agreement sets forth a procedure and
methodology for the preparation of a closing balance sheet;


 


WHEREAS,
a dispute has arisen between the Parties as to whether any payment is required
to be made by Amarin to Valeant under Section 2.7 of the Purchase
Agreement, or otherwise, based on the closing balance sheet prepared by Valeant
or based on the levels of Amarin Product inventory in the sales channel (to
include, without limitation, and for the avoidance of doubt the wholesaler and
retailer level of the sales chain) (the “CBS Dispute”); and


 


WHEREAS,
the Parties desire to resolve the CBS Dispute, and to settle and dispose of all
claims and potential claims between themselves with respect to the CBS Dispute;


 


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NOW,
THEREFORE, in consideration of the mutual promises set
forth herein and other good and valuable consideration, the receipt and legal
sufficiency of which are hereby acknowledged, the Parties hereto agree as
follows:


 


1.                                       Valeant,
in consideration of the execution of this Settlement Agreement, and in
consummation of the transactions contemplated hereby, on behalf of itself and
its administrators, agents, representatives, directors, officers, employees,
consultants, affiliates, subsidiaries, attorneys and the successors and assigns
of any or all of them (collectively, the “Valeant Releasors”), hereby releases
and forever discharges Amarin and its administrators, agents, representatives,
directors, officers, employees, consultants, affiliates, subsidiaries,
attorneys and the successors and assigns of any or all of them (collectively
the “Amarin Releasees”) from any and all accounts, accounts reckonings,
actions, agreements, bills, bonds, causes of action, claims, compensation of
whatever nature, controversies, costs, covenants, damages, debts, demands,
executions, expenses, extents, fees, judgments, liabilities, losses,
provisions, rights, suits, sums of money and trespasses whatsoever with respect
to the CBS Dispute, whether in law, in equity, or otherwise, whether liquidated
or unliquidated, whether known or unknown, suspected or unsuspected,
anticipated or unanticipated (collectively, the “Claims”), which any of the
Valeant Releasors may now have against the Amarin Releasees or ever had, or
which they or any of their respective heirs, executors or administrators,
hereafter can, shall or may have, for, upon or by reason of any matter, cause
or thing, whatsoever, on or at any time prior to the date of this Settlement
Agreement.


 


2.                                       Amarin
in consideration of the execution of this Settlement Agreement, and in
consummation of the transactions contemplated hereby, on behalf of itself and
its


 


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administrators, agents, representatives,
employees, directors, officers, consultants, affiliates, subsidiaries,
attorneys and the successors and assigns of any or all of them (collectively,
the “Amarin Releasors”), hereby releases and forever discharges Valeant and its
administrators, agents, representatives, directors, officers, employees,
consultants, affiliates, subsidiaries, attorneys and the successors and assigns
of any or all of them (collectively the “Valeant Releasees”) from any and all
Claims, which any of the Amarin Releasors may now have against the Valeant
Releasees or ever had, or which they or any of their respective heirs,
executors or administrators, hereafter can, shall or may have, for, upon or by
reason of any matter, cause or thing, whatsoever, on or at any time prior to
the date of this Settlement Agreement.


 


3.                                       In
consideration for the entering into of this Settlement Agreement the Parties
agree that the following amendments shall be made to the Purchase Agreement,
namely:


 


3.1                                 Section 2.2(a)
of the Purchase Agreement shall be deleted in its entirety to be replaced by
the following:


 


“Section 2.2(a)
The purchase price for the Acquired Assets (the “Purchase Price”) will consist of
(i) Thirty-Eight Million U.S. Dollars (U.S. $38,000,000), payable at
Closing by the Buyer to the Sellers or to any Third Party at the Sellers’
direction, and (ii) Two Million U.S. Dollars (U.S. $2,000,000), payable on or
before November 30, 2004, and (iii) the assumption by Buyer at Closing of
the Assumed Liabilities.”


 


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In furtherance of the foregoing, at Amarin’s
direction and on Amarin’s behalf, at such time as Valeant pays the $2 million
payable to Amarin under Section 2.2(a)(ii), Valeant will pay $1 million of
the $2 million directly to Elan.


