UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
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FORM 8-K
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CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): March 17, 2017
PERNIX THERAPEUTICS HOLDINGS, INC.
(Exact name of registrant as specified in its charter)
Maryland |
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001-14494 |
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33-0724736 |
(State or Other Jurisdiction |
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(Commission File Number) |
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(IRS Employer Identification No.) |
10 North Park Place, Suite 201, Morristown, NJ |
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07960 |
(Address of principal executive offices) |
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(Zip Code) |
Registrant's telephone number, including area code: (800) 793-2145 |
(Former Name or Former Address, if Changed Since Last Report.) |
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions ( see General Instruction A.2. below):
o
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)o
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)o
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))o
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
1.01 Entry Into a Material Definitive Agreement
On March 17, 2017, Pernix Therapeutics Holdings, Inc. and its wholly owned subsidiary Pernix Ireland Limited (together, "Pernix") and Glaxo Group Limited, GlaxoSmithKline
LLC, GlaxoSmithKline Intellectual Property Holdings Limited, and GlaxoSmithKline Intellectual Property Management Limited (collectively, "GSK") entered into an amendment (the
"Amendment") to the Interim Settlement Agreement between Pernix and GSK dated July 27, 2015 (as amended by the Amendment, the "Interim Settlement
Agreement"). The Amendment establishes a payment schedule for satisfaction of the current balance of the award (the "Award") granted to GSK in the arbitration of
certain matters previously disputed by the parties. Pursuant to the Amendment, Pernix and GSK have agreed that the current outstanding balance of the Award is $21.45 million and
that Pernix is obligated to pay the Award in quarterly installments in amounts totaling $1.0 million in 2017, $3.5 million in 2018 and $16.95 million in 2019. Pernix has agreed that for so
long as the Interim Settlement Agreement is in effect, Pernix will be subject to certain restrictions on non-ordinary course payments and transactions and GSK will have certain information
rights. GSK has agreed that for so long as Pernix complies with the payment schedule set forth in the Amendment, as well as other agreed-upon obligations, enforcement of the Award
will be stayed and GSK shall not seek to enforce or exercise any other remedies in respect of the Award.
The foregoing summary is qualified by reference to the full text of the Amendment, which is filed as Exhibit 10.1 hereto and incorporated by reference herein.
9.01 Financial Statements and Exhibits
(d) Exhibits.
10.1 Amendment to the Interim Settlement Agreement dated March 17, 2017.
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
PERNIX THERAPEUTICS HOLDINGS, INC.
Date: March 21, 2017
By:
/s/ John A. Sedor
John A. Sedor
Chief Executive Officer
Exhibit No.
Description
10.1
Amendment to the Interim Settlement Agreement dated March 17, 2017.
Exhibit 10.1
AMENDMENT NO. 1
TO THE INTERIM SETTLEMENT AGREEMENT
BETWEEN PERNIX AND GSK
This AMENDMENT NO. 1 to the interim settlement agreement (this " Amendment "), dated as of March 17, 2017, is entered into by and between Pernix Therapeutics Holdings, Inc. (" Pernix Holdings "), Pernix Ireland Limited (" Pernix Ireland " and together with Pernix Holdings, " Pernix "), on the one hand, and Glaxo Group Limited, GlaxoSmithKline LLC, GlaxoSmithKline Intellectual Property Holdings Limited, and GlaxoSmithKline Intellectual Property Management Limited (collectively, " GSK "), on the other. Each of the foregoing shall be referred to herein as a " Party " and collectively as the " Parties ."
WITNESSETH:
WHEREAS, the Parties entered into an Interim Settlement Agreement, dated July 27, 2015 (as amended, restated, supplemented or otherwise modified from time to time, the " Interim Settlement Agreement ").
WHEREAS, on January 25, 2017, a final determination was made in the Arbitration (ICC Case No. 21284/RD) awarding GSK certain damages and fees (the " Award ");
WHEREAS, Pernix has made certain payments to GSK under Sections 1 and 4 of the Interim Settlement Agreement;
WHEREAS, Pernix has made or will make certain payments to GSK pursuant to the Stay Agreement, dated as of February 28, 2017, by and between Pernix and GSK; and
WHEREAS, the Parties agree to amend Section 4 of the Interim Settlement Agreement to establish a payment schedule for satisfaction of the remaining Award, as set forth on Schedule 1 , attached hereto.
Now, therefore, in consideration of the foregoing, the covenants and conditions contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:
Section 1. Certain Defined Terms .
Capitalized terms used in this Amendment without definition shall have the meanings set forth in the Interim Settlement Agreement.
Section 2. Amendments .
Section 4 of the Interim Settlement Agreement is hereby amended and restated to read in its entirety as follows:
4. Post-Arbitration Reconciliation
a. The Parties acknowledge and agree that (i) as of March 17, 2017, the total outstanding balance of the Award is Twenty-One Million Four Hundred Fifty Thousand Dollars ($21,450,000) (the " Current Award Balance ") and is currently due and payable by Pernix to GSK, and (ii) the Current Award Balance is unconditionally owed to GSK by Pernix, without offset, defense or counterclaim of any kind, nature or description.
b. In consideration for GSK's agreement set forth in Section 4(e), Pernix agrees to make the payments set forth on Schedule 1 (each such payment, an " Award Payment ") by the dates noted, with a final payment due on December 31, 2019, in full satisfaction of the Award. Each Award Payment shall be credited against and reduce the Current Award Balance.
c. For so long as this Agreement remains in effect, without the express prior written consent of GSK (which consent will not be unreasonably withheld):
(i) Pernix shall not make payments to any of its creditors, except for such payments in the ordinary course of business of Pernix that are determined by Pernix and its advisers in good faith to be necessary to preserve the value of the business of Pernix and ensure an orderly process for Pernix to continue to evaluate its restructuring and strategic alternatives; provided that, for the avoidance of doubt, Pernix may pay the fees and expenses of its professionals and advisors as and when due;
(ii) Pernix shall not restructure any material provision of any credit agreement, indenture or other similar agreement governing indebtedness for borrowed money; and
(iii) neither Pernix Holdings nor Pernix Ireland shall consolidate, amalgamate or merge with or into or wind up into (whether or not it is a surviving entity) any person or entity.
d. Pernix or its advisors further agree that during the term of this Agreement, Pernix or its advisors shall provide periodic updates to GSK, when reasonably requested by GSK, regarding the status of Pernix's ongoing evaluation of restructuring and other strategic alternatives, including, without limitation, periodic updates regarding any sale process conducted by Pernix. GSK agrees that each GSK update recipient shall enter into reasonable and customary confidentiality and restricted use agreements in favor of Pernix (it being agreed that those certain Confidential Disclosure Agreements dated as of February 23, 2017 entered into between Pernix Holdings and each of GlaxoSmithKline LLC and Debevoise & Plimpton LLP, as GSK's counsel, qualify as such). Nothing herein shall preclude GSK or any of its affiliates from participating as a potential purchaser in any sale process conducted by Pernix.
e. GSK agrees that, for so long as the provisions of Section 4 of this Agreement are complied with, enforcement of the Award shall be stayed, and GSK shall not seek to enforce the Award or otherwise exercise any rights or remedies in respect of the Award (the " Stay "). The Stay is limited in nature and shall not be deemed or construed to constitute a waiver of any rights and remedies with respect to the Award. The Parties agree that the running of all statutes of limitation, the doctrine of laches, and any other time-based defenses applicable to all claims, remedies or causes of action that GSK may be entitled to take or bring in order to enforce its rights and remedies with respect to the Award are, to the fullest extent permitted by law, tolled and suspended for so long as the Stay remains in effect.