 


3.2                                 Sections
11.3(a) and (b) of the Purchase Agreement shall be deleted in their entirety to
be replaced by the following:


 


“11.3                     REDUCTION OF
INVENTORY


 


“(a)            As promptly as
reasonably practicable after the execution and delivery of this Agreement,
Amarin shall use Best Efforts to enter into inventory repurchase agreements
(the “Repurchase Agreements”) with each of Quality King Health Care, Cardinal
Distribution, Amerisource Bergen and McKesson Drug Company (collectively, the “Key
Wholesalers”) providing for the repurchase by Amarin at its own cost of certain
inventory held by such distributors.  The
Repurchase Agreements shall be reasonably acceptable to Buyer.  Under the Repurchase Agreements, Amarin shall
seek to repurchase the quantities of inventory set forth in Schedule 11.3
hereto (the “Designated Inventory”) at the prices indicated therein; provided,
however, that in Amarin’s sole discretion it may repurchase any portion
of the Designated Inventory at prices exceeding those set forth in Schedule 11.3,
up to a maximum of 10% above the scheduled prices.  To the extent Amarin effects any repurchases
at a price higher than that set forth in Schedule 11.3, the quantity of
Designated Inventory that Amarin shall seek to repurchase from the relevant Key
Wholesaler(s) (as set forth on Schedule 11.3) will be proportionately
reduced. Each of the Repurchase Agreements, and the obligations thereunder of
Amarin and the respective Key Wholesalers, shall be subject to and conditioned
upon the consummation of the Closing under this Agreement (except to the extent
any Repurchase Agreements are entered into after the Closing as contemplated in
Section 11.3(b) below).  The
Repurchase Agreements shall provide that (i) Amarin’s obligation to pay for
repurchased inventory shall be subject to confirmation of the receipt and
authenticity of the applicable inventory to Amarin’s reasonable satisfaction
and (ii) Amarin shall use its Best Efforts to cause any or all repurchased
inventory to be destroyed. The Repurchase Agreements shall give Amarin the
option of using repurchasing agents or other third parties reasonably
acceptable to Buyer to perform any of Amarin’s obligations under this Section 11.3.  Notwithstanding anything herein to the
contrary, in no event shall Amarin be required to pay more than Nine Million
Three Hundred Thousand Dollars ($9,300,000) in


 


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performing its obligations under this Section 11.3,
which limitation shall apply to all costs and expenses incurred by Amarin in
effecting the repurchase of Designated Inventory including the costs of
repurchase and any administrative fees, third party costs including fees and
expenses of any repurchasing agent, and costs of destroying repurchased inventory.


 


“(b)           Amarin and Buyer
acknowledge and agree that the Closing hereunder shall not be contingent on
Amarin’s ability to enter into any Repurchase Agreements and the execution of
Repurchase Agreements shall not constitute a condition to the obligation of
either party to consummate the Closing. 
In the event that upon Closing (i) any of the Key Wholesalers has not
entered into a Repurchase Agreement providing for the repurchase of Designated
Inventory on the terms contemplated herein or (ii) Amarin is otherwise unable
to obtain Repurchase Agreements for the repurchase of all or any portion of the
Designated Inventory within the price range specified herein, then the parties
shall proceed with the Closing (subject to the satisfaction of all applicable
conditions set forth in this Agreement), and for a period of 60 days after the
Closing Date Amarin shall continue to use its Best Efforts to enter into
Repurchase Agreements in a total amount not to exceed Nine Million Three
Hundred Thousand Dollars ($9,300,000) with respect to any Designated Inventory
not then covered by a Repurchase Agreement. 
Upon the expiration of such 60-day period, Amarin’s obligation to effect
the Repurchase Agreements under this Section 11.3 shall automatically
terminate and Amarin shall have no further obligations whatsoever hereunder
(other than its obligations under any Repurchase Agreements then in effect), provided
that thereafter Amarin shall pay to Buyer the following amounts:  (i) within twenty (20) days following the
expiration of such 60-day period, Amarin shall pay Buyer an amount equal to the
difference between (A) Nine Million Three Hundred Thousand Dollars ($9,300,000)
and (B) the aggregate amount of costs and expenses incurred by Amarin as of
such date in performing its obligations under this Section 11.3.”


 


3.3                                 Section 11.12(b)
of the Purchase Agreement shall be deleted in its entirety to be replaced by
the following:


 


“Section 11.12
(b)  On or before Closing, Amarin shall
pay, or provide funds to API to pay, the full amount of rent, additional rent
and like amounts payable by API through the end of the current lease term
ending August, 2005 under the lease 
relating to the New Jersey Facility (the “New Jersey Lease”).”