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f. If Pernix violates any covenant that is included in Section 4 of this Agreement or if either Pernix Holdings or Pernix Ireland commences or is the subject of any insolvency proceeding, (i) all amounts outstanding in respect of the Award shall automatically be immediately due and payable, and (ii) the Stay shall automatically and immediately terminate and be of no further force or effect and GSK shall be free in its sole and absolute discretion, without limitation, to proceed to enforce any and all of its rights and remedies with respect to the Award.
Section 3. Conditions to Effectiveness of this Amendment .
This Amendment shall become effective upon the execution and delivery of this Amendment by the Parties.
Section 4. Representations and Warranties.
Each of the Parties hereby represents and warrants that each of the following statements is true, accurate and complete as to such Party as of the date hereof:
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Section 5. Miscellaneous .
[ Remainder of Page Left Intentionally Blank ]
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IN WITNESS WHEREOF, the Parties have executed and delivered this Amendment as of the day and year first above written.
PERNIX THERAPEUTICS HOLDINGS, INC.
By
/s/ K. R. Pina
Name: Kenneth R. Pina
Title: Senior Vice President and General Counsel
PERNIX IRELAND LIMITED
By
/s/ John A. Sedor
Name: John A. Sedor
Title: President
GLAXO GROUP LIMITED
By
/s/ Paul Williamson
Name: Paul Williamson
Title: Authorised Signatory
For and on behalf of
Edinburgh Pharmaceutical Industries Limited
Corporate Director
GLAXOSMITHKLINE LLC
By
/s/ PD Villarreal
Name: PD Villarreal
Title: Senior Vice President of Global Litigation
GLAXOSMITHKLINE INTELLECTUAL PROPERTY HOLDINGS LIMITED
By
/s/ Paul Williamson
Name: Paul Williamson
Title: Authorised Signatory
For and on behalf of
Glaxo Group Limited
Corporate Director
GLAXOSMITHKLINE INTELLECTUAL PROPERTY MANAGEMENT LIMITED
By
/s/ Paul Williamson
Name: Paul Williamson
Title: Authorised Signatory
For and on behalf of
The Wellcome Foundation Limited
Corporate Director
Total GSK ($million) | $21.45 | |||
3-Year Payment Plan | ||||
Period Ending | Beg Balance | Ending Balance | Payments | Cumulative Payment |
12/31/2016 | $21.45 | |||
3/31/2017 1 | $21.45 | $21.20 | $0.25 | $0.25 |
6/30/2017 | $21.20 | $20.95 | $0.25 | $0.50 |
9/30/2017 | $20.95 | $20.70 | $0.25 | $0.75 |
12/31/2017 | $20.70 | $20.45 | $0.25 | $1.00 |
3/31/2018 | $20.45 | $19.95 | $0.50 | $1.50 |
6/30/2018 | $19.95 | $18.95 | $1.00 | $2.50 |
9/30/2018 | $18.95 | $17.95 | $1.00 | $3.50 |
12/31/2018 | $17.95 | $16.95 | $1.00 | $4.50 |
3/31/2019 | $16.95 | $12.95 | $4.00 | $8.50 |
6/30/2019 | $12.95 | $8.95 | $4.00 | $12.50 |
9/30/2019 | $8.95 | $4.95 | $4.00 | $16.50 |
12/31/2019 | $4.95 | $0.00 | $4.95 | $21.45 |
Total | $21.45 | |||
Year End | Beg Balance | Ending Balance | Payments | Cumulative Payment |
2017 | $21.45 | $20.45 | $1.00 | $1.00 |
2018 | $20.45 | $16.95 | $3.50 | $4.50 |
2019 | $16.95 | $0.00 | $16.95 | $21.45 |
Total | $21.45 | |||
1 This amount, which was also noted in Section 3(c) of the Stay Agreement, dated as of February 28, 2017, by | ||||
and among the Parties, was paid by wire transfer from Pernix to GSK on 3/16/2017. |