 


3.4                                 Exhibit A of
the Purchase Agreement shall be deleted in its entirety to be replaced by the
following:


 


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“EXHIBIT A


 


Purchase Price Allocation


 


Amarin Products and Rights


 


	
  Zelapar
  Rights

  	
   

  	
  $

  	
  10.0 million

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Permax®
  Rights

  	
   

  	
  $

  	
  18.4 million

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  PCP Products
  and Rights

  	
   

  	
  $

  	
  10.0 million

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  API Shares

  	
   

  	
  $

  	
  1.6 million

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  TOTAL

  	
   

  	
  $

  	
  40.0 million

  	
   

  



 


4.                                       The Parties
agree that, subject to the mutual releases contained herein, all obligations
and duties created under the Purchase Agreement which, by their terms, are to
be performed after the Closing Date (as defined in the Purchase Agreement)
shall remain in full force and effect and such obligations and duties are not
altered by the terms of this Settlement Agreement, with the exception of the amendments
made to the Purchase Agreement detailed in paragraph 3 above and save as set
out in paragraph 5 below.


 


5.                                       The Parties
hereby agree, in consideration of the amendments made to the Purchase Agreement
detailed in paragraph 3 above and the mutual releases contained herein, that
for the purposes of Section 2.7 of the Purchase Agreement:


 


5.1                                 the API Adjustment
Amount (as defined in the Purchase Agreement) shall be deemed to be zero
with no further sum being payable by either of the Parties to the other;


 


5.2                                 no further
action will be necessary from either party in respect of the closing balance
sheet mechanism.


 


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6.                                       In consideration of the amendments made to the
Purchase Agreement detailed in paragraphs 3 and 5 above and the mutual releases
contained herein, the parties hereby further agree that if during the Section 6
Option Period (as defined below), Amarin or any of its affiliates elect to
promote, distribute, sell, or otherwise commercialize Miraxion for use in the
treatment of huntington’s disease or any other neurological condition or
disorder in any Miraxion Territory (as defined below) through or in combination
with the efforts of one or more third parties, whether by license, distribution
agreement or co-promotion agreement, or otherwise (but for the avoidance of
doubt not any form of manufacturing, research and/or development agreement or
agreement involving Amarin selling substantially all of its assets or where
there is a change of control of Amarin (meaning the ownership of in excess of
50% of the issued share capital of Amarin is acquired by a single entity or
entities acting in concert) (together a “Third Party Commercialization”), then
Valeant shall have the first right to negotiate with Amarin to exclusively
participate in the Third Party Commercialization of Miraxion in that Miraxion
Territory as follows:


 


6.1                                 For purposes hereof, the following terms shall have
the following meanings:


 


(a)                                  “Miraxion Territory” shall mean Canada, the
United States and/or any of the countries of the European Union (for which
licenses have not already been entered into by Laxdale Limited prior to the
date of this Settlement Agreement), or any discrete portion thereof that is
separately identified for Third Party Commercialization.


 


(b)                                 “Section 6 Option Period” shall mean, with
respect to each Miraxion Territory, the period commencing on the date of this
Settlement Agreement and ending


 


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six (6) months
after Commercial Launch (as defined below) of Miraxion in the Miraxion
Territory.


 


(c)                                  “Commercial Launch” shall mean, with respect to
each Miraxion Territory, the date on which saleable Miraxion product is first
available in commercial quantities in the hands of wholesalers for resale in
the Miraxion Territory.


 


6.2                                 Amarin shall provide Valeant with details of the
proposed Third Party Commercialization which shall include, in reasonably
detailed form, a report on the research and development program to date and a draft
heads of agreement setting out the main commercial terms of the proposed Third
Party Commercialization (the “Proposal Dossier”).


 


6.3                                 For a period of 60 days from the date of receipt of
the Proposal Dossier (the “Negotiation Period”) Valeant shall then have the
exclusive right to negotiate with Amarin with a view to participation with
Amarin in the Third Party Commercialization in the manner set out in the
Proposal Dossier.  Valeant will notify
Amarin in writing of its decision to exercise its right of negotiation within
seven (7) days of Valeant’s receipt of Amarin’s Proposal Dossier and upon the
receipt of such notification (a “Positive Indication”) the parties shall
exclusively negotiate in good faith.


 


6.4                                 In the event that the Parties fail to execute mutually
acceptable formal heads of agreement in respect of such Third Party
Commercialization within the Negotiation Period then Amarin may thereafter
enter into negotiations and/or agreement with any third party.


 


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6.5                                 Notwithstanding Amarin’s right to negotiate and agree
with a third party pursuant to paragraph 6.4 hereof, if Amarin enters into bona
fide arms-length heads of agreement with a third party (the “Third Party”) to
participate in any Third Party Commercialization and Valeant had previously
given a Positive Indication then Valeant shall have the exclusive right,
exercisable at any time within 10 Business Days following (i)Amarin’s delivery
to Valeant of the terms of the proposed Third Party  heads of agreement in pre-signature form on a
no names basis (subject to Valeant entering into such form of confidentiality
agreement as Amarin shall reasonably request); and (ii) Amarin’s delivery toa
nominated and reputable firm of lawyers and/or accountants of Valeant’s choice
and to Amarin’s reasonable satisfaction (the “Verifier”) of reasonably full
evidence of the bona fides of such Third Party’s heads of agreement including,
without limitation the Third Party’s identity (subject to the Verifier entering
into such form of confidentiality agreement as Amarin shall reasonably request)
, to pre-empt the Third Party and participate in the Third Party
Commercialization on the terms agreed to by Amarin and the Third Party in the
heads of agreement.  If Valeant does not
notify Amarin in writing of its election to participate in the Third Party
Commercialization within such 10-day period, Valeant shall be deemed to have
elected not to participate, and Amarin shall thereafter be free to consummate
its agreement with such Third Party on terms which are not materially worse to
Amarin than those set forth in the heads of agreement. If Valeant notifies
Amarin in writing of its election to participate in the Third Party
Commercialization within such 10-day period,Valeant and Amarin shall, acting in
good faith, seek to


 


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consummate such transaction as soon as is reasonably practicable
thereafter. Valeant shall within 10 Business Days from the date of such
consummation additionally pay to Amarin a non-refundable sum of $500,000 by way
of a break up fee and Amarin shall promptly pay all of the Third Party’s
verifiable and vouched for out of pocket costs and expenses incurred in its due
diligence on the Third Party Commercialization up to the level of $500,000.


 


6.6                                 In the event that Amarin sells substantially all of
its assets or there is a change of control of Amarin (meaning the ownership of
in excess of 50% of the issued share capital of Amarin is acquired by a single
entity or entities acting in concert) then Amarin shall require its successor
to assume and be bound by this Settlement Agreement, including this paragraph
6.


 


7.                                       This
Settlement Agreement is conditional upon the receipt of the consent required by
Amarin pursuant to Section 7.3 of the debenture entered into on August 4, 2003 (as
amended) between Amarin and Elan Corporation plc (the “Debenture”) (and any
lawful assignees or successors in title of those Elan group companies set out
in  Schedule 1 to the Debenture).  If such
condition is not fulfilled on or before October 7, 2004, this Settlement
Agreement (save for paragraph 17) shall be void and shall have no further force
(to include, without limitation, and for avoidance of doubt, paragraph 16).


 


8.                                       In connection
with the foregoing:


 


8.1                                 The Parties
acknowledge that they are each represented by legal counsel of their own
choosing in connection with this Settlement Agreement, have read this


 


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Settlement Agreement and
understand the terms used herein.  The
Parties also acknowledge that they have had the opportunity to:


 


(i)                             investigate
the terms of this Settlement Agreement; and


 


(ii)                          determine
the advisability of entering into this Settlement Agreement; and in consequence
of the foregoing, have voluntarily entered into this Settlement Agreement
intending to be bound by the terms and provisions hereof.


 


8.2                                 The Parties
understand and agree that this is a full and final release of the Claims, and
the Parties hereby knowingly and voluntarily waive any and all rights or
benefits which they may have had, may now have or in the future may have under
the terms of Section 1542 of the California Civil Code, which provides as
follows:


 


“A general
release does not extend to claims which a creditor does not know or suspect to
exist in his favor at the time of executing the release, which if known by him
must have materially affected his settlement with the debtor.”


 


The Parties
understand that Section 1542 gives them the right not to release existing
claims of which they are not now aware, but they voluntarily choose to waive
their right in making this settlement.


 


8.3                                 The Parties
understand and agree that the waivers and releases set forth in this Agreement
do not apply to any claims, obligations, rights or duties arising under this
Settlement Agreement.


 


8.4                                 Each of the
Parties hereby warrants and represents on behalf of itself and the Amarin
Releasors (in the case of Amarin) and the Valeant Releasors (in the case of
Valeant) that as the date of this Settlement Agreement they are not aware of


 


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any accounts, accounts
reckonings, actions, agreements, bills, bonds, causes of action, claims,
compensation of whatever nature, controversies, costs, covenants, damages,
debts, demands, executions, expenses, extents, fees, judgments, liabilities,
losses, provisions, rights, suits, sums of money and trespasses whatsoever,
whether in law, in equity, or otherwise, whether liquidated or unliquidated,
whether known or unknown, suspected or unsuspected, anticipated or
unanticipated claims against the other save for any Claim arising in respect of
the CBS Dispute.


 


9.                                       The Parties
acknowledge and agree that they have the full right and authority to enter into
and perform this Settlement Agreement and this Settlement Agreement has been
duly executed on behalf of each undersigned entity.


 


10.                                 The Parties
acknowledge and agree that they are not relying on any representations or
promises that are not set forth in writing in this Settlement Agreement.  The Parties also acknowledge and agree that
this Settlement Agreement constitutes:


 


10.1                           their
complete and final agreement on the subject matter thereof and that it
supersedes all prior or contemporaneous understandings or agreements (oral or
written) between the Parties with respect to the subject matter hereof;


 


10.2                           is not
intended to confer upon any person or entity other than the Parties any rights
or remedies hereunder; and


 


10.3                           is binding
upon each of the party’s respective heirs, executors, administrators,
successors and assigns; and


 


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the Parties further acknowledge and agree
that this Settlement Agreement shall not be changed, modified, supplemented,
amended or rescinded except by written instrument and executed by the Parties
hereto.


 


11.                                 The Parties
agree and acknowledge that this Settlement Agreement has been and shall be
construed to have been drafted mutually by the Parties.  This Settlement Agreement shall not be
construed more strictly against one party or group of parties than against
another, it being recognized that, because this Settlement Agreement resulted
from arms’-length negotiations, the Parties have contributed substantially and
materially to the documentation of its terms and conditions.


 


12.                                 In the event
any portion of this Settlement Agreement is determined to be invalid or
unenforceable by a court of competent jurisdiction, the Parties agree that the
validity or enforceability of the remaining provisions shall not be affected
and all remaining provisions shall be enforced to the fullest extent permitted
by law.


 


13.                                 This
Settlement Agreement shall be binding upon and inure to the benefit of each of
the Parties and their respective administrators, agents, representatives,
directors, officers, employees, consultants, affiliates, subsidiaries,
attorneys and the successors and assigns of any or all of them.


 


14.                                 The Parties
each covenant, represent and warrant that they have not assigned, conveyed,
disposed, encumbered, sold or otherwise transferred any claim or demand
released and discharged by this Settlement Agreement.


 


15.                                 The Parties
agree not to make any disparaging or derogatory statements regarding any other
party.  It shall not be a breach of this
Settlement Agreement for any party to testify


 


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truthfully in any judicial or administrative
proceeding, or to make factually accurate statements in legal or public filings
or otherwise.


 


16.                                 The Parties
acknowledge and agree that this Settlement Agreement is entered into solely for
the purpose of avoiding the burdens, inconveniences and expenses that
litigating would have on the Parties. 
This Settlement Agreement, or the payment of any sum in connection
herewith, is not, and should not be construed as an admission of any wrongdoing
or liability whatsoever on behalf of any party hereto, each of whom expressly
denies any wrongdoing or liability. The Parties further acknowledge and agree
that neither this Settlement Agreement nor the negotiations of the Parties
preceding this Settlement Agreement or the fact of its execution may be used as
a finding of fact or offered as evidence by one party against the other in any
fashion, whether as an admission or evidence of any wrongdoing or liability or
otherwise, or in any proceeding whatsoever, for any purposes, except pursuant
to any dispute involving claims directly arising under the express terms of
this Settlement Agreement.


 


17.                                 This Settlement
Agreement shall be governed, construed and enforced in accordance with the laws
of the State of California, without regard to principles of conflicts of
law.  The Parties acknowledge and agree
that any action commenced to enforce the terms of this Settlement Agreement
shall be filed in the courts of the State of California in Orange County, or,
if a Party has or can acquire jurisdiction, in the United States District Court
for the Southern District of California.


 


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18.                                 This
Settlement Agreement may be executed and delivered in one or more counterparts,
each of which shall be deemed an original, but all of which shall constitute
one and the same instrument.  This
Settlement Agreement may be executed by facsimile.


 


IN WITNESS WHEREOF,
the Parties hereto have caused this Settlement Agreement to be       duly executed as of the date set forth
above.


 


 


	
   

  	
  VALEANT
  PHARMACEUTICALS

  INTERNATIONAL

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  AMARIN
  CORPORATION PLC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  AMARIN
  PHARMACEUTICALS COMPANY

  LIMITED

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  	
   

  



 


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ACKNOWLEDGED AND APPROVED


THIS           DAY OF                          ,
200   


 


	
  ELAN CORPORATION PLC
  (or any lawful assignees

  
	
  or successors in title of those Elan group
  companies set

  
	
  out in 
  Schedule 1 to the Debenture)

  
	
   

  
	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  



 


